Northwest Bancshares, Inc. - Quarter Report: 2025 March (Form 10-Q)

Marketable securities available-for-sale (amortized cost of $ and $, respectively)

Marketable securities held-to-maturity (fair value of $ and $, respectively)

Total cash and cash equivalents and marketable securities Loans held-for-sale Loans held for investment Allowance for credit losses()()Loans receivable, net FHLB stock, at cost Accrued interest receivable Real estate owned, net Premises and equipment, net Bank-owned life insurance Goodwill Other intangible assets, net Other assets Total assets$ Liabilities and shareholders’ equity Liabilities: Noninterest-bearing demand deposits$ Interest-bearing demand deposits Money market deposit accounts Savings deposits Time deposits Total deposits Borrowed funds Subordinated debt Junior subordinated debentures Advances by borrowers for taxes and insurance Accrued interest payable Other liabilities Total liabilities Shareholders’ equity:

Preferred stock, $ par value: authorized, shares issued

Common stock, $ par value: shares authorized, and shares issued and outstanding, respectively

Additional paid-in capital Retained earnings Accumulated other comprehensive loss()()Total shareholders’ equity Total liabilities and shareholders’ equity$

See accompanying notes to unaudited Consolidated Financial Statements.

Table of Contents

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except share data)


	2025	2024
Interest income:
Loans receivable	$
Mortgage-backed securities
Taxable investment securities
Tax-free investment securities
FHLB stock dividends
Interest-earning deposits
Total interest income
Interest expense:
Deposits
Borrowed funds
Total interest expense
Net interest income
Provision for credit losses - loans
Provision/(benefit) for credit losses - unfunded commitments	()	()
Net interest income after provision for credit losses
Noninterest income:


Gain on sale of SBA loans

Service charges and fees


Trust and other financial services income

Gain on real estate owned, net
Income from bank-owned life insurance
Mortgage banking income
Other operating income
Total noninterest income
Noninterest expense:
Compensation and employee benefits
Premises and occupancy costs
Office operations
Collections expense
Processing expenses
Marketing expenses
Federal deposit insurance premiums
Professional services
Amortization of intangible assets

Merger, asset disposition and restructuring expense

Other expenses
Total noninterest expense
Income before income taxes
Federal and state income taxes expense
Net income	$
Basic earnings per share	$
Diluted earnings per share	$

See accompanying notes to unaudited Consolidated Financial Statements.

Table of Contents

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Unaudited)

(in thousands)


	2025	2024
Net income	$
Other comprehensive income/(loss) net of tax:
Net unrealized holding gains/(losses) on marketable securities:
Unrealized holding gains/(losses), net of tax of ($) and $, respectively		()

Net unrealized holding gains/(losses) on marketable securities		()

Change in fair value of interest rate swaps, net of tax of $ and ($), respectively	()


Defined benefit plan:
Actuarial reclassification adjustments for prior period service costs and actuarial gains included in net income, net of tax of $ and $, respectively	()	()



Other comprehensive income/(loss)		()

Total comprehensive income	$

) ) )

See accompanying notes to unaudited Consolidated Financial Statements.

Table of Contents

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)


	Three months ended March 31,
	2025	2024
Operating activities:
Net income	$
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
Net loss on sale of assets	()	()
Mortgage banking activity	()	()
Gain on sale of SBA loans	()	()
Net depreciation, amortization and accretion
Decrease in other assets
Decrease in other liabilities	()	()
Net amortization on marketable securities	()
Noncash compensation expense related to stock benefit plans
Noncash write-down of other assets
Origination of loans held-for-sale	()	()
Proceeds from sale of loans held-for-sale
Net cash provided by operating activities

Investing activities:
Purchase of marketable securities available-for-sale	()	()
Proceeds from maturities and principal reductions of marketable securities held-to-maturity
Proceeds from maturities and principal reductions of marketable securities available-for-sale
Loan originations	()	()
Proceeds from loan maturities and principal reductions
Net proceeds/(redemptions) of FHLB stock		()
Proceeds from sale of real estate owned
Purchases of premises and equipment, net	()	()
Net cash used in investing activities	()	()

Financing activities:
Net increase in deposits
Net (decrease)/increase in short-term borrowings	()
Increase in advances by borrowers for taxes and insurance
Cash dividends paid on common stock	()	()
Proceeds from stock options exercised
Net cash provided by financing activities
Net increase/(decrease) in cash and cash equivalents	$	()

Cash and cash equivalents at beginning of period	$
Net increase/(decrease) in cash and cash equivalents		()
Cash and cash equivalents at end of period	$

Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $ and $, respectively)	$
Income taxes

Non-cash activities:
Loan foreclosures and repossessions	$

See accompanying notes to unaudited Consolidated Financial Statements.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(1)

community-banking offices throughout Pennsylvania, Western New York, Eastern Ohio, and Indiana.

The accompanying unaudited Consolidated Financial Statements include the accounts of the Company and its subsidiary, Northwest Bank, and Northwest’s subsidiaries Northwest Capital Group, Inc., Great Northwest Corporation, and Mutual Federal Interest Company, Inc. The unaudited Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information or footnotes required for complete annual financial statements. In the opinion of management, all adjustments necessary for the fair presentation of the Company’s financial position and results of operations have been included. The Consolidated Financial Statements have been prepared using the accounting policies described in the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 updated, as required, for any new pronouncements or changes.

The results of operations for the quarter ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any other period.

Table of Contents

(2)

() Debt issued by government-sponsored enterprises:Due after one year through five years () Municipal securities:Due after one year through five years Due after five years through ten years () Due after ten years () Corporate debt issues:Due in one year or less () Due after five years through ten years () Due after ten years Mortgage-backed securities:Fixed rate pass-through () Variable rate pass-through () Fixed rate agency CMOs () Variable rate agency CMOs () Total mortgage-backed securities () Total marketable securities available-for-sale$ ()

Table of Contents

() Debt issued by government-sponsored enterprises: Due after one year through five years () Municipal securities: Due after one year through five years () Due after five years through ten years () Due after ten years () Corporate debt issues: Due in one year or less () Due after five years through ten years () Mortgage-backed securities: Fixed rate pass-through () Variable rate pass-through () Fixed rate agency CMOs () Variable rate agency CMOs () Total mortgage-backed securities () Total marketable securities available-for-sale$ ()

() Due after one year through five years () Mortgage-backed securities: Fixed rate pass-through () Variable rate pass-through Fixed rate agency CMOs () Variable rate agency CMOs () Total mortgage-backed securities () Total marketable securities held-to-maturity$ ()

Table of Contents

() Mortgage-backed securities: Fixed rate pass-through () Variable rate pass-through Fixed rate agency CMOs () Variable rate agency CMOs () Total mortgage-backed securities () Total marketable securities held-to-maturity$ ()

Due after one year through five years Due after five years through ten years Due after ten years Total mortgage-backed securities$

The following table shows the contractual maturity of our mortgage-backed securities held-to-maturity at March 31, 2025 (in thousands):


	Amortized cost	Fair value
Mortgage-backed securities:
Due within one year	$
Due after one year through five years
Due after five years through ten years
Due after ten years
Total mortgage-backed securities	$

() ()Municipal securities () ()Corporate issues () ()Mortgage-backed securities - agency () () ()Total $ () () ()

Table of Contents

() ()Corporate debt issues () ()Municipal securities () () ()Mortgage-backed securities - agency () () ()Total $ () () ()

The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of March 31, 2025, which were comprised of individual securities, represent a credit loss impairment. All of these securities were issued by U.S. government agencies, U.S. government-sponsored enterprises, local municipalities, or represent corporate debt. The securities issued by the U.S. government agencies or U.S. government-sponsored enterprises are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The securities issued by local municipalities and the corporate debt issues were all highly rated by major rating agencies and have no history of credit losses. The unrealized losses were primarily attributable to changes in the interest rate environment and not due to the credit quality of these investment securities. As of March 31, 2025, the Company does not have the intent to sell these investment securities and it is more likely than not that we will not be required to sell these securities before their anticipated recovery, which may be at maturity.

All of the Company’s held-to-maturity debt securities are issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The decline in fair value of the held-to-maturity debt securities were primarily attributable to changes in the interest rate environment and not due to the credit quality of these investment securities, therefore, the Company did not record an allowance for credit losses for these securities as of March 31, 2025.

Home equity loans Vehicle loans Consumer loans Total Personal Banking Commercial Banking: Commercial real estate loans Commercial real estate loans - owner occupied Commercial loans Total Commercial Banking Total$

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2024 (in thousands):

Table of Contents

Home equity loans Vehicle loans Consumer loans Total Personal Banking Commercial Banking:Commercial real estate loans Commercial real estate loans - owner occupied Commercial loans Total Commercial Banking Total$

We present the amortized cost of our loans on nonaccrual status including such loans with no allowance.

During the three months ended March 31, 2025, we did t recognize any interest income on nonaccrual loans.

Table of Contents

Home equity loans Vehicle loans Consumer loans Total Personal Banking Commercial Banking:Commercial real estate loans Commercial real estate loans - owner occupied Commercial loans Total Commercial Banking Total$

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2024 (in thousands):

Real estate

Equipment

Other

Total

Commercial Banking:

Commercial real estate loans

% % % % % % %Commercial Banking: % % % % % % % %

Table of Contents

The following table provides information related to the amortized cost basis of loan payment delinquencies at December 31, 2024 (in thousands):

30-59 days
delinquent

60-89 days
delinquent

90 days or
greater
delinquent

Total
delinquency

Current

Total loans
receivable

Personal Banking:

Residential mortgage loans

Home equity loans

Vehicle loans

Consumer loans

Total Personal Banking

Commercial Banking:

Commercial real estate loans

Commercial real estate loans - owner occupied

Commercial loans

Total Commercial Banking

Total originated loans

Credit Quality Indicators: For Commercial Banking we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. We analyze loans individually by classifying the loans by credit risk. Credit relationships greater than or equal to $ million classified as special mention or substandard are reviewed quarterly for deterioration or improvement to determine if the loan is appropriately classified. We use the following definitions for risk ratings other than pass:

Table of Contents

Substandard Total residential mortgage loans Residential mortgage current period charge-offs () () ()Home equity loansPass Substandard Total home equity loans Home equity current period charge-offs () () ()() ()Vehicle loansPass Substandard Total vehicle loans Vehicle current period charge-offs ()()()()() ()Consumer loansPass Substandard Total consumer loans Consumer loan current period charge-offs()()()()()()()()()Total Personal Banking Commercial Banking: Commercial real estate loansPass Special mention Substandard Total commercial real estate loans Commercial real estate current period charge-offs () ()Commercial real estate loans - owner occupiedPass Special mention Substandard Total commercial real estate loans - owner occupied Commercial real estate - owner occupied current period charge-offs Commercial loansPass Special mention Substandard

For the year ended December 31, 2024, $ million of revolving loans were converted to term loans.

Table of Contents

(4)

Less: accumulated amortization()()Core deposit intangibles - net$ Total intangible assets - net$

For the quarter ended March 31, 2024 For the year ending December 31, 2025 For the year ending December 31, 2026 For the year ending December 31, 2027

Balance at March 31, 2025$

We performed our annual goodwill impairment test as of June 30, 2024 in accordance with Accounting Standards Codification ("ASC") 350, Intangibles - Goodwill and Other, and concluded that goodwill was impaired. As of March 31, 2025, there were no events or changes in circumstances that would cause us to update that year’s goodwill impairment test and we concluded there was impairment of goodwill as of such dates.

(5)

%$ %

(1) Net of discounts due to the fair value adjustment made at the time of acquisition.

Cash distributions on the trust securities are made on a quarterly basis to the extent interest on the debentures is received by the Trusts. We have the right to defer payment of interest on the subordinated debentures at any time, or from time-to-time, for periods not exceeding . If interest payments on the subordinated debentures are deferred, the distributions on the trust securities also are deferred. To date there have been interest deferrals. Interest on the subordinated debentures and distributions on the trust securities is cumulative. Our obligation constitutes a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the trust under the preferred securities. For the quarters ended March 31, 2025 and March 31, 2024 total interest expense paid on trust preferred securities was $ million.

The Trusts must redeem the preferred securities when the debentures are paid at maturity or upon an earlier redemption of the debentures to the extent the debentures are redeemed. All or part of the debentures may be redeemed at any time. Also, the debentures may be redeemed at any time if existing laws or regulations, or the interpretation or application of these laws or regulations, change causing:

•the interest on the debentures to no longer be deductible by the Company for federal income tax purposes;

•the trusts to become subject to federal income tax or to certain other taxes or governmental charges;

•the trusts to register as an investment company; or

•the preferred securities to no longer qualify as Tier 1 capital.

Table of Contents

(6)

million, of which $ million is fully collateralized. At March 31, 2025, we had a liability which represents deferred income of $ million related to the standby letters of credit.

million unsecured line of credit with a correspondent bank for private label credit card facilities for certain existing commercial clients of the Bank, of which $ million in notional value of credit cards have been issued. These issued credit cards had an outstanding balance of $ million at March 31, 2025. The clients of the Bank are responsible for repaying any balances due on these credit cards directly to the correspondent bank; however, if the customer fails to repay their balance, the Bank could be required to satisfy the obligation to correspondent bank and initiate collection from our customer as part of the existing credit facility of that customer.

(7)

Less: Dividends and undistributed earnings allocated to participating securities Net income available to common shareholders - two class method - Basic and Diluted$ Denominator for earnings per share - treasury stock method - Basic and DilutedWeighted average common shares outstanding - Basic Add: Potentially dilutive shares Denominator for treasury stock method - Diluted Denominator for earnings per share - two class method - Basic and Diluted:Weighted average common shares outstanding - Basic Add: Average participating shares outstanding Denominator for two class method - Diluted Basic earnings per share$ Diluted earnings per share$ Anti-dilutive awards (1)

(1) Reflects the total number of shares related to outstanding options that have been excluded from the computation of diluted earnings per share because the impact would have been anti-dilutive.

Table of Contents

(8)

Interest cost Expected return on plan assets()() Amortization of prior service cost()() Amortization of the net loss() Net periodic cost$ ()

Because of the current funding status, we do not anticipate a funding requirement during the year ending December 31, 2025.

(9)

Table of Contents

significant unrealized appreciation or depreciation on these financial instruments.

— Securities available-for-sale — Securities held-to-maturity — Loans receivable, net — Loans held-for-sale — Accrued interest receivable — Interest rate lock commitments — Forward commitments — Foreign exchange swaps — Interest rate swaps designated as hedging instruments ()Interest rate swaps not designated as hedging instruments ()FHLB stock — Total financial assets$ ()Financial liabilities: Savings and checking deposits$ — Time deposits — Borrowed funds ()Subordinated debt — Junior subordinated debentures — Foreign exchange swaps — Interest rate swaps designated as hedging instruments ()Interest rate swaps not designated as hedging instruments ()Risk participation agreements — Accrued interest payable — Total financial liabilities$ ()

Table of Contents

— Securities available-for-sale — Securities held-to-maturity — Loans receivable, net — Loans held-for-sale — Accrued interest receivable — Interest rate lock commitments — Forward commitments — Forward exchange swaps — Interest rate swaps designated as hedging instruments ()Interest rate swaps not designated as hedging instruments ()FHLB stock — Total financial assets$ ()Financial liabilities: Savings and checking accounts$ — Time deposits — Borrowed funds ()Subordinated debt — Junior subordinated debentures — Foreign exchange swaps — Interest rate swaps designated as hedging instruments ()Interest rate swaps not designated as hedging instruments ()Risk participation agreements — Accrued interest payable — Total financial liabilities$ ()

(1) Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.

Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both March 31, 2025 and December 31, 2024.

Table of Contents

— Government-sponsored enterprises — States and political subdivisions — Corporate — Total debt securities — Mortgage-backed securities: GNMA — FNMA — FHLMC — Non-agency — Collateralized mortgage obligations: GNMA — FNMA — FHLMC — Total mortgage-backed securities — Interest rate lock commitments — Forward commitments — Foreign exchange swaps — Interest rate swaps designated as hedging instruments () Interest rate swaps not designated as hedging instruments () Total assets$ () Foreign exchange swaps $ — Interest rate swaps designated as hedging instruments () Interest rate swaps not designated as hedging instruments () Risk participation agreements — Total liabilities $ ()

Table of Contents

— Government-sponsored enterprises — States and political subdivisions — Corporate — Total debt securities — Mortgage-backed securities: GNMA — FNMA — FHLMC — Non-agency — Collateralized mortgage obligations: GNMA — FNMA — FHLMC — Total mortgage-backed securities — Interest rate lock commitments — Forward commitments — Foreign exchange swaps — Interest rate swaps designated as hedging instruments () Interest rate swaps not designated as hedging instruments () Total assets$ () Foreign exchange swaps$ — Interest rate swaps designated as hedging instruments () Interest rate swaps not designated as hedging instruments () Risk participation agreements — Total liabilities $ ()

Interest rate lock commitments:Net activity ()Transfers from Level 3 Transfers into Level 3 Ending balance$

(1)Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.

Table of Contents

(10)

separate pay-fixed interest rate swaps in order to synthetically convert short-term three month FHLB advances to fixed-rate term funding with an aggregate value of $ million with maturities ranging from three to . Our risk management objective and strategy for these interest rate swaps at such time was to reduce our exposure to variability in interest-related cash outflows attributable to changes in the USD-SOFR swap rate, the designated benchmark interest rate being hedged. Based upon our contemporaneous quantitative analysis at the inception of the interest rate swaps, we have determined these interest rate swaps qualify for hedge accounting in accordance with ASC 815, Derivatives and Hedging. Our cash flow hedges are recorded within other assets on the Consolidated Statement of Financial Condition at their estimated fair value.

As long as the hedge remains highly effective, the changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. A hedging relationship that is determined to not be highly effective no longer qualifies for hedge accounting and any gain or loss is recognized immediately into earnings. Amounts reclassified into earnings are included in interest expense in the Consolidated Statement of Income.

Derivatives Not Designated as Hedging Instruments

We act as an interest rate or foreign exchange swap counterparty for certain commercial borrowers in the normal course of servicing our customers, which are accounted for at fair value. We manage our exposure to such interest rate or foreign exchange swaps by entering into corresponding and offsetting interest rate swaps with third parties that mirror the terms of the swaps we have with the commercial borrowers. These positions (referred to as “customer swaps”) directly offset each other and our exposure is the fair value of the derivatives due to changes in credit risk of our commercial borrowers and third parties. Customer swaps are recorded within other assets or other liabilities on the Consolidated Statement of Financial Condition at their estimated fair value. Changes to the fair value of assets and liabilities arising from these derivatives are included, net, in other operating income in the Consolidated Statement of Income.

We enter into interest rate lock commitments for residential mortgage loans which commit us to lend funds to a potential borrower at a specific interest rate within a specified period of time. Interest rate lock commitments that relate to the origination of mortgage loans that will be held-for-sale are considered derivative financial instruments under applicable accounting guidance. Interest rate lock commitments on loans held-for-sale are carried at fair value in other assets on the Consolidated Statement of Financial Condition. Northwest Bank sells loans to the secondary market on a mandatory or best efforts basis. The loans sold on a mandatory basis commit us to deliver a specific principal amount of mortgage loans to an investor at a specified price, by a specified date, or the commitment must be paired off. These forward commitments entered into on a mandatory delivery basis meet the definition of a derivative financial instrument. All closed loans to be sold on a mandatory delivery basis are classified as held-for-sale on the Consolidated Statement of Financial Condition. Changes to the fair value of the interest rate lock commitments and the forward commitments are recorded in mortgage banking income in the Consolidated Statements of Income.

We enter into risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which we are a participant. The risk participation agreements provide credit protection to the financial institution should the borrower fail to perform on its interest rate derivative contract with the financial institution. These risk participation agreements are recorded within other liabilities on the Consolidated Statement of Financial Condition at their estimated fair value. Changes to the fair value of the risk participation agreements are included in other operating income in the Consolidated Statement of Income.

Table of Contents

Derivatives not designated as hedging instruments:Interest rate swap agreements Foreign exchange swap agreements Interest rate lock commitments Forward commitments Risk participation agreements Total Derivatives$ At December 31, 2024Derivatives designated as hedging instruments:Interest rate swap agreements$ Derivatives not designated as hedging instruments: Interest rate swap agreements Foreign exchange swap agreements Interest rate lock commitments Forward commitments Risk participation agreements Total derivatives $ Non-hedging swap derivatives:(Decrease)/increase in other income() Increase/(decrease) in mortgage banking income ()

%$()5/11/2027Issued May 12, 2023 %()5/12/2028Issued May 19, 2023 %()11/19/2027Issued May 31, 2023 %()11/30/2026Issued July 26, 2023 %()7/26/2028Issued July 31, 2023 %()1/31/2028Issued August 9, 2023 %()8/9/2027Total$ $()

Table of Contents

() Interest rate swaps - not hedging () Derivative liabilitiesGross amounts of
recognized liabilitiesGross amounts offset in
the consolidated statement
of financial conditionNet amounts of
liabilities presented in
the consolidated of conditionInterest rate swaps - hedging () Interest rate swaps - not hedging ()

The following tables present the gross amounts of these assets and liabilities with any offsets to arrive at the net amounts recognized in the Consolidated Statements of Financial Condition as of December 31, 2024 (dollars in thousands).

Derivative assets

Gross amounts of
recognized assets

Gross amounts offset in
the consolidated statement
of financial condition

Net amounts of
assets presented in the consolidated of condition

Interest rate swaps - hedging

()

Interest rate swaps - not hedging

()

Derivative liabilities

Gross amounts of
recognized liabilities

Gross amounts offset in
the consolidated statement
of financial condition

Net amounts of
liabilities presented in
the consolidated of condition

Interest rate swaps - hedging

()

Interest rate swaps - not hedging

()

(11)

Table of Contents

(12)

) ()Other comprehensive/(loss) income before reclassification adjustments (1) (2) () Amounts reclassified from accumulated other comprehensive income (3) ()()Net other comprehensive income/(loss) ()() Balance as of March 31, 2025$()() ()

For the quarter ended March 31, 2024

Unrealized
losses
on securities
available-for-sale

Change in
fair value
of interest
rate swaps

Change in
defined benefit
pension plans

Total

Balance as of December 31, 2023

()

Other comprehensive (loss)/income before reclassification adjustments (4) (5)

()

Amounts reclassified from accumulated other comprehensive income (6)

()

Net other comprehensive income/(loss)

()

Balance as of March 31, 2024

()

(1)Consists of unrealized holding gains, net of tax of ($).

(2)Change in fair value of interest rate swaps, net of tax $.

(3)Consists of realized gains, net of tax of $.

(4)Consists of unrealized holding losses, net of tax of $.

(5)Change in fair value of interest rate swaps, net of tax ($).

(6)Consists of realized gains, net of tax of $.

Table of Contents

(13)

operating segment, Banking, is also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of the various components of the business such as branches and lending, which are then aggregated because operating performance, products/services and customers are similar. The chief operating decision maker will evaluate the financial performance of the Company’s business components such as by evaluating revenue streams, significant expenses and budget to actual results in assessing the Company’s segment and in the determination of allocating resources. The information reviewed is on a consolidated basis and discrete financial information is not available. The chief operating decision maker uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The chief operating decision maker uses consolidated net income through return on average assets and return on average equity and the efficiency ratio, as well as loan growth to benchmark the Company against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessment performance and in establishing compensation. Loans, investments, and deposits provide the revenues in the banking operation. Interest expense, provisions for credits losses and payroll provide the significant expenses in the banking operating. All operations are domestic.

Accounting policies for segment are the same as those described in Note 1 of the Notes to the Consolidated Financial Statements in Item 8 of Part II of our 2024 Annual Report on Form 10-K. Segment performance is evaluated using consolidated net income.

Reconciliation of revenueService charges and fees Trust and other financial services income

Other revenue (1)

Consolidated revenues$ Less:Interest expense Segment net interest income and noninterest income$ Less:Provision for credit losses Compensation and employee benefits Processing expenses Premises and occupancy costs Professional services Office operations Federal deposit insurance premiums Other segment items (2) Income tax expense Segment net income/consolidated net income$

(1) Other revenues include loan sales, gain on real estate owned, income from bank owned life insurance and other operating income.

(2) Other segment items include expenses for collections, marketing, amortization of intangibles, merger, asset disposition and restructuring and other operating expense.

Table of Contents

Interest expense Depreciation Amortization Other significant noncash items:Provision for credit losses Segment assets Expenditures for segment assets

Table of Contents

Total deposits increased by $30 million, to $12.2 billion at March 31, 2025 from $12.1 billion at December 31, 2024. This increase was driven by a $117 million, or 6%, increase in money market accounts a $51 million, or 2%, increase in savings deposits. Partially offsetting these increases was a decrease in time deposits of $81 million, or 3%, drively primarily in a decrease in brokered CDs, and a $76 million, or 3%, decrease in interest demand deposit accounts. The increase in both money market and saving account balances was partly due to customers shifting funds to these competitively priced products as their time deposits matured.

As of March 31, 2025, we had $141 million of brokered deposits, which made up 5% of our time deposits and 1% of our total deposit balance at quarter end. The balance carried an average all-in cost of 4.23% and an average original term of 12 months. These deposits were purchased through a registered broker, as part of an Asset/Liability Committee (“ALCO”) strategy to increase and diversify funding sources.

In addition, at quarter end we had $697 million of deposits through our participation in the Intrafi Network Deposits and FIS Insured Deposit programs. These deposits are part of a reciprocal program that allows our depositors to receive expanded FDIC coverage by placing multiple interest-bearing demand accounts at other member banks and Northwest Bank receives an equal amount of deposits from other member banks. The balance carried an average cost of 3.43%.

At March 31, 2025 and December 31, 2024, we had total deposits in excess of $250,000 (the limit for FDIC insurance) of $1.9 billion. At those dates, we had no deposits that were uninsured for any other reason. The following table presents details regarding the Company's uninsured deposits portfolio:


	As of March 31, 2025
	Balance		Percent of total deposits		Number of relationships
Uninsured deposits per the Call Report (1)	$	3,222,098	26.5	%	5,345
Less intercompany deposit accounts	1,282,989		10.5	%	12
Less collateralized deposit accounts	395,737		3.3	%	237
Uninsured deposits excluding intercompany and collateralized accounts	$	1,543,372	12.7	%	5,096

(1) Uninsured deposits presented may be different from actual amounts due to titling of accounts.

Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $29 million, or 0.24% of total deposits, as of March 31, 2025. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $186 million, or 1.53%, of total deposits, as of March 31, 2025. The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $303,000 as of March 31, 2025.

Total shareholders’ equity remained stable at $1.6 billion, or $12.75 per share, at March 31, 2025 compared to $12.52 per share at December 31, 2024, increasing by $32 million in the current year. This increase was the result of year-to-date earnings of $43 million as well as an improvement in accumulated other comprehensive loss of $12 million, or 11%, primarily due to a decrease in unrealized losses in the available-for-sale investment portfolio, partially offset by $26 million of cash dividend payments for the three months ended March 31, 2025.

Regulatory Capital

Financial institutions and their holding companies are subject to various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct, material effect on a company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, financial institutions must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting guidelines. Capital amounts and classifications are also subject to qualitative judgments made by the regulators about components, risk-weighting and other factors.

Applicable rules limit an organization’s capital distributions and certain discretionary bonus payments if the organization does not hold a “capital conservation buffer” consisting of 2.5% of Total, Tier 1 and Common Equity Tier 1 (“CET1”) capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements.

Quantitative measures, established by regulation to ensure capital adequacy, require financial institutions to maintain minimum amounts and ratios (set forth in the table below) of Total, CET1 and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). Capital requirements are presented in the tables below (dollars in thousands).

Table of Contents


	At March 31, 2025
	Actual				Minimum capital requirements (1)				Well capitalized requirements (2)
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,743,294	16.46	%	$	1,111,756	10.50	%	$	1,058,816	10.00	%
Northwest Bank	1,504,953		14.23	%	1,110,377		10.50	%	1,057,502		10.00	%

Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,496,161		14.13	%	899,993		8.50	%	635,289		6.00	%
Northwest Bank	1,372,608		12.98	%	898,877		8.50	%	846,002		8.00	%

CET1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,370,251		12.94	%	741,171		7.00	%	N/A		N/A
Northwest Bank	1,372,608		12.98	%	740,251		7.00	%	687,376		6.50	%

Tier 1 capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,496,161		10.51	%	569,466		4.00	%	N/A		N/A
Northwest Bank	1,372,608		9.65	%	568,942		4.00	%	711,177		5.00	%

(1) Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio).

(2) Reflects the well-capitalized standard applicable to Northwest Bank and the well-capitalized standard applicable to the Company under the Federal Reserve Board’s Regulation Y.


	At December 31, 2024 (1)
	Actual				Minimum capital requirements (2)				Well capitalized requirements (3)
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,708,786	16.08	%	$	1,115,932	10.50	%	$	1,062,793	10.00	%
Northwest Bank	1,466,832		13.81	%	1,114,929		10.50	%	1,061,837		10.00	%

Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,468,646		13.82	%	903,374		8.50	%	637,676		6.00	%
Northwest Bank	1,341,230		12.63	%	902,561		8.50	%	849,469		8.00	%

CET1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,342,801		12.63	%	743,955		7.00	%	N/A		N/A
Northwest Bank	1,341,230		12.63	%	743,286		7.00	%	690,194		6.50	%

Tier 1 capital (leverage) (to average assets)
Northwest Bancshares, Inc.	1,468,646		10.39	%	565,426		4.00	%	N/A		N/A
Northwest Bank	1,341,230		9.50	%	564,937		4.00	%	706,171		5.00	%

(1) We elected to temporarily delay the estimated impact of current expected credit losses ("CECL") on regulatory capital in accordance with a rule of the Federal Reserve Board and other U.S. banking agencies for a two-year deferral period, followed by a three-year transition period which began January 1, 2022. As of December 31, 2024, 75% of the impact of the CECL deferral was phased, while the impact of the CECL deferral was fully phased in as of March 31, 2025.

(2) Amounts and ratios include the capital conservation buffer of 2.5%, which does not apply to Tier 1 capital to average assets (leverage ratio).

(3) Reflects the well-capitalized standard applicable to Northwest Bank and the well-capitalized standard applicable to the Company under the Federal Reserve Board’s Regulation Y.

Table of Contents

Regulatory Considerations

It is uncertain how the rapid changes initiated by the Trump administration will impact our business going forward. These include the impact of tariffs, immigration reform, and changes at the agencies that regulate us, including the modification, rescission, withdrawal or changes to the approach and enforcement of rules and guidance relating to us.

Liquidity

Northwest Bank is required to maintain a sufficient level of liquid assets, as determined by management and reviewed for adequacy by the FDIC and the Pennsylvania Department of Banking and Securities during their regular examinations. Northwest frequently monitors its liquidity position primarily using the ratio of unencumbered available-for-sale liquid assets as a percentage of deposits and borrowings (“liquidity ratio”). Northwest Bank’s liquidity ratio at March 31, 2025 was 12.42%. Northwest Bank adjusts liquidity levels in order to meet funding needs for deposit outflows, payment of real estate taxes and insurance on mortgage loan escrow accounts, repayment of borrowings and loan commitments. At March 31, 2025, Northwest had $3.2 billion of additional borrowing capacity available with the FHLB, including $250 million on an overnight line of credit, which had no balance as of March 31, 2025, as well as $546 million of borrowing capacity available with the Federal Reserve Bank and $105 million with two correspondent banks.

Dividends

We paid $26 million in cash dividends during the quarter ended March 31, 2025 compared to $25 million for the quarter ended March 31, 2024. The common stock dividend payout ratio (dividends declared per share divided by net income per diluted share) for March 31, 2025 and 2024 was 58.8% and 87.0% on dividends of $0.20 per share. On April 17, 2025, the Board of Directors declared a cash dividend of $0.20 per share payable on May 20, 2025 to shareholders of record as of May 8, 2025. This represents the 122th consecutive quarter we have paid a cash dividend.

Nonperforming Assets

The following table sets forth information with respect to nonperforming assets. Nonaccrual loans are those loans on which the accrual of interest has ceased. Generally, when a loan is 90 days past due, we fully reverse all accrued interest thereon and cease to accrue interest thereafter. Exceptions are made for loans that have contractually matured, are in the process of being modified to extend the maturity date and are otherwise current as to principal and interest, and well-secured loans that are in the process of collection. Loans may also be placed on nonaccrual before they reach 90 days past due if conditions exist that call into question our ability to collect all contractual interest. Other nonperforming assets represent property acquired through foreclosure or repossession. Foreclosed property is carried at the lower of its fair value less estimated costs to sell or the principal balance of the related loan.

Table of Contents


	March 31, 2025			December 31, 2024
	(in thousands)
Loans 90 days or more past due:
Residential mortgage loans	$	4,005		4,931
Home equity loans	1,893			2,250
Vehicle loans	3,212			3,191
Other consumer loans	814			776
Commercial real estate loans	23,374			7,702
Commercial real estate - owner occupied	59			—
Commercial loans	5,994			7,335
Total loans 90 days or more past due	$	39,351		26,185
Total real estate owned (REO)	$	80		35
Total loans 90 days or more past due and REO	39,431			26,220
Total loans 90 days or more past due to net loans receivable	0.35		%	0.23		%
Total loans 90 days or more past due and REO to total assets	0.27		%	0.18		%
Nonperforming assets:
Nonaccrual loans - loans 90 days or more past due	38,747			25,529
Nonaccrual loans - loans less than 90 days past due	20,003			35,872
Loans 90 days or more past due still accruing	603			656
Total nonperforming loans	59,353			62,057
Other nonperforming assets (1)	16,102			$	16,102
Total nonperforming assets	$	75,535		$	78,194
Total nonaccrual loans to total loans	0.52		%	0.55		%

(1) Other nonperforming assets includes nonaccrual loans held for sale.

Allowance for Credit Losses

On an ongoing basis, the Credit Administration department, as well as loan officers and department heads, review and monitor the loan portfolio for problem loans. This portfolio monitoring includes a review of the monthly delinquency reports as well as historical comparisons and trend analysis. Personal and small business commercial loans are classified primarily by delinquency status. In addition, a meeting is held every quarter with each vertical to monitor the performance and status of commercial loans on an internal watch list. On an on-going basis, the loan officer, in conjunction with a portfolio manager, grades or classifies problem commercial loans or potential problem commercial loans based upon their knowledge of the lending relationship and other information previously accumulated. This rating is also reviewed independently by our Loan Review department on a periodic basis. Our loan grading system for problem commercial loans is consistent with industry regulatory guidelines which classifies loans as “substandard”, “doubtful” or “loss”. Loans that do not expose us to risk sufficient to warrant classification in one of the previous categories, but which possess some weaknesses, are designated as “special mention”. A “substandard” loan is any loan that is 90 days or more contractually delinquent or is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as “doubtful” have all the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions or values, highly questionable and improbable. Loans classified as “loss” have all the weakness inherent in those classified as “doubtful” and are considered uncollectible.

Credit relationships that have been classified as substandard or doubtful and are greater than or equal to $1.0 million are reviewed by the Credit Administration department to determine if they no longer continue to demonstrate similar risk characteristics to their loan pool. If a loan no longer demonstrates similar risk characteristics to their loan pool they are removed from the pool and an individual assessment will be performed.

If it is determined that a loan needs to be individually assessed, the Credit Administration department determines the proper measure of fair value for each loan based on one of three methods: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent, less costs of sale or disposal. If the measurement of the fair value of the loan is more or less than the amortized cost basis of the loan, the Credit Administration department adjusts the specific allowance associated with that individual loan accordingly.

Table of Contents

If a substandard or doubtful loan is not individually assessed, it is grouped with other loans that possess common characteristics for credit losses and analysis. For the purpose of calculating reserves, we have grouped our loans into seven segments: residential mortgage loans, home equity loans, vehicle loans, consumer loans, commercial real estate loans, commercial real estate loans - owner occupied and commercial loans. The allowance for credit losses is measured using a combination of statistical models and qualitative assessments. We use a twenty four month forecasting period and revert to historical average loss rates thereafter. Reversion to average loss rates takes place over twelve months. Historical average loss rates are calculated using historical data beginning in October 2009 through the current period.

The credit losses for individually assessed loans along with the estimated loss for each homogeneous pool are consolidated into one summary document. This summary schedule along with the support documentation used to establish this schedule is presented to management’s Allowance for Credit Losses Committee (“ACL Committee”) monthly. The ACL Committee reviews and approves the processes and ACL documentation presented. Based on this review and discussion, the appropriate amount of ACL is estimated and any adjustments to reconcile the actual ACL with this estimate are determined. The ACL Committee also considers if any changes to the methodology are needed. In addition to the ACL Committee’s review and approval, a review is performed by the Risk Management Committee of the Board of Directors on a quarterly basis and annually by internal audit.

In addition to the reviews by management’s ACL Committee and the Board of Directors’ Risk Management Committee, regulators from either the FDIC and/or the Pennsylvania Department of Banking and Securities perform an extensive review on at least an annual basis for the adequacy of the ACL and its conformity with regulatory guidelines and pronouncements. Any recommendations or enhancements from these independent parties are considered by management and the ACL Committee and implemented accordingly.

We acknowledge that this is a dynamic process and consists of factors, many of which are external and out of our control that can change frequently, rapidly and substantially. The adequacy of the ACL is based upon estimates using all the information previously discussed as well as current and known circumstances and events. There is no assurance that actual portfolio losses will not be substantially different than those that were estimated.

We utilize a structured methodology each period when analyzing the adequacy of the allowance for credit losses and the related provision for credit losses, which the ACL Committee assesses regularly for appropriateness. As part of the analysis as of March 31, 2025, we considered the most recent economic conditions and forecasts available which incorporated the impact of material recent economic events. In addition, we considered the overall trends in asset quality, reserves on individually assessed loans, historical loss rates and collateral valuations. The ACL increased by $6 million to $123 million, or 1.09% of total loans at March 31, 2025, up slightly from 1.04% at December 31, 2024.

Total classified loans increased by $7 million to $279 million at March 31, 2025 compared to $272 million at December 31, 2024.

We also consider how the levels of nonaccrual loans and historical charge-offs have influenced the required amount of allowance for credit losses. Nonaccrual loans of $59 million at March 31, 2025 decreased by $2 million, or 4%, from $61 million at December 31, 2024, or 0.52% of total loans receivable as of March 31, 2025 and 0.55% of total loans receivable as of December 31, 2024. As a percentage of average loans, annualized net charge-offs remained low at 0.08% for the three months ended March 31, 2025 compared to 0.32% for the year ended December 31, 2024 which included a $15 million write-down on certain loans to fair value before they were transferred to for sale.

Table of Contents

Comparison of Operating Results for the Quarters Ended March 31, 2025 and 2024

The following chart provides a reconciliation of net income from the quarter ended March 31, 2024 to the the quarter ended March 31, 2025 (dollars in thousands):

Net income for the quarter ended March 31, 2025 was $43 million, or $0.34 per diluted share, an increase of $14 million, or 49%, from net income of $29 million, or $0.23 per diluted share, for the quarter ended March 31, 2024. This increase in net income resulted primarily from a increase in net interest income of $25 million, or 24%, partially offset by a $4 million increase in the provision for credit losses, an increase in noninterest expense of $2 million, or 2% and a $4 million, or 52%, increase in income tax expense. Net income for the quarter ended March 31, 2025 represents annualized returns on average equity and average assets of 10.90% and 1.22%, respectively, compared to 7.57% and 0.81% for the same quarter last year.

To make it easier to compare both the results across several periods and the yields on various types of earning assets (some taxable, some not), we present net interest income in the discussion below on a fully taxable equivalent “FTE basis” (i.e., as if all income were taxable and at the same rate). For example, $100 of tax-exempt income would be presented as $126, an amount that, if taxed at the statutory federal income tax rate of 21%, would yield $100. See the "GAAP to Non-GAAP Reconciliations" for information regarding tax-equivalent adjustments and GAAP results.

Net Interest Income

Table of Contents

Net interest income for the first quarter of 2025 was $128 million which increased $25 million, or 24%, from the first quarter of 2024. Net interest income (FTE) was $129 million for the quarter ended March 31, 2025 and net interest margin (FTE) was 3.87%. Compared to the same quarter of the prior year, net interest income (FTE) increased $25 million and net interest margin (FTE) increased by seventy-seven basis points. The increase in net interest income (FTE) and net interest margin (FTE) was driven by an increase in interest income resulting from higher earning asset yields, inclusive of an non-accrual interest recovery, coupled with a decrease in interest expense due to decline in the average balance of borrowings and higher cost brokered CD. Partly offsetting this increase was a decrease in the average balance of earning assets.

Average loans receivable decreased $169 million, or 1.5%, from the quarter ended March 31, 2024. This decrease was driven by personal banking loans and commercial real estate loans, which decreased by $388 million and $120 million, respectively. These decreases were partially offset by an increase in commercial loans of $339 million from the quarter ended March 31, 2024 as we have continued to build-out our commercial lending verticals. Interest income on loans receivable increased by $15 million, or 10%, from the same quarter in the prior year, driven by a loan mix shift towards higher yielding commercial loans and also includes an interest recovery of $13.1 million on a non-accrual commercial loan payoff during the quarter ended March 31, 2025.

Average investments declined 1% from the first quarter of 2024 driven by the sale of investment securities during the second quarter of 2024 coupled with regular principal payments and maturities. Interest income on investment securities increased by $4 million, or 43%, from the quarter ended March 31, 2024. The increase is due to the increase in the average yield on investments (FTE) to 2.62% for the quarter ended March 31, 2025 which was partially offset by a decline in the average balance of investments.

Table of Contents

Average deposits grew 2% from the quarter ended March 31, 2024 driven by an increase in our average money market and saving deposit accounts which grew by $122 million and $72 million, respectively, from the quarter ended March 31, 2024 partly due to customers shifting funds to these competitively priced products as their time deposits matured. These increases were partially offset by a decrease in time deposits of $69 million. Interest expense on deposits remained flat at $47 million for both quarters ended March 31, 2024 and 2025, primarily attributable to decrease in average yield and an increase in average balance of deposit accounts as we continued competitively positioning our deposit products.

Compared to the quarter ended March 31, 2024, average borrowings saw a 52% reduction. This decrease attributable to the strategic pay-down of wholesale borrowings with the proceeds from our investment portfolio restructuring in the second quarter of 2024. The decrease in the average balance of borrowings resulted in a decrease in interest expense on borrowings by $4 million from the quarter ended March 31, 2024.

Table of Contents

Average Balance Sheet

(in thousands)

The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.


	Quarter ended March 31,
	2025					2024
	Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
Assets
Interest-earning assets:
Residential mortgage loans	$	3,155,738	30,394	3.85	%	$	3,392,524	32,674	3.85	%
Home equity loans	1,139,728		16,164	5.75	%	1,205,273		17,294	5.77	%
Consumer loans	1,948,230		26,273	5.47	%	2,033,620		25,033	4.95	%

Commercial real estate loans	2,879,607		56,508	7.85	%	2,999,224		43,425	5.73	%
Commercial loans	2,053,213		36,012	7.02	%	1,714,667		31,857	7.35	%
Loans receivable (a) (b) (d) (includes FTE adjustments of $713 and $712, respectively)	11,176,516		165,351	6.00	%	11,345,308		150,283	5.33	%
Mortgage-backed securities (c)	1,773,402		11,730	2.65	%	1,717,306		7,944	1.85	%
Investment securities (c) (d) (includes FTE adjustments of $154 and $145, respectively)	263,825		1,599	2.43	%	333,752		1,430	1.71	%
FHLB stock, at cost	20,862		366	7.11	%	32,249		607	7.57	%
Other interest-earning deposits	243,412		2,416	3.97	%	61,666		832	5.34	%
Total interest-earning assets (includes FTE adjustments of $914 and $889, respectively)	13,478,017		181,462	5.46	%	13,490,281		161,096	4.80	%
Noninterest-earning assets (e)	924,466					918,331

Total assets	$	14,402,483				$	14,408,612

Liabilities and shareholders’ equity
Interest-bearing liabilities:
Savings deposits	$	2,194,305	6,452	1.19	%	$	2,122,035	5,036	0.95	%
Interest-bearing demand deposits	2,593,228		7,063	1.10	%	2,538,823		5,402	0.86	%
Money market deposit accounts	2,082,948		9,306	1.81	%	1,961,332		7,913	1.62	%
Time deposits	2,629,388		24,504	3.78	%	2,697,983		29,335	4.37	%
Total interest-bearing deposits (g)	9,499,869		47,325	2.02	%	9,320,173		47,686	2.07	%
Borrowed funds (f)	224,122		2,206	3.99	%	469,697		5,708	4.89	%
Subordinated debentures	114,576		1,148	4.01	%	114,225		1,148	4.02	%
Junior subordinated debentures	129,856		2,098	6.46	%	129,597		2,459	7.51	%
Total interest-bearing liabilities	9,968,423		52,777	2.15	%	10,033,692		57,001	2.28	%
Noninterest-bearing demand deposits (g)	2,588,502					2,567,781
Noninterest-bearing liabilities	228,947					257,269

Total liabilities	12,785,872					12,858,742
Shareholders’ equity	1,616,611					1,549,870
Total liabilities and shareholders’ equity	$	14,402,483				$	14,408,612
Net interest income (FTE)/Interest rate spread (FTE) (d)			128,685	3.31	%			104,095	2.52	%
Net interest-earning assets/Net interest margin (FTE)	$	3,509,594		3.87	%	$	3,456,589		3.10	%
Tax equivalent adjustment (d)			867					857
Net interest income, GAAP basis			127,818					103,238
Ratio of interest-earning assets to interest- bearing liabilities	1.35X					1.34X

(a)Average gross loans includes loans held as available-for-sale and loans placed on nonaccrual status.

(b)Interest income includes accretion/amortization of deferred loan fees/expenses, which were not material.

(c)Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.

(d)Interest income on tax-free investment securities and tax-free loans are presented on a FTE basis. We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.

(e)Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f)Average balances include FHLB borrowings and collateralized borrowings.

(g)Average cost of deposits were 1.59% and 1.61%, respectively.

(h)Annualized.

Table of Contents

Rate/Volume Analysis

(in thousands)

The following table represents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected interest income (FTE) and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) net change. Changes that cannot be attributed to either rate or volume have been allocated to both rate and volume.


	For the quarter ended March 31, 2025 vs. 2024
	Increase/(decrease) due to			Total increase/(decrease)
	Rate		Volume
Interest-earning assets:
Loans receivable	$	17,564	(2,496)	15,068
Mortgage-backed securities	3,416		370	3,786
Investment securities	594		(425)	169
FHLB stock, at cost	(42)		(199)	(241)
Other interest-earning deposits	(220)		1,804	1,584
Total interest-earning assets	21,312		(946)	20,366

Interest-bearing liabilities:
Savings deposits	1,204		212	1,416
Interest-bearing demand deposits	1,513		148	1,661
Money market deposit accounts	850		543	1,393
Time deposits	(4,192)		(639)	(4,831)
Borrowed funds	(1,085)		(2,417)	(3,502)
Subordinated debt	(3)		3	—
Junior subordinated debentures	(365)		4	(361)
Total interest-bearing liabilities	(2,078)		(2,146)	(4,224)

Net change in net interest income (FTE)	$	23,390	1,200	24,590

Provision for Credit Losses


	1Q24			2Q24		3Q24		4Q24		1Q25
Provision for credit losses - loans (in thousands)	$	4,234		2,169		5,727		15,549		8,256
Provision/(benefit) for credit losses - unfunded commitments (in thousands)	(799)			(2,539)		(852)		1,016		(345)
Annualized net charge-offs to average loans	0.16		%	0.07	%	0.18	%	0.87	%	0.08	%

The provision for credit losses increased by $4 million from the quarter ended March 31, 2024. This increase included a $4 million increase in the provision for credit losses - loans, as well as a $0.5 million increase in the provision for credit losses - unfunded commitments.

The changes in the provision noted above is driven by growth within our commercial lending portfolio and changes in the economic forecasts coupled with a decline in our reserves for unfunded commitments in the current period. This decline is based on the timing of origination and funding of commercial construction loans and lines of credit.

Additionally, the Company saw an increase in classified loans to $279 million, or 2.49% of total loans, at March 31, 2025 from $229 million, or 1.99% of total loans, at March 31, 2024 and $272 million, or 2.44% of total loans, at December 31, 2024.

In determining the amount of the current period provision, we considered current and forecasted economic conditions, including but not limited to improvements in unemployment levels, expected economic growth, bankruptcy filings, and changes in real estate values and the impact of these factors on the quality of our loan portfolio and historical loss experience. We analyze the allowance for credit losses as described in the section entitled “Allowance for Credit Losses.” The provision that is recorded is appropriate, in our judgment, to bring this reserve to a level that reflects the current expected lifetime losses in our loan portfolio relative to loan mix, a reasonable and supportable economic forecast period and historical loss experience at March 31, 2025.

Table of Contents

Noninterest Income

(a) Other noninterest income includes the net gain on real estate owned, mortgage banking income, and other operating income. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report.

Noninterest income for the quarter ended March 31, 2025 was $28 million, an increase of $0.4 million, or 1%, from the quarter ended March 31, 2024, which was driven by a $0.8 million increase in income from trust and other financial services from market sensitive income sources. Additionally, the gain on the sale of SBA loans increased $0.4 million, or 42%, to $1 million for the three months ended March 31, 2025 due to increased loan sale activity. Service charges and fees decreased $0.5 million, or 3%, to $15 million for the three months ended March 31, 2025 driven by commercial loan fees and deposit related fees based on customer activity.

Noninterest Expense

(a) Other noninterest expense includes collections expense, marketing expense, FDIC insurance expense, amortization of intangible assets, asset disposition and restructuring expense, and other expenses. See the "Consolidated Statements of Income" in Item 1. Financial Statements of this report.

Noninterest expense increased by $2 million, or 2%, from the quarter ended March 31, 2024. This increase was primarily attributable to an increase in compensation and employee benefits expense of $3 million, or 6%, to $55 million for the quarter ended March 31, 2025 driven primarily by an increase in incentive compensation and an increase in medical expenses. Partially offsetting this was a decrease in professional services expense of 1 million, or 32%.

Income Taxes

The provision for income taxes increased by $4 million from the quarter ended March 31, 2024 primarily due to higher income before income taxes.

The provision for income taxes is primarily driven by changes in our current period income before taxes. We anticipate our effective tax rate to be between 22.0% and 24.0% for the year ending December 31, 2025.

Table of Contents

GAAP to Non-GAAP Reconciliations

The following non-GAAP financial measures used by the Company provide information useful to investors in understanding our operating performance and trends, and facilitate comparisons with the performance of our peers. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company’s Consolidated Statements of Income.


	Quarter ended
	March 31, 2025	December 31, 2024	September 30, 2024	June 30, 2024	March 31, 2024

Net interest income fully tax equivalent (FTE)
Net interest income (GAAP)	$	114,197	111,302	106,841
Plus: Taxable-equivalent adjustment	867	851	914	883	857
Net interest income FTE	128,685	115,048	112,216	107,724	104,095

Table of Contents

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As the holding company for a savings bank, one of our primary market risks is interest rate risk. Interest rate risk is the sensitivity of net interest income to variations in interest rates over a specified time period. The sensitivity results from differences in the time periods in which interest rate sensitive assets and liabilities mature or re-price. We attempt to control interest rate risk by matching, within acceptable limits, the re-pricing periods of assets and liabilities. We have attempted to limit our exposure to interest sensitivity by increasing core deposits, borrowing funds with fixed-rates and longer maturities and by shortening the maturities of our assets by emphasizing the origination of more short-term fixed rate loans and adjustable rate loans. We also have the ability to sell a portion of the long-term, fixed-rate mortgage loans that we originate. In addition, we purchase shorter term or adjustable-rate investment securities and mortgage-backed securities.

We have an Asset/Liability Committee consisting of members of management which meets monthly to review market interest rates, economic conditions, the pricing of interest-earning assets and interest-bearing liabilities, cash flow projections, and the balance sheet structure. On a quarterly basis, this Committee also reviews the interest rate risk position, liquidity stress scenarios, and capital stress scenarios.

The Board of Directors has a Risk Management Committee which meets quarterly and reviews interest rate risk and trends, our interest sensitivity position, the liquidity position and the market risk inherent in the investment portfolio.

In an effort to assess interest rate risk and market risk, we utilize a simulation model to determine the effect of immediate incremental increases and decreases in interest rates on net income and the market value of equity. Certain assumptions are made regarding loan prepayments and decay rates of savings and interest-bearing demand accounts. Because it is difficult to accurately project the market reaction of depositors and borrowers, the effect of actual changes in interest rates on these assumptions may differ from simulated results. We have established the following guidelines for assessing interest rate risk:

Net interest income simulation. Given a parallel shift of 100 basis points (“bps”), 200 bps and 300 bps in interest rates, the estimated net income may not decrease by more than 5%, 10% and 15%, respectively, within a one-year period.

Net income simulation. Given a parallel shift of 100 bps, 200 bps and 300 bps in interest rates, the estimated net income may not decrease by more than 10%, 20% and 30%, respectively, within a one-year period.

Market value of equity simulation. The market value of equity is the present value of assets and liabilities. Given a parallel shift of 100 bps, 200 bps and 300 bps in interest rates, the market value of equity may not decrease by more than 10%, 20% and 25%, respectively, from the computed economic value at current interest rate levels.

The following table illustrates the simulated impact of a 100 bps, 200 bps or 300 bps upward or a 100 bps, 200 bps or 300 bps downward movement in interest rates on net income, return on average equity, earnings per share and market value of equity. This analysis was prepared assuming that interest-earning asset and interest-bearing liability levels at March 31, 2025 remain constant. The impact of the rate movements was computed by simulating the effect of an immediate and sustained shift in interest rates over a twelve-month period from March 31, 2025 levels.


	Increase									Decrease
Parallel shift in interest rates over the next 12 months	100 bps			200 bps			300 bps			100 bps			200 bps			300 bps
Projected percentage increase/(decrease) in net interest income	(0.8)		%	(2.0)		%	(3.2)		%	(1.0		%)	(5.7		%)	(8.2		%)
Projected percentage increase/(decrease) in net income	(2.0)		%	(4.9)		%	(7.9)		%	(2.5		%)	(14.4		%)	(20.6		%)
Projected increase/(decrease) in return on average equity	(2.0)		%	(4.7)		%	(7.5)		%	(2.4		%)	(13.8		%)	(19.9		%)
Projected increase/(decrease) in earnings per share	$	(0.02)		$	(0.06)		$	(0.09)		$	(0.03)		$	(0.17)		$	(0.24)
Projected percentage increase/(decrease) in market value of equity	(4.6		%)	(9.7		%)	(14.8		%)	2.7		%	2.1		%	2.6		%

The figures included in the table above represent projections that were computed based upon certain assumptions including prepayment rates and decay rates. These assumptions are inherently uncertain and, as a result, cannot precisely predict the impact of changes in interest rates. Actual results may differ significantly due to timing, magnitude and frequency of interest rate changes and changes in market conditions, and actions that may be taken by management in response to interest rate changes.

Table of Contents

Item 4. CONTROLS AND PROCEDURES

Under the supervision of and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the Evaluation Date, these disclosure controls and procedures were effective.

There were no changes in the internal controls over financial reporting during the period covered by this report or in other factors that have materially affected, or are reasonably likely to materially affect the internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are subject to a number of asserted and unasserted claims encountered in the normal course of business. We believe that any additional liability, other than that which has already been accrued, that may result from such potential litigation will not have a material adverse effect on the financial statements. However, we cannot presently determine whether or not any claims against us will have a material adverse effect on our results of operations in any future reporting period. Refer to Note 11.

Item 1A. RISK FACTORS

Except as previously disclosed, there have been no material updates or additions to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission. Additional risks not presently known to us, or that we currently deem immaterial, may also adversely affect our business, financial condition or results of operations.

Table of Contents

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

a) Not applicable.

b) Not applicable.

c) On December 13, 2012, the Board of Directors approved a program that authorizes the repurchase of approximately 5,000,000 shares of common stock. This program does not have an expiration date. During the quarter ended March 31, 2025, there were no shares of common stock repurchased and there are a maximum of 2,261,130 remaining shares that can be purchased under the current repurchase program.

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

During the three months ended March 31, 2025, no directors or officers of the Company, as defined in Section 16 of the Exchange Act, or any “Rule 10b5-1 trading arrangements” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K of the Exchange Act.

Table of Contents

Item 6. EXHIBITS


31.1			Certification of the Chief Executive Officer pursuant to Rule 13a-15 or 15d-15 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of the Chief Financial Officer pursuant to Rule 13a-15 or 15d-15 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*			Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101.INS			The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH			XBRL Taxonomy Extension Schema Document.
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB			XBRL Taxonomy Extension Label Linkbase.
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document.
104			The cover page of this Quarterly Report on Form 10-Q, formatted in inline XBRL.

* Furnished herwith

Table of Contents

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned thereunto duly authorized.


NORTHWEST BANCSHARES, INC.
(Registrant)


Date:	May 6, 2025	By:	/s/ Louis J. Torchio
			Louis J. Torchio
			President and Chief Executive Officer
			(Duly Authorized Officer)


Date:	May 6, 2025	By:	/s/ Joseph D. Canfield Jr.
			Joseph D. Canfield Jr.
			Executive Vice President, Chief Accounting Officer
			(Principal Accounting Officer)

Northwest Bancshares, Inc. - Quarter Report: 2025 March (Form 10-Q)

Similar companies