Northwest Bancshares, Inc. Announces Third Quarter 2019 Earnings and Quarterly Dividend

WARREN, Pa., Oct. 21, 2019 /PRNewswire/ -- Northwest Bancshares, Inc., (the "Company"), NWBI announced net income for the quarter ended September 30, 2019 of $33.4 million, or $0.31 per diluted share. This represents an increase of $5.7 million, or 20.5%, compared to the same quarter last year when net income was $27.7 million or $0.27 per diluted share. The annualized returns on average shareholders' equity and average assets for the quarter ended September 30, 2019 were 9.90% and 1.25% compared to 8.93% and 1.15% for the same quarter last year.

Northwest Bank (PRNewsfoto/Northwest Bank)

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.18 per share payable on November 15, 2019 to shareholders of record as of November 1, 2019. This is the 100th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's stock as of September 30, 2019, this represents an annualized dividend yield of approximately 4.39%.

In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We were very pleased with the record earnings that we achieved this quarter despite the continued challenges that we, and the rest of the industry, are experiencing with net interest margin compression as a result of the inverted yield curve. Our annualized loan growth is steady at mid-single digits and diversified among all loan categories. In addition, we are encouraged with the expansion of our mortgage banking capabilities which will continue to enhance core fee income." Mr. Seiffert continued, "As always, we continue to focus on efficiency. We were very pleased with the progress that we made this quarter as almost all expense categories showed improvement over the linked second quarter. As a result, our efficiency ratio for the quarter decreased to 58.8%."

Net interest income increased by $5.1 million, or 6.0%, to $90.9 million for the quarter ended September 30, 2019, from $85.8 million for the quarter ended September 30, 2018, primarily due to a $10.4 million, or 11.4%, increase in interest income on loans receivable. This increase was primarily due to an increase of $819.2 million, or 10.3%, in the average balance of loans. Partially offsetting this improvement was an increase in interest expense on deposits of $5.5 million, or 66.3%, due to recent increases in market interest rates, resulting in an increase in the cost of our interest-bearing liabilities to 0.89% from 0.60%. The net impact of these changes caused the Company's net interest margin to decrease to 3.79% for the quarter ended September 30, 2019 from 3.92% for the same quarter last year.

The provision for loan losses decreased by $3.7 million, or 52.7%, to $3.3 million for the quarter ended September 30, 2019, from $7.0 million for the quarter ended September 30, 2018. The provision was elevated in the prior year due primarily to a $4.6 million write-down of a land development loan in the third quarter of 2018.

Noninterest income increased by $3.6 million, or 16.0%, to $26.2 million for the quarter ended September 30, 2019, from $22.6 million for the quarter ended September 30, 2018. This increase was due to a $1.8 million increase in mortgage banking income as a result of expanding our secondary market sales capabilities. In addition, there was a $696,000, or 38.6%, increase in other operating income from increases in swap income and Visa dividend income, a $400,000, or 3.0%, increase in service charges and fees as a result of increased customer activity from the Union Community Bank ("UCB") acquisition, and a $355,000, or 8.3%, increase in trust and other financial services income due to new brokerage production. In addition, we recognized a gain of $826,000 in the current quarter on the sale of approximately $50 million of one- to four- family mortgage loans from our portfolio. We chose to sell these loans as they were identified as most likely to refinance due to declining market interest rates and we redeployed the proceeds into shorter duration consumer and commercial loans at an equivalent yield.

Noninterest expense increased by $4.0 million, or 6.0%, to $70.6 million for the quarter ended September 30, 2019, from $66.6 million for the quarter ended September 30, 2018. This increase resulted primarily from a $3.3 million, or 8.7%, increase in compensation and employee benefits due to both internal growth in compensation and staff as well as the addition of UCB employees. In addition, processing expenses increased by $1.5 million, or 15.6%, as we continue to invest in technology and infrastructure and refresh our loan origination platforms. Partially offsetting this increase was a decrease in federal deposit insurance premiums of $1.4 million due to an assessment credit received during the quarter as a result of the deposit insurance fund becoming fully funded.

Net income for the nine-month period ended September 30, 2019 was $84.8 million, or $0.80 per diluted share. This represents an increase of $5.8 million, or 7.4%, compared to the nine-month period ended September 30, 2018, when net income was $79.0 million, or $0.76 per diluted share. The annualized returns on average shareholders' equity and average assets for the nine-month period ended September 30, 2019 were 8.65% and 1.10% compared to 8.67% and 1.11% for the same period last year. This increase in net income was the result of an increase in net interest income after provision of $21.8 million, or 9.3%, which was partially offset by an increase in noninterest expense of $15.7 million, or 7.7%. Contributing to the additional expense is the added cost of UCB operations, including new marketing costs, additional processing costs associated with our new commercial and residential mortgage platforms as well as increased online banking usage fees, and the acquisition costs associated with the UCB conversion in March 2019.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. Northwest operates 172 full-service community banking offices and ten free standing drive-through facilities in Pennsylvania, New York and Ohio. Northwest Bancshares, Inc.'s common stock is listed on the NASDAQ Global Select Market ("NWBI"). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.

# # #

Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; and (7) increased risk associated with commercial real-estate and business loans. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Unaudited)
(dollars in thousands, except per share amounts)

	September 30, 2019			December 31, 2018		September 30, 2018
Assets
Cash and cash equivalents	$	107,602		68,789		73,946
Marketable securities available-for-sale (amortized cost of $801,465, $811,015 and $829,345, respectively)	807,823			801,450		811,556
Marketable securities held-to-maturity (fair value of $19,237, $22,446 and $23,534, respectively)	18,958			22,765		24,222
Total cash and cash equivalents and marketable securities	934,383			893,004		909,724

Residential mortgage loans held-for-sale	8,859			—		—
Residential mortgage loans	2,887,274			2,864,470		2,846,834
Home equity loans	1,328,173			1,258,422		1,272,345
Consumer loans	1,094,293			859,713		776,049
Commercial real estate loans	2,812,839			2,471,821		2,518,066
Commercial loans	720,579			597,013		582,768
Total loans receivable	8,852,017			8,051,439		7,996,062
Allowance for loan losses	(52,859)			(55,214)		(55,975)
Loans receivable, net	8,799,158			7,996,225		7,940,087

Federal Home Loan Bank stock, at cost	21,401			15,635		15,452
Accrued interest receivable	27,069			24,490		25,798
Real estate owned, net	1,237			2,498		2,486
Premises and equipment, net	148,796			143,390		144,612
Bank-owned life insurance	187,971			171,079		170,042
Goodwill	344,720			307,420		307,420
Other intangible assets	22,410			19,821		21,167
Other assets	93,329			34,211		38,543
Total assets	$	10,580,474		9,607,773		9,575,331
Liabilities and shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	1,905,650		1,736,156		1,724,202
Interest-bearing demand deposits	1,678,644			1,455,460		1,499,344
Money market deposit accounts	1,828,001			1,661,623		1,676,845
Savings deposits	1,635,754			1,636,099		1,650,357
Time deposits	1,633,451			1,404,841		1,403,205
Total deposits	8,681,500			7,894,179		7,953,953

Borrowed funds	255,257			234,389		179,117
Junior subordinated debentures	121,787			111,213		111,213
Advances by borrowers for taxes and insurance	24,331			43,298		23,297
Accrued interest payable	1,314			744		627
Other liabilities	144,515			66,312		66,448
Total liabilities	9,228,704			8,350,135		8,334,655
Shareholders' equity
Preferred stock, $0.01 par value: 50,000,000 shares authorized, no shares issued	—			—		—
Common stock, $0.01 par value: 500,000,000 shares authorized, 106,658,067, 103,354,030, and 103,293,480 shares issued and outstanding, respectively	1,067			1,034		1,033
Paid-in capital	801,382			745,926		742,863
Retained earnings	577,018			550,374		541,469
Accumulated other comprehensive loss	(27,697)			(39,696)		(44,689)
Total shareholders' equity	1,351,770			1,257,638		1,240,676
Total liabilities and shareholders' equity	$	10,580,474		9,607,773		9,575,331

Equity to assets	12.78		%	13.09	%	12.96	%
Tangible common equity to assets	9.64		%	10.03	%	9.86	%
Book value per share	$	12.67		12.17		12.01
Tangible book value per share	$	9.23		9.00		8.83
Closing market price per share	$	16.39		16.94		17.32
Full time equivalent employees	2,218			2,128		2,133
Number of banking offices	182			172		172

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share amounts)

	Quarter ended
	September 30, 2019			June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
	September 30, 2019			June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Interest income:
Loans receivable	$	101,091		100,917		94,935		92,512		90,733
Mortgage-backed securities	4,188			4,280		3,965		3,942		3,572
Taxable investment securities	884			898		936		924		814
Tax-free investment securities	224			237		182		170		205
FHLB dividends	307			316		171		151		119
Interest-earning deposits	172			159		100		69		162
Total interest income	106,866			106,807		100,289		97,768		95,605
Interest expense:
Deposits	13,694			12,484		10,145		8,985		8,233
Borrowed funds	2,236			1,720		2,162		1,952		1,555
Total interest expense	15,930			14,204		12,307		10,937		9,788
Net interest income	90,936			92,603		87,982		86,831		85,817
Provision for loan losses	3,302			4,667		6,467		3,792		6,982
Net interest income after provision for loan losses	87,634			87,936		81,515		83,039		78,835
Noninterest income:
Gain/(loss) on sale of investments	—			29		(6)		4		—
Gain on sale of loans	826			—		—		—		—
Service charges and fees	13,558			13,339		12,043		12,827		13,158
Trust and other financial services income	4,609			4,444		4,195		4,246		4,254
Insurance commission income	1,887			2,145		2,178		1,906		2,046
Gain/(loss) on real estate owned, net	(227)			91		(3)		(14)		(247)
Income from bank owned life insurance	1,095			1,197		1,005		1,038		1,460
Mortgage banking income	1,921			188		216		213		82
Other operating income	2,500			1,930		2,034		3,028		1,804
Total noninterest income	26,169			23,363		21,662		23,248		22,557
Noninterest expense:
Compensation and employee benefits	40,816			42,008		38,188		39,319		37,535
Premises and occupancy costs	7,061			7,387		7,218		6,567		6,821
Office operations	3,197			3,708		3,131		3,455		3,508
Collections expense	747			939		308		780		483
Processing expenses	11,122			10,634		10,434		10,160		9,620
Marketing expenses	1,373			2,729		1,886		2,331		1,949
Federal deposit insurance premiums	(702)			681		706		637		721
Professional services	3,032			3,198		2,524		3,134		2,368
Amortization of intangible assets	1,702			1,760		1,447		1,346		1,462
Real estate owned expense	119			128		159		187		205
Restructuring/acquisition expense	23			1,105		1,926		435		186
Other expenses	2,106			3,235		3,497		3,922		1,759
Total noninterest expense	70,596			77,512		71,424		72,273		66,617
Income before income taxes	43,207			33,787		31,753		34,014		34,775
Income tax expense	9,793			7,404		6,709		7,547		7,035
Net income	$	33,414		26,383		25,044		26,467		27,740

Basic earnings per share	$	0.32		0.25		0.24		0.26		0.27
Diluted earnings per share	$	0.31		0.25		0.24		0.26		0.27

Weighted average common shares outstanding - basic	105,517,707			105,233,635		103,101,789		102,479,086		102,334,954
Weighted average common shares outstanding - diluted	106,270,544			106,258,215		104,496,592		103,749,383		103,942,695

Annualized return on average equity	9.90		%	8.01	%	7.96	%	8.44	%	8.93	%
Annualized return on average assets	1.25		%	1.02	%	1.03	%	1.09	%	1.15	%
Annualized return on tangible common equity	13.46		%	10.97	%	10.74	%	11.29	%	12.07	%

Efficiency ratio *	58.81		%	64.37	%	62.07	%	64.04	%	59.95	%
Annualized noninterest expense to average assets *	2.59		%	2.88	%	2.79	%	2.91	%	2.70	%

*	Excludes restructuring/acquisition expenses and amortization of intangible assets (non-GAAP).

Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share amounts)

	Nine months ended September 30,
	2019			2018
Interest income:
Loans receivable	$	296,943		264,059
Mortgage-backed securities	12,433			9,839
Taxable investment securities	2,718			2,140
Tax-free investment securities	643			908
FHLB dividends	794			301
Interest-earning deposits	431			766
Total interest income	313,962			278,013
Interest expense:
Deposits	36,323			22,000
Borrowed funds	6,118			4,203
Total interest expense	42,441			26,203
Net interest income	271,521			251,810
Provision for loan losses	14,436			16,540
Net interest income after provision for loan losses	257,085			235,270
Noninterest income:
Gain on sale of investments	23			153
Gain on sale of loans	826			—
Service charges and fees	38,940			37,965
Trust and other financial services income	13,248			12,335
Insurance commission income	6,210			6,885
Loss on real estate owned, net	(139)			(617)
Income from bank owned life insurance	3,297			4,783
Mortgage banking income	2,325			383
Other operating income	6,464			6,567
Total noninterest income	71,194			68,454
Noninterest expense:
Compensation and employee benefits	121,012			113,076
Premises and occupancy costs	21,666			20,952
Office operations	10,036			10,684
Collections expense	1,994			1,429
Processing expenses	32,190			28,886
Marketing expenses	5,988			6,103
Federal deposit insurance premiums	685			2,109
Professional services	8,754			7,464
Amortization of intangible assets	4,909			4,502
Real estate owned expense	406			630
Restructuring/acquisition expense	3,054			579
Other expenses	8,838			7,411
Total noninterest expense	219,532			203,825
Income before income taxes	108,747			99,899
Income tax expense	23,906			20,875
Net income	$	84,841		79,024

Basic earnings per share	$	0.81		0.78
Diluted earnings per share	$	0.80		0.76

Weighted average common shares outstanding - basic	104,626,560			101,937,338
Weighted average common shares outstanding - diluted	105,681,615			103,504,069

Annualized return on average equity	8.65		%	8.67	%
Annualized return on average assets	1.10		%	1.11	%
Annualized return on tangible common equity	11.52		%	11.58	%

Efficiency ratio *	61.73		%	62.06	%
Annualized noninterest expense to average assets *	2.75		%	2.80	%

*	Excludes restructuring/acquisition expenses and amortization of intangible assets (non-GAAP).

Northwest Bancshares, Inc. and Subsidiaries
Asset quality (Unaudited)
(dollars in thousands)

	September 30, 2019			June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Nonaccrual loans current:
Residential mortgage loans	$	676		432		124		264		869
Home equity loans	607			475		643		437		496
Consumer loans	68			94		76		196		126
Commercial real estate loans	7,674			12,605		10,520		9,947		10,905
Commercial loans	3,777			5,666		4,277		4,736		1,972
Total nonaccrual loans current	$	12,802		19,272		15,640		15,580		14,368
Nonaccrual loans delinquent 30 days to 59 days:
Residential mortgage loans	$	40		13		824		1,358		15
Home equity loans	102			418		160		266		333
Consumer loans	246			172		154		294		182
Commercial real estate loans	925			469		2,642		219		3,124
Commercial loans	44			45		321		23		150
Total nonaccrual loans delinquent 30 days to 59 days	$	1,357		1,117		4,101		2,160		3,804
Nonaccrual loans delinquent 60 days to 89 days:
Residential mortgage loans	$	979		910		1,323		1,262		547
Home equity loans	436			717		954		376		418
Consumer loans	426			322		683		582		464
Commercial real estate loans	536			1,426		3,588		1,260		1,872
Commercial loans	—			780		397		332		352
Total nonaccrual loans delinquent 60 days to 89 days	$	2,377		4,155		6,945		3,812		3,653
Nonaccrual loans delinquent 90 days or more:
Residential mortgage loans	$	11,722		10,617		10,781		12,965		13,154
Home equity loans	5,966			5,591		5,542		5,996		5,838
Consumer finance loans	1			10		—		22		39
Consumer loans	3,399			2,892		3,215		3,228		3,535
Commercial real estate loans	22,292			21,123		24,528		25,509		27,122
Commercial loans	5,741			2,920		2,027		3,010		2,714
Total nonaccrual loans delinquent 90 days or more	$	49,121		43,153		46,093		50,730		52,402
Total nonaccrual loans	$	65,657		67,697		72,779		72,282		74,227
Total nonaccrual loans	$	65,657		67,697		72,779		72,282		74,227
Loans 90 days past maturity and still accruing	85			55		166		166		195
Nonperforming loans	65,742			67,752		72,945		72,448		74,422
Real estate owned, net	1,237			2,070		2,345		2,498		2,486
Nonperforming assets	$	66,979		69,822		75,290		74,946		76,908
Nonaccrual troubled debt restructuring *	$	9,138		13,375		14,951		15,306		9,777
Accruing troubled debt restructuring	21,162			17,894		17,861		18,302		19,370
Total troubled debt restructuring	$	30,300		31,269		32,812		33,608		29,147

Nonperforming loans to total loans	0.74		%	0.78	%	0.85	%	0.90	%	0.93	%
Nonperforming assets to total assets	0.63		%	0.66	%	0.73	%	0.78	%	0.80	%
Allowance for loan losses to total loans	0.60		%	0.61	%	0.65	%	0.69	%	0.70	%
Allowance for loan losses to nonperforming loans	80.40		%	78.38	%	76.39	%	76.21	%	75.21	%

*	Amounts included in nonperforming loans above.

Northwest Bancshares, Inc. and Subsidiaries
Loans by credit quality indicators (Unaudited)
(dollars in thousands)

At September 30, 2019	Pass		Special mention *	Substandard **	Doubtful	Loss	Loans receivable
Personal Banking:
Residential mortgage loans	$	2,887,077	—	9,056	—	—	2,896,133
Home equity loans	1,320,930		—	7,243	—	—	1,328,173
Consumer loans	1,090,030		—	4,263	—	—	1,094,293
Total Personal Banking	5,298,037		—	20,562	—	—	5,318,599
Commercial Banking:
Commercial real estate loans	2,601,025		69,380	142,253	181	—	2,812,839
Commercial loans	639,998		37,666	42,800	115	—	720,579
Total Commercial Banking	3,241,023		107,046	185,053	296	—	3,533,418
Total loans	$	8,539,060	107,046	205,615	296	—	8,852,017
At June 30, 2019
Personal Banking:
Residential mortgage loans	$	2,890,472	—	8,692	—	—	2,899,164
Home equity loans	1,307,887		—	7,060	—	—	1,314,947
Consumer loans	1,007,813		—	3,611	—	—	1,011,424
Total Personal Banking	5,206,172		—	19,363	—	—	5,225,535
Commercial Banking:
Commercial real estate loans	2,586,013		86,434	135,525	181	—	2,808,153
Commercial loans	621,889		38,182	42,141	982	—	703,194
Total Commercial Banking	3,207,902		124,616	177,666	1,163	—	3,511,347
Total loans	$	8,414,074	124,616	197,029	1,163	—	8,736,882
At March 31, 2019
Personal Banking:
Residential mortgage loans	$	2,858,007	—	9,154	—	—	2,867,161
Home equity loans	1,317,323		—	7,082	—	—	1,324,405
Consumer loans	926,832		—	4,230	—	—	931,062
Total Personal Banking	5,102,162		—	20,466	—	—	5,122,628
Commercial Banking:
Commercial real estate loans	2,577,176		87,053	135,080	—	—	2,799,309
Commercial loans	573,160		34,610	40,168	—	—	647,938
Total Commercial Banking	3,150,336		121,663	175,248	—	—	3,447,247
Total loans	$	8,252,498	121,663	195,714	—	—	8,569,875
At December 31, 2018
Personal Banking:
Residential mortgage loans	$	2,853,460	—	11,010	—	—	2,864,470
Home equity loans	1,251,518		—	6,904	—	—	1,258,422
Consumer loans	855,277		—	4,436	—	—	859,713
Total Personal Banking	4,960,255		—	22,350	—	—	4,982,605
Commercial Banking:
Commercial real estate loans	2,254,350		94,688	122,783	—	—	2,471,821
Commercial loans	538,762		19,281	38,970	—	—	597,013
Total Commercial Banking	2,793,112		113,969	161,753	—	—	3,068,834
Total loans	$	7,753,367	113,969	184,103	—	—	8,051,439
At September 30, 2018
Personal Banking:
Residential mortgage loans	$	2,835,806	—	11,028	—	—	2,846,834
Home equity loans	1,265,237		—	7,108	—	—	1,272,345
Consumer loans	771,555		—	4,494	—	—	776,049
Total Personal Banking	4,872,598		—	22,630	—	—	4,895,228
Commercial Banking:
Commercial real estate loans	2,283,152		53,529	181,385	—	—	2,518,066
Commercial loans	526,584		24,760	31,424	—	—	582,768
Total Commercial Banking	2,809,736		78,289	212,809	—	—	3,100,834
Total loans	$	7,682,334	78,289	235,439	—	—	7,996,062


*	Includes $8.7 million, $8.1 million, $3.4 million, $7.1 million, and $9.2 million of acquired loans at September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 30, 2018, respectively.
**	Includes $46.6 million, $38.6 million, $37.8 million, $39.3 million, and $45.3 million of acquired loans at September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 30, 2018, respectively.

Northwest Bancshares, Inc. and Subsidiaries
Loan delinquency (Unaudited)
(dollars in thousands)

	September 30, 2019			*		June 30, 2019			*		March 31, 2019			*		December 31, 2018			*		September 30, 2018			*
(Number of loans and dollar amount of loans)
Loans delinquent 30 days to 59 days:
Residential mortgage loans	21	$	1,236	—	%	30	$	1,629	0.1	%	311	$	28,009	1.0	%	333	$	27,777	1.0	%	27	$	1,500	0.1	%
Home equity loans	149	4,774		0.4	%	148	4,573		0.3	%	195	7,626		0.6	%	233	8,649		0.7	%	184	5,673		0.4	%
Consumer finance loans	43	98		11.2	%	75	130		9.0	%	128	295		12.9	%	327	661		17.3	%	280	632		10.7	%
Consumer loans	821	7,499		0.7	%	781	7,500		0.7	%	777	7,228		0.8	%	1,073	9,447		1.1	%	984	8,408		1.1	%
Commercial real estate loans	27	5,308		0.2	%	31	2,418		0.1	%	48	28,965		1.0	%	37	5,503		0.2	%	36	5,386		0.2	%
Commercial loans	20	362		0.1	%	14	666		0.1	%	30	3,359		0.5	%	21	973		0.2	%	17	622		0.1	%
Total loans delinquent 30 days to 59 days	1,081	$	19,277	0.2	%	1,079	$	16,916	0.2	%	1,489	$	75,482	0.9	%	2,024	$	53,010	0.7	%	1,528	$	22,221	0.3	%

Loans delinquent 60 days to 89 days:
Residential mortgage loans	95	$	5,320	0.2	%	78	$	6,264	0.2	%	29	$	2,602	0.1	%	71	$	6,425	0.2	%	61	$	4,704	0.2	%
Home equity loans	66	2,103		0.2	%	59	2,319		0.2	%	53	2,544		0.2	%	63	2,065		0.2	%	69	2,536		0.2	%
Consumer finance loans	21	43		4.9	%	25	44		3.0	%	28	47		2.1	%	86	172		4.5	%	112	234		4.0	%
Consumer loans	267	2,589		0.2	%	313	2,853		0.3	%	271	2,130		0.2	%	389	3,042		0.4	%	352	3,251		0.4	%
Commercial real estate loans	15	1,893		0.1	%	16	2,617		0.1	%	17	4,064		0.1	%	24	5,387		0.2	%	30	6,678		0.3	%
Commercial loans	10	589		0.1	%	16	1,725		0.2	%	7	738		0.1	%	8	560		0.1	%	21	1,104		0.2	%
Total loans delinquent 60 days to 89 days	474	$	12,537	0.1	%	507	$	15,822	0.2	%	405	$	12,125	0.2	%	641	$	17,651	0.2	%	645	$	18,507	0.2	%

Loans delinquent 90 days or more: **
Residential mortgage loans	237	$	11,816	0.4	%	129	$	10,800	0.4	%	113	$	10,801	0.4	%	145	$	12,985	0.5	%	143	$	13,483	0.5	%
Home equity loans	157	5,966		0.4	%	136	5,591		0.4	%	155	5,542		0.4	%	161	6,037		0.5	%	150	5,838		0.5	%
Consumer finance loans	9	1		0.1	%	5	10		0.7	%	—	—		—	%	6	21		0.6	%	16	39		0.7	%
Consumer loans	389	3,400		0.3	%	705	2,898		0.3	%	764	3,221		0.3	%	432	3,233		0.4	%	766	3,541		0.5	%
Commercial real estate loans	118	22,292		0.8	%	118	21,123		0.7	%	125	24,589		0.9	%	128	25,587		1.0	%	126	27,228		1.1	%
Commercial loans	40	5,741		0.8	%	25	2,920		0.4	%	23	2,027		0.3	%	29	3,010		0.5	%	29	2,714		0.5	%
Total loans delinquent 90 days or more	950	$	49,216	0.6	%	1,118	$	43,342	0.5	%	1,180	$	46,180	0.6	%	901	$	50,873	0.6	%	1,230	$	52,843	0.7	%

Total loans delinquent	2,505	$	81,030	0.9	%	2,704	$	76,080	0.9	%	3,074	$	133,787	1.6	%	3,566	$	121,534	1.5	%	3,403	$	93,571	1.2	%

*	Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**	Includes purchased credit impaired loans of $95,000, $190,000, $87,000, $145,000, and $440,000 at September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, and September 30, 2018, respectively.

Northwest Bancshares, Inc. and Subsidiaries
Allowance for loan losses (Unaudited)
(dollars in thousands)

	Quarter ended
	September 30, 2019			June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Beginning balance	$	53,107		55,721		55,214		55,975		57,332
Provision	3,302			4,667		6,467		3,792		6,982
Charge-offs residential mortgage	(190)			(397)		(357)		(375)		(214)
Charge-offs home equity	(466)			(389)		(153)		(341)		(426)
Charge-offs consumer finance	(59)			(58)		(179)		(329)		(445)
Charge-offs consumer	(3,019)			(2,508)		(2,842)		(3,751)		(3,470)
Charge-offs commercial real estate	(389)			(4,367)		(604)		(1,538)		(4,859)
Charge-offs commercial	(1,151)			(1,087)		(3,270)		(824)		(985)
Recoveries	1,724			1,525		1,445		2,605		2,060
Ending balance	$	52,859		53,107		55,721		55,214		55,975
Net charge-offs to average loans, annualized	0.16		%	0.34	%	0.29	%	0.23	%	0.42	%

	Nine months ended September 30,
	2019			2018
Beginning balance	$	55,214		56,795
Provision	14,436			16,540
Charge-offs residential mortgage	(944)			(804)
Charge-offs home equity	(1,008)			(1,444)
Charge-offs consumer finance	(296)			(2,484)
Charge-offs consumer	(8,369)			(9,401)
Charge-offs commercial real estate	(5,360)			(5,849)
Charge-offs commercial	(5,508)			(2,501)
Recoveries	4,694			5,123
Ending balance	$	52,859		55,975
Net charge-offs to average loans, annualized	0.26		%	0.29	%

	September 30, 2019
	Originated loans			Acquired loans		Total loans
	Balance		Reserve	Balance	Reserve	Balance	Reserve
Residential mortgage loans	$	2,808,957	2,507	87,176	92	2,896,133	2,599
Home equity loans	1,069,906		2,791	258,267	295	1,328,173	3,086
Consumer finance loans	872		140	—	—	872	140
Consumer loans	1,053,156		12,035	40,265	554	1,093,421	12,589
Personal Banking Loans	4,932,891		17,473	385,708	941	5,318,599	18,414
Commercial real estate loans	2,374,054		20,215	438,785	3,622	2,812,839	23,837
Commercial loans	661,287		9,729	59,292	879	720,579	10,608
Commercial Banking Loans	3,035,341		29,944	498,077	4,501	3,533,418	34,445
Total Loans	$	7,968,232	47,417	883,785	5,442	8,852,017	52,859

Northwest Bancshares, Inc. and Subsidiaries
Average balance sheet (Unaudited)
(dollars in thousands)

The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and average cost of 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
	September 30, 2019					June 30, 2019					March 31, 2019					December 31, 2018					September 30, 2018
	Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans	$	2,894,716	28,991	4.01	%	$	2,857,425	29,300	4.10	%	$	2,842,556	29,282	4.12	%	$	2,837,220	28,794	4.06	%	$	2,804,027	28,974	4.13	%
Home equity loans	1,316,033		16,131	4.86	%	1,319,056		17,717	5.39	%	1,265,974		16,048	5.14	%	1,264,169		15,788	4.95	%	1,272,847		15,248	4.75	%
Consumer finance loans	1,128		55	19.50	%	1,826		87	19.06	%	2,999		139	18.54	%	4,751		220	18.52	%	7,176		343	19.12	%
Consumer loans	1,027,451		11,861	4.58	%	943,254		10,649	4.53	%	869,536		10,052	4.69	%	791,685		9,365	4.69	%	704,203		8,337	4.70	%
Commercial real estate loans	2,796,351		34,441	4.82	%	2,801,953		35,537	5.02	%	2,560,408		30,767	4.81	%	2,492,331		29,991	4.71	%	2,540,270		29,974	4.62	%
Commercial loans	710,847		9,949	5.48	%	670,613		7,966	4.70	%	615,090		8,967	5.83	%	590,195		8,666	5.75	%	598,842		8,203	5.36	%
Total loans receivable (a) (b) (d)	8,746,526		101,428	4.60	%	8,594,127		101,256	4.73	%	8,156,563		95,255	4.74	%	7,980,351		92,824	4.61	%	7,927,365		91,079	4.56	%
Mortgage-backed securities (c)	641,085		4,188	2.61	%	644,887		4,280	2.65	%	604,463		3,965	2.62	%	619,105		3,942	2.55	%	598,596		3,572	2.39	%
Investment securities (c) (d)	218,753		1,168	2.14	%	226,325		1,198	2.12	%	227,312		1,167	2.05	%	227,813		1,140	2.00	%	244,346		1,074	1.76	%
FHLB stock, at cost	16,302		307	7.47	%	16,117		316	7.86	%	16,098		171	4.31	%	14,372		151	4.17	%	9,819		119	4.81	%
Other interest-earning deposits	28,832		172	2.33	%	20,983		159	3.00	%	14,136		100	2.83	%	10,454		68	2.55	%	26,057		162	2.43	%
Total interest-earning assets	9,651,498		107,263	4.41	%	9,502,439		107,209	4.53	%	9,018,572		100,658	4.53	%	8,852,095		98,125	4.40	%	8,806,183		96,006	4.33	%
Noninterest earning assets (e)	916,781					910,225					868,843					743,262					746,077
Total assets	$	10,568,279				$	10,412,664				$	9,887,415				$	9,595,357				$	9,552,260
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	1,658,670	788	0.19	%	$	1,696,715	777	0.18	%	$	1,650,947	758	0.19	%	$	1,637,400	758	0.18	%	$	1,672,990	785	0.19	%
Interest-bearing demand deposits	1,655,952		1,711	0.41	%	1,674,779		1,569	0.38	%	1,452,963		1,162	0.32	%	1,442,587		1,066	0.29	%	1,460,556		1,064	0.29	%
Money market deposit accounts	1,798,175		3,772	0.83	%	1,776,558		3,433	0.78	%	1,693,626		2,579	0.62	%	1,678,664		1,910	0.45	%	1,685,368		1,565	0.37	%
Time deposits	1,618,591		7,423	1.82	%	1,561,034		6,705	1.72	%	1,432,679		5,646	1.60	%	1,401,352		5,251	1.49	%	1,403,967		4,819	1.36	%
Borrowed funds (f)	243,960		1,002	1.63	%	147,119		413	1.13	%	257,550		1,006	1.58	%	216,975		782	1.43	%	129,523		239	0.73	%
Junior subordinated debentures	121,767		1,235	3.97	%	121,757		1,307	4.25	%	114,727		1,156	4.03	%	111,213		1,170	4.12	%	111,213		1,316	4.63	%
Total interest-bearing liabilities	7,097,115		15,931	0.89	%	6,977,962		14,204	0.82	%	6,602,492		12,307	0.76	%	6,488,191		10,937	0.67	%	6,463,617		9,788	0.60	%
Noninterest-bearing demand deposits (g)	1,915,392					1,888,697					1,785,158					1,750,253					1,724,427
Noninterest bearing liabilities	216,433					225,623					223,480					112,349					132,062
Total liabilities	9,228,940					9,092,282					8,611,130					8,350,793					8,320,106
Shareholders' equity	1,339,339					1,320,382					1,276,285					1,244,564					1,232,154
Total liabilities and shareholders' equity	$	10,568,279				$	10,412,664				$	9,887,415				$	9,595,357				$	9,552,260
Net interest income/Interest rate spread			91,332	3.52	%			93,005	3.71	%			88,351	3.77	%			87,188	3.73	%			86,218	3.73	%
Net interest-earning assets/Net interest margin	$	2,554,383		3.79	%	$	2,524,477		3.91	%	$	2,416,080		3.97	%	$	2,363,904		3.94	%	$	2,342,566		3.92	%
Ratio of interest-earning assets to interest-bearing liabilities	1.36					1.36X					1.37X					1.36X					1.36X


(a)	Average gross loans receivable 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 was 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 fully taxable equivalent ("FTE") basis.
(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 0.63%, 0.58%, 0.51%, 0.45%, and 0.41%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.59%, 4.71%, 4.72%, 4.60%, and 4.54%, respectively, Investment securities - 2.03%, 2.01%, 1.97%, 1.92%, and 1.67%, respectively, Interest-earning assets - 4.39%, 4.51%, 4.51%, 4.38%, and 4.31%, respectively. GAAP basis net interest rate spreads were 3.50%, 3.69%, 3.75%, 3.71%, and 3.71%, respectively, and GAAP basis net interest margins were 3.77%, 3.90%, 3.96%, 3.92%, and 3.90%, respectively.

Northwest Bancshares, Inc. and Subsidiaries
Average balance sheet (Unaudited)
(dollars in thousands)

The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and average cost of 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.

	Nine months ended September 30,
	2019					2018
	Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)
Assets:
Interest-earning assets:
Residential mortgage loans	$	2,865,091	87,572	4.08	%	$	2,774,074	84,585	4.07	%
Home equity loans	1,300,537		48,868	5.02	%	1,284,114		45,617	4.75	%
Consumer finance loans	1,977		282	19.02	%	10,923		1,627	19.86	%
Consumer loans	947,326		32,562	4.60	%	666,055		23,788	4.78	%
Commercial real estate loans	2,720,435		99,930	4.84	%	2,510,206		86,188	4.53	%
Commercial loans	665,867		28,724	5.69	%	606,076		23,273	5.06	%
Loans receivable (a) (b) (d)	8,501,233		297,938	4.69	%	7,851,448		265,078	4.51	%
Mortgage-backed securities (c)	630,279		12,433	2.63	%	575,663		9,839	2.28	%
Investment securities (c) (d)	224,111		3,532	2.10	%	245,429		3,289	1.79	%
FHLB stock	14,840		794	7.15	%	8,999		301	4.47	%
Other interest-earning deposits	20,531		431	2.77	%	53,254		766	1.90	%
Total interest-earning assets	9,390,994		315,128	4.49	%	8,734,793		279,273	4.27	%
Noninterest earning assets (e)	898,459					753,403
Total assets	$	10,289,453				$	9,488,196
Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings deposits	$	1,668,806	2,323	0.19	%	$	1,680,892	2,307	0.18	%
Interest-bearing demand deposits	1,611,554		4,442	0.37	%	1,449,573		2,541	0.23	%
Money market deposit accounts	1,756,251		9,784	0.74	%	1,694,519		3,830	0.30	%
Time deposits	1,538,113		19,774	1.72	%	1,419,849		13,322	1.25	%
Borrowed funds (f)	216,160		2,421	1.50	%	122,376		412	0.45	%
Junior subordinated debentures	119,417		3,698	4.08	%	111,213		3,791	4.50	%
Total interest-bearing liabilities	6,910,301		42,442	0.82	%	6,478,422		26,203	0.54	%
Noninterest-bearing demand deposits (g)	1,847,344					1,669,423
Noninterest bearing liabilities	219,806					122,199
Total liabilities	8,977,451					8,270,044
Shareholders' equity	1,312,002					1,218,152
Total liabilities and shareholders' equity	$	10,289,453				$	9,488,196
Net interest income/Interest rate spread			272,686	3.67	%			253,070	3.73	%
Net interest-earning assets/Net interest margin	$	2,480,693		3.87	%	$	2,256,371		3.86	%
Ratio of interest-earning assets to interest-bearing liabilities	1.36X					1.35X


(a)	Average gross loans receivable 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 was 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 fully taxable equivalent basis.
(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 0.58% and 0.37%, respectively.
(h)	Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 4.67% and 4.50%, respectively, Investment securities - 2.00% and 1.66%, respectively, Interest-earning assets - 4.47% and 4.26%, respectively. GAAP basis net interest rate spreads were 3.65% and 3.71%, respectively, and GAAP basis net interest margins were 3.86% and 3.84%, respectively.

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SOURCE Northwest Bank

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