UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, ~~2021~~2022

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number 001-34582

NORTHWEST BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Maryland

27-0950358

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

~~100 Liberty Street~~3 Easton Oval

~~Warren,~~Suite 500

Columbus

~~Pennsylvania~~Ohio

~~16365~~43219

(Address of Principal Executive Offices)

(Zip Code)

(814) 726-2140

(Registrant’s telephone number, including area code)

Not applicable

~~(Former~~(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, 0.01 Par Value

NWBI

NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.

☒ Large accelerated filer ☐ Accelerated filer

☐ Non-accelerated filer ☐ Smaller reporting company

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock ($0.01 par value), ~~127,252,913~~126,710,453 shares outstanding as of April 30, ~~2021.~~2022.

Table of Contents

NORTHWEST BANCSHARES, INC.

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Statements of Financial Condition ~~as of~~ at March 31, ~~2021~~2022 and December 31, 20 20 2021 (Unaudited)

Consolidated Statements of Income for the quarter ended March 3 1 , 202 12 and 20202 201 (Unaudited)

Consolidated Statements of Comprehensive Income for the quarter ended Ma r chMarch 3 1 , 202 12 and 20202 201 (Unaudited)

Consolidated Statements of Changes in Shareholders’ Equity for the quarter ended March 31 3 1 , 202 12 and 20202 201 (Unaudited)

Consolidated Statements of Cash Flows for the ~~quarter~~ quarter ended March ~~31,~~ 3 1 , 202 2 and 202 1 ~~and 20~~20 (Unaudited)

Notes to Consolidated Financial Statements (Unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

4039

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

5049

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

5251

Item 3.

Defaults Upon Senior Securities

5251

Item 4.

Mine Safety Disclosures

5251

Item 5.

Other ~~information~~I nformation

Item 1. FINANCIAL STATEMENTS

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(in thousands, except share data)


		March 31, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Assets	Assets				Assets
Cash and cash equivalents	Cash and cash equivalents	$	979,290	736,277	Cash and cash equivalents	$	1,161,006	1,279,259

Marketable securities available-for-sale (amortized cost of $1,430,352 and $1,375,685, respectively)		1,430,131		1,398,941
Marketable securities held-to-maturity (fair value of $593,232 and $179,666, respectively)		604,284		178,887
Marketable securities available-for-sale (amortized cost of $1,542,170 and $1,565,002, respectively)					Marketable securities available-for-sale (amortized cost of $1,542,170 and $1,565,002, respectively)	1,442,098		1,548,592
Marketable securities held-to-maturity (fair value of $677,376 and $751,513, respectively)					Marketable securities held-to-maturity (fair value of $677,376 and $751,513, respectively)	737,730		768,154
Total cash and cash equivalents and marketable securities	Total cash and cash equivalents and marketable securities	3,013,705		2,314,105	Total cash and cash equivalents and marketable securities	3,340,834		3,596,005

Loans held-for-sale	Loans held-for-sale	46,270		58,786	Loans held-for-sale	19,272		25,056

Loans held for investment	Loans held for investment	10,321,770		10,522,063	Loans held for investment	10,119,762		9,991,336

Allowance for credit losses	Allowance for credit losses	(123,997)		(134,427)	Allowance for credit losses	(99,295)		(102,241)
Loans receivable, net	Loans receivable, net	10,244,043		10,446,422	Loans receivable, net	10,039,739		9,914,151

FHLB stock, at cost	FHLB stock, at cost	21,861		21,748	FHLB stock, at cost	13,318		14,184
Accrued interest receivable	Accrued interest receivable	28,732		35,554	Accrued interest receivable	26,268		25,599
Real estate owned, net	Real estate owned, net	1,738		2,232	Real estate owned, net	929		873
Premises and equipment, net	Premises and equipment, net	158,784		161,538	Premises and equipment, net	149,970		156,524
Bank-owned life insurance	Bank-owned life insurance	252,599		253,951	Bank-owned life insurance	254,109		256,213
Goodwill	Goodwill	382,356		382,279	Goodwill	380,997		380,997
Other intangible assets, net	Other intangible assets, net	18,342		19,936	Other intangible assets, net	11,654		12,836
Other assets	Other assets	148,196		168,503	Other assets	193,365		144,126
Total assets	Total assets	$	14,270,356	13,806,268	Total assets	$	14,411,183	14,501,508

Liabilities and shareholders’ equity	Liabilities and shareholders’ equity				Liabilities and shareholders’ equity
Liabilities:	Liabilities:				Liabilities:
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	$	3,000,019	2,716,224	Noninterest-bearing demand deposits	$	3,128,849	3,099,526
Interest-bearing demand deposits	Interest-bearing demand deposits	2,826,461		2,755,950	Interest-bearing demand deposits	2,891,622		2,940,442
Money market deposit accounts	Money market deposit accounts	2,521,881		2,437,539	Money market deposit accounts	2,680,613		2,629,882
Savings deposits	Savings deposits	2,229,214		2,047,424	Savings deposits	2,367,438		2,303,760
Time deposits	Time deposits	1,535,519		1,642,096	Time deposits	1,251,878		1,327,555
Total deposits	Total deposits	12,113,094		11,599,233	Total deposits	12,320,400		12,301,165

Borrowed funds	Borrowed funds	253,617		283,044	Borrowed funds	121,436		139,093
Subordinated debt					Subordinated debt	123,670		123,575
Junior subordinated debentures	Junior subordinated debentures	128,859		128,794	Junior subordinated debentures	129,119		129,054
Advances by borrowers for taxes and insurance	Advances by borrowers for taxes and insurance	44,024		45,230	Advances by borrowers for taxes and insurance	44,022		44,582
Accrued interest payable	Accrued interest payable	659		2,054	Accrued interest payable	563		1,804
Other liabilities	Other liabilities	189,109		209,210	Other liabilities	148,461		178,664
Total liabilities	Total liabilities	12,729,362		12,267,565	Total liabilities	12,887,671		12,917,937

Shareholders’ equity:	Shareholders’ equity:				Shareholders’ equity:
Preferred stock, $0.01 par value: 50,000,000 authorized, 0 shares issued		0		0
Common stock, $0.01 par value: 500,000,000 shares authorized, 127,222,648 and 127,019,452 shares issued and outstanding, respectively		1,272		1,270
Preferred stock, $0.01 par value: 50,000,000 authorized, no shares issued					Preferred stock, $0.01 par value: 50,000,000 authorized, no shares issued	—		—
Common stock, $0.01 par value: 500,000,000 shares authorized, 126,686,373 and 126,612,183 shares issued and outstanding, respectively					Common stock, $0.01 par value: 500,000,000 shares authorized, 126,686,373 and 126,612,183 shares issued and outstanding, respectively	1,267		1,266
Additional paid-in capital	Additional paid-in capital	1,018,822		1,015,502	Additional paid-in capital	1,012,308		1,010,405
Retained earnings	Retained earnings	571,612		555,480	Retained earnings	612,481		609,529

Accumulated other comprehensive loss	Accumulated other comprehensive loss	(50,712)		(33,549)	Accumulated other comprehensive loss	(102,544)		(37,629)
Total shareholders’ equity	Total shareholders’ equity	1,540,994		1,538,703	Total shareholders’ equity	1,523,512		1,583,571
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	14,270,356	13,806,268	Total liabilities and shareholders’ equity	$	14,411,183	14,501,508

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)


		Quarter ended March 31,			Quarter ended March 31,
		2021		2020			2022		2021
Interest income:	Interest income:					Interest income:
Loans receivable	Loans receivable	$	102,318	94,973		Loans receivable	$	88,174	102,318
Mortgage-backed securities	Mortgage-backed securities	4,200		4,175		Mortgage-backed securities	6,360		4,200
Taxable investment securities	Taxable investment securities	634		648		Taxable investment securities	677		634
Tax-free investment securities	Tax-free investment securities	575		185		Tax-free investment securities	674		575
FHLB stock dividends	FHLB stock dividends	116		262		FHLB stock dividends	81		116
Interest-earning deposits	Interest-earning deposits	183		135		Interest-earning deposits	467		183
Total interest income	Total interest income	108,026		100,378		Total interest income	96,433		108,026
Interest expense:	Interest expense:					Interest expense:
Deposits	Deposits	5,514		11,403		Deposits	3,751		5,514
Borrowed funds	Borrowed funds	2,054		1,747		Borrowed funds	2,059		2,054
Total interest expense	Total interest expense	7,568		13,150		Total interest expense	5,810		7,568
Net interest income	Net interest income	100,458		87,228		Net interest income	90,623		100,458
Provision for credit losses	Provision for credit losses	(5,620)		27,637		Provision for credit losses	(1,481)		(5,620)
Net interest income after provision for credit losses	Net interest income after provision for credit losses	106,078		59,591		Net interest income after provision for credit losses	92,104		106,078
Noninterest income:	Noninterest income:					Noninterest income:
Gain/(loss) on sale of investments		(21)		181
Gain on sale of loans		0		1,302
Loss on sale of investments						Loss on sale of investments	(2)		(21)

Service charges and fees	Service charges and fees	12,394		15,116		Service charges and fees	13,067		12,394

Trust and other financial services income	Trust and other financial services income	6,484		5,001		Trust and other financial services income	7,012		6,484
Insurance commission income	Insurance commission income	2,546		2,372		Insurance commission income	—		2,546
Loss on real estate owned, net	Loss on real estate owned, net	(42)		(91)		Loss on real estate owned, net	(29)		(42)
Income from bank-owned life insurance	Income from bank-owned life insurance	1,736		1,036		Income from bank-owned life insurance	1,983		1,736
Mortgage banking income	Mortgage banking income	6,020		1,194		Mortgage banking income	1,465		6,020

Other operating income	Other operating income	2,836		1,865		Other operating income	2,244		2,836
Total noninterest income	Total noninterest income	31,953		27,976		Total noninterest income	25,740		31,953
Noninterest expense:	Noninterest expense:					Noninterest expense:
Compensation and employee benefits	Compensation and employee benefits	47,239		42,746		Compensation and employee benefits	46,917		47,239
Premises and occupancy costs	Premises and occupancy costs	8,814		7,471		Premises and occupancy costs	7,797		8,814
Office operations	Office operations	3,165		3,382		Office operations	3,383		3,165
Collections expense	Collections expense	616		474		Collections expense	520		616
Processing expenses	Processing expenses	13,456		11,142		Processing expenses	12,548		13,456
Marketing expenses	Marketing expenses	1,980		1,507		Marketing expenses	2,128		1,980
Federal deposit insurance premiums	Federal deposit insurance premiums	1,307		0		Federal deposit insurance premiums	1,129		1,307
Professional services	Professional services	4,582		2,812		Professional services	2,573		4,582
Amortization of intangible assets	Amortization of intangible assets	1,594		1,651		Amortization of intangible assets	1,183		1,594
Real estate owned expense	Real estate owned expense	75		95		Real estate owned expense	37		75
Merger/asset disposition expense		9		2,458
Merger, asset disposition and restructuring expense						Merger, asset disposition and restructuring expense	1,374		9

Other expenses	Other expenses	3,354		4,873		Other expenses	2,355		3,354
Total noninterest expense	Total noninterest expense	86,191		78,611		Total noninterest expense	81,944		86,191
Income before income taxes	Income before income taxes	51,840		8,956		Income before income taxes	35,900		51,840
Federal and state income taxes expense	Federal and state income taxes expense	11,603		1,017		Federal and state income taxes expense	7,613		11,603
Net income	Net income	$	40,237	7,939		Net income	$	28,287	40,237
Basic earnings per share	Basic earnings per share	$	0.32	0.08		Basic earnings per share	$	0.22	0.32
Diluted earnings per share	Diluted earnings per share	$	0.32	0.07		Diluted earnings per share	$	0.22	0.32

See accompanying notes to unaudited Consolidated Financial Statements.

Table of Contents

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

Quarter ended March 31,
2021 2020
Net income $ 40,237 7,939
Other comprehensive income net of tax:
Net unrealized holding gains/(losses) on marketable securities:
Unrealized holding gains/(losses), net of tax of $5,981 and $(3,277), respectively (17,421) 8,157
Reclassification adjustment for (gains)/losses included in net income, net of tax of $22 and $(14), respectively (75) 37
Net unrealized holding gains/(losses) on marketable securities (17,496) 8,194
Change in fair value of interest rate swaps, net of tax of $0 and $162, respectively 0 (409)
Defined benefit plan:
Actuarial reclassification adjustments for prior period service costs and actuarial losses included in net income, net of tax of $(129) and $(99), respectively 333 249
Other comprehensive income/(loss) (17,163) 8,034
Total comprehensive income $ 23,074 15,973


	Quarter ended March 31,
	2022		2021
Net income	$	28,287	40,237
Other comprehensive income net of tax:
Net unrealized holding losses on marketable securities:
Unrealized holding losses, net of tax of $18,877 and $5,981, respectively	(64,783)		(17,421)
Reclassification adjustment for gains included in net income, net of tax of $0 and $22, respectively	(1)		(75)
Net unrealized holding losses on marketable securities	(64,784)		(17,496)






Defined benefit plan:
Actuarial reclassification adjustments for prior period service costs and actuarial (gains)/losses included in net income, net of tax of $50 and ($129), respectively	(131)		333



Other comprehensive loss	(64,915)		(17,163)

Total comprehensive (loss)/income	$	(36,628)	23,074

See accompanying notes to unaudited Consolidated Financial Statements.

Table of Contents

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(in thousands, expect share data)


					Additional paid-in capital	Retained earnings	Accumulated other comprehensive income/(loss)	Total shareholders’ equity					Additional paid-in capital	Retained earnings	Accumulated other comprehensive loss		Total shareholders’ equity
		Common stock								Common stock
Quarter ended March 31, 2021		Shares	Amount
Beginning balance at December 31, 2020		127,019,452	$	1,270	1,015,502	555,480	(33,549)	1,538,703
Quarter ended March 31, 2022									Quarter ended March 31, 2022	Shares	Amount			Additional paid-in capital	Retained earnings	Accumulated other comprehensive loss		Total shareholders’ equity
Beginning balance at December 31, 2021									Beginning balance at December 31, 2021	126,612,183	$	1,266

Comprehensive income:	Comprehensive income:								Comprehensive income:
Net income	Net income	—	—		—	40,237	—	40,237	Net income	—	—		—	28,287	—		28,287

Other comprehensive loss, net of tax of $5,874		—	—		—	—	(17,163)	(17,163)
Other comprehensive loss, net of tax of $18,927									Other comprehensive loss, net of tax of $18,927	—	—		—	—	(64,915)		(64,915)

Total comprehensive income/(loss)	Total comprehensive income/(loss)	—	—		—	40,237	(17,163)	23,074	Total comprehensive income/(loss)	—	—		—	28,287	(64,915)		(36,628)

Exercise of stock options	Exercise of stock options	567,429	6		6,921	—	—	6,927	Exercise of stock options	101,613	1		1,204	—	—		1,205

Stock-based compensation expense	Stock-based compensation expense	1,930	—		961	—	—	961	Stock-based compensation expense	10,222	—		699	—	—		699

Share repurchases		(353,552)	(4)		(4,562)	—	—	(4,566)

Stock-based compensation forfeited	Stock-based compensation forfeited	(12,611)	—		—	—	—	—	Stock-based compensation forfeited	(37,645)	—		—	—	—		—

Dividends paid ($0.19 per share)		—	—		—	(24,105)	—	(24,105)
Dividends paid ($0.20 per share)									Dividends paid ($0.20 per share)	—	—		—	(25,335)	—		(25,335)

Ending balance at March 31, 2021		127,222,648	$	1,272	1,018,822	571,612	(50,712)	1,540,994
Ending balance at March 31, 2022									Ending balance at March 31, 2022	126,686,373	$	1,267	1,012,308	612,481	(102,544)		1,523,512


					Additional paid-in capital	Retained earnings	Accumulated other comprehensive income/(loss)	Total shareholders’ equity					Additional paid-in capital	Retained earnings	Accumulated other comprehensive income/(loss)		Total shareholders’ equity
		Common stock								Common stock
Quarter ended March 31, 2020		Shares	Amount
Beginning balance at December 31, 2019		106,859,088	$	1,069	805,750	583,407	(36,941)	1,353,285
Quarter ended March 31, 2021									Quarter ended March 31, 2021	Shares	Amount			Additional paid-in capital	Retained earnings	Accumulated other comprehensive income/(loss)		Total shareholders’ equity
Beginning balance at December 31, 2020									Beginning balance at December 31, 2020	127,019,452	$	1,270

Comprehensive income:	Comprehensive income:								Comprehensive income:
Net income	Net income	—	—		—	7,939	—	7,939	Net income	—	—		—	40,237	—		40,237

Other comprehensive income, net of tax of $(3,228)		—	—		—	—	8,034	8,034
Other comprehensive loss, net of tax of $5,874									Other comprehensive loss, net of tax of $5,874	—	—		—	—	(17,163)		(17,163)

Total comprehensive income		—	—		—	7,939	8,034	15,973
Total comprehensive income/(loss)									Total comprehensive income/(loss)	—	—		—	40,237	(17,163)		23,074

Adoption of ASU No. 2016-13		—	—		—	(9,649)	—	(9,649)

Exercise of stock options	Exercise of stock options	87,305	—		1,005	—	—	1,005	Exercise of stock options	567,429	6		6,921	—	—		6,927

Stock-based compensation expense	Stock-based compensation expense	—	—		1,495	—	—	1,495	Stock-based compensation expense	1,930	—		961	—	—		961

Share repurchases									Share repurchases	(353,552)	(4)		(4,562)	—	—		(4,566)

Stock-based compensation forfeited	Stock-based compensation forfeited	(12,910)	—		—	—	—	—	Stock-based compensation forfeited	(12,611)	—		—	—	—		—

Dividends paid ($0.19 per share)	Dividends paid ($0.19 per share)	—	—		—	(20,317)	—	(20,317)	Dividends paid ($0.19 per share)	—	—		—	(24,105)	—		(24,105)

Ending balance at March 31, 2020		106,933,483	$	1,069	808,250	561,380	(28,907)	1,341,792
Ending balance at March 31, 2021									Ending balance at March 31, 2021	127,222,648	$	1,272	1,018,822	571,612	(50,712)		1,540,994

See accompanying notes to unaudited Consolidated Financial Statements.

Table of Contents

NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)


		Quarter ended March 31,				Quarter ended March 31,
		2021		2020		2022		2021
Operating activities:	Operating activities:				Operating activities:
Net income	Net income	$	40,237	7,939	Net income	$	28,287	40,237
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:					Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Provision for credit losses	Provision for credit losses	(5,620)		27,637	Provision for credit losses	(1,481)		(5,620)
Net gain on sale of assets		(262)		(804)
Net loss/(gain) on sale of assets					Net loss/(gain) on sale of assets	780		(262)
Mortgage banking activity	Mortgage banking activity	(8,429)		(1,114)	Mortgage banking activity	677		(8,429)

Net depreciation, amortization and accretion	Net depreciation, amortization and accretion	6,514		1,413	Net depreciation, amortization and accretion	3,595		6,514
(Increase)/decrease in other assets	(Increase)/decrease in other assets	33,746		(38,950)	(Increase)/decrease in other assets	(30,666)		33,746
Increase/(decrease) in other liabilities		(21,034)		49,956
Decrease in other liabilities					Decrease in other liabilities	(31,625)		(21,034)
Net amortization on marketable securities	Net amortization on marketable securities	2,154		233	Net amortization on marketable securities	1,505		2,154
Noncash compensation expense related to stock benefit plans	Noncash compensation expense related to stock benefit plans	961		1,495	Noncash compensation expense related to stock benefit plans	699		961
Noncash write-down of real estate owned	Noncash write-down of real estate owned	123		100	Noncash write-down of real estate owned	29		123

Origination of loans held-for-sale	Origination of loans held-for-sale	(240,765)		(29,912)	Origination of loans held-for-sale	(104,535)		(240,765)
Proceeds from sale of loans held-for-sale	Proceeds from sale of loans held-for-sale	260,394		32,309	Proceeds from sale of loans held-for-sale	110,278		260,394

Net cash provided by operating activities		68,019		50,302
Net cash (used in)/provided by operating activities					Net cash (used in)/provided by operating activities	(22,457)		68,019

Investing activities:	Investing activities:				Investing activities:
Purchase of marketable securities held-to-maturity	Purchase of marketable securities held-to-maturity	(428,861)		0	Purchase of marketable securities held-to-maturity	—		(428,861)
Purchase of marketable securities available-for-sale	Purchase of marketable securities available-for-sale	(220,666)		(20,610)	Purchase of marketable securities available-for-sale	(61,640)		(220,666)
Proceeds from maturities and principal reductions of marketable securities held-to-maturity	Proceeds from maturities and principal reductions of marketable securities held-to-maturity	3,374		825	Proceeds from maturities and principal reductions of marketable securities held-to-maturity	30,092		3,374
Proceeds from maturities and principal reductions of marketable securities available-for-sale	Proceeds from maturities and principal reductions of marketable securities available-for-sale	128,556		86,354	Proceeds from maturities and principal reductions of marketable securities available-for-sale	83,295		128,556
Proceeds from sale of marketable securities available-for-sale	Proceeds from sale of marketable securities available-for-sale	35,357		0	Proceeds from sale of marketable securities available-for-sale	—		35,357
Proceeds from bank-owned life insurance	Proceeds from bank-owned life insurance	1,750		0	Proceeds from bank-owned life insurance	1,354		1,750
Loan originations	Loan originations	(975,141)		(866,950)	Loan originations	(901,499)		(975,141)
Loan purchases					Loan purchases	(210,775)		—
Proceeds from loan maturities and principal reductions	Proceeds from loan maturities and principal reductions	1,169,026		787,243	Proceeds from loan maturities and principal reductions	985,218		1,169,026
Proceeds from sale of loans held for investment		0		50,791

Net proceeds/(redemptions) of FHLB stock	Net proceeds/(redemptions) of FHLB stock	(113)		1,609	Net proceeds/(redemptions) of FHLB stock	866		(113)
Proceeds from sale of real estate owned	Proceeds from sale of real estate owned	479		168	Proceeds from sale of real estate owned	—		479
Proceeds from sale of real estate owned for investment, net	Proceeds from sale of real estate owned for investment, net	76		152	Proceeds from sale of real estate owned for investment, net	76		76
Purchase of premises and equipment		(285)		(3,553)
Disposals/(purchases) of premises and equipment, net					Disposals/(purchases) of premises and equipment, net	329		(285)

Net cash provided by/(used) in investing activities		(286,448)		36,029

Net cash used in investing activities					Net cash used in investing activities	(72,684)		(286,448)

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NORTHWEST BANCSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (continued)

(in thousands)


		Quarter ended March 31,				Three months ended March 31,
		2021		2020		2022		2021
Financing activities:	Financing activities:				Financing activities:
Net increase in deposits	Net increase in deposits	$	513,861	200,728	Net increase in deposits	$	19,235	513,861

Repayments of long-term borrowings	Repayments of long-term borrowings	(20,000)		0	Repayments of long-term borrowings	—		(20,000)
Net decrease in short-term borrowings	Net decrease in short-term borrowings	(9,469)		(54,737)	Net decrease in short-term borrowings	(17,657)		(9,469)
Increase/(decrease) in advances by borrowers for taxes and insurance		(1,206)		2,598
Decrease in advances by borrowers for taxes and insurance					Decrease in advances by borrowers for taxes and insurance	(560)		(1,206)
Cash dividends paid on common stock	Cash dividends paid on common stock	(24,105)		(20,317)	Cash dividends paid on common stock	(25,335)		(24,105)
Purchase of common stock for retirement	Purchase of common stock for retirement	(4,566)		0	Purchase of common stock for retirement	—		(4,566)
Proceeds from stock options exercised	Proceeds from stock options exercised	6,927		1,005	Proceeds from stock options exercised	1,205		6,927

Net cash provided by financing activities		461,442		129,277
Net cash (used in)/provided by financing activities					Net cash (used in)/provided by financing activities	(23,112)		461,442

Net increase in cash and cash equivalents		$	243,013	215,608
Net (decrease)/increase in cash and cash equivalents					Net (decrease)/increase in cash and cash equivalents	$	(118,253)	243,013

Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	$	736,277	60,846	Cash and cash equivalents at beginning of period	$	1,279,259	736,277
Net increase in cash and cash equivalents		243,013		215,608
Net (decrease)/increase in cash and cash equivalents					Net (decrease)/increase in cash and cash equivalents	(118,253)		243,013
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	979,290	276,454	Cash and cash equivalents at end of period	$	1,161,006	979,290

Cash paid during the period for:	Cash paid during the period for:				Cash paid during the period for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $5,543 and $9,907, respectively)		$	8,963	13,458
Interest on deposits and borrowings (including interest credited to deposit accounts of $3,650 and $5,543, respectively)					Interest on deposits and borrowings (including interest credited to deposit accounts of $3,650 and $5,543, respectively)	$	7,051	8,963
Income taxes	Income taxes	0		556	Income taxes	84		—

Non-cash activities:	Non-cash activities:				Non-cash activities:
Loan foreclosures and repossessions	Loan foreclosures and repossessions	$	1,197	1,351	Loan foreclosures and repossessions	$	1,142	1,197
Sale of real estate owned financed by the Company	Sale of real estate owned financed by the Company	54		0	Sale of real estate owned financed by the Company	—		54

See accompanying notes to unaudited Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(1) Basis of Presentation and Informational Disclosures

Northwest Bancshares, Inc. (the “Company” or “NWBI”), a Maryland corporation headquartered in ~~Warren, Pennsylvania,~~Columbus, Ohio, is a bank holding company regulated by the Board of Governors of the Federal Reserve System ~~("FRB"~~(“FRB”). The primary activity of the Company is the ownership of all of the issued and outstanding common stock of Northwest Bank, a Pennsylvania-chartered savings bank (“Northwest”). Northwest is regulated by the Federal Deposit Insurance Corporation ~~("FDIC"~~(“FDIC”) and the Pennsylvania Department of Banking. Northwest operates 170 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, and Northwest’s subsidiaries Northwest Capital Group, Inc., ~~Allegheny Services, Inc.,~~ Great Northwest Corporation, ~~The Bert Company (doing business as Northwest Insurance Services)~~ and MutualFirst ~~Investment~~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, ~~2020~~2021 updated, as required, for any new pronouncements or changes.

Certain items previously reported have been reclassified to conform to the current ~~year's~~year’s reporting format.

The results of operations for the quarter ended ~~March 31, 2021~~ are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021,~~2022, or any other period.

Stock-Based Compensation

Stock-based compensation expense of ~~$961,000~~$699,000 and ~~$1.5 million~~$961,000 for the quarters ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, was recognized in compensation expense relating to our stock benefit plans. At March 31, ~~2021,~~2022, there was compensation expense of ~~$1.8~~$1.3 million to be recognized for awarded but unvested stock options and ~~$8.6~~$7.5 million for unvested restricted common shares.

Income Taxes-Uncertain Tax Positions

Accounting standards prescribe a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. At March 31, ~~2021,~~2022, we had ~~$336,000~~$241,000 of liability for unrecognized tax benefits.

We recognize interest accrued related to: (1) unrecognized tax benefits in other expenses and (2) refund claims in other operating income. We recognize penalties (if any) in other expenses. We are subject to audit by the Internal Revenue Service and any state in which we conduct business for the tax periods ended December 31, 2021, 2020, 2019 ~~2018,~~ and ~~2017.~~2018.

~~Recently Adopted Accounting Standards~~

~~In August 2018, the Financial Accounting Standards Board ("FASB") issued the accounting standard update ("ASU") 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) - Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.”~~ This guidance removes and adds disclosure requirements for defined benefit pension or other post-retirement plans. On January 1, 2021, the Company adopted ASU 2018-14 on a retrospective basis for disclosures impacted. The adoption of this standard did not have a material effect on our results of operations or financial position. Refer to Note 8, "Pension and Other Post-Retirement Benefits".

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~"Income Taxes - Simplifying the Accounting for Income Taxes."~~This guidance simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences. ASU 2019-12 also simplifies aspects of the accounting for franchise taxes and

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~~enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.~~ ~~On January 1, 2021, the Company adopted ASU 2019-12 on a prospective basis. The adoption of this standard did not have a material effect on our results of operations or financial position.~~

(2) Marketable Securities

The following table shows the portfolio of marketable securities available-for-sale at March 31, ~~2021~~2022 (in thousands):


		Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value		Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value
Debt issued by the U.S government and agencies:	Debt issued by the U.S government and agencies:						Debt issued by the U.S government and agencies:
Due in one year through five years							Due in one year through five years	$	20,000	—	(738)	19,262
Due after ten years	Due after ten years	$	40,142	0	(1,318)	38,824	Due after ten years	56,586		—	(5,196)	51,390

Debt issued by government sponsored enterprises:
Due in less than one year		25,211		93	0	25,304
Debt issued by government-sponsored enterprises:							Debt issued by government-sponsored enterprises:

Due in one year through five years							Due in one year through five years	992		13	—	1,005
Due in five years through ten years	Due in five years through ten years	68,802		91	(2,253)	66,640	Due in five years through ten years	46,172		1	(4,313)	41,860

Municipal securities:	Municipal securities:						Municipal securities:
Due in less than one year	Due in less than one year	4,130		8	0	4,138	Due in less than one year	892		5	—	897
Due in one year through five years	Due in one year through five years	2,627		55	0	2,682	Due in one year through five years	1,257		6	(11)	1,252
Due in five years through ten years	Due in five years through ten years	22,040		464	(139)	22,365	Due in five years through ten years	25,181		55	(705)	24,531
Due after ten years	Due after ten years	69,493		2,275	(2)	71,766	Due after ten years	95,265		26	(6,971)	88,320

Residential mortgage-backed securities:	Residential mortgage-backed securities:						Residential mortgage-backed securities:
Fixed rate pass-through	Fixed rate pass-through	324,804		3,571	(3,104)	325,271	Fixed rate pass-through	252,798		410	(15,540)	237,668
Variable rate pass-through	Variable rate pass-through	13,970		433	(18)	14,385	Variable rate pass-through	10,577		203	(14)	10,766

Fixed rate agency CMOs	Fixed rate agency CMOs	811,591		7,403	(8,264)	810,730	Fixed rate agency CMOs	995,579		94	(67,438)	928,235
Variable rate agency CMOs	Variable rate agency CMOs	47,542		571	(87)	48,026	Variable rate agency CMOs	36,871		202	(161)	36,912
Total residential mortgage-backed securities	Total residential mortgage-backed securities	1,197,907		11,978	(11,473)	1,198,412	Total residential mortgage-backed securities	1,295,825		909	(83,153)	1,213,581
Total marketable securities available-for-sale	Total marketable securities available-for-sale	$	1,430,352	14,964	(15,185)	1,430,131	Total marketable securities available-for-sale	$	1,542,170	1,015	(101,087)	1,442,098

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The following table shows the portfolio of marketable securities available-for-sale at December 31, ~~2020~~2021 (in thousands):

Amortized
cost Gross
unrealized
holding
gains Gross
unrealized
holding
losses Fair
value
Debt issued by the U.S. government and agencies:
Due after ten years $ 40,761 211 (55) 40,917
Debt issued by government sponsored enterprises:
Due in less than one year 24,976 159 0 25,135
Due in one year through five years 238 3 0 241
Due in five years through ten years 68,973 238 (80) 69,131
Municipal securities:
Due in less than one year 4,008 14 0 4,022
Due in one year through five years 2,803 63 (2) 2,864
Due in five years through ten years 16,045 429 (5) 16,469
Due after ten years 89,778 3,752 (72) 93,458
Residential mortgage-backed securities:
Fixed rate pass-through 339,406 7,125 (86) 346,445
Variable rate pass-through 14,778 431 (20) 15,189
Fixed rate agency CMOs 723,586 11,758 (1,093) 734,251
Variable rate agency CMOs 50,333 519 (33) 50,819
Total residential mortgage-backed securities 1,128,103 19,833 (1,232) 1,146,704
Total marketable securities available-for-sale $ 1,375,685 24,702 (1,446) 1,398,941


	Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value
Debt issued by the U.S. government and agencies:
Due in one year through five years	$	20,000	—	(68)	19,932
Due after ten years	57,681		—	(1,722)	55,959

Debt issued by government-sponsored enterprises:
Due in less than one year	177		—	—	177
Due in one year through five years	991		73	—	1,064

Due in five years through ten years	46,411		1	(1,568)	44,844




Municipal securities:
Due in less than one year	946		13	—	959
Due in one year through five years	1,261		22	(3)	1,280
Due in five years through ten years	23,692		661	(146)	24,207
Due after ten years	99,558		2,884	(187)	102,255





Residential mortgage-backed securities:
Fixed rate pass-through	265,604		2,389	(2,525)	265,468
Variable rate pass-through	11,306		294	(9)	11,591

Fixed rate agency CMOs	997,680		2,284	(18,965)	980,999
Variable rate agency CMOs	39,695		224	(62)	39,857
Total residential mortgage-backed securities	1,314,285		5,191	(21,561)	1,297,915
Total marketable securities available-for-sale	$	1,565,002	8,845	(25,255)	1,548,592

The following table shows the portfolio of marketable securities held-to-maturity at March 31, ~~2021~~2022 (in thousands):


		Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value		Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value
Debt issued by government sponsored enterprises:
Debt issued by the U.S. government and agencies:							Debt issued by the U.S. government and agencies:
Due in one year through five years	Due in one year through five years	$	16,900	0	(83)	16,817	Due in one year through five years	$	16,478	—	(968)	15,510
Due in five years through ten years	Due in five years through ten years	107,971		0	(5,135)	102,836	Due in five years through ten years	107,974		—	(11,375)	96,599

Residential mortgage-backed securities:	Residential mortgage-backed securities:						Residential mortgage-backed securities:
Fixed rate pass-through	Fixed rate pass-through	188,378		131	(2,320)	186,189	Fixed rate pass-through	176,949		24	(12,117)	164,856
Variable rate pass-through	Variable rate pass-through	824		30	0	854	Variable rate pass-through	643		18	—	661
Fixed rate agency CMOs	Fixed rate agency CMOs	289,608		628	(4,321)	285,915	Fixed rate agency CMOs	435,087		—	(35,948)	399,139
Variable rate agency CMOs	Variable rate agency CMOs	603		18	0	621	Variable rate agency CMOs	599		12	—	611
Total residential mortgage-backed securities	Total residential mortgage-backed securities	479,413		807	(6,641)	473,579	Total residential mortgage-backed securities	613,278		54	(48,065)	565,267
Total marketable securities held-to-maturity	Total marketable securities held-to-maturity	$	604,284	807	(11,859)	593,232	Total marketable securities held-to-maturity	$	737,730	54	(60,408)	677,376

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The following table shows the portfolio of marketable securities held-to-maturity at December 31, ~~2020~~2021 (in thousands):


		Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value		Amortized cost		Gross unrealized holding gains	Gross unrealized holding losses	Fair value
Debt issued by government sponsored enterprises:
Debt issued by the U.S. government and agencies:							Debt issued by the U.S. government and agencies:
Due in one through five years							Due in one through five years	$	16,478	—	(206)	16,272
Due in five years through ten years	Due in five years through ten years	$	67,990	12	(123)	67,879	Due in five years through ten years	107,973		—	(4,613)	103,360

Residential mortgage-backed securities:	Residential mortgage-backed securities:						Residential mortgage-backed securities:
Fixed rate pass-through	Fixed rate pass-through	1,723		131	0	1,854	Fixed rate pass-through	183,092		58	(2,161)	180,989
Variable rate pass-through	Variable rate pass-through	919		30	0	949	Variable rate pass-through	667		24	—	691
Fixed rate agency CMOs	Fixed rate agency CMOs	107,651		716	(2)	108,365	Fixed rate agency CMOs	459,345		251	(10,011)	449,585
Variable rate agency CMOs	Variable rate agency CMOs	604		15	0	619	Variable rate agency CMOs	599		17	—	616
Total residential mortgage-backed securities	Total residential mortgage-backed securities	110,897		892	(2)	111,787	Total residential mortgage-backed securities	643,703		350	(12,172)	631,881
Total marketable securities held-to-maturity	Total marketable securities held-to-maturity	$	178,887	904	(125)	179,666	Total marketable securities held-to-maturity	$	768,154	350	(16,991)	751,513

The following table shows the contractual maturity of our residential mortgage-backed securities available-for-sale at March 31, ~~2021~~2022 (in thousands):


		Amortized cost		Fair value		Amortized cost		Fair value

Residential mortgage-backed securities:	Residential mortgage-backed securities:				Residential mortgage-backed securities:
Due in less than one year	Due in less than one year	$	5,169	5,183	Due in less than one year	$	382	382
Due in one year through five years	Due in one year through five years	20,613		20,942	Due in one year through five years	18,660		18,319
Due after five years through ten years	Due after five years through ten years	94,567		95,753	Due after five years through ten years	78,165		76,050
Due after ten years	Due after ten years	1,077,558		1,076,534	Due after ten years	1,198,618		1,118,830
Total residential mortgage-backed securities	Total residential mortgage-backed securities	$	1,197,907	1,198,412	Total residential mortgage-backed securities	$	1,295,825	1,213,581

The following table shows the contractual maturity of our residential mortgage-backed securities held-to-maturity at March 31, ~~2021~~2022 (in thousands):


		Amortized cost		Fair value		Amortized cost		Fair value

Residential mortgage-backed securities:	Residential mortgage-backed securities:				Residential mortgage-backed securities:
Due in less than one year		$	1	1

Due in one year through five years	Due in one year through five years	1,060		1,130	Due in one year through five years	$	709	727
Due after five years through ten years	Due after five years through ten years	40,547		38,780	Due after five years through ten years	40,477		36,191
Due after ten years	Due after ten years	437,805		433,668	Due after ten years	572,092		528,349
Total residential mortgage-backed securities	Total residential mortgage-backed securities	$	479,413	473,579	Total residential mortgage-backed securities	$	613,278	565,267

The following table shows the fair value of and gross unrealized losses on marketable securities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at March 31, ~~2021~~2022 (in thousands):


		Less than 12 months			12 months or more		Total			Less than 12 months			12 months or more		Total
		Fair value		Unrealized loss	Fair value	Unrealized loss	Fair value	Unrealized loss		Fair value		Unrealized loss	Fair value	Unrealized loss	Fair value	Unrealized loss
U.S. government sponsored enterprises		$	222,278	(8,716)	1,758	(73)	224,036	(8,789)
U.S. government-sponsored enterprises									U.S. government-sponsored enterprises	$	66,445	(4,519)	156,991	(18,071)	223,436	(22,590)
Municipal securities	Municipal securities	3,573		(141)	122	0	3,695	(141)	Municipal securities	101,496		(7,356)	2,741	(331)	104,237	(7,687)

Residential mortgage-backed securities - agency	Residential mortgage-backed securities - agency	1,007,574		(18,064)	10,589	(50)	1,018,163	(18,114)	Residential mortgage-backed securities - agency	1,184,448		(80,073)	523,224	(51,145)	1,707,672	(131,218)

Total	Total	$	1,233,425	(26,921)	12,469	(123)	1,245,894	(27,044)	Total	$	1,352,389	(91,948)	682,956	(69,547)	2,035,345	(161,495)

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		Less than 12 months			12 months or more		Total			Less than 12 months			12 months or more		Total
		Fair value		Unrealized loss	Fair value	Unrealized loss	Fair value	Unrealized loss		Fair value		Unrealized loss	Fair value	Unrealized loss	Fair value	Unrealized loss
U.S. government sponsored enterprises		$	67,809	(179)	1,923	(80)	69,732	(259)
U.S. government-sponsored enterprises									U.S. government-sponsored enterprises	$	132,782	(3,504)	106,160	(4,673)	238,942	(8,177)

Municipal securities	Municipal securities	4,257		(79)	0	0	4,257	(79)	Municipal securities	25,118		(336)	—	—	25,118	(336)
Residential mortgage-backed securities - agency	Residential mortgage-backed securities - agency	300,767		(1,202)	5,533	(31)	306,300	(1,233)	Residential mortgage-backed securities - agency	1,428,582		(26,516)	184,389	(7,217)	1,612,971	(33,733)
Total	Total	$	372,833	(1,460)	7,456	(111)	380,289	(1,571)	Total	$	1,586,482	(30,356)	290,549	(11,890)	1,877,031	(42,246)

The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position as of March 31, ~~2021,~~2022, which were comprised of ~~192~~494 individual securities, represents a credit loss impairment. All of these securities were issued by U.S. government agencies, U.S. government-sponsored enterprises or local municipalities. The securities issued by the U.S. government agencies or U.S. government-sponsored ~~agencies.~~enterprises are ~~There 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 securities issued by local municipalities 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. The Company does not have the intent to sell these investment securities and it is likely that we will not be required to sell these securities before their anticipated recovery, which may be at maturity.

All of the ~~Company's~~Company’s held-to-maturity debt securities are issued by U.S. government agencies or U.S. government-sponsored ~~agencies.~~enterprises. ~~There~~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. Therefore, the Company did not record an allowance for credit losses for these securities as of March 31, ~~2021.~~2022.

The following table presents the credit quality of our held-to-maturity securities, based on the latest information available as of March 31, ~~2021.~~2022 (in thousands). The credit ratings are sourced from nationally recognized rating agencies, which include ~~Moody's~~Moody’s and S&P, or when credit ratings cannot be sourced from the agencies, they are presented based on asset type. All of our held-to-maturity securities were current in their payment of principal and interest as of March 31, ~~2021.~~2022.


		AA+		Total		AA+		Total

Held-to-maturity securities:
Debt issued by government sponsored enterprises		$	124,871	124,871
Held-to-maturity securities (at amortized cost):					Held-to-maturity securities (at amortized cost):
Debt issued by the U.S. government-sponsored enterprises					Debt issued by the U.S. government-sponsored enterprises	$	124,452	124,452
Residential mortgage-backed securities	Residential mortgage-backed securities	479,413		479,413	Residential mortgage-backed securities	613,278		613,278
Total marketable securities held-to-maturity	Total marketable securities held-to-maturity	$	604,284	604,284	Total marketable securities held-to-maturity	$	737,730	737,730

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(3) Loans Receivable

The following table shows a summary of our loans receivable at amortized cost basis at March 31, ~~2021~~2022 and December 31, ~~2020~~2021 (in thousands):


		March 31, 2021				December 31, 2020				March 31, 2022				December 31, 2021
		Originated		Acquired	Total	Originated	Acquired	Total		Originated (1)		Acquired (2)	Total	Originated (1)	Acquired (2)	Total
Personal Banking:	Personal Banking:								Personal Banking:

Residential mortgage loans ~~(1)~~(3)	Residential mortgage loans ~~(1)~~(3)	$	2,693,075	278,603	2,971,678	2,753,593	314,528	3,068,121	Residential mortgage loans ~~(1)~~(3)	$	2,924,864	197,025	3,121,889	2,783,459	211,161	2,994,620
Home equity loans	Home equity loans	1,138,718		268,806	1,407,524	1,175,703	292,033	1,467,736	Home equity loans	1,089,234		197,286	1,286,520	1,107,202	212,729	1,319,931
Vehicle loans	Vehicle loans	1,063,255		141,598	1,204,853	995,040	157,633	1,152,673	Vehicle loans	1,457,137		90,118	1,547,255	1,384,246	99,985	1,484,231
Consumer loans	Consumer loans	288,146		61,356	349,502	288,066	67,254	355,320	Consumer loans	305,969		42,757	348,726	307,961	46,556	354,517
Total Personal Banking	Total Personal Banking	5,183,194		750,363	5,933,557	5,212,402	831,448	6,043,850	Total Personal Banking	5,777,204		527,186	6,304,390	5,582,868	570,431	6,153,299

Commercial Banking:	Commercial Banking:								Commercial Banking:
Commercial real estate loans	Commercial real estate loans	2,242,151		583,846	2,825,997	2,223,108	624,873	2,847,981	Commercial real estate loans	2,189,050		384,491	2,573,541	2,202,027	423,454	2,625,481
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	326,416		137,023	463,439	344,016	153,892	497,908	Commercial real estate loans - owner occupied	326,958		59,394	386,352	321,253	68,750	390,003
Commercial loans	Commercial loans	1,011,722		133,325	1,145,047	1,019,482	171,628	1,191,110	Commercial loans	803,833		70,918	874,751	765,877	81,732	847,609
Total Commercial Banking	Total Commercial Banking	3,580,289		854,194	4,434,483	3,586,606	950,393	4,536,999	Total Commercial Banking	3,319,841		514,803	3,834,644	3,289,157	573,936	3,863,093
Total loans receivable, gross	Total loans receivable, gross	8,763,483		1,604,557	10,368,040	8,799,008	1,781,841	10,580,849	Total loans receivable, gross	9,097,045		1,041,989	10,139,034	8,872,025	1,144,367	10,016,392

Allowance for credit losses	Allowance for credit losses	(95,572)		(28,425)	(123,997)	(102,874)	(31,553)	(134,427)	Allowance for credit losses	(83,685)		(15,610)	(99,295)	(86,750)	(15,491)	(102,241)
Total loans receivable, net ~~(2)~~(4)	Total loans receivable, net ~~(2)~~(4)	$	8,667,911	1,576,132	10,244,043	8,696,134	1,750,288	10,446,422	Total loans receivable, net ~~(2)~~(4)	$	9,013,360	1,026,379	10,039,739	8,785,275	1,128,876	9,914,151

(1) Includes originated and purchased loan pools.

(2) Includes loans subject to purchase accounting.

(3) Includes fair value of ~~$46.3~~$19.3 million and ~~$58.8~~$25.1 million of loans held-for-sale at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

~~(2)~~(4) Includes ~~$40.6~~$63.1 million and ~~$40.9~~$62.8 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Table of Contents

The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended March 31, ~~2021~~2022 (in thousands):


		Balance as of March 31, 2021		Current period provision	Charge-offs	Recoveries	Balance as of December 31, 2020		Balance as of March 31, 2022		Current period provision	Charge-offs	Recoveries	Balance as of December 31, 2021
Allowance for Credit Losses	Allowance for Credit Losses							Allowance for Credit Losses
Personal Banking:	Personal Banking:							Personal Banking:
Residential mortgage loans	Residential mortgage loans	$	5,861	(592)	(855)	42	7,266	Residential mortgage loans	$	13,306	6,962	(1,183)	154	7,373
Home equity loans	Home equity loans	5,241		(652)	(228)	129	5,992	Home equity loans	5,643		369	(447)	421	5,300
Vehicle loans	Vehicle loans	14,888		773	(1,307)	597	14,825	Vehicle loans	14,181		(1,305)	(647)	650	15,483
Consumer loans	Consumer loans	2,563		651	(1,296)	337	2,871	Consumer loans	3,109		994	(1,076)	307	2,884
Total Personal Banking	Total Personal Banking	28,553		180	(3,686)	1,105	30,954	Total Personal Banking	36,239		7,020	(3,353)	1,532	31,040

Commercial Banking:	Commercial Banking:							Commercial Banking:
Commercial real estate loans	Commercial real estate loans	70,206		(4,831)	(4,626)	282	79,381	Commercial real estate loans	44,572		(9,665)	(1,024)	1,120	54,141
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	6,753		(3,766)	0	1	10,518	Commercial real estate loans - owner occupied	4,276		389	—	4	3,883
Commercial loans	Commercial loans	18,485		2,797	(54)	2,168	13,574	Commercial loans	14,208		775	(681)	937	13,177
Total Commercial Banking	Total Commercial Banking	95,444		(5,800)	(4,680)	2,451	103,473	Total Commercial Banking	63,056		(8,501)	(1,705)	2,061	71,201
Total	Total	$	123,997	(5,620)	(8,366)	3,556	134,427	Total	$	99,295	(1,481)	(5,058)	3,593	102,241

Allowance for Credit Losses - off-balance sheet exposure	Allowance for Credit Losses - off-balance sheet exposure							Allowance for Credit Losses - off-balance sheet exposure
Personal Banking:	Personal Banking:							Personal Banking:

Residential mortgage loans	Residential mortgage loans	$	2	0	0	0	2	Residential mortgage loans	$	6	4	—	—	2
Home equity loans	Home equity loans	34		(1)	0	0	35	Home equity loans	55		16	—	—	39

Total Personal Banking	Total Personal Banking	36		(1)	0	0	37	Total Personal Banking	61		20	—	—	41

Commercial Banking:	Commercial Banking:							Commercial Banking:
Commercial real estate loans	Commercial real estate loans	2,115		(1,334)	0	0	3,449	Commercial real estate loans	1,792		911	—	—	881
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	388		62	0	0	326	Commercial real estate loans - owner occupied	208		66	—	—	142
Commercial loans	Commercial loans	2,080		(471)	0	0	2,551	Commercial loans	1,993		599	—	—	1,394
Total Commercial Banking	Total Commercial Banking	4,583		(1,743)	0	0	6,326	Total Commercial Banking	3,993		1,576	—	—	2,417
Total off-balance sheet exposure	Total off-balance sheet exposure	$	4,619	(1,744)	0	0	6,363	Total off-balance sheet exposure	$	4,054	1,596	—	—	2,458

Table of Contents

Balance as of March 31, 2020 Current
period provision Charge-offs Recoveries Cumulative effect of ASU 2016-13* Balance as of December 31, 2019
Allowance for Credit Losses
Personal Banking:
Residential mortgage loans $ 10,673 894 (343) 107 7,441 2,574
Home equity loans 9,786 895 (289) 205 5,786 3,189
Vehicle loans 11,994 5,359 (1,843) 344 842 7,292
Consumer loans 5,166 3,518 (1,645) 416 (2,424) 5,301
Total Personal Banking 37,619 10,666 (4,120) 1,072 11,645 18,356
Commercial Banking:
Commercial real estate loans 29,380 11,269 (310) 290 2,288 15,843
Commercial real estate loans - owner occupied 8,374 1,365 (21) 7 1,278 5,745
Commercial loans 17,524 4,337 (815) 424 (4,419) 17,997
Total Commercial Banking 55,278 16,971 (1,146) 721 (853) 39,585
Total 92,897 27,637 (5,266) 1,793 10,792 57,941
Allowance for Credit Losses - off-balance sheet exposure
Personal Banking:
Home equity loans 34 4 0 0 (293) 323
Consumer loans 0 0 0 0 (402) 402
Total Personal Banking 34 4 0 0 (695) 725
Commercial Banking:
Commercial real estate loans 3,294 1,283 0 0 1,934 77
Commercial real estate loans - owner occupied 95 4 0 0 88 3
Commercial loans 1,281 189 0 0 923 169
Total Commercial Banking 4,670 1,476 0 0 2,945 249
Total off-balance sheet exposure $ 4,704 1,480 0 0 2,250 974

* Includes the impact of the initial allowance on PCD loans of $517,000.


	Balance as of March 31, 2021		Current period provision	Charge-offs	Recoveries	Balance as of December 31, 2020
Allowance for Credit Losses
Personal Banking:
Residential mortgage loans	$	5,861	(592)	(855)	42	7,266
Home equity loans	5,241		(652)	(228)	129	5,992
Vehicle loans	14,888		773	(1,307)	597	14,825
Consumer loans	2,563		651	(1,296)	337	2,871
Total Personal Banking	28,553		180	(3,686)	1,105	30,954

Commercial Banking:
Commercial real estate loans	70,206		(4,831)	(4,626)	282	79,381
Commercial real estate loans - owner occupied	6,753		(3,766)	—	1	10,518
Commercial loans	18,485		2,797	(54)	2,168	13,574
Total Commercial Banking	95,444		(5,800)	(4,680)	2,451	103,473
Total	$	123,997	(5,620)	(8,366)	3,556	134,427

Allowance for Credit Losses - off-balance sheet exposure
Personal Banking:
Residential mortgage loans	$	2	—	—	—	2
Home equity loans	34		(1)	—	—	35

Total Personal Banking	36		(1)	—	—	37

Commercial Banking:
Commercial real estate loans	2,115		(1,334)	—	—	3,449
Commercial real estate loans - owner occupied	388		62	—	—	326
Commercial loans	2,080		(471)	—	—	2,551
Total Commercial Banking	4,583		(1,743)	—	—	6,326
Total off-balance sheet exposure	$	4,619	(1,744)	—	—	6,363

During the quarter ended March 31, ~~2021, there were 0 loans sold that were classified as held for investment. During~~2022, the ~~quarter ended March 31, 2020, we sold $50~~Company purchased a $72.7 million ~~of loans that were classified as held for- investment, for~~small business equipment finance loan pool and a ~~gain of $1.3~~$138.1 million ~~which is reported in gain on sale of loans on the Consolidated Statements of Income.~~one- to four-family jumbo mortgage loan pool.

Table of Contents

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at March 31, ~~2021~~2022 (in thousands):


		Total loans receivable		Allowance for credit losses	Nonaccrual loans (1)	Loans 90 days past due and accruing	TDRs	Allowance related to TDRs	Additional commitments to customers with loans classified as TDRs		Total loans receivable		Allowance for credit losses	Nonaccrual loans (1)	Loans 90 days past due and accruing	TDRs	Allowance related to TDRs	Additional commitments to customers with loans classified as TDRs
Personal Banking:	Personal Banking:									Personal Banking:
Residential mortgage loans	Residential mortgage loans	$	2,971,678	5,861	11,571	0	8,285	516	0	Residential mortgage loans	$	3,121,889	13,306	7,450	—	6,187	861	—
Home equity loans	Home equity loans	1,407,524		5,241	8,069	0	2,003	369	26	Home equity loans	1,286,520		5,643	4,910	—	1,503	489	—
Vehicle loans	Vehicle loans	1,204,853		14,888	3,976	0	0	0	0	Vehicle loans	1,547,255		14,181	2,782	—	—	—	—
Consumer loans	Consumer loans	349,502		2,563	777	197	1	0	0	Consumer loans	348,726		3,109	618	420	—	—	—
Total Personal Banking	Total Personal Banking	5,933,557		28,553	24,393	197	10,289	885	26	Total Personal Banking	6,304,390		36,239	15,760	420	7,690	1,350	—

Commercial Banking:	Commercial Banking:									Commercial Banking:
Commercial real estate loans	Commercial real estate loans	2,825,997		70,206	175,136	0	15,318	1,097	473	Commercial real estate loans	2,573,541		44,572	100,887	—	16,426	1,620	364
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	463,439		6,753	3,747	0	688	113	0	Commercial real estate loans - owner occupied	386,352		4,276	655	—	152	25	—
Commercial loans	Commercial loans	1,145,047		18,485	20,678	0	1,215	249	700	Commercial loans	874,751		14,208	6,859	—	4,433	589	—
Total Commercial Banking	Total Commercial Banking	4,434,483		95,444	199,561	0	17,221	1,459	1,173	Total Commercial Banking	3,834,644		63,056	108,401	—	21,011	2,234	364

Total	Total	$	10,368,040	123,997	223,954	197	27,510	2,344	1,199	Total	$	10,139,034	99,295	124,161	420	28,701	3,584	364

(1)Includes ~~$7.4~~$16.0 million of nonaccrual TDRs.

The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, ~~2020,~~2021 (in thousands):


		Total loans receivable		Allowance for credit losses	Nonaccrual loans (1)	Loans 90 days past due and accruing	TDRs	Allowance related to TDRs	Additional commitments to customers with loans classified as TDRs		Total loans receivable		Allowance for credit losses	Nonaccrual loans (1)	Loans 90 days past due and accruing	TDRs	Allowance related to TDRs	Additional commitments to customers with loans classified as TDRs
Personal Banking:	Personal Banking:									Personal Banking:
Residential mortgage loans	Residential mortgage loans	$	3,068,121	7,266	15,924	0	8,431	560	0	Residential mortgage loans	$	2,994,620	7,373	10,402	—	6,749	1,442	—
Home equity loans	Home equity loans	1,467,736		5,992	9,123	0	2,058	381	26	Home equity loans	1,319,931		5,300	5,758	—	1,781	718	—
Vehicle loans	Vehicle loans	1,152,673		14,825	5,533	1	0	0	0	Vehicle loans	1,484,231		15,483	3,263	—	—	—	—
Consumer loans	Consumer loans	355,320		2,871	1,031	584	1	0	0	Consumer loans	354,517		2,884	675	331	—	—	—
Total Personal Banking	Total Personal Banking	6,043,850		30,954	31,611	585	10,490	941	26	Total Personal Banking	6,153,299		31,040	20,098	331	8,530	2,160	—

Commercial Banking:	Commercial Banking:									Commercial Banking:
Commercial real estate loans	Commercial real estate loans	2,847,981		79,381	44,092	0	18,430	787	471	Commercial real estate loans	2,625,481		54,141	129,666	—	17,025	2,024	400
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	497,908		10,518	3,642	0	761	123	0	Commercial real estate loans - owner occupied	390,003		3,883	1,233	—	159	24	—
Commercial loans	Commercial loans	1,191,110		13,574	23,487	0	2,454	165	362	Commercial loans	847,609		13,177	7,474	—	4,574	609	60
Total Commercial Banking	Total Commercial Banking	4,536,999		103,473	71,221	0	21,645	1,075	833	Total Commercial Banking	3,863,093		71,201	138,373	—	21,758	2,657	460

Total	Total	$	10,580,849	134,427	102,832	585	32,135	2,016	859	Total	$	10,016,392	102,241	158,471	331	30,288	4,817	460

(1)Includes ~~$10.7~~$17.2 million of nonaccrual TDRs.

Table of Contents

We present the amortized cost of our loans on nonaccrual status including such loans with no allowance. The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the quarter ended March 31, ~~2021~~2022 (in thousands):


										March 31, 2022
		Nonaccrual loans at January 1, 2021		Nonaccrual loans at March 31, 2021 with an allowance	Nonaccrual loans with no allowance	Loans 90 days past due and accruing		Nonaccrual loans at January 1, 2022		Nonaccrual loans with an allowance	Nonaccrual loans with no allowance	Total nonaccrual loans at the end of the period	Loans 90 days past due and accruing
Personal Banking:	Personal Banking:						Personal Banking:
Residential mortgage loans	Residential mortgage loans	$	15,924	11,571	0	0	Residential mortgage loans	$	10,402	7,450	—	7,450	—
Home equity loans	Home equity loans	9,123		8,069	0	0	Home equity loans	5,758		4,706	204	4,910	—
Vehicle loans	Vehicle loans	5,533		3,976	0	0	Vehicle loans	3,263		2,738	44	2,782	—
Consumer loans	Consumer loans	1,031		672	105	197	Consumer loans	675		617	1	618	420
Total Personal Banking	Total Personal Banking	31,611		24,288	105	197	Total Personal Banking	20,098		15,511	249	15,760	420

Commercial Banking:	Commercial Banking:						Commercial Banking:
Commercial real estate loans	Commercial real estate loans	44,092		159,915	15,221	0	Commercial real estate loans	129,666		15,730	85,157	100,887	—
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	3,642		3,747	0	0	Commercial real estate loans - owner occupied	1,233		655	—	655	—
Commercial loans	Commercial loans	23,487		16,503	4,175	0	Commercial loans	7,474		3,472	3,387	6,859	—
Total Commercial Banking	Total Commercial Banking	71,221		180,165	19,396	0	Total Commercial Banking	138,373		19,857	88,544	108,401	—

Total	Total	$	102,832	204,453	19,501	197	Total	$	158,471	35,368	88,793	124,161	420

During the quarter ended March 31, ~~2021,~~2022, we recognized ~~$279,000~~$153,000 of interest income on nonaccrual and troubled debt restructuring loans.

The following table presents the amortized cost of our loans on nonaccrual status as of the ~~beginning and end of the~~ year ended December 31, ~~2020~~2021 (in thousands):


										December 31, 2021
		Nonaccrual loans at January 1, 2020		Nonaccrual loans at December 31, 2020 with an allowance	Nonaccrual loans with no allowance	Loans 90 days past due and accruing		Nonaccrual loans at January 1, 2021		Nonaccrual loans with an allowance	Nonaccrual loans with no allowance	Total nonaccrual loans at the end of the period	Loans 90 days past due and accruing
Personal Banking:	Personal Banking:						Personal Banking:
Residential mortgage loans	Residential mortgage loans	$	14,476	15,923	0	0	Residential mortgage loans	$	15,924	10,402	—	10,402	—
Home equity loans	Home equity loans	6,745		8,872	252	0	Home equity loans	9,123		5,551	207	5,758	—
Vehicle loans	Vehicle loans	3,147		5,377	156	1	Vehicle loans	5,533		3,251	12	3,263	—
Consumer loans	Consumer loans	1,079		1,030	1	584	Consumer loans	1,031		674	1	675	331
Total Personal Banking	Total Personal Banking	25,447		31,202	409	585	Total Personal Banking	31,611		19,878	220	20,098	331

Commercial Banking:	Commercial Banking:						Commercial Banking:
Commercial real estate loans	Commercial real estate loans	18,832		27,079	17,013	0	Commercial real estate loans	44,092		65,529	64,137	129,666	—
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	16,032		3,642	0	0	Commercial real estate loans - owner occupied	3,642		1,233	—	1,233	—
Commercial loans	Commercial loans	8,559		18,069	5,418	0	Commercial loans	23,487		3,941	3,533	7,474	—
Total Commercial Banking	Total Commercial Banking	43,423		48,790	22,431	0	Total Commercial Banking	71,221		70,703	67,670	138,373	—

Total	Total	$	68,870	79,992	22,840	585	Total	$	102,832	90,581	67,890	158,471	331

During the year ended December 31, ~~2020,~~2021, we recognized ~~$842,000~~$803,000 of interest income on nonaccrual and troubled debt restructuring loans.

Table of Contents

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of March 31, ~~2021~~2022 (in thousands):


		Real estate		Equipment	Other	Total		Real estate		Equipment	Total
Personal Banking:	Personal Banking:						Personal Banking:
Residential mortgage loans	Residential mortgage loans	$	588	0	0	588	Residential mortgage loans	$	577	—	577
Home equity loans	Home equity loans	99		0	0	99	Home equity loans	99		—	99

Total Personal Banking	Total Personal Banking	687		0	0	687	Total Personal Banking	676		—	676

Commercial Banking:	Commercial Banking:						Commercial Banking:
Commercial real estate loans	Commercial real estate loans	157,335		1,925	6,451	165,711	Commercial real estate loans	95,904		1,631	97,535

Commercial loans	Commercial loans	3,255		190	10,948	14,393	Commercial loans	3,841		1,854	5,695
Total Commercial Banking	Total Commercial Banking	160,590		2,115	17,399	180,104	Total Commercial Banking	99,745		3,485	103,230

Total	Total	$	161,277	2,115	17,399	180,791	Total	$	100,421	3,485	103,906

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, ~~2020~~2021 (in thousands):


		Real estate		Equipment	Other	Total		Real estate		Equipment	Total
Personal Banking:	Personal Banking:						Personal Banking:
Residential mortgage loans	Residential mortgage loans	$	1,269	0	0	1,269	Residential mortgage loans	$	580	—	580
Home equity loans	Home equity loans	99		0	0	99	Home equity loans	99		—	99

Total Personal Banking	Total Personal Banking	1,368		0	0	1,368	Total Personal Banking	679		—	679

Commercial Banking:	Commercial Banking:						Commercial Banking:
Commercial real estate loans	Commercial real estate loans	79,392		1,997	1,703	83,092	Commercial real estate loans	119,825		1,705	121,530

Commercial loans	Commercial loans	3,313		197	11,069	14,579	Commercial loans	3,973		1,926	5,899
Total Commercial Banking	Total Commercial Banking	82,705		2,194	12,772	97,671	Total Commercial Banking	123,798		3,631	127,429

Total	Total	$	84,073	2,194	12,772	99,039	Total	$	124,477	3,631	128,108

Table of Contents

Our loan portfolios include loans that have been modified in a TDR, where concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include: extending the note’s maturity date, permitting interest only payments, reducing the interest rate to a rate lower than current market rates for new debt with similar risk, reducing the principal payment, principal forbearance or other actions. These concessions are applicable to all loan segments and classes. Certain TDRs are classified as nonperforming at the time of restructuring and may be returned to performing status after considering the borrower’s sustained repayment performance for a period of at least six months.

When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, the loan’s observable market price or the current fair value of the collateral, less selling costs, for collateral dependent loans. If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premiums or discounts), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment in accordance with ASC 310-10. As a result, loans modified in a TDR may have the financial effect of increasing the specific allowance associated with the loan.

Loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, we evaluate the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, partial charge-offs may be taken to further write-down the carrying value of the loan, or the loan may be charged-off completely.

In March 2020 and August 2020, joint statements were issued by federal and state regulatory agencies, after consultation with the FASB, to clarify that short-term loan modifications are not TDRs if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to any relief. Under this guidance, six months is provided as an example of short-term, and current is defined as less than 30 days past due at the time the modification program is implemented. The guidance also provides that these modified loans generally will not be classified as nonaccrual during the term of the modification. For borrowers who are 30 days or more past due when enrolling in a loan modification program related to the COVID-19 pandemic, we evaluate the loan modifications under our existing TDR framework, and where such a loan modification would result in a concession to a borrower experiencing financial difficulty, the loan will be accounted for as a TDR and will generally not accrue interest. This TDR relief under the CARES Act was extended by the Consolidated Appropriations Act, 2021 ~~("CAA"~~(“CAA”), signed into law on December 27, 2020. Under the CAA, such relief will continue until the earlier of 60 days after the date the COVID-19 national emergency comes to an end or January 1, 2022. Certain loan modifications made during the prior year were done in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the ~~Coronavirus~~.Coronavirus. Accordingly, these loans ~~and leases~~ were not categorized as ~~troubled debt restructurings.~~

TDRs.

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~~The following~~ollowing table provides a roll forward of troubled debt restructurings for the periods indicated (dollars in thousands):


		For the quarter ended March 31,							For the quarter ended March 31,
		2021			2020				2022			2021
		Number of contracts	Amount		Number of contracts	Amount			Number of contracts	Amount		Number of contracts	Amount
Beginning TDR balance:	Beginning TDR balance:	170	$	32,135	176	$	31,999	Beginning TDR balance:	134	$	30,288	170	$	32,135
New TDRs	New TDRs	0	0		2	2,518		New TDRs	—	—		—	—
Re-modified TDRs	Re-modified TDRs	4	922		2	2,076		Re-modified TDRs	1	202		4	922
Net paydowns	Net paydowns	0	(2,488)		0	(2,841)		Net paydowns	—	(1,030)		—	(2,488)
Charge-offs:	Charge-offs:							Charge-offs:
Residential mortgage loans	Residential mortgage loans	0	0		0	0		Residential mortgage loans	1	(3)		—	—
Home equity loans		0	0		1	(10)
Vehicle loans		0	0		0	0
Commercial real estate loans		0	0		0	0
Commercial real estate loans - owner occupied		0	0		0	0
Commercial loans		0	0		0	0

Paid-off loans:	Paid-off loans:							Paid-off loans:
Residential mortgage loans	Residential mortgage loans	0	0		2	(330)		Residential mortgage loans	1	(201)		—	—
Home equity loans	Home equity loans	0	0		0	0		Home equity loans	1	(64)		—	—
Vehicle loans		0	0		0	0

Commercial real estate loans	Commercial real estate loans	3	(2,384)		1	(26)		Commercial real estate loans	1	(289)		3	(2,384)
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	1	(47)		0	0		Commercial real estate loans - owner occupied	—	—		1	(47)
Commercial loans	Commercial loans	2	(628)		3	(34)		Commercial loans	—	—		2	(628)
Ending TDR balance:	Ending TDR balance:	164	$	27,510	171	$	33,352	Ending TDR balance:	130	$	28,701	164	$	27,510
Accruing TDRs	Accruing TDRs		$	20,120		$	15,977	Accruing TDRs		$	12,686		$	20,120
Nonaccrual TDRs	Nonaccrual TDRs		7,390			17,375		Nonaccrual TDRs		16,015			7,390

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The following table provides information related to TDRs (including re-modified TDRs) by portfolio segment and by class of financing receivable during the ~~quarter ended March 31, 2021~~periods indicated (in thousands):

For the quarter ended March 31, 2021
Number of contracts Recorded
investment
at the time of
modification Current
recorded
investment Current
allowance
Personal Banking:
Residential mortgage loans 1 $ 121 117 10
Home equity loans 1 3 2 0
Vehicle loans 0 0 0 0
Consumer loans 0 0 0 0
Total Personal Banking 2 124 119 10
Commercial Banking:
Commercial real estate loans 2 812 803 130
Commercial real estate loans - owner occupied 0 0 0 0
Commercial loans 0 0 0 0
Total Commercial Banking 2 812 803 130
Total 4 $ 936 922 140


	For the quarter ended March 31, 2022
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance








Commercial Banking:
Commercial real estate loans	1	$	330	202	11


Total Commercial Banking	1	330		202	11

Total	1	$	330	202	11

~~The following table provides information related to TDRs (including re-modified TDRs) by portfolio segment and by class of financing receivable during the quarter ended March 31, 2020 (in thousands):~~

For the quarter ended March 31, 2020
Number of contracts Recorded
investment
at the time of
modification Current
recorded
investment Current
allowance
Personal Banking:
Residential mortgage loans 0 $ 0 0 0
Home equity loans 1 19 18 0
Vehicle loans 0 0 0 0
Consumer loans 0 0 0 0
Total Personal Banking 1 19 18 0
Commercial Banking:
Commercial real estate loans 0 0 0 0
Commercial real estate loans - owner occupied 2 2,077 2,076 176
Commercial loans 1 2,500 2,500 1,628
Total Commercial Banking 3 4,577 4,576 1,804
Total 4 $ 4,596 4,594 1,804


	For the quarter ended March 31, 2021
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance

Personal Banking:
Residential mortgage loans	1	$	121	117	10
Home equity loans	1	3		2	—


Total Personal Banking	2	124		119	10

Commercial Banking:
Commercial real estate loans	2	812		803	130


Total Commercial Banking	2	812		803	130

Total	4	$	936	922	140

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The following table provides information as of March 31, 2022 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended March 31, 2022 (in thousands):


		Type of modification
	Number of contracts	Rate		Payment	Maturity date	Other	Total







Commercial Banking:
Commercial real estate loans	1	$	—	—	202	—	202


Total Commercial Banking	1	—		—	202	—	202

Total	1	$	—	—	202	—	202

The following table provides information as of March 31, 2021 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended March 31, 2021 (in thousands):

Type of modification
Number of contracts Rate Payment Maturity date Other Total
Personal Banking:
Residential mortgage loans 1 $ 117 0 0 0 117
Home equity loans 1 0 0 2 0 2
Vehicle loans 0 0 0 0 0 0
Consumer loans 0 0 0 0 0 0
Total Personal Banking 2 117 0 2 0 119
Commercial Banking:
Commercial real estate loans 2 0 0 729 74 803
Commercial real estate loans - owner occupied 0 0 0 0 0 0
Commercial loans 0 0 0 0 0 0
Total Commercial Banking 2 0 0 729 74 803
Total 4 $ 117 0 731 74 922


		Type of modification
	Number of contracts	Rate		Payment	Maturity date	Other	Total
Personal Banking:
Residential mortgage loans	1	$	117	—	—	—	117
Home equity loans	1	—		—	2	—	2


Total Personal Banking	2	117		—	2	—	119

Commercial Banking:
Commercial real estate loans	2	—		—	729	74	803


Total Commercial Banking	2	—		—	729	74	803

Total	4	$	117	—	731	74	922

The following table provides information asrelated to troubled debt restructurings modified within the previous twelve months of March 31, ~~2020 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended March 31, 2020 (in thousands):~~2022 that subsequently defaulted:

Type of modification
Number of contracts Rate Payment Maturity date Other Total
Personal Banking:
Residential mortgage loans 0 $ 0 0 0 0 0
Home equity loans 1 0 0 18 0 18
Vehicle loans 0 0 0 0 0 0
Consumer loans 0 0 0 0 0 0
Total Personal Banking 1 0 0 18 0 18
Commercial Banking:
Commercial real estate loans 0 0 0 0 0 0
Commercial real estate loans - owner occupied 2 0 0 2,076 0 2,076
Commercial loans 1 0 0 0 2,500 2,500
Total Commercial Banking 3 0 0 2,076 2,500 4,576
Total 4 $ 0 0 2,094 2,500 4,594


	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance






Commercial Banking:
Commercial real estate loans	1	$	4,167	3,823	—

Total Commercial Banking	1	4,167		3,823	—

Total	1	$	4,167	3,823	—

~~NaN~~No TDRs modified within the previous twelve months of March 31, 2021 ~~or March 31, 2020~~ subsequently defaulted.

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The following table provides information related to the amortized cost basis of loan payment delinquencies at March 31, ~~2021~~2022 (in thousands):


		30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans receivable	90 Days or greater delinquent and accruing (1)		30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans receivable	90 days or greater delinquent and accruing

Personal Banking:	Personal Banking:									Personal Banking:
Residential mortgage loans	Residential mortgage loans	$	22,236	2,062	9,333	33,631	2,938,047	2,971,678	0	Residential mortgage loans	$	24,057	1,950	3,976	29,983	3,091,906	3,121,889	—
Home equity loans	Home equity loans	3,334		953	7,044	11,331	1,396,193	1,407,524	0	Home equity loans	3,867		1,138	2,968	7,973	1,278,547	1,286,520	—
Vehicle loans	Vehicle loans	4,669		1,466	2,970	9,105	1,195,748	1,204,853	0	Vehicle loans	4,724		1,324	1,432	7,480	1,539,775	1,547,255	—
Consumer loans	Consumer loans	1,063		402	852	2,317	347,185	349,502	197	Consumer loans	1,319		515	770	2,604	346,122	348,726	420
Total Personal Banking	Total Personal Banking	31,302		4,883	20,199	56,384	5,877,173	5,933,557	197	Total Personal Banking	33,967		4,927	9,146	48,040	6,256,350	6,304,390	420

Commercial Banking:	Commercial Banking:									Commercial Banking:
Commercial real estate loans	Commercial real estate loans	7,526		6,578	27,877	41,981	2,784,016	2,825,997	0	Commercial real estate loans	2,485		112	21,264	23,861	2,549,680	2,573,541	—
Commercial real estate loans - owner occupied	Commercial real estate loans - owner occupied	4,714		1,031	1,860	7,605	455,834	463,439	0	Commercial real estate loans - owner occupied	1,158		—	135	1,293	385,059	386,352	—
Commercial loans	Commercial loans	3,032		8,979	4,860	16,871	1,128,176	1,145,047	0	Commercial loans	1,268		103	795	2,166	872,585	874,751	—
Total Commercial Banking	Total Commercial Banking	15,272		16,588	34,597	66,457	4,368,026	4,434,483	0	Total Commercial Banking	4,911		215	22,194	27,320	3,807,324	3,834,644	—

Total loans	Total loans	$	46,574	21,471	54,796	122,841	10,245,199	10,368,040	197	Total loans	$	38,878	5,142	31,340	75,360	10,063,674	10,139,034	420

The following table provides information related to the amortized cost basis of loan payment delinquencies at December 31, ~~2020~~2021 (in thousands):

30-59 days
delinquent 60-89 days
delinquent 90 days or
greater
delinquent Total
delinquency Current Total loans
receivable 90 days or
greater
delinquent
and accruing
(1)
Personal Banking:
Residential mortgage loans $ 28,797 5,083 14,489 48,369 3,019,752 3,068,121 0
Home equity loans 4,763 1,656 8,441 14,860 1,452,876 1,467,736 0
Vehicle loans 7,707 1,776 4,599 14,082 1,138,592 1,152,674 1
Consumer loans 2,867 966 1,459 5,292 350,027 355,319 584
Total Personal Banking 44,134 9,481 28,988 82,603 5,961,247 6,043,850 585
Commercial Banking:
Commercial real estate loans 6,692 1,615 23,307 31,614 2,816,366 2,847,980 0
Commercial real estate loans - owner occupied 4,231 0 1,980 6,211 491,698 497,909 0
Commercial loans 6,405 864 7,325 14,594 1,176,516 1,191,110 0
Total Commercial Banking 17,328 2,479 32,612 52,419 4,484,580 4,536,999 0
Total originated loans $ 61,462 11,960 61,600 135,022 10,445,827 10,580,849 585

~~(1) Represents acquired loans that were originally recorded at fair value upon acquisition. These loans are considered to be accruing because we can reasonably~~

estimate future cash flows and expect to fully collect the carrying value of these loans. Therefore, we are accreting the difference between the carrying value and their expected cash flows into interest income.


	30-59 days delinquent		60-89 days delinquent	90 days or greater delinquent	Total delinquency	Current	Total loans receivable	90 days or greater delinquent and accruing

Personal Banking:
Residential mortgage loans	$	20,567	5,433	7,641	33,641	2,960,979	2,994,620	—
Home equity loans	3,153		949	4,262	8,364	1,311,567	1,319,931	—
Vehicle loans	5,331		1,487	1,635	8,453	1,475,778	1,484,231	—
Consumer loans	1,205		519	765	2,489	352,028	354,517	331
Total Personal Banking	30,256		8,388	14,303	52,947	6,100,352	6,153,299	331

Commercial Banking:
Commercial real estate loans	16,938		699	23,489	41,126	2,584,355	2,625,481	—
Commercial real estate loans - owner occupied	127		70	574	771	389,232	390,003	—
Commercial loans	193		727	1,105	2,025	845,584	847,609	—
Total Commercial Banking	17,258		1,496	25,168	43,922	3,819,171	3,863,093	—
Total originated loans	$	47,514	9,884	39,471	96,869	9,919,523	10,016,392	331

~~Table of Contents~~

Credit Quality Indicators: For Commercial Banking ~~loans~~ 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 $1.0 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:

Special Mention — Loans designated as special mention have specific, well-defined risk issues, which create a high level of uncertainty regarding the long-term viability of the business. Loans in this class are considered to have high-risk characteristics. A special mention loan exhibits material negative financial trends due to company-specific or systemic conditions. If these potential weaknesses are not mitigated, they threaten the borrower’s capacity to meet its debt obligations. Special mention loans still demonstrate sufficient financial flexibility to react to and positively address the root cause of the adverse financial trends without significant deviations from their current business strategy. Their potential weaknesses deserve our close attention and warrant enhanced monitoring.

Substandard — Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the

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liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified as substandard. In addition, those weaknesses make collection or liquidation in full highly questionable and improbable. A loan classified as doubtful exhibits discernible loss potential, but a complete loss seems very unlikely. The possibility of a loss on a doubtful loan is high, but because of certain important and reasonably specific pending factors that may strengthen the loan, its classification as an estimated loss is deferred until a more exact status can be determined.

Loss — Loans classified as loss are considered uncollectible and of such value that the continuance as a loan is not warranted. A loss classification does not mean that the loan has no recovery or salvage value; instead, it means that it is not practical or desirable to defer writing off all or a portion of a basically worthless loan even though partial recovery may be possible in the future.

For Personal Banking loans a pass risk rating is maintained until they are greater than 90 days past due, and risk rating reclassification is based primarily on past due status of the loan. The risk rating categories can generally be described by the following groupings:

Pass — Loans classified as pass are homogeneous loans that are less than 90 days past due from the required payment date at month-end.

Substandard — Loans classified as substandard are homogeneous loans that are greater than 90 days past due from the required payment date at month-end, loans classified as TDRs ~~PCD loans,~~ or homogenous retail loans that are greater than 180 days past due from the required payment date at month-end that has been written down to the value of underlying collateral, less costs to sell.

Doubtful — Loans classified as doubtful are homogeneous loans that are greater than 180 days past due from the required payment date at month-end and not written down to the value of underlying collateral. These loans are generally charged-off in the month in which the 180 day period elapses.

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The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of March 31, ~~2021~~2022 (in thousands):

YTD March 31, 2021 2020 2019 2018 2017 Prior Revolving loans Revolving loans converted to term loans Total loans
receivable
Personal Banking:
Residential mortgage loans
Pass $ 134,720 643,244 370,299 204,157 223,251 1,374,432 0 0 2,950,103
Substandard 0 88 0 1,113 1,232 19,142 0 0 21,575
Total residential mortgage loans 134,720 643,332 370,299 205,270 224,483 1,393,574 0 0 2,971,678
Home equity loans
Pass 32,737 259,169 177,981 86,119 79,633 276,030 443,607 41,481 1,396,757
Substandard 0 0 360 297 479 5,648 2,435 1,548 10,767
Total home equity loans 32,737 259,169 178,341 86,416 80,112 281,678 446,042 43,029 1,407,524
Vehicle loans
Pass 177,560 413,746 311,993 190,015 59,197 47,027 0 0 1,199,538
Substandard 0 541 1,739 1,351 793 891 0 0 5,315
Total vehicle loans 177,560 414,287 313,732 191,366 59,990 47,918 0 0 1,204,853
Consumer loans
Pass 31,080 116,764 73,190 30,897 15,021 17,456 61,529 2,027 347,964
Substandard 1 179 243 107 68 643 244 53 1,538
Total consumer loans 31,081 116,943 73,433 31,004 15,089 18,099 61,773 2,080 349,502
Total Personal Banking 376,098 1,433,731 935,805 514,056 379,674 1,741,269 507,815 45,109 5,933,557
Business Banking:
Commercial real estate loans
Pass 57,139 441,573 465,578 306,635 253,157 839,616 34,516 9,070 2,407,284
Special Mention 0 331 18,003 12,862 39,582 24,896 328 728 96,730
Substandard 0 33,707 22,108 63,575 39,069 155,940 2,883 4,701 321,983
Total commercial real estate loans 57,139 475,611 505,689 383,072 331,808 1,020,452 37,727 14,499 2,825,997
Commercial real estate loans - owner occupied
Pass 6,883 29,494 59,292 83,443 67,713 134,215 3,971 8,787 393,798
Special Mention 0 0 4,277 4,467 4,944 9,076 851 0 23,615
Substandard 0 0 6,648 1,566 11,025 25,791 762 234 46,026
Total commercial real estate loans - owner occupied 6,883 29,494 70,217 89,476 83,682 169,082 5,584 9,021 463,439
Commercial loans
Pass 216,409 316,410 98,014 45,486 45,621 109,288 220,954 9,702 1,061,884
Special Mention 200 5,610 2,572 2,125 2,803 172 8,223 918 22,623
Substandard 0 6,291 5,414 6,180 3,353 4,909 21,031 13,362 60,540
Total commercial loans 216,609 328,311 106,000 53,791 51,777 114,369 250,208 23,982 1,145,047
Total Business Banking 280,631 833,416 681,906 526,339 467,267 1,303,903 293,519 47,502 4,434,483
Total loans $ 656,729 2,267,147 1,617,711 1,040,395 846,941 3,045,172 801,334 92,611 10,368,040


	YTD March 31, 2022		2021	2020	2019	2018	Prior	Revolving loans	Revolving loans converted to term loans	Total loans receivable
Personal Banking:
Residential mortgage loans
Pass	$	81,603	810,544	585,855	289,202	146,678	1,194,484	—	—	3,108,366
Substandard	—		—	583	375	238	12,327	—	—	13,523
Total residential mortgage loans	81,603		810,544	586,438	289,577	146,916	1,206,811	—	—	3,121,889
Home equity loans
Pass	27,811		145,099	199,289	128,051	60,585	250,728	426,764	42,015	1,280,342
Substandard	—		—	66	303	191	3,507	1,176	935	6,178
Total home equity loans	27,811		145,099	199,355	128,354	60,776	254,235	427,940	42,950	1,286,520
Vehicle loans
Pass	223,063		729,574	260,616	177,605	101,513	52,103	—	—	1,544,474
Substandard	—		541	390	856	531	463	—	—	2,781
Total vehicle loans	223,063		730,115	261,006	178,461	102,044	52,566	—	—	1,547,255
Consumer loans
Pass	28,887		106,849	71,992	40,506	17,879	20,568	59,537	1,470	347,688
Substandard	—		203	103	153	64	80	422	13	1,038
Total consumer loans	28,887		107,052	72,095	40,659	17,943	20,648	59,959	1,483	348,726
Total Personal Banking	361,364		1,792,810	1,118,894	637,051	327,679	1,534,260	487,899	44,433	6,304,390
Business Banking:
Commercial real estate loans
Pass	25,880		324,062	451,209	319,291	249,608	868,339	28,639	9,583	2,276,611
Special mention	—		794	4,070	46,100	1,189	5,206	1,253	—	58,612
Substandard	—		97	8,358	44,165	44,672	133,415	492	7,119	238,318


Total commercial real estate loans	25,880		324,953	463,637	409,556	295,469	1,006,960	30,384	16,702	2,573,541
Commercial real estate loans - owner occupied
Pass	26,504		67,571	18,312	42,419	51,402	145,640	3,839	1,510	357,197
Special mention	—		—	—	647	2,046	722	64	—	3,479
Substandard	—		—	—	4,790	3,457	15,510	—	1,919	25,676


Total commercial real estate loans - owner occupied	26,504		67,571	18,312	47,856	56,905	161,872	3,903	3,429	386,352
Commercial loans
Pass	182,912		163,204	97,395	65,195	24,462	61,417	238,852	5,688	839,125
Special mention	166		180	616	625	386	2	1,302	—	3,277
Substandard	—		246	1,463	3,725	2,616	2,763	11,263	10,273	32,349


Total commercial loans	183,078		163,630	99,474	69,545	27,464	64,182	251,417	15,961	874,751
Total Business Banking	235,462		556,154	581,423	526,957	379,838	1,233,014	285,704	36,092	3,834,644

Total loans	$	596,826	2,348,964	1,700,317	1,164,008	707,517	2,767,274	773,603	80,525	10,139,034

For the quarter ended March 31, ~~2021, $6.1~~2022, $5.1 million of revolving loans were converted to term loans.

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The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of December 31, ~~2020~~2021 (in thousands):


		Year to date December 31, 2020		2019	2018	2017	2016	Prior	Revolving loans	Revolving loans converted to term loans	Total loans receivable		2021		2020	2019	2018	2017	Prior	Revolving loans	Revolving loans converted to term loans	Total loans receivable
Personal Banking:	Personal Banking:											Personal Banking:
Residential mortgage loans	Residential mortgage loans											Residential mortgage loans
Pass	Pass	$	641,963	418,057	229,477	247,426	215,893	1,289,728	0	0	3,042,544	Pass	$	644,862	602,429	304,275	156,639	171,240	1,098,635	—	—	2,978,080
Substandard	Substandard	0		68	1,293	1,674	1,091	21,451	0	0	25,577	Substandard	138		489	377	538	882	14,116	—	—	16,540
Total residential mortgage loans	Total residential mortgage loans	641,963		418,125	230,770	249,100	216,984	1,311,179	0	0	3,068,121	Total residential mortgage loans	645,000		602,918	304,652	157,177	172,122	1,112,751	—	—	2,994,620
Home equity loans	Home equity loans											Home equity loans
Pass	Pass	273,076		193,439	94,757	87,717	81,212	219,061	465,453	40,759	1,455,474	Pass	150,847		210,224	138,661	65,011	61,692	209,959	435,660	40,766	1,312,820
Substandard	Substandard	0		210	318	281	876	5,158	3,509	1,910	12,262	Substandard	—		—	441	60	455	3,820	1,275	1,060	7,111
Total home equity loans	Total home equity loans	273,076		193,649	95,075	87,998	82,088	224,219	468,962	42,669	1,467,736	Total home equity loans	150,847		210,224	139,102	65,071	62,147	213,779	436,935	41,826	1,319,931
Vehicle loans	Vehicle loans											Vehicle loans
Pass	Pass	448,746		352,661	218,372	70,122	31,197	24,791	0	0	1,145,889	Pass	801,084		292,804	205,653	119,304	34,546	27,576	—	—	1,480,967
Substandard	Substandard	343		1,958	2,087	1,210	667	519	0	0	6,784	Substandard	387		365	1,141	745	379	247	—	—	3,264
Total vehicle loans	Total vehicle loans	449,089		354,619	220,459	71,332	31,864	25,310	0	0	1,152,673	Total vehicle loans	801,471		293,169	206,794	120,049	34,925	27,823	—	—	1,484,231
Consumer loans	Consumer loans											Consumer loans
Pass	Pass	128,809		83,419	35,183	17,439	7,848	11,757	66,965	1,695	353,115	Pass	117,856		81,266	47,195	20,595	9,794	12,202	63,025	1,578	353,511
Substandard	Substandard	133		399	139	192	36	619	686	1	2,205	Substandard	213		161	105	64	26	50	357	30	1,006
Total consumer loans	Total consumer loans	128,942		83,818	35,322	17,631	7,884	12,376	67,651	1,696	355,320	Total consumer loans	118,069		81,427	47,300	20,659	9,820	12,252	63,382	1,608	354,517
Total Personal Banking	Total Personal Banking	1,493,070		1,050,211	581,626	426,061	338,820	1,573,084	536,613	44,365	6,043,850	Total Personal Banking	1,715,387		1,187,738	697,848	362,956	279,014	1,366,605	500,317	43,434	6,153,299
Business Banking:	Business Banking:											Business Banking:
Commercial real estate loans	Commercial real estate loans											Commercial real estate loans
Pass	Pass	417,390		473,115	316,045	264,702	195,168	709,459	36,980	29,755	2,442,614	Pass	306,689		433,219	335,541	263,524	221,450	683,537	26,288	10,179	2,280,427
Special Mention		584		3,381	20,180	24,675	15,424	15,817	597	3,048	83,706
Special mention												Special mention	803		1,808	52,513	3,296	1,394	8,529	729	23	69,095
Substandard	Substandard	7,426		4,007	57,694	56,991	24,056	140,147	2,240	29,100	321,661	Substandard	—		34,153	44,712	46,045	56,077	89,311	492	5,169	275,959

Total commercial real estate loans	Total commercial real estate loans	425,400		480,503	393,919	346,368	234,648	865,423	39,817	61,903	2,847,981	Total commercial real estate loans	307,492		469,180	432,766	312,865	278,921	781,377	27,509	15,371	2,625,481
Commercial real estate loans - owner occupied
Commercial real estate - owner occupied												Commercial real estate - owner occupied
Pass	Pass	24,895		67,162	87,497	71,626	46,760	100,081	4,422	7,648	410,091	Pass	69,084		19,452	51,997	60,824	57,676	94,687	2,822	2,707	359,249
Special Mention		0		4,371	4,514	3,643	4,276	3,689	3,822	0	24,315
Special mention												Special mention	—		—	—	769	1,959	1,444	856	—	5,028
Substandard	Substandard	0		21,627	1,903	12,898	4,013	21,777	874	410	63,502	Substandard	—		—	3,575	2,887	7,840	10,602	—	822	25,726

Total commercial real estate loans - owner occupied		24,895		93,160	93,914	88,167	55,049	125,547	9,118	8,058	497,908
Total commercial real estate - owner occupied loans												Total commercial real estate - owner occupied loans	69,084		19,452	55,572	64,480	67,475	106,733	3,678	3,529	390,003
Commercial loans	Commercial loans											Commercial loans
Pass	Pass	479,436		99,877	50,915	51,858	58,597	49,178	286,467	16,170	1,092,498	Pass	224,367		110,171	73,276	27,668	20,748	76,987	262,805	12,301	808,323
Special Mention		5,828		2,751	5,579	4,588	162	190	16,512	5,668	41,278
Special mention												Special mention	197		661	812	1,195	50	581	2,234	—	5,730
Substandard	Substandard	1,660		3,343	2,932	2,016	2,266	3,003	27,988	14,126	57,334	Substandard	329		4,767	5,102	4,437	1,529	2,116	6,667	8,609	33,556

Total commercial loans	Total commercial loans	486,924		105,971	59,426	58,462	61,025	52,371	330,967	35,964	1,191,110	Total commercial loans	224,893		115,599	79,190	33,300	22,327	79,684	271,706	20,910	847,609
Total Business Banking	Total Business Banking	937,219		679,634	547,259	492,997	350,722	1,043,341	379,902	105,925	4,536,999	Total Business Banking	601,469		604,231	567,528	410,645	368,723	967,794	302,893	39,810	3,863,093

Total loans	Total loans	$	2,430,289	1,729,845	1,128,885	919,058	689,542	2,616,425	916,515	150,290	10,580,849	Total loans	$	2,316,856	1,791,969	1,265,376	773,601	647,737	2,334,399	803,210	83,244	10,016,392

For the year ended December 31, ~~2020, $23.1~~2021, $27.3 million of revolving loans were converted to term loans.

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(4) Goodwill and Other Intangible Assets

The following table provides information for intangible assets subject to amortization at the dates indicated (in thousands):


		March 31, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Amortizable intangible assets:	Amortizable intangible assets:				Amortizable intangible assets:
Core deposit intangibles - gross	Core deposit intangibles - gross	$	74,899	71,182	Core deposit intangibles - gross	$	74,899	74,899
Acquisitions	Acquisitions	0		3,717	Acquisitions	—		—
Less: accumulated amortization	Less: accumulated amortization	(58,322)		(56,896)	Less: accumulated amortization	(63,320)		(62,158)
Core deposit intangibles - net	Core deposit intangibles - net	$	16,577	18,003	Core deposit intangibles - net	$	11,579	12,741
Customer and Contract intangible assets - gross	Customer and Contract intangible assets - gross	$	12,775	12,775	Customer and Contract intangible assets - gross	$	12,775	12,775

Customer list intangible assets disposed of due to sale of insurance business					Customer list intangible assets disposed of due to sale of insurance business	—		(1,547)
Less: accumulated amortization	Less: accumulated amortization	(11,010)		(10,842)	Less: accumulated amortization	(12,700)		(11,133)
Customer and Contract intangible assets - net	Customer and Contract intangible assets - net	1,765		1,933	Customer and Contract intangible assets - net	75		95
Total intangible assets - net	Total intangible assets - net	$	18,342	19,936	Total intangible assets - net	$	11,654	12,836

The following table shows the actual aggregate amortization expense for the quarters ended March 31, ~~2021~~2022 and ~~2020,~~2021, as well as the estimated aggregate amortization expense, based upon current levels of intangible assets, for the current fiscal year and each of the five succeeding fiscal years (in thousands):


For the quarter ended March 31, ~~2021~~2022	$	~~1,594~~1,183
For the quarter ended March 31, ~~2020~~2021	~~1,651~~1,594


For the year ending December 31, ~~2021~~	~~5,902~~
~~For the year ending December 31,~~ 2022	~~4,681~~4,277
For the year ending December 31, 2023	~~3,592~~3,270
For the year ending December 31, 2024	~~2,692~~2,452
For the year ending December 31, 2025	~~1,819~~1,662
For the year ending December 31, 2026	~~947~~871
For the year ending December 31, 2027	305

The following table provides information for the changes in the carrying amount of goodwill (in thousands):

Total

Balance at December 31, ~~2019~~2020

~~346,103~~

~~Goodwill acquired~~

~~36,176~~

~~Balance at December 31, 2020~~

382,279

Purchase accounting adjustment

Goodwill disposed of due to sale of insurance business

77(1,359)

Balance at December 31, 2021

380,997

Balance at March 31, ~~2021~~2022

~~382,356~~380,997

We performed our annual goodwill impairment test as of June 30, ~~2020~~2021 in accordance with ASC 350, as updated by ASU 2017-04 ("(“Step 0"0”), and concluded that goodwill was not impaired. As of March 31, ~~2021,~~2022, there were no events or changes in circumstances that would cause us to update that goodwill impairment test and we have concluded there is no impairment inof goodwill.

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(5) Borrowed Funds

(a) Borrowings

March 31, 2021
Amount Average rate
Term notes payable to the FHLB of Indianapolis acquired from MutualFirst $ 2,012 2.58 %
Collateralized borrowings, due within one year 128,192 0.19 %
Subordinated debentures, net of issuance costs 123,413 4.00 %
Total borrowed funds $ 253,617

Borrowed funds at March 31, 2022 and December 31, 2021 are presented in the following table:


	March 31, 2022				December 31, 2021
	Amount		Average rate		Amount		Average rate






Collateralized borrowings, due within one year	$	121,436	0.19	%	$	139,093	0.19	%
Total borrowed funds	$	121,436			$	139,093

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Borrowings from the Federal Home Loan ~~Bank ("FHLB"~~Banks (“FHLB”) of Pittsburgh and Indianapolis, if any, are secured by our residential first mortgage and other qualifying loans. Certain of these borrowings are subject to restrictions or penalties in the event of prepayment. ~~During the quarter ended March 31, 2021, $20.0 million of term notes payable to the FHLB of Indianapolis matured.~~

The revolving line of credit with the FHLB of Pittsburgh carries a commitment of $250.0 million. The rate is adjusted daily by the FHLB of Pittsburgh, and any borrowings on this line may be repaid at any time without penalty. The revolving line of credit had 0no balance as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021.

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, collateralized borrowings due within one year were ~~$128.2~~$121.4 million and ~~$137.7~~$139.1 million, respectively. These borrowings are collateralized by cash or various securities held in safekeeping by the FHLB.

On September 9, 2020, the Company issued $125.0 million of 4.00% fixed-to-floating rate subordinated notes with a maturity date of September 15, 2030. The subordinated notes, which qualify as Tier 2 capital, bear interest at an annual rate of 4.00%, payable semi-annually in arrears commencing on March 15, 2021, and a floating rate of interest equivalent to the 3-month Secured Overnight Financing Rate ~~("SOFR"~~(“SOFR”) plus 3.89% payable quarterly in arrears commencing on December 15, 2025. The subordinated debt issuance costs of approximately $1.8 million are being amortized over five years on a straight-line basis into interest expense. At March 31, 2022 and December 31, 2021, subordinated debentures, net of issuance costs, were $123.7 million and $123.6 million, respectively.

(b) Trust Preferred Securities

The Company has 7 statutory business trusts: Northwest Bancorp Capital Trust III, a Delaware statutory business trust, Northwest Bancorp Statutory Trust IV, a Connecticut statutory business trust, LNB Trust II, a Delaware statutory business trust, Union National Capital Trust I ("(“UNCT I"I”), a Delaware statutory business trust, Union National Capital Trust II ("(“UNCT ~~II"~~II”), a Delaware statutory business trust, MFBC Statutory Trust I, a Delaware statutory trust, and Universal Preferred Trust, a Delaware statutory trust (the ~~"Trusts"~~“Trusts”). The Trusts exist solely to issue preferred securities to third parties for cash, issue common securities to the Company in exchange for capitalization of the Trusts, invest the proceeds from the sale of trust securities in an equivalent amount of debentures of the Company, and engage in other activities that are incidental to those previously listed.

The Trusts have invested the proceeds of the offerings in junior subordinated deferrable interest debentures issued by the Company. The structure of these debentures mirrors the structure of the trust-preferred securities. These subordinated debentures are the sole assets of the Trusts. As the shareholders of the trust preferred securities are the primary beneficiaries of the Trusts, the Trusts are not consolidated in our financial statements.

The following table sets forth a summary of the cumulative trust preferred securities and the junior subordinated debt held by the Trust as of ~~March 31, 2021.~~the date listed.


		Maturity date	Interest rate	Capital debt securities		March 31, 2021			Maturity date	Interest rate	Capital debt securities		March 31, 2022		December 31, 2021
Northwest Bancorp Capital Trust III	Northwest Bancorp Capital Trust III	December 30, 2035	3-month LIBOR plus 1.38%	$	50,000	$	51,547	Northwest Bancorp Capital Trust III	December 30, 2035	3-month LIBOR plus 1.38%	$	50,000	$	51,547	51,547
Northwest Bancorp Statutory Trust IV	Northwest Bancorp Statutory Trust IV	December 15, 2035	3-month LIBOR plus 1.38%	50,000		51,547		Northwest Bancorp Statutory Trust IV	December 15, 2035	3-month LIBOR plus 1.38%	50,000		51,547		51,547
LNB Trust II	LNB Trust II	June 15, 2037	3-month LIBOR plus 1.48%	7,875		8,119		LNB Trust II	June 15, 2037	3-month LIBOR plus 1.48%	7,875		8,119		8,119
UNCT I (1)	UNCT I (1)	January 23, 2034	3-month LIBOR plus 2.85%	8,000		7,931		UNCT I (1)	January 23, 2034	3-month LIBOR plus 2.85%	8,000		7,956		7,950
UNCT II (1)	UNCT II (1)	November 23, 2034	3-month LIBOR plus 2.00%	3,000		2,721		UNCT II (1)	November 23, 2034	3-month LIBOR plus 2.00%	3,000		2,748		2,741
MFBC Statutory Trust I (1)	MFBC Statutory Trust I (1)	September 15, 2035	3-month LIBOR plus 1.70%	5,000		3,502		MFBC Statutory Trust I (1)	September 15, 2035	3-month LIBOR plus 1.70%	5,000		3,606		3,580
Universal Preferred Trust (1)	Universal Preferred Trust (1)	October 7, 2035	3-month LIBOR plus 1.69%	5,000		3,492		Universal Preferred Trust (1)	October 7, 2035	3-month LIBOR plus 1.69%	5,000		3,596		3,570
						$	128,859						$	129,119	129,054

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

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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 five years. If interest payments on the subordinated debentures are deferred, the distributions on the trust securities also are deferred. To date there have been 0no 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.

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:

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•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 I capital.

We may, at any time, dissolve any of the Trusts and distribute the debentures to the trust security holders, subject to receipt of any required regulatory approvals.

(6) Guarantees

We issue standby letters of credit in the normal course of business. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party. We are required to perform under a standby letter of credit when drawn upon by the guaranteed third party in the case of nonperformance by our customer. The credit risk associated with standby letters of credit is essentially the same as that involved in extending loans to customers and is subject to normal loan underwriting procedures. Collateral may be obtained based on management’s credit assessment of the customer. At March 31, ~~2021,~~2022, the maximum potential amount of future payments we could be required to make under these non-recourse standby letters of credit was ~~$44.0~~$45.7 million, of which ~~$35.5~~$35.9 million is fully collateralized. At March 31, ~~2021,~~2022, we had a liability which represents deferred income of ~~$529,000~~$583,000 related to the standby letters of credit.

(7) Earnings Per Share

Basic earnings per common share ~~("EPS"~~(“EPS”) is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, without considering any dilutive items. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. During the quarter ended March 31, 2021, 2,346,655 stock options were not included in the computation of diluted earnings per share because the stock options’ exercise price was more than the average market price of the common shares of $14.03. During the quarter ended March 31, 2020, 2,033,345 stock options were not included in the computation of diluted earnings per share because the stock options’ exercise price was less than the average market price of the common shares of $14.62.

The following table sets forth the computation of basic and diluted EPS (in thousands, except share data and per share amounts):


		Quarter ended March 31,			Quarter ended March 31,
		2021		2020			2022		2021
Net income						Net income	$	28,287	40,237
Less: Dividends and undistributed earnings allocated to participating securities						Less: Dividends and undistributed earnings allocated to participating securities	177		—
Net income available to common shareholders	Net income available to common shareholders	$	40,237	7,939		Net income available to common shareholders	$	28,110	40,237

Weighted average common shares outstanding	Weighted average common shares outstanding	126,182,409		105,882,553		Weighted average common shares outstanding	125,861,738		126,182,409
Dilutive potential shares due to effect of stock options		517,615		265,694
Add: Participating shares outstanding						Add: Participating shares outstanding	791,217		517,615
Total weighted average common shares and dilutive potential shares	Total weighted average common shares and dilutive potential shares	$	126,700,024	106,148,247		Total weighted average common shares and dilutive potential shares	126,652,955		126,700,024

Basic earnings per share	Basic earnings per share	$	0.32	0.08		Basic earnings per share	$	0.22	0.32

Diluted earnings per share	Diluted earnings per share	$	0.32	0.07		Diluted earnings per share	$	0.22	0.32

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(8) Pension and Other Post-Retirement Benefits

The following table sets forth the net periodic costs for the defined benefit pension plans and post-retirement healthcare plans for the periods indicated (in thousands):


		Quarter ended March 31,						Quarter ended March 31,
		Pension benefits			Other post-retirement benefits			Pension benefits			Other post-retirement benefits
		2021		2020	2021	2020		2022		2021	2022	2021
Service cost	Service cost	$	2,860	2,098	0	0	Service cost	$	2,599	2,860	—	—
Interest cost	Interest cost	1,517		1,714	4	7	Interest cost	1,671		1,517	10	4
Expected return on plan assets	Expected return on plan assets	(3,465)		(3,091)	0	0	Expected return on plan assets	(3,864)		(3,465)	—	—
Amortization of prior service cost	Amortization of prior service cost	(580)		(581)	0	0	Amortization of prior service cost	(564)		(580)	—	—
Amortization of the net loss	Amortization of the net loss	1,039		924	4	5	Amortization of the net loss	381		1,039	2	4
Net periodic cost	Net periodic cost	$	1,371	1,064	8	12	Net periodic cost	$	223	1,371	12	8

We anticipate making a contribution to our defined benefit pension plan ofbetween $0 and $2.0 ~~million to $4.0~~ million during the year ending December 31, ~~2021.~~2022.

(9) Disclosures About Fair Value of Financial Instruments

We are required to disclose fair value information about financial instruments whether or not recognized in the Consolidated Statement of Financial Condition. Fair value information of certain financial instruments and all nonfinancial instruments is not required to be disclosed. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

Financial assets and liabilities recognized or disclosed at fair value on a recurring basis and certain financial assets and liabilities on a non-recurring basis are accounted for using a three-level hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. This hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3). When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used.

Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques:

• Level 1 - Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets. This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities.

• Level 2 - Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets or liabilities that are actively traded. Level 2 also includes pricing models in which the inputs are corroborated by market data, for example, matrix pricing.

• Level 3 - Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 inputs include the following:

◦Quotes from brokers or other external sources that are not considered binding;

◦Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price; and

◦Quotes and other information from brokers or other external sources where the inputs are not deemed observable.

We are responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. We perform due diligence to understand the inputs used or how the data was calculated or derived. We also corroborate the reasonableness of external inputs in the valuation process.

The carrying amounts reported in the Consolidated Statement of Financial Condition approximate fair value for the following financial instruments: cash and cash equivalents, marketable securities available-for-sale, accrued interest receivable, interest rate lock commitments, forward commitments, interest rate swaps, savings and checking deposits, foreign exchange swaps, risk participation agreements, and accrued interest payable.

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Marketable Securities

Where available, market values are based on quoted market prices, dealer quotes, and prices obtained from independent pricing services.

Debt Securities — available-for-sale - Generally, debt securities are valued using pricing for similar securities, recently executed transactions and other pricing models utilizing observable inputs. The valuation for most debt securities is classified as Level 2. Securities within Level 2 include corporate bonds, municipal bonds, mortgage-backed securities and U.S. government obligations. Certain debt securities which were AAA rated at purchase do not have an active market and as such we have used an alternative method to determine the fair value of these securities. The fair value has been determined using a discounted cash flow model using market assumptions, which generally include cash flow, collateral and other market assumptions. As such, securities which otherwise would have been classified as Level 2 securities if an active market for those assets or similar assets existed are included herein as Level 3 assets.

Debt Securities — held-to-maturity - The fair value of debt securities held-to-maturity is determined in the same manner as debt securities available-for-sale.

Loans Receivable

Loans with comparable characteristics including collateral and re-pricing structures are segregated for valuation purposes. Each loan pool is separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows are discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans include remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans are separately evaluated given the impact delinquency has on the projected future cash flow of the loan including the approximate discount or market rate, which is not considered an exit price.

Loans Held-for-Sale

The estimated fair value of loans held-for-sale is based on market bids obtained from potential buyers.

~~Loans Held for Investment~~

The fair value of loans held for investment is estimated using a discounted cash flow analysis that utilizes interest rates currently being offered for similar loans adjusted for liquidity and credit risk.

FHLB Stock

Due to the restrictions placed on transferability of FHLB stock, it is not practical to determine the fair value.

Deposit Liabilities

The estimated fair value of deposits with no stated maturity, which includes demand deposits, money market, and other savings accounts, is the amount payable on demand. Although market premiums paid for depository institutions reflect an additional value for these low-cost deposits, adjusting fair value for any value expected to be derived from retaining those deposits for a future period of time or from the benefit that results from the ability to fund interest-earning assets with these deposit liabilities is prohibited. The fair value estimates of deposit liabilities do not include the benefit that results from the low-cost funding provided by these deposits compared to the cost of borrowing funds in the market. Fair values for time deposits are estimated using a discounted cash flow calculation that applies contractual cost currently being offered in the existing portfolio to current market rates being offered locally for deposits of similar remaining maturities. The valuation adjustment for the portfolio consists of the present value of the difference of these two cash flows, discounted at the assumed market rate of the corresponding maturity.

Borrowed Funds

Fixed rate advances are valued by comparing their contractual cost to the prevailing market cost. The carrying amount of ~~collateralized borrowings~~repurchase agreements approximates ~~the~~their fair value.

Subordinated Debentures

The fair value of our subordinated debentures is calculated using the discounted cash flows at rates observable for other similarly traded liabilities.

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Junior Subordinated Debentures

The fair value of junior subordinated debentures is calculated using the discounted cash flows at the prevailing rate of interest.

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Interest Rate Lock Commitments and Forward Commitments

The fair value of interest rate lock commitments is based on the value of underlying loans held-for-sale which is based on quoted prices for similar loans in the secondary market. This value is then adjusted based on the probability of the loan closing (i.e., the “pull-through” amount, a significant unobservable input). The fair value of forward sale commitments is based on quoted prices from the secondary market based on the settlement date of the contracts.

Cash Flow Hedges, Interest Rate and Foreign Exchange Swap Agreements

The fair value of interest rate swaps is based upon the present value of the expected future cash flows using the LIBOR swap curve, the basis for the underlying interest rate. To price interest rate swaps, cash flows are first projected for each payment date using the fixed rate for the fixed side of the swap and the forward rates for the floating side of the swap. These swap cash flows are then discounted to time zero using LIBOR zero-coupon interest rates. The sum of the present value of both legs is the fair market value of the interest rate swap. These valuations have been derived from our third party vendor’s proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. The fair value of the foreign exchange swap is derived from proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions we believe to be reasonable. Risk participation agreements are entered into when Northwest purchases a portion of a commercial loan that has an interest rate swap. Northwest assumes credit risk on its portion of the interest rate swap should the borrower fail to pay as agreed. The value of risk participation agreements is determined based on the value of the swap after considering the credit quality, probability of default, and loss given default of the borrower.

Off-Balance Sheet Financial Instruments

These financial instruments generally are not sold or traded, and estimated fair values are not readily available. However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, there was 0no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at March 31, 2022 (in thousands):


	Carrying amount		Estimated fair value	Level 1	Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	1,161,006	1,161,006	1,161,006	—	—
Securities available-for-sale	1,442,098		1,442,098	—	1,442,098	—
Securities held-to-maturity	737,730		677,376	—	677,376	—
Loans receivable, net	10,020,467		9,389,401	—	—	9,389,401
Residential mortgage loans held-for-sale	19,272		19,272	—	—	19,272
Accrued interest receivable	26,268		26,268	26,268	—	—
Interest rate lock commitments	1,680		1,680	—	—	1,680


Interest rate swaps not designated as hedging instruments	23,338		23,338	—	23,338	—
FHLB stock	13,318		13,318	—	—	—
Total financial assets	$	13,445,177	12,753,757	1,187,274	2,142,812	9,410,353

Financial liabilities:
Savings and checking deposits	$	11,068,522	11,068,522	11,068,522	—	—
Time deposits	1,251,878		1,261,070	—	—	1,261,070

Borrowed funds	121,436		121,419	121,419	—	—
Subordinated debt	123,670		123,987	—	123,987	—
Junior subordinated debentures	129,119		115,159	—	—	115,159
Forward commitments	43		43	—	43	—
Foreign exchange swaps	6		6	—	6	—

Interest rate swaps not designated as hedging instruments	23,363		23,363	—	23,363	—
Risk participation agreements	31		31	—	31	—
Accrued interest payable	563		563	563	—	—
Total financial liabilities	$	12,718,631	12,714,163	11,190,504	147,430	1,376,229

Table of Contents

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at ~~March~~December 31, 2021 (in thousands):

Carrying
amount Estimated
fair value Level 1 Level 2 Level 3
Financial assets:
Cash and cash equivalents $ 979,290 979,290 979,290 0 0
Securities available-for-sale 1,430,131 1,430,131 0 1,430,131 0
Securities held-to-maturity 604,284 593,232 0 593,232 0
Loans receivable, net 10,197,773 10,080,207 0 0 10,080,207
Residential mortgage loans held-for-sale 46,270 46,270 0 0 46,270
Accrued interest receivable 28,732 28,732 28,732 0 0
Interest rate lock commitments 5,060 5,060 0 0 5,060
Forward commitments 450 450 0 450 0
Interest rate swaps not designated as hedging instruments 34,961 34,961 0 34,961 0
FHLB stock 21,861 21,861 0 0 0
Total financial assets $ 13,348,812 13,220,194 1,008,022 2,058,774 10,131,537
Financial liabilities:
Savings and checking deposits $ 10,577,575 10,577,575 10,577,575 0 0
Time deposits 1,535,519 1,557,947 0 0 1,557,947
Borrowed funds 253,617 255,664 130,209 125,455 0
Junior subordinated debentures 128,859 121,217 0 0 121,217
Interest rate swaps not designated as hedging instruments 35,158 35,158 0 35,158 0
Risk participation agreements 81 81 0 81 0
Accrued interest payable 659 659 659 0 0
Total financial liabilities $ 12,531,468 12,548,301 10,708,443 160,694 1,679,164

~~Table of Contents~~

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at December 31, 2020 (in thousands):


		Carrying amount		Estimated fair value	Level 1	Level 2	Level 3		Carrying amount		Estimated fair value	Level 1	Level 2	Level 3
Financial assets:	Financial assets:							Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	736,277	736,277	736,277	0	0	Cash and cash equivalents	$	1,279,259	1,279,259	1,279,259	—	—
Securities available-for-sale	Securities available-for-sale	1,398,941		1,398,941	0	1,398,941	0	Securities available-for-sale	1,548,592		1,548,592	—	1,548,592	—
Securities held-to-maturity	Securities held-to-maturity	178,887		179,666	0	179,666	0	Securities held-to-maturity	768,154		751,513	—	751,513	—
Loans receivable, net	Loans receivable, net	10,387,636		10,334,521	0	0	10,334,521	Loans receivable, net	9,889,095		9,648,825	—	—	9,648,825
Residential mortgage loans held-for-sale	Residential mortgage loans held-for-sale	58,786		58,786	0	0	58,786	Residential mortgage loans held-for-sale	25,056		25,056	—	—	25,056
Accrued interest receivable	Accrued interest receivable	35,554		35,554	35,554	0	0	Accrued interest receivable	25,599		25,599	25,599	—	—
Interest rate lock commitments	Interest rate lock commitments	6,465		6,465	0	0	6,465	Interest rate lock commitments	1,684		1,684	—	—	1,684
Forward commitments	Forward commitments	1,105		1,105	0	1,105	0	Forward commitments	371		371	—	371	—
Interest rate swaps not designated as hedging instruments	Interest rate swaps not designated as hedging instruments	53,863		53,863	0	53,863	0	Interest rate swaps not designated as hedging instruments	31,254		31,254	—	31,254	—
FHLB stock	FHLB stock	21,748		21,748	0	0	0	FHLB stock	14,184		14,184	—	—	—
Total financial assets	Total financial assets	$	12,879,262	12,826,926	771,831	1,633,575	10,399,772	Total financial assets	$	13,583,248	13,326,337	1,304,858	2,331,730	9,675,565

Financial liabilities:	Financial liabilities:							Financial liabilities:
Savings and checking accounts	Savings and checking accounts	$	9,957,137	9,957,137	9,957,137	0	0	Savings and checking accounts	$	10,973,610	10,973,610	10,973,610	—	—
Time deposits	Time deposits	1,642,096		1,669,546	0	0	1,669,546	Time deposits	1,327,555		1,339,308	—	—	1,339,308

Borrowed funds	Borrowed funds	283,044		283,074	159,745	123,329	123,329	Borrowed funds	139,093		139,093	139,093	—	—
Subordinated debt								Subordinated debt	123,575		129,138	—	129,138	—
Junior subordinated debentures	Junior subordinated debentures	128,794		121,106	0	0	121,106	Junior subordinated debentures	129,054		120,083	—	—	120,083
Foreign exchange swaps								Foreign exchange swaps	341		341	—	341	—
Interest rate swaps not designated as hedging instruments	Interest rate swaps not designated as hedging instruments	54,579		54,579	0	54,579	0	Interest rate swaps not designated as hedging instruments	31,357		31,357	—	31,357	—
Risk participation agreements	Risk participation agreements	86		86	0	86	0	Risk participation agreements	60		60	—	60	—
Accrued interest payable	Accrued interest payable	2,054		2,054	2,054	0	0	Accrued interest payable	1,804		1,804	1,804	—	—
Total financial liabilities	Total financial liabilities	$	12,067,790	12,087,582	10,118,936	177,994	1,913,981	Total financial liabilities	$	12,726,449	12,734,794	11,114,507	160,896	1,459,391

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, ~~2021~~2022 and December 31, ~~2020.~~ 2021.

Table of Contents

The following table represents assets and liabilities measured at fair value on a recurring basis at March 31, 2022 (in thousands):


	Level 1		Level 2	Level 3	Total assets at fair value


Debt securities:
U.S. government and agencies	$	—	70,652	—	70,652
Government-sponsored enterprises	—		42,865	—	42,865
States and political subdivisions	—		115,000	—	115,000

Total debt securities	—		228,517	—	228,517

Residential mortgage-backed securities:
GNMA	—		15,213	—	15,213
FNMA	—		143,311	—	143,311
FHLMC	—		89,488	—	89,488
Non-agency	—		422	—	422
Collateralized mortgage obligations:
GNMA	—		441,895	—	441,895
FNMA	—		239,181	—	239,181
FHLMC	—		284,071	—	284,071


Total mortgage-backed securities	—		1,213,581	—	1,213,581

Interest rate lock commitments	—		—	1,680	1,680


Interest rate swaps not designated as hedging instruments	—		23,338	—	23,338
Total assets	$	—	1,465,436	1,680	1,467,116

Forward commitments	$	—	43	—	43
Foreign exchange swaps	—		6	—	6
Interest rate swaps not designated as hedging instruments	—		23,363	—	23,363
Risk participation agreements	—		31	—	31
Total liabilities	$	—	23,443	—	23,443

Table of Contents

The following table represents assets and liabilities measured at fair value on a recurring basis at ~~March~~December 31, 2021 (in thousands):

Level 1 Level 2 Level 3 Total assets
at fair value
Debt securities:
U.S. government and agencies $ 0 38,824 0 38,824
Government sponsored enterprises 0 91,944 0 91,944
States and political subdivisions 0 100,951 0 100,951
Total debt securities 0 231,719 0 231,719
Residential mortgage-backed securities:
GNMA 0 21,645 0 21,645
FNMA 0 195,233 0 195,233
FHLMC 0 122,321 0 122,321
Non-agency 0 457 0 457
Collateralized mortgage obligations:
GNMA 0 460,426 0 460,426
FNMA 0 233,754 0 233,754
FHLMC 0 164,576 0 164,576
Total mortgage-backed securities 0 1,198,412 0 1,198,412
Interest rate lock commitments 0 0 5,060 5,060
Forward commitments 0 450 0 450
Interest rate swaps not designated as hedging instruments 0 34,961 0 34,961
Total assets $ 0 1,465,542 5,060 1,470,602
Interest rate swaps not designated as hedging instruments $ 0 35,158 0 35,158
Risk participation agreements 0 81 0 81
Total liabilities $ 0 35,239 0 35,239

~~Table of Contents~~

~~The following table represents assets and liabilities measured at fair value on a recurring basis at December 31, 2020 (in thousands):~~


		Level 1		Level 2	Level 3	Total assets at fair value		Level 1		Level 2	Level 3	Total assets at fair value

Debt securities:	Debt securities:						Debt securities:
U.S. government and agencies	U.S. government and agencies	$	0	40,917	0	40,917	U.S. government and agencies	$	—	75,891	—	75,891
Government sponsored enterprises		0		94,507	0	94,507
Government-sponsored enterprises							Government-sponsored enterprises	—		46,085	—	46,085
States and political subdivisions	States and political subdivisions	0		116,813	0	116,813	States and political subdivisions	—		128,701	—	128,701

Total debt securities	Total debt securities	0		252,237	0	252,237	Total debt securities	—		250,677	—	250,677

Residential mortgage-backed securities:	Residential mortgage-backed securities:						Residential mortgage-backed securities:
GNMA	GNMA	0		23,026	0	23,026	GNMA	—		16,510	—	16,510
FNMA	FNMA	0		203,571	0	203,571	FNMA	—		160,063	—	160,063
FHLMC	FHLMC	0		134,572	0	134,572	FHLMC	—		100,055	—	100,055
Non-agency	Non-agency	0		465	0	465	Non-agency	—		431	—	431
Collateralized mortgage obligations:	Collateralized mortgage obligations:						Collateralized mortgage obligations:
GNMA	GNMA	0		343,409	0	343,409	GNMA	—		492,328	—	492,328
FNMA	FNMA	0		262,109	0	262,109	FNMA	—		269,060	—	269,060
FHLMC	FHLMC	0		179,552	0	179,552	FHLMC	—		259,468	—	259,468

Total mortgage-backed securities	Total mortgage-backed securities	0		1,146,704	0	1,146,704	Total mortgage-backed securities	—		1,297,915	—	1,297,915

Interest rate lock commitments	Interest rate lock commitments	0		0	6,465	6,465	Interest rate lock commitments	—		—	1,684	1,684
Forward commitments	Forward commitments	0		1,105	0	1,105	Forward commitments	—		371	—	371
Interest rate swaps not designated as hedging instruments	Interest rate swaps not designated as hedging instruments	0		53,863	0	53,863	Interest rate swaps not designated as hedging instruments	—		31,254	—	31,254
Total assets	Total assets	$	0	1,453,909	6,465	1,460,374	Total assets	$	—	1,580,217	1,684	1,581,901

Foreign exchange swaps							Foreign exchange swaps	$	—	341	—	341
Interest rate swaps not designated as hedging instruments	Interest rate swaps not designated as hedging instruments	$	0	54,579	0	54,579	Interest rate swaps not designated as hedging instruments	—		31,357	—	31,357
Risk participation agreements	Risk participation agreements	0		86	0	86	Risk participation agreements	—		60	—	60

Total liabilities	Total liabilities	$	0	54,665	0	54,665	Total liabilities	$	—	31,758	—	31,758

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis (in thousands):

For the quarter ended March 31,
2021 2020
Beginning balance January 1, $ 6,465 559
Total gains or losses:
Included in net income 0 0
Included in other comprehensive income 0 0
Interest rate lock commitments:
Net activity 1,405 52
Transfers from Level 3 0 0
Transfers into Level 3 0 0
Ending balance March 31, $ 5,060 507


	For the quarter ended March 31,
	2022		2021
Beginning balance January 1,	$	1,684	6,465





Interest rate lock commitments:

Net activity	(4)		(1,405)



Ending balance	$	1,680	5,060

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans held-for-sale, loans ~~measured for impairment,~~individually assessed, real estate owned, and mortgage servicing rights.

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The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of March 31, ~~2021~~2022 (in thousands):


		Level 1		Level 2	Level 3	Total assets at fair value		Level 1		Level 2	Level 3	Total assets at fair value
Loans individually assessed	Loans individually assessed	$	0	0	157,696	157,696	Loans individually assessed	$	—	—	7,178	7,178

Mortgage servicing rights							Mortgage servicing rights	—		—	22	22
Real estate owned, net	Real estate owned, net	0		0	1,738	1,738	Real estate owned, net	—		—	929	929
Total assets	Total assets	$	0	0	159,434	159,434	Total assets	$	—	—	8,129	8,129

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of December 31, ~~2020~~2021 (in thousands):


		Level 1		Level 2	Level 3	Total assets at fair value		Level 1		Level 2	Level 3	Total assets at fair value
Loans individually assessed	Loans individually assessed	$	0	0	95,303	95,303	Loans individually assessed	$	—	—	46,968	46,968

Mortgage servicing rights							Mortgage servicing rights	—		—	380	380
Real estate owned, net	Real estate owned, net	0		0	2,232	2,232	Real estate owned, net	—		—	873	873

Total assets	Total assets	$	0	0	97,535	97,535	Total assets	$	—	—	48,221	48,221

Individually Assessed Loans - A loan is considered to be individually assessed as described in Note 1(f) of the Notes to the Consolidated Financial Statements in Item 8 of Part II of our ~~2020~~2021 Annual Report on Form 10-K. We classify loans individually assessed as nonrecurring Level 3.

Real Estate Owned - Real estate owned is comprised of property acquired through foreclosure or voluntarily conveyed by borrowers. These assets are recorded on the date acquired at the lower of the related loan balance or fair value, less estimated disposition costs, with the fair value being determined by appraisal. Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or fair value, less estimated disposition costs. We classify real estate owned as nonrecurring Level 3.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at March 31, ~~2021~~2022 (in thousands):

Fair value

Valuation
techniques

Significant
unobservable inputs

Range
(weighted average)

Fair value

Valuation techniques

Significant
unobservable inputs

Range (weighted average)

Loans individually assessed

157,696

Appraisal value (1)

Estimated cost to sell

10.0%

Loans individually assessed

7,178

Appraisal value (1)

Estimated cost to sell

10.0%

Discounted cash flow

Discount rate

10.92% to 16.6% (12.88%)

Discounted cash flow

Discount rate

5.46% to 13.26% (7.25%)

Mortgage servicing rights

Discounted cash flow

Annual service cost

$86

Prepayment rate

7.1% to 18.3% (9.8%)

Expected life (months)

47.8 to 102.3 (77.1)

Option adjusted spread

650 basis points

Forward yield curve

0.23% to 1.92%

Real estate owned, net

1,738

Appraisal value (1)

Estimated cost to sell

10.0%

Real estate owned, net

929

Appraisal value (1)

Estimated cost to sell

10.0%

Loans held for sale

19,272

Quoted prices for similar loans in active markets adjusted by an expected pull-through rate

Estimated pull-through rate

100.0%

(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.

(10) Derivative Financial Instruments

We are a party to derivative financial instruments in the normal course of business to manage our own exposure to fluctuations in interest rates and to meet the needs of our customers. The primary derivatives that we use are interest rate swaps and caps and foreign exchange contracts, which are entered into with counterparties that meet established credit standards. We believe that the credit risk inherent in all of our derivative contracts is minimal based on our credit standards and the netting and collateral provisions of the interest rate swap agreements.

~~Derivatives Designated as Hedging Instruments~~

During March 2020, the Company entered into 4 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 $100 million with maturities ranging from ~~three~~ to five years. 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-LIBOR swap rate, the designated benchmark interest rate being hedged. Based upon our contemporaneous quantitative analysis at the inception of each interest rate swap, we have determined these interest rate swaps to qualify for hedge accounting in accordance with ASC 815, ~~Derivatives and Hedging~~.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted

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~~transaction affects earnings. During the quarter ended September 30, 2020, the Company discontinued these cash flow hedges and, as a result, reclassified a $1.3 million loss into earnings.~~

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 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.

Table of Contents

The following table presents information regarding our derivative financial instruments for the periods indicated (in thousands):

Asset derivatives Liability derivatives
Notional amount Fair value Notional amount Fair value
At March 31, 2021
Derivatives not designated as hedging instruments:
Interest rate swap agreements $ 607,671 34,961 607,671 35,158
Interest rate lock commitments 129,127 5,060 0 0
Forward commitments 28,082 450 0 0
Risk participation agreements 0 0 77,282 81
Total derivatives $ 764,880 40,471 684,953 35,239
At December 31, 2020
Derivatives not designated as hedging instruments:
   Interest rate swap agreements $ 599,300 53,863 599,300 54,579
   Interest rate lock commitments 171,357 6,465 0 0
   Forward commitments 25,474 1,105 0 0
Risk participation agreements 0 0 77,532 86
Total derivatives $ 796,131 61,433 676,832 54,665

~~Table of Contents~~


	Asset derivatives			Liability derivatives
	Notional amount		Fair value	Notional amount	Fair value
At March 31, 2022


Derivatives not designated as hedging instruments:
Interest rate swap agreements	$	625,751	23,338	625,751	23,363
Foreign exchange swap agreements	—		—	290	6
Interest rate lock commitments	72,147		1,680	—	—
Forward commitments	—		—	8,078	43
Risk participation agreements	—		—	94,626	31
Total Derivatives	$	697,898	25,018	728,745	23,443

At December 31, 2021


Derivatives not designated as hedging instruments:
Interest rate swap agreements	$	644,997	31,254	644,997	31,357
Foreign exchange swap agreements	—		—	17,124	341
Interest rate lock commitments	67,473		1,684	—	—
Forward commitments	14,484		371	—	—
Risk participation agreements	—		—	93,135	60
Total derivatives	$	726,954	33,309	755,256	31,758

The following table presents income or expense recognized on derivatives for the periods indicated (in thousands):

For the quarter ended March 31,
2021 2020
Hedging derivatives:
Decrease in interest expense $ 0 (12)
Non-hedging swap derivatives:
Increase/(decrease) in other income 524 (177)
Increase in mortgage banking income 2,060 1


	For the quarter ended March 31,
	2022		2021



Non-hedging swap derivatives:
Increase in other income	$	61	524
Increase in mortgage banking income	418		2,060

(11) Legal Proceedings

We establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated. As of March 31, ~~2021,~~2022, we do not anticipate that the aggregate ultimate liability arising out of any pending or threatened legal proceedings will be material to our Consolidated Financial Statements. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate loss to us from legal proceedings.

During the ~~year-ended~~year ended December 31, 2018, Northwest and our subsidiary, The Bert Company (doing business as Northwest Insurance Services) (“NWIS”), were involved in a lawsuit against, among others, First National Bank of Pennsylvania (“FNB”) and their insurance subsidiary, First National Insurance Agency, LLC (“FNIA”). All counterclaims against Northwest were discontinued and, in December 2018, a verdict was rendered in favor of NWIS on several of its claims. Post-trial proceedings have continued throughout the current year and, due to the inherent uncertainties with respect to these proceedings, we have not accrued any awards associated with this verdict within our Consolidated Financial Statements as of March 31, ~~2021.~~2022.

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(12) Changes in Accumulated Other Comprehensive Income

The following tables show the changes in accumulated other comprehensive income by component for the periods indicated (in thousands):

For the quarter ended March 31, 2021
Unrealized
gains/(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, 2020 $ 16,843 0 (50,392) (33,549)
Other comprehensive loss before reclassification adjustments (1) (17,421) 0 0 (17,421)
Amounts reclassified from accumulated other comprehensive income (2) (3) (75) 0 333 258
Net other comprehensive income/(loss) (17,496) 0 333 (17,163)
Balance as of March 31, 2021 $ (653) 0 (50,059) (50,712)


	For the quarter ended March 31, 2022
	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, 2021	$	(12,317)	—	(25,312)	(37,629)



Other comprehensive loss before reclassification adjustments (1)	(64,783)		—	—	(64,783)
Amounts reclassified from accumulated other comprehensive income (2) (3)	(1)		—	(131)	(132)

Net other comprehensive loss	(64,784)		—	(131)	(64,915)

Balance as of March 31, 2022	$	(77,101)	—	(25,443)	(102,544)

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For the quarter ended March 31, 2020
Unrealized
gains/(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, 2019 $ 3,147 0 (40,088) (36,941)
Other comprehensive income/(loss) before reclassification adjustments (4) (5) 8,157 (409) 0 7,748
Amounts reclassified from accumulated other comprehensive income (6) (7) 37 0 249 286
Net other comprehensive income/(loss) 8,194 (409) 249 8,034
Balance as of March 31, 2020 $ 11,341 (409) (39,839) (28,907)


	For the quarter ended March 31, 2021
	Unrealized gains/(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, 2020	$	16,843	—	(50,392)	(33,549)



Other comprehensive loss before reclassification adjustments (4)	(17,421)		—	—	(17,421)
Amounts reclassified from accumulated other comprehensive income (5) (6)	(75)		—	333	258

Net other comprehensive (loss)/income	(17,496)		—	333	(17,163)

Balance as of March 31, 2021	$	(653)	—	(50,059)	(50,712)

(1)Consists of unrealized holding ~~gains,~~losses, net of tax of ~~$(5,981).~~$18,877.

(2)Consists of realized gains, net of tax of ~~$(22).~~$0.

(3)Consists of realized gains, net of tax of ~~$129.~~$50.

(4)Consists of unrealized holding ~~gains,~~losses, net of tax ~~$3,277.~~$5,981.

(5)~~Consists of unrealized holding gains, net of tax $(162).~~

~~(6)~~Consists of realized gains, net of tax ~~of $14.~~$22.

~~(7)~~(6)Consists of realized losses, net of tax of ~~$99.~~ ($129).

~~(13) Subsequent Events~~

The Company completed the sale of NWIS to USI Insurance Services LLC (“Buyer”) in accordance with the Asset Purchase Agreement (the “Agreement”), dated April 1, 2021. Pursuant to the Agreement, Buyer purchased substantially all of the assets of NWIS and assumed certain liabilities of NWIS.

Under the terms and conditions in the Agreement, at the closing of the transaction (the “Closing”), an aggregate purchase price of $31.8 million was paid in cash by the Buyer to the Company, less approximately $2.8 million in closing adjustments as set forth in the Agreement.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

In addition to historical information, this document may contain certain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, as they reflect management’s analysis only as of the date of this report. We have no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this report.

Important factors that might cause such a difference include, but are not limited to:

• the disruption to local, regional, national and global economic activity caused by infectious disease outbreaks, including the outbreak of coronavirus ~~or COVID-19,~~(COVID-19) and the significant impact that such outbreak has had and may continue to have on our growth, operations and earnings;

•changes in asset quality, including increases in default rates on loans and higher levels of nonperforming loans and loan charge-offs generally, and specifically resulting from the economic dislocation caused by the COVID-19 pandemic;

•changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

•changes in federal, state, or local tax laws and tax rates;

• general economic conditions, either nationally or in our market areas, that are different than expected;

• inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

• adverse changes in the securities and credit markets;

• cyber-security concerns, including an interruption or breach in the security of our website or other information systems;

• technological changes that may be more difficult or expensive than expected;

• the ability of third-party providers to perform their obligations to us;

• competition among depository and other financial institutions;

• our ability to enter new markets successfully and capitalize on growth opportunities;

• ~~managing~~our ability to manager our internal growth and our ability to successfully integrate acquired entities, businesses or branch offices;

• changes in consumer spending, borrowing and savings habits;

• our ability to continue to increase and manage our commercial and personal loans;

• possible impairments of securities held by us, including those issued by government entities and government sponsored enterprises;

• the impact of the economy on our loan portfolio (including cash flow and collateral values), investment portfolio, customers and capital market activities;

• our ability to receive regulatory approvals for proposed transactions or new lines of business;

• the effects of any federal government shutdown;

• changes in the financial performance and/or condition of our borrowers; and

• the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the ~~FASB~~Financial Accounting Standards Board (“FASB”) and other accounting standard ~~setters.~~setters;

• changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses;

• our ability to access cost-effective funding;

• the effect of global or national war, conflict, or terrorism;

• our ability to manage market risk, credit risk and operational risk in the current economic environment;

• our ability to retain key employees; and

• our compensation expense associated with equity allocated or aware to our employees.

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Overview of Critical Accounting Policies Involving Estimates

Please refer to Note 1 of the Notes to Consolidated Financial Statements in Item 8 of Part II of our ~~2020~~2021 Annual Report on Form 10-K.

Recently Issued Accounting Standards

The following accounting standard updates issued by the FASB have not yet been adopted.

In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides temporary optional guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The

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guidance provides expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The amendments primarily include contract modifications and hedge accounting, as well as providing a one-time election for the sale or transfer of debt securities classified as held-to-maturity. This guidance is effective as of March 12, 2020 through December 31, 2022. We are currently in the process of evaluating the amendments and determining the impact on our financial statements.

In January 2021, the FASB issued ASU No. 2021-01, "“Reference Rate Reform."” This ASU provides amendments, which are elective, and apply to all entities that have derivative instruments that use an interest rate for margining, discounting or contract price alignment of certain derivative instruments that isare modified as a result of the reference rate reform. This guidance is effective as of the date of issuance through December 31, 2022. We are currently in the process of evaluating the amendments and determining the impact on our financial statements.

In March 2022, the FASB issued ASU No. 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosure.” This ASU eliminates the accounting guidance for troubled debt restructurings, while enhancing disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty. This ASU also requires the disclosure of current period gross write-offs by year for origination for financing receivables. This guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those years, with early adoption permitted. This ASU is applied prospectively to modifications and write-offs beginning on the first day of the fiscal year of adoption. An entity may elect to adopt a modified retrospective transition method on the recognition and measurement of the TDR guidance. We are currently in the process of evaluating the ASU and determining the impact on our financial statements.

Comparison of Financial Condition

Total assets at March 31, ~~2021~~2022 were ~~$14.270~~$14.411 billion, ~~an increase~~a decrease of ~~$464.1~~$90.3 million, or ~~3.4%~~0.6%, from ~~$13.806~~$14.502 billion at December 31, ~~2020.~~2021. This ~~increase~~decrease in assets was ~~largely~~ due to ~~an increase~~a decrease in marketable securities ~~held-to-maturity~~ as well as ~~an increase~~a decrease in total cash and cash equivalents, partially offset by an increase in loans receivable, as described in further detail below.

Total cash and cash equivalents ~~increased~~decreased by ~~$243.0~~$118.3 million, or 9.2%, to ~~$979.3 million~~$1.161 billion at March 31, ~~2021~~2022 from ~~$736.3 million~~$1.279 billion at December 31, ~~2020.~~2021. This ~~increase~~decrease was ~~primarily due to~~driven by the ~~increase in customer deposit balances associated with Paycheck Protection Program ("PPP") loan funds~~purchase of a $72.7 million small business equipment finance pool and ~~consumer stimulus checks.~~a $138.1 million one-to four-family jumbo mortgage package during March.

Total marketable securities ~~increased~~decreased by ~~$456.6~~$136.9 million, or ~~28.9%~~5.9%, to ~~$2.034~~$2.180 billion at March 31, ~~2021~~2022 from ~~$1.578~~$2.317 billion at December 31, ~~2020.~~2021. This ~~increase~~decrease was primarily due to the ~~$425.4~~$106.5 million ~~increase~~decrease in ~~held-to-maturity~~available-for-sale marketable securities primarily as a result of ~~investing excess cash generated by deposits within our held-to-maturity portfolio.~~the rising interest rate environment which negatively impacted the fair market value.

Total loans receivable ~~decreased~~increased by ~~$212.8~~$122.6 million, or ~~2.0%~~1.2%, to ~~$10.368~~$10.139 billion at March 31, ~~2021,~~2022, from ~~$10.581~~$10.016 billion at December 31, ~~2020.~~2021. This ~~decrease~~increase was due to the purchase of the loan pools described above, as well as continued growth of consumer indirect auto loans, which increased by $63.0 million, or 4.2%, to $1.547 billion at March 31, 2022 compared to $1.484 billion at December 31, 2021. These increases were offset by decreases across all other portfolios due to loan paydowns and payoffs, including $32.1 million of PPP loan forgiveness, outpacing ~~new originations across all of our loan portfolios during the current quarter, with the exception of consumer loans, primarily indirect auto, which~~originations.

Total deposits increased by ~~$46.4~~$19.2 million, or ~~3.1%~~0.2%, to ~~$1.554~~$12.320 billion at March 31, ~~2021 compared to $1.508~~2022 from $12.301 billion at December 31, ~~2020.~~

~~Total deposits increased by $513.9 million, or 4.4%, to $12.113 billion at March 31, 2021 from $11.599 billion at December 31, 2020.~~2021. This increase was primarily due to increases in ~~checking deposits of $354.3 million, or 6.5%, as well as~~ savings and money market deposits of ~~$266.1~~$114.4 million, or ~~5.9%~~2.3%. ~~These~~These increases were primarily the result of ~~PPP loan funds~~customers reinvesting time deposit maturities and ~~consumer stimulus checks.~~ annual tax refunds. Partially offsetting this increase was a decrease in time deposits of ~~$106.6~~$75.7 million, or ~~6.5%~~5.7%, as customers continue to move funds from term products to checking and savings accounts.

Total shareholders’ equity at March 31, ~~2021~~2022 was ~~$1.541~~$1.524 billion, or ~~$12.11~~$12.03 per share, ~~an increase~~a decrease of ~~$2.3~~$60.1 million, or ~~0.1%~~3.8%, from ~~$1.539~~$1.584 billion, or ~~$12.11~~$12.51 per share, at December 31, ~~2020.~~2021. This ~~increase~~decrease was primarily the result of ~~quarterly earnings~~an increase in accumulated

Table of ~~$40.2 million. Partially offsetting this~~Contents

other comprehensive loss of $64.9 million due to an increase ~~was~~in unrealized losses in the investment portfolio, as well as a payment of cash dividends of ~~$24.1~~$25.3 million for the ~~quarter~~three months ended March 31, ~~2021 as well as an increase in accumulated other comprehensive loss~~2022. This decrease was partially offset by quarterly earnings of ~~$17.2 million due primarily to a reduction in unrealized gains in the investment portfolio.~~$28.3 million.

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~~“capital conservation ~~buffer"~~buffer” consisting of 2.5% of Total, Tier 1 and Common Equity Tier 1 ~~("CET1"~~(“CET1”) capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements.

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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 (in thousands).


		At March 31, 2021
						Minimum capital				Well capitalized					At March 31, 2022
		Actual				requirements (1)				requirements					Actual				Minimum capital requirements (1)				Well capitalized requirements
		Amount		Ratio		Amount		Ratio		Amount		Ratio			Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)	Total capital (to risk weighted assets)													Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	Northwest Bancshares, Inc.	$	1,667,271	16.831	%	$	1,040,104	10.500	%	$	990,575	10.000	%	Northwest Bancshares, Inc.	$	1,687,337	16.891	%	$	1,048,912	10.500	%	$	998,964	10.000	%
Northwest Bank	Northwest Bank	1,442,118		14.573	%	1,039,040		10.500	%	989,562		10.000	%	Northwest Bank	1,420,908		14.238	%	1,047,877		10.500	%	997,978		10.000	%

Tier 1 capital (to risk weighted assets)	Tier 1 capital (to risk weighted assets)													Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	Northwest Bancshares, Inc.	1,442,200		14.559	%	841,989		8.500	%	792,460		8.000	%	Northwest Bancshares, Inc.	1,480,958		14.825	%	849,119		8.500	%	799,171		8.000	%
Northwest Bank	Northwest Bank	1,340,460		13.546	%	841,128		8.500	%	791,650		8.000	%	Northwest Bank	1,338,199		13.409	%	848,281		8.500	%	798,382		8.000	%

CET1 capital (to risk weighted assets)	CET1 capital (to risk weighted assets)													CET1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	Northwest Bancshares, Inc.	1,317,330		13.299	%	693,403		7.000	%	643,874		6.500	%	Northwest Bancshares, Inc.	1,355,828		13.572	%	699,275		7.000	%	649,327		6.500	%
Northwest Bank	Northwest Bank	1,340,460		13.546	%	692,694		7.000	%	643,215		6.500	%	Northwest Bank	1,338,199		13.409	%	698,585		7.000	%	648,686		6.500	%

Tier 1 capital (leverage) (to average assets)	Tier 1 capital (leverage) (to average assets)													Tier 1 capital (leverage) (to average assets)
Northwest Bancshares, Inc.	Northwest Bancshares, Inc.	1,442,200		10.248	%	562,893		4.000	%	703,617		5.000	%	Northwest Bancshares, Inc.	1,480,958		10.431	%	567,907		4.000	%	709,884		5.000	%
Northwest Bank	Northwest Bank	1,340,460		9.683	%	553,750		4.000	%	692,188		5.000	%	Northwest Bank	1,338,199		9.428	%	567,749		4.000	%	709,686		5.000	%

(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).

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		At December 31, 2020
						Minimum capital				Well capitalized					At December 31, 2021
		Actual				requirements (1)				requirements					Actual				Minimum capital requirements (1)				Well capitalized requirements
		Amount		Ratio		Amount		Ratio		Amount		Ratio			Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)	Total capital (to risk weighted assets)													Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	Northwest Bancshares, Inc.	$	1,654,198	16.642	%	$	1,043,693	10.500	%	$	993,993	10.000	%	Northwest Bancshares, Inc.	$	1,682,487	17.056	%	$	1,035,786	10.500	%	$	986,463	10.000	%
Northwest Bank	Northwest Bank	1,478,310		14.887	%	1,042,655		10.500	%	993,004		10.000	%	Northwest Bank	1,551,084		15.738	%	1,034,819		10.500	%	985,542		10.000	%

Tier I capital (to risk weighted assets)	Tier I capital (to risk weighted assets)													Tier I capital (to risk weighted assets)
Northwest Bancshares, Inc.	Northwest Bancshares, Inc.	1,406,321		14.148	%	844,894		8.500	%	795,195		8.000	%	Northwest Bancshares, Inc.	1,475,190		14.954	%	838,494		8.500	%	789,170		8.000	%
Northwest Bank	Northwest Bank	1,354,028		13.636	%	844,054		8.500	%	794,403		8.000	%	Northwest Bank	1,467,362		14.889	%	837,711		8.500	%	788,434		8.000	%

CET1 capital (to risk weighted assets)	CET1 capital (to risk weighted assets)													CET1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	Northwest Bancshares, Inc.	1,281,516		12.893	%	695,795		7.000	%	646,096		6.500	%	Northwest Bancshares, Inc.	1,350,125		13.687	%	690,524		7.000	%	641,201		6.500	%
Northwest Bank	Northwest Bank	1,354,028		13.636	%	695,103		7.000	%	645,453		6.500	%	Northwest Bank	1,467,362		14.889	%	689,879		7.000	%	640,602		6.500	%

Tier I capital (leverage) (to average assets)	Tier I capital (leverage) (to average assets)													Tier I capital (leverage) (to average assets)
Northwest Bancshares, Inc.	Northwest Bancshares, Inc.	1,406,321		10.145	%	554,501		4.000	%	693,126		5.000	%	Northwest Bancshares, Inc.	1,475,190		10.349	%	570,160		4.000	%	712,699		5.000	%
Northwest Bank	Northwest Bank	1,354,028		9.903	%	546,905		4.000	%	683,631		5.000	%	Northwest Bank	1,467,362		10.296	%	570,047		4.000	%	712,558		5.000	%

(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).

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Liquidity

We are 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 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, ~~2021~~2022 was ~~18.3%~~19.2%. We adjust 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, ~~2021,~~2022, Northwest had ~~$3.867~~$3.526 billion of additional borrowing capacity available with the FHLB, including $250.0 million on an overnight line of credit which had no balance at March 31, ~~2021,~~2022, as well as ~~$84.0~~$91.4 million of borrowing capacity available with the Federal Reserve Bank and $110.0 million with three correspondent banks.

Dividends

We paid ~~$24.1~~$25.3 million and ~~$20.3~~$24.1 million in cash dividends during the quarters ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The common stock dividend payout ratio (dividends declared per share divided by net income per diluted share) was ~~59.4%~~90.9% and ~~271.4%~~59.4% for the quarters ended March 31, ~~2021~~2022 and March 31, ~~2020,~~2021, respectively, on dividends of $0.20 per share for the quarter ended March 31, 2022 and $0.19 per share for the ~~quarters~~quarter ended March 31, ~~2021 and March 31, 2020.~~2021. On April ~~26, 2021,~~25, 2022, the Board of Directors declared a cash dividend of $0.20 per share payable on May ~~17, 2021~~16, 2022 to shareholders of record as of May ~~6, 2021.~~5, 2022. This represents the ~~106th~~110th consecutive quarter we have paid a cash dividend.

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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.


		March 31, 2021			December 31, 2020			March 31, 2022			December 31, 2021
		(in thousands)						(in thousands)
Nonaccrual loans 90 days or more past due:
Loans 90 days or more past due:							Loans 90 days or more past due:
Residential mortgage loans	Residential mortgage loans	$	9,333		14,489		Residential mortgage loans	$	3,976		7,641
Home equity loans	Home equity loans	7,044			8,441		Home equity loans	2,968			4,262
Consumer loans		3,625			5,473
Vehicle loans							Vehicle loans	1,432			1,635
Other consumer loans							Other consumer loans	770			765
Commercial real estate loans	Commercial real estate loans	29,737			25,287		Commercial real estate loans	21,264			23,489
Commercial real estate - owner occupied							Commercial real estate - owner occupied	135			574
Commercial loans	Commercial loans	4,860			7,325		Commercial loans	795			1,105
Total loans 90 days or more past due	Total loans 90 days or more past due	$	54,599		61,015		Total loans 90 days or more past due	$	31,340		39,471
Total REO, net		$	1,738		2,232
Total real estate owned (REO)							Total real estate owned (REO)	$	929		873
Total loans 90 days or more past due and REO	Total loans 90 days or more past due and REO	56,337			63,247		Total loans 90 days or more past due and REO	32,269			40,344
Total loans 90 days or more past due to net loans receivable	Total loans 90 days or more past due to net loans receivable	0.53		%	0.58	%	Total loans 90 days or more past due to net loans receivable	0.31		%	0.40	%
Total loans 90 days or more past due and REO to total assets	Total loans 90 days or more past due and REO to total assets	0.39		%	0.46	%	Total loans 90 days or more past due and REO to total assets	0.22		%	0.28	%
Nonperforming assets:	Nonperforming assets:						Nonperforming assets:
Nonaccrual loans - loans 90 days or more past due	Nonaccrual loans - loans 90 days or more past due	54,599			61,015		Nonaccrual loans - loans 90 days or more past due	$	30,920		39,140
Nonaccrual loans - loans less than 90 days past due	Nonaccrual loans - loans less than 90 days past due	169,355			41,817		Nonaccrual loans - loans less than 90 days past due	93,241			119,331
Loans 90 days or more past due and still accruing		197			585
Loans 90 days or more past due still accruing							Loans 90 days or more past due still accruing	420			331
Total nonperforming loans	Total nonperforming loans	224,151			103,417		Total nonperforming loans	124,581			158,802
Total nonperforming assets	Total nonperforming assets	$	225,889		105,649		Total nonperforming assets	$	125,510		159,675
Total nonaccrual loans to total loans							Total nonaccrual loans to total loans	1.22		%	1.59	%
Nonaccrual TDR loans (1)	Nonaccrual TDR loans (1)	$	7,390		10,704		Nonaccrual TDR loans (1)	$	16,015		17,216
Accruing TDR loans	Accruing TDR loans	20,120			21,431		Accruing TDR loans	12,686			13,072
Total TDR loans	Total TDR loans	$	27,510		32,135		Total TDR loans	$	28,701		30,288

(1)Included in nonaccrual loans above.

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Allowance for Credit Losses

We adopted CECL on January 1, 2020, as further described in Note 1(f) of the Notes to the Consolidated Financial Statements in Item 8 of Part II of our ~~2020~~20210 Annual Report on Form 10-K. Our Board of Directors has adopted an “Allowance for Credit Losses” policy designed to provide management with a systematic methodology for determining and documenting the allowance for credit losses each reporting period. This methodology was developed to provide a consistent process ~~and review procedure~~ to ensure that the allowance for credit losses is in conformity with GAAP, our policies and procedures and other supervisory and regulatory guidelines.

On an ongoing basis, the Credit Administration department, as well as loan officers, branch managers 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 region 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,

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conditions or values, highly questionable and improbable. Loans classified as “loss” have all the weakness inherent in those classified as ~~"doubtful"~~“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.

If a substandard or doubtful loan is not ~~considered~~ individually ~~for impairment,~~assessed, it is grouped with other loans that possess common characteristics for ~~impairment evaluation~~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.~~models and qualitative assessments. We ~~use a twelve month forecasting period, with the exception of the commercial real estate segment in which 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 Loss Committee ("(“ACL ~~Committee"~~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~~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.

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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, ~~2021,~~2022, we considered the most recent economic conditions and forecasts available which incorporated the impact of ~~COVID-19.~~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 decreased by ~~$10.4~~$2.9 million, or ~~7.8%~~2.9%, to ~~$124.0~~$99.3 million, or ~~1.20%~~0.98% of total loans at March 31, ~~2021~~2022 from ~~$134.4~~$102.2 million, or ~~1.27%~~1.02% of total loans, at December 31, ~~2020.~~2021. Total classified loans decreased ~~$21.6~~$43.3 million, or ~~4.4%~~11.9%, to ~~$467.7~~$319.9 million at March 31, ~~2021~~2022 from ~~$489.3~~$363.2 million at December 31, ~~2020.~~ 2021. This decrease was primarily due to the upgrade and payoff of loans in our commercial real estate ~~and commercial portfolios~~portfolio during the current quarter.

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 ~~$224.0~~$124.2 million, or ~~2.16%~~1.22% of total loans receivable at March 31, ~~2021, increased~~2022, decreased by ~~$121.1~~$34.3 million, or ~~117.8%~~21.7%, from ~~$102.8~~$158.5 million, or ~~2.16%~~1.59% of total loans receivable at December 31, ~~2020.~~2021. This decrease was primarily related to upgrades to loans within our commercial real estate portfolio. As a percentage of average loans, annualized net charge-offs ~~increased~~decreased to ~~0.19%~~0.06% for the quarter ended March 31, ~~2021~~2022 compared to ~~0.13%~~0.20% for the year ended December 31, ~~2020.~~2021.

Comparison of Operating Results for the Quarters Ended March 31, ~~2021~~2022 and ~~2020~~2021

Net income for the quarter ended March 31, ~~2021~~2022 was $28.3 million, or $0.22 per diluted share, a decrease of $12.0 million, or 29.7%, from net income of $40.2 million, or $0.32 ~~per diluted share, an increase of $32.3 million, from net income of $7.9 million, or $0.07~~ per diluted share, for the quarter ended March 31, ~~2020.~~2021. The ~~increase~~decrease in net

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income primarily resulted from a decrease in provision for credit losses of $33.3 million to a current period credit of $5.6 million for the quarter ended March 31, 2021 compared to provision expense of $27.6 million for the quarter ended March 31, 2020. Also contributing to the increase in net income was an increase in net interest income of ~~$13.2~~$9.8 million, or ~~15.2%~~9.8% and ~~an increase~~a decrease in noninterest income of ~~$4.0~~$6.2 million, or ~~14.2%~~19.4%. Partially offsetting these changes was ~~an increase~~a decrease in the negative provision for credit losses of $4.1 million, or 73.6%, a decrease in noninterest expense of ~~$7.6~~$4.2 million, or ~~9.6%.~~4.9%, and a $4.0 million, or 34.4%, decrease in income tax expense. Net income for the quarter ended March 31, ~~2021~~2022 represents annualized returns on average equity and average assets of ~~10.61%~~7.17% and ~~1.17%~~0.80%, respectively, compared to ~~2.37%~~10.61% and ~~0.30%~~1.17% for the same quarter last year. A further discussion of notable changes follows.

Interest Income

Total interest income ~~increased $7.6~~decreased $11.6 million, or ~~7.6%~~10.7%, to $96.4 million for the quarter ended March 31, 2022 from $108.0 million for the quarter ended March 31, ~~2021 from $100.4 million for the quarter ended March 31, 2020.~~2021. This ~~increase~~decrease is due to an increase in the average balance of interest-earning assets by $3.248 billion, or 33.7%, to $12.885 billion for the quarter ended March 31, 2021 from $9.637 billion for the quarter ended March 31, 2020. This increase is due to growth across all interest-earning asset categories as well as the MutualBank acquisition in the second quarter of 2020. Offsetting this increase in average balance was a decrease in the average yield earned on interest-earning assets to 2.91% for the quarter ended March 31, 2022 from 3.40% for the quarter ended March 31, 2021 ~~from 4.19%~~due to the continued low interest rate environment. Offsetting this decrease in average yield earned was an increase in the average balance of interest-earning assets by $565.2 million, or 4.4%, to $13.450 billion for the quarter ended March 31, ~~2020 due to decreases~~2022 from $12.885 billion for the quarter ended March 31, 2021, which was primarily driven by growth in ~~market interest rates over~~ the ~~past year.~~mortgage-backed securities portfolio.

Interest income on loans receivable ~~increased~~decreased by ~~$7.3~~$14.1 million, or ~~7.7%~~13.8%, to $88.2 million for the quarter ended March 31, 2022 compared to $102.3 million for the quarter ended March 31, ~~2021 compared~~2021. This decrease in interest income was due to ~~$95.0~~decreases in both the average balance of loans receivable and the average yield on loans receivable. The average balance of loans receivable decreased $507.7 million, or 4.9%, to $9.899 billion for the quarter ended March 31, ~~2020. This increase in interest income is primarily due to the increase in the average balance of loans receivable of $1.633 billion, or 18.6%, to~~2022 from $10.406 billion for the quarter ended March 31, 2021 ~~from $8.774 billion~~due to slower loan demand and $361.3 million of PPP loan forgiveness since March 31 of last year. The average yield on loans receivable decreased to 3.61% for the quarter ended March 31, ~~2020. This increase in average balance is primarily~~2022 from 3.99% for the quarter ended March 31, 2021, due to the ~~purchase of loans of $1.517 billion as part of the MutualBank acquisition. Included~~decrease in market interest rates. Also, included in loan interest income for the current quarter is ~~$535,000 of accretion related to MutualBank loan purchase accounting and $4.8~~just $1.2 million of accretion related to PPP fees, net of origination ~~costs. Partially offsetting this increase in average balance was a decrease~~costs, compared to $4.8 million in the ~~average yield on loans receivable to 3.99% for the~~first quarter ended March 31, 2021 from 4.35% for the quarter ended March 31, 2020, again due to the decrease in market interest rates as well as $370.5 million of PPP loans as of March 31, 2021 with coupon rates of 1.00%.last year.

Interest income on mortgage-backed securities ~~remained flat at $4.2~~increased by $2.2 million, ~~for both the quarter ended March 31, 2021 and~~or 51.4%, to $6.4 million for the quarter ended March 31, ~~2020. The~~2022 compared to $4.2 million for the quarter ended March 31, 2021. This increase was driven by an increase in the average balance of mortgage-backed securities ~~increased by $656.1~~of $620.6 million, or ~~98.1%~~46.9%, to $1.945 billion for the quarter ended March 31, 2022 from $1.325 billion for the quarter ended March 31, ~~2021 from $668.5 million for the quarter ended March 31, 2020.~~2021. This increase in average balance was primarily a result of ~~mortgage-backed securities received as part of the MutualBank acquisition as well as~~ additional purchases utilizing excess cash from deposit growth during the past year. ~~Offsetting this increase was a decrease in the~~The average yield on mortgage-backed securities remained relatively consistent, increasing slightly to 1.31% for the quarter ended March 31, 2022 from 1.27% for the quarter ended March 31, ~~2021 from 2.50% for the quarter ended March 31, 2020. This decrease in yield was primarily due to the assumption of mortgage-backed securities from MutualBank with~~

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~~market yields lower than the existing Northwest portfolio due to mark-to-market purchase accounting adjustments, as well as new purchases at lower market yields.~~2021.

Interest income on investment securities increased by ~~$376,000,~~$142,000, or ~~45.1%~~11.7%, for the quarter ended March 31, ~~2021~~2022 to ~~$1.2~~$1.4 million from ~~$833,000~~$1.2 million for the quarter ended March 31, ~~2020.~~2021. This increase was due to an increase in the average balance of investment securities by ~~$187.2~~$42.3 million, or ~~129.9%~~12.8%, to $373.7 million for the quarter ended March 31, 2022 from $331.4 million for the quarter ended March 31, ~~2021 from $144.2 million for the quarter ended March 31, 2020.~~2021. The average balance of investment securities increased due to the utilization of excess funds from deposit growth. ~~Partially offsetting this increase was a decrease in the~~The average yield on investment securities ~~which decreased~~remained consistent, decreasing slightly to 1.45% for the quarter ended March 31, 2022 from 1.46% for the quarter ended March 31, ~~2021 from 2.31% for the quarter ended March 31, 2020 due to new investment purchases at yields lower than existing portfolios.~~2021.

Dividends on FHLB stock decreased by ~~$146,000,~~$35,000, or ~~55.7%~~30.2%, to $81,000 for the quarter ended March 31, 2022 from $116,000 for the quarter ended March 31, ~~2021 from $262,000~~2021. This decrease was due to the decrease in the average balance of FHLB stock. The average balance of FHLB stock decreased by $7.9 million, or 36.4%, to $13.9 million for the quarter ended March 31, ~~2020. This decrease was primarily due to the decrease in average yield on FHLB stock. The average yield decreased to 2.17%~~2022 from $21.8 million for the quarter ended March 31, 2021 from 6.61% for the quarter ended March 31, 2020 as the FHLB of Pittsburgh recently decreased yields on required stock holdings in reaction to lower market interest rates. Slightly offsetting this decrease was an increase in the average balance of FHLB stock by $5.9 million, or 36.9%.2021. Required FHLB stock holdings fluctuate with, among other things, the utilization of our borrowing capacity as well as capital requirements established by the FHLB. The average yield increased to 2.38% for the quarter ended March 31, 2022 from 2.17% for the quarter ended March 31, 2021.

Interest income on interest-earning deposits increased by ~~$48,000,~~$284,000, or ~~35.6%~~155.2%, to $467,000 for the quarter ended March 31, 2022 from $183,000 for the quarter ended March 31, ~~2021 from $135,000 for the quarter ended March 31, 2020.~~2021. The average balance of interest-earning deposits increased by ~~$766.4~~$417.8 million, or 52.2%, to $1.2 billion for the quarter ended March 31, 2022 from $801.1 million for the quarter ended March 31, 2021 ~~from $34.7 million for the quarter ended March 31, 2020~~ due to excess liquidity from ~~recent deposit inflows. This~~loan paydowns and payoffs as well as PPP loan forgiveness. Also contributing to this increase ~~in average balance~~ was ~~offset by the decrease~~an increase in the average yield on interest-earning deposits to 0.15% for the quarter ended March 31, 2022 from 0.09% for the quarter ended March 31, ~~2021 from 1.54%~~2021.

Interest Expense

Interest expense decreased by $1.8 million, or 23.2%, to $5.8 million for the quarter ended March 31, ~~2020 as the Federal Reserve decreased their targeted federal funds rate.~~

~~Interest Expense~~

~~Interest expense decreased by $5.6 million, or 42.4%, to~~2022 from $7.6 million for the quarter ended March 31, ~~2021 from $13.2 million for the quarter ended March 31, 2020.~~2021. This decrease in interest expense was primarily due to the decline in the average cost of interest-bearing liabilities, which decreased to 0.25% for the quarter ended March 31, 2022 from 0.33% for the quarter ended March 31, ~~2021 from 0.72% for the quarter ended March 31, 2020.~~2021. This decrease resulted from decreases in the interest rate paid on deposits ~~and junior subordinated debentures~~ in response to decreases in market interest rates. Partially offsetting this decrease was an increase in the average balance of interest-bearing liabilities by ~~$2.039~~$180.2 million, or 1.9%,

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to $9.559 billion ~~or 27.8%, to~~for the quarter ended March 31, 2022 from $9.378 billion for the quarter ended March 31, ~~2021 from $7.339 billion for the quarter ended March 31, 2020.~~2021. This increase in the average balance resulted from ~~both internal~~ growth in ~~deposits and borrowings as well as the addition of $1.617 billion of deposits from the acquisition of MutualBank.~~deposits.

Net Interest Income

Net interest income ~~increased~~decreased by ~~$13.2~~$9.8 million, or ~~15.2%~~9.8%, to $90.6 million for the quarter ended March 31, 2022 from $100.5 million for the quarter ended March 31, ~~2021 from $87.2 million for the quarter ended March 31, 2020.~~2021. This ~~increase~~decrease is attributable to the factors discussed above. ~~Despite the overall increase in net interest income due primarily to balance sheet growth and the accretion of loan purchase accounting and PPP fees, our~~Our interest rate spread decreased to 2.66% for the quarter ended March 31, 2022 from 3.07% for the quarter ended March 31, 2021 ~~from 3.47%~~and our net interest margin decreased to 2.73% for the quarter ended March 31, ~~2020 and our net interest margin decreased to~~2022 from 3.16% for the quarter ended March 31, 2021 ~~from 3.64% for the quarter ended March 31, 2020~~ primarily due to declining interest-earning asset ~~yields. Contributing to~~yields as well as the ~~decline in asset yields was an increase in average~~increased weighting of cash ~~balances~~and investments as a percentage of ~~$766.4 million, earning just 0.09%, due to deposit growth associated with the PPP loan funds and consumer stimulus checks.~~total assets.

Provision for Credit Losses

The negative provision for credit losses decreased by ~~$33.3~~$4.1 million, or ~~120.3%~~73.6%, to a current period credit of $1.5 million for the quarter ended March 31, 2022 compared to a negative provision of $5.6 million for the quarter ended March 31, ~~2021 compared to a~~2021. The current period negative provision ~~expense of $27.6 million for the quarter ended March 31, 2020. The prior year first quarter~~ was ~~significantly impacted~~driven by ~~the onset of COVID-19~~continued improvements in asset quality and ~~the uncertainty surrounding the possible~~classified loans, as described above. The negative ~~effect on economic forecasts. As such, the outsized~~ provision in the prior year was driven by the ~~estimated increase in possible future loan~~release of the previously outsized allowance for credit losses ~~due to COVID-19.~~established during the COVID-19 pandemic.

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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~~“Allowance for Credit Losses."” The provision that is recorded is sufficient, 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, ~~2021.~~2022.

Noninterest Income

Noninterest income ~~increased~~decreased by ~~$4.0~~$6.2 million, or ~~14.2%~~19.4%, to $25.7 million for the quarter ended March 31, 2022 from $32.0 million for the quarter ended March 31, ~~2021 from $28.0~~2021. This decrease was primarily due to a decrease in mortgage banking income of $4.6 million, or 75.7%, to $1.5 million for the quarter ended March 31, ~~2020. This increase was primarily due to an increase in mortgage banking income of $4.8 million to~~2022 from $6.0 million for the quarter ended March 31, 2021 ~~from $1.2~~due to the impact of less favorable pricing in the secondary market. In addition, insurance commission income decreased by $2.5 million, or 100.0%, for the quarter ended March 31, ~~2020~~2022 due to ~~continued efforts to expand our secondary market sales capabilities over~~ the ~~last year,~~sale of the insurance business during the second quarter of 2021. Partially offsetting these decreases was an increase in service charges and fees of $673,000, or 5.4%, as ~~well as an interest rate environment conducive to refinance~~customer activity ~~and attractive secondary market pricing.~~ increased in 2022 after COVID-19 restricted behavior in the prior year.In addition, trust and other financial services income increased ~~$1.5 million,~~$528,000, or ~~29.7%, as a result of additional fee income for the MutualBank acquisition. Partially offsetting these increases was a decrease in service charges and fees of $2.7 million, or 18.0%~~8.1%, due to ~~the impact of the Durbin amendment on our interchange fees which came into effect~~successful growth in ~~the second half of 2020.~~wealth management relationships.

Noninterest Expense

Noninterest expense ~~increased~~decreased by ~~$7.6~~$4.2 million, or ~~9.6%~~4.9%, to $81.9 million for the quarter ended March 31, 2022 from $86.2 million for the quarter ended March 31, ~~2021 from $78.6~~2021. This decrease was due to a decline in a majority of the noninterest expense categories. Professional services decreased $2.0 million, or 43.8%, to $2.6 million for the quarter ended March 31, ~~2020. This increase resulted primarily~~2022 from ~~an increase of $4.5 million, or 10.5%, in compensation and employee benefits to $47.2~~$4.6 million for the quarter ended March 31, 2021 ~~from $42.7 million for the quarter ended March 31, 2020 primarily~~ due to the addition of MutualBank employees during the second quarter of 2020. In addition, processing expenses increased by $2.3 million, or 20.8%, to $13.5 million for the quarter ended March 31, 2021 from $11.1 million for the quarter ended March 31, 2020 as we continue to invest in technology and infrastructure and as activity driven utilization fees for online and mobile banking have increased. Professional services expense increased $1.8 million, or 62.9%, due to the utilizationuse of third-party experts to recruit talent and assist with our digital strategy ~~rollout.~~rollout in the prior year. Premises and occupancy costs ~~increased $1.3~~decreased $1.0 million, or ~~18.0%~~11.5%, ~~over~~to $7.8 million for the quarter ended March 31, 2022 from $8.8 million for the quarter ended March 31, 2021 due primarily to the cost savings from the prior year branch optimization initiative. In addition, there was an decrease in other expenses of $1.0 million for the quarter ended March 31, 2022 due primarily due to ~~additional snow removal costs. Lastly, FDIC insurance premiums increased by $1.3 million due to assessment credits received~~the increase in the ~~previous year.~~discount rate used to calculate our pension liability and related pension expense. Partially offsetting these decreases was a $1.4 million increase in merger, asset disposition and restructuring expense as a result of the branch optimization initiative announced during the fourth quarter of 2021.

Income Taxes

The provision for income taxes ~~increased~~decreased by ~~$10.6~~$4.0 million, or 34.4%, to $7.6 million for the quarter ended March 31, 2022 from $11.6 million for the quarter ended March 31, ~~2021 from $1.0 million for the quarter ended March 31, 2020.~~ 2021. This ~~increase~~decrease in income ~~tax expense is primarily~~taxes was due to a decrease in income before taxes in the ~~result of the $42.9 million increase in pretax income to $51.8 million for the quarter ended March 31, 2021 from $9.0 million for the quarter ended March 31, 2020.~~current year. We anticipate our effective tax rate to be between ~~20.0%~~21.0% and 23.0% for the year ending December 31, ~~2021.~~2022.

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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,											Quarter ended March 31,
		2021					2020						2022					2021
		Average balance		Interest	Avg. yield/ cost (h)		Average balance		Interest	Avg. yield/ cost (h)			Average balance		Interest	Avg. yield/ cost (i)		Average balance		Interest	Avg. yield/ cost (i)
Assets	Assets											Assets
Interest-earning assets:	Interest-earning assets:											Interest-earning assets:
Residential mortgage loans	Residential mortgage loans	$	3,007,439	26,366	3.51	%	$	2,845,483	28,062	3.94	%	Residential mortgage loans	$	2,980,788	25,542	3.43	%	$	3,007,439	26,366	3.51	%
Home equity loans	Home equity loans	1,432,009		12,815	3.63	%	1,345,059		14,801	4.43	%	Home equity loans	1,293,986		11,472	3.60	%	1,432,009		12,815	3.63	%
Consumer loans	Consumer loans	1,463,284		14,566	4.04	%	1,123,336		12,160	4.35	%	Consumer loans	1,799,037		14,907	3.36	%	1,463,284		14,566	4.04	%

Commercial real estate loans	Commercial real estate loans	3,313,892		38,471	4.64	%	2,747,419		31,437	4.53	%	Commercial real estate loans	3,000,204		29,757	3.97	%	3,313,892		38,471	4.64	%
Commercial loans	Commercial loans	1,189,812		10,566	3.55	%	712,621		8,856	4.92	%	Commercial loans	824,770		6,897	3.34	%	1,189,812		10,566	3.55	%
Loans receivable (a) (b) (d) (includes FTE adjustments of $600 and $336, respectively)		10,406,436		102,784	4.01	%	8,773,918		95,316	4.37	%
Loans receivable (a) (b) (d) (includes FTE adjustments of $401 and $600, respectively)												Loans receivable (a) (b) (d) (includes FTE adjustments of $401 and $600, respectively)	9,898,785		88,575	3.63	%	10,406,436		102,784	4.01	%
Mortgage-backed securities (c)	Mortgage-backed securities (c)	1,324,558		4,200	1.27	%	668,470		4,175	2.50	%	Mortgage-backed securities (c)	1,945,173		6,360	1.31	%	1,324,558		4,200	1.27	%
Investment securities (c) (d) (includes FTE adjustments of $254 and $60, respectively)		331,358		1,381	1.67	%	144,152		881	2.44	%
Investment securities (c) (d) (includes FTE adjustments of $189 and $254, respectively)												Investment securities (c) (d) (includes FTE adjustments of $189 and $254, respectively)	373,694		1,540	1.65	%	331,358		1,381	1.67	%
FHLB stock, at cost	FHLB stock, at cost	21,811		116	2.17	%	15,931		262	6.61	%	FHLB stock, at cost	13,870		81	2.38	%	21,811		116	2.17	%
Other interest-earning deposits	Other interest-earning deposits	801,119		183	0.09	%	34,697		135	1.54	%	Other interest-earning deposits	1,218,960		467	0.15	%	801,119		183	0.09	%
Total interest-earning assets (includes FTE adjustments of $854 and $396, respectively)		12,885,282		108,664	3.42	%	9,637,168		100,769	4.21	%
Total interest-earning assets (includes FTE adjustments of $590 and $854, respectively)												Total interest-earning assets (includes FTE adjustments of $590 and $854, respectively)	13,450,482		97,023	2.93	%	12,885,282		108,664	3.42	%
Noninterest-earning assets (e)	Noninterest-earning assets (e)	1,102,477					960,303					Noninterest-earning assets (e)	973,092					1,102,477

Total assets	Total assets	$	13,987,759				$	10,597,471				Total assets	$	14,423,574				$	13,987,759

Liabilities and shareholders’ equity	Liabilities and shareholders’ equity											Liabilities and shareholders’ equity
Interest-bearing liabilities:	Interest-bearing liabilities:											Interest-bearing liabilities:
Savings deposits	Savings deposits	$	2,118,030	625	0.12	%	$	1,611,111	727	0.18	%	Savings deposits	$	2,334,494	592	0.10	%	$	2,118,030	625	0.12	%
Interest-bearing demand deposits	Interest-bearing demand deposits	2,783,429		429	0.06	%	1,915,871		1,307	0.27	%	Interest-bearing demand deposits	2,875,430		321	0.05	%	2,783,429		429	0.06	%
Money market deposit accounts	Money market deposit accounts	2,497,495		657	0.11	%	1,921,243		3,088	0.65	%	Money market deposit accounts	2,668,105		653	0.10	%	2,497,495		657	0.11	%
Time deposits	Time deposits	1,583,525		3,803	0.97	%	1,528,891		6,281	1.65	%	Time deposits	1,292,608		2,185	0.69	%	1,583,525		3,803	0.97	%
Borrowed funds (f)	Borrowed funds (f)	267,163		1,412	2.14	%	240,118		709	1.19	%	Borrowed funds (f)	135,289		158	0.47	%	143,806		154	0.43	%
Subordinated debentures (g)												Subordinated debentures (g)	123,608		1,250	4.05	%	123,357		1,258	4.14	%
Junior subordinated debentures	Junior subordinated debentures	128,817		642	1.99	%	121,809		1,038	3.37	%	Junior subordinated debentures	129,077		651	2.02	%	128,817		642	1.99	%
Total interest-bearing liabilities	Total interest-bearing liabilities	9,378,459		7,568	0.33	%	7,339,043		13,150	0.72	%	Total interest-bearing liabilities	9,558,611		5,810	0.25	%	9,378,459		7,568	0.33	%
Noninterest-bearing demand deposits (g)		2,805,206					1,640,180
Noninterest-bearing demand deposits (h)												Noninterest-bearing demand deposits (h)	3,060,698					2,805,206
Noninterest-bearing liabilities	Noninterest-bearing liabilities	265,667					268,139					Noninterest-bearing liabilities	203,537					265,667

Total liabilities	Total liabilities	12,449,332					9,247,362					Total liabilities	12,822,846					12,449,332

Shareholders’ equity	Shareholders’ equity	1,538,427					1,350,109					Shareholders’ equity	1,600,728					1,538,427

Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	13,987,759				$	10,597,471				Total liabilities and shareholders’ equity	$	14,423,574				$	13,987,759

Net interest income/Interest rate spread	Net interest income/Interest rate spread			101,096	3.09	%			87,619	3.48	%	Net interest income/Interest rate spread			91,213	2.68	%			101,096	3.09	%

Net interest-earning assets/Net interest margin	Net interest-earning assets/Net interest margin	$	3,506,823		3.18	%	$	2,298,125		3.66	%	Net interest-earning assets/Net interest margin	$	3,891,871		2.75	%	$	3,506,823		3.18	%

Ratio of interest-earning assets to interest-bearing liabilities		1.37X					1.31X
Ratio of interest-earning assets to interest- bearing liabilities												Ratio of interest-earning assets to interest- bearing liabilities	1.41X					1.37X

(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 fully taxable equivalent ~~("FTE"~~(“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 and subordinated debt.~~borrowings.

(g)On September 9, 2020, the Company issued $125.0 million of 4.00% fixed-to-floating rate subordinated notes with a maturity of September 15, 2030.

(h)Average cost of deposits were ~~0.19%~~0.12% and ~~0.53%~~0.19%, respectively.

~~(h)~~(i)Annualized. Shown on a FTE basis. The FTE basis adjusts for the tax benefit of income on certain tax exempt loans and investments using the federal statutory rate applicable to each period presented. We believe this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts. GAAP basis yields were: loans — ~~3.99%~~3.61% and ~~4.35%~~3.99%, respectively; investment securities — ~~1.46%~~1.45% and ~~2.31%~~1.46%, respectively; interest-earning assets — ~~3.40%~~2.91% and ~~4.19%~~3.40%, respectively. GAAP basis net interest rate spreads were ~~3.07%~~2.66% and ~~3.47%~~3.07%, respectively; and GAAP basis net interest margins were ~~3.16%~~2.73% and ~~3.64%~~3.16%, respectively.

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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 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, 2021 vs. 2020					For the quarter ended March 31, 2022 vs. 2021
		Increase/(decrease) due to			Total increase/(decrease)		Increase/(decrease) due to			Total increase/(decrease)
		Rate		Volume			Rate		Volume
Interest-earning assets:	Interest-earning assets:					Interest-earning assets:
Loans receivable	Loans receivable	$	(7,869)	15,337	7,468	Loans receivable	$	(9,666)	(4,543)	(14,209)
Mortgage-backed securities	Mortgage-backed securities	(2,055)		2,080	25	Mortgage-backed securities	130		2,030	2,160
Investment securities	Investment securities	(280)		780	500	Investment securities	(16)		175	159
FHLB stock, at cost	FHLB stock, at cost	(177)		31	(146)	FHLB stock, at cost	11		(46)	(35)
Other interest-earning deposits	Other interest-earning deposits	(126)		174	48	Other interest-earning deposits	124		160	284
Total interest-earning assets	Total interest-earning assets	(10,507)		18,402	7,895	Total interest-earning assets	(9,417)		(2,224)	(11,641)

Interest-bearing liabilities:	Interest-bearing liabilities:					Interest-bearing liabilities:
Savings deposits	Savings deposits	(246)		144	(102)	Savings deposits	(88)		55	(33)
Interest-bearing demand deposits	Interest-bearing demand deposits	(1,001)		123	(878)	Interest-bearing demand deposits	(118)		10	(108)
Money market deposit accounts	Money market deposit accounts	(2,557)		126	(2,431)	Money market deposit accounts	(46)		42	(4)
Time deposits	Time deposits	(2,557)		79	(2,478)	Time deposits	(1,126)		(492)	(1,618)
Borrowed funds	Borrowed funds	566		137	703	Borrowed funds	14		(10)	4
Subordinated debt						Subordinated debt	(28)		20	(8)
Junior subordinated debentures	Junior subordinated debentures	(419)		23	(396)	Junior subordinated debentures	8		1	9
Total interest-bearing liabilities	Total interest-bearing liabilities	(6,214)		632	(5,582)	Total interest-bearing liabilities	(1,384)		(374)	(1,758)

Net change in net interest income	Net change in net interest income	$	(4,293)	17,770	13,477	Net change in net interest income	$	(8,033)	(1,850)	(9,883)

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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, enticing customers to extend certificates of deposit maturities, 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 and the balance sheet structure. On a quarterly basis, this Committee also reviews the interest rate risk position and cash flow projections.

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 15%, 30% and 35%, 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 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, ~~2021~~2022 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, ~~2021~~2022 levels.


		Increase									Decrease				Increase									Decrease
Parallel shift in interest rates over the next 12 months	Parallel shift in interest rates over the next 12 months	100 bps			200 bps			300 bps			100 bps			Parallel shift in interest rates over the next 12 months	100 bps			200 bps			300 bps			100 bps
Projected percentage increase/(decrease) in net interest income	Projected percentage increase/(decrease) in net interest income	1.3		%	1.7		%	1.7		%	(3.7)		%	Projected percentage increase/(decrease) in net interest income	1.1		%	1.7		%	2.2		%	(4.2		%)
Projected percentage increase/(decrease) in net income	Projected percentage increase/(decrease) in net income	3.4		%	4.3		%	4.5		%	(9.1)		%	Projected percentage increase/(decrease) in net income	3.1		%	4.9		%	6.6		%	(11.4		%)
Projected increase/(decrease) in return on average equity	Projected increase/(decrease) in return on average equity	3.2		%	4.1		%	4.3		%	(8.8)		%	Projected increase/(decrease) in return on average equity	3.0		%	4.7		%	6.3		%	(11.1		%)
Projected increase/(decrease) in earnings per share	Projected increase/(decrease) in earnings per share	$	0.03		$	0.04		$	0.04		$	(0.09)		Projected increase/(decrease) in earnings per share	$	0.02		$	0.04		$	0.05		$	(0.10)
Projected percentage decrease in market value of equity		(1.4)		%	(7.5)		%	(14.6)		%	(8.9)		%
Projected percentage increase/(decrease) in market value of equity														Projected percentage increase/(decrease) in market value of equity	(5.0		%)	(10.2		%)	(15.3		%)	1.6		%

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.

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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 ~~its~~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 ~~12.~~11.

Item 1A. RISK FACTORS

Except as previously disclosed, there have been no material ~~updated~~updates or additions to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 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.

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Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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, ~~2021, we~~2022, there were no shares of common stock repurchased ~~353,552 shares~~ and there are a maximum of ~~3,720,710~~2,261,130 remaining shares that can be purchased under the current repurchase program.

Month Number of shares purchased Average
price paid
per share Total number of shares purchased as part of a publicly announced repurchase plan Maximum number of
shares yet to be purchased under the plan
January 165,497 $ 12.79 165,497 3,908,765
February 188,055 12.90 188,055 3,720,710
March — — — 3,720,710
353,552

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

Not applicable.

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Item 6. EXHIBITS


10.1			Northwest Bancshares, Inc. 2022 Equity Incentive Plan (incorporated by reference to the proxy statement for the Annual Meeting of Stockholders filed with the Securities and Exchange Commission on March 10, 2022 (file no. 001-34582)).

10.2			Northwest Bank Annual Performance Award Plan.

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.

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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, ~~2021~~2022	By:	/s/ Ronald J. Seiffert
			Ronald J. Seiffert
			Chairman, President and Chief Executive Officer
			(Duly Authorized Officer)


Date:	May 6, ~~2021~~2022	By:	/s/ Jeffrey ~~R. White~~J. Maddigan
			Jeffrey ~~R. White~~J. Maddigan
			~~Senior~~Executive Vice President, Finance, Accounting and ~~Controller~~Corporate Treasurer
			(Principal Accounting Officer)

5453


	Balance as of March 31, 2020		Current period provision	Charge-offs	Recoveries	Cumulative effect of ASU 2016-13*	Balance as of December 31, 2019
Allowance for Credit Losses
Personal Banking:
Residential mortgage loans	$	10,673	894	(343)	107	7,441	2,574
Home equity loans	9,786		895	(289)	205	5,786	3,189
Vehicle loans	11,994		5,359	(1,843)	344	842	7,292
Consumer loans	5,166		3,518	(1,645)	416	(2,424)	5,301
Total Personal Banking	37,619		10,666	(4,120)	1,072	11,645	18,356

Commercial Banking:
Commercial real estate loans	29,380		11,269	(310)	290	2,288	15,843
Commercial real estate loans - owner occupied	8,374		1,365	(21)	7	1,278	5,745
Commercial loans	17,524		4,337	(815)	424	(4,419)	17,997
Total Commercial Banking	55,278		16,971	(1,146)	721	(853)	39,585
Total	92,897		27,637	(5,266)	1,793	10,792	57,941

Allowance for Credit Losses - off-balance sheet exposure
Personal Banking:

Home equity loans	34		4	0	0	(293)	323
Consumer loans	0		0	0	0	(402)	402
Total Personal Banking	34		4	0	0	(695)	725

Commercial Banking:
Commercial real estate loans	3,294		1,283	0	0	1,934	77
Commercial real estate loans - owner occupied	95		4	0	0	88	3
Commercial loans	1,281		189	0	0	923	169
Total Commercial Banking	4,670		1,476	0	0	2,945	249
Total off-balance sheet exposure	$	4,704	1,480	0	0	2,250	974


	For the quarter ended March 31, 2020
	Number of contracts	Recorded investment at the time of modification		Current recorded investment	Current allowance

Personal Banking:
Residential mortgage loans	0	$	0	0	0
Home equity loans	1	19		18	0
Vehicle loans	0	0		0	0
Consumer loans	0	0		0	0
Total Personal Banking	1	19		18	0

Commercial Banking:
Commercial real estate loans	0	0		0	0
Commercial real estate loans - owner occupied	2	2,077		2,076	176
Commercial loans	1	2,500		2,500	1,628
Total Commercial Banking	3	4,577		4,576	1,804

Total	4	$	4,596	4,594	1,804


	YTD March 31, 2021		2020	2019	2018	2017	Prior	Revolving loans	Revolving loans converted to term loans	Total loans receivable
Personal Banking:
Residential mortgage loans
Pass	$	134,720	643,244	370,299	204,157	223,251	1,374,432	0	0	2,950,103
Substandard	0		88	0	1,113	1,232	19,142	0	0	21,575
Total residential mortgage loans	134,720		643,332	370,299	205,270	224,483	1,393,574	0	0	2,971,678
Home equity loans
Pass	32,737		259,169	177,981	86,119	79,633	276,030	443,607	41,481	1,396,757
Substandard	0		0	360	297	479	5,648	2,435	1,548	10,767
Total home equity loans	32,737		259,169	178,341	86,416	80,112	281,678	446,042	43,029	1,407,524
Vehicle loans
Pass	177,560		413,746	311,993	190,015	59,197	47,027	0	0	1,199,538
Substandard	0		541	1,739	1,351	793	891	0	0	5,315
Total vehicle loans	177,560		414,287	313,732	191,366	59,990	47,918	0	0	1,204,853
Consumer loans
Pass	31,080		116,764	73,190	30,897	15,021	17,456	61,529	2,027	347,964
Substandard	1		179	243	107	68	643	244	53	1,538
Total consumer loans	31,081		116,943	73,433	31,004	15,089	18,099	61,773	2,080	349,502
Total Personal Banking	376,098		1,433,731	935,805	514,056	379,674	1,741,269	507,815	45,109	5,933,557
Business Banking:
Commercial real estate loans
Pass	57,139		441,573	465,578	306,635	253,157	839,616	34,516	9,070	2,407,284
Special Mention	0		331	18,003	12,862	39,582	24,896	328	728	96,730
Substandard	0		33,707	22,108	63,575	39,069	155,940	2,883	4,701	321,983


Total commercial real estate loans	57,139		475,611	505,689	383,072	331,808	1,020,452	37,727	14,499	2,825,997
Commercial real estate loans - owner occupied
Pass	6,883		29,494	59,292	83,443	67,713	134,215	3,971	8,787	393,798
Special Mention	0		0	4,277	4,467	4,944	9,076	851	0	23,615
Substandard	0		0	6,648	1,566	11,025	25,791	762	234	46,026


Total commercial real estate loans - owner occupied	6,883		29,494	70,217	89,476	83,682	169,082	5,584	9,021	463,439
Commercial loans
Pass	216,409		316,410	98,014	45,486	45,621	109,288	220,954	9,702	1,061,884
Special Mention	200		5,610	2,572	2,125	2,803	172	8,223	918	22,623
Substandard	0		6,291	5,414	6,180	3,353	4,909	21,031	13,362	60,540


Total commercial loans	216,609		328,311	106,000	53,791	51,777	114,369	250,208	23,982	1,145,047
Total Business Banking	280,631		833,416	681,906	526,339	467,267	1,303,903	293,519	47,502	4,434,483

Total loans	$	656,729	2,267,147	1,617,711	1,040,395	846,941	3,045,172	801,334	92,611	10,368,040


Month	Number of shares purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced repurchase plan	Maximum number of shares yet to be purchased under the plan
January	165,497	$	12.79	165,497	3,908,765
February	188,055	12.90		188,055	3,720,710
March	—	—		—	3,720,710
	353,552