Docoh
Loading...

NWBI Northwest Bancshares

Filed: 26 Oct 20, 9:10am

EXHIBIT 99.1
 
PRESS RELEASE OF NORTHWEST BANCSHARES, INC.
EARNINGS RELEASE
 
FOR IMMEDIATE RELEASE
 
Contact:Ronald J. Seiffert, Chairman, President and Chief Executive Officer (814) 726-2140
William W. Harvey, Jr., Senior Executive Vice President and Chief Financial Officer (814) 726-2140
 
Northwest Bancshares, Inc. Announces Third Quarter 2020 Earnings and Quarterly Dividend
 
Warren, Pennsylvania — October 26, 2020
 
Northwest Bancshares, Inc., (the "Company"), (NasdaqGS: NWBI) announced net income for the quarter ended September 30, 2020 of $38.1 million, or $0.30 per diluted share. This represents an increase of $4.6 million, or 13.9%, compared to the same quarter last year when net income was $33.4 million, or $0.31 per diluted share. The annualized returns on average shareholders’ equity and average assets for the quarter ended September 30, 2020 were 9.82% and 1.09% compared to 9.90% and 1.25% for the same quarter last year. As noted in the non-GAAP reconciliation, when adjusting for COVID-related provision expense and branch optimization related costs, non-GAAP net income was approximately $40.1 million, or $0.32 per diluted share, which would represent an increase over the same quarter in the prior year of $6.7 million, or 20.0%, and result in a return on average shareholders’ equity of 10.36% and a return on average assets of 1.15%.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.19 per share payable on November 16, 2020 to shareholders of record as of November 5, 2020.  This is the 104th consecutive quarter in which the Company has paid a cash dividend. Based on the market value of the Company's common stock as of September 30, 2020, this represents an annualized dividend yield of approximately 8.26%.
 
In making this announcement, Ronald J. Seiffert, Chairman, President and CEO, noted, "We are very pleased with the many positive results in the current quarter beginning once again with strong fee income led by our mortgage banking operations. We are also delighted to report that our credit loss provision decreased significantly from the first and second quarters, as expected, and essentially mirrored net charge-offs in the third quarter. From a credit quality perspective, delinquencies continue to be well maintained and loans requesting payment deferrals have decreased significantly from last quarter from $1.312 billion, or 12.1% of the loan portfolio, at June 30, 2020 to just $212.7 million, or 2.0%, at September 30, 2020. Although classified assets jumped by $161.3 million, or 54.4%, during the quarter to $457.8 million, over 45% of total classified assets are in the hotel/hospitality industry with virtually all the increase attributable to downgrades in this sector as second deferral requests were considered."

Mr. Seiffert continued, "Looking ahead, we are anxious to execute upon the initiatives we have set in motion this year including branch optimization to be completed in December, the continued implementation of our digital strategy and capitalizing on our very successful subordinated debt offering."

Net interest income increased by $12.6 million, or 13.9%, to $103.5 million for the quarter ended September 30, 2020, from $90.9 million for the quarter ended September 30, 2019, largely due to a $6.2 million, or 6.1%, increase in interest income on loans receivable. This increase in interest income was mainly due to an increase of $2.031 billion, or 23.2%, in the average balance of loans, primarily as a result of the acquisition of MutualBank during the second quarter of 2020. Also contributing to this increase in net interest income was a decrease of $6.1 million, or 38.0%, in total interest expense due to a decline in market interest rates when compared to the prior year, resulting in a decrease in the cost of our interest-bearing liabilities to 0.42% for the quarter ended September 30, 2020 from 0.89% for the quarter ended September 30, 2019. Despite the overall increase in net interest income, net interest margin decreased to 3.26% for the quarter ended September 30, 2020 from 3.79% for the same quarter last year as interest earning asset yields decreased to 3.55% for the quarter ended September 30, 2020 from 4.41% for the quarter ended September 30, 2019. Contributing to the decline in asset yields was the increase in average cash balances of $762.8 million, earning just 0.11%, due to deposit growth associated with Payroll Protection Program ("PPP") loan funds and consumer stimulus checks. In addition, PPP loan balances of approximately $500 million with coupon rates of 1.00%, have negatively impacted overall interest earning asset yields.

 The provision for credit losses increased by $3.5 million to $6.8 million for the quarter ended September 30, 2020, from $3.3 million for the quarter ended September 30, 2019. During the current year, the Company adopted ASU 2016-13, referred to as Current Expected Credit Losses ("CECL"), which requires that all financial assets measured at amortized cost be presented at
1


the net amount expected to be collected inclusive of the entity's current estimate of all lifetime expected credit losses. In addition, the estimated economic impact of COVID-19 caused us to increase our provision expense for the quarter by approximately $1.5 million. Finally, total classified loans have increased to $457.8 million, or 4.25% of total loans, at September 30, 2020 from $205.9 million, or 2.33% of total loans, as of September 30, 2019.
     
Noninterest income increased by $10.5 million, or 40.1%, to $36.7 million for the quarter ended September 30, 2020, from $26.2 million for the quarter ended September 30, 2019.  This increase was primarily due to the increase in mortgage banking income of $9.1 million to $11.1 million for the quarter ended September 30, 2020 from $1.9 million for the quarter ended September 30, 2019. This increase was due to continued efforts to expand our secondary market sales capabilities over the last year, as well as an interest rate environment conducive to refinance activity and attractive secondary market pricing. In addition, there was a $796,000, or 5.9%, increase in service charges and fees and a $767,000, or 16.6%, increase in trust and other financial services income, both primarily due to additional fee income as a result of the acquisition of MutualBank.
     
Noninterest expense increased by $16.3 million, or 23.1%, to $86.9 million for the quarter ended September 30, 2020, from $70.6 million for the quarter ended September 30, 2019. This increase resulted primarily from an increase of $6.6 million, or 16.1%, in compensation and employee benefits due to both internal growth in compensation and staff as well as the addition of MutualBank employees. Also contributing to this increase was an increase of $3.9 million, or 35.2%, in processing expenses as we continue to invest in technology and infrastructure and as activity driven utilization fees for online and mobile banking and loan origination platforms has increased. Lastly, FDIC insurance premiums increased $2.2 million due to assessment credits received in the previous year.

The provision for income taxes decreased by $1.3 million, or 13.5%, to $8.5 million for the quarter ended September 30, 2020, from $9.8 million for the quarter ended September 30, 2019. This decrease was due primarily to a lower annual effective tax rate as a result of the lower year-to-date income before taxes in the current year as well as a change in state tax apportionment.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution offering a complete line of business and personal banking products, employee benefits and wealth management services, as well as the fulfillment of business and personal insurance needs. As of September 30, 2020, Northwest operated 205 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York, Ohio and Indiana. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market (“NWBI”). Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed on-line at www.northwest.com.
 
#                      #                      #
 
Forward-Looking Statements - This release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses or the ability to complete sales transactions; (7) increased risk associated with commercial real-estate and business loans; and (8) the effect of any pandemic, including COVID-19, war or act of terrorism.  Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.
2


Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Unaudited)
(dollars in thousands, except per share amounts)
September 30,
2020
December 31,
2019
September 30,
2019
Assets  
Cash and cash equivalents$656,749 60,846 107,602 
Marketable securities available-for-sale (amortized cost of $1,385,835, $815,495 and $801,465, respectively)1,409,150 819,901 807,823 
Marketable securities held-to-maturity (fair value of $16,168, $18,223 and $19,237, respectively)15,333 18,036 18,958 
Total cash and cash equivalents and marketable securities2,081,232 898,783 934,383 
Residential mortgage loans held-for-sale25,140 7,709 8,859 
Residential mortgage loans3,118,229 2,860,418 2,887,274 
Home equity loans1,484,365 1,342,918 1,328,173 
Consumer loans1,487,083 1,125,132 1,094,293 
Commercial real estate loans3,319,743 2,754,390 2,812,839 
Commercial loans1,347,292 718,107 720,579 
Total loans receivable10,781,852 8,808,674 8,852,017 
Allowance for credit losses(140,209)(57,941)(52,859)
Loans receivable, net10,641,643 8,750,733 8,799,158 
Federal Home Loan Bank stock, at cost23,171 14,740 21,401 
Accrued interest receivable36,916 25,755 27,069 
Real estate owned, net2,575 950 1,237 
Premises and equipment, net166,919 147,409 148,796 
Bank-owned life insurance252,621 189,091 187,971 
Goodwill386,044 346,103 344,720 
Other intangible assets, net21,601 23,076 22,410 
Other assets176,083 97,268 93,329 
Total assets$13,788,805 10,493,908 10,580,474 
Liabilities and shareholders’ equity  
Liabilities  
Noninterest-bearing demand deposits$2,641,234 1,609,653 1,905,650 
Interest-bearing demand deposits2,663,878 1,944,108 1,678,644 
Money market deposit accounts2,396,567 1,863,998 1,828,001 
Savings deposits2,022,918 1,604,838 1,635,754 
Time deposits1,732,022 1,569,410 1,633,451 
Total deposits11,456,619 8,592,007 8,681,500 
Borrowed funds398,216 246,336 255,257 
Junior subordinated debentures128,729 121,800 121,787 
Advances by borrowers for taxes and insurance29,755 44,556 24,331 
Accrued interest payable1,002 1,142 1,314 
Other liabilities227,253 134,782 144,515 
Total liabilities12,241,574 9,140,623 9,228,704 
Shareholders’ equity  
Preferred stock, $0.01 par value: 50,000,000 shares authorized, no shares issued— — — 
Common stock, $0.01 par value: 500,000,000 shares authorized, 127,801,297, 106,859,088, and 106,658,067 shares issued and outstanding, respectively1,278 1,069 1,067 
Paid-in capital1,023,827 805,750 801,382 
Retained earnings544,695 583,407 577,018 
Accumulated other comprehensive loss(22,569)(36,941)(27,697)
Total shareholders’ equity1,547,231 1,353,285 1,351,770 
Total liabilities and shareholders’ equity$13,788,805 10,493,908 10,580,474 
Equity to assets11.22 %12.90 %12.78 %
Tangible common equity to assets8.52 %9.72 %9.64 %
Book value per share$12.11 12.66 12.67 
Tangible book value per share$8.92 9.21 9.23 
Closing market price per share$9.20 16.63 16.39 
Full time equivalent employees2,523 2,209 2,218 
Number of banking offices213 181 182 
3


Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share amounts)
 Quarter ended
 September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
 
Interest income:    
Loans receivable$107,241 103,012 94,973 97,866 101,091 
Mortgage-backed securities4,652 4,038 4,175 4,237 4,188 
Taxable investment securities427 439 648 683 884 
Tax-free investment securities655 564 185 201 224 
FHLB dividends218 309 262 262 307 
Interest-earning deposits221 185 135 169 172 
Total interest income113,414 108,547 100,378 103,418 106,866 
Interest expense:    
Deposits8,443 9,336 11,403 12,893 13,694 
Borrowed funds1,437 1,133 1,747 1,580 2,236 
Total interest expense9,880 10,469 13,150 14,473 15,930 
Net interest income103,534 98,078 87,228 88,945 90,936 
   Provision for credit losses6,818 51,750 27,637 8,223 3,302 
Net interest income after provision for credit losses96,716 46,328 59,591 80,722 87,634 
Noninterest income: 
Gain/(loss) on sale of investments(12)(8)181 27 — 
Gain on sale of loans— — 1,302 908 826 
Service charges and fees14,354 13,069 15,116 14,125 13,558 
Trust and other financial services income5,376 4,823 5,001 4,517 4,609 
Insurance commission income2,331 2,395 2,372 1,858 1,887 
Gain/(loss) on real estate owned, net(32)(97)(91)86 (227)
Income from bank-owned life insurance1,576 1,248 1,036 1,121 1,095 
Mortgage banking income11,055 12,022 1,194 1,494 1,921 
Other operating income2,022 2,044 1,865 4,077 2,500 
Total noninterest income36,670 35,496 27,976 28,213 26,169 
Noninterest expense: 
Compensation and employee benefits47,371 40,049 42,746 42,074 40,816 
Premises and occupancy costs8,342 7,195 7,471 7,051 7,061 
Office operations4,626 3,711 3,382 4,097 3,197 
Collections expense1,264 644 474 566 747 
Processing expenses15,042 11,680 11,142 10,263 11,122 
Marketing expenses2,147 2,047 1,507 1,010 1,373 
Federal deposit insurance premiums1,498 1,618 — — (702)
Professional services3,246 2,825 2,812 3,533 3,032 
Amortization of intangible assets1,781 1,760 1,651 1,634 1,702 
Real estate owned expense111 89 95 72 119 
Acquisition/branch optimization expense1,414 9,679 2,458 1,114 23 
Other expenses27 7,866 4,873 5,157 2,106 
Total noninterest expense86,869 89,163 78,611 76,571 70,596 
Income/(loss) before income taxes46,517 (7,339)8,956 32,364 43,207 
Income tax expense/(benefit)8,467 (1,139)1,017 6,773 9,793 
Net income/(loss)$38,050 (6,200)7,939 25,591 33,414 
Basic earnings per share$0.30 (0.05)0.08 0.24 0.32 
Diluted earnings per share$0.30 (0.05)0.07 0.24 0.31 
Weighted average common shares outstanding - basic126,855,810 121,480,563 105,882,553 105,627,194 105,517,707 
Weighted average common shares outstanding - diluted126,855,810 121,480,563 106,148,247 106,306,615 106,270,544 
Annualized return on average equity9.82 %(1.63)%2.37 %7.52 %9.90 %
Annualized return on average assets1.09 %(0.18)%0.30 %0.97 %1.25 %
Annualized return on tangible common equity **13.28 %(2.22)%3.28 %10.32 %13.46 %
Efficiency ratio *59.68 %58.19 %64.67 %63.01 %58.81 %
Annualized noninterest expense to average assets *2.39 %2.30 %2.83 %2.80 %2.59 %
*    Excludes acquisition/branch optimization expenses and amortization of intangible assets (non-GAAP).
** Excludes goodwill and other intangible assets (non-GAAP).
4


Northwest Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share amounts)
Nine months ended September 30,
20202019
Interest income:
Loans receivable$305,226 296,943 
Mortgage-backed securities12,865 12,433 
Taxable investment securities1,514 2,718 
Tax-free investment securities1,404 643 
FHLB dividends789 794 
Interest-earning deposits541 431 
Total interest income322,339 313,962 
Interest expense:
Deposits29,182 36,323 
Borrowed funds4,317 6,118 
Total interest expense33,499 42,441 
Net interest income288,840 271,521 
Provision for credit losses86,205 14,436 
Net interest income after provision for credit losses202,635 257,085 
Noninterest income:
Gain on sale of investments161 23 
Gain on sale of loans1,302 826 
Service charges and fees42,539 38,940 
Trust and other financial services income15,200 13,248 
Insurance commission income7,098 6,210 
Loss on real estate owned, net(220)(139)
Income from bank-owned life insurance3,860 3,297 
Mortgage banking income24,271 2,325 
Other operating income5,931 6,464 
Total noninterest income100,142 71,194 
Noninterest expense:
Compensation and employee benefits130,166 121,012 
Premises and occupancy costs23,008 21,666 
Office operations11,719 10,036 
Collections expense2,382 1,994 
Processing expenses37,864 32,190 
Marketing expenses5,701 5,988 
Federal deposit insurance premiums3,116 685 
Professional services8,883 8,754 
Amortization of intangible assets5,192 4,909 
Real estate owned expense295 406 
Acquisition/branch optimization expense13,551 3,054 
Other expenses12,766 8,838 
Total noninterest expense254,643 219,532 
Income before income taxes48,134 108,747 
Income tax expense8,345 23,906 
Net income$39,789 84,841 
Basic earnings per share$0.34 0.81 
Diluted earnings per share$0.34 0.80 
Weighted average common shares outstanding - basic118,088,122 104,626,560 
Weighted average common shares outstanding - diluted118,088,122 105,681,615 
Annualized return on average equity3.33 %8.65 %
Annualized return on average assets0.42 %1.10 %
Annualized return on tangible common equity **4.66 %11.52 %
Efficiency ratio *60.65 %61.73 %
Annualized noninterest expense to average assets *2.50 %2.75 %
*    Excludes acquisition/branch optimization expenses and amortization of intangible assets (non-GAAP).
** Excludes goodwill and other intangible assets (non-GAAP).

5


Northwest Bancshares, Inc. and Subsidiaries
Reconciliation of Non-GAAP to GAAP Net Income (Unaudited) *
(dollars in thousands, except per share amounts)
Quarter ended September 30,Nine months ended September 30,
2020201920202019
Operating results (non-GAAP):
Net interest income$103,534 90,936 288,840 271,521 
Provision for credit losses5,349 3,302 21,551 14,436 
Noninterest income36,670 26,169 100,142 71,194 
Noninterest expense85,455 70,573 243,092 216,478 
Income taxes9,274 9,799 29,682 24,761 
Net operating income (non-GAAP)$40,126 33,431 94,657 87,040 
Diluted earnings per share (non-GAAP)$0.32 0.31 0.80 0.82 
Average equity$1,540,934 1,339,339 1,596,252 1,312,002 
Average assets13,903,655 10,568,279 12,590,018 10,289,453 
Annualized return on average equity (non-GAAP)10.36 %9.90 %7.92 %8.87 %
Annualized return on average assets (non-GAAP)1.15 %1.26 %1.00 %1.13 %
Reconciliation of net operating income to net income:
Net operating income (non-GAAP)$40,126 33,431 94,657 87,040 
Non-GAAP adjustments, net of tax:
COVID-related provision **(1,058)— (33,462)— 
CECL provision impact due to acquisition of MutualBank— — (13,089)— 
PPP deferred origination costs— — 3,034 — 
COVID-related off balance sheet provision **— — (1,594)— 
Acquisition/branch optimization expense(1,018)(17)(9,757)(2,199)
Net income (GAAP)$38,050 33,414 39,789 84,841 
Diluted earnings per share (GAAP)$0.30 0.31 0.34 0.80 
Annualized return on average equity (GAAP)9.82 %9.90 %3.33 %8.65 %
Annualized return on average assets (GAAP)1.09 %1.25 %0.42 %1.10 %
* The table summarizes the Company’s results from operations on a GAAP basis and on an operating (non-GAAP) basis for the periods indicated. Operating results exclude estimated COVID-related provision, CECL provision related to the acquisition of MutualBank, PPP deferred origination costs, estimated COVID-related off balance sheet provision and acquisition/branch optimization expense. The net tax effect was calculated using statutory tax rates of approximately 28.0%. The Company believes this non-GAAP presentation provides a meaningful comparison of operational performance and facilitates a more effective evaluation and comparison of results to assess performance in relation to ongoing operations.
** To arrive at the non-COVID related provision estimates, the Company applied Moody's forecast scenarios prior to the onset of COVID-19 to the Company's loan portfolio at September 30, 2020.
6


Northwest Bancshares, Inc. and Subsidiaries
Regulatory Capital Requirements (Unaudited)
(dollars in thousands)
 At September 30, 2020
 ActualMinimum capital
requirements (1)
Well capitalized
requirements 
 AmountRatioAmountRatioAmountRatio
Total capital (to risk weighted assets)      
Northwest Bancshares, Inc.$1,655,949 16.607 %$1,046,981 10.500 %$997,125 10.000 %
Northwest Bank1,445,508 14.512 %1,045,896 10.500 %996,092 10.000 %
Tier 1 capital (to risk weighted assets)    
Northwest Bancshares, Inc.1,521,913 15.263 %847,556 8.500 %797,700 8.000 %
Northwest Bank1,311,472 13.166 %846,678 8.500 %796,873 8.000 %
Common equity tier 1 capital (to risk weighted assets)    
Northwest Bancshares, Inc.1,273,896 12.776 %697,988 7.000 %648,131 6.500 %
Northwest Bank1,311,472 13.166 %697,264 7.000 %647,460 6.500 %
Tier 1 capital (leverage) (to average assets)    
Northwest Bancshares, Inc.1,521,913 10.977 %554,608 4.000 %693,260 5.000 %
Northwest Bank1,311,472 9.522 %550,907 4.000 %688,634 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). For further information related to the capital conservation buffer, see "Item 1. Business - Supervision and Regulation" of our 2019 Annual Report on Form 10-K.

7


Northwest Bancshares, Inc. and Subsidiaries
Marketable Securities (Unaudited)
(dollars in thousands)
September 30, 2020
Marketable securities available-for-saleAmortized costGross unrealized
holding gains
Gross unrealized
holding losses
Fair value
   Debt issued by the U.S. government and agencies:    
Due after ten years$34,000 176 — 34,176 
   Debt issued by government sponsored enterprises:
   Due in less than one year35,731 284 — 36,015 
   Due in one year through five years253 — 257 
   Due in five years through ten years69,135 170 (178)69,127 
   Municipal securities:
   Due in less than one year4,241 18 — 4,259 
   Due in one year through five years3,343 73 (2)3,414 
   Due in five years through ten years11,077 312 — 11,389 
   Due after ten years92,530 2,930 — 95,460 
   Residential mortgage-backed securities:
   Fixed rate pass-through356,898 6,467 (102)363,263 
   Variable rate pass-through15,798 538 (18)16,318 
   Fixed rate agency CMOs710,620 13,035 (722)722,933 
   Variable rate agency CMOs52,209 369 (39)52,539 
   Total residential mortgage-backed securities1,135,525 20,409 (881)1,155,053 
   Total marketable securities available-for-sale$1,385,835 24,376 (1,061)1,409,150 
Marketable securities held-to-maturity
   Residential mortgage-backed securities:    
   Fixed rate pass-through$1,823 128 — 1,951 
   Variable rate pass-through970 33 — 1,003 
   Fixed rate agency CMOs11,936 659 — 12,595 
   Variable rate agency CMOs604 15 — 619 
   Total residential mortgage-backed securities15,333 835 — 16,168 
   Total marketable securities held-to-maturity$15,333 835 — 16,168 

8


Northwest Bancshares, Inc. and Subsidiaries
Borrowed Funds (Unaudited)
(dollars in thousands)
September 30, 2020
AmountAverage rate
Term notes payable to the Federal Home Loan Bank (FHLB):  
   Payable to FHLB of Pittsburgh$30,000 0.40 %
   Payable to the FHLB of Indianapolis acquired from MutualBank118,107 1.70 %
      Total term notes payable to the FHLB148,107 
Collateralized borrowings, due within one year126,832 0.19 %
Subordinated debentures, net of issuance costs$123,277 4.00 %
      Total borrowed funds *$398,216 
* As of September 30, 2020, the Company had $3.8 billion of additional borrowing capacity available with the Federal Home Loan Bank of Pittsburgh, including a $250.0 million overnight line of credit, which had no balance, as well as $103.0 million of borrowing capacity available with the Federal Reserve Bank and $110.0 million with three correspondent banks.

9


Northwest Bancshares, Inc. and Subsidiaries
Asset Quality (Unaudited)
(dollars in thousands)
 September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Nonaccrual loans current:     
Residential mortgage loans$1,128 413 285 72 676 
Home equity loans366 481 592 197 607 
Consumer loans234 214 77 78 68 
Commercial real estate loans22,610 30,677 14,337 9,241 7,674 
Commercial loans6,488 6,551 3,514 3,424 3,777 
Total nonaccrual loans current$30,826 38,336 18,805 13,012 12,802 
Nonaccrual loans delinquent 30 days to 59 days:   
Residential mortgage loans$60 61 691 674 40 
Home equity loans445 247 159 224 102 
Consumer loans230 335 143 121 246 
Commercial real estate loans692 2,372 496 196 925 
Commercial loans57 — — 55 44 
Total nonaccrual loans delinquent 30 days to 59 days$1,484 3,015 1,489 1,270 1,357 
Nonaccrual loans delinquent 60 days to 89 days:     
Residential mortgage loans$576 1,013 218 1,048 979 
Home equity loans618 960 539 689 436 
Consumer loans781 666 488 417 426 
Commercial real estate loans2,745 163 2,096 413 536 
Commercial loans15 768 37 341 — 
Total nonaccrual loans delinquent 60 days to 89 days$4,735 3,570 3,378 2,908 2,377 
Nonaccrual loans delinquent 90 days or more:     
Residential mortgage loans$14,750 15,369 10,457 12,682 11,722 
Home equity loans7,845 7,060 5,816 5,635 5,966 
Consumer loans5,352 6,896 3,459 3,610 3,400 
Commercial real estate loans35,496 29,729 25,342 25,014 22,292 
Commercial loans6,310 11,535 16,685 4,739 5,741 
Total nonaccrual loans delinquent 90 days or more$69,753 70,589 61,759 51,680 49,121 
Total nonaccrual loans$106,798 115,510 85,431 68,870 65,657 
Total nonaccrual loans$106,798 115,510 85,431 68,870 65,657 
Loans 90 days past due and still accruing495 77 31 32 85 
Nonperforming loans107,293 115,587 85,462 68,902 65,742 
Real estate owned, net2,575 1,897 1,075 950 1,237 
Nonperforming assets$109,868 117,484 86,537 69,852 66,979 
Nonaccrual troubled debt restructuring *$17,120 17,562 17,375 9,043 9,138 
Accruing troubled debt restructuring17,684 17,888 15,977 22,956 21,162 
Total troubled debt restructuring$34,804 35,450 33,352 31,999 30,300 
Nonperforming loans to total loans1.00 %1.06 %0.97 %0.78 %0.74 %
Nonperforming assets to total assets0.80 %0.85 %0.81 %0.67 %0.63 %
Allowance for credit losses to total loans1.30 %1.29 %1.05 %0.66 %0.60 %
Allowance for total loans excluding PPP loan balances1.36 %1.36 %N/AN/AN/A
Allowance for credit losses to nonperforming loans130.68 %121.63 %108.70 %84.09 %80.40 %
*    Amounts included in nonperforming loans above.
10


Northwest Bancshares, Inc. and Subsidiaries
Loans by Credit Quality Indicators (Unaudited)
(dollars in thousands)
At September 30, 2020PassSpecial
mention *
Substandard
**
Doubtful
***
LossLoans
receivable
Personal Banking:      
Residential mortgage loans$3,117,442 — 25,927 — — 3,143,369 
Home equity loans1,471,919 — 12,446 — — 1,484,365 
Consumer loans1,478,109 — 8,974 — — 1,487,083 
Total Personal Banking6,067,470 — 47,347 — — 6,114,817 
Commercial Banking:      
Commercial real estate loans2,850,611 110,073 359,059 — — 3,319,743 
Commercial loans1,255,255 40,631 51,406 — — 1,347,292 
Total Commercial Banking4,105,866 150,704 410,465 — — 4,667,035 
Total loans$10,173,336 150,704 457,812 — — 10,781,852 
At June 30, 2020
Personal Banking:      
Residential mortgage loans$3,196,304 — 26,451 — — 3,222,755 
Home equity loans1,438,339 — 12,031 — — 1,450,370 
Consumer loans1,508,129 — 9,990 — — 1,518,119 
Total Personal Banking6,142,772 — 48,472 — — 6,191,244 
Commercial Banking:      
Commercial real estate loans3,034,984 72,755 199,993 1,092 — 3,308,824 
Commercial loans1,270,279 41,458 42,692 4,290 — 1,358,719 
Total Commercial Banking4,305,263 114,213 242,685 5,382 — 4,667,543 
Total loans$10,448,035 114,213 291,157 5,382 — 10,858,787 
At March 31, 2020
Personal Banking:      
Residential mortgage loans$2,830,596 — 7,690 — — 2,838,286 
Home equity loans1,345,052 — 8,211 — — 1,353,263 
Consumer loans1,174,067 — 3,988 — — 1,178,055 
Total Personal Banking5,349,715 — 19,889 — — 5,369,604 
Commercial Banking:      
Commercial real estate loans2,537,736 73,967 143,765 — — 2,755,468 
Commercial loans618,267 43,071 50,464 — — 711,802 
Total Commercial Banking3,156,003 117,038 194,229 — — 3,467,270 
Total loans$8,505,718 117,038 214,118 — — 8,836,874 
At December 31, 2019
Personal Banking:      
Residential mortgage loans$2,858,582 — 9,545 — — 2,868,127 
Home equity loans1,336,111 — 6,807 — — 1,342,918 
Consumer loans1,120,732 — 4,400 — — 1,125,132 
Total Personal Banking5,315,425 — 20,752 — — 5,336,177 
Commercial Banking:      
Commercial real estate loans2,538,816 80,570 135,004 — — 2,754,390 
Commercial loans616,983 42,380 58,744 — — 718,107 
Total Commercial Banking3,155,799 122,950 193,748 — — 3,472,497 
Total loans$8,471,224 122,950 214,500 — — 8,808,674 
At September 30, 2019
Personal Banking:      
Residential mortgage loans$2,887,077 — 9,056 — — 2,896,133 
Home equity loans1,320,930 — 7,243 — — 1,328,173 
Consumer loans1,090,030 — 4,263 — — 1,094,293 
Total Personal Banking5,298,037 — 20,562 — — 5,318,599 
Commercial Banking:      
Commercial real estate loans2,601,025 69,380 142,253 181 — 2,812,839 
Commercial loans639,998 37,666 42,800 115 — 720,579 
Total Commercial Banking3,241,023 107,046 185,053 296 — 3,533,418 
Total loans$8,539,060 107,046 205,615 296 — 8,852,017 
* Includes $34.7 million, $37.4 million, $13.1 million, $10.3 million, and $8.7 million of acquired loans at September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.
**    Includes $129.2 million, $108.2 million, $56.8 million, $53.1 million, and $46.6 million of acquired loans at September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.
***     Includes $1.1 million of acquired loans at June 30, 2020.
11


Northwest Bancshares, Inc. and Subsidiaries
Loan Delinquency (Unaudited)
(dollars in thousands)
September 30,
2020
*June 30,
2020
*March 31,
2020
*December 31,
2019
*September 30,
2019
*
(Number of loans and dollar amount of loans)               
Loans delinquent 30 days to 59 days:  
Residential mortgage loans17 $736 — %15 $629 — %358 $32,755 1.2 %292 $23,296 0.8 %21 $1,236 — %
Home equity loans129 4,984 0.3 %118 4,569 0.3 %190 7,061 0.5 %173 6,469 0.5 %149 4,774 0.4 %
Consumer loans1,078 8,586 0.6 %629 7,199 0.5 %953 8,774 0.7 %960 9,208 0.8 %864 7,597 0.7 %
Commercial real estate loans28 5,090 0.2 %46 14,177 0.4 %58 12,895 0.5 %43 7,921 0.3 %27 5,308 0.2 %
Commercial loans19 1,797 0.1 %12 1,242 0.1 %35 7,545 1.1 %32 1,187 0.2 %20 362 0.1 %
Total loans delinquent 30 days to 59 days1,271 $21,193 0.2 %820 $27,816 0.3 %1,594 $69,030 0.8 %1,500 $48,081 0.5 %1,081 $19,277 0.2 %
Loans delinquent 60 days to 89 days:             
Residential mortgage loans65 $4,788 0.2 %64 $5,364 0.2 %11 $511 — %67 $5,693 0.2 %95 $5,320 0.2 %
Home equity loans56 1,860 0.1 %59 2,326 0.2 %65 2,652 0.2 %66 2,405 0.2 %66 2,103 0.2 %
Consumer loans323 3,049 0.2 %258 2,916 0.2 %265 2,610 0.2 %395 3,302 0.3 %288 2,632 0.2 %
Commercial real estate loans14 4,212 0.1 %18 3,913 0.1 %12 2,981 0.1 %19 1,690 0.1 %15 1,893 0.1 %
Commercial loans357 — %15 1,151 0.1 %10 309 — %17 6,403 0.9 %10 589 0.1 %
Total loans delinquent 60 days to 89 days465 $14,266 0.1 %414 $15,670 0.1 %363 $9,063 0.1 %564 $19,493 0.2 %474 $12,537 0.1 %
Loans delinquent 90 days or more: **               
Residential mortgage loans168 $14,750 0.5 %185 $15,369 0.5 %129 $10,457 0.4 %141 $12,775 0.4 %138 $11,816 0.4 %
Home equity loans193 7,845 0.5 %182 7,060 0.5 %152 5,816 0.4 %159 5,688 0.4 %157 5,966 0.4 %
Consumer loans696 5,847 0.4 %709 6,896 0.5 %445 3,459 0.3 %590 3,611 0.3 %398 3,401 0.3 %
Commercial real estate loans136 35,496 1.1 %149 29,729 0.9 %139 25,342 0.9 %129 25,014 0.9 %118 22,292 0.8 %
Commercial loans34 6,310 0.5 %47 11,535 0.8 %51 16,685 2.3 %37 4,739 0.7 %40 5,741 0.8 %
Total loans delinquent 90 days or more1,227 $70,248 0.7 %1,272 $70,589 0.7 %916 $61,759 0.7 %1,056 $51,827 0.6 %851 $49,216 0.6 %
Total loans delinquent2,963 $105,707 1.0 %2,506 $114,075 1.1 %2,873 $139,852 1.6 %3,120 $119,401 1.4 %2,406 $81,030 0.9 %
*    Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.
**    Includes purchased credit deteriorated loans of $20.3 million, $18.0 million, and $298,000 at September 30, 2020, June 30, 2020, and March 31, 2020, respectively, and purchased credit impaired loans of $147,000 and $95,000 at December 31, 2019, and September 30, 2019, respectively.

12


Northwest Bancshares, Inc. and Subsidiaries
Analysis of Loan Portfolio by Loan Sector (Unaudited)
(dollars in thousands)
Loans outstanding
The following table provides delinquency information for various loan sectors in our portfolio that are potentially vulnerable to the COVID-19 pandemic impacts at September 30, 2020:
At September 30, 202030-59 days
delinquent
*60-89 days
delinquent
*90 days
or greater
delinquent
*Total
delinquent
*Current*Total
loans
receivable
*
Restaurants/bars$27 — %$623 — %$1,012 — %$1,662 — %$97,009 0.9 %$98,671 0.9 %
Hotels/hospitality— %1,083 — %6,751 0.1 %7,837 0.1 %174,687 1.6 %182,524 1.7 %
Gyms and fitness— — %— — %— %— %5,302 — %5,307 — %
Transportation44 — %19 — %2,313 — %2,376 — %77,371 0.7 %79,747 0.7 %
Oil and gas— %— — %23 — %30 — %11,385 0.1 %11,415 0.1 %
Residential care facilities— — %— — %— — %— — %233,248 2.2 %233,248 2.2 %
Retail buildings222 — %263 — %850 — %1,335 — %448,829 4.2 %450,164 4.2 %
Education/student housing— — %1,427 — %503 — %1,930 — %144,214 1.3 %146,144 1.4 %
Construction/development:
   Education/student housing— — %— — %— — %— — %48,175 0.4 %48,175 0.4 %
   Hotels/hospitality— — %— — %— — %— — %25,559 0.2 %25,559 0.2 %
   Residential care facilities— — %— — %— — %— — %36,667 0.3 %36,667 0.3 %
   All other construction/development2,139 — %— — %5,476 0.1 %7,615 0.1 %182,201 1.7 %189,816 1.8 %
All other sectors18,751 0.2 %10,851 0.1 %53,315 0.5 %82,917 0.8 %9,191,498 85.2 %9,274,415 86.0 %
   Total loans$21,193 0.2 %$14,266 0.1 %$70,248 0.7 %$105,707 1.0 %$10,676,145 99.0 %$10,781,852 100.0 %
* Percent of total loans outstanding.

Loan deferrals
The following table represents loans that entered into and are currently in a deferment offered by the Company to aid customers in the COVID-19 pandemic as of September 30, 2020. Of these loan deferrals, 297 borrowers applied for and received PPP loans totaling approximately $50.8 million:
Balance as of
June 30, 2020
Loans returned to full payment status, net of paymentsLoans moved into
a second deferral
New loans entered into
first deferral
Balance as of
September 30, 2020
Number of loans Outstanding principal balance*Number of loansOutstanding principal balanceNumber of loansOutstanding principal balanceNumber of loansOutstanding principal balanceNumber of loansOutstanding principal balance*
Residential mortgage loans936$131,567 4.1 %871 $121,725 65 $9,842 46 $6,125 111 $15,967 0.5 %
Home equity loans65242,836 3.0 %625 40,606 27 2,230 21 1,409 48 3,639 0.2 %
Consumer loans2,45549,374 3.3 %2,399 48,068 56 1,306 67 1,042 123 2,348 0.2 %
Commercial real estate loans1,511967,340 29.2 %1,434 794,288 77 173,052 17 10,609 94 183,661 5.5 %
Commercial loans652120,999 8.9 %635 119,029 17 1,970 11 5,115 28 7,085 0.5 %
   Total loans6,206$1,312,116 12.1 %5,964 $1,123,716 242 $188,400 162 $24,300 404 $212,700  **2.0 %
* Percent of total loans outstanding by the respective total amount of that type of loan.
** As of September 30, 2020, $177.9 million of loan deferrals expire in Q4 2020 and $34.8 million of loan deferrals expire in Q1 2021. In addition, of the $212,700 total loan deferrals, $153.2 million are in the hospitality industry.
13


Northwest Bancshares, Inc. and Subsidiaries
Allowance for Credit Losses (Unaudited)
(dollars in thousands)
Quarter ended
 September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
Beginning balance$140,586 92,897 57,941 52,859 53,107 
CECL adoption— — 10,792 — — 
Initial allowance on loans purchased with credit deterioration— 8,845 — — — 
Provision6,818 51,750 27,637 8,223 3,302 
Charge-offs residential mortgage(129)(38)(343)(222)(190)
Charge-offs home equity(88)(173)(289)(113)(466)
Charge-offs consumer(3,356)(3,191)(3,488)(3,142)(3,078)
Charge-offs commercial real estate(532)(690)(331)(107)(389)
Charge-offs commercial(4,892)(10,349)(815)(1,143)(1,151)
Recoveries1,802 1,535 1,793 1,586 1,724 
Ending balance$140,209 140,586 92,897 57,941 52,859 
Net charge-offs to average loans, annualized0.27 %0.51 %0.16 %0.14 %0.16 %

Nine months ended September 30,
20202019
Beginning balance$57,941 55,214 
CECL adoption10,792 — 
Initial allowance on loans purchased with credit deterioration8,845 — 
Provision86,205 14,436 
Charge-offs residential mortgage(510)(944)
Charge-offs home equity(550)(1,008)
Charge-offs consumer(10,035)(8,665)
Charge-offs commercial real estate(1,553)(5,360)
Charge-offs commercial(16,056)(5,508)
Recoveries5,130 4,694 
Ending balance$140,209 52,859 
Net charge-offs to average loans, annualized0.32 %0.26 %

September 30, 2020
Originated loansAcquired loansTotal loans
BalanceReserveBalanceReserveBalanceReserve
Residential mortgage loans$2,794,489 10,244 348,880 1,792 3,143,369 12,036 
Home equity loans1,169,709 7,488 314,656 2,097 1,484,365 9,585 
Consumer loans1,242,220 16,433 244,863 3,427 1,487,083 19,860 
Personal Banking Loans5,206,418 34,165 908,399 7,316 6,114,817 41,481 
Commercial real estate loans2,488,967 66,960 830,776 20,020 3,319,743 86,980 
Commercial loans1,147,492 8,455 199,800 3,293 1,347,292 11,748 
Commercial Banking Loans3,636,459 75,415 1,030,576 23,313 4,667,035 98,728 
Total Loans$8,842,877 109,580 1,938,975 30,629 10,781,852 140,209 

14


Northwest Bancshares, Inc. and Subsidiaries
Average Balance Sheet (Unaudited)
(dollars in thousands) 
    The following table sets forth certain information relating to the Company’s average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated.  Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented.  Average balances are calculated using daily averages. 
 Quarter ended 
September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
Average
balance
InterestAvg.
yield/
cost (h)
Average
balance
InterestAvg.
yield/
cost (h)
Average
balance
InterestAvg.
yield/
cost (h)
Average
balance
InterestAvg.
yield/
cost (h)
Average
balance
InterestAvg.
yield/
cost (h)
Assets:              
Interest-earning assets:              
Residential mortgage loans$3,176,436 28,769 3.62 %$3,092,392 29,019 3.75 %$2,845,483 28,062 3.94 %$2,847,932 28,011 3.93 %$2,894,716 28,991 4.01 %
Home equity loans1,479,429 13,732 3.69 %1,415,091 13,806 3.92 %1,345,059 14,801 4.43 %1,333,748 15,354 4.57 %1,316,033 16,131 4.86 %
Consumer loans1,437,828 15,851 4.39 %1,375,130 14,993 4.39 %1,123,336 12,160 4.35 %1,073,565 12,016 4.44 %1,028,579 11,916 4.60 %
Commercial real estate loans3,306,386 36,887 4.37 %3,156,749 34,595 4.34 %2,747,419 31,437 4.53 %2,741,687 32,985 4.71 %2,796,351 34,441 4.82 %
Commercial loans1,377,223 12,603 3.58 %1,161,228 11,269 3.84 %712,621 8,856 4.92 %717,438 9,841 5.37 %710,847 9,949 5.48 %
Total loans receivable (a) (b) (d)10,777,302 107,842 3.98 %10,200,590 103,682 4.09 %8,773,918 95,316 4.37 %8,714,370 98,207 4.47 %8,746,526 101,428 4.60 %
Mortgage-backed securities (c)1,004,803 4,651 1.85 %714,657 4,038 2.26 %668,470 4,175 2.50 %667,910 4,237 2.54 %641,085 4,188 2.61 %
Investment securities (c) (d)216,081 1,336 2.47 %170,309 1,244 2.92 %144,152 881 2.44 %151,289 938 2.48 %218,753 1,168 2.14 %
FHLB stock, at cost25,595 218 3.39 %22,192 309 5.60 %15,931 262 6.61 %13,400 262 7.76 %16,302 307 7.47 %
Other interest-earning deposits791,601 221 0.11 %623,870 185 0.12 %34,697 135 1.54 %31,624 169 2.09 %28,832 172 2.33 %
Total interest-earning assets12,815,382 114,268 3.55 %11,731,618 109,458 3.75 %9,637,168 100,769 4.21 %9,578,593 103,813 4.30 %9,651,498 107,263 4.41 %
Noninterest-earning assets (e)1,088,273 1,858,513 960,303 869,117 916,781 
Total assets$13,903,655   $13,590,131   $10,597,471  $10,447,710  $10,568,279  
Liabilities and shareholders’ equity:               
Interest-bearing liabilities:               
Savings deposits$2,015,604 648 0.13 %$1,884,202 648 0.14 %$1,611,111 727 0.18 %$1,615,996 792 0.19 %$1,658,670 788 0.19 %
Interest-bearing demand deposits2,680,591 763 0.11 %2,428,060 812 0.13 %1,915,871 1,307 0.27 %1,769,623 1,570 0.35 %1,655,952 1,711 0.41 %
Money market deposit accounts2,347,097 1,347 0.23 %2,204,810 1,600 0.29 %1,921,243 3,088 0.65 %1,845,535 3,226 0.69 %1,798,175 3,772 0.83 %
Time deposits1,782,350 5,685 1.27 %1,761,260 6,276 1.43 %1,528,891 6,281 1.65 %1,607,992 7,305 1.80 %1,618,591 7,423 1.82 %
Borrowed funds (f)420,715 717 0.68 %371,700 296 0.32 %240,118 709 1.19 %177,670 444 0.99 %243,960 1,002 1.63 %
Junior subordinated debentures128,658 720 2.19 %127,472 837 2.60 %121,809 1,038 3.37 %121,796 1,136 3.65 %121,767 1,235 3.97 %
Total interest-bearing liabilities9,375,015 9,880 0.42 %8,777,504 10,469 0.48 %7,339,043 13,150 0.72 %7,138,612 14,473 0.80 %7,097,115 15,931 0.89 %
Noninterest-bearing demand deposits (g)2,703,266 2,401,368 1,640,180 1,800,861 1,915,392 
Noninterest-bearing liabilities284,440 882,391 268,139 158,434 216,433 
Total liabilities12,362,721   12,061,263   9,247,362   9,097,907   9,228,940   
Shareholders’ equity1,540,934 1,528,868 1,350,109 1,349,803 1,339,339 
Total liabilities and shareholders’ equity$13,903,655   $13,590,131   $10,597,471   $10,447,710   $10,568,279   
Net interest income/Interest rate spread 104,388 3.13 % 98,989 3.27 % 87,619 3.48 % 89,340 3.50 % 91,332 3.52 %
Net interest-earning assets/Net interest margin$3,440,367  3.26 %$2,954,114  3.38 %$2,298,125  3.66 %$2,439,981  3.73 %$2,554,383  3.79 %
Ratio of interest-earning assets to interest-bearing liabilities1.37X  1.34X  1.31X  1.34X  1.36X  
(a)    Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
(b)    Interest income includes accretion/amortization of deferred loan fees/expenses, which was not material.
(c)    Average balances do not include the effect of unrealized gains or losses on securities held as available-for-sale.
(d)    Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent ("FTE") basis.
(e)     Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.
(f)    Average balances include FHLB borrowings, collateralized borrowings and subordinated debt.
(g)    Average cost of deposits were 0.29%, 0.35%, 0.53%, 0.59%, and 0.63%, respectively.
(h)    Shown on a FTE basis. GAAP basis yields for the periods indicated were: Loans - 3.96%, 4.06%, 4.35%, 4.46%, and 4.59%, respectively, Investment securities - 2.00%, 2.36%, 2.31%, 2.34%, and 2.03%, respectively, Interest-earning assets - 3.52%, 3.72%, 4.19%, 4.28%, and 4.39%, respectively. GAAP basis net interest rate spreads were 3.10%, 3.24%, 3.47%, 3.48%, and 3.50%, respectively, and GAAP basis net interest margins were 3.23%, 3.34%, 3.64%, 3.71%, and 3.77%, respectively.
15


Northwest Bancshares, Inc. and Subsidiaries
Average Balance Sheet (Unaudited)
(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.
 Nine months ended September 30,
 20202019
Average
balance
InterestAvg.
yield/
cost (h)
Average
balance
InterestAvg.
yield/
cost (h)
Assets      
Interest-earning assets:      
Residential mortgage loans$3,038,712 85,850 3.77 %$2,865,091 87,572 4.08 %
Home equity loans1,424,580 42,340 3.97 %1,300,537 48,868 5.02 %
Consumer loans1,302,282 43,004 4.41 %949,303 32,844 4.60 %
Commercial real estate loans3,071,047 102,918 4.40 %2,720,435 99,930 4.84 %
Commercial loans1,084,739 32,727 3.96 %665,867 28,724 5.69 %
Loans receivable (a) (b) (d)9,921,360 306,839 4.13 %8,501,233 297,938 4.69 %
Mortgage-backed securities (c)796,739 12,865 2.15 %630,279 12,433 2.63 %
Investment securities (c) (d)176,991 3,461 2.61 %224,111 3,532 2.10 %
FHLB stock, at cost21,255 789 4.96 %14,840 794 7.15 %
Other interest-earning deposits483,390 541 0.15 %20,531 431 2.77 %
Total interest-earning assets11,399,735 324,495 3.80 %9,390,994 315,128 4.49 %
Noninterest-earning assets (e)1,190,283 898,459  
Total assets$12,590,018   $10,289,453   
Liabilities and shareholders’ equity      
Interest-bearing liabilities:     
Savings deposits$1,837,624 2,023 0.15 %$1,668,806 2,323 0.19 %
Interest-bearing demand deposits2,342,748 2,882 0.16 %1,611,554 4,442 0.37 %
Money market deposit accounts2,157,212 6,035 0.37 %1,756,251 9,784 0.74 %
Time deposits1,691,168 18,243 1.44 %1,538,113 19,774 1.72 %
Borrowed funds (f)344,457 1,721 0.67 %216,160 2,421 1.50 %
Junior subordinated debentures125,988 2,595 2.71 %119,417 3,698 4.08 %
Total interest-bearing liabilities8,499,197 33,499 0.53 %6,910,301 42,442 0.82 %
Noninterest-bearing demand deposits (g)2,250,864 1,847,344  
Noninterest-bearing liabilities243,705 219,806  
Total liabilities10,993,766   8,977,451   
Shareholders’ equity1,596,252 1,312,002   
Total liabilities and shareholders’ equity$12,590,018   $10,289,453   
Net interest income/Interest rate spread 290,996 3.27 % 272,686 3.67 %
Net interest-earning assets/Net interest margin$2,900,538  3.40 %$2,480,693  3.87 %
Ratio of interest-earning assets to interest-bearing liabilities1.34X  1.36X  
(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") 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, collateralized borrowings and subordinated debt.
(g)Average cost of deposits were 0.38% and 0.58%, respectively.
(h)Shown on a FTE basis. GAAP basis yields were: Loans — 4.11% and 4.67%, respectively; Investment securities — 2.20% and 2.00%, respectively; Interest-earning assets — 3.78% and 4.47%, respectively. GAAP basis net interest rate spreads were 3.25% and 3.65%, respectively; and GAAP basis net interest margins were 3.38% and 3.86%, respectively.
16