Building for the Future
2012 Summary Annual Report
“Highest Customer Satisfaction with Retail Banking
in the Mid-Atlantic Region, Three Years in a Row”
Northwest J.D. Power and Associates Celebration, Warren, Pennsylvania • June 27, 2012
Building Loyalty, Trust, and Value
among our Employees, Customers,
Communities, and Shareholders
Dear Shareholder,
It is my pleasure to report another year of significant progress at Northwest
Bancshares, Inc. As we began the 2012 year, our company established the
following specific goals that we believed were key to our success:
• Achieving record earnings
• Enhancing shareholder value through effective capital management
• Attaining significant growth in loans
• Strengthening our lending and credit functions
• Strengthening our Compliance Management System and
being released from the existing regulatory enforcement action
•
Improving the overall credit quality of our company
• Continuing to be recognized for industry excellence
Message to Stockholders
Although we fell slightly short of achieving
the first goal of record earnings, we are pleased
to report considerable success in achieving all
the other goals established for 2012.
EarningS PErformancE
Net income for the year ended December 31,
2012 was $63.6 million, down $591,000, or
less than 1%, from 2011. However, because
there were fewer shares outstanding in 2012,
earnings per share increased to $0.68 in 2012
from $0.64 in 2011.
Most notable about this year’s operating
performance was our ability to maintain a
consistent net interest margin despite the
challenge of historically low levels of interest
rates. As a result, net interest income was
$264.0 million in 2012, down slightly from
$267.3 million the previous year.
Negatively impacting this year’s earnings was
a $2.4 million increase in losses on foreclosed
real estate properties. Most of these losses
were incurred on Florida properties as we
continue to address the limited remnants of
our discontinued Florida operation.
Also negatively impacting earnings was a $6.0
million, or 3.0%, increase in operating expense
as we significantly increased our staffing
levels in response to regulatory requirements.
Much of the increase in staffing related to
our initiatives to strengthen our Compliance
Management System and the lending and
credit functions. Although costly, we believe
these enhancements will greatly assist in
avoiding future regulatory and credit issues.
On a positive note, the provision for loan
losses decreased $7.8 million, or 22.9%, over
the previous year as credit quality improved
and recoveries of prior year losses accelerated.
Also positively impacting this year’s earnings
was a $3.8 million increase in mortgage
banking revenues as the sale of mortgage loans
to Freddie Mac yielded record levels of profits.
Enhancing SharEholDEr ValuE
Enhancing shareholder value remains the
primary goal of our company. Given our
robust capital position and temporary
restrictions on acquiring other banks, it is
essential that we pursue the best opportunities
available to return excess capital to our
shareholders. To that end, we were pleased this
year to repurchase 4.2 million shares of our
common stock at an average price of $11.81.
We currently view stock buybacks at these
levels as a better alternative for the return of
capital than paying special dividends.
As we approached the end of 2012, our
Board determined that we should pay the
dividend we would normally pay in the first
quarter of 2013 prior to the end of 2012. This
decision was prompted by the anticipation of
future increases in the tax rates for dividends.
We acknowledge that this action may be
confusing for our shareholders, as they
received five dividend payments in 2012
while we anticipate only three payments in
2013. However, we believe the potential tax
savings justifies any confusion that may result.
Given that five dividend payments of $0.12
were made in 2012, the dividend yield to our
shareholders was approximately 5%.
At the time we reported the decision to
prepay the fourth quarter dividend, we also
announced an increase of 5.0 million shares
to our existing share repurchase program.
As of December 31, 2012, there were 6.5
million shares remaining to be repurchased
Five dividend payments of $0.12 were made in 2012 and the dividend yield to our shareholders was approximately 5%.
2
under this plan. Since completing our second
step offering in December of 2009, we have
repurchased 19.4 million shares at a total cost
of $231.2 million and an average per share
price of $11.92. Although these purchases
were completed at a price in excess of tangible
book value, we estimate that the resulting
dilution will be recovered in less than three
years through increases in earnings per share.
In an effort to enhance shareholder value, we
will continue to monitor our capital position,
the market value of our shares, the tax rates for
dividends and the opportunities to grow our
company when assessing future alternatives for
the utilization of capital.
loan growth
For several years we have recognized that
the growth of our loan portfolio is a mission
critical issue for Northwest. With a significant
amount of cash invested in overnight deposits
earning less than 0.25%, any deployment of
cash to fund loan growth provides a significant
increase in interest income. In this regard, we
were pleased to grow loans by $151 million,
or 2.7%, in a year when economic activity
was measured and American businesses
were reluctant to borrow. We commend our
business development teams for their success
in addressing this strategic goal.
StrEngthEning lEnDing anD
crEDit functionS
Over the past ten years, we have made great
strides in lowering our dependency on
residential mortgage loans while building a
diversified commercial loan portfolio. While
that portfolio was growing, we remained
vigilant in enhancing credit oversight. During
2012, we completed another transformational
step in our lending and credit evolution.
Recognizing that our lenders were
significantly burdened with administrative
responsibilities, we moved many of their
administrative tasks to our independent credit
administration group, thereby providing
additional time for business development. An
additional benefit of this realignment is that
it will provide more consistent administration
of credit and further enhancements in credit
quality.
StrEngthEning our
comPliancE managEmEnt SyStEm
We began 2012 operating under a formal
“Consent Order,” which was issued by the
FDIC on August 8, 2011 and required
Northwest to strengthen our Compliance
Management System. A strong Compliance
Management System provides assurance
that all governmental regulations are
properly addressed. The Dodd-Frank Act,
which established the Consumer Financial
Protection Bureau, significantly increased the
expectations of federal banking regulators
with regard to regulatory compliance, with an
emphasis on enhancing consumer protection.
Northwest’s management team reacted
quickly, decisively and aggressively to the
requirements of the Consent Order and it was
removed by the FDIC on July 2, 2012. The
Consent Order was later replaced by a less
severe agreement known as a “Memorandum
of Understanding” which requires additional
assurance from Northwest that our
strengthened compliance management system
is functioning properly and is sustainable. We
continue to work diligently to further address
Loans grew by $151 million in a year when economic activity was measured and businesses were reluctant to borrow.
3
Message to Stockholders
these requirements and to be relieved of all
regulatory restrictions. However, until such
time as our regulators lift these restrictions,
we will not be permitted to acquire another
banking institution.
Our efforts to meet the enhanced compliance
expectations have come at a great cost to our
institution and its shareholders. The ongoing
annual expense associated with this additional
regulatory burden now exceeds $4 million.
imProVing crEDit Quality
The sustained economic downturn of the past
five years has taken its toll on our nation’s
borrowers and we began the year with
persistently high levels of non-performing
assets. Our goal on January 1, 2012 was to
significantly reduce the volume of delinquent
borrowers and troubled assets. Much progress
has been made. Loans delinquent ninety
days or more decreased from $95.8 million
to $68.3 million while total delinquent loans
decreased from $174.9 million to $157.4
million. Non-performing assets, which include
loans delinquent 90 days or more, restructured
loans and foreclosed real estate, decreased
from $131.1 million to $118.7 million.
Our lending and credit personnel are to be
commended for their efforts in improving
asset quality.
As a result of this improvement, loans charged
off in 2012 were $30.5 million compared to
$42.4 million in 2011. In addition, the amount
that was set aside in 2012 for future loan losses
was $26.3 million, down significantly from
$34.2 million the previous year.
We continue to work diligently at improving the
credit culture at Northwest and we believe the
changes we have made to our lending and credit
areas will greatly improve both credit quality and
credit consistency in the years ahead.
rEcognition
We were pleased for the third consecutive year
to be ranked “Highest Customer Satisfaction
with Retail Banking in the Mid-Atlantic
Region” by J.D. Power and Associates. Our
staff continues to take great pride in the
level of service they provide to all Northwest
customers.
We were also honored to learn that Forbes
named Northwest to its list of “America’s
Most Trustworthy Companies” for the second
time. Creating a high level of trust with our
customers and shareholders is a core value of
our company and this recognition validates
the strength of that commitment.
For the second time, Keefe, Bruyette &
Woods recognized Northwest as one of
the top 50 banks in the country for our
ten-year operating performance. Given our
commitment to provide consistent returns
through continuous improvement, this
award also has a very special meaning to our
company.
Finally, Bank Director magazine named
Northwest in 2012 to its “Nifty 50,” a
prestigious list of top performing banks as
assessed by strategy, business model, and the
operating skill of its management team. These
rankings highlight banks that excel both in
deploying their capital and getting a return on
that capital.
othEr notablE EVEntS
Although we were not permitted to acquire
another depository institution during
2012, we pursued opportunities to enhance
In December, we acquired The Bert Agency, a provider of employee benefit plans and property and casualty insurance.
4
our franchise through other acquisition
opportunities. On December 31, 2012, we
acquired The Bert Agency, a provider of
employee benefit plans and property and
casualty insurance. We are excited about
this additional opportunity to expand our
insurance offerings and we look forward to
continued growth in this area.
In an effort to improve efficiency, we
consolidated customers’ accounts from
our offices in Glen Burnie, Maryland and
Johnsonburg and Weedville, Pennsylvania
with Northwest offices in the same geographic
vicinities. As customers increasingly choose
to transact business using alternative
delivery channels, we continue to seek office
consolidation opportunities as a method to
improve our efficiency.
looking ahEaD
We believe the financial industry will
continue to face tremendous challenges in
the years ahead. Our Board of Directors and
management team continuously assess our
strategy as circumstances change and new
opportunities emerge. Our primary area of
focus going forward will be the improvement
of earnings as measured by our return-on-
average assets. We believe this ratio is the best
assessment of how effectively we are managing
our company. Return-on-average-assets
was 0.79% in 2012. Reaching a level that
approaches 1.00% is a strategic target we must
achieve to keep Northwest competitive with
our peers in providing attractive shareholder
returns. Given the current economic, interest-
rate and regulatory environment, this will
not be an easy task. However, if we can
deploy more excess cash to our loan portfolio,
normalize loan loss provisions, increase
noninterest income, and squeeze more
efficiencies from our operations, we believe
this target is within reach.
We also remain devoted stewards of our
capital and recognize that it must be actively
managed to maximize shareholder returns.
Given this commitment, we will pursue
opportunities to leverage capital by acquiring
other banks when such acquisitions are not
excessively dilutive to tangible equity and
when such dilution can be recovered within
a reasonable period of time. If acceptable
leverage opportunities do not materialize,
we will continue to return capital to our
shareholders by actively pursuing share
buybacks while giving full consideration to the
payment of special dividends.
concluSion
On behalf of the Directors, officers and
employees of Northwest Bancshares, Inc.,
I thank you for your continued confidence
in our company. We remain committed
to managing Northwest in a manner that
enhances the value of your investment.
Sincerely,
William J. Wagner
Chairman, President and CEO
We remain devoted stewards of our capital and recognize that it must be actively managed to maximize shareholder returns.
5
NEW YORK
OHIO
PENNSYLVANIA
Market Coverage
Northwest Bancshares, Inc.’s
network of offices serves
communities in Pennsylvania,
New York, Ohio, and Maryland.
NORTHWEST SAVINGS BANK
NORTHWEST CONSUMER DISCOUNT COMPANY
MARYLAND
NEW YORK
OHIO
PENNSYLVANIA
MARYLAND
6
NORTHWEST SAVINGS BANK
NORTHWEST CONSUMER DISCOUNT COMPANY
Financial Highlights
northwESt bancSharES, inc. anD SubSiDiariES
in thousands, except per share and other data
at yEar EnD DEcEmbEr 31,
Total assets
Loans receivable, net
Deposits
Shareholders’ equity
Book value per share
Closing market price per share
for thE yEar EnDED DEcEmbEr 31,
Net interest income
Net income
Diluted earnings per share
Dividends per share (1)
kEy financial ratioS for thE yEar EnDED DEcEmbEr 31,
Return on average shareholders’ equity
Return on average assets
Tangible common equity
Average interest rate spread
Nonperforming assets to total assets at end of period
Net charge-offs as a percentage of average loans outstanding
Allowance for loan losses to nonperforming loans at end of period
Allowance for loan losses as a percentage of loans receivable
othEr Data at DEcEmbEr 31,
Number of:
Community banking locations
Consumer finance offices
Full time equivalent employees
Registered shareholders(2)
(1) Includes acceleration of first quarter 2013 dividend paid on December 24, 2012
(2) Excludes shareholders who own their stock in “street name.”
2012
$7,942,600
$5,629,261
$5,764,600
$1,128,469
$12.05
$12.14
$263,976
$63,560
$0.68
$0.60
5.48%
0.79%
12.23%
3.41%
1.84%
0.43%
60.91%
1.28%
165
52
2,042
14,486
2011
$7,957,705
$5,480,381
$5,780,325
$1,154,904
$11.85
$12.44
$267,269
$64,151
$0.64
$0.43
5.24%
0.80%
12.59%
3.39%
1.99%
0.72%
54.26%
1.28%
168
52
1,950
14,914
2010
$8,148,155
$5,457,593
$5,764,336
$1,307,450
$11.85
$11.78
$257,641
$57,523
$0.53
$0.40
4.40%
0.71%
14.19%
3.19%
2.08%
0.63%
51.49%
1.38%
171
52
1,881
14,693
7
Growth & Performance
Northwest has demonstrated the ability to safely grow our balance sheet...
while increasing income commensurate with that growth...
aSSEtS
in billions of dollars
$6.33
$6.45
$6.53
$6.66
$6.93
$5.68
$8.03
$8.15
$7.96
$7.94
10
8
6
4
2
0
annual nEt incomE
in millions of dollars
$56.8
$52.4
$51.5
$49.1
$48.2
$42.8
$32.7
$64.2
$63.6
$57.5
80
70
60
50
40
30
20
10
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
which the market has
rewarded in the exceptional
performance of our stock.
NWBI (+507.00%)
S&P 500 (+208.51%)
SNL U.S. Bank (+98.54%)
Stock PricE PErformancE SincE iPo
in total return %
600
400
200
0
-200
8
4
9
9
1
5
9
9
1
6
9
9
1
7
9
9
1
8
9
9
1
9
9
9
1
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
Corporate Profile
northwESt bancSharES, inc., a savings
Our Business Solutions offering includes
and loan holding company, owns and operates
commercial loans, business deposit accounts,
Northwest Savings Bank, a Pennsylvania-chartered
cash management services, and benefits
savings bank headquartered in Warren,
management services featuring personal
Pennsylvania.
attention and local decision making.
As of December 31, 2012, we held assets of $7.94
Our Personal Banking offering includes
billion and operated 165 community banking
mortgage, home equity, and consumer loans,
locations and 267 Automated Teller Machines
and checking and other deposit products with a
(ATMs) throughout our markets in central,
personal touch and a complete menu of delivery
eastern, and western Pennsylvania, western
channels. We also provide comprehensive
New York, eastern Ohio, and Maryland.
brokerage, trust, and investment management
Our primary business involves gathering funds
from deposits and borrowings and investing those
services, and personal insurance products to
meet all of our customers’ financial needs.
funds in loans and investment securities.
We also operate Northwest Consumer Discount
For 116 years, we have served our communities
with an ever-expanding array of banking and
investment products that meet the needs of both
business and personal customers.
Company, a consumer finance company that
specializes in helping customers meet their
consumer credit needs. As of December 31, 2012,
Northwest Consumer had loans outstanding of
$108.7 million at 52 offices across Pennsylvania.
SourcES of funDS
Subordinated Debt
1%
Money Market Deposit
Accounts
17%
Certificates of
Deposit
28%
Savings
Accounts
17%
Borrowed
Funds
13%
Checking
Accounts
24%
inVEStmEnt of funDS
Consumer Loans
3%
Commercial Loans
5%
Other Assets
7%
Home Equity
Loans
14%
Commercial
Real Estate loans
20%
Mortgage
Loans
30%
Cash &
Investments
21%
9
Strategic Focus
10
Looking ahead, Northwest is positioned
to be a premier provider of financial services
in all of our markets. As displayed in the
sections that follow, we have demonstrated
significant success in delivering:
• buSinESS SolutionS including
business loans and deposits as well as
assisting businesses with their employee
benefit plans.
• PErSonal banking products and
services, including checking and
deposit accounts and loans to fill all
personal needs.
Business Solutions
wE SPEcializE in DEVEloPing laSting
rElationShiPS baSED on cuStom-tailorED
ProDuctS anD SErVicES, local DEciSion
making, anD PErSonal attEntion.
Northwest’s goal is to provide a wide array of financial
solutions to businesses utilizing products and services
that are competitively priced and of the highest quality.
• Business Checking
• Retirement Plans
• Merchant Services
• Commercial Lending
• Small Business Loans
• Employee Benefits
• Insurance
• Express Deposit
• Business Online Banking and Bill Pay
• Business Mobile Banking
• Business Credit Cards
11
Business Solutions
Building a strategic process with our business customers
loanS
Northwest’s commercial loans have grown
substantially over the past four years...
while yields have remained at attractive levels
despite the low interest rate environment....
and loan losses have been much lower than
the industry average.
commErcial loanS
in millions of dollars
commErcial loan yiElDS VS.
3-yEar trEaSury yiElD at DEcEmbEr 31
loan loSSES VS. inDuStry aVEragE loSSES
as a % of loans
2,500
2,000
1,500
1,000
500
0
$1,886.0 $1,889.6
$2,048.6
$1,695.7
$1,487.4
2008
2009
2010
2011
2012
7
6
5
4
3
2
1
0
6.05%
5.82%
5.73%
5.63%
5.25%
1.70%
1.00%
1.02%
0.36%
0.36%
2008
2009
2010
2011
2012
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2.50%
2.55%
1.55%
1.29%
0.19%
0.51%
0.63%
0.72%
0.88%
0.43%
2008
2009
2010
2011
2012
Northwest commercial loan yields
3-year Treasury yield
Northwest losses
Industry average losses
DEPoSitS
Balances of business deposits have
increased substantially...
while the average cost of such
deposits has decreased.
Northwest’s mix of business deposits is
diversified due to our focus on meeting
the needs of all types of businesses.
buSinESS DEPoSit balancES
in millions of dollars
$1,017.6
$784.5
$808.6
$855.3
$691.2
1,200
1,000
800
600
400
200
0
12
coSt of buSinESS DEPoSitS
0.81%
0.56%
1.0
0.8
0.6
0.4
0.2
0.0
2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
Interest
Checking
Accounts
15%
Business
Money Market
Accounts
28%
Municipal
Accounts
17%
0.28%
0.17%
0.12%
Non-Interest
Checking Accounts
40%
Business Solutions
EmPloyEE bEnEfitS
Northwest has increased assets under
management in recent years...
along with the number of
benefit plans administered...
which has driven an increase in
fee income from these business lines.
bEnEfit Plan aSSEtS unDEr managEmEnt
in millions of dollars
# of bEnEfit PlanS aDminiStErED
bEnEfit Plan managEmEnt rEVEnuE
in millions of dollars
$808.9
$718.7
$651.3
$542.8
$375.1
1,000
800
600
400
200
0
1,798
1,828
1,538
2,000
1,500
1,000
500
0
822
864
2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
10
8
6
4
2
0
$8.8
$8.1
$7.3
$4.0
$4.1
2008
2009
2010
2011
2012
aSSEt miX
as a % of total assets
bEnEfit PlanS aDminiStErED
as a % of total plans
buSinESS rEVEnuE
as a % of total revenue
Investment
Management
9%
Investment
Management
6%
Investment
Management
14%
Benefits
86%
Employee
Benefit
46%
Retirement
Benefit
45%
Employee
Benefit
43%
Retirement
Benefit
51%
13
Personal Banking
northwESt haS a comPrEhEnSiVE
array of financial toolS to
SatiSfy our cuStomErS’ nEEDS aS
thEy liVE, work, anD Play.
Our company’s goal is to deliver the
highest quality personal banking
products and services with maximum
convenience and competitive pricing.
• Checking, Savings, and CDs
• Loans and Lines of Credit
• Mobile Banking
• Online Banking and Bill Pay
• 50,000+ Free ATMs
• eStatementsplus
• Debit and Credit Cards
• Telephone Banking
14
Personal Banking
DEEPEning rElationShiPS
Our strategy of increasing the
number of services per household...
and decreasing the number of
single service households...
creates meaningful customer relationships,
reduces attrition, and improves
operating performance.
SErVicES PEr houSEholD
# of SinglE SErVicE houSEholDS
# of houSEholDS
2.711
2.629
2.547
3.00
2.75
2.50
2.25
2.00
2.908
2.846
100,000
96,659
94,213
88,991
84,641
81,319
90,000
80,000
70,000
60,000
2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
300,000
275,000
250,000
225,000
200,000
295,051
297,957
295,596 292,397
288,502
2008
2009
2010
2011
2012
incrEaSing chEcking balancES
Northwest has had great success in recent
years in procuring new checking accounts...
while checking account balances have also
increased significantly...
and provided significant levels of
checking-related fee income.
# of chEcking accountS
250,000
200,000
189,424
203,354
213,359
218,420
222,427
150,000
100,000
50,000
0
2008
2009
2010
2011
2012
chEcking account balancES
in millions of dollars
$935.0
$867.9
$725.6
$779.3
$616.6
2008
2009
2010
2011
2012
1,000
800
600
400
200
0
35
30
25
20
15
10
5
0
chEcking account fEES
in millions of dollars
$30.0
$31.5
$34.8
$32.3
$31.5
2008
2009
2010
2011
2012
15
Personal Banking
Building quality personal relationships emphasizing service, convenience, and value
rEmaining a PrEfErrED ProViDEr of conSumEr crEDit
The mortgage and home equity portfolios have provided an attractive and stable yield during a period of low interest rates while losses remain relatively
low during the recent economic downturn due to our conservative lending practices and low average balances.
mortgagE Portfolio yiElD VS.
10-yEar trEaSury yiElD at DEcEmbEr 31
Mortgage yield
10-year Treasury yield
5.96%
5.78%
5.54%
5.27%
4.83%
3.85%
3.30%
2.25%
1.89%
1.78%
2008
2009
2010
2011
2012
6
5
4
3
2
1
0
8
7
6
5
4
3
2
1
0
homE EQuity Portfolio yiElD VS.
3-yEar trEaSury yiElD at DEcEmbEr 31
Yield on home equity loans
3-year Treasury yield
mortgagE & homE EQuity loanS loSSES
as a % of total mortgages and home equities
6.54%
6.15%
5.89%
5.64%
5.27%
1.70%
1.00%
1.02%
0.36%
0.36%
2008
2009
2010
2011
2012
0.25
0.20
0.15
0.10
0.05
0.00
0.24%
0.24%
0.24%
0.08%
0.05%
2008
2009
2010
2011
2012
conSumEr loanS
We continue to retain much of our consumer loan
portfolio during the recent cycle of low demand.
While losses have remained
at manageable levels...
and yields have remained attractive
during a period of low interest rates.
conSumEr loanS
in millions of dollars
$267.5
$273.9
$255.8
$245.7
$235.4
conSumEr loan loSSES
as a % of consumer loans
1.95%
1.94%
1.81%
1.64%
2.20%
2.5
2.0
1.5
1.0
0.5
0.0
12
10
8
6
4
2
0
2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
yiElD on conSumEr loanS VS.
3-yEar trEaSury yiElD at DEcEmbEr 31
10.45%
10.60%
11.30%
11.57%
11.98%
1.00%
1.70%
1.02%
0.36%
0.36%
2008
2009
2010
2011
2012
Yield on consumer loans
3-year Treasury yield
300
250
200
150
100
50
0
16
Investment Management and Insurance
northwESt iS DEDicatED to turning
our cuStomErS’ financial SuccESS
into financial SEcurity.
We have achieved significant growth in
both personal assets under management
and number of clients as we leverage the
opportunities to develop such relationships
with customers who also use our banking
services.
• Investments
• Planning and Management
• Trust and Estate Services
• Employee Benefits
• Insurance
• Retirement Plans
• Oil and Gas Lease Income
17
Investment Management
Assets under management have
increased significantly in recent years...
while we have had success
with customer retention...
which has provided a growing source
of fee income.
PErSonal aSSEtS unDEr managEmEnt
in millions of dollars
# of cliEntS
inVEStmEnt managEmEnt rEVEnuE
in millions of dollars
750
625
500
375
250
$703
$639
$558
$508
$415
7,714
6,905
8,607
7,526
7,787
10,000
8,000
6,000
4,000
2,000
0
2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
5
4
3
2
1
0
$4.6
$4.7
$4.0
$3.5
$3.0
2008
2009
2010
2011
2012
PErSonal aSSEt miX
as a % of total assets under management
PErSonal cliEnt miX
as a % of total clients
PErSonal rEVEnuE miX
as a % of total Investment Management revenue
Trust
56%
Brokerage
34%
18
Investment Management
10%
Investment Management
10%
Trust
16%
Brokerage
74%
Brokerage
26%
Trust
62%
Investment Management
12%
Financial Data and Investor Information
19
Financial Data
conDEnSED conSoliDatED balancE ShEEt
(in thousands, except share data)
aSSEtS
Cash and cash equivalents
Marketable securities available-for-sale
Marketable securities held-to-maturity
Loans receivable, net of allowance for loan losses of $73,219 and $71,138
Accrued interest receivable
Real estate owned, net
Bank-owned life insurance
Premises and equipment
Goodwill and other intangible assets
Federal Home Loan Bank stock, at cost
Other assets
total aSSEtS
liabilitiES anD SharEholDErS’ EQuity
Deposits
Borrowed funds
Advances by borrowers for taxes and insurance
Accrued interest payable
Other liabilities
Trust preferred securities
total liabilitiES
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; 93,652,960 and 97,493,046
shares issued and outstanding, respectively
Paid-in capital
Retained earnings
Unallocated common stock of Employee Stock Ownership Plan
Accumulated other comprehensive loss, net
total SharEholDErS’ EQuity
total liabilitiES anD SharEholDErS’ EQuity
20
aS of DEcEmbEr 31,
2012
2011
$
451,704
1,079,074
155,081
5,629,261
23,313
26,165
137,044
138,824
177,990
46,834
77,310
$ 7,942,600
$ 5,764,600
860,047
23,325
888
62,177
103,094
6,814,131
—
937
613,249
550,296
(24,525)
(11,488)
1,128,469
$ 7,942,600
$
688,297
908,349
231,389
5,480,381
24,599
26,887
133,524
132,152
174,005
48,935
109,187
$ 7,957,705
$ 5,780,325
827,925
23,571
1,104
66,782
103,094
6,802,801
—
975
659,523
543,598
(25,966)
(23,226)
1,154,904
$ 7,957,705
conDEnSED conSoliDatED StatEmEntS of incomE
(in thousands, except share data)
intErESt incomE:
Loans
Investments and interest-earning cash
total intErESt incomE
intErESt EXPEnSE:
Deposits
Borrowed funds
total intErESt EXPEnSE
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
nonintErESt incomE:
Service charges and fees
Trust and other financial services income
Gain/(loss) on securities
Insurance commission income
Income from bank-owned life insurance
Other
total nonintErESt incomE
nonintErESt EXPEnSE:
Compensation and employee benefits
Premises and occupancy costs
Office operations
Processing expenses
Amortization of intangibles
Marketing expenses
Federal deposit insurance premiums
Other
total nonintErESt EXPEnSE
Income before income taxes
Income tax expense
nEt incomE
Basic earnings per share
Diluted earnings per share
yEarS EnDED DEcEmbEr 31,
2012
2011
2010
$
309,391
29,784
339,175
$
320,942
39,128
360,070
$
328,948
41,620
370,568
43,377
31,822
75,199
263,976
26,338
237,638
34,486
8,544
323
6,264
4,961
3,189
57,767
111,727
22,409
13,224
25,000
1,012
7,829
5,554
18,722
205,477
89,928
26,368
63,560
0.68
0.68
$
$
$
60,721
32,080
92,801
267,269
34,170
233,099
35,378
8,125
(579)
6,548
6,019
2,645
58,136
106,595
23,055
12,850
23,332
1,819
9,953
7,101
15,522
200,227
91,008
26,857
64,151
0.64
0.64
$
$
$
75,174
37,753
112,927
257,641
40,486
217,155
37,921
7,252
660
5,190
5,080
4,295
60,398
100,709
22,665
13,864
23,152
2,784
9,875
9,054
14,405
196,508
81,045
23,522
57,523
0.53
0.53
$
$
$
21
Directors and Officers
board of Directors
northwest bancshares, inc.
and northwest Savings bank
corporate officers
northwest bancshares, inc.
and northwest Savings bank
william J. wagner
Chairman, President, and
Chief Executive Officer
Northwest Bancshares, Inc.
John m. bauer
Co-Chairman,
Contact Technologies, Inc.
richard l. carr
Retired Superintendent,
Titusville Area School District
Deborah J. chadsey
Attorney and Partner,
Kavinoky Cook LLP
Dr. a. Paul king
Retired President,
Oral Surgery of Erie
Joseph f. long
Retired Partner, KPMG LLP
Treasurer, Passavant Hospital
Foundation
Dr. richard E. mcDowell
President Emeritus,
The University of Pittsburgh
at Bradford
John P. meegan
Executive Vice President and
Chief Operating Officer,
Hefren-Tillotson, Inc.
Sonia m. Probst
Retired Chief Executive Officer,
Rouse Estate
Philip m. tredway
President and
Chief Executive Officer,
Erie Molded Plastics, Inc.
william J. wagner
President and
Chief Executive
Officer
Steven g. fisher
Executive Vice President,
Banking Services
william w. harvey, Jr.
Executive Vice President,
Finance and
Chief Financial Officer
timothy a. huber
Executive Vice President,
Chief Lending Officer
gregory c. larocca
Executive Vice President,
Wealth Management,
Trust & Insurance Services and
Corporate Secretary
Julia w. mctavish
Executive Vice President,
Chief Human Resources Officer
michael g. Smelko
Executive Vice President,
Chief Credit Officer
ronald b. andzelik
Senior Vice President,
Compliance and Community
Reinvestment Act Officer
robert bablak, Jr.
Senior Vice President,
Community Banking
John k. beard
Senior Vice President,
Retail Investment Services
22
Douglas bert
Senior Vice President,
Senior Executive,
Insurance Services
william m. guthrie
Senior Vice President,
Senior Executive,
Wealth Management
John E. hall
Senior Vice President,
Consumer Lending
neil r. hoffman
Senior Vice President,
Commercial Lending
gerald J. ritzert
Senior Vice President,
Finance and Controller
richard f. Seibel
Senior Vice President,
Risk Management
Vicki l. Stec
Senior Vice President,
Compliance and
Bank Secrecy Officer
David E. westerburg
Senior Vice President,
Marketing and Operations,
Chief Marketing Officer
andrew c. young
Senior Vice President,
Chief Information Officer
Stephen m. bell
Vice President,
Facilities
thomas k. creal
Vice President,
Credit Administration
michael r. DelPrince
Vice President,
Finance
barbara l. Demontier
Vice President,
Human Resources
michael a. Doherty
Vice President,
Credit Administration
w. norman Ewing
Vice President,
Systems and Programming
James g. holding
Vice President,
Communications
Dean c. huya
Vice President,
Loss Mitigation
Paul c. lindberg
Vice President,
Loan Review
Dorothy E. lobdell
Vice President,
Mortgage Lending
Edward a. martone
Vice President,
Human Resources
kevin g. mizak
Vice President,
Chief Auditor
Donald E. reed
Vice President,
Finance and Treasurer
David c. Stevenson
Vice President,
Computer Operations
Eric D. Stoever
Vice President,
Chief Technology Officer
James m. Swanson
Vice President,
Retail Deposit Products
william c. tarpenning
Vice President,
Mortgage Banking
Deborah a. Vecellio
Vice President,
Mortgage Servicing
Shawn o. walker
Vice President,
Marketing
region Presidents
northwest Savings bank
Richard J. Oppitz
Maryland
Nancy J. May
Eastern Pennsylvania
Julie A. Marasco
Northwest Pennsylvania, Ohio
Christopher A. Martin
Southwest Pennsylvania
James E. Martin
Erie, Pennsylvania
Jonathan E. Rockey
Central Pennsylvania
Jonathan P. Scalise
New York
Investor Information
corporate headquarters:
online Shareholder access:
common Stock information:
100 Liberty Street
P.O. Box 128
Warren, Pennsylvania 16365
Telephone : (814) 726-2140
Fax : (814) 728-7716
www.northwestsavingsbank.com
annual meeting:
April 17, 2013, 11:00 a.m.
The Struthers Library Theatre
302 West Third Avenue
Warren, Pennsylvania 16365
Stock listing:
Northwest Bancshares, Inc. common stock
is traded on the NASDAQ Global Select
Market under the symbol “NWBI.”
Registered shareholders may access their
account(s) online through American Stock
Transfer & Trust Company, LLC at www.
amstock.com. Here you can easily initiate
a number of transactions and inquiries
as well as obtain important details about
your holdings and general stock transfer
information.
• Update your mailing address
• Access account information
• Print a duplicate 1099 tax form
• Combine/consolidate accounts
• Request a replacement
dividend check
• Download stock transfer
instructions and forms
• Enroll in direct deposit of
dividends
Stock transfer, registrar, and
Dividend Disbursing agent:
financial information:
Shareholder communications regarding
change of address, change in registration
of certificates, reporting of lost certificates
and dividend checks should be directed to:
American Stock Transfer and Trust
Company, LLC
6201 15th Avenue
Brooklyn, New York 11219
Toll Free : (800) 937-5449
Toll Free : (877) 777-0800
Fax : (718) 236-2641
Email : info@amstock.com
Web Site : www.amstock.com
The Annual Report on Form 10-K is
filed with the Securities and Exchange
Commission (SEC). Copies of this
document and other filings, including
exhibits thereto, may be obtained
electronically at the SEC home page at
www.sec.gov or through the Company’s
website www.northwestsavingsbank.com.
Copies may also be obtained, without
charge, upon request by writing to the
Company’s corporate headquarters.
independent auditors:
KPMG LLP
Pittsburgh, Pennsylvania
Securities counsel:
Luse Gorman Pomerenk & Schick, P.C.
Washington, D.C.
Year Ended December 31, 2012 High
$13.08
First quarter
13.00
Second quarter
12.70
Third quarter
12.50
Fourth quarter
Year Ended December 31, 2011 High
$12.59
First quarter
12.67
Second quarter
13.36
Third quarter
12.93
Fourth quarter
Low
$12.14
11.03
11.22
11.11
Low
$11.47
11.90
10.74
11.33
Cash Dividends Declared
$ 0.12
0.12
0.12
0.24 (1)
Cash Dividends Declared
$ 0.10
0.11
0.11
0.11
(1) Includes acceleration of first quarter 2013 dividend paid on December 24, 2012
Dividend reinvestment &
Direct Stock Purchase and Sale Plan:
Northwest Bancshares, Inc. is pleased
to offer a Dividend Reinvestment
and Direct Stock Purchase and Sale
Plan through American Stock
Transfer & Trust Company, LLC
(the “Plan Administrator”).
The plan provides both existing
registered shareholders and interested
new investors with a convenient method
to purchase shares of Northwest
Bancshares, Inc. common stock.
If you are already a registered share-
holder or are interested in becoming
one, you may access the plan material
and enroll online at www.amstock.com
by clicking on “Invest Online”
under “Shareholder Services” or via
our investor relations website at
www.northwestsavingsbank.com.
Alternatively, you may request a
plan prospectus and enrollment
application by calling American Stock
Transfer & Trust Company, toll-free, at
(877) 715-0499 or Northwest, toll-free,
at (800) 859-1000 or (814) 728-7263.
Direct Deposit of Dividends:
Shareholders who do not reinvest
their dividends may elect to have cash
dividends directly deposited into their
savings or checking account, thereby
providing immediate access to funds
and eliminating mail delays and lost or
stolen checks. You may enroll online by
accessing your shareholder account(s)
at www.amstock.com or, to obtain
an enrollment card, by calling the
Company’s transfer agent, toll-free, at
(800) 937-5449 or Northwest, toll-free,
at (800) 859-1000.
investor relations:
William J. Wagner
President and Chief Executive Officer
William W. Harvey, Jr.
Executive Vice President and
Chief Financial Officer
Shareholder relations:
Ian R. Scott
Assistant Vice President,
Shareholder Relations and
Assistant Corporate Secretary
(800) 859-1000
23
Notes
In addition to historical information, this report may contain certain forward-looking statements that are based on assumptions and information currently available to management, including
assumptions as to changes in market interest rates. These forward-looking statements are subject to various risks and uncertainties including, but not limited to, economic, regulatory, competitive,
legislative, and other factors affecting the company and its operations. Readers are cautioned not to place undue reliance on these forward-looking statements as actual results may differ materially
from those expressed or implied. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the release of this report.
24
“Highest Customer Satisfaction with Retail Banking in
the Mid-Atlantic Region, Three Years in a Row”
50
keeFe, BRuYette & WOOdS
Bank Director
Magazine
2012
Northwest Savings Bank received the highest numerical score among retail banks in the Mid-Atlantic region in the proprietary J.d. Power and Associates 2010-2012
Retail Banking Satisfaction Studies.SM Study based on 51,498 total responses measuring 31 providers in the Mid-Atlantic region (de, Md, NJ, NY, PA, VA & Wash.,
d.C.) and measures opinions of consumers with their primary banking provider. Proprietary study results are based on experiences and perceptions of consumers
surveyed January-February, 2012. Your experiences may vary. Visit jdpower.com.
100 Liberty Street
PO Box 128
Warren, Pennsylvania 16365
(814) 726-2140
www.northwestsavingsbank.com