Northwest Bancshares, Inc. Annual Report 2017

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FY2017 Annual Report · Northwest Bancshares, Inc.

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Message to Shareholders

William J. Wagner, Chairman and CEO

2017 was another very busy year

for Northwest Bancshares, Inc.,

with our company achieving

great success in addressing the

major strategic goals of increasing

production and revenue, improving

effi ciency, strengthening risk

management and enhancing

customer convenience.

While these initiatives greatly improved the
quality of our institution, several of them also
signiﬁ cantly impacted operating revenues for
the year, resulting in a relatively “noisy” income
statement. While reported earnings under
Generally Accepted Accounting Principles
(GAAP) were a respectable $94.5 million, or
$.92 per share, these results included a $10.3
million after-tax proﬁ t on the sale of our three
Maryland banking offi ces, $2.7 million of after-
tax restructuring expense relating to the closure
of our consumer ﬁ nance subsidiary and a $3.1
million reduction in income taxes relating to
the passage of the Tax Cuts and Jobs Act of
2017. Adjusting GAAP earnings to remove these
non-core items results in core earnings of $83.7
million, or $.83 per share, which is slightly higher
than the previous year’s adjusted earnings of
$82.3 million, or $.82 per share, but less than our
expectations as the year began. However, in
comparing the years, we note that the closure
of our consumer ﬁ nance subsidiary, with its
45 offi ces, elevated consumer loan losses in
the current year by approximately $6 million,
resulting in a $4 million reduction in net income
after-tax. Excluding these losses, in addition to
those previously discussed, adjusted earnings for
2017 were $88.7 million, a 7.8% increase over the
previous year.

Production and Revenue Growth

Our Revenue and Production Division had a
strong showing in 2017, with our lenders closing
commercial, residential mortgage and consumer
loans in the amounts of $947 million, $763 million
and $298 million, respectively. Unfortunately, we
also experienced heavy loan payoff s during the
year as competition was intense and borrowers
continued to pay down debt, thereby limiting
net growth in these portfolios to 5.7%, 1.1% and
4.4%, respectively. The focus for deposit growth
this year, similar to the past few years, was on
checking accounts, as balances increased by $176
million, or 6.1%. Contributing most signiﬁ cantly
to this eff ort was the opening of more than
21,000 new personal checking accounts, which
brought more than 10,000 new households to
the Northwest family. Along with this growth
in personal checking accounts, we doubled the
number of new business checking accounts
opened when compared to the previous year,
resulting in the addition of 3,700 new business
deposit customers. Contributing signiﬁ cantly
to this achievement were the eff orts of our
small business lenders, who doubled their loan
production over the previous year.

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Checking account balances increased by $176 million and we
opened more than 21,000 new personal checking accounts,
bringing over 10,000 new households to the Northwest family.

The Production and Revenue Division also
executed on several initiatives designed to
drive future success in production levels. In
an eff ort to automate the customer referral
process, we implemented “Northwest
Connect,” a customer relationship management
system which documents and integrates the
business development eff orts of all Northwest
production personnel. Also, with a goal to drive
effi ciency and provide a vastly streamlined and
improved investment off ering to our wealth
management customers, we shed four separate
investment management platforms and
selected LPL Financial as our sole provider of
investment products.

Effi ciency Improvement

This year, our eff orts to improve effi ciency
were led by three major initiatives: the sale
of our Maryland offi ces, the divestiture of our
retirement services business and the closure of
our consumer ﬁ nance subsidiary. It is important
to note that these three lines of business were
experiencing little growth and providing meager
bottom line income. They also had relatively
high expense ratios, with expenses aggregating
$20 million, which equates to .22% of our
company’s consolidated assets. Given that our
company-wide expense-to-asset ratio is 2.80%,
these expenses represented approximately 8%
of total operating expense. An ancillary beneﬁ t
of these three initiatives was a reduction in
the complexity of our organization, which
will enable our staff to narrow their focus on
the lines of business that present the greatest
opportunity for growth and improvement in
proﬁ tability.

In seeking additional opportunities to enhance
effi ciency, our support staff continued to
address the challenges of the combined impact
of the LNB and First Niagara acquisitions, which

were completed in 2015 and 2016, respectively,
and increased transaction volumes by 40%
to 50%. In that regard, we were pleased to
achieve the normalization of our operations and
staffi ng levels in mid-year 2017, and we continue
to seek opportunities to improve effi ciency
through technology utilization and process
improvement. In this regard, our operations
personnel completed several notable initiatives
relating to the centralization of commercial
loan operations, the automation of the indirect
lending process and the implementation of an
automated system to handle debit card disputes.
Finally, we initiated a project to automate the
commercial loan origination process, which is
designed to improve effi ciency, enhance credit
reporting and address future requirements
relating to credit stress testing and CECL. We
anticipate that this new process will launch in
mid-year 2018.

Strengthening Risk Management

Our Risk Management Division continued to
strengthen their enterprise risk management
process through both the implementation of
new vendor management software and the
enhancement of our capabilities to identify
and communicate risk. While we continue to
address the requirements of a $10 billion bank
with regard to Dodd-Frank stress testing, we
remain active in lobbying our representatives
in Congress for their support in eliminating
that burdensome and expensive exercise. In a
similar regard, our executive management team
continued to support our industry’s eff orts to
lessen the immense regulatory burden that has
so signiﬁ cantly impacted our nation’s banks.
Finally, the bank’s credit department continued
to support our institution’s eff ort to manage
credit risk in the loan portfolio, and we are
pleased to report that overall credit quality is
currently at the highest level in recent history.

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We doubled the number of new business checking accounts
opened when compared to the previous year, resulting in
the addition of 3,700 new business deposit customers.

Enhancing Customer Convenience

Conclusion

With a continued focus on customer convenience,
we introduced a new website in 2017 which was
successfully rolled out with minimal customer
disruption and a high level of customer acclaim. This
conversion was a complex process that involved
signiﬁ cant potential for disruption, and our team is to
be commended for delivering a seamless transition.
Also, in an eff ort to further protect our customers
from the escalating threat of cyber fraud and identity
theft, we off ered fraud protection software that
received a high level of subscription.

Hiring of President and

Chief Operating Offi cer

We were pleased to announce in November,
2017 that Ronald J. Seiff ert was hired as President
and Chief Operating Offi cer of both Northwest
Bancshares, Inc. and Northwest Bank. Ron is
a seasoned banker, having spent 23 years at
Huntington Bank, where he rose to the level of
Vice Chairman. During his time at Huntington, the
bank’s assets grew from $2 billion to $25 billion,
with Ron serving in various leadership roles in credit
administration, retail lending, commercial banking
and operational support. Most recently, Ron served
as Chairman, President and CEO of Delaware
County Bank in central Ohio, where he led the eff ort
to improve credit quality and restore the bank to
proﬁ tability. In his initial assignment with Northwest,
Ron will lead all of our revenue and production
areas as well as the ﬁ nance, administration, facilities
and operational support departments of the bank.
We believe that Ron’s strong commercial banking
experience will be a great beneﬁ t to our institution,
and that his positive attitude and high ethical
standards closely align with the Northwest culture.
We have enjoyed having Ron as a member of our
executive team over the past few months, and we
anticipate that he will contribute greatly to the
future success of our company.

As we reﬂ ect on another year of signiﬁ cant
accomplishment, we pause and take note of the
current strength of our institution. Our company
undoubtedly has never been in a better position
to compete and elevate our performance. The mix
of our loan and deposit portfolios for the ﬁ rst time
approaches the level of commercial banks of our
size and, as a result, our net interest margin is at a
historic high. Our fee income is also at the highest
level in our history, and we have narrowed our focus
on the fee-producing activities that provide the best
opportunities for growth and enhanced proﬁ tability.
The credit proﬁ le of our loan portfolio continues to
improve and nonperforming assets rest at very low
levels. We have an abundance of capital to not only
support future growth, but also provide adequate
protection for our shareholders in the event of an
economic downturn. Our support systems and menu
of products and services have never been better,
and the markets we serve are experiencing low
levels of unemployment and increasing economic
strength. We believe we have a solid relationship
with our regulators fostered by mutual cooperation
and respect. And last but not least, we have
exceptional employees who are intelligent, capable,
driven and ﬁ ercely loyal to our company. We believe
Northwest's future is bright, and we look forward to
executing strategies designed to improve proﬁ tability
and enhance shareholder value.

On behalf of the Board of Directors and Northwest’s
2,500 dedicated employees, I wish to thank our
shareholders for their continued conﬁ dence in our
company.

Sincerely,

William J. Wagner
Chairman and CEO

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Corporate Proﬁ le

Northwest Bancshares, Inc.

Northwest Bancshares, Inc. is a federally-
chartered savings and loan holding company
that owns and operates Northwest Bank,
a Pennsylvania-chartered savings bank
headquartered in Warren, Pennsylvania.

For more than 120 years, we have served our
communities by meeting the diverse ﬁ nancial
needs of individuals, families, organizations
and businesses seeking to bank, borrow,
invest, insure and plan their futures.

As of December 31, 2017, we held assets of
$9.36 billion, 162 full-service community
banking locations, ten free-standing drive
through locations and 285 ATMs across
Pennsylvania, New York and Ohio.

Our primary business involves gathering funds from deposits and

borrowings and investing them in loans and investment securities.

18%

Source
of Funds

21%

32%

38%

10%

Investment
of Funds

15%

21%

28%

Checking Accounts

Money Market Accounts

Savings Accounts

Certiﬁ cates of Deposit

Borrowed Funds

Subordinated Debt

38%

21%

18%

Mortgage Loans

Commercial Real Estate

Home Equity Loans

Cash and Investments

Consumer Loans

Commercial Loans

32%

28%

15%

10%

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Northwest's sources of funds and mix of loans and investments

have changed considerably over the years as we have strived

to transform from a thrift to commercial bank.

Loan Growth and Mix in billions of dollars

1-4 Family Residential Mortgages

Home Equity Loans

Consumer Loans

Commercial Real Estate

Commercial and Industrial

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Deposit Growth and Mix in billions of dollars

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Savings Accounts

Checking Accounts

Money Market Accounts

Certiﬁ cates of Deposit

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Financial Highlights

Northwest Bancshares, Inc. and subsidiaries

In thousands, except per share and other data

AT YEAR END DECEMBER 31,

2017

2016

2015

Total assets

Loans receivable, net

Deposits

Shareholders’ equity

Book value per share

Tangible book value per share

Closing market price per share

FOR THE YEAR ENDED DECEMBER 31,

Net interest income

Net income

Non-GAAP net income

Diluted earnings per share

Non-GAAP earnings per share

Dividends per share

KEY FINANCIAL RATIOS FOR THE YEAR ENDED DECEMBER 31,

Return on average shareholders’ equity (1)

Return on average assets (1)

Tangible common equity

Average interest rate spread

Nonperforming assets to total assets at end of period

Net charge-off s as a percentage of average loans outstanding

$ 9,363,934

$ 9,623,640

$ 8,951,899

7,736,614

7,496,408

7,159,449

7,826,989

7,882,321

6,612,581

1,207,724

1,170,663

1,163,163

11.79

8.54

16.73

11.51

8.17

18.03

11.42

8.76

13.39

$ 330,785

$ 307,335

$ 263,253

94,467

83,735

0.92

0.83

0.64

7.04%

0.88%

9.68%

3.72%

0.75%

0.31%

49,667

82,264

0.49

0.82

0.60

7.09%

0.90%

8.95%

3.60%

0.88%

0.21%

76.00%

0.81%

60,540

67,012

0.64

0.71

0.56

6.08%

0.80%

10.28%

3.29%

0.91%

0.23%

85.86%

0.87%

Allowance for loan losses to nonperforming loans at end of period

87.43%

Allowance for loan losses as a percentage of loans receivable

0.73%

OTHER DATA AT DECEMBER 31,

Full-service community banking locations

162

167

176

Average deposits per full-service location (2)

$ 48,315

$ 48,063

$ 37,571

Full time equivalent employees

Registered shareholders (3)

2,106

13,209

2,306

13,690

2,186

14,363

(1) Excludes after-tax impact of restructuring and acquisition expenses of $4.4 million, $34.7 million and $6.5 million for 2017, 2016 and 2015,

respectively, as well as a gain on the sale of offi ces of $17.2 million for 2017.

(2) In thousands. 2016 excludes three offi ces pending sale in Maryland.
(3) Excludes shareholders who own their stock in “street name.”

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Growth and Performance

While Northwest

resumed its long-standing

Assets
in billions of dollars

$9.62

$9.36

$8.95

$8.03

$8.15

$7.96

$7.94

$7.88

$7.78

tradition of balance sheet

$6.93

growth in 2015 and 2016,

this past year we focused

on developing platforms

and processes that will

prepare us to cross the

$10 billion threshold.

Proﬁ tability on an

adjusted basis has

increased signiﬁ cantly

over the past three

years as a result of our

acquisition initiatives

and focus on revenue

growth and operating

effi ciency.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Net Income
in millions of dollars

GAAP Non-GAAP

$64.2

$63.4

$66.6

$62.0

$57.5

$67.0
$60.5

$60.5

$48.2

$32.7

$94.5

$83.7

$82.3

$49.7

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Common Stock Information

Stock Price Performance Since IPO
in total return % (Source: SNL Financial)

2017 High
1Q $18.63 $16.21 $0.16

Low

Div

2Q $17.39 $14.95 $0.16

3Q $17.41 $15.06 $0.16

4Q $17.78 $15.34 $0.16

2016 High
1Q $13.71 $11.78 $0.15

Low

Div

2Q $14.89 $13.09 $0.15

3Q $15.75 $14.47 $0.15

4Q $19.10 $15.26 $0.15

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+1,719.53%
NWBI
S&P 500
+796.79%
SNL U.S. Bank +667.88%

2,000

1,500

1,000

500

-500

1
9
9
4

1
9
9
5

1
9
9
6

1
9
9
7

1
9
9
8

1
9
9
9

2
0
0
0

2
0
0
1

2
0
0
2

2
0
0
3

2
0
0
4

2
0
0
5

2
0
0
6

2
0
0
7

2
0
0
8

2
0
0
9

2
0
1
0

2
0
1
1

2
0
1
2

2
0
1
3

2
0
1
4

2
0
1
5

2
0
1
6

2
0
1
7

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Market Coverage

A network of ofﬁces across
three states.

In 2017, we were proud to be named one of Bankrate's
“Best Regional Banks” and by Time's Money Magazine as the
“Best Bank in Pennsylvania” and runner-up in New York.

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Making a diff erence

For us, this isn't just a job. It's our chance to make a diff erence.

To bring dreams to life. To solve real problems. To make someone's life easier.

That's why we go above and beyond. From the teller who shows a customer a new way
to save to the advisor helping your employees prepare for retirement.

People at Northwest care about others. And, we take pride in our work.
We're always thinking, how can we help?

That passion can make a big diff erence—
even in small ways.

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Business Solutions

A greater degree of conﬁ dence.

Cash Management. Financing. Insurance.
Investments. Beneﬁ ts. If you're running a business,
you need to consider it all.

At Northwest, we make it easy with a fresh
perspective focused on taking care of business
your way. We work one-on-one with our clients
to pinpoint opportunities and work out a plan.
We learn about them, their operations and their
vision. Then, our ﬂ exible model lets us customize
solutions to ﬁ t their goals and preferences.

Whether they're just getting started, or they've
been in business 50 years, we surround them
with the people and products to give them a
greater degree of conﬁ dence.

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Business Solutions

Loans and Deposits

Commercial relationships continue to be a growing segment of our business as commercial loans
and deposits have grown substantially over the past ﬁ ve years. Yields and costs have started to
increase due to the changing interest rate environment, but our interest spread remains attractive.
Our business deposit mix continues to improve as we meet the needs of all types of businesses.

Commercial Loans
in billions of dollars

$2.103

$2.295

$2.962

$3.071

$3.233

Business Deposit Balances
in billions of dollars

$1.705

$1.701

$1.405

$1.206

$1.073

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

Commercial Loan Yields

Cost of Business Deposits

4.61%

4.46%

4.30%

4.23%

4.42%

0.19%

0.14%

0.13%

0.11%

0.08%

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

Commercial Loan Losses
as a % of commercial loans

0.94%

0.59%

0.38%

0.33%

0.24%

2013

2014

2015

2016

2017

Business Deposit Mix

14%

20%

52%

52% of business deposits
were in non-interest
bearing checking accounts

Money Market

Interest Checking

Municipal

20%

14%

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Business Solutions

Trust Services

Business assets have been expanding in recent years, driven primarily by growth of our
retirement plan business and endowment and foundation management services.

Business Trust Assets Under Management
in millions of dollars

Business Trust Asset Mix
as a % of total business assets under management

$1,046.5

$1,091.9

$1,123.6

$1,337.7

$1,222.7

13%

82%

82% of business trust
assets were in
retirement plans

Endowments/Foundations 13%

Investment Management

Trusts

2013

2014

2015

2016

2017

Business Trust Revenue
in millions of dollars

Business Trust Revenue Mix
as a % of total business revenue

$3.7

$3.4

$3.9

$4.0

$4.2

13%

75%

75% of business trust
revenue came from
retirement plans

Endowments/Foundations 13%

Investment Management

2013

2014

2015

2016

2017

75%

Trusts

Business investments, retirement plans and succession
plans play an enormous role in the health of a business.
That's where our trust offi cers shine.

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Insurance Services

Through Northwest Insurance Services, we complete our full-service business
off er with a personal approach to property and casualty insurance and
employee beneﬁ ts, which signiﬁ cantly boosts fee income.

Business Insurance Revenue
in millions of dollars

Business Insurance Revenue Mix
as a % of total business insurance revenue

$7.0

$7.3

$6.4

$8.2

2013

2014

2015

2016

2017

31%

69%

69% of business insurance
revenue came from
employee beneﬁ ts
accounts

Property and Casualty

31%

Northwest Insurance Services advisors work with businesses
as an extension of their team—from plan evaluation and
implementation to employee education and administration.

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Personal Solutions

We are all in.

There's an energy that deﬁ nes Northwest. A spirit that says yes-we-can.
And a passion that's evident in everything we do.

You can see it when we greet customers. Hear it when we
come up with great solutions. And feel it when you walk into
any offi ce or visit us online.

That energy comes from each and every one of us,
working together to reach one goal—to make life better.

For our customers, we team up to do the best job we can.
So we can make a diff erence, every single day.

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Deposits

We pride ourselves in the relationships we've built meeting our customers' needs. We continue to
have great success attracting and keeping new checking account customers, and look forward to
serving our customers for years to come as we deepen those relationships.

Number of Households

Number of Checking Accounts

398,395

419,192

311,141

310,993

288,747

289,185

337,904

223,139

229,020

253,717

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

Services Per Household

3.056

3.031

2.987

2.941

Checking Account Balances
in millions of dollars

$1,749.0

$1,796.6

2.861

$1,325.6

$963.6

$1,035.9

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

Savings and Insured Money Fund
Deposit Balances
in billions of dollars

$3.168

$3.041

$2.038

$2.061

$2.325

Checking Account Fees
in millions of dollars

$31.2

$32.0

$33.7

$44.2

$38.7

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

(1) In 2017, services per household declined as we welcomed former Northwest Consumer Discount Company single-service loan customers to the bank.

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Personal Solutions

Loans

Mortgage and home equity loans are a core off ering and continue to provide a stable return.
Consumer loans have grown substantially in recent years with an emphasis on higher credit quality.
Accordingly, while consumer loan yields have decreased signiﬁ cantly during the most recent
two years, so have the losses from such loans.

Mortgage Portfolio Yield

Consumer Loans
in millions of dollars

4.53%

4.43%

4.26%

4.14%

4.10%

$631.3

$671.4

$510.6

$228.3

$242.7

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

Home Equity Portfolio Yield

Consumer Loan Portfolio Yield

4.89%

4.72%

4.54%

4.46%

4.77%

11.62%

10.76%

6.86%

6.62%

5.97%

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

Mortgage and Home Equity Loan Losses
as a % of total mortgages and home equities

Consumer Loan Losses
as a % of consumer loans

0.15%

2.65%

0.13%

0.11%

0.09%

0.08%

2.20%

1.97%

2.02%

2013

2014

2015

2016

2017

2013

2014

2015

2016

2017

8284c3.indd 18

(1) Excludes consumer ﬁ nance loans from Northwest Consumer Discount Company.

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Trust Services

We have consistently grown personal assets under management through our focus on
relationship, service and customized investment management solutions, which has led to a
growing contribution to fee income.

Personal Trust Assets Under Management
in millions of dollars

Personal Trust Asset Mix
as a % of total personal assets under management

$372.0

$393.2

$403.0

$309.8

2013

2014

2015

2016

2017

Personal Trust Revenue
in millions of dollars

$2.8

$3.1

$3.5

$3.6

2013

2014

2015

2016

2017

28%

72% of trust assets
were in investment
management accounts

Trusts

28%

72%

Personal Trust Revenue Mix
as a % of total personal revenue

33%

67% of trust revenue
came from investment
management accounts

Trusts

33%

67%

Our experienced team of trust offi cers help
ensure customer assets are protected—
and their legacies are fulﬁ lled.

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Personal Solutions

Northwest Advisors

Northwest Advisors personal assets under management and the quality of our program
grew signiﬁ cantly in 2016 and 2017 as a result of the First Niagara acquisition and transition
to LPL Financial as our broker dealer.

Personal Assets Under Management
in millions of dollars

Personal Asset Mix
as a % of total personal assets under management

$1,487.1

$1,274.9

$540.1

$587.1

$396.6

2013

2014

2015

2016

2017

34%

32%

34%

34% of personal
investment assets were
in advisory accounts

Brokerage

Annuity

34%

32%

Personal Investment Management Revenue
in millions of dollars

Personal Investment Management Revenue Mix
as a % of total personal revenue

$9.1

$4.7

$4.2

$5.2

$2.3

2013

2014

2015

2016

2017

19%

33%

48%

48% of personal
investment revenue came
from advisory accounts

Brokerage

Annuity

33%

19%

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Insurance

Through the acquisitions of a number of insurance companies over the last few years and
an investment in digital partnerships, we've increased our physical and online presence,
which signiﬁ cantly increased revenue in 2017.

Personal Insurance Revenue
in thousands of dollars

Personal Insurance Revenue Mix
as a % of total personal insurance revenue

$1,209.2

$901.1

$576.5

$469.3

$352.2

2013

2014

2015

2016

2017

28%

72% of personal insurance
revenue came from property
and casualty policies

Health, Life and
Disability Insurance

28%

72%

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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

AS OF DECEMBER 31,

2017

2016

$ 77,710

$ 389,867

792,535

29,678

826,200

19,978

Loans receivable, net of allowance for loan losses of $56,795 and $60,939

7,736,614

7,496,408

Assets held-for-sale

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

Liabilities held-for-sale

Borrowed funds

Advances by borrowers for taxes and insurance

Accrued interest payable

Other liabilities

Trust preferred securities

TOTAL LIABILITIES

—

152,528

23,352

5,666

171,547

151,944

333,089

11,733

30,066

21,699

4,889

171,449

161,185

339,853

7,390

32,194

$ 9,363,934

$ 9,623,640

$ 7,826,989

$ 7,882,321

—

108,238

40,825

460

68,485

111,213

215,657

142,899

36,879

635

63,373

111,213

8,156,210

8,452,977

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;

102,394,828 and 101,699,406 shares issued and outstanding, respectively

Paid-in capital

Retained earnings

Accumulated other comprehensive loss

TOTAL SHAREHOLDERS’ EQUITY

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

1,027

1,017

730,719

508,058

718,834

478,803

(32,080)

(27,991)

1,207,724

1,170,663

$ 9,363,934

$ 9,623,640

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Condensed consolidated statements of income

In thousands, except per 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

YEARS ENDED DECEMBER 31,

2017

2016

2015

$ 339,992

$ 329,039

$ 298,665

18,864

16,595

20,915

358,856

345,634

319,580

23,057

5,014

23,465

14,834

28,071

38,299

24,055

32,272

56,327

330,785

307,335

263,253

19,751

13,542

9,712

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

311,034

293,793

253,541

NONINTEREST INCOME:

Service charges and fees

Trust and other ﬁ nancial services income

Gain/(loss) on sale of investments

Insurance commission income

Income from bank-owned life insurance

Other (1)

TOTAL NONINTEREST INCOME

NONINTEREST EXPENSE:

Compensation and employee beneﬁ ts

Premises and occupancy costs

Offi ce operations

Collections expense

Processing expenses

Amortization of intangibles

Marketing expenses

Federal deposit insurance premiums

Restructuring and acquisition expenses

Other

TOTAL NONINTEREST EXPENSE

Income before income taxes

Income tax expense

NET INCOME

Basic earnings per share

Diluted earnings per share

(1) Includes gain on the sale of Maryland offi ces of $17,186 in 2017.

49,717

17,987

1,148

9,013

6,093

26,522

110,480

44,113

14,103

625

10,522

5,361

10,636

85,360

38,362

12,342

1,037

9,526

4,338

3,231

68,836

150,228

140,927

119,818

28,863

16,342

2,849

39,086

6,764

9,607

3,518

4,419

23,927

26,134

14,898

2,431

34,859

4,259

8,852

4,404

49,191

21,883

24,641

12,337

3,247

30,780

1,688

8,499

5,109

9,751

18,007

285,603

307,838

233,877

135,911

41,444

71,315

21,648

88,500

27,960

$ 94,467

$ 49,667

$ 60,540

$ 0.94

$ 0.92

$ 0.50

$ 0.49

$ 0.64

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Directors and Offi cers

Board of Directors

William J. Wagner
Chairman and
Chief Executive Offi cer
Northwest Bancshares, Inc.

Ronald J. Seiff ert
President and
Chief Operating Offi cer
Northwest Bancshares, Inc.

Robert M. Campana
President
Campana Capital

Deborah J. Chadsey
Attorney and Partner
Kavinoky Cook LLP

Corporate Offi cers

William J. Wagner
Chief Executive Offi cer

Ronald J. Seiff ert
President
Chief Operating Offi cer

Steven G. Fisher
Senior Executive Vice President
Chief Revenue Offi cer

William W. Harvey, Jr.
Senior Executive Vice President
Chief Financial Offi cer

Michael W. Bickerton
Executive Vice President
Commercial Lending

Richard K. Laws
Executive Vice President
Chief Counsel
Corporate Secretary

Timothy B. Fannin
Retired Partner
Catalano, Case, Catalano
& Clark-Radzieta, LLP

John P. Meegan
Executive Vice President and
Chief Operating Offi cer
Hefren-Tillotson, Inc.

Timothy M. Hunter
President and
Chief Executive Offi cer
McInnes Rolled Rings and
Erie Bronze & Aluminum Company

Mark A. Paup
President and
Chief Executive Offi cer
Zippo Manufacturing and
W.R. Case and Sons Cutlery Company

William F. McKnight
Controller
Interstate Chemical Company

Sonia M. Probst
Retired Chief Executive Offi cer
Rouse Estate

Gerald J. Ritzert
Executive Vice President
Corporate Controller

Jonathan P. Scalise
Executive Vice President
Business Development

Michael G. Smelko
Executive Vice President
Chief Credit Offi cer

Louis J. Torchio
Executive Vice President
Retail Lending

Thomas J. Townsend
Executive Vice President
Chief Risk Offi cer

Shawn O. Walker
Executive Vice President
Chief Marketing Offi cer

Philip M. Tredway
President and
Chief Executive Offi cer
Erie Molded Plastics, Inc.

Andrew C. Young
Executive Vice President
Chief Information Offi cer

Ronald B. Andzelik
Senior Vice President
Chief Compliance Offi cer

Neil A. Aquino, Jr.
Senior Vice President
Commercial Real Estate Lending

John K. Beard
Senior Vice President
Northwest Advisors

Stephen M. Bell
Senior Vice President
Facilities

Douglas H. Bert
Senior Vice President
Insurance Services

Michele D. Cavalier
Senior Vice President
Senior Trust Offi cer

Julia W. McTavish
Executive Vice President
Chief Human Resources Offi cer

David E. Westerburg
Executive Vice President
Chief Operations Offi cer

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Christina D. Dinger
Vice President
Process Improvement/
Program Management

W. Norman Ewing
Vice President
Systems and Programming

Jack R. Freeman
Vice President
Corporate Credit Offi cer

Dean C. Huya
Vice President
Loss Mitigation

Julie K. Johnson
Vice President
Loan Servicing

Kimberly A. Johnson
Vice President
Electronic Banking

Raymond R. Learn II
Vice President
Fair Lending Offi cer

Dorothy E. Lobdell
Vice President
Retail Lending

Corporate Offi cers

Thomas K. Creal IV
Senior Vice President
Credit Administration

John E. Hall
Senior Vice President
Indirect Lending

Eric D. Stoever
Senior Vice President
Chief Technology Offi cer

James M. Swanson
Senior Vice President
Deposit Operations

Neil R. Hoff man
Senior Vice President
Commercial/Industrial Lending

William C. Tarpenning
Senior Vice President
Retail Lending

D. Kirk Jacobson
Senior Vice President
Small Business Lending

C. Forrest Teff t
Senior Vice President
Corporate Finance Lending

Pamela L. Balas
Vice President
Loan Servicing

Steven M. Crissey
Vice President
Human Resources

Michael R. DelPrince
Vice President
Accounting

Barbara L. DeMontier
Vice President
Human Resources

Jeff rey J. Maddigan
Senior Vice President
Treasurer

Kevin G. Mizak
Senior Vice President
Chief Auditor

Melody Schott
Senior Vice President
Offi ce Services

Heidi Schwab
Senior Vice President
Loan Operations

Vicki L. Stec
Senior Vice President
Bank Secrecy Offi cer

Region Presidents

John J. Golding
New York

Julie A. Marasco
Northwest Pennsylvania

James E. Martin
Erie, Pennsylvania

Nancy J. May
Eastern Pennsylvania

Kevin W. Nelson
Ohio

Jonathan E. Rockey
Central Pennsylvania

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Investor Information

Corporate Headquarters

Financial Information

100 Liberty Street
PO Box 128
Warren, Pennsylvania 16365
Telephone: (814) 726-2140
Fax: (814) 728-7716
www.northwest.com

Annual Meeting

April 18, 2018, 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.”

Stock Transfer, Registrar and
Dividend Disbursing Agent

Shareholder communications regarding change of address,
change in stock registration, reporting of lost certiﬁ cates
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) 715-0499
Email: help@astﬁ nancial.com
www.astﬁ nancial.com

Online Shareholder Access

Registered shareholders can sign up to access their
account(s) online through American Stock Transfer & Trust
Company, LLC at www.astﬁ nancial.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

Independent Auditors

KPMG LLP, Pittsburgh, Pennsylvania

Securities Counsel

Luse Gorman, P.C., Washington, D.C.

The Annual Report on Form 10-K is ﬁ led with the
Securities and Exchange Commission (SEC). Copies of
this document and other ﬁ lings, including exhibits thereto,
may be obtained electronically at the SEC home page
at www.sec.gov or through the company’s website,
www.northwest.com. Copies may also be obtained,
without charge, upon request by writing to the company’s
corporate headquarters.

Dividend Reinvestment and
Direct Stock Purchase and Sale Plan

Northwest Bancshares, Inc. is pleased to off er 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 shareholder or are interested
in becoming one, you may access the plan material and
enroll online at www.astﬁ nancial.com by clicking on
“Invest Online” or from our investor relations website at
www.northwest.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.astﬁ nancial.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
Chairman and Chief Executive Offi cer

Ronald J. Seiff ert
President and Chief Operating Offi cer

William W. Harvey, Jr.
Senior Executive Vice President and Chief Financial Offi cer

Shareholder Relations

Ian R. Scott
Assistant Vice President, Shareholder Relations and
Assistant Corporate Secretary
(800) 859-1000

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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 aff ecting the company and its operations. Readers are
cautioned not to place undue reliance on these forward-looking statements, as actual results may diff er materially from
those expressed or implied. Management has no obligation to revise or update these forward-looking statements to reﬂ ect
events or circumstances that arise after the release of this report. ©2018 Northwest Bancshares, Inc.

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