Northwest Bancshares, Inc.
Annual Report 2021

Plain-text annual report

Champions of Opportunity A Message to Shareholders from Ronald J. Seiffert — Chairman, President and CEO It is difficult to believe that it has been more objectives outlined in our five-year strategic than two years since the beginning of the plan, which was approved by our Board of COVID-19 pandemic. Reflecting on that, I think Directors in October 2018. about how much has changed, and how that change has impacted each of us physically, emotionally, financially or practically as we live our day-to-day lives. I would like to begin this year’s message by thanking our valued employees for their dedication to being there, standing strong as Champions of Opportunity for our customers, our communities and for each other. More times than I can count, I have noted moments when our team has gone above and beyond to understand and empathize with customers and fellow employees, empowering them to triumph In 2021, we prioritized the following initiatives to help ensure a solid return on your investment and your continued belief in us: • Embarked on an initiative reaffirming our culture and commonality of goal and purpose, recognizing that we truly are Champions of Opportunity; • Completed Phase I of our digital transformation strategy, which converted 15 of our major systems/applications to our new digital platform; over these challenging times and pursue their • Announced our 2022 branch optimization own vision of wealth and happiness. While providing support to others, our teams also answered the call in 2021 by embracing progress, change and innovation. Their willingness to adopt and learn new technology led to the successful implementation of the first phase of our digital transformation efforts, which provided customers with simple, fast and secure digital banking solutions designed to provide seamless account access and financial insights where and when they want it. As with our employees and our customers, we share a fundamental commitment to strategy, which includes the closing of 20 branches at an expected annual cost savings of $8 million; • Executed our retail workforce optimization strategy, which focused on creating cost savings in our branch network through increased efficiencies; • Recruited key executive-level talent to the company across departments, including Marketing, Human Resources and Information Systems; • Established our new holding company you, our shareholders. Our team’s dedication headquarters for Northwest Bancshares, Inc. to supporting others through daily practice in Columbus, Ohio, while maintaining our of trust, collaboration and accountability is Northwest Bank headquarters in Warren, what allowed us to continue to deliver on the Pennsylvania; 1 • Sold our insurance business at a gain of Commercial Banking $25 million; • Expanded the initiatives of our Diversity and Inclusion strategy through increased activities of our Inclusion Council as part of our Environmental, Social and Governance (ESG) commitment; • Recruited Pablo Vegas to the Northwest Bank Board of Directors, who represents the Columbus market and is experienced in strategy, technology and operations; • Continued the execution of our strong succession management and mentoring programs, including the completion of an engagement with Korn Ferry which assessed personal and professional development opportunities for our four Generate improved results from the significant investments we made in 2021 in our Delaware Valley LPO, the creation of our Healthcare Vertical, the expansion of our Corporate Finance Department and through the addition of quality Commercial Bankers in Indiana, Pittsburgh, Columbus and Cleveland; Develop equipment finance capability through hiring external expertise or through an acquisition of an independent company; Assess end-to-end Commercial sales and credit processes to remove friction and to improve our overall customer experience. Business Banking senior executive vice presidents; and, finally Expand our capability through the • Generated very strong credit quality metrics despite the negative impact of the pandemic resulting in charge-offs and delinquencies of 0.20% and 1.00%, respectively, at December 31, 2021. development of new loan options, bundled treasury management products and innovative technology to improve our small business customer experience; Expand the production and sale of SBA loan products. The execution of these key initiatives contributed significantly to our financial performance. For Digital Transformation the fiscal year ending December 31, 2021, the company generated net income of $154.3 million and an ROA of 1.08%. The financial statements incorporated in this report will provide an in-depth analysis of these results. 2022 Focus Execute Phase II of our digital platform strategy to include the conversion of six new systems/applications. Branch Optimization 2.0 Close 20 branches, which represents approximately 12% of our retail network. In October 2021, our executive management team presented a refreshed strategic plan to our Workforce Optimization 2.0 Board of Directors for approval, which included Reduce costs in our retail branch network key initiatives to further enhance our financial through process improvements and through performance for 2022. The major initiatives that the migration of our customer base to our emerged from this process are as follows: digital platform. 2 Customer Experience Continue to institutionalize our Customer Experience strategy, shifting our focus and aspiration away from just customer “satisfaction” to customer “experience”. Through the effective execution of these initiatives in 2022, we are confident that we will build upon the historically-consistent financial performance of the company and, in turn, enhance shareholder value. Marketing and Communication Conclusion Strengthen marketing and communication by leveraging data to develop and implement Despite the many challenges created by growth strategies for each of the bank’s lines the prolonged pandemic and the continued of business. Risk Management Continue our historically-strong emphasis on maintaining effective risk management practices and oversight across the bank in response to an increasingly complex banking environment. Diversity and Inclusion Through our Inclusion Council established in 2020, continue to develop focused ESG initiatives to build upon the bank’s inclusive environment to include data collection and analysis, education, training and development and community engagement. Mergers and Acquisitions headwinds created by the interest rate environment in 2021, I was very pleased with the performance of our bank. We were able to complete a number of strategic initiatives during 2021, which will enhance our ability to perform at higher levels during 2022. We are in the fourth year of executing our compelling five-year strategic plan approved in 2018 by our Board of Directors which, we believe, will continue to enhance shareholder returns in 2022 and beyond. However, we continue to have a strong bias that our greatest strength is our people. We have exceptional employees who are extremely dedicated to our company, to our customers and to the communities which we serve. On behalf of our Board of Directors and our employees, I wish to thank our customers Continue to explore merger opportunities for their continued loyalty and trust and within our defined target market of our shareholders for your confidence in our Pennsylvania, New York, Ohio and Indiana. company and for your support! Talent Acquisition, Development and Retention Sincerely, Continue to aggressively pursue and develop top talent across all our job families to support our growth and to respond to the Ronald J. Seiffert increasing complexities of our business. Chairman, President and CEO 3 Corporate Profile Northwest Bancshares, Inc. Northwest Bancshares, Inc. is a federally- banking locations, eight free-standing drive chartered bank holding company that through locations and 226 ATMs across owns and operates Northwest Bank, a Pennsylvania, New York, Ohio and Indiana. Pennsylvania-chartered savings bank For more than 125 years, we have served our headquartered in Warren, Pennsylvania. communities by meeting the diverse financial needs of individuals, families, organizations As of December 31, 2021, we held assets of and businesses seeking to bank, borrow, $14.50 billion, 162 full-service community invest and plan their futures. Our primary business involves gathering funds from deposits and borrowings and investing them in loans and investment securities. Source of Funds Investment of Funds Checking Accounts ........................... 48% Money Market Accounts ..................21% Savings Accounts .................................18% Certificates of Deposit ..................... 10% Borrowed Funds ..................................... 1% Subordinated Debt ................................ 1% Junior Subordinated Debentures .... 1% Cash and Investments .......................26% Commercial Real Estate .................. 22% Mortgage Loans .................................. 22% Consumer Loans ..................................14% Home Equity Loans ............................ 10% Commercial Loans................................. 6% 4 6%10%14%22%22%26%10%18%21%48%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 a commercial bank. Loan Growth and Mix in billions of dollars $12.5 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 2018 2019 2020 2021 $10 $7.5 $5 $2.5 $0 Deposit Growth and Mix in billions of dollars $12.5 Savings Accounts $10 $7.5 $5 $2.5 $0 Checking Accounts Money Market Accounts Certificates 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 2018 2019 2020 2021 5 Financial Highlights Northwest Bancshares, Inc. and subsidiaries In thousands, except per share and other data AT YEAR END DECEMBER 31, 2021 2020 2019 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 Diluted earnings per share Dividends per share 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 $ 14,501,508 $ 13,806,268 $ 10,493,908 9,914,151 10,446,422 8,750,733 12,301,165 11,599,233 8,592,007 1,583,571 1,538,703 1,353,285 12.51 9.40 14.16 12.11 8.95 12.74 12.66 9.21 16.63 $ 391,262 $ 391,728 $ 360,466 154,323 74,854 110,432 1.21 0.79 9.91% 1.08% 8.43% 2.89% 1.10% 0.20% 0.62 0.76 4.72% 0.58% 8.48% 3.24% 0.77% 0.27% 1.04 0.72 8.36% 1.07% 9.72% 3.62% 0.67% 0.23% Allowance for credit losses to nonperforming loans at end of period 64.38% 129.99% 84.09% Allowance for credit losses as a percentage of loans receivable 1.02% 1.27% 0.66% OTHER DATA AT DECEMBER 31, Full-service community banking locations 162 162 172 Average deposits per full-service location (1) $ 75,933 $ 71,600 $ 49,954 Full-time equivalent employees Registered shareholders (2) 2,332 2,421 2,209 10,182 12,442 12,532 (1) In thousands. (2) Excludes shareholders who own their stock in “street name.” 6 Growth and Performance Assets in billions of dollars Assets Total assets increased $695.2 million over prior year primarily due to increases in marketable securities and total cash and cash equivalents, as a result of increases in customer deposits. Net income Net income increased $79.5 million over prior year resulting primarily from a release in provision for credit losses that were built up in the prior year due to uncertainty around the impact of COVID-19 as well as a 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Annual Net Income in millions of dollars $110.4 $83.7 $74.9 $60.5 $49.7 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 $25.3 million gain from the sale Diluted earnings per share in dollars of our insurance business. Earnings per share $1.04 $0.83 $0.64 $0.49 $0.62 Common Stock Information Stock Price Performance Since IPO in total return % (Source: S&P Capital IQ) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2021 High Low Div 1Q $ 15.48 $ 12.42 $ 0.19 2Q $ 14.76 $ 13.45 $ 0.20 3Q $ 13.88 $ 12.37 $ 0.20 4Q $ 14.50 $ 13.11 $ 0.20 2020 High Low Div 1Q $ 16.67 $ 9.92 2Q $ 12.24 $ 8.52 $ 0.19 $ 0.19 3Q $ 10.72 $ 8.84 $ 0.19 4Q $ 12.84 $ 9.07 $ 0.19 2,100 1,550 1,000 450 -100 NWBI +1,796.48% S&P 500 +1,618.08% S&P Banks +853.56% 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 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 7 $154.3$74.9$110.4$105.5$94.5$49.7$60.5$62.0$66.6$63.4$154.3$131.4$113.4$83.7$82.3$67.0$154.3$131.4$113.4$83.7$82.3$67.0$154.3$131.4$113.4$83.7$82.3$67.0$154.3$131.4$113.4$83.7$82.3$67.0$154.3$131.4$113.4$83.7$82.3$67.0$14.50$13.81$10.49$9.61$9.36$9.62$8.95$7.78$7.88$7.94$1.21$0.62$1.04$1.02$0.92$0.49$0.64$0.67$0.73$0.68$1.21$1.09$1.07$1.02$0.83$0.82$0.71$1.21$1.09$1.07$1.02$0.83$0.82$0.71$1.21$1.09$1.07$1.02$0.83$0.82$0.71$1.21$1.09$1.07$1.02$0.83$0.82$0.71$1.21$1.09$1.07$1.02$0.83$0.82$0.71$1.21$1.09$1.07$1.02$0.83$0.82$0.71Here to make the difference Corporate Responsibility | northwest.com/esg For more than 125 years, doing what’s right for the people, communities and world around us has been at the heart of who we are. Here you’ll find how we meet Environmental, Social and Governance (ESG) standards and uphold responsible business principles to fulfill our shared purpose to create opportunities and empower one another — all to pave the way for a better tomorrow. Governance and Ethics Integrity, transparency and trust are three principles that drive the way we do business. Empowering Customers It’s our mission to empower people with the knowledge and tools they need to improve their lives. Investing in our Team We’re real people with a shared passion for helping others — most importantly, our employees. Committed to Inclusion We face each day as one, embracing our unique perspectives to spark creative solutions. Strengthening Communities We’re dedicated to making a difference in the places where we live and work. Focused on Sustainability Whether it’s the environment, our communities, economy or our people, we’re here to make a long-lasting impression. In 2021, Northwest Bank earned a Home Possible RISE Award from Freddie Mac, which helps low-income homebuyers secure mortgages. 8 WE ARE COMMITTED TO COMMUNITY DEVELOPMENT Community Donations Community Lending We donate to support job creation, We’re committed to nurturing dreams of affordable housing and other services prosperity — from home ownership to in low- and moderate-income entrepreneurship — for those who need it neighborhoods. most. Annual Community Donations Annual Community Lending in thousands of dollars 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 (1) Does not include all donations made at the local level. (2) Includes PPP loans. In the spotlight: Belmont Financial Education Center In 2021, we were proud to stand alongside our partners from Belmont Housing in Buffalo to cut the ribbon marking the grand opening of the Belmont Financial Education Center, powered by Northwest. Through this partnership, people who live on the East Side of Buffalo and beyond will be able to put their children through college, invest in homes, start businesses and retire in comfort and security. This is what true economic development looks like. Scan this code to learn more. 9 $755,689$899,513$510,734$366,401$329,249$1,026,065$1,217,900$1,217,499$993,000$1,314,500 Market Coverage Proudly serving people and businesses across four states. Northwest Bancshares, Inc. Headquarters Columbus, Ohio Northwest Bank Headquarters Warren, Pennsylvania Bucks Montgomery C h e s t e r Philadelphia Delaware 2021 was an award-winning year for Northwest Bank as we were ranked Highest Customer Satisfaction with Retail Banking and Most Trusted Retail Bank in Pennsylvania by J.D. Power — we were also named one of America's Best Banks by Forbes. 10 Business Solutions We're passionate about helping people. At Northwest, we believe there are opportunities around every corner. And we're here to surround you with the tailored solutions and personalized advice you need to find them. Our network of local experts puts you and your business at the center of everything they do, understanding your unique needs, identifying customized tools and ultimately, empowering you to achieve your financial goals. From treasury management and financing to investment management and employee benefits for businesses big and small, consider our team an extension of yours. 11 Business Solutions Loans and Deposits Commercial relationships continue to be a growing segment of our business as commercial loans and deposits have grown over the past five years. Yields and costs have declined due to the changing interest rate environment. Our business deposit mix continues to improve as we meet the needs of all types of businesses. Commercial Loans in billions of dollars Business Deposit Balances in billions of dollars 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Commercial Loan Yields Cost of Business Deposits 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Commercial Loan Losses as a % of commercial loans Business Deposit Mix 54% 54% of business deposits were in non-interest bearing checking accounts Money Market Accounts ......... 18% Interest Checking Accounts ... 14% Municipal Accounts ................... 14% 2017 2018 2019 2020 2021 12 14%14%18%54%0.44%0.45%0.35%0.35%0.25%$3.812$3.536$2.098$1.919$1.7014.18%4.27%5.00%4.72%4.41%0.04%0.05%0.34%0.34%0.19%$3.863$4.537$3.472$3.069$3.035Trust Services Business trust revenue has remained strong over the past year as we continue to diversify our mix of both revenue and assets under management. Business Trust Assets Under Management in billions of dollars Business Trust Asset Mix as a % of total business assets under management 82% 82% of business trust assets were in retirement plans Endowments/Foundations ... 12% Investment Management .........4% Trusts ..................................................2% 2017 2018 2019 2020 2021 Business Trust Revenue in millions of dollars Business Trust Revenue Mix as a % of total business revenue 73% 73% of business trust revenue came from retirement plans Endowments/Foundations ... 17% Investment Management .........7% Trusts ..................................................3% 2017 2018 2019 2020 2021 Business investments, employee retirement plans and succession plans play an important role in the health of a business. That's where our trust officers shine. 13 12%82%$6.1$4.9$4.3$4.3$4.27%17%73%3%$1.946$1.824$1.447$1.239$1.338 It's time to bank easier Simple, fast and secure access at your fingertips. We're always looking for ways to make banking better. And when we get it right, it just clicks. Which is why in 2021, we launched our enhanced digital experience. With digital banking, we’re here for you any time you need us, giving you the freedom to bank when, where and how you want. Powered by the latest technology and backed by our dedicated people, our digital evolution enables us to be more connected than ever. Experience Easier Whether you're a personal or business customer, our reimagined digital experience means better banking is at your fingertips. Safe, simple and secure, our enhanced online and mobile banking is designed for easy access and fast functioning on any device. For Personal Customers: For Business Customers: Send Money Fast Stay Safe and Secure Experience the quick and secure Powerful tools that help keep your convenience of sending money with Zelle®, business secure, including alerts and plus easy-to-use bill pay and money transfers card controls, positive pay to protect between internal or external accounts. Monitor Easily Enjoy powerful tools that help you manage your financial well-being, including instant checks and ACH transactions and biometric facial recognition and fingerprint access in mobile. Customize Your Access credit score checks, recommendations to help With entitlements, enable the right reduce debt, plus enhanced ways for you to access for the right people, so your budget today and plan for the future. business runs the way you want. Stay Secure Move Money Easily Powerful tools that help keep your account Enjoy banking that runs at the speed of safe, including alerts and card controls your business, including simple money managed within online banking, biometric transfers with built-in alerts, bill pay facial recognition and fingerprint access in designed for business, plus payments mobile, and passcode authentication. through wire transfers and ACH. 1414 Zelle and the Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license. Personal Solutions Increasing the value of you. At Northwest, we find joy in going the extra mile, helping you along the journey to achieve your financial goals. Our team of trusted advisors treat your dreams as theirs, approaching every one of them with fresh thought and personal attention. Whether you're just getting started or financially secure, the tools we provide today will make a lasting difference tomorrow. 15 Personal Solutions Deposits We pride ourselves in the relationships we've built meeting our customers' needs. We continue to have great success attracting and retaining new checking account customers and look forward to serving them for years to come as we deepen those relationships. Number of Households Number of Checking Accounts 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Services Per Household Checking Account Balances in billions of dollars 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Savings and Insured Money Fund Deposit Balances in billions of dollars Checking Account Fees in millions of dollars 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 16 (1) In 2021, number of households declined due to the divestiture of our insurance business. $48.3$51.9$49.6$46.2$44.2354,706357,837325,869313,864310,993$3.171$2.815$1.971$1.838$1.797$4.274$3.870$3.096$2.960$3.041470,205472,854421,896401,727393,0703.1243.0992.9752.8472.853Loans Mortgage and home equity loans are a core offering and continue to provide a stable return. Consumer loans have grown substantially in recent years with an emphasis on higher credit quality. Mortgage Portfolio Yield Consumer Loans in millions of dollars 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Home Equity Portfolio Yield Consumer Loan Portfolio Yield 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Mortgage and Home Equity Loan Losses as a % of total mortgages and home equity loans Consumer Loan Losses as a % of consumer loans 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 (1) Excludes consumer finance loans from Northwest Consumer Discount Company. 17 3.72%4.40%4.57%4.95%5.98%0.16%0.03%0.05%0.07%0.08%$1,838.7$1,508.0$1,125.1$859.7$671.43.56%3.89%4.91%4.80%4.45%3.46%3.71%4.04%4.06%4.11%0.55%0.84%1.05%1.86%1.83% Personal Solutions Trust Services We continue to grow personal trust revenue through our focus on relationships, service and customized investment management solutions. Personal Trust Assets Under Management in millions of dollars Personal Trust Asset Mix as a % of total personal assets under management 51% of trust assets were in investment management accounts Trusts ............................................ 49% 51% 2017 2018 2019 2020 2021 Personal Trust Revenue in millions of dollars Personal Trust Revenue Mix as a % of total personal revenue 50% of trust revenue came from investment management accounts Trusts ............................................ 50% 50% 2017 2018 2019 2020 2021 Our experienced team of trust officers help ensure customer assets are protected— and their legacies are fulfilled. 18 50%50%51%49%$7.0$5.0$3.9$3.8$3.6$899.8$804.0$404.0$364.9$403.0Northwest Investment Services 2021 was another record-breaking year, with personal assets under management and revenue hitting new highs. Financial Wellness conversations continue to uncover new opportunities with our retail clients. Personal Assets Under Management in millions of dollars Personal Asset Mix as a % of total personal assets under management 36% 36% of personal investment assets were in advisory accounts Annuity .........................................33% Brokerage ....................................31% 2017 2018 2019 2020 2021 Personal Investment Management Revenue in millions of dollars Personal Investment Management Revenue Mix as a % of total personal revenue 57% 57% of personal investment revenue came from advisory accounts Annuity ........................................ 30% Brokerage ................................... 13% 2017 2018 2019 2020 2021 19 30%57%13%33%36%31%$16.3$11.7$10.8$9.7$9.1$2,554.4$2,230.6$1,727.3$1,440.6$1,487.1 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, 2021 2020 $ 1,279,259 $ 736,277 1,548,592 1,398,941 768,154 178,887 Loans receivable, net of allowance for credit losses of $102,241 and $134,427 9,914,151 10,446,422 FHLB stock, at cost Accrued interest receivable Real estate owned, net Premises and equipment, net Bank-owned life insurance Goodwill and other intangible assets Other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits Borrowed funds Subordinated Debt Junior subordinated debentures Advances by borrowers for taxes and insurance Accrued interest payable Other liabilities TOTAL LIABILITIES 14,184 25,599 873 21,748 35,554 2,232 156,524 161,538 256,213 253,951 393,833 402,215 144,126 168,503 $ 14,501,508 $ 13,806,268 $ 12,301,165 $ 11,599,233 139,093 123,575 159,715 123,329 129,054 128,794 44,582 1,804 45,230 2,054 178,664 209,210 12,917,937 12,267,565 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; 126,612,183 and 127,091,452 shares issued and outstanding, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,266 1,270 1,010,405 1,015,502 609,529 555,480 (37,629) (33,549) 1,583,571 1,538,703 $ 14,501,508 $ 13,806,268 20 Condensed consolidated statements of income In thousands, except per share data INTEREST INCOME Loans Investments and interest-earning deposits TOTAL INTEREST INCOME INTEREST EXPENSE Deposits Borrowed funds TOTAL INTEREST EXPENSE Net interest income Provision for credit losses YEARS ENDED DECEMBER 31, 2021 2020 2019 $ 390,343 $ 410,907 $ 394,809 28,165 23,161 22,571 418,508 434,068 417,380 19,122 35,896 49,216 8,124 6,444 7,698 27,246 42,340 56,914 391,262 391,728 360,466 (11,883) 83,975 22,659 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 403,145 307,753 337,807 NONINTEREST INCOME Gain/(Loss) on sale of investments Gain on sale of loans Service charges and fees Trust and other financial services income Insurance commission income Income from bank-owned life insurance Mortgage banking income Gain on sale of insurance business Other TOTAL NONINTEREST INCOME NONINTEREST EXPENSE Compensation and employee benefits Premises and occupancy costs Office operations Collections expense Processing expenses Marketing expenses Federal deposit insurance premiums Professional services Amortization of intangible assets Merger, asset disposition and restructuring expense Other TOTAL NONINTEREST EXPENSE Income before income taxes Income tax expense NET INCOME Basic earnings per share Diluted earnings per share (176) — 51,837 27,921 3,633 6,050 15,892 25,327 12,405 236 1,302 55,613 20,922 9,132 5,190 31,391 — 50 1,734 53,065 17,765 8,068 4,418 3,819 — 8,479 10,488 142,889 132,265 99,407 193,887 178,375 163,086 31,073 13,769 1,932 30,622 15,728 3,275 28,717 14,133 2,560 55,763 50,050 42,453 8,237 4,975 7,695 4,767 6,998 685 17,621 12,482 12,287 5,553 3,453 8,647 6,856 20,789 16,853 6,543 4,168 14,473 344,910 347,492 296,103 201,124 92,526 141,111 46,801 17,672 30,679 $ 154,323 $ 74,854 $ 110,432 $ 1.22 $ 1.21 $ 0.62 $ 0.62 $ 1.05 $ 1.04 21 Directors and Officers Board of Directors Ronald J. Seiffert Chairman, President and CEO Northwest Bancshares, Inc. Robert M. Campana President Campana Capital Deborah J. Chadsey Attorney and Partner Kavinoky Cook LLP Wilbur R. Davis Retired Co-Founder and CEO Ontario Systems, LLC Corporate Officers Ronald J. Seiffert President Chief Executive Officer Timothy B. Fannin Retired Partner Catalano, Case, Catalano & Clark-Radzieta, LLP Mark A. Paup President and CEO Zippo Manufacturing, W.R. Case and Sons Cutlery Company Timothy M. Hunter President and CEO McInnes Rolled Rings Sonia M. Probst Retired CEO Rouse Estate William F. McKnight Controller Interstate Chemical Company John P. Meegan Retired Executive Vice President and COO Hefren-Tillotson, Inc. David M. Tullio President and CEO Custom Engineering Company, LAMJEN, Inc. Ronald B. Andzelik Executive Vice President Chief Risk Officer Richard K. Laws Executive Vice President Chief Counsel/Corporate Secretary John J. Golding Senior Executive Vice President Consumer Banking Thomas K. Creal IV Executive Vice President Chief Credit Officer William W. Harvey, Jr. Senior Executive Vice President Chief Financial Officer Devin T. Cygnar Executive Vice President Chief Marketing Officer Mark T. Reitzes Senior Executive Vice President Commercial Banking David W. Heeter Executive Vice President Corporate Ambassador Louis J. Torchio Senior Executive Vice President Retail Lending and Business Banking Kyle P. Kane Executive Vice President Chief Human Resources Officer Jeffrey J. Maddigan Executive Vice President Finance and Accounting Julia W. McTavish Executive Vice President Human Resources Shawn O. Walker Executive Vice President Corporate Communications and Regional Marketing Scott J. Watson Executive Vice President Chief Information Officer 22 Corporate Officers Carey A. Barnum Senior Vice President Deputy Chief Auditor Stephen M. Bell Senior Vice President Corporate Real Estate Michael W. Cappetta Senior Vice President Chief Technology Officer Kevin S. Carpenter Senior Vice President Secondary Market Michele D. Cavalier Senior Vice President Senior Trust Officer James M. Colestro Senior Vice President Retail Lending Steven M. Crissey Senior Vice President Human Resources Barbara L. DeMontier Senior Vice President Human Resources Rocco N. Diina Senior Vice President Mortgage Lending Jack R. Freeman Senior Vice President Credit Jennifer L. Gibson Senior Vice President Indiana Region Kelli M. Griffin Senior Vice President Customer Experience John M. Guidone Senior Vice President Dealer Services Andrew R. Hahn Senior Vice President Investment Services Richard C. Hamister Senior Vice President Great Lakes Region Ian J. Hinsdale Senior Vice President Bank Secrecy Act (BSA) Julie A. Marasco Senior Vice President Northwest PA Region Kristyn L. McGlynn Senior Vice President Credit Kristen E. Mekulsia Senior Vice President South Central PA Region Kevin G. Mizak Senior Vice President Chief Auditor Kevin W. Nelson Senior Vice President Commercial Banking Melody P. Schott Senior Vice President Support Services Jacqueline N. Snell Senior Vice President Controller Julie Fallon Hughes Senior Vice President Southwest PA/Ohio Region Lance L. Spencer Senior Vice President Chief Information Security Officer Bryan P. Jasin Senior Vice President Small Business Banking Christina D. Dinger Senior Vice President Enterprise Project Management Leslie D. Kurtz Senior Vice President Chief Compliance Officer Seth A. Erickson Senior Vice President Credit Sheila I. Evans Senior Vice President Commercial Banking Kristen M. Federici Senior Vice President Accounting Raymond R. Learn Senior Vice President Deputy Chief Counsel Dorothy E. Lobdell Senior Vice President Retail Lending Operations John R. Malizia Senior Vice President Commercial Banking Tina M. Stinson Senior Vice President Treasury Management C. Forrest Tefft Senior Vice President Corporate Finance Jeffrey R. White Senior Vice President Deputy Chief Risk Officer Mark H. Worthy Senior Vice President Commercial Banking Brenda J. Yurick Senior Vice President Deputy Chief Counsel 23 Investor Information Corporate Headquarters 3 Easton Oval Suite 500 Columbus, OH 43219 Phone: (814) 726-2140 Fax: (814) 728-7716 www.northwest.com Annual Meeting Due to the current social distancing challenges caused by COVID-19, our Annual Meeting will be held virtually this year at 11:00 a.m., Eastern Time on April 20, 2022 at www.virtualshareholdermeeting.com/NWBI2022. 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 certificates and dividend checks should be directed to: American Stock Transfer and Trust Company, LLC 6201 15th Avenue Brooklyn, NY 11219 Toll Free: 1-800-937-5449 Toll Free: 1-877-715-0499 Email: help@astfinancial.com www.astfinancial.com Online Shareholder Access Registered shareholders can securely manage their account(s) online through American Stock Transfer & Trust Company, LLC at www.astfinancial.com by clicking “Login”, “Individuals” and “Shareholder Central”. Here you can easily obtain important details about your holdings and general stock transfer information, as well as initiate a number of transactions and inquiries including the following: • Update your mailing address • 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. Financial Information 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 www.sec.gov or through the company’s website, www.northwest.com. Copies may also be obtained, without charge, by submitting a request to: Shareholder Relations Northwest Bancshares, Inc. 100 Liberty Street P.O. Box 128 Warren, PA 16365 Phone: (814) 728-7263 Email: shareholderrelations@northwest.com Dividend Reinvestment and 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 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 materials and enroll online at www.astfinancial.com by clicking on “Login”, “Individuals” and “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 1-877-715-0499 or Northwest, toll-free, at 1-800-859-1000 or (814) 728-7263. Direct Deposit of Dividends Registered 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.astfinancial.com or, to obtain an enrollment card, by calling American Stock Transfer & Trust Company, toll-free, at 1-877-715-0449 or Northwest, toll-free, at 1-800-859-1000 or (814) 728-7263. Investor Relations Ronald J. Seiffert Chairman, President and Chief Executive Officer William W. Harvey, Jr. Senior Executive Vice President and Chief Financial Officer Shareholder Relations Jacqueline N. Snell Senior Vice President, Controller 24 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. ©2022 Northwest Bancshares, Inc. 

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