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What changed in Northwest Bancshares, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Northwest Bancshares, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+401 added−437 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-25)

Top changes in Northwest Bancshares, Inc.'s 2025 10-K

401 paragraphs added · 437 removed · 343 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

131 edited+19 added−51 removed141 unchanged
Biggest changeDeferred loan fees and costs are recognized as part of interest income immediately upon prepayment or the sale of the related loan. At December 31, 2024, we had $63 million of net deferred loan origination fees. Loan origination fees vary with the volume and type of loans and commitments originated and purchased, principal repayments, and competitive conditions in the marketplace.
Biggest changeLoan origination fees vary with the volume and type of loans and commitments originated and purchased, principal repayments, and competitive conditions in the marketplace. Loan origination costs that were deferred were $17.7 million, $16.3 million and $16.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Our investment policy does permit the purchase of complex securities, derivatives and other high-risk securities as long as the investment has a pre-purchase sensitivity analysis completed and the results are within our our established range. The policy does not permit additional investments in pooled trust preferred securities, or single issuer trust preferred securities.
Our investment policy does permit the purchase of complex securities, derivatives and other high-risk securities as long as the investment has a pre-purchase sensitivity analysis completed and the results are within our established range. The policy does not permit additional investments in pooled trust preferred securities, or single issuer trust preferred securities.
In addition to the ERMC, we maintain the following management-level committees to oversee our risk categories: Compliance Risk Management Committee; Credit Committee; Model Risk Management Committee; Operational Risk Management Committee; and the Asset/Liability Committee.
In addition to the ERMC, we maintain the following management-level committees to oversee our risk categories: Compliance Risk Management Committee; Credit Risk Committee; Model Risk Management Committee; Operational Risk Management Committee; and the Asset/Liability Committee.
The BSA, as amended, and its implementing regulations require Northwest Bank to implement, among other things, internal controls, policies and procedures; conduct customer due diligence; and adhere to certain recordkeeping and reporting requirements. The Anti-Money Laundering Act of 2020 (the “AML Act”), enacted as part of the National Defense Authorization Act, requires the U.S.
The BSA, as amended, and its implementing regulations require Northwest Bank to, among other things, implement internal controls, policies and procedures; conduct customer due diligence; and adhere to certain recordkeeping and reporting requirements. The Anti-Money Laundering Act of 2020 (the “AML Act”), enacted as part of the National Defense Authorization Act, requires the U.S.
The Company’s sole direct consolidated subsidiary is Northwest Bank. Northwest Bank is a Pennsylvania-chartered stock savings bank that is not a member of the Federal Reserve System and its deposit accounts are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (the “DIF”).
The Company’s sole direct active consolidated subsidiary is Northwest Bank. Northwest Bank is a Pennsylvania-chartered stock savings bank that is not a member of the Federal Reserve System and its deposit accounts are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (the “DIF”).
Our multi-family commercial real estate loans are secured by multi-family residences, such as rental properties, student housing, and senior living facilities. Our other commercial real estate loans are secured by nonresidential properties such as hotels, commercial offices, medical buildings, manufacturing facilities and retail establishments.
Our multi-family commercial real estate loans are secured by multi-family residences, such as rental properties, student housing, and senior living facilities. Our other commercial real estate loans are secured by nonresidential properties such as hotels, commercial offices, medical buildings, manufacturing facilities, industrial and retail establishments.
Under the terms and subject to the conditions of the Merger Agreement, at the Effective Time, each share of Penns Woods’ common stock, $5.55 par value, issued and outstanding immediately prior to the Effective Time (except for Treasury Shares (as provided for in the Merger Agreement)), will be converted, in accordance with the procedures set forth in the Merger Agreement, into a right to receive 2.385 shares of common stock, $0.01 par value, of the Company.
Under the terms and subject to the conditions of the Merger Agreement, at the Effective Time, each share of Penns Woods’ common stock, $5.55 par value, issued and outstanding immediately prior to the Effective Time (except for Treasury Shares (as provided for in the Merger Agreement), converted, in accordance with the procedures set forth in the Merger Agreement, into a right to receive 2.385 shares of common stock, $0.01 par value, of the Company.
The Operational Risk Management Committee, chaired by our Chief Operational Risk Officer, oversees and monitors operational risk exposures, including escalating issues and recommending policies, procedures and practices to manage operational risks. Additionally, we maintain a cybersecurity program, which is led by our Chief Information Security Officer (“CISO”). For more information, see Item 1C. Cybersecurity. Treasury Risk.
The Operational Risk Management Committee, chaired by our Chief Operational Risk Officer, oversees and monitors operational risk exposures, including escalating issues and recommending policies, procedures and practices to manage operational risks. Additionally, we maintain a cybersecurity program, which is led by our Chief Information Security Officer (“CISO”). For more information, see Item 1C. Cybersecurity. Reputational Risk.
Our principal lending activities are the origination of fixed and adjustable-rate loans collateralized by one-to-four-family residential real estate, shorter term consumer loans and loans collateralized by multi-family residential and commercial real estate as well as commercial business loans. Generally, we focus our lending activities in the geographic areas where we maintain offices.
Our principal lending activities are the origination of fixed and adjustable-rate loans collateralized by one-to-four-family residential real estate, shorter term consumer loans, mainly collateralized by automobiles, and loans collateralized by multi-family residential and commercial real estate as well as commercial business loans. Generally, we focus our lending activities in the geographic areas where we maintain offices.
As of December 31, 2024 , Northwest Bank’s capital exceeded all applicable regulatory requirements and it had an appropriate capital conservation buffer. The following table presents the minimum regulatory capital ratios, minimum ratio plus capital conservation buffer and well-capitalized minimums that the Company and Northwest Bank must satisfy.
As of December 31, 2025 , Northwest Bank’s capital exceeded all applicable regulatory requirements and it had an appropriate capital conservation buffer. The following table presents the minimum regulatory capital ratios, minimum ratio plus capital conservation buffer and well-capitalized minimums that the Company and Northwest Bank must satisfy.
At December 31, 2024, Northwest Bancshares, Inc.’s investment in the Trusts totaled $4 million, and the Trusts had assets of $130 million, net of discounts due to fair value adjustments made at the time of acquisition of Union Community Bank and MutualFirst Financial, Inc.
At December 31, 2025, Northwest Bancshares, Inc.’s investment in the Trusts totaled $4 million, and the Trusts had assets of $130 million, net of discounts due to fair value adjustments made at the time of acquisition of Union Community Bank and MutualFirst Financial, Inc.
The BRMC consists entirely of independent directors and provides a regular report to the full Board regarding matters reviewed at it’s Committee meetings. The Bank has a comprehensive Enterprise Risk Management Policy, approved by the Board of Directors. Risk Management Roles and Responsibilities.
The BRMC consists entirely of independent directors and provides a regular report to the full Board regarding matters reviewed at its Committee meetings. The Bank has a comprehensive Enterprise Risk Management Policy, approved by the Board of Directors. Risk Management Roles and Responsibilities.
Performance under the capital restoration plan must be guaranteed by the parent bank holding company up to the lesser of the amount of the capital deficiency when deemed undercapitalized. As of December 31, 2024 , Northwest Bank was well capitalized as defined above.
Performance under the capital restoration plan must be guaranteed by the parent bank holding company up to the lesser of the amount of the capital deficiency when deemed undercapitalized. As of December 31, 2025 , Northwest Bank was well capitalized as defined above.
The components of leverage and risk-based capital are substantially the same as those defined by the FDIC, which are discussed above. Northwest Bank is subject to Department of Banking regulations that limit the amount that a bank may lend relative to appraised values of real estate securing the loans, as determined by an appraisal at the time of loan origination.
The components of leverage and risk-based capital are substantially the same as those defined by the FDIC, which are discussed above. 14 Table of Contents Northwest Bank is subject to Department of Banking regulations that limit the amount that a bank may lend relative to appraised values of real estate securing the loans, as determined by an appraisal at the time of loan origination.
The fair values of our securities are based on published or securities dealers’ market values, when available. See Note 4 to the Consolidated Financial Statements for a detailed analysis and description of our investment portfolio and valuation techniques.
The fair values of our securities are based on published or securities dealers’ market values, when available. See Note 5 to the Consolidated Financial Statements for a detailed analysis and description of our investment portfolio and valuation techniques.
The Bank Secrecy Act and USA PATRIOT Act The Bank Secrecy Act (the “BSA”), as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), and its implementing regulations require Northwest Bank to implement a compliance program designed to detect and prevent money laundering, terrorist financing, and other illicit 18 Table of Contents financial crimes.
The Bank Secrecy Act and USA PATRIOT Act The Bank Secrecy Act (the “BSA”), as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), and its implementing regulations require Northwest Bank to implement a compliance program designed to detect and prevent money laundering, terrorist financing, and other illicit financial crimes.
FinCEN has yet to issue a final rule that establishes the compliance obligations of financial institutions with respect to the National Priorities, and several other mandatory rulemakings under the AML Act remain outstanding.
FinCEN has yet to issue a final rule that establishes the compliance obligations of financial institutions with respect to the National Priorities, and most of the other mandatory rulemakings under the AML Act remain outstanding.
As a member, Northwest Bank is required to own capital stock in the FHLB of Pittsburgh and is authorized to apply for borrowings on the security of certain of its real estate loans, provided certain standards related to 7 Table of Contents creditworthiness have been met. Borrowings are made pursuant to several different programs.
As a member, Northwest Bank is required to own capital stock in the FHLB of Pittsburgh and is authorized to apply for borrowings on the security of certain of its real estate loans, provided certain standards related to creditworthiness have been met. Borrowings are made pursuant to several different programs.
The policy also provides that a bank holding company should inform the Federal Reserve Board reasonably in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being paid, or that could result in a material adverse change to the bank holding 14 Table of Contents company’s capital structure.
The policy also provides that a bank holding company should inform the Federal Reserve Board reasonably in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being paid, or that could result in a material adverse change to the bank holding company’s capital structure.
Our principal lending activities are the origination of loans secured by first mortgages on owner-occupied, one-to-four-family residences, shorter term consumer loans, and commercial business and commercial real estate loans. Our principal sources of funds are personal and business deposits, borrowed funds and the principal and interest payments on loans and marketable securities.
Our principal lending activities are the origination of loans secured by first 2 Table of Contents mortgages on owner-occupied, one-to-four-family residences, shorter term consumer loans, and commercial business and commercial real estate loans. Our principal sources of funds are personal and business deposits, borrowed funds and the principal and interest payments on loans and marketable securities.
The DOJ clarified that it will assess competition considerations in connection with bank and bank holding company mergers using its 2023 Merger Guidelines, which is the general merger review framework the DOJ now uses to evaluate transactions in all segments of the economy, and 2024 Banking Addendum.
The DOJ clarified that it will assess competition considerations in connection with bank and BHC mergers using its 2023 Merger Guidelines, which is the general merger review framework the DOJ now uses to evaluate transactions in all segments of the economy, and the 2024 Banking Addendum.
Acquisition of the Company Any holder, other than an individual, of 25% or more of a class of the Company’s voting stock, or a lesser percentage if such holder otherwise exercises a “controlling influence” over the Company, is subject to regulation as a bank holding company under the BHCA.
Acquisition of the Company 12 Table of Contents Any holder, other than an individual, of 25% or more of a class of the Company’s voting stock, or a lesser percentage if such holder otherwise exercises a “controlling influence” over the Company, is subject to regulation as a bank holding company under the BHCA.
The second line of defense is responsible for, among other things, formulating and overseeing our Enterprise Risk Management Policy and related policies and procedures, effectively challenging the first line of defense and identifying, measuring, monitoring and reporting on aggregate risks of the business and support functions.
The second line of defense is responsible for, among other things, formulating and overseeing 8 Table of Contents our Enterprise Risk Management Policy and related policies and procedures, effectively challenging the first line of defense and identifying, measuring, monitoring and reporting on aggregate risks of the business and support functions.
At December 31, 2024, the Trusts have issued a total of $129 million of trust preferred securities. The Trusts are not consolidated with Northwest Bancshares, Inc.
At December 31, 2025, the Trusts have issued a total of $129 million of trust preferred securities. The Trusts are not consolidated with Northwest Bancshares, Inc.
In addition, any person other than a bank holding company is required to obtain prior non-objection of the Federal Reserve Board to acquire 10% or more of a class of voting stock of the Company under the Change in Bank Control Act, as amended (the “CIBCA”).
In addition, any person other than a bank holding company is required to obtain prior non-objection of the Federal Reserve Board to acquire 10% or more of a class of voting stock of the Company under the Change in Bank Control Act.
Administration of many of these consumer protection rules are the responsibility of the CFPB, which has exclusive supervisory authority over insured depository institutions with more than $10 billion in total assets and any affiliates thereof.
Administration of many of these consumer protection rules are the 17 Table of Contents responsibility of the CFPB, which has exclusive supervisory authority over insured depository institutions with more than $10 billion in total assets and any affiliates thereof.
Loan portfolios of all types are monitored as part of ongoing independent credit review and administration functions which ensure underwriting quality, loan administration, collateral, diversity (by industry, geography, products and borrowers) adhere to policy requirements.
Loan portfolios of all types are monitored as part of ongoing 9 Table of Contents independent credit review and administration functions which ensure underwriting quality, loan administration, collateral, diversity (by industry, geography, products and borrowers) adhere to policy requirements.
Institutions that fall into an “undercapitalized” category are subject to a variety of mandatory and discretionary 16 Table of Contents supervisory actions, including a restriction on capital distributions and the requirement to file a capital restoration plan with the regulators.
Institutions that fall into an “undercapitalized” category are subject to a variety of mandatory and discretionary supervisory actions, including a restriction on capital distributions and the requirement to file a capital restoration plan with the regulators.
Permissible Activities 12 Table of Contents As a bank holding company, the Company and its subsidiaries are generally limited to activities deemed by the Federal Reserve Board to be the business of banking or closely related activities that are incidental to banking.
Permissible Activities As a bank holding company, the Company and its subsidiaries are generally limited to activities deemed by the Federal Reserve Board to be the business of banking or closely related activities that are incidental to banking.
In recent years we have emphasized the origination of commercial real estate loans and commercial business loans, which generally have adjustable-rates of interest and shorter maturities than one-to-four-family residential real estate loans.
In recent years we have emphasized the origination of commercial real estate loans and 4 Table of Contents commercial business loans, which generally have adjustable-rates of interest and shorter maturities than one-to-four-family residential real estate loans.
The following description of our market area is based upon information obtained from SNL Securities, the Bureau of Labor Statistics, the Federal Housing Financial Agency and the Mortgage Bankers Association. Pennsylvania Market Area . Our retail branch network of 82 community banking offices within the Commonwealth of Pennsylvania encompasses 24 counties.
The following description of our market area is based upon information obtained from SNL Securities, the Bureau of Labor Statistics, the Federal Housing Financial Agency and the Mortgage Bankers Association. Pennsylvania Market Area . Our retail branch network of 102 community banking offices within the Commonwealth of Pennsylvania encompasses 29 counties.
Higher levels of capital are required for asset categories believed to present greater risk. 13 Table of Contents Common equity Tier 1 capital is generally defined as common stockholders’ equity and retained earnings. Tier 1 capital is generally defined as common equity Tier 1 and additional Tier 1 capital.
Higher levels of capital are required for asset categories believed to present greater risk. Common equity Tier 1 capital is generally defined as common stockholders’ equity and retained earnings. Tier 1 capital is generally defined as common equity Tier 1 and additional Tier 1 capital.
The CRO regularly reports to the Board Risk Management Committee as well as the Bank’s Enterprise Risk Management Committee (“ERMC”) on risk management matters. 8 Table of Contents • The “third line of defense” is comprised of the Internal Audit organization.
The CRO regularly reports to the Board Risk Management Committee as well as the Bank’s Enterprise Risk Management Committee (“ERMC”) on risk management matters. • The “third line of defense” is comprised of the Internal Audit organization.
The subordinated notes, which qualify as Tier 2 capital, bear interest at an annual rate of 4.00%, payable semi-annually in arrears commencing on March 15, 2021, and a floating rate of interest equivalent to the 3-month Term Secured Overnight Financing Rate ( “ SOFR”) plus 3.89% payable quarterly in arrears commencing on December 15, 2025.
The subordinated notes, which qualify as Tier 2 capital, subject to certain limitations based on maturity date, bear interest at an annual rate of 4.00%, payable semi-annually in arrears commencing on March 15, 2021, and a floating rate of interest equivalent to the 3-month Term Secured Overnight Financing Rate ( “ SOFR”) plus 3.89% payable quarterly in arrears commencing on December 15, 2025.
Actual changes in our net interest income will depend on many factors, and therefore may differ from our estimated risk to changes in interest rates. The Asset/Liability Committee assists the Board of Directors and bank management in overseeing, reviewing, and monitoring market and treasury risk. 9 Table of Contents Model and Data Risk .
Actual changes in our net interest income will depend on many factors, and therefore may differ from our estimated risk to changes in interest rates. The Asset/Liability Committee assists the Board of Directors and bank management in overseeing, reviewing, and monitoring market and liquidity risk. Model and Data Risk .
We are committed to foster a workplace where we all feel accepted, seen and heard. One way we have engaged our entire employee population is through our 5 Employee Resource Groups (ERGSs). This has provided an opportunity to leverage diverse talents and perspectives. Workforce Health and Safety.
We are committed to foster a workplace where we all feel accepted, seen and heard. One way we have engaged our entire employee population is through our 5 Employee Resource Groups (ERGSs). This has provided an opportunity to leverage diverse talents and perspectives. Compensation and Benefits.
Well capitalized Adequately capitalized Undercapitalized Significantly undercapitalized Actual CET1 risk based capital ratio ≥ 6.5% ≥ 4.5% 12.63 % Tier 1 risk based capital ratio ≥ 8.0% ≥ 6.0% 12.63 % Total risk based capital ratio ≥ 10.0% ≥ 8.0% 13.81 % Tier 1 leverage ratio ≥ 5.0% ≥ 4.0% 9.50 % Safety and Soundness Guidelines The federal banking agencies, including the FDIC, have adopted guidelines prescribing safety and soundness standards relating to internal controls, risk management, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth and compensation, fees and benefits.
Well capitalized Adequately capitalized Undercapitalized Significantly undercapitalized Actual CET1 risk based capital ratio ≥ 6.5% ≥ 4.5% 12.75 % Tier 1 risk based capital ratio ≥ 8.0% ≥ 6.0% 12.75 % Total risk based capital ratio ≥ 10.0% ≥ 8.0% 14.01 % Tier 1 leverage ratio ≥ 5.0% ≥ 4.0% 9.77 % Safety and Soundness Guidelines The federal banking agencies, including the FDIC, have adopted guidelines prescribing safety and soundness standards relating to internal controls, risk management, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth and compensation, fees and benefits.
Our retail branch network of 11 community banking offices in Ohio includes two counties in northeastern Ohio, including the Cleveland metro area. The major employment sectors in this market are similar to the contiguous market in western Pennsylvania. Our Ohio market area has a total population of approximately 857,000 and total households of approximately 357,000 as of December 31, 2024.
Our retail branch network of 11 community banking offices in Ohio includes two counties in northeastern Ohio, including the Cleveland metro area. The major employment sectors in this market are similar to the contiguous market in western Pennsylvania. Our Ohio market area has a total population of approximately 861,000 and total households of approximately 387,000 as of December 31, 2025.
The principal types of other consumer loans we offer are direct and indirect automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by investment accounts. These loans are typically offered with maturities of ten years or less.
The principal types of other consumer loans we offer are direct auto refinance loans, indirect automobile and recreational loans, unsecured personal loans, credit card loans, and loans secured by investment accounts. These loans are typically offered with maturities of ten years or less.
No dividend may generally be paid that would result in Northwest Bank failing to comply with its regulatory capital requirements. Federal Banking Regulation Northwest Bank is also subject to extensive regulation, examination and supervision by the FDIC, as its primary federal regulator.
Dividends may be paid out of accumulated net earnings. No dividend may generally be paid that would result in Northwest Bank failing to comply with its regulatory capital requirements. Federal Banking Regulation Northwest Bank is also subject to extensive regulation, examination and supervision by the FDIC, as its primary federal regulator.
Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations. Northwest Bank exercised this opt-out election during the year ended December 31, 2024 .
Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations. Northwest Bank exercised this opt-out election, which was reflected during the year ended December 31, 2025 .
The CRE Lending Guidance requires that appropriate processes be in place to identify, monitor and control 17 Table of Contents risks associated with real estate lending concentrations.
The CRE Lending Guidance requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations.
Our New York market area has a total population of approximately 2.0 million and total households of approximately 864,000 as of December 31, 2024. This area has experienced a decrease in population between 2020 and 2024, of 1.5%.
Our New York market area has a total population of approximately 2.0 million and total households of approximately 941,000 as of December 31, 2025. This area has experienced a decrease in population between 2020 and 2025, of 1.2%.
As of September 30, 2024, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of Ohio was one in every 3,450 housing units, compared to the national average of one in every 4,578 housing units. Indiana Market Area . Our retail branch network of 20 community banking offices in Indiana includes nine counties in Indiana.
As of September 30, 2025, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of Ohio was one in every 2,736 housing units, compared to the national average of one in every 3,163 housing units. Indiana Market Area . Our retail branch network of 20 community banking offices in Indiana includes nine counties in Indiana.
For loans originated and managed within the Corporate Finance portfolio, the Total Credit Exposure limit is increased to $50.0 million for borrowers with a strong credit profile and a risk rating of 3 or better. The Aggregate Credit Exposure, which represents total relationship exposure which may include multiple distinct borrowers, limit is $100.0 million.
The Total Credit Exposure limit is increased to $50 million for loans originated to borrowers with an investment grade rating and a risk rating of 3 or better. These loans are generally managed within the Corporate Finance portfolio. The Aggregate Credit Exposure, which represents total relationship exposure which may include multiple distinct borrowers, the limit is $100.0 million.
Northwest Bank is a community-oriented financial institution offering personal and commercial banking solutions, investment management and trust services. Northwest Bank’s mutual savings bank predecessor was founded in 1896. 1 Table of Contents As of December 31, 2024, Northwest Bank operated 141 community-banking locations throughout its market area in Pennsylvania, western New York, eastern Ohio, and Indiana.
Northwest Bank is a community-oriented financial institution offering personal and commercial banking solutions, investment management and trust services. Northwest Bank’s mutual savings bank predecessor was founded in 1896. As of December 31, 2025, Northwest Bank operated 161 community-banking locations throughout its market area in Pennsylvania, western New York, northeastern Ohio, and Indiana.
As of December 31, 2024, the unemployment rate for our Ohio market was 4.4%, compared to the national average of 4.1%. As of September 30, 2024, the House Price Index for the last four quarters in our Ohio market area increased by 6.6%, compared to an increase in the national average of 4.3%.
As of December 31, 2025, the unemployment rate for our Ohio market was 4.5%, compared to the national average of 4.4%. As of September 30, 2025, the House Price Index for the last four quarters in our Ohio market area increased by 4.8%, compared to an increase in the national average of 2.3%.
Home Equity Loans and Lines of Credit . Generally, our home equity loans are secured by the borrower’s principal residence with a maximum loan-to-value ratio, including the principal balances of both the first and subordinate mortgage loans, of 95% or less.
Generally, our home equity loans are secured by the borrower’s principal residence with a maximum loan-to-value ratio, including the principal balances of both the first and subordinate mortgage loans, of 95% or less. We generally underwrite home equity loans and lines of credit in a manner similar to our underwriting of residential mortgage loans.
This market has a diverse economy driven by healthcare and education industries, service businesses, technology companies and small manufacturing operations. Our Indiana market area has a total population of approximately 934,000 and total households of approximately 368,000 as of December 31, 2024. The population of this area has remained stable between 2020 and 2024.
This market has a diverse economy driven by healthcare and education industries, service businesses, technology companies and small manufacturing operations. Our Indiana market area has a total population of approximately 1.3 million and total households of approximately 832,000 as of December 31, 2025. The population of this area has remained stable between 2020 and 2025.
In particular, amounts realizable on the sale of repossessed automobiles may be significantly reduced based upon the condition of the automobiles and the lack of demand for used automobiles. At December 31, 2024, other consumer loans totaled $1.9 billion, or 17% of gross loans. Commercial Real Estate Loans .
In particular, amounts realizable on the sale of repossessed automobiles may be significantly reduced based upon the condition of the automobiles and the lack of demand for used automobiles. At December 31, 2025, other consumer loans totaled $2.5 billion, or 19% of gross loans. Commercial Real Estate Loans .
As of September 30, 2024, the House Price Index for the last four quarters in our Indiana market area increased by 6.4%, compared to an increase in the national average of 4.3%.
As of September 30, 2025, the House Price Index for the last four quarters in our Indiana market area increased by 2.9%, compared to an increase in the national average of 2.3%.
We also issued 1,277,565 shares of common stock and contributed $1.0 million in cash from the offering proceeds to Northwest Charitable Foundation, a charitable foundation that we established for the benefit of the communities in which Northwest Bank operates. As of December 31, 2024, the Company had 127,508,003 shares outstanding and a market capitalization of approximately $1.682 billion.
We also issued 1,277,565 shares of common stock and contributed $1.0 million in cash from the offering proceeds to Northwest Charitable Foundation, a charitable foundation that we established for the benefit of the communities in which Northwest Bank operates. As of December 31, 2025, the Company had 146,107,964 shares outstanding and a market capitalization of approximately $1.753 billion.
As of September 30, 2024, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of New York was one in every 4,829 housing units, compared to the national average of one in every 4,578 housing units. Northeastern Ohio Market Area .
As of September 30, 2025, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of New York was one in every 3,423 housing units, compared to the national average of one in every 3,163 housing units. Northeastern Ohio Market Area .
Congress has recently considered, and is currently considering, various proposals for more comprehensive data privacy and cybersecurity legislation, to which the Company and its subsidiaries may be subject if passed. 19 Table of Contents Financial institutions, including the Company and Northwest Bank, are also subject to the Gramm-Leach-Bliley Act which, among other things: (i) imposes certain limitations on their ability to share nonpublic personal information about their customers with nonaffiliated third parties; (ii) requires that they provide certain disclosures to customers about their information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by them with nonaffiliated third parties (with certain exceptions); and (iii) requires that they develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on their size and complexity, the nature and scope of their activities, and the sensitivity of customer information they process, as well as plans for responding to cybersecurity breaches.
Financial institutions, including the Company and Northwest Bank, are also subject to the Gramm-Leach-Bliley Act which, among other things: (i) imposes certain limitations on their ability to share nonpublic personal information about their customers with nonaffiliated third parties; (ii) requires that they provide certain disclosures to customers about their information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by them with nonaffiliated third parties (with certain exceptions); and (iii) requires that they develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on their size and complexity, the nature and scope of their activities, and the sensitivity of customer information they process, as well as plans for responding to cybersecurity breaches.
As of September 30, 2024, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of Pennsylvania was one in every 7,424 housing units, compared to the national average of one in every 4,578 housing units. Western New York Market Area .
As of September 30, 2025, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of Pennsylvania was one in every 3,325 housing units, compared to the national average of one in every 3,163 housing units. Western New York Market Area .
Immediately after the effective time of the Merger (the “Effective Time”), or at such later time as the Company determines, Penns Woods’ wholly-owned subsidiary banks, Luzerne Bank, a Pennsylvania-chartered state bank, and Jersey Shore State Bank, a Pennsylvania-chartered state bank, will merge with and into Northwest Bank, with Northwest Bank as the surviving bank in the subsidiary bank mergers.
Immediately after the effective time of the Merger (the “Effective Time”), Penns Woods’ wholly-owned subsidiary banks, Luzerne Bank, a Pennsylvania-chartered state bank, and Jersey Shore State Bank, a Pennsylvania-chartered state bank, merged with and into Northwest Bank, with Northwest Bank as the surviving bank in the subsidiary bank mergers.
Our credit risk relates to the risk that our borrowers will not repay their loan balances. To minimize our risk of loan write-offs, we have developed policies and procedures outlining our underwriting guidelines across all loan types. The loan policies contain guidance and establish requirements specific to loan types for each line of business.
To minimize our risk of loan write-offs, we have developed policies and procedures outlining our underwriting guidelines across all loan types. The loan policies contain guidance and establish requirements specific to loan types for each line of business.
As of September 30, 2024, the House Price Index for the last four quarters in our New York market increased by 7.0%, compared to an increase in the national average of 4.3%.
As of September 30, 2025, the House Price Index for the last four quarters in our New York market increased by 6.8%, compared to an increase in the national average of 2.3%.
Our fixed-rate residential mortgage loan products offer fixed rates for up to 30 years. Whenever possible, our fixed-rate residential mortgages are originated and underwritten according to secondary mortgage market guidelines in order to manage credit risk, as well as interest rate risk and liquidity risk.
Whenever possible, our fixed-rate residential mortgages are originated and underwritten according to secondary mortgage market guidelines in order to manage credit risk, as well as interest rate risk and liquidity risk.
Set forth below is a brief description of certain regulatory requirements that are applicable to the Company and Northwest Bank. The description below is limited to certain material aspects of the statutes and regulations addressed, and is not intended to be a complete description of such statutes and regulations and their effects on the Company and Northwest Bank.
The description below is limited to certain material aspects of the statutes and regulations addressed, and is not intended to be a complete description of such statutes and regulations and their effects on the Company and Northwest Bank.
Northwest Bank must file reports with the Department of Banking and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to entering into certain transactions including acquisitions of other financial institutions. Northwest Bank is examined periodically by the Department of Banking and the FDIC to test Northwest Bank’s compliance with various laws and regulations.
Northwest Bank must file reports with the Department of Banking and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to entering into certain transactions including acquisitions of other financial institutions.
We expect continued competition from these financial institutions in the foreseeable future. With the continued acceptance of internet banking by our customers and consumers generally, competition for deposits has increased from institutions operating outside of our market area.
Our most direct competition for deposits comes from other banks, brokerage houses and credit unions in our market areas. We expect continued competition from these financial institutions in the foreseeable future. With the continued acceptance of internet banking by our customers and consumers generally, competition for deposits has increased from institutions operating outside of our market area.
As of September 30, 2024, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of Indiana was one in every 3,441 housing units, compared to the national average of one in every 4,578 housing units. 3 Table of Contents Lending Activities General .
As of September 30, 2025, the foreclosure rate for mortgage loans on one-to-four unit residential properties in the state of Indiana was one in every 2,544 housing units, compared to the national average of one in every 3,163 housing units. Lending Activities General .
As a member of the Federal Home Loan Bank of Pittsburgh, Northwest Bank is required to acquire and hold shares of capital stock in the Federal Home Loan Bank in specified amounts. As of December 31, 2024, Northwest Bank was in compliance with this requirement.
The Federal Home Loan Bank System provides a central credit facility primarily for member institutions. As a member of the Federal Home Loan Bank of Pittsburgh, Northwest Bank is required to acquire and hold shares of capital stock in the Federal Home Loan Bank in specified amounts. As of December 31, 2025, Northwest Bank was in compliance with this requirement.
This regulation and supervision, as well as federal and state law, establishes a comprehensive framework of activities in which the Company and Northwest Bank may engage and is intended primarily for the protection and benefit of depositors and other customers, the DIF, the U.S. banking and financial system, and the broader economy, not for the protection or benefit of the Company’s shareholders or non-deposit creditors.
Northwest Bank is examined periodically by the Department of Banking and the FDIC to test Northwest Bank’s compliance with various laws and regulations. 11 Table of Contents This regulation and supervision, as well as federal and state law, establishes a comprehensive framework of activities in which the Company and Northwest Bank may engage and is intended primarily for the protection and benefit of depositors and other customers, the DIF, the U.S. banking and financial system, and the broader economy, not for the protection or benefit of the Company’s shareholders or non-deposit creditors.
Real estate secured loans are underwritten centrally by our underwriting team. Non-real estate loans are underwritten by local loan officers and/or a centralized underwriting team who are granted various levels of authority based on their lending experience and expertise. These authority levels are reviewed by the Credit Committee on at least an annual basis.
Non-real estate loans are underwritten by local loan officers and/or a centralized underwriting team who are granted various levels of authority based on their lending experience and expertise. These authority levels are reviewed by the Credit Risk Committee on at least an annual basis. For commercial loans, aggregate credit exposures over $1.0 million are underwritten by Commercial Credit Management.
None of our employees are represented by a collective bargaining group. As a community-based bank, our reputation is an extremely valuable and important component of our business. We strive to conduct our business in a manner that enhances our reputation.
Our annual turnover rate (voluntary and involuntary) was 28.8% a s of December 31, 2025. None of our employees are represented by a collective bargaining group. As a community-based bank, our reputation is an extremely valuable and important component of our business. We strive to conduct our business in a manner that enhances our reputation.
The Merger Agreement provides for a business combination whereby Penns Woods will merge with and into the Company (the “Merger”), with the Company as the surviving corporation in the merger.
In accordance with the Merger Agreement, the Company and Penns Woods completed a business combination whereby Penns Woods merged with and into the Company (the “Merger”), with the Company as the surviving corporation in the Merger.
Examples of strategic risk include adverse business decisions, poor implementation of business decisions, or the inability to adapt to changes in the economic competitive environment. This risk is a function of a bank’s strategic goals and business strategies. Subsidiary Activities Northwest Bancshares, Inc.’s sole direct consolidated subsidiary is Northwest Bank.
Examples of strategic risk include adverse business decisions, poor implementation of business decisions, or the inability to adapt to changes in the economic competitive environment. This risk is a function of a bank’s strategic goals and business strategies. Liquidity Risk.
The maximum loan-to-value ratio for these loans is 80% of the as-completed appraised value. 4 Table of Contents Our residential mortgage loans customarily include due-on-sale clauses, which are provisions giving us the right to declare loans immediately due and payable in the event, among other things, borrowers sell or otherwise dispose of underlying real properties serving as collateral for loans.
Our residential mortgage loans customarily include due-on-sale clauses, which are provisions giving us the right to declare loans immediately due and payable in the event, among other things, borrowers sell or otherwise dispose of underlying real properties serving as collateral for loans. Home Equity Loans and Lines of Credit .
We provide employees with compensation packages that include base salaries, and if eligible, incentive compensation, annual bonuses, and equity incentives. In addition, we also offer employees a 401(k) plan with an employer match contribution, medical, dental, vision, disability, life, wellness plan, employee assistance plan, flexible work arrangement, paid time off, flexible spending accounts, and voluntary benefits.
In addition, we also offer employees a 401(k) plan with an employer match contribution, medical, dental, vision, disability, life, wellness plan, employee assistance plan, flexible work arrangement, paid time off, flexible spending accounts, and voluntary benefits.
Our executive offices are located at 3 Easton Oval, Suite 500, Columbus, Ohio 43219. We also maintain administrative offices located at 100 Liberty Street, Warren, Pennsylvania 16365. The telephone number for these addresses is (814) 726-2140.
Our executive offices are located at 3 Easton Oval, Suite 500, Columbus, Ohio 43219. We also maintain administrative offices located at 100 Liberty Street, Warren, Pennsylvania 16365.
The average median household income in this market increased by 5.6% over the last year to $69,253 as of December 31, 2024, compared to the national median income level of $78,770. As of December 31, 2024, the unemployment rate for our New York market area was 4.4%, compared to the national average of 4.1%.
The average median household income in this market increased by 6.8% over the last year to $73,960 as of December 31, 2025, compared to the national median income level of $86,867. As of December 31, 2025, the unemployment rate for our New York market area was 4.6%, compared to the national average of 4.4%.
The Pennsylvania markets in which we operate our retail branches contain approximately half of Pennsylvania’s population and a similar percentage of households. T hese markets have experienced a 2.1% decrease in population between 2020 and 2024.
Our Pennsylvania market area has a total population of approximately 4.9 million and total households of approximately 2.5 million as of December 31, 2025. The Pennsylvania markets in which we operate our retail branches contain approximately half of Pennsylvania’s population and a similar percentage of households. T hese markets have experienced a 1.9% decrease in population between 2020 and 2025.
This area has experienced an increase in population between 2020 and 2024, of 2.3%. The median household income for our Ohio market increased 2.2% over the last year to $70,100 as of December 31, 2024, compared to the national median income level of $78,770.
This area has experienced an increase in population between 2020 and 2025, of 3.4%. The median household income for our Ohio market increased 19.5% over the last year to $83,750 as of December 31, 2025, compared to the national median income level of $86,867.
The investment policy is reviewed at least annually, and any changes to the policy are subject to approval by the Board of Directors. The overall objectives of the investment policy are to maintain a portfolio of high quality and diversified investments, to provide liquidity, and to control interest rate risk while providing an acceptable return.
The overall objectives of the investment policy are to maintain a portfolio of high quality and diversified investments, to provide liquidity, and to control interest rate risk while providing an acceptable return.
At December 31, 2024, commercial real estate loans totaled $2.9 billion, or 26% of gross loans. Loans secured by multi-family commercial and commercial real estate generally involve a greater degree of credit risk than residential mortgage loans and carry larger loan balances.
Loans secured by multi-family commercial and commercial real estate generally involve a greater degree of credit risk than residential mortgage loans and carry larger loan balances.
In response to the bank failures in early 2023, the FDIC implemented a special assessment to recover the losses to the DIF at an annual rate of approximately 13.4 basis points over eight quarterly collection periods, which began in 2024, and currently projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.
In response to the bank failures in early 2023, in November 2023, the FDIC implemented a special assessment to recover the losses to the DIF at an annual rate of approximately 13.4 basis points over eight quarterly collection periods, which began in 2024.
The median household income for our Indiana market increased 2.6% over the last year to $62,248 as of December 31, 2024, compared to the national median income level of $78,770. As of December 31, 2024, the unemployment rate for our Indiana market was 4.5%, compared to the national average of 4.1%.
The median household income for our Indiana market increased 5.3% over the last year to $65,566 as of December 31, 2025, compared to the national median income level of $86,867. As of December 31, 2025, the unemployment rate for our Indiana market was 3.5%, compared to the national average of 4.4%.
As of December 31, 2024, the market’s average median household income has decreased over the last year by 2.1%, to $66,127, compared to the national median income level of $78,770. The household income growth rate in Pennsylvania of 7.8%, is projected to be slightly lower than the national average growth rates during the next five years of 8.8%.
As of December 31, 2025, the market’s average median household income has increased over the last year by 8.9%, to $72,000, compared to the national median income level of $86,867. The household income growth rate in Pennsylvania of 10.9%, is projected to be slightly lower than the national average growth rates during the next five years of 11.3%.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf consumer acceptance of debit financial services does not continue to develop or develops more slowly than expected or if there is a shift in the mix of payment forms, such as cash, credit cards, and debit cards, away from our products and services, it could have a material adverse effect on our financial position and results of operations. 32 Table of Contents Other Risks Related to Our Business The corporate governance provisions in our articles of incorporation and bylaws, and the corporate governance provisions under Maryland law, may prevent or impede the holders of our common stock from obtaining representation on our Board of Directors and may impede takeovers of the Company that our board might conclude are not in the best interest of us or our stockholders .
Biggest changeIf consumer acceptance of debit card services does not continue to develop or develops more slowly than expected or if there is a shift in the mix of payment forms, such as cash, credit cards, and debit cards, away from our products and services, it could have a material adverse effect on our financial position and results of operations.
As the financial services industry evolves, consumers may find debit financial services to be less attractive than traditional or other financial services. Consumers might not use debit card financial services for any number of reasons, including the general perception of our industry.
As the financial services industry evolves, consumers may find debit card services to be less attractive than traditional or other financial services. Consumers might not use debit card services for any number of reasons, including the general perception of our industry.
As we continue to grow, we are likely to become more dependent on these sources, which may include FHLB advances, proceeds from the sale of loans, federal funds purchased and brokered certificates of deposit. Adverse operating results or changes in industry conditions could lead to difficulty or an inability to maintain timely access to these additional funding sources.
As we continue to grow, we are likely to become more dependent on these sources, which may include FHLB advances, proceeds from the sale of loans and securities, federal funds purchased and brokered certificates of deposit. Adverse operating results or changes in industry conditions could lead to difficulty or an inability to maintain timely access to these additional funding sources.
The financial services sector represents a significant concentration within our investment portfolio. Within our investment portfolio, we have a significant amount of corporate debt and mortgage-backed securities issued by companies in the financial services sector. Given current market conditions, this sector has an enhanced level of credit risk.
The financial services sector represents a significant concentration within our investment portfolio. Within our investment portfolio, we have corporate debt and mortgage-backed securities issued by companies in the financial services sector. Given current market conditions, this sector has an enhanced level of credit risk.
The Company and Northwest Bank operate in a highly regulated industry and are subject to extensive laws, regulation, supervision and examination by the Federal Reserve Board, the Department of Banking, the FDIC and the CFPB.
The Company and Northwest Bank operate in a highly regulated industry and are subject to extensive laws, regulation, supervision and examination by the Federal Reserve Board, the Department of Banking, the FDIC, the CFPB and the SEC.
Climate-related risks could adversely affect our business and performance, including indirectly through impacts on our customers. There continues to be concern, including on the part of our regulators, regarding climate change and its impacts.
Climate-related risks could adversely affect our business and performance, including indirectly through impacts on our customers. There continues to be concern, including on the part of state regulators, regarding climate change and its impacts.
Any changes made to the rates offered on deposits to remain competitive with other financial institutions may also adversely affect profitability and liquidity. Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and/or loans, brokered deposits, borrowings from the FHLB and/or Federal Reserve discount window, and unsecured borrowings.
Any changes made to the rates offered on deposits to remain competitive with other financial institutions may also adversely affect profitability and liquidity. 25 Table of Contents Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and/or loans, brokered deposits, borrowings from the FHLB and/or Federal Reserve discount window, and unsecured borrowings.
The termination of our membership or any changes in card network rules or standards, including interpretation and implementation of existing rules or standards, could increase the cost of operating our merchant services business or limit our ability to provide debit card and cash management solutions to or through our customers, and could have a material adverse effect on our business, financial condition and results of operations.
The termination of our membership or any changes in card network rules or standards, including interpretation and implementation of existing rules or standards, could increase the cost of operating our merchant services business or limit our ability to provide debit card and cash 31 Table of Contents management solutions to or through our customers, and could have a material adverse effect on our business, financial condition and results of operations.
Furthermore, if customers do not perceive our new offerings as providing 27 Table of Contents significant value, they may fail to accept our new products and services. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service.
Furthermore, if customers do not perceive our new offerings as providing significant value, they may fail to accept our new products and services. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service.
The benefits of this strategy will depend on our ability to realize expected expense reductions without experiencing significant customer attrition. 34 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
The benefits of this strategy will depend on our ability to realize expected expense reductions without experiencing significant customer attrition. 33 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.
A deterioration in economic conditions in the United States and our markets could 24 Table of Contents result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.
Treasury market could have a negative impact on perceptions about the strength and soundness of the Company’s business even if the Company is not subject to the same adverse developments. In addition, adverse developments with respect to third parties with whom the Company has important relationships could also negatively impact 25 Table of Contents perceptions about the Company.
Treasury market could have a negative impact on perceptions about the strength and soundness of the Company’s business even if the Company is not subject to the same adverse developments. In addition, adverse developments with respect to third parties with whom the Company has important relationships could also negatively impact perceptions about the Company.
If consumers do not continue or increase their usage of debit cards, including making changes in the way debit cards are loaded, our operating revenues and debit card deposits may remain at current levels or decline. Any projected growth for the industry may not occur or may occur more slowly than estimated.
If consumers do not continue or increase their usage of debit cards, including making changes in the way debit cards are loaded, our operating revenues may remain at current levels or decline. Any projected growth for the industry may not occur or may occur more slowly than estimated.
We may be compelled to change or cease some of our business or operational practices or to incur additional capital, compliance, and other costs because of climate- or environmental-driven 30 Table of Contents changes in applicable law or supervisory expectations or due to related political, social, market, or similar pressure.
We may be compelled to change or cease some of our business or operational practices or to incur additional capital, compliance, and other costs because of climate- or environmental-driven changes in applicable law or supervisory expectations or due to related political, social, market, or similar pressure.
If a significant amount of these deposits were withdrawn within a short period of time, it could have a negative impact on our short-term liquidity and have an adverse impact on our earnings. Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.
If a significant amount of these deposits were withdrawn within a short period of time, it could have a negative impact on our short-term liquidity and have an adverse impact on our earnings. 32 Table of Contents Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.
The acquired loans are re-risked at that date of acquisition based on our credit standards, which can temporarily increase loans classified as special mention and substandard for a period of time until these loans are integrated and conform to our credit standards.
The acquired loans are re-risk rated at that date of acquisition based on our credit standards, which can temporarily increase loans classified as special mention and substandard for a period of time until these loans are integrated and conform to our credit standards.
We could become subject to more stringent capital requirements, which could adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares. Federal regulations establish minimum capital requirements for bank holding companies and insured depository institutions, including minimum risk-based capital and leverage ratios.
We could become subject to more stringent capital requirements, which could adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares. 21 Table of Contents Federal regulations establish minimum capital requirements for bank holding companies and insured depository institutions, including minimum risk-based capital and leverage ratios.
Risks Related to Economic Conditions 24 Table of Contents A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings.
Risks Related to Economic Conditions A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings.
Any of these events could have a material adverse effect on our financial condition and results of operations. In addition, any insurance coverage we may have may not be adequate to compensate for losses from any of the foregoing.
Any of these events could have a material adverse effect on our financial condition and results of operations. 28 Table of Contents In addition, any insurance coverage we may have may not be adequate to compensate for losses from any of the foregoing.
Risks Related to our Business Strategy Acquisitions may disrupt our business and dilute stockholder value. 26 Table of Contents We regularly evaluate merger and acquisition opportunities with other financial institutions and financial services companies. As a result, negotiations may take place and future mergers or acquisitions involving cash, debt, or equity securities may occur at any time.
Risks Related to our Business Strategy Acquisitions may disrupt our business and dilute stockholder value. We regularly evaluate merger and acquisition opportunities with other financial institutions and financial services companies. As a result, negotiations may take place and future mergers or acquisitions involving cash, debt, or equity securities may occur at any time.
The directors of the Company do not have significant experience in cybersecurity risk management in other business entities comparable to the Company and rely on members of management, including, but not limited to, the CISO, CIO, Chief Operational Risk Management Officer, Chief Technology Officer and Chief Data Officer, for cybersecurity guidance.
The directors of the Company have modest experience in cybersecurity risk management in other business entities comparable to the Company and rely on members of management, including, but not limited to, the CISO, CIO, Chief Operational Risk Management Officer, Chief Technology Officer and Chief Data Officer, for cybersecurity guidance.
We also may be adversely affected if we become subject to new data privacy or cybersecurity laws and regulations or if existing laws and regulations are amended or interpreted in such a manner that requires us to change our business practices, policies or systems or otherwise incur significant additional costs in order to comply.
We also may be adversely affected if we become subject to new data privacy or cybersecurity laws and regulations or if existing laws and regulations are amended or interpreted in such a manner that requires us to change our business 22 Table of Contents practices, policies or systems or otherwise incur significant additional costs in order to comply.
Such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one- to four-family residential mortgage loans. Also, many of our commercial borrowers have more than one loan outstanding with us.
Such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one- to 19 Table of Contents four-family residential mortgage loans. Also, many of our commercial borrowers have more than one loan outstanding with us.
We generate revenues primarily from gains on the sale of mortgage loans to investors, and from the amortization of deferred mortgage servicing rights. We recognized noninterest income of $2 million on mortgage banking activities during the year ended December 31, 2024. We also earn interest on loans held for sale while awaiting delivery to our investors.
We generate revenues primarily from gains on the sale of mortgage loans to investors, and from the amortization of deferred mortgage servicing rights. We recognized noninterest income of $3 million on mortgage banking activities during the year ended December 31, 2025. We also earn interest on loans held for sale while awaiting delivery to our investors.
These and other political and market developments are affecting and could continue to affect consumer confidence levels and cause adverse changes in loan payment patterns, causing increases in delinquencies and default rates, which may impact our charge-offs and the provision for credit losses.
These and other political and market developments are affecting and could continue to affect consumer confidence levels and cause adverse changes in loan payment 29 Table of Contents patterns, causing increases in delinquencies and default rates, which may impact our charge-offs and the provision for credit losses.
In addition, the fair values of securities could decline if the overall economy and the financial condition of some of the issuers deteriorates and there remains limited liquidity for these securities. During the year ended December 31, 2024, we incurred other comprehensive losses of $6 million related to net changes in unrealized holding losses in the available-for-sale investment securities portfolio.
In addition, the fair values of securities could decline if the overall economy and the financial condition of some of the issuers deteriorates and there remains limited liquidity for these securities. During the year ended December 31, 2025, we incurred other comprehensive income of $34 million related to net changes in unrealized holding losses in the available-for-sale investment securities portfolio.
Our efforts to take these risks into account in making lending and other decisions may not be effective in protecting us from the negative impact of new laws and regulations or changes in consumer or business behavior. Further, there is increased scrutiny of climate change-related policies, goals and disclosures.
Our efforts to take these risks into account in making lending and other decisions may not be effective in protecting us from the negative impact of new laws and regulations or changes in consumer or business behavior. Further, there is increased public, investor, activist, legislative, and regulatory scrutiny of climate change-related policies, goals and disclosures.
Risks Related to Operational Matters 28 Table of Contents Risks associated with system failures, interruptions, or cybersecurity breaches could negatively affect our earnings. Information technology systems are critical to our business. We use various information technology systems to manage our customer relationships, general ledger, deposits, and loans.
Risks Related to Operational Matters Risks associated with system failures, interruptions, or cybersecurity breaches could negatively affect our earnings. Information technology systems are critical to our business. We use various information technology systems to manage our customer relationships, general ledger, deposits, and loans.
During the year ended December 31, 2024, we incurred other comprehensive loss of $6 million related to net changes in unrealized holding losses in the available-for-sale investment securities portfolio. The current level of, or any increases in market interest rates may reduce our mortgage banking income.
During the year ended December 31, 2025, we incurred other comprehensive income of $34 million related to net changes in unrealized holding losses in the available-for-sale investment securities portfolio. The current level of, or any increases in market interest rates may reduce our mortgage banking income.
Our municipal bond portfolio may be impacte d by the effects of economic stress on state and local governments. At December 31, 2024, we had $69 million invested in debt obligations of states, municipalities and political subdivisions (collectively referred to as our municipal bond portfolio). We also had $204 million of loans outstanding to municipalities and political subdivisions.
Our municipal bond portfolio may be impacte d by the effects of economic stress on state and local governments. At December 31, 2025, we had $90 million invested in debt obligations of states, municipalities and political subdivisions (collectively referred to as our municipal bond portfolio). We also had $239 million of loans outstanding to municipalities and political subdivisions.
If our government banking deposits were lost within a short period of time, this could negatively impact our liquidity and earnings. As of December 31, 2024, we held $618 million of deposits from municipalities throughout Pennsylvania, New York, Ohio, and Indiana. These deposits may be more volatile than other deposits.
If our government banking deposits were lost within a short period of time, this could negatively impact our liquidity and earnings. As of December 31, 2025, we held $700 million of deposits from municipalities throughout Pennsylvania, Ohio, and Indiana. These deposits may be more volatile than other deposits.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Securities” for a discussion of our securities portfolio and the unrealized losses related to the portfolio, as well as the “Marketable Securities” and “Disclosures about Fair Value of Financial Instruments” footnotes to the audited financial statements. 31 Table of Contents Our exposure to municipalities may lead to operating losses.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Balance Sheet Analysis—Securities” for a discussion of our securities portfolio and the unrealized losses related to the portfolio, as well as the “Marketable Securities” and “Disclosures about Fair Value of Financial Instruments” footnotes to the audited financial statements. Our exposure to municipalities may lead to operating losses.
The economy is subject to worldwide events, such as the COVID-19 pandemic and geopolitical tensions in the Middle East and Europe, as well as domestic events, any or all of which could impact inflationary pressures and interest rates to dampen demand.
The economy is subject to worldwide events, such as geopolitical tensions in Europe, the Middle East, and Latin America, as well as domestic events, any or all of which could impact inflationary pressures and interest rates to dampen demand.
If we cannot raise additional capital when needed, our ability to further expand our operations through internal growth and acquisitions could be materially impaired. New lines of business or new products and services may subject us to additional risks.
Accordingly, we may not be able to raise additional capital, if needed, with favorable terms. If we cannot raise additional capital when needed, our ability to further expand our operations through internal growth and acquisitions could be materially impaired. New lines of business or new products and services may subject us to additional risks.
Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Our business strategy includes growth in assets, deposits and the scale of our operations.
Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Our business strategy includes growth in assets, deposits, the scale of our operations and potentially opening new banking locations.
The laws and regulations applicable to us are subject to frequent 21 Table of Contents change and interpretations and the supervisory environment may be heightened at the regulators’ discretion.
The laws and regulations applicable to us are subject to frequent change and interpretations and the supervisory environment may be heightened at the regulators’ discretion.
Provisions in our articles of incorporation and bylaws may prevent or impede holders of our common stock from obtaining representation on our Board of Directors and may make takeovers of Northwest Bancshares, Inc. more difficult.
Provisions in our articles of incorporation and bylaws may prevent or impede holders of our common stock from obtaining representation on our Board of Directors and may make takeovers of the Company more difficult.
Changes in interest rates also affect the current fair value of our interest-earning investment securities portfolio. Generally, the value of securities moves inversely with changes in interest rates. At December 31, 2024, the fair value of our investment and mortgage-backed securities portfolio totaled $1.7 billion. Net unrealized losses on these securities totaled $282 million at December 31, 2024.
Changes in interest rates also affect the current fair value of our interest-earning investment securities portfolio. Generally, the value of securities moves inversely with changes in interest rates. At December 31, 2025, the fair value of our investment and mortgage-backed securities portfolio totaled $2.2 billion. Net unrealized losses on these securities totaled $202 million at December 31, 2025.
At December 31, 2024, 36% of our loan portfolio was secured by properties located in Pennsylvania, and 16% of our loan portfolio was secured by properties located in New York, with a large portion of the rest of our loans secured by real estate located in Ohio and Indiana.
At December 31, 2025, 39% of our loan portfolio was secured by properties located in Pennsylvania, and 10% of our loan portfolio was secured by properties located in New York, with a large portion of the rest of our loans secured by real estate located in Ohio and Indiana.
On occasion we have employed various financial methodologies that limit, or “hedge,” the adverse effects of rising or decreasing interest rates on our loan portfolios and short-term liabilities. We also engage in hedging strategies with respect to arrangements with our customers. Our hedging activity varies based on the level and volatility of interest rates and other changing market conditions.
On occasion we have employed various financial methodologies that limit, or “hedge,” the adverse effects of rising or decreasing interest rates on our loan portfolios and short-term liabilities. We also engage in hedging strategies with respect to arrangements with our customers.
Based on these factors, we have a concentration in multi-family and commercial real estate lending, as such loans represent 357% of total bank capital as of December 31, 2024.
Based on these factors, we have a concentration in residential and commercial real estate lending, as such loans represent a combined 342% of total bank capital as of December 31, 2025.
We compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, fintech companies, money market funds and other mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere.
We compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, fintech companies, including those related to digital currencies or cryptocurrencies (including stablecoins), money market funds and other mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere.
While we have developed policies and procedures designed to promote compliance with the BSA, as amended, and its implementing regulations, these policies and procedures may not be effective in preventing violations of the law.
In recent years, several banking institutions have received large fines for non-compliance with the BSA, as amended, and its implementing regulations. While we have developed policies and procedures designed to promote compliance with the BSA, as amended, and its implementing regulations, these policies and procedures may not be effective in preventing violations of the law.
Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank and to commit resources to support such subsidiary bank.
The Federal Reserve Board may require us to commit capital resources to support Northwest Bank. Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank and to commit resources to support such subsidiary bank.
We have expanded our market presence through acquisitions and growth. Our branch network continues to be a very significant source of new business generation, however, consumers continue to migrate much of their routine banking to self-service channels.
Our inability to tailor our retail delivery model to respond to consumer preferences in banking may negatively affect earnings. We have expanded our market presence through acquisitions and growth. Our branch network continues to be a very significant source of new business generation, however, consumers continue to migrate much of their routine banking to self-service channels.
In addition, if we foreclose on these loans, our holding period for the collateral may be longer than for a single or multi-family residential property if there are fewer potential purchasers of the collateral.
In addition, if we foreclose on these loans, our holding period for the collateral may be longer than for a single or multi-family residential property if there are fewer potential purchasers of the collateral. The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny.
For example, the Company is unable to predict what, if any, changes to the regulatory environment may be enacted by Congress, both chambers of which became under Republican control beginning in 2025, or the new presidential administration and what the impact of any changes will be on the Company.
For example, the Company is unable to predict what, if any, changes to the regulatory environment may be enacted by Congress, or the presidential administration and what the impact of any changes will be on the Company.
We would seek acquisition partners that offer us either significant market presence or the potential to expand our market footprint and improve profitability through economies of scale or expanded services. For example, on December 16, 2024, we entered into the Merger Agreement with Penns Woods.
We would seek acquisition partners that offer us either significant market presence or the potential to expand our market footprint and improve profitability through economies of scale or expanded services. For example, on July 25, 2025, we acquired Penns Woods Bancorp, Inc. ("Penns Woods").
A federal government shutdown could also result in reduced income for government employees or employees of companies that engage in business with the federal government, which could result in greater loan delinquencies, increases in our nonperforming, criticized and classified assets and a decline in demand for our products and services. 33 Table of Contents Our inability to tailor our retail delivery model to respond to consumer preferences in banking may negatively affect earnings.
A federal government shutdown could also result in reduced income for government employees or employees of companies that engage in business with the federal government, which could result in greater loan delinquencies, increases in our nonperforming, criticized and classified assets and a decline in demand for our products and services.
These estimates and assumptions are based on management’s best estimates and experience as of that date and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known. Areas requiring significant estimates and assumptions by management include our evaluation of the adequacy of our allowance for credit losses.
These estimates and assumptions are based on management’s best estimates and experience as of 30 Table of Contents that date and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known.
Treasury’s FinCEN. The BSA, as amended, and its implementing regulations also require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open accounts at the financial institution.
Treasury’s FinCEN. The BSA, as amended, and its implementing regulations also require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open accounts at the financial institution. Failure to comply with the BSA, as amended, and its implementing regulations could result in fines or sanctions or affect our ability to pursue further acquisition opportunities.
Risks Related to Market Interest Rates The reversal of the historically low interest rate environment has and may continue to adversely affect our net interest income and profitability. The Federal Reserve Board decreased benchmark interest rates significantly, to near zero, in response to the COVID-19 pandemic.
Risks Related to Market Interest Rates The reversal of the historically low interest rate environment has and may continue to adversely affect our net interest income and profitability. Beginning in 2022, the Federal Reserve Board reversed its historical policy of near zero interest rates in an effort to curb inflation.
Furthermore, management of the Company has both an Enterprise Risk Management Committee and an Information Technology Steering 29 Table of Contents Committee (“ITSC”), both of which are comprised of the most senior members of management, including the Chief Executive Officer, Chief Information Officer (“CIO”), and Chief Operating Officer.
Furthermore, management of the Company has both an Enterprise Risk Management Committee and an Operational Risk Management Committee, both of which are comprised of the most senior members of management, including the Chief Executive Officer, Chief Information Officer (“CIO”), and Chief Information Security Officer. The Operating Risk Management Committee and the ERMC meets quarterly, or more frequently if needed.
Inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our non-interest expenses.
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. Inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our non-interest expenses.
Under the CRE Lending Guidance, a financial institution that, like us, is actively involved in commercial real estate lending should perform a risk assessment to identify concentrations.
The FDIC and the other federal banking regulatory agencies have jointly promulgated the CRE Lending Guidance on sound risk management practices for financial institutions with concentrations in commercial real estate lending. Under the CRE Lending Guidance, a financial institution that, like us, is actively involved in commercial real estate lending should perform a risk assessment to identify concentrations.
Hedging strategies can be imperfect and may fail to protect us from loss. Moreover, hedging activities could result in costs if the hedge proves to be ineffective.
Our hedging activity varies based on the level and volatility of interest rates and other changing market conditions. 23 Table of Contents Hedging strategies can be imperfect and may fail to protect us from loss. Moreover, hedging activities could result in costs if the hedge proves to be ineffective.
Risks Related to Laws and Regulations Changes in laws and regulations and the cost of compliance with new laws and regulations may adversely affect our operations and our income.
This may result in a material adverse effect on collateral values and our ability to minimize losses. 20 Table of Contents Risks Related to Laws and Regulations Changes in laws and regulations and the cost of compliance with new laws and regulations may adversely affect our operations and our income.
The ITSC meets monthly, or more frequently if needed, and the ERMC meets quarterly, or more frequently if needed. Material items related to cybersecurity are reported to the Innovation and Technology and Risk Management Sub-Committees. The Company also engages outside consultants to support its cybersecurity efforts.
Material items related to cybersecurity are reported to the Risk Management Sub-Committee. The Company also engages outside consultants to support its cybersecurity efforts.
The Board of the Company has an Innovation and Technology Sub-Committee, consisting of wholly independent directors chartered, among other items, with a focus on cybersecurity risk. Additionally, the Company’s Board has a designated Risk Management Sub-Committee with the responsibility of monitoring enterprise level risks, including those related to cybersecurity.
The Board of the Company has a Risk Management Committee, consisting of wholly independent directors chartered, among other items, with a focus on cybersecurity risk.
Competitive factors driven by consumer sentiment or otherwise can also reduce our ability to generate fee income, such as through overdraft fees. Our profitability depends upon our ability to successfully compete in our market areas. We may be subject to intellectual property-related disputes or may fail to effectively obtain, maintain, defend, or enforce our intellectual property rights.
Our profitability depends upon our ability to successfully compete in our market areas. 27 Table of Contents We may be subject to intellectual property-related disputes or may fail to effectively obtain, maintain, defend, or enforce our intellectual property rights.
Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside of our control, and on our financial performance. Accordingly, we may not be able to raise additional capital, if needed, with favorable terms.
Also, the need to raise additional capital may force our management to spend more time in managerial and financing-related activities than in operational activities. 26 Table of Contents Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside of our control, and on our financial performance.
These reasons and the legal and regulatory responses have impacted the foreclosure process and completion time of foreclosures for residential mortgage lenders. This may result in a material adverse effect on collateral values and our ability to minimize its losses.
These reasons and the legal and regulatory responses have impacted the foreclosure process and completion time of foreclosures for residential mortgage lenders.
Any change in these regulations and oversight, whether in the form of regulatory policy, new regulations or legislation or additional deposit insurance premiums could have a material impact on our operations. The potential exists for additional federal or state laws and regulations, or changes in policy, affecting lending and funding practices and liquidity standards.
Future changes in these regulations and oversight, whether in the form of regulatory policy, new regulations or legislation, presidential executive orders, or new interpretation or application of existing statutes and regulations by courts and government agencies, or additional deposit insurance premiums could have a material impact on our operations.
New investors may also have rights, preferences and privileges senior to our current stockholders, which may adversely impact our current stockholders. Also, the need to raise additional capital may force our management to spend more time in managerial and financing-related activities than in operational activities.
New investors may also have rights, preferences and privileges senior to our current stockholders, which may adversely impact our current stockholders.
Changes in interest rates could adversely affect our results of operations and financial condition. Our results of operations and financial condition could be significantly affected by changes in interest rates.
As discussed below, the increase in market interest rates has had, and may continue to have, an adverse effect on our net interest income and profitability. Changes in interest rates could adversely affect our results of operations and financial condition. Our results of operations and financial condition could be significantly affected by changes in interest rates.
Risks Related to Investment Activities We could record future losses on our investment securities portfolio.
Areas requiring significant estimates and assumptions by management include our evaluation of the adequacy of our allowance for credit losses. Risks Related to Investment Activities We could record future losses on our investment securities portfolio.
The effects of such policies upon our business, financial condition and results of operations cannot be predicted. Inflation can have an adverse impact on our business and on our customers. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money.
New appointments to the Federal Reserve Board could affect its monetary policies, and in turn, interest rates. The effects of such policies upon our business, financial condition and results of operations cannot be predicted. Inflation can have an adverse impact on our business and on our customers.
Although they have decreased since 23 Table of Contents late 2023 in response to the Federal Reserve Board’s rate decreases, they remain at historically high levels. As discussed below, the increase in market interest rates has had, and may continue to have, an adverse effect on our net interest income and profitability.
Market interest rates have risen significantly in response to the Federal Reserve Board’s rate increases. In late 2023, the Federal Reserve Board began lowering benchmark interest rates, and although interest rates have decreased as a result, they remain at historically high levels.
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The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny. 20 Table of Contents The FDIC and the other federal banking regulatory agencies have jointly promulgated the CRE Lending Guidance on sound risk management practices for financial institutions with concentrations in commercial real estate lending.
Added
The current U.S. administration has implemented significant changes in federal priorities and has taken steps to change the operations, structure, and policy focus of various federal agencies, as well as regulatory priorities, policy approaches and interpretations of existing laws by those federal agencies.
Removed
We expect the Trump administration will seek to implement a regulatory reform agenda that is significantly different than that of the Biden administration, impacting the rulemaking, supervision, examination, and enforcement priorities of the federal banking agencies.
Added
It is also possible the expected changes in regulation do not occur or are reversed by a subsequent administration, or the regulatory measures that are ultimately enacted deliver significant competitive advantages to financial services that are structured differently or serve different markets than the Company and Northwest Bank The potential exists for additional federal or state laws and regulations, or changes in policy, affecting lending and funding practices and liquidity standards.
Removed
Failure to comply with the Bank Secrecy, as amended, and its implementing regulations could result in fines or sanctions or affect our ability to pursue further acquisition opportunities. During the last year, several banking institutions have received large fines for non-compliance with the BSA, as amended, and its implementing regulations.
Added
Moreover, competition with fintech companies may be particularly intense, due to, among other things, differing regulatory environments. For example, the Guiding and Establishing National Innovation for U.S.
Removed
Furthermore, changes to the Basel III capital rules, including the implementation of Basel III endgame, that apply to banking organizations that are larger or more internationally active than the Company and Northwest may be informally applied or considered by the Federal Reserve Board and the FDIC in their regulation, supervision and examination of, and indirectly adversely impact, smaller institutions such as the Company and the Bank. 22 Table of Contents The Federal Reserve Board may require us to commit capital resources to support Northwest Bank.
Added
Stablecoins Act of 2025 (GENIUS Act) provides a legal framework for stablecoins to be issued in the United States, which may allow new and existing competitors to compete for funds that may have otherwise been deposited with banks, such as Northwest Bank.
Removed
Beginning in 2022, the Federal Reserve Board reversed its policy of near zero interest rates given its concerns over inflation. Market interest rates have risen significantly in response to the Federal Reserve Board’s rate increases.
Added
Competitive factors driven by consumer sentiment or otherwise can also reduce our ability to generate fee income, such as through overdraft fees.
Removed
The Merger Agreement provides for a business combination whereby Penns Woods will merge with and into the Company, with the Company as the surviving corporation in the merger.
Added
The current U.S. administration has implemented rapid shifts in macroeconomic policies, such as those relating to trade restrictions and tariffs, which have created concerns over an increase in inflation and a slowdown in economic growth.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIntegral elements of the Plans related to the Company’s response to cybersecurity vulnerabilities include the following: • Identifying the appropriate team and any appropriate sub-teams to address specific system failures, interruptions, or cybersecurity breaches, or categories thereof. • Coordinating incident or crisis management activities, including developing, maintaining, and following appropriate procedures to respond to and document identified system failures, interruptions, or cybersecurity breaches. • Conducting post-incident reviews to gather feedback on incident response procedures and address any identified gaps in cybersecurity measures. • Providing training and conducting periodic exercises to promote employee and stakeholder preparedness and awareness of the Plans. • Reviewing the Plans at least annually, or whenever there is a material change in the Company’s business practices that may reasonably affect its incident response procedures.
Biggest changeIntegral elements of the Plans include: • Establishing the appropriate team(s) and sub‑teams to address specific system failures, interruptions, or cybersecurity incidents. • Coordinating incident and crisis management activities, including documented procedures for response and remediation. • Conducting post‑incident reviews to evaluate response effectiveness and remediate identified gaps. • Providing training and conducting periodic exercises to promote preparedness and awareness. • Reviewing the Plans at least annually, or upon material changes in business practices that may reasonably affect incident response procedures.
Lastly, at least annually, the CISO reports directly to our Board of Directors the overall status of the cybersecurity program and the Company’s compliance with the Interagency Guidelines for Safeguarding Customer Information.
At least annually, the CISO reports directly to the Board of Directors on the overall status of the cybersecurity program and the Company’s compliance with the Interagency Guidelines for Safeguarding Customer Information.
ITEM 1C. CYBERSECURITY Risk Management and Strategy Our risk management program is designed to identify, assess, and mitigate risks across various aspects of the Company, including credit, market, treasury, operational, compliance, model and data, and reputational risks.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We maintain an enterprise risk management program designed to identify, assess, and mitigate risks across the Company, including credit, market, treasury, operational, compliance, model and data, strategic and reputational risks.
Any material findings related to the risk assessment, risk management and control decisions, service provider arrangements, results of testing, system failures, interruptions or cybersecurity breaches are discussed as are management’s responses and any recommendations for program changes. 36 Table of Contents
Any material findings related to risk assessments, risk management and control decisions, service provider arrangements, testing results, and system failures, interruptions, or cybersecurity incidents are discussed along with management’s responses and recommendations for program changes.
Cybersecurity is a critical component of this program, given the increasing reliance on technology and potential for system failure, interruption, or a cybersecurity breach to occur, which could disrupt business operations or compromise confidential, personal, sensitive or proprietary information.
Cybersecurity is a critical component of this program due to our reliance on technology and the potential for system failures, interruptions, and cybersecurity incidents that could disrupt business operations or compromise confidential, personal, sensitive, or proprietary information.
Management determines the scope and objectives of the penetration analysis. We maintain both an incident response plan and a crisis management plan (the “Plans”) that provide a documented framework for responding to actual or potential system failures, interruptions, or cybersecurity breaches, including timely notification of and escalation to the appropriate Board-approved management committees as discussed further below.
Incident Response and Business Resiliency We maintain an Incident Response Plan and a Crisis Management Plan (collectively, the “Plans”) that provide a documented framework for responding to actual or potential system failures, interruptions, or cybersecurity incidents, including timely notification to, and escalation within, appropriate Board‑approved management committees.
The Plans are coordinated through the Business Resiliency Manager and Major Incident Manager, who ultimately report to the CISO and the CIO respectively, and key 35 Table of Contents members of management who are embedded into the Plans by their design. The Plans facilitate coordination across multiple parts of our organization and are evaluated at least annually.
The Plans are coordinated by the Business Resiliency Manager and Major Incident Manager—who report to the CISO and CIO, respectively—and embed key members of management by design. The Plans facilitate cross‑functional coordination and are evaluated at least annually.
The CISO reports summaries of key issues, including significant system failures, interruptions or cybersecurity breaches, discussed at committee meetings and the actions taken to the Innovation and Technology Committee of our Board of Directors on a quarterly basis (or more frequently as may be required by the incident response plan).
More frequent meetings occur, as needed, pursuant to our incident response plan. The CISO reports summaries of key issues—including significant system failures, interruptions, or cybersecurity incidents—to management committees, and the Chief Operational Risk Officer reports summaries of key cybersecurity risks to the Risk Committee of the Board of Directors on a quarterly basis.
We leverage internal and third-party auditors and independent third-party sources to periodically review our processes, systems, and controls related to our cybersecurity security program. This includes assessing control design and operating effectiveness and recommendations to strengthen our cybersecurity program.
Testing, Audits, and Assessments We leverage internal auditors, third‑party assessors, and independent sources to periodically review processes, systems, and controls associated with our cybersecurity program. These reviews include assessments of control design and operating effectiveness and recommendations to strengthen the program. Regular internal monitoring is integral to our risk assessment process and includes testing of key controls, systems, and procedures.
Not withstanding our defensive measures and processes, the threats posed by system failures, interruptions, or cybersecurity breaches are severe. For further discussion of risks from cybersecurity threats, see the section captioned “Risks Related to Operational Matters” in Item 1A. Risk Factors. Governance. Our CISO is accountable for managing our enterprise cybersecurity department and delivering our cybersecurity program.
Limitations and Risk Considerations Notwithstanding our defensive measures and processes, the threats posed by system failures, interruptions, or cybersecurity incidents are significant and continually evolving. For further discussion of risks from cybersecurity threats, refer to Item 1A. Risk Factors—Risks Related to Operational Matters.
In an effort to prepare for and respond to system failures, interruptions or cybersecurity breaches, the Company has implemented a multi-layered cybersecurity program that integrates people, technology, and processes and is intended to comply with the information security standards established pursuant to the Gramm-Leach-Bliley Act (GLBA) 12 CFR 364, Appendix B.
Our cybersecurity risk management program integrates people, technology, and processes and is intended to comply with the Interagency Guidelines Establishing Information Security Standards promulgated under the Gramm‑Leach‑Bliley Act (GLBA), 12 CFR Part 364, Appendix B.
The responsibilities of this department include privacy, resiliency, cybersecurity risk assessment, defense operations, incident response, vulnerability assessment, threat intelligence, identity access governance, and the evaluation of third-party risk management and business resilience as it relates to the cybersecurity program. The foregoing responsibilities are covered on a day-to-day basis by our CISO and their team.
The cybersecurity department encompasses privacy, resiliency, cybersecurity risk assessment, defense operations, incident response, vulnerability assessment, threat intelligence, identity and access governance, and the evaluation of third‑party risk management and business resilience as they relate to the cybersecurity program. The department is comprised of cybersecurity professionals with varying education and experience and is generally subject to professional education and certification requirements.
Our CISO is primarily responsible for this cybersecurity component and is a key member of the organization, reporting directly to the CIO (who then reports directly to our Chief Executive Officer) and, as discussed below, periodically to the Innovation and Technology Committee, Enterprise Risk Committee and to our Board of Directors.
Governance Our Chief Information Security Officer (CISO) is accountable for delivering our enterprise cybersecurity program and reports to the Chief Information Officer (CIO), who reports to the Chief Executive Officer. The CISO also provides periodic updates to the Enterprise Risk Management Committee and to our Board of Directors, as described below.
The third-party risk management policy applies to any business arrangement between the Company and another individual or entity, by contract or otherwise, in alignment with the Interagency Guidance on Third-Party Relationships: Risk Management. The third-party risk management program is audited periodically in accordance with our Board approved internal audit plan.
The program includes a detailed onboarding process and periodic reviews of third parties with access to confidential, personal, sensitive, or proprietary information, consistent with the FDIC Interagency Guidance on Third‑Party Relationships: Risk Management. The program is audited periodically in accordance with our Board‑approved internal audit plan.
The ITSC meets quarterly and the Operational Risk Management Committee meets at least quarterly to provide oversight of the risk management strategy, standards, policies, practices, controls, and mitigation and prevention efforts employed to manage cybersecurity risks. More frequent meetings occur from time to time in accordance with the incident response plan to facilitate timely informing and monitoring efforts.
Our CISO has substantial relevant expertise and formal training with 25+ years of cybersecurity and IT experience across the financial services, retail, and insurance sectors. The Operational Risk Management Committee meets at least quarterly to provide oversight of the risk management strategy, standards, policies, practices, controls, and mitigation and prevention efforts employed to manage cybersecurity risks.
Regular internal monitoring is integral to the Company’s risk assessment process, which includes regular testing of internal key controls, systems, and procedures. In addition, independent third-party penetration testing of the effectiveness of security controls and preparedness measures is conducted at least annually or more often, if warranted by the risk assessment or other external factors.
In addition, independent third‑party penetration testing of the effectiveness of security controls and preparedness measures is conducted at least annually. Management determines the scope and objectives of the penetration testing.
We also actively monitor our email gateways for incoming and outgoing malicious emails and monitor remote connections as a significant portion of our workforce has the option to work remotely. The Company relies on third-party vendor solutions to support its operations.
Monitoring and Workforce Considerations We actively monitor inbound and outbound internet connections and email for malicious content and employ controls to monitor remote connections, recognizing that a significant portion of our workforce may work remotely.
To mitigate the cyber, privacy and other o perational risks associated with the use of third-party vendors, the Company maintains a third-party risk management program, which is implemented through a third-party risk management policy and includes a detailed onboarding process and periodic reviews of third-party vendors with access to confidential, personal, sensitive and propriety information.
Third-party risk management We rely on third‑party vendors to support our operations, many of whom—particularly within financial services—have access to confidential, personal, sensitive, and proprietary information. To mitigate cyber, privacy, and operational risks associated with 34 Table of Contents third‑party relationships, we maintain a Third‑Party Risk Management Program implemented through Board‑approved policies.
To date, the Company has not, to its knowledge, experienced an incident materially affecting or reasonably likely to materially affect the Company.
Incident History and Materiality To date, the Company has not, to its knowledge, experienced a cybersecurity incident that has materially affected or is reasonably likely to materially affect the Company. We maintain processes designed to identify and assess the materiality of cybersecurity threats and incidents, including escalation protocols to management committees and the Board where appropriate.
Removed
This cybersecurity program includes employee training, the use of innovative technologies, and the implementation of policies and procedures in the areas of information security, data governance, business continuity and disaster recovery, privacy, third-party risk management, and incident response.
Added
The program includes: • Governance and policies: Information security, data protection, privacy, third‑party risk management, business continuity and disaster recovery, and incident response. • Controls and processes: A control framework designed to govern, identify, protect, detect, respond, and recover from system failures, interruptions, and cybersecurity incidents. • Framework alignment: Operations informed by industry best practices and recommendations from the National Institute of Standards and Technology (NIST) Cybersecurity Framework, Federal Financial Institutions Examination Council (FFIEC) guidance, and Center for Internet Security (CIS) Benchmarks. • Technology and operations: Preventive and detective tooling to monitor, block, and alert on suspicious activity across our environment, including email gateways and remote connections. • Training and exercises: Regular employee education, tabletop exercises, and recovery and resilience testing.
Removed
Our objective for managing cybersecurity risk is to avoid or minimize the impacts of external threat events or other efforts that penetrate, disrupt or misuse our systems or information.
Added
We regularly collaborate with peer institutions, industry groups, and policymakers to discuss cybersecurity trends and issues and to identify evolving best practices. Our cybersecurity program is periodically reviewed to address changing threats, technologies, regulatory expectations, and business conditions.
Removed
The cybersecurity program is built upon a foundation of advanced security technology, our internal employee team, and operations based on industry best practice and recommendations from the National Institute of Standards and Technology (NIST) Cybersecurity Maturity Framework, Federal Financial Institutions Examination Council (FFIEC) Guidelines, and Center for Internet Security (CIS) Benchmarks.
Removed
This consists of controls designed to govern, identify, protect, detect, respond and recover from system failures, interruptions, and cybersecurity breaches. Our CISO and our CIO, along with key members of their teams, regularly collaborate with peer banks, industry groups, and policymakers to discuss cybersecurity trends and issues and identify best practices.
Removed
The cybersecurity program is periodically reviewed by such personnel with the goal of addressing changing threats and conditions. We also employ a variety of preventative and monitoring tools designed to monitor, block, and provide alerts regarding suspicious activity including suspected.
Removed
We have established processes and systems designed to mitigate cybersecurity risk, including regular and ongoing education and training for employees, preparedness simulations and tabletop exercises, and recovery and resilience tests. We engage in regular assessments of our infrastructure, software systems, and network architecture, using internal cybersecurity experts and third-party specialists.
Removed
Many of these their-party vendors, especially in the financial services industry, have access to confidential, personal, sensitive and proprietary information.
Removed
The cybersecurity department consists of cybersecurity professionals with varying degrees of education and experience. Individuals within the cybersecurity department are generally subject to professional education and certification requirements. Our CISO has substantial relevant expertise and formal training in the areas of cybersecurity risk management, including 25 years of cybersecurity experience in the financial services, retail, insurance sectors.
Removed
Our Board of Directors has established management committees including the Innovation and Technology Steering Committee (ITSC), which focuses on overseeing our information security and technology programs, including management’s actions to identify, assess, mitigate, and remediate or prevent material cybersecurity issues and risks, and the Operational Risk Management Committee, which focuses on the identification, monitoring, assessment, and management of risk associated with our cybersecurity program.
Removed
These committees provide oversight and governance of the cybersecurity program and are chaired by the CIO and Chief Operational Risk Management Officer, respectively, and include the CISO and other key departmental managers from throughout the Company.
Removed
Additionally, the Chief Operational Risk Management Officer reports summaries of key cybersecurity risks to the Risk Committee of our Board of Directors on a quarterly basis. The Innovation and Technology Committee of our Board of Directors is responsible for overseeing our cybersecurity program, including management’s actions to identify, assess, mitigate, and remediate or prevent material cybersecurity issues and risks.
Removed
Our CISO and our CIO provide quarterly reports to the Innovation and Technology Committee regarding our cybersecurity program, key enterprise cybersecurity initiatives, and other matters relating to cybersecurity processes. The Innovation and Technology Committee reviews and approves our cybersecurity and technology budgets and strategies annually.
Removed
Additionally, the Risk Committee of our Board of Directors reviews key metrics summarizing our cybersecurity risk profile on a quarterly basis. The Innovation and Technology Committee and Risk Committee each provide a report of their activities to our full Board of Directors at each Board meeting.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES As of December 31, 2024, we conducted our business through our main office located in Warren, Pennsylvania, 74 other full-service offices and eight free-standing drive-up locations throughout our market area in central and western Pennsylvania, 27 full-service offices and one free-standing drive-up location in western New York, 10 full-service offices and one free-standing drive-up location in eastern Ohio, and 19 full-service offices and one free-standing drive-up location in Indiana.
Biggest changeWe conducted our business through 94 full-service offices and 8 free-standing drive-up locations throughout our market area in central and western Pennsylvania, 27 full-service offices and 1 free-standing drive-up location in western New York, 10 full-service offices and 1 free-standing drive-up location in north eastern Ohio, and 20 full-service offices in Indiana.
At December 31, 2024, our premises and equipment had an aggregate net book value of approximately $124 million.
At December 31, 2025, our premises and equipment had an aggregate net book value of approximately $140 million. 35 Table of Contents
Added
ITEM 2. PROPERTIES As of December 31, 2025, our Company's headquarters were located in Columbus, Ohio and the Bank's headquarters were located in Warren, Pennsylvania.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee Note 19 in the notes to the Consolidated Financial Statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeSee Note 20 in the notes to the Consolidated Financial Statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Northwest Bancshares, Inc., the NASDAQ Composite Index, and the NASDAQ Bank Index At December 31, 2019 2020 2021 2022 2023 2024 Northwest Bancshares, Inc. 100.00 82.01 96.62 101.06 96.63 108.85 NASDAQ Composite 100.00 144.92 177.06 119.45 172.77 223.87 NASDAQ Bank 100.00 90.81 128.28 107.54 114.99 141.59 38 Table of Contents ITEM 6. [RESERVED]
Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Northwest Bancshares, Inc., the NASDAQ Composite Index, and the NASDAQ Bank Index At December 31, 2020 2021 2022 2023 2024 2025 Northwest Bancshares, Inc. 100.00 117.82 123.23 117.83 132.72 128.95 NASDAQ Composite 100.00 122.18 82.43 119.22 154.48 187.14 NASDAQ Bank 100.00 141.27 118.42 126.63 155.92 166.91 37 Table of Contents ITEM 6. [RESERVED]
There were no sales of unregistered securities during the quarter ended December 31, 2024. On December 13, 2012, the Board of Directors approved a program that authorizes the repurchase of approximately 5,000,000 shares of common stock. This program does not have an expiration date.
There were no sales of unregistered securities during the quarter ended December 31, 2025. On December 13, 2012, the Board of Directors approved a program that authorizes the repurchase of approximately 5,000,000 shares of common stock. This program does not have an expiration date.
During the year ended December 31, 2024, we did not repurchase any shares and there are a maximum of 2,261,130 remaining shares that can be purchased under the current repurchase program. 37 Table of Contents Stock Performance Graph The following stock performance graph compares (a) the cumulative total return on our common stock between December 31, 2019 and December 31, 2024, (b) the cumulative total return on stocks included in the Total Return Index for the NASDAQ Stock Market (US) over such period, and (c) the cumulative total return on stocks included in the NASDAQ Bank Index over such period.
During the year ended December 31, 2025, we did not repurchase any shares and there are a maximum of 2,261,130 remaining shares that can be purchased under the current repurchase program. 36 Table of Contents Stock Performance Graph The following stock performance graph compares (a) the cumulative total return on our common stock between December 31, 2020 and December 31, 2025, (b) the cumulative total return on stocks included in the Total Return Index for the NASDAQ Stock Market (US) over such period, and (c) the cumulative total return on stocks included in the NASDAQ Bank Index over such period.
As of February 18, 2025, we had 23 registered market makers, 10,243 stockholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms), and 127,514,857 shares outstanding.
As of February 18, 2026, we had 22 registered market makers, 10,434 stockholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms), and 146,139,471 shares outstanding.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAt December 31, 2024 2023 (In thousands) Selected Consolidated Financial Data: Total assets $ 14,408,224 14,419,105 Cash and cash equivalents 288,378 122,260 Marketable securities held-to-maturity 124,462 124,458 Marketable securities available-for-sale 120,237 182,068 Mortgage-backed securities held-to-maturity 626,124 690,381 Mortgage-backed securities available-for-sale 988,707 861,291 Loans held-for-sale 76,331 8,768 Loans receivable, net of allowance for credit losses: Residential mortgage loans 3,163,922 3,401,224 Home equity loans 1,144,551 1,222,455 Consumer loans 1,970,813 2,097,917 Commercial real estate loans 2,801,652 2,918,968 Commercial loans 1,982,257 1,640,234 Total loans receivable, net 11,063,195 11,280,798 Deposits 12,144,554 11,979,902 Borrowed funds 200,331 398,895 Subordinated debt 114,538 114,189 Shareholders’ equity 1,596,856 1,551,317 For the years ended December 31, 2024 2023 2022 (In thousands except per share data) Selected Consolidated Operating Data: Total interest income $ 669,196 587,922 448,798 Total interest expense 233,618 152,239 28,117 Net interest income 435,578 435,683 420,681 Provision for credit losses 24,505 22,874 28,315 Net interest income after provision for credit losses 411,073 412,809 392,366 Noninterest income 87,010 113,823 110,849 Noninterest expense 368,537 351,554 329,523 Income before income taxes 129,546 175,078 173,692 Income tax expense 29,268 40,121 40,026 Net income $ 100,278 134,957 133,666 Earnings per share: Basic $ 0.79 1.06 1.05 Diluted $ 0.79 1.06 1.05 40 Table of Contents At or for the year ended December 31, 2024 2023 2022 Selected Financial Ratios and Other Data: Return on average assets (1), (5), (6), (7) 0.70 % 0.95 % 0.94 % Return on average equity (2), (5), (6), (7) 6.41 % 8.94 % 8.80 % Average capital to average assets 10.87 % 10.58 % 10.71 % Capital to total assets 11.08 % 10.76 % 10.57 % Tangible common equity to tangible assets (8) 8.65 % 8.30 % 8.03 % Net interest rate spread (3) 2.66 % 2.86 % 3.11 % Net interest margin (4) 3.26 % 3.28 % 3.20 % Noninterest expense to average assets (5), (6), (7) 2.56 % 2.46 % 2.32 % Efficiency ratio (5), (6), (7) 70.52 % 63.98 % 62.00 % Noninterest income to average assets 0.60 % 0.80 % 0.78 % Net interest income to noninterest expense (5), (6), (7) 1.18x 1.24x 1.28x Dividend payout ratio 101.27 % 75.47 % 76.19 % Nonperforming loans to net loans receivable 0.56 % 0.86 % 0.76 % Nonperforming assets to total assets 0.54 % 0.67 % 0.58 % Allowance for credit losses to nonperforming loans 188.24 % 129.01 % 143.98 % Allowance for credit losses to loans receivable 1.04 % 1.10 % 1.08 % Average interest-earning assets to average interest-bearing liabilities 1.35x 1.37x 1.41x Number of banking offices 141 142 150 (1) Represents net income divided by average assets.
Biggest changeThe information at December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023 is derived in part from the audited Consolidated Financial Statements that appear in this document. 38 Table of Contents At December 31, 2025 2024 (In thousands) Selected Consolidated Financial Data: Total assets $ 16,766,617 14,408,224 Cash and cash equivalents 233,647 288,378 Marketable securities held-to-maturity 124,465 124,462 Marketable securities available-for-sale 178,261 120,237 Mortgage-backed securities held-to-maturity 558,904 626,124 Mortgage-backed securities available-for-sale 1,408,121 988,707 Loans held-for-sale 22,437 76,331 Loans receivable, net of allowance for credit losses: Residential mortgage loans 3,090,234 3,163,922 Home equity loans 1,501,383 1,144,551 Consumer loans 2,533,128 1,970,813 Commercial real estate loans 3,233,989 2,801,652 Commercial loans 2,498,370 1,982,257 Total loans receivable, net 12,857,104 11,063,195 Deposits 13,943,017 12,144,554 Borrowed funds 446,283 200,331 Subordinated debt 114,800 114,538 Shareholders’ equity 1,890,424 1,596,856 For the years ended December 31, 2025 2024 2023 (In thousands except per share data) Selected Consolidated Operating Data: Total interest income $ 749,668 669,196 587,922 Total interest expense 224,266 233,618 152,239 Net interest income 525,402 435,578 435,683 Provision for credit losses 55,584 24,505 22,874 Net interest income after provision for credit losses 469,818 411,073 412,809 Noninterest income 129,268 87,010 113,823 Noninterest expense 436,296 368,537 351,554 Income before income taxes 162,790 129,546 175,078 Income tax expense 36,777 29,268 40,121 Net income $ 126,013 100,278 134,957 Earnings per share: Basic $ 0.93 0.79 1.06 Diluted $ 0.92 0.79 1.06 39 Table of Contents At or for the year ended December 31, 2025 2024 2023 Selected Financial Ratios and Other Data: Return on average assets (1), (5), (6), (7) 0.82 % 0.70 % 0.95 % Return on average equity (2), (5), (6), (7) 7.27 % 6.41 % 8.94 % Average capital to average assets 11.31 % 10.87 % 10.58 % Capital to total assets 11.27 % 11.08 % 10.76 % Tangible common equity to tangible assets (8) 8.64 % 8.65 % 8.30 % Net interest rate spread (3) 3.13 % 2.66 % 2.86 % Net interest margin (4) 3.69 % 3.26 % 3.28 % Net interest income to noninterest expense (5), (6), (7) 1.20X 1.18x 1.24x Noninterest expense to average assets (5), (6), (7) 2.85 % 2.56 % 2.46 % Efficiency ratio (5), (6), (7) 66.64 % 70.52 % 63.98 % Noninterest income to average assets 0.84 % 0.60 % 0.80 % Dividend payout ratio 86.96 % 101.27 % 75.47 % Nonperforming loans to net loans receivable 0.84 % 0.56 % 0.86 % Nonperforming assets to total assets 0.64 % 0.54 % 0.67 % Allowance for credit losses to nonperforming loans 139.18 % 188.24 % 129.01 % Allowance for credit losses to loans receivable 1.15 % 1.04 % 1.10 % Average interest-earning assets to average interest-bearing liabilities 1.36X 1.35x 1.37x Number of banking offices 161 141 142 (1) Represents net income divided by average assets.
In addition, we invest excess funds in short-term interest earning and other assets, which provide liquidity to meet lending requirements. There were no short-term interest-earning deposits at December 31, 2024. For additional information about our cash flows from operating, financing, and investing activities, see the Consolidated Statements of Cash Flows included in the Consolidated Financial Statements.
In addition, we invest excess funds in short-term interest earning and other assets, which provide liquidity to meet lending requirements. There were no short-term interest-earning deposits at December 31, 2025. For additional information about our cash flows from operating, financing, and investing activities, see the Consolidated Statements of Cash Flows included in the Consolidated Financial Statements.
(11) Shown on a FTE basis and in consideration of applicable current federal, state and local tax rates. 52 Table of Contents Rate/Volume Analysis The following table presents, on a FTE basis, the changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities for the year ended December 31, 2024 compared to 2023 and for the year ended December 31, 2023 compared to 2022.
(11) Shown on a FTE basis and in consideration of applicable current federal, state and local tax rates. 52 Table of Contents Rate/Volume Analysis The following table presents, on a FTE basis, the changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities for the year ended December 31, 2025 compared to 2024 and for the year ended December 31, 2024 compared to 2023.
These deposits are part of a reciprocal program that allows our depositors to receive expanded FDIC insurance coverage above the insurance coverage available to our depositors at a single FDIC-insured institution, by placing multiple interest-bearing demand accounts at other member banks and Northwest receives an equal amount of deposits from other member banks.
These deposits are part of a reciprocal program that allows our depositors to receive expanded FDIC insurance coverage above the insurance coverage available to our depositors at a single FDIC-insured institution, by placing multiple interest-bearing demand accounts at o ther member banks and Northwest receives an equal amount of deposits from other member banks.
We utilized a multi-scenario based macroeconomic forecast in determining the December 31, 2024 allowance for credit losses, which included a weighting of three scenarios: an upside scenario, a baseline scenario and a downside scenario. We placed the most weight on the baseline scenario, with the remaining weight split evenly between the upside and downside scenarios.
We utilized a multi-scenario based macroeconomic forecast in determining the December 31, 2025 allowance for credit losses, which included a weighting of three scenarios: an upside scenario, a baseline scenario and a downside scenario. We placed the most weight on the baseline scenario, with the remaining weight split evenly between the upside and downside scenarios.
We utilize a structured methodology each period when analyzing the adequacy of the allowance for credit losses and the related provision for credit losses, which the ACL Committee assesses regularly for appropriateness. As part of the analysis as of December 31, 2024, we considered the most recent economic conditions and forecasts available.
We utilize a structured methodology each period when analyzing the adequacy of the allowance for credit losses and the related provision for credit losses, which the ACL Committee assesses regularly for appropriateness. As part of the analysis as of December 31, 2025, we considered the most recent economic conditions and forecasts available.
The allowance for credit losses represents management’s estimate of 41 Table of Contents lifetime expected losses based on all available information. The allowance for credit losses is based on management’s evaluation of relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.
The allowance for credit losses represents management’s estimate of 40 Table of Contents lifetime expected losses based on all available information. The allowance for credit losses is based on management’s evaluation of relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.
At December 31, 2024, Northwest Bancshares, Inc. and Northwest Bank exceeded all regulatory minimum capital requirements and were considered to be “well capitalized”. The following table summarizes Northwest Bancshares and Northwest Bank’s total shareholders’ equity, regulatory capital, total risk-based assets, and leverage and risk-based capital ratios at the dates indicated. Northwest Bancshares, Inc.
At December 31, 2025, Northwest Bancshares, Inc. and Northwest Bank exceeded all regulatory minimum capital requirements and were considered to be “well capitalized”. The following table summarizes Northwest Bancshares and Northwest Bank’s total shareholders’ equity, regulatory capital, total risk-based assets, and leverage and risk-based capital ratios at the dates indicated. Northwest Bancshares, Inc.
The following table sets forth the scheduled maturities, carrying values, amortized cost, market values and weighted average yields for our marketable securities and mortgage-backed securities portfolios at December 31, 2024. The annualized weighted average yields are calculated by taking the interest of the marketable securities divided by the amortized cost.
The following table sets forth the scheduled maturities, carrying values, amortized cost, market values and weighted average yields for our marketable securities and mortgage-backed securities portfolios at December 31, 2025. The annualized weighted average yields are calculated by taking the interest of the marketable securities divided by the amortized cost.
The following table sets forth the maturity of our loan portfolio at December 31, 2024. Demand loans and loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less.
The following table sets forth the maturity of our loan portfolio at December 31, 2025. Demand loans and loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less.
Similarly, the amount of principal repayments on loans and the amount of new loan originations is heavily influenced by the general level of market interest rates, consumer confidence and consumer spending. Funds received from loan maturities and principal payments on loans for the years ended December 31, 2024, 2023 and 2022 were $3.2 billion, $3.4 billion, and $4.0 billion, respectively.
Similarly, the amount of principal repayments on loans and the amount of new loan originations is heavily influenced by the general level of market interest rates, consumer confidence and consumer spending. Funds received from loan maturities and principal payments on loans for the years ended December 31, 2025, 2024 and 2023 were $4.4 billion, $3.2 billion, and $3.4 billion, respectively.
(2) Represents net income divided by average equity. (3) Represents average yield on interest-earning assets less average cost of interest-bearing liabilities (shown on a fully taxable equivalent (“FTE”) basis). (4) Represents net interest income as a percentage of average interest-earning assets (shown on a FTE basis). (5) 2022 includes $5.6 million in merger, asset disposition and restructuring expense.
(2) Represents net income divided by average equity. (3) Represents average yield on interest-earning assets less average cost of interest-bearing liabilities (shown on a fully taxable equivalent (“FTE”) basis). (4) Represents net interest income as a percentage of average interest-earning assets (shown on a FTE basis). (5) 2023 includes $6.7 million in merger, asset disposition and restructuring expense.
(2) Represents weighted average nominal rate at year end. The following table sets forth the dollar amount of deposits in each state by branch location as of December 31, 2024.
(2) Represents weighted average nominal rate at year end. The following table sets forth the dollar amount of deposits in each state by branch location as of December 31, 2025.
The balance carried an average cost of 3.68%. 47 Table of Contents The following table sets forth the dollar amount of deposits in the various types of accounts we offered at the dates indicated.
The balance carried an average cost of 3.00%. 47 Table of Contents The following table sets forth the dollar amount of deposits in the various types of accounts we offered at the dates indicated.
Total charge-offs related to the loan sales and transfer to loans held-for-sale was a combined $15 million. 58 Table of Contents Analysis of the Allowance for Credit Losses . The following table sets forth the analysis of the allowance for credit losses for the periods indicated.
Total charge-offs related to the loan sales and transfer to loans held-for-sale was a combined $15 million for December 31, 2024. 58 Table of Contents Analysis of the Allowance for Credit Losses . The following table sets forth the analysis of the allowance for credit losses for the periods indicated.
Cash flows from the repayment of principal and the maturity or call of marketable securities for the years ended December 31, 2024, 2023 and 2022 were $147 million, $169 million, and $330 million, respectively. When necessary, we utilize borrowings as a source of liquidity and as a source of funds for long-term investment when market conditions permit.
Cash flows from the repayment of principal and the maturity or call of marketable securities for the years ended December 31, 2025, 2024 and 2023 were $213 million, $147 million, and $169 million, respectively. When necessary, we utilize borrowings as a source of liquidity and as a source of funds for long-term investment when market conditions permit.
If we placed 100% weighting on the downside scenario, the quantitative allowance for credit losses would have been approximately $31 million higher.
If we placed 100% weighting on the downside scenario, the quantitative allowance for credit losses would have been approximately $89 million higher.
Our collection procedures for personal loans generally provide that at 15 days delinquent, a notice of late charges is sent and personal contact efforts are attempted by telephone to strengthen the collection process and obtain reasons for the delinquency. Also, plans to establish a payment program are developed. Personal contact efforts are continued throughout the collection process, as necessary.
Collection procedures . Our collection procedures for personal loans generally provide that at 15 days delinquent, a notice of late charges is sent and personal contact efforts are attempted by telephone to strengthen the collection process and obtain reasons for the delinquency. Also, plans to establish a payment program are developed.
If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLB of Pittsburgh and the Federal Reserve Bank of Cleveland, which provide an additional source of funds. At December 31, 2024, Northwest Bank had an outstanding balance of $175 million with the FHLB of Pittsburgh.
If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLB of Pittsburgh and the Federal Reserve Bank of Cleveland, which provide an additional source of funds. At December 31, 2025, Northwest Bank had an outstanding balance of $438 million with the FHLB of Pittsburgh.
The decrease in the average balance of borrowings resulted in a decrease in interest expense on borrowings by $19 million from 2023. 51 Table of Contents Average Balance Sheets The following table sets forth average balance sheets, average yields, on a fully taxable equivalent basis, and average costs, and certain other information at and for the periods indicated.
The decrease in the average balance of borrowings resulted in a decrease in interest expense on borrowings by $3 million from 2024. 51 Table of Contents Average Balance Sheets The following table sets forth average balance sheets, average yields, on a fully taxable equivalent basis, and average costs, and certain other information at and for the periods indicated.
Time deposits scheduled to mature in less than one year at December 31, 2024, totaled $2.5 billion. We believe that a significant portion of such deposits will remain with us. Deposits are our primary source of externally generated funds.
Time deposits scheduled to mature in less than one year at December 31, 2025, totaled $2.8 billion. We believe that a significant portion of such deposits will remain with us. Deposits are our primary source of externally generated funds.
The following table presents the expected future payments of the contractual obligations aggregated by obligation type at December 31, 2024.
The following table presents the expected future payments of the contractual obligations aggregated by obligation type at December 31, 2025.
We also sell a portion of the loans we originate as part of our mortgage banking operations, and the cash flows from such sales for the years ended December 31, 2024, 2023 and 2022 were $207 million, $204 million, and $384 million, respectively.
We also sell a portion of the loans we originate as part of our mortgage banking operations, and the cash flows from such sales for the years ended December 31, 2025, 2024 and 2023 were $193 million, $207 million, and $204 million, respectively.
(2) See Note 11 to the Consolidated Financial Statements, Borrowed Funds, for additional information. (3) See Note 3 to the Consolidated Financial Statements, Leases, for additional information. 62 Table of Contents Impact of Inflation and Changing Prices.
(2) See Note 12 to the Consolidated Financial Statements, Borrowed Funds, for additional information. (3) See Note 4 to the Consolidated Financial Statements, Leases, for additional information. 62 Table of Contents Impact of Inflation and Changing Prices.
At December 31, 2024, stockholders’ equity totaled $1.6 billion. During 2024, our Board of Directors declared regular quarterly cash dividends totaling $0.80 per share of common stock. 61 Table of Contents Regulatory Capital Requirements.
At December 31, 2025, stockholders’ equity totaled $1.9 billion. During 2025, our Board of Directors declared regular quarterly cash dividends totaling $0.80 per share of common stock. 61 Table of Contents Regulatory Capital Requirements.
The FDIC allows us to consider any unencumbered, available-for-sale marketable security, whose sale would not impair our capital adequacy, to be eligible for liquidity. Liquidity is monitored through the use of a standard liquidity ratio of liquid assets to borrowings plus deposits. Using this formula, Northwest Bank’s liquidity ratio was 11.73% as of December 31, 2024.
The FDIC allows us to consider any unencumbered, available-for-sale marketable security, whose sale would not impair our capital adequacy, to be eligible for liquidity. Liquidity is monitored through the use of a standard liquidity ratio of liquid assets to borrowings plus deposits. Using this formula, Northwest Bank’s liquidity ratio was 18.44% as of December 31, 2025.
We borrow from these sources to reduce interest rate risk and to provide liquidity when necessary. 60 Table of Contents At December 31, 2024, our customers had $1.3 billion of unused lines of credit available and $190 million in loan commitments. This amount does not include the unfunded portion of loans in process.
We borrow from these sources to reduce interest rate risk and to provide liquidity when necessary. 60 Table of Contents At December 31, 2025, our customers had $1.8 billion of unused lines of credit available and $358 million in loan commitments. This amount does not include the unfunded portion of loans in process.
At December 31, 2024, Northwest Bancshares, Inc. (on an unconsolidated basis) had liquid assets of $239 mil lion. Other activity with respect to cash flow was the payment of cash dividends on common stock in the amount of $102 million, $102 million, and $101 million for years the ended December 31, 2024, 2023 and 2022, respectively.
At December 31, 2025, Northwest Bancshares, Inc. (on an unconsolidated basis) had liquid assets of $158 mil lion. Other activity with respect to cash flow was the payment of cash dividends on common stock in the amount of $110 million, $102 million, and $102 million for years the ended December 31, 2025, 2024 and 2023, respectively.
If the value of the property is less than the principal balance, less any related specific credit loss reserve allocations, the difference is charged against the allowance for credit losses. Any subsequent write-down of real estate owned or loss at the time of disposition is charged against income. Nonaccrual, Past Due, Restructured Loans and Nonperforming Assets .
If the value of the property is less than the principal balance, less any prior charge offs, the difference is charged against the allowance for credit losses. Any subsequent write-down of real estate owned or loss at the time of disposition is charged against income. Nonaccrual, Past Due, Restructured Loans and Nonperforming Assets .
For example, $100 of tax-exempt income would be presented as $126, an amount that, if taxed at the statutory federal income tax rate of 21%, would yield $100. See the “Average Balance Sheet” for information regarding tax-equivalent adjustments and GAAP results. Net interest income for 2024 was $436 million, which remained flat compared to 2023.
For example, $100 of tax-exempt income would be presented as $126, an amount that, if taxed at the statutory federal income tax rate of 21%, would yield $100. See the “Average Balance Sheet” for information regarding tax-equivalent adjustments and GAAP results. Net interest income for 2025 was $525 million, which increased $90 million compared to 2024.
The following table sets forth the aggregate amount of our classified assets at the dates indicated. At December 31, 2024 2023 (In thousands) Substandard assets $ 322,025 218,571 Doubtful assets — — Loss assets — — Total classified assets $ 322,025 218,571 Allowance for Credit Losses .
The following table sets forth the aggregate amount of our classified assets at the dates indicated. At December 31, 2025 2024 (In thousands) Substandard assets $ 453,432 322,025 Doubtful assets — — Loss assets — — Total classified assets $ 453,432 322,025 Allowance for Credit Losses .
The net cash flow from the receipt and repayment of borrowings was a net decrease of $199 million, a net decrease of $282 million, and a net increase of $532 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The net cash flow from the receipt and repayment of borrowings was a net decrease of $148 million, $199 million, and $282 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The following sensitivity analyses do not represent management ’ s expectations of the deterioration of our portfolios or the economic environment, but are provided as hypothetical scenarios to assess the sensitivity of the allowance for credit losses to changes in key inputs.
The following sensitivity analyses does not represent management ’ s expectations of the deterioration of our portfolios or the economic environment, but is provided as a hypothetical scenario to assess the sensitivity of the allowance for credit losses to changes in key inputs.
Our net income was $100 million, or $0.79 per diluted share, for the year ended December 31, 2024 compared to $135 million, or $1.06 per diluted share, for the year ended December 31, 2023, and $134 million, or $1.05 per diluted share, for the year ended December 31, 2022.
Our net income was $126 million, or $0.92 per diluted share, for the year ended December 31, 2025 compared to $100 million, or $0.79 per diluted share, for the year ended December 31, 2024, and $135 million, or $1.06 per diluted share, for the year ended December 31, 2023.
The provision for credit losses was $25 million for the year ended December 31, 2024 compared to $23 million for the year ended December 31, 2023, and $28 million for the year ended December 31, 2022. 39 Table of Contents Selected Financial and Other Data The summary financial information presented below is derived in part from the Company’s Consolidated Financial Statements.
The provision for credit losses was $56 million for the year ended December 31, 2025 compared to $25 million for the year ended December 31, 2024, and $23 million for the year ended December 31, 2023. Selected Financial and Other Data The summary financial information presented below is derived in part from the Company’s Consolidated Financial Statements.
Loan originations for the years ended December 31, 2024, 2023 and 2022 were $3.3 billion, $4.2 billion, and $4.9 billion, respectively.
Loan originations for the years ended December 31, 2025, 2024 and 2023 were $4.6 billion, $3.3 billion, and $4.2 billion, respectively.
See th e “Consolidated Statements of Income” in Ite m 1. Financial Statements of this report. Noninterest expense increased $17 million, or 5%, from the year ended December 31, 2023.
See th e “Consolidated Statements of Income” in Ite m 1. Financial Statements of this report. Noninterest expense increased $68 million, or 18%, from the year ended December 31, 2024.
Financial institutions, such as Northwest Bank, are also subject to deposit outflows. Our net deposits increased by $165 million for the year ended December 31, 2024, increased by $515 million for the year ended December 31, 2023, and decreased by $837 million for the year ended December 31, 2022.
Financial institutions, such as Northwest Bank, are also subject to deposit outflows. Our net deposits increased by $1.8 billion for the year ended December 31, 2025, increased by $165 million for the year ended December 31, 2024, and increased by $515 million for the year ended December 31, 2023.
At December 31, 2024, we ha d 130 loans, with an aggregate principal balance of $110 million, designated as “special mention”. We regularly review our asset portfolio to determine whether any assets require classification in accordance with applicable regulations. Our largest classified assets generally are also our largest nonperforming assets.
At December 31, 2025, we h ad 297 loans, with an aggregate principal balance of $193 million, designated as “special mention”. We regularly review our asset portfolio to determine whether any assets require classification in accordance with applicable regulations. Our largest classified assets generally are also our largest nonperforming assets.
(5) Interest income on tax-free investment securities is presented on a FTE basis including adjustments, as indicated. (6) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale. (7) Average balances include FHLB borrowings and collateralized borrowings.
(5) Interest income on tax-free investment securities is presented on a FTE basis including adjustments, as indicated. (6) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale. (7) Average balances include FHLB borrowings and collateralized borrowings. (8) Average cost of deposits was 1.55%, 1.71% and 0.91%, respectively.
(6) 2023 includes $6.7 million in merger, asset disposition and restructuring expense. (7) 2024 includes $5.8 million in merger, asset disposition and restructuring expense and a $39.4 loss on sale of investments. (8) Excludes goodwill and other intangible assets (non-GAAP).
(6) 2024 includes $5.8 million in merger, asset disposition and restructuring expense and a $39.4 loss on sale of investments. (7) 2025 includes $42.8 million in merger, asset disposition and restructuring expense and $20.7 million of CECL day 1 provision expense. (8) Excludes goodwill and other intangible assets (non-GAAP).
Net income for the year ended December 31, 2024 represents a return on average equity and average assets of 6.41% and 0.70%, respectively, compared to 8.94% and 0.95% for the year ended December 31, 2023. A discussion of significant changes follows.
Net income for the year ended December 31, 2025 represents a return on average equity and average assets of 7.27% and 0.82%, respectively, compared to 6.41% and 0.70% for the year ended December 31, 2024. A discussion of significant changes follows.
Generally, if a loan becomes 30 days past due, a collection letter is sent and the loan becomes subject to possible legal action if suitable arrangements for payment have not been made.
Personal contact efforts are continued throughout the collection process, as necessary. Generally, if a loan becomes 30 days past due, a collection letter is sent and the loan becomes subject to possible legal action if suitable arrangements for payment have not been made.
At December 31, 2024, Northwest Bank had $3.2 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250 million overnight line of credit, which had no balance at December 31, 2024, as well as $555 million of borrowing capacity available with the Federal Reserve Bank and $105 million with two correspondent banks.
At December 31, 2025, Northwest Bank had $3.4 billion of additional borrowing capacity available with the FHLB of Pittsburgh, including a $250 million overnight line of credit, which had no balance at December 31, 2025, as well as $1.5 billion of borrowing capacity available with the Federal Reserve Bank and $369 million with four correspondent banks.
In addition, we considered the overall trends in asset quality, reserves on individually assessed loans, historical loss rates and collateral valuations. The ACL decreased by $8 million, or 7%, to $117 million, or 1.04% of gross loans at December 31, 2024 from $125 million, or 1.10% of total loans, at December 31, 2023.
In addition, we considered the overall trends in asset quality, reserves on individually assessed loans, historical loss rates and collateral valuations. The ACL increased by $33 million, or 29%, to $150 million, or 1.15% of gross loans at December 31, 2025 from $117 million, or 1.04% of total loans, at December 31, 2024.
Government and agencies 124,462 109,998 124,458 107,658 Total marketable securities held-to-maturity $ 750,586 637,948 814,839 699,506 43 Table of Contents The following table sets forth information regarding the issuers and the carrying value of our mortgage-backed securities at the dates indicated.
Government and agencies 124,465 116,151 124,462 109,998 Total marketable securities held-to-maturity $ 683,369 605,929 750,586 637,948 43 Table of Contents The following table sets forth information regarding the issuers and the carrying value of our mortgage-backed securities at the dates indicated.
Asset Quality We actively manage asset quality through our underwriting practices and collection procedures. Our underwriting practices are focused on balancing risk and return while our collection operations focus on diligently working with delinquent borrowers in an effort to minimize losses. Collection procedures .
Our effective tax rate for the year ended December 31, 2025 and December 31, 2024 was 22.6%. Asset Quality We actively manage asset quality through our underwriting practices and collection procedures. Our underwriting practices are focused on balancing risk and return while our collection operations focus on diligently working with delinquent borrowers in an effort to minimize losses.
These changes were partially offset by $102 million of cash dividend payments during the year ended December 31, 2024. 49 Table of Contents Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023 Net Income Net income for the year ended December 31, 2024 was $100 million, or $0.79 per diluted share, a decrease of $35 million, or 25.7%, from $135 million, or $1.06 per diluted share, for the year ended December 31, 2023.
These changes were partially offset by $110 million of cash dividend payments during the year ended December 31, 2025. 49 Table of Contents Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024 Net Income Net income for the year ended December 31, 2025 was $126 million, or $0.92 per diluted share, an increase of $26 million, or 26%, from $100 million, or $0.79 per diluted share, for the year ended December 31, 2024.
This increase was the result of net income of $100 million for the year ended December 31, 2024, as well as a decrease in accumulated other comprehensive loss of $39 million due primarily to a decrease in unrealized loss in the available-for-sale investment portfolio.
This increase was the result stock issued as part of our Penns Woods merger of 230 million, net income of $126 million for the year ended December 31, 2025, as well as a decrease in accumulated other comprehensive loss of $40 million due primarily to a decrease in unrealized loss in the available-for-sale investment portfolio.
As of December 31, 2024 2023 2022 Tangible common equity to assets Total shareholders’ equity $ 1,596,856 1,551,317 1,491,486 Less: goodwill and intangible assets (383,834) (386,287) (389,557) Tangible common equity $ 1,213,022 1,165,030 1,101,929 Total assets $ 14,408,224 14,419,105 14,113,324 Less: goodwill and intangible assets (383,834) (386,287) (389,557) Tangible assets $ 14,024,390 14,032,818 13,723,767 Tangible common equity to tangible assets 8.65 % 8.30 % 8.03 % Critical Accounting Estimates Our significant accounting policies are described in Note 1 of the notes to the Consolidated Financial Statements .
As of December 31, 2025 2024 2023 Tangible common equity to assets Total shareholders’ equity $ 1,890,424 $ 1,596,856 1,551,317 Less: goodwill and intangible assets (483,997) (383,834) (386,287) Tangible common equity $ 1,406,427 $ 1,213,022 1,165,030 Total assets $ 16,766,617 $ 14,408,224 14,419,105 Less: goodwill and intangible assets (483,997) (383,834) (386,287) Tangible assets $ 16,282,620 $ 14,024,390 14,032,818 Tangible common equity to tangible assets 8.64 % 8.65 % 8.30 % Critical Accounting Estimates Our significant accounting policies are described in Note 1 of the notes to the Consolidated Financial Statements .
One year or less More than one year to five years More than five years to ten years More than ten years Total Amortized cost Annualized weighted average yield Amortized cost Annualized weighted average yield Amortized cost Annualized weighted average yield Amortized cost Annualized weighted average yield Amortized cost Fair value Annualized weighted average yield (Dollars in thousands) Marketable securities available-for-sale: Government sponsored entities $ — — % $ 122 6.10 % $ — — % $ — — % $ 122 118 6.10 % U.S.
One year or less More than one year to five years More than five years to ten years More than ten years Total Amortized cost Annualized weighted average yield Amortized cost Annualized weighted average yield Amortized cost Annualized weighted average yield Amortized cost Annualized weighted average yield Amortized cost Fair value Annualized weighted average yield (Dollars in thousands) Marketable securities available-for-sale: Government sponsored entities $ — — % $ 1,040 4.17 % $ 996 5.19 % $ — — % $ 2,036 2,047 4.67 % U.S.
At December 31, 2024 2023 Amount % of total loans (1) Amount % of total loans (1) (Dollars in thousands) Balance at end of year applicable to: Residential mortgage loans $ 14,347 28.4 % $ 18,193 30.0 % Home equity loans 4,845 10.3 % 5,403 10.8 % Vehicle loans 22,389 16.7 % 26,911 17.6 % Consumer loans 1,883 1.1 % 1,199 1.0 % Commercial real estate loans 44,328 22.3 % 51,267 23.1 % Commercial real estate loans - owner occupied 3,882 3.2 % 3,775 3.0 % Commercial loans 25,145 18.0 % 18,495 14.5 % Total $ 116,819 100.0 % $ 125,243 100.0 % (1) Represents percentage of loans in each category to total loans.
At December 31, 2025 2024 Amount % of total loans (1) Amount % of total loans (1) (Dollars in thousands) Balance at end of year applicable to: Residential mortgage loans $ 10,546 23.8 % $ 14,347 28.4 % Home equity loans 6,149 11.6 % 4,845 10.3 % Vehicle loans 25,945 18.7 % 22,389 16.7 % Consumer loans 4,817 1.1 % 1,883 1.1 % Commercial real estate loans 58,234 22.4 % 44,328 22.3 % Commercial real estate loans - owner occupied 4,679 2.9 % 3,882 3.2 % Commercial loans 39,842 19.5 % 25,145 18.0 % Total $ 150,212 100.0 % $ 116,819 100.0 % (1) Represents percentage of loans in each category to total loans.
Gross loans receivable decreased by $226 million, or 2%, to $11.2 billion at December 31, 2024, from $11.4 billion at December 31, 2023. Our personal banking loan portfolio decreased by $451 million, or 7%, to $6.3 billion at December 31, 2024 from $6.8 billion at December 31, 2023.
Gross loans receivable increased by $1.8 billion, or 16%, to $13.0 billion at December 31, 2025, from $11.2 billion at December 31, 2024. Our personal banking loan portfolio increased by $849 million, or 13%, to $7.2 billion at December 31, 2025 from $6.3 billion at December 31, 2024.
Quarterly, management’s Credit Committee reviews the concentration of credit by industry and customer, lending products and activity, competition and collateral values, as well as economic conditions in general and in each of our market areas.
This increase was the result of the increase in total loans of $1.8 billion, coupled with the increase in non-performing assets and substandard loans. Quarterly, management’s Credit Committee reviews the concentration of credit by industry and customer, lending products and activity, competition and collateral values, as well as economic conditions in general and in each of our market areas.
See the “Consolidated Statements of Income” in Item 1. Financial Statements of this report. Noninterest income decreased by $27 million, or 24% which was driven by a loss on sale of investments of $39 million; excluding the loss on sale of securities non interest income grew by $13 million, or 11%.
See the “Consolidated Statements of Income” in Item 1. Financial Statements of this report. Noninterest income increased by $42 million, or 49% which was driven by a loss on sale of investments in 2024 of $39 million.
(8) Average cost of deposits was 1.71%, 0.91% and 0.12%, respectively and average cost of interest-bearing deposits were 2.18%, 1.20%, and 0.16%, respectively. (9) Net interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (10) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(9) Net interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (10) Net interest margin represents net interest income as a percentage of average interest-earning assets.
For the years ended December 31, 2024 2023 2022 Average balance Interest Average yield/cost (11) Average balance Interest Average yield/cost (11) Average balance Interest Average yield/cost (11) (Dollars in thousands) Interest-earning assets: Loans receivable (includes FTE adjustments of $2,928, $2,477, and $1,954, respectively) (1), (2), (3) $ 11,285,219 618,704 5.48 % $ 11,100,118 546,136 4.92 % $ 10,318,898 409,782 3.97 % Mortgage-backed securities (4) 1,739,141 39,793 2.29 % 1,822,375 32,886 1.80 % 1,968,528 30,804 1.56 % Investment securities (includes FTE adjustments of $576, $704, and $834, respectively) (4), (5) 287,118 5,825 2.03 % 357,436 6,312 1.77 % 381,518 6,671 1.75 % FHLB stock, at cost 24,948 1,891 7.58 % 39,467 2,868 7.27 % 17,065 730 4.27 % Interest-earning deposits 126,097 6,487 5.15 % 55,998 2,901 5.11 % 567,609 3,599 0.63 % Total interest-earning assets (includes FTE adjustments of $3,504, $3,181, and $2,788, respectively) 13,462,523 672,700 5.00 % 13,375,349 591,103 4.42 % 13,253,618 451,586 3.41 % Noninterest-earning assets (6) 922,648 894,415 924,080 Total assets $ 14,385,171 $ 14,269,809 $ 14,177,698 Interest-bearing liabilities: Savings deposits $ 2,142,852 24,222 1.13 % $ 2,148,127 8,822 0.41 % $ 2,336,217 2,343 0.10 % Interest-bearing demand deposits 2,574,810 27,394 1.06 % 2,556,281 11,606 0.45 % 2,810,889 1,517 0.05 % Money market deposit accounts 1,966,732 34,564 1.76 % 2,183,583 24,734 1.13 % 2,613,422 3,377 0.13 % Time deposits 2,758,157 119,312 4.33 % 1,913,372 60,181 3.15 % 1,161,432 6,883 0.59 % Borrowed funds (7) 308,540 13,882 4.50 % 691,636 32,903 4.76 % 212,026 4,531 2.14 % Subordinated debt 114,355 4,592 4.02 % 114,002 4,592 4.03 % 117,625 4,750 4.04 % Junior subordinated debentures 129,695 9,652 7.32 % 129,434 9,401 7.14 % 129,175 4,716 3.60 % Total interest-bearing liabilities 9,995,141 233,618 2.34 % 9,736,435 152,239 1.56 % 9,380,786 28,117 0.30 % Noninterest-bearing demand deposits (8) 2,582,540 2,785,279 3,070,892 Noninterest-bearing liabilities 244,036 237,810 207,316 Total liabilities 12,821,717 12,759,524 12,658,994 Shareholders’ equity 1,563,454 1,510,285 1,518,704 Total liabilities and shareholders’ equity $ 14,385,171 $ 14,269,809 $ 14,177,698 Net interest income 439,082 438,864 423,469 Net interest rate spread (9) 2.66 % 2.86 % 3.11 % Net interest-earning assets/net interest margin (10) $ 3,467,382 3.26 % $ 3,638,959 3.28 % $ 3,872,832 3.20 % Tax equivalent adjustment 3,504 3,181 2,788 Net interest income, GAAP basis 435,578 435,683 420,681 Ratio of average interest-earning assets to average interest-bearing liabilities 1.35X 1.37X 1.41X (1) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
For the years ended December 31, 2025 2024 2023 Average balance Interest Average yield/cost (11) Average balance Interest Average yield/cost (11) Average balance Interest Average yield/cost (11) (Dollars in thousands) Interest-earning assets: Loans receivable (includes FTE adjustments of $3,052, $2,928, and $2,477, respectively) (1), (2), (3) $ 12,000,638 684,374 5.70 % $ 11,285,219 618,704 5.48 % $ 11,100,118 546,136 4.92 % Mortgage-backed securities (4) 1,816,835 50,623 2.79 % 1,739,141 39,793 2.29 % 1,822,375 32,886 1.80 % Investment securities (includes FTE adjustments of $784, $576, and $704, respectively) (4), (5) 285,355 7,776 2.72 % 287,118 5,825 2.03 % 357,436 6,312 1.77 % FHLB stock, at cost 25,549 2,037 7.97 % 24,948 1,891 7.58 % 39,467 2,868 7.27 % Interest-earning deposits 199,582 8,694 4.30 % 126,097 6,487 5.15 % 55,998 2,901 5.11 % Total interest-earning assets (includes FTE adjustments of $3,836, $3,504, and $3,181, respectively) 14,327,959 753,504 5.26 % 13,462,523 672,700 5.00 % 13,375,349 591,103 4.42 % Noninterest-earning assets (6) 1,006,230 922,648 894,415 Total assets $ 15,334,189 $ 14,385,171 $ 14,269,809 Interest-bearing liabilities: Savings deposits $ 2,278,597 25,976 1.14 % $ 2,142,852 24,222 1.13 % $ 2,148,127 8,822 0.41 % Interest-bearing demand deposits 2,732,535 31,597 1.16 % 2,574,810 27,394 1.06 % 2,556,281 11,606 0.45 % Money market deposit accounts 2,281,300 43,248 1.90 % 1,966,732 34,564 1.76 % 2,183,583 24,734 1.13 % Time deposits 2,722,945 98,157 3.60 % 2,758,157 119,312 4.33 % 1,913,372 60,181 3.15 % Total interest-bearing deposits 10,015,377 198,978 1.99 % 9,442,551 205,492 2.18 % 8,801,363 105,343 1.20 % Borrowed funds (7) 284,212 11,044 3.89 % 308,540 13,882 4.50 % 691,636 32,903 4.76 % Subordinated debt 114,696 5,916 5.13 % 114,355 4,592 4.02 % 114,002 4,592 4.03 % Junior subordinated debentures 129,954 8,328 6.32 % 129,695 9,652 7.32 % 129,434 9,401 7.14 % Total interest-bearing liabilities 10,544,239 224,266 2.13 % 9,995,141 233,618 2.34 % 9,736,435 152,239 1.56 % Noninterest-bearing demand deposits (8) 2,818,078 2,582,540 2,785,279 Noninterest-bearing liabilities 237,963 244,036 237,810 Total liabilities 13,600,280 12,821,717 12,759,524 Shareholders’ equity 1,733,909 1,563,454 1,510,285 Total liabilities and shareholders’ equity $ 15,334,189 $ 14,385,171 $ 14,269,809 Net interest income 529,238 439,082 438,864 Net interest rate spread (9) 3.13 % 2.66 % 2.86 % Net interest-earning assets/net interest margin (10) $ 3,783,720 3.69 % $ 3,467,382 3.26 % $ 3,638,959 3.28 % Tax equivalent adjustment 3,836 3,504 3,181 Net interest income, GAAP basis 525,402 435,578 435,683 Ratio of average interest-earning assets to average interest-bearing liabilities 1.36X 1.35X 1.37X (1) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.
Total shareholders’ equity at December 31, 2024 was $1.60 billion, or $12.52 per share, an increase of $46 million, or 2.9%, from $1.55 billion, or $12.20 per share, at December 31, 2023.
Total shareholders’ equity at December 31, 2025 was $1.89 billion, or $12.94 per share, an increase of $294 million, or 18.4%, from $1.60 billion, or $12.52 per share, at December 31, 2024.
Government, agency and GSEs 45,411 35,509 115,755 98,911 Municipal securities 68,807 58,627 85,766 75,469 Corporate debt issues 25,429 26,101 8,466 7,688 Total marketable securities available-for-sale $ 1,278,665 1,108,944 1,240,003 1,043,359 The following table sets forth certain information regarding the amortized cost and fair value of our held-to-maturity marketable securities portfolio and mortgage-backed securities portfolio at the dates indicated.
Government, agency and GSEs 45,340 37,959 45,411 35,509 Municipal securities 90,139 83,268 68,807 58,627 Corporate debt issues 55,652 57,034 25,429 26,101 Total marketable securities available-for-sale $ 1,710,978 1,586,382 1,278,665 1,108,944 The following table sets forth certain information regarding the amortized cost and fair value of our held-to-maturity marketable securities portfolio and mortgage-backed securities portfolio at the dates indicated.
At December 31, 2024 2023 (Dollars in thousands) Loans 90 days or more past due: Residential mortgage loans $ 4,931 7,995 Home equity loans 2,250 3,126 Vehicle loans 3,191 3,051 Consumer loans 776 927 Commercial real estate loans 7,702 6,535 Commercial real estate loans - owner occupied — 177 Commercial loans 7,335 2,780 Total loans 90 days or more past due $ 26,185 24,591 Total real estate owned (REO) $ 35 104 Total loans 90 days or more past due and REO 26,220 24,695 Total loans 90 days or more past due to net loans receivable 0.24 % 0.22 % Total loans 90 days or more past due and REO to total assets 0.18 % 0.17 % Nonperforming assets: Nonaccrual loans - loans 90 days or more past due $ 25,529 21,894 Nonaccrual loans - loans less than 90 days past due 35,872 72,490 Loans 90 days or more past due still accruing 656 2,698 Total nonperforming loans 62,057 97,082 Other nonperforming assets (1) 16,102 — Total nonperforming assets $ 78,194 97,186 (1) Other nonperforming assets includes nonaccrual loans held for sale. 56 Table of Contents Classification of Assets .
At December 31, 2025 2024 (Dollars in thousands) Loans 90 days or more past due: Residential mortgage loans $ 10,001 4,931 Home equity loans 2,492 2,250 Vehicle loans 4,098 3,191 Consumer loans 795 776 Commercial real estate loans 31,723 7,702 Commercial real estate loans - owner occupied 1,022 — Commercial loans 16,269 7,335 Total loans 90 days or more past due $ 66,400 26,185 Total real estate owned (REO) $ 76 35 Total loans 90 days or more past due and REO 66,476 26,220 Total loans 90 days or more past due to net loans receivable 0.52 % 0.24 % Total loans 90 days or more past due and REO to total assets 0.40 % 0.18 % Nonperforming assets: Nonaccrual loans - loans 90 days or more past due $ 65,753 25,529 Nonaccrual loans - loans less than 90 days past due 41,530 35,872 Loans 90 days or more past due still accruing 646 656 Total nonperforming loans 107,929 62,057 Other nonperforming assets (1) — 16,102 Total nonperforming assets $ 108,005 78,194 (1) Other nonperforming assets includes nonaccrual loans held for sale. 56 Table of Contents Classification of Assets .
Maturity period Certificates of deposit (In thousands) Three months or less $ 141,194 Over three months through six months 123,113 Over six months through twelve months 104,198 Over twelve months 5,420 Total $ 373,925 At December 31, 2024 and 2023, we had total deposits in excess of $250,000 per depositor per account ownership category (the limit for FDIC insurance) of $1.9 billion and $1.8 billion, respectively.
Maturity period Certificates of deposit (In thousands) Three months or less $ 218,916 Over three months through six months 264,455 Over six months through twelve months 106,896 Over twelve months 6,672 Total $ 596,939 At December 31, 2025 and 2024, we had total deposits in excess of $250,000 per depositor per account ownership category (the limit for FDIC insurance) of $2.0 billion and $1.9 billion, respectively.
Northwest Bank At December 31, At December 31, 2024 2023 2024 2023 (Dollars in thousands) (Dollars in thousands) Total shareholders’equity (GAAP capital) $ 1,601,303 1,560,316 $ 1,595,639 1,516,850 Add: Accumulated other comprehensive loss 110,914 149,492 110,914 149,492 Add: Other deductions (11,617) (11,645) (11,617) (11,645) Less: non-qualifying intangible assets (357,799) (269,982) (353,706) (265,889) CET 1 capital 1,342,801 1,428,181 1,341,230 1,388,808 Additions to Tier 1 capital 125,845 125,585 — — Leverage or Tier 1 capital 1,468,646 1,553,766 1,341,230 1,388,808 Add: Tier 2 capital (1) 240,140 246,117 125,602 131,928 Total risk-based capital $ 1,708,786 1,799,883 $ 1,466,832 1,520,736 Average assets for leverage ratio $ 14,135,644 14,332,246 $ 14,123,417 14,322,564 Net risk-weighted assets including off-balance-sheet items $ 10,627,925 10,743,366 $ 10,618,368 10,734,057 CET 1 capital ratio 12.635 % 13.294 % 12.631 % 12.938 % Minimum requirement 4.500 % 4.500 % 4.500 % 4.500 % Leverage capital ratio 10.390 % 10.841 % 9.496 % 9.697 % Minimum requirement 4.000 % 4.000 % 4.000 % 4.000 % Total risk-based capital ratio 16.078 % 16.753 % 13.814 % 14.167 % Minimum requirement 8.000 % 8.000 % 8.000 % 8.000 % (1) Tier 2 capital consists of the allowance for credit losses, which is limited to 1.25% of total risk-weighted assets as detailed under the regulations of the FDIC, and 45% of pre-tax net unrealized gains on securities available-for-sale.
Northwest Bank At December 31, At December 31, 2025 2024 2025 2024 (Dollars in thousands) (Dollars in thousands) Total shareholders’equity (GAAP capital) $ 1,890,319 1,601,303 $ 1,962,095 1,595,639 Add: Accumulated other comprehensive loss 70,692 110,914 70,692 110,914 Add: Other deductions — (11,617) — (11,617) Less: non-qualifying intangible assets (456,691) (357,799) (452,570) (353,706) CET 1 capital 1,504,320 1,342,801 1,580,217 1,341,230 Additions to Tier 1 capital — 125,845 — — Leverage or Tier 1 capital 1,504,320 1,468,646 1,580,217 1,341,230 Add: Tier 2 capital (1) 373,175 240,140 155,076 125,602 Total risk-based capital $ 1,877,495 1,708,786 $ 1,735,293 1,466,832 Average assets for leverage ratio $ 16,190,890 14,135,644 $ 16,178,523 14,123,417 Net risk-weighted assets including off-balance-sheet items $ 12,402,262 10,627,925 $ 12,389,750 10,618,368 CET 1 capital ratio 12.129 % 12.635 % 12.754 % 12.631 % Minimum requirement 4.500 % 4.500 % 4.500 % 4.500 % Leverage capital ratio 9.291 % 10.390 % 9.767 % 9.496 % Minimum requirement 4.000 % 4.000 % 4.000 % 4.000 % Total risk-based capital ratio 15.138 % 16.078 % 14.006 % 13.814 % Minimum requirement 8.000 % 8.000 % 8.000 % 8.000 % (1) Tier 2 capital consists of the allowance for credit losses, which is limited to 1.25% of total risk-weighted assets as detailed under the regulations of the FDIC, and 45% of pre-tax net unrealized gains on securities available-for-sale.
At December 31, 2024 2023 (In thousands) Residential mortgage-backed securities: FNMA $ 443,354 568,160 GNMA 668,668 407,441 FHLMC 502,805 576,066 Other (including non-agency) 4 5 Total residential mortgage-backed securities $ 1,614,831 1,551,672 Marketable Securities Portfolio Maturities and Yields .
At December 31, 2025 2024 (In thousands) Residential mortgage-backed securities: FNMA $ 490,200 443,354 GNMA 858,333 668,668 FHLMC 618,489 502,805 Other (including non-agency) 3 4 Total residential mortgage-backed securities $ 1,967,025 1,614,831 Marketable Securities Portfolio Maturities and Yields .
As a percentage of average loans, net charge-offs increased to 0.32% for the year ended December 31, 2024 compared to 0.11% due to the loans noted above being written-down to fair value prior to the sale.
As a percentage of average loans, net charge-offs decreased to 0.25% for the year ended December 31, 2025 compared to 0.32% due to certain commercial real estate loans that were written down to fair value prior to be transferred to held-for-sale as of December 31, 2024.
Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $26.2 million, or 0.22% of total deposits, as of December 31, 2024. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $167.4 million, or 1.38% of total deposits, as of December 31, 2024.
Our large st uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $42.4 million, or 0.31% of total deposits, as of December 31, 2025.
The increase in net interest income (FTE) and decrease in net interest margin (FTE) was driven by an increase in interest income resulting from higher earning asset yields offset by an increase in interest-bearing deposit costs and a shift in funding mix to higher cost deposits due to the higher interest rate environment. 50 Table of Contents Average loans receivable increased $185 million, or 2%, from the year ended December 31, 2023.
The increase in net interest income (FTE) and net interest margin (FTE) was driven by an increase in interest income resulting from an increase in average earning assets from the Penns Woods acquisition coupled with higher earning asset yields which was offset by an increase in interest expense due to an increase in the average balance interest bearing liabilities from the Penns Woods acquisitions which was slightly offset by a lower costs of funding. 50 Table of Contents Average loans receivable increased $715 million, or 6%, from the year ended December 31, 2024.
At December 31, 2024 2023 Amount Percent Amount Percent (Dollars in thousands) Personal Banking: Residential mortgage loans $ 3,178,269 28.4 % $ 3,419,417 30.0 % Home equity loans 1,149,396 10.3 % 1,227,858 10.8 % Vehicle loans 1,870,843 16.7 % 2,008,601 17.6 % Consumer loans (1) 124,242 1.1 % 117,426 1.0 % Total Personal Banking 6,322,750 56.5 % 6,773,302 59.4 % Commercial Banking: Commercial real estate 2,495,726 22.3 % 2,628,457 23.1 % Commercial real estate - owner occupied 354,136 3.2 % 345,553 3.0 % Commercial loans 2,007,402 18.0 % 1,658,729 14.5 % Total Commercial Banking 4,857,264 43.5 % 4,632,739 40.6 % Total loans receivable, gross 11,180,014 100.0 % 11,406,041 100.0 % Total allowance for credit losses (116,819) (125,243) Total loans receivable, net $ 11,063,195 $ 11,280,798 (1) Consists primarily of secured and unsecured personal loans.
At December 31, 2025 2024 Amount Percent Amount Percent (Dollars in thousands) Personal Banking: Residential mortgage loans $ 3,100,780 23.8 % $ 3,178,269 28.4 % Home equity loans 1,507,532 11.6 % 1,149,396 10.3 % Vehicle loans 2,426,636 18.7 % 1,870,843 16.7 % Consumer loans (1) 137,254 1.1 % 124,242 1.1 % Total Personal Banking 7,172,202 55.2 % 6,322,750 56.5 % Commercial Banking: Commercial real estate 2,915,696 22.4 % 2,495,726 22.3 % Commercial real estate - owner occupied 381,206 2.9 % 354,136 3.2 % Commercial loans 2,538,212 19.5 % 2,007,402 18.0 % Total Commercial Banking 5,835,114 44.8 % 4,857,264 43.5 % Total loans receivable, gross 13,007,316 100.0 % 11,180,014 100.0 % Total allowance for credit losses (150,212) (116,819) Total loans receivable, net $ 12,857,104 $ 11,063,195 (1) Consists primarily of secured and unsecured personal loans.
Net interest income (FTE) was $439 million for 2024 and net interest margin (FTE) was 3.26%. Compared to the prior year, net interest income (FTE) increased $0.2 million and net interest margin (FTE) decreased by two basis points.
Net interest income (FTE) was $529 million for 2025 and net interest margin (FTE) was 3.69%. Compared to the prior year, net interest income (FTE) increased $90 million and net interest margin (FTE) increased by forty-three basis points.
Years ended December 31, 2024 vs. 2023 Years ended December 31, 2023 vs. 2022 Increase/(decrease) due to Total increase/(decrease) Increase/(decrease) due to Total increase/(decrease) Rate Volume Rate Volume (In thousands) Interest-earning assets: Loans receivable $ 62,421 10,147 72,568 97,916 38,438 136,354 Mortgage-backed securities 8,811 (1,904) 6,907 4,720 (2,638) 2,082 Investment securities 939 (1,426) (487) 67 (426) (359) FHLB stock, at cost 124 (1,101) (977) 510 1,628 2,138 Interest-earning deposits (27) 3,613 3,586 30,861 (31,559) (698) Total interest-earning assets 72,268 9,329 81,597 134,074 5,443 139,517 Interest-bearing liabilities: Savings deposits 15,459 (59) 15,400 7,251 (772) 6,479 Interest-bearing demand deposits 15,591 197 15,788 11,245 (1,156) 10,089 Money market deposit accounts 13,640 (3,810) 9,830 26,226 (4,869) 21,357 Time deposits 22,588 36,543 59,131 29,647 23,651 53,298 Borrowed funds (1,786) (17,235) (19,021) 5,555 22,817 28,372 Subordinated debt (14) 14 — (12) (146) (158) Junior subordinated debentures 232 19 251 4,667 18 4,685 Total interest-bearing liabilities 65,710 15,669 81,379 84,579 39,543 124,122 Net change in net interest income $ 6,558 (6,340) 218 49,495 (34,100) 15,395 Provision for Credit Losses 2020 2021 2022 2023 2024 Provision for credit losses - loans (in thousands) $ 83,975 (11,883) 17,860 18,664 27,679 Provision/(benefit) for credit losses - unfunded commitments (in thousands) 3,139 (3,905) 10,455 4,210 (3,174) Annualized net charge-offs to average loans 0.27 % 0.20 % 0.02 % 0.11 % 0.32 % The provision for credit losses increased by $2 million, or 7.1%, compared to the year ended December 31, 2023.
Years ended December 31, 2025 vs. 2024 Years ended December 31, 2024 vs. 2023 Increase/(decrease) due to Total increase/(decrease) Increase/(decrease) due to Total increase/(decrease) Rate Volume Rate Volume (In thousands) Interest-earning assets: Loans receivable $ 24,870 40,800 65,670 62,421 10,147 72,568 Mortgage-backed securities 8,665 2,165 10,830 8,811 (1,904) 6,907 Investment securities 1,999 (48) 1,951 939 (1,426) (487) FHLB stock, at cost 99 47 146 124 (1,101) (977) Interest-earning deposits (952) 3,158 2,206 (27) 3,613 3,586 Total interest-earning assets 34,681 46,122 80,803 72,268 9,329 81,597 Interest-bearing liabilities: Savings deposits 207 1,547 1,754 15,459 (59) 15,400 Interest-bearing demand deposits 2,378 1,825 4,203 15,591 197 15,788 Money market deposit accounts 2,721 5,963 8,684 13,640 (3,810) 9,830 Time deposits (19,886) (1,269) (21,155) 22,588 36,543 59,131 Borrowed funds (1,893) (945) (2,838) (1,786) (17,235) (19,021) Subordinated debt 1,307 17 1,324 (14) 14 — Junior subordinated debentures (1,340) 16 (1,324) 232 19 251 Total interest-bearing liabilities (16,506) 7,154 (9,352) 65,710 15,669 81,379 Net change in net interest income $ 51,187 38,968 90,155 6,558 (6,340) 218 Provision for Credit Losses 2021 2022 2023 2024 2025 Provision for credit losses - loans (in thousands) (11,883) 17,860 18,664 27,679 56,849 Provision/(benefit) for credit losses - unfunded commitments (in thousands) (3,905) 10,455 4,210 (3,174) (1,265) Annualized net charge-offs to average loans 0.20 % 0.02 % 0.11 % 0.32 % 0.25 % The provision for credit losses increased by $31 million, or 127%, compared to the year ended December 31, 2024.
At December 31, 2024 2023 Balance Percent (1) Rate (2) Balance Percent (1) Rate (2) (Dollars in thousands) Savings deposits $ 2,171,251 17.9 % 1.12 % $ 2,105,234 17.6 % 0.42 % Demand deposits 5,287,919 43.5 % 0.52 % 5,303,569 44.3 % 0.22 % Money market deposit accounts 2,007,739 16.5 % 1.72 % 1,968,218 16.4 % 1.26 % Time deposits: Maturing within 1 year 2,547,129 21.0 % 4.08 % 2,464,022 20.6 % 4.44 % Maturing 1 to 3 years 109,727 0.9 % 1.96 % 98,229 0.8 % 0.86 % Maturing more than 3 years 20,789 0.2 % 0.46 % 40,630 0.3 % 0.24 % Total certificates 2,677,645 22.1 % 4.46 % 2,602,881 21.7 % 2.31 % Total deposits $ 12,144,554 100.0 % 1.69 % $ 11,979,902 100.0 % 0.88 % (1) Represents percentage of total deposits.
At December 31, 2025 2024 Balance Percent (1) Rate (2) Balance Percent (1) Rate (2) (Dollars in thousands) Savings deposits $ 2,366,513 17.0 % 1.10 % $ 2,171,251 17.9 % 1.12 % Demand deposits 6,118,988 43.9 % 0.52 % 5,287,919 43.5 % 0.52 % Money market deposit accounts 2,540,818 18.2 % 1.70 % 2,007,739 16.5 % 1.72 % Time deposits: Maturing within 1 year 2,826,421 20.3 % 3.41 % 2,547,129 21.0 % 4.08 % Maturing 1 to 3 years 73,906 0.5 % 1.15 % 109,727 0.9 % 1.96 % Maturing more than 3 years 16,371 0.1 % 0.40 % 20,789 0.2 % 0.46 % Total certificates 2,916,698 20.9 % 3.37 % 2,677,645 22.1 % 4.46 % Total deposits $ 13,943,017 100.0 % 1.43 % $ 12,144,554 100.0 % 1.69 % (1) Represents percentage of total deposits.
Years ended December 31, 2024 2023 (Dollars in thousands) Loans receivable $ 11,180,014 11,406,041 Average loans outstanding 11,285,219 11,100,118 Allowance for credit losses Balance at beginning of period 125,243 118,036 ASU 2022-02 Adoption — 426 Provision for credit losses 27,679 18,664 Charge-offs: Residential mortgage loans (845) (1,189) Home equity loans (1,736) (852) Vehicle loans (8,809) (6,468) Consumer loans (5,929) (5,983) Commercial real estate loans (15,321) (2,298) Commercial real estate loans - owner occupied — (68) Commercial loans (14,462) (4,166) Total charge-offs (47,102) (21,024) Recoveries: Residential mortgage loans 1,472 1,636 Home equity loans 1,127 709 Vehicle loans 1,778 2,021 Consumer loans 1,591 1,206 Commercial real estate loans 3,480 2,029 Commercial real estate loans - owner occupied 38 66 Commercial loans 1,513 1,474 Total recoveries 10,999 9,141 Balance at end of period $ 116,819 125,243 Allowance for credit losses as a percentage of loans receivable 1.04 % 1.10 % Net charge-offs as a percentage of average loans outstanding: Residential mortgage loans (0.02) % (0.01) % Home equity loans 0.05 % 0.01 % Vehicle loans 0.37 % 0.22 % Consumer loans 4.04 % 4.11 % Commercial real estate loans 0.39 % 0.01 % Commercial real estate loans - owner occupied — % — % Commercial loans 0.72 % 0.20 % Total Average Loans Receivable 0.32 % 0.11 % Allowance for credit losses as a percentage of nonperforming loans 188.24 % 129.01 % Allowance for credit losses as a percentage of nonperforming assets 149.40 % 128.87 % 59 Table of Contents Allocation of Allowance for Credit Losses .
Years ended December 31, 2025 2024 (Dollars in thousands) Loans receivable $ 13,007,316 11,180,014 Average loans outstanding 12,000,638 11,285,219 Allowance for credit losses Balance at beginning of period 116,819 125,243 Initial allowance on loans purchased with credit deterioration 6,029 — Provision for credit losses 56,849 27,679 Charge-offs: Residential mortgage loans (1,226) (845) Home equity loans (1,580) (1,736) Vehicle loans (8,828) (8,809) Consumer loans (6,441) (5,929) Commercial real estate loans (14,150) (15,321) Commercial real estate loans - owner occupied (336) — Commercial loans (7,095) (14,462) Total charge-offs (39,656) (47,102) Recoveries: Residential mortgage loans 724 1,472 Home equity loans 840 1,127 Vehicle loans 2,158 1,778 Consumer loans 1,638 1,591 Commercial real estate loans 3,414 3,480 Commercial real estate loans - owner occupied 84 38 Commercial loans 1,313 1,513 Total recoveries 10,171 10,999 Balance at end of period $ 150,212 116,819 Allowance for credit losses as a percentage of loans receivable 1.15 % 1.04 % Net charge-offs as a percentage of average loans outstanding: Residential mortgage loans 0.02 % (0.02) % Home equity loans 0.06 % 0.05 % Vehicle loans 0.32 % 0.37 % Consumer loans 3.70 % 4.04 % Commercial real estate loans 0.34 % 0.39 % Commercial real estate loans - owner occupied 0.01 % — % Commercial loans 0.26 % 0.72 % Total Average Loans Receivable 0.25 % 0.32 % Allowance for credit losses as a percentage of nonperforming loans 139.18 % 188.24 % Allowance for credit losses as a percentage of nonperforming assets 139.08 % 149.40 % 59 Table of Contents Allocation of Allowance for Credit Losses .
At December 31, 2024 2023 Amortized cost Fair value Amortized cost Fair value (In thousands) Residential mortgage-backed securities held-to-maturity: Fixed rate pass-through $ 132,816 112,635 147,874 127,040 Variable rate pass-through 364 365 449 450 Fixed rate agency CMOs 492,415 414,426 541,529 463,835 Variable rate agency CMOs 529 524 529 523 Total residential mortgage-backed securities held-to-maturity 626,124 527,950 690,381 591,848 Marketable securities held-to-maturity: U.S.
At December 31, 2025 2024 Amortized cost Fair value Amortized cost Fair value (In thousands) Residential mortgage-backed securities held-to-maturity: Fixed rate pass-through $ 118,614 106,253 132,816 112,635 Variable rate pass-through 310 313 364 365 Fixed rate agency CMOs 439,452 382,686 492,415 414,426 Variable rate agency CMOs 528 526 529 524 Total residential mortgage-backed securities held-to-maturity 558,904 489,778 626,124 527,950 Marketable securities held-to-maturity: U.S.
The following is only a summary and should be read in conjunction with the Consolidated Financial Statements and notes included elsewhere in this document. The information at December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 is derived in part from the audited Consolidated Financial Statements that appear in this document.
The following is only a summary and should be read in conjunction with the Consolidated Financial Statements and notes included elsewhere in this document.
The decrease in net income resulted, primarily from a decrease in noninterest income of $27 million, or 23.6%, resulting from a loss on investment sale as part of our securities portfolio restructure.
Additionally, contributing to the increase in net income was an increase in noninterest income of $42 million, or 49%, resulting from a loss on investment sale as part of our securities portfolio restructure in the prior year.
At December 31, 2024 2023 Amortized cost Fair value Amortized cost Fair value (In thousands) Residential mortgage-backed securities available-for-sale: Fixed rate pass-through $ 237,892 220,417 209,069 183,874 Variable rate pass-through 3,738 3,789 7,140 7,080 Fixed rate agency CMOs 852,648 719,833 789,842 646,787 Variable rate agency CMOs 44,740 44,668 23,965 23,550 Total residential mortgage-backed securities available-for-sale 1,139,018 988,707 1,030,016 861,291 Marketable securities available-for-sale: U.S.
At December 31, 2025 2024 Amortized cost Fair value Amortized cost Fair value (In thousands) Residential mortgage-backed securities available-for-sale: Fixed rate pass-through $ 407,377 400,700 237,892 220,417 Variable rate pass-through 3,015 3,079 3,738 3,789 Fixed rate agency CMOs 1,063,820 958,681 852,648 719,833 Variable rate agency CMOs 45,635 45,661 44,740 44,668 Total residential mortgage-backed securities available-for-sale 1,519,847 1,408,121 1,139,018 988,707 Marketable securities available-for-sale: U.S.
The following table provides details regarding the Company’s uninsured deposits portfolio: As of December 31, 2024 Balance Percent of total deposits Number of relationships Uninsured deposits per the Call Report (1) $ 3,131,231 25.8 % 5,233 Less intercompany deposit accounts 1,244,219 10.3 % 11 Less collateralized deposit accounts 413,479 3.4 % 224 Uninsured deposits excluding intercompany and collateralized accounts $ 1,473,533 12.1 % 4,998 (1) Uninsured deposits presented may be different from actual amounts due to titling of accounts.
The following table provides details regarding the Company’s uninsured deposits portfolio: As of December 31, 2025 Balance Percent of total deposits Number of relationships Uninsured deposits per the Call Report (1) $ 3,737,960 26.8 % 6,289 Less intercompany deposit accounts 1,339,304 9.6 % 12 Less collateralized deposit accounts 435,258 3.1 % 260 Uninsured deposits excluding intercompany and collateralized accounts $ 1,963,398 14.1 % 6,017 (1) Uninsured deposits presented may be different from actual amounts due to titling of accounts.
Noninterest Income Breakdown of noninterest income for the year ended December 31, Change from 2023 Change from 2023 2024 Amount Percent 2023 Amount Percent 2022 Noninterest income: Loss on sale of investments $ (39,413) (31,106) 374 % $ (8,307) (8,299) NA $ (8) Gain on sale of mortgage servicing rights — (8,305) (100) % 8,305 8,305 NA — Gain on sale of SBA loans 3,819 2,019 112 % 1,800 1,800 NA — Service charges and fees 62,957 3,743 6 % 59,214 4,026 7 % 55,188 Trust and other financial services income 30,102 2,818 10 % 27,284 (481) (2) % 27,765 Income from bank-owned life insurance 6,327 (2,261) (26) % 8,588 1,459 20 % 7,129 Other operating income (1) 23,218 6,279 37 % 16,939 (3,836) (18) % 20,775 Total noninterest (loss)/income $ 87,010 (26,813) (24) % $ 113,823 2,974 3 % $ 110,849 (1) Other noninterest income includes the net gain on real estate owned, mortgage banking income, and other operating income.
The provision that is recorded is sufficient, in our judgment, to bring this reserve to a level that reflects the current expected lifetime losses in our loan portfolio relative to loan mix, a reasonable and supportable economic forecast period and historical loss experience at December 31, 2025. 53 Table of Contents Noninterest Income Breakdown of noninterest income for the year ended December 31, Change from 2024 Change from 2023 2025 Amount Percent 2024 Amount Percent 2023 Noninterest income: Gain/(loss) on sale of investments $ 178 39,591 (100) % $ (39,413) (31,106) 374 % $ (8,307) Gain on sale of mortgage servicing rights — — NA — (8,305) (100) % 8,305 Gain on sale of SBA loans 2,835 (984) (26) % 3,819 2,019 112 % 1,800 Service charges and fees 65,072 2,115 3 % 62,957 3,743 6 % 59,214 Trust and other financial services income 32,314 2,212 7 % 30,102 2,818 10 % 27,284 Income from bank-owned life insurance 12,772 6,445 102 % 6,327 (2,261) (26) % 8,588 Other operating income (1) 16,097 (7,121) (31) % 23,218 6,279 37 % 16,939 Total noninterest (loss)/income $ 129,268 42,258 49 % $ 87,010 (26,813) (24) % $ 113,823 (1) Other noninterest income includes the net gain on real estate owned, mortgage banking income, and other operating income.
During the years ended December 31, 2024 2023 (Dollars in thousands) FHLB borrowings: Average balance outstanding $ 254,033 568,350 Maximum outstanding at end of any month during year 493,300 787,300 Balance outstanding at end of year 175,000 338,500 Weighted average interest rate during year 5.49 % 5.37 % Weighted average interest rate at end of year 4.64 % 5.70 % Collateralized borrowings: Average balance outstanding $ 26,061 63,694 Maximum outstanding at end of any month during year 35,278 101,059 Balance outstanding at end of year 22,323 35,495 Weighted average interest rate during year 1.71 % 1.09 % Weighted average interest rate at end of year 1.73 % 1.72 % Collateral received: Average balance outstanding $ 31,326 37,942 Maximum outstanding at end of any month during year 55,900 62,300 Balance outstanding at end of year 3,008 24,900 Weighted average interest rate during year 5.35 % 5.28 % Weighted average interest rate at end of year 4.65 % 5.26 % Subordinated borrowings: Average balance outstanding $ 114,378 114,029 Maximum outstanding at end of any month during year 114,538 114,189 Balance outstanding at end of year 114,538 114,189 Weighted average interest rate during year 4.00 % 4.00 % Weighted average interest rate at end of year 4.00 % 4.00 % Total borrowings: Average balance outstanding $ 425,798 784,015 Maximum outstanding at end of any month during year 681,027 1,009,462 Balance outstanding at end of year 314,869 513,084 Weighted average interest rate during year 4.85 % 4.82 % Weighted average interest rate at end of year 4.20 % 5.02 % Shareholders’ equity .
During the years ended December 31, 2025 2024 (Dollars in thousands) FHLB borrowings: Average balance outstanding $ 268,331 254,033 Maximum outstanding at end of any month during year 437,569 493,300 Balance outstanding at end of year 438,051 175,000 Weighted average interest rate during year 4.39 % 5.49 % Weighted average interest rate at end of year 4.02 % 4.64 % Collateralized borrowings: Average balance outstanding $ 19,307 26,061 Maximum outstanding at end of any month during year 22,988 35,278 Balance outstanding at end of year 8,232 22,323 Weighted average interest rate during year 1.65 % 1.71 % Weighted average interest rate at end of year 1.55 % 1.73 % Collateral received: Average balance outstanding $ 8,285 31,326 Maximum outstanding at end of any month during year 30,950 55,900 Balance outstanding at end of year — 3,008 Weighted average interest rate during year 4.37 % 5.35 % Weighted average interest rate at end of year — % 4.65 % Subordinated borrowings: Average balance outstanding $ 114,705 114,378 Maximum outstanding at end of any month during year 114,800 114,538 Balance outstanding at end of year 114,800 114,538 Weighted average interest rate during year 5.16 % 4.00 % Weighted average interest rate at end of year 7.60 % 4.00 % Total borrowings: Average balance outstanding $ 410,628 425,798 Maximum outstanding at end of any month during year 560,601 681,027 Balance outstanding at end of year 561,083 314,869 Weighted average interest rate during year 4.48 % 4.85 % Weighted average interest rate at end of year 4.69 % 4.20 % Shareholders’ equity .
Interest income on investment securities increased by $7 million, or 17%, from the year ended December 31, 2023 due to the increase in the average yield on investments (FTE) to 2.25% for 2024 which was partially offset by a decline in the average balance of investments for both periods.
Interest income on investment securities increased by $13 million, or 28%, from the year ended December 31, 2024 due to the increase in the average balance of investments and the increase in yield on investments (FTE) to 2.78% for 2025. Average deposits grew 7% from 2024 driven by an increase in average balances from the Penns Woods acquisition.
Partially offsetting these increases was a decrease in income from bank owned life insurance of $2 million, resulting from higher death benefits received in the prior year. 54 Table of Contents Noninterest Expense Breakdown of noninterest expense for the year ended December 31, Change from 2023 Change from 2023 2024 Amount Percent 2023 Amount Percent 2022 Noninterest expense: Compensation and employee benefits $ 214,455 18,764 10 % $ 195,691 7,332 4 % $ 188,359 Premises and occupancy 29,469 318 1 % 29,151 (467) (2) % 29,618 Processing expense 59,351 664 1 % 58,687 6,191 12 % 52,496 Professional services 14,883 (2,936) (16) % 17,819 3,116 21 % 14,703 Other operating expense (1) 50,379 173 — % 50,206 5,859 13 % 44,347 Total noninterest (loss)/income $ 368,537 16,983 5 % $ 351,554 22,031 7 % $ 329,523 (1) Other noninterest expense includes collections expense, marketing expense, FDIC insurance expense, amortization of intangible assets, real estate owned expense, merger, asset disposition and restructuring expense, and other expenses.
Offsetting these increases was a decrease in other operating income of $7 million, or 31% driven by a gain on sale of Visa B shares and a gain on a low income housing tax credit investment in the prior year. 54 Table of Contents Noninterest Expense Breakdown of noninterest expense for the year ended December 31, Change from 2024 Change from 2023 2025 Amount Percent 2024 Amount Percent 2023 Noninterest expense: Compensation and employee benefits $ 237,910 23,455 11 % $ 214,455 18,764 10 % $ 195,691 Premises and occupancy 31,399 1,930 7 % 29,469 318 1 % 29,151 Processing expense 58,489 (862) (1) % 59,351 664 1 % 58,687 Professional services 13,122 (1,761) (12) % 14,883 (2,936) (16) % 17,819 Merger, asset disposition and restructuring expense 42,787 37,024 642 % 5,763 (986) (15) % 6,749 Other operating expense (1) 52,589 7,973 18 % 44,616 1,159 3 % 43,457 Total noninterest (loss)/income $ 436,296 67,759 18 % $ 368,537 16,983 5 % $ 351,554 (1) Other noninterest expense includes collections expense, marketing expense, FDIC insurance expense, amortization of intangible assets, merger, asset disposition and restructuring expense, and other expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

13 edited+2 added−2 removed19 unchanged
Biggest changeAlso, interest rates on certain types of assets and liabilities may fluctuate in advance of or lag behind changes in market interest rates. Additionally, certain assets, such as some adjustable-rate loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset.
Biggest changeAdditionally, certain assets, such as some adjustable-rate loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset. Moreover, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in preparing the table.
Because it is difficult to 64 Table of Contents accurately project the market reaction of depositors and borrowers, the effect of actual changes in interest rates on these assumptions may differ from simulated results. We have established the following guidelines for assessing interest rate risk: Net Interest Income Simulation .
Because it is difficult to accurately project the market reaction of depositors and borrowers, the effect of actual changes in interest rates on these assumptions may differ from simulated results. We have established the following guidelines for assessing interest rate risk: 64 Table of Contents Net Interest Income Simulation .
These analyses were prepared assuming that total interest-earning asset and interest-bearing liability levels at December 31, 2023 remain constant. The impact of the rate movements was computed by simulating the effect of an immediate and sustained shift in interest rates over a twelve-month period from December 31, 2023 levels.
These analyses were prepared assuming that total interest-earning asset and interest-bearing liability levels at December 31, 2025 remain constant. The impact of the rate movements was computed by simulating the effect of an immediate and sustained shift in interest rates over a twelve-month period from December 31, 2025 levels.
At December 31, 2024, total interest-earning liabilities maturing or re-pricing within one year exceeded total interest-bearing assets maturing or re-pricing in the same period by $30 million , representing a one-year gap ratio of 0.21%. 63 Table of Contents The following table sets forth, on a carrying value basis, the amounts of interest-earning assets and interest-bearing liabilities outstanding at December 31, 2024, which are expected to re-price or mature, based upon certain assumptions, in each of the future time periods shown.
At December 31, 2025, total interest-earning liabilities maturing or re-pricing within one year exceeded total interest-bearing assets maturing or re-pricing in the same period by $71 million , representing a one-year gap ratio of 0.42%. 63 Table of Contents The following table sets forth, on a carrying value basis, the amounts of interest-earning assets and interest-bearing liabilities outstanding at December 31, 2025, which are expected to re-price or mature, based upon certain assumptions, in each of the future time periods shown.
Increase Decrease Parallel shift in interest rates over the next 12 months 100 bps 200 bps 300 bps 100 bps 200 bps 300 bps Projected percentage increase/(decrease) in net interest income (1.0) % (2.3) % (3.7) % (0.6) % (4.0) % (6.4) % Projected percentage increase/(decrease) in net income (2.4) % (5.5) % (8.8) % (1.5) % (9.7) % (15.4) % Projected increase/(decrease) in return on average equity (2.2) % (5.2) % (8.9) % (1.4) % (9.3) % (14.7) % Projected increase/(decrease) in earnings per share $ (0.03) $ (0.07) $ (0.11) $ (0.02) $ (0.12) $ (0.18) Projected percentage increase/(decrease) in market value of equity (5.1) % (10.5) % (16.0) % 3.4 % 3.9 % 5.7 % The following table illustrates the simulated impact of a parallel 100 bps, 200 bps or 300 bps upward or 100 bps downward movement in interest rates on net interest income, net income, return on average equity, earnings per share, and market value of equity.
Increase Decrease Parallel shift in interest rates over the next 12 months 100 bps 200 bps 300 bps 100 bps 200 bps 300 bps Projected percentage increase/(decrease) in net interest income (1.2) % (3.0) % (4.8) % (0.5) % (4.6) % (6.3) % Projected percentage increase/(decrease) in net income (2.8) % (6.7) % (10.9) % (1.1) % (10.5) % (14.5) % Projected increase/(decrease) in return on average equity (2.7) % (6.5) % (10.4) % (1.0) % (10.0) % (13.9) % Projected increase/(decrease) in earnings per share $ (0.03) $ (0.08) $ (0.14) $ (0.01) $ (0.13) $ (0.18) Projected percentage increase/(decrease) in market value of equity (4.2) % (9.2) % (14.2) % 2.3 % 1.3 % 0.7 % The following table illustrates the simulated impact of a parallel 100 bps, 200 bps or 300 bps upward or 100 bps downward movement in interest rates on net interest income, net income, return on average equity, earnings per share, and market value of equity.
As of December 31, 2024 we had $175 million of cash flow hedges.
As of December 31, 2025 we had $175 million of cash flow hedges.
Increase Decrease Parallel shift in interest rates over the next 12 months 100 bps 200 bps 300 bps 100 bps 200 bps 300 bps Projected percentage decrease in net interest income (1.4) % (3.1) % (4.9) % (0.1) % (5.2) % (11.2) % Projected percentage decrease in net income (3.3) % (7.4) % (11.5) % (0.3) % (12.7) % (27.0) % Projected decrease in return on average equity (3.1) % (7.1) % (11.1) % (0.2) % (12.2) % (26.1) % Projected decrease in earnings per share $ (0.04) $ (0.08) $ (0.13) $ — $ (0.14) $ (0.29) Projected percentage decrease in market value of equity (8.6) % (17.2) % (25.3) % 8.6 % 10.8 % 9.4 % The figures included in the tables above represent projections that were computed based upon certain assumptions including loan prepayment rates and deposit decay rates.
Increase Decrease Parallel shift in interest rates over the next 12 months 100 bps 200 bps 300 bps 100 bps 200 bps 300 bps Projected percentage decrease in net interest income (1.0) % (2.3) % (3.7) % (0.6) % (4.0) % (6.4) % Projected percentage decrease in net income (2.4) % (5.5) % (8.8) % (1.5) % (9.7) % (15.4) % Projected decrease in return on average equity (2.2) % (5.2) % (8.9) % (1.4) % (9.3) % (14.7) % Projected decrease in earnings per share $ (0.03) $ (0.07) $ (0.11) $ (0.02) $ (0.12) $ (0.18) Projected percentage decrease in market value of equity (5.1) % (10.5) % (16.0) % 3.4 % 3.9 % 5.7 % The figures included in the tables above represent projections that were computed based upon certain assumptions including loan prepayment rates and deposit decay rates.
When assessing our interest rate sensitivity, analysis of historical trends indicates that loans will prepay at various speeds (or annual rates) depending on the variance between the weighted average portfolio rates and the current market rates.
Compared to 2024, the overall sensitivity changes are driven by increases in asset sensitivity driven from growth in floating rate commercial loans. When assessing our interest rate sensitivity, analysis of historical trends indicates that loans will prepay at various speeds (or annual rates) depending on the variance between the weighted average portfolio rates and the current market rates.
We purchase adjustable-rate investment securities and mortgage-backed securities, which at December 31, 2024, totaled $76 million, and originate adjustable-rate loans, which at December 31, 2024, totaled $ 4.3 billion or 38% of our gross loan portfolio. Of our $13.2 billion of interest-earning assets at December 31, 2024, $4.3 billion, or 33%, consisted of assets with adjustable rates of interest.
We purchase adjustable-rate investment securities and mortgage-backed securities, which at December 31, 2025, totaled $110 million, and originate adjustable-rate loans, which at December 31, 2025, totaled $ 5.6 billion or 43% of our gross loan portfolio. Of our $15.4 billion of interest-earning assets at December 31, 2025, $5.7 billion, or 37%, consisted of assets with adjustable rates of interest.
While fluctuations are expected because of changes in interest rates, we have established policy limits for various interest rate scenarios. Given interest rate shocks of +100 to +300 bps and -100 to -300 bps the market value of net assets is not expected to decrease by more than 15% to 35%. 66 Table of Contents
Given interest rate shocks of +100 to +300 bps and -100 to -300 bps the market value of net assets is not expected to decrease by more than 15% to 35%. 66 Table of Contents
For purposes of this analysis, management has estimated, based on historical trends, that $584 million, or 22%, of our interest-bearing demand accounts and $409 million, or 19%, of our savings deposits are interest sensitive and may re-price in one year or less, and that the remainder may re-price over longer time periods. 65 Table of Contents The above assumptions are annual percentages based on remaining balances and should not be regarded as indicative of the actual prepayments and withdrawals that we may experience.
For purposes of this analysis, management has estimated, based on historical trends, that $648 million, or 22%, of our interest-bearing demand accounts and $423 million, or 18%, of our savings deposits are interest sensitive and may re-price in one year or less, and that the remainder may re-price over longer time periods.
Moreover, certain shortcomings are inherent in the analysis presented by the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to re-pricing, they may react in different degrees to changes in market interest rates.
For example, although certain assets and liabilities may have similar maturities or periods to re-pricing, they may 65 Table of Contents react in different degrees to changes in market interest rates. Also, interest rates on certain types of assets and liabilities may fluctuate in advance of or lag behind changes in market interest rates.
Moreover, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in preparing the table. In addition, we regularly measure and monitor the market value of our net assets and the changes therein.
In addition, we regularly measure and monitor the market value of our net assets and the changes therein. While fluctuations are expected because of changes in interest rates, we have established policy limits for various interest rate scenarios.
Removed
Amounts maturing or re-pricing Within 1 year Over 1-3 years Over 3-5 years Over 5-10 years Over 10 years Total (Dollars in thousands) Rate-sensitive assets: Interest-earning deposits $ 184,264 — — — — 184,264 Mortgage-backed securities: Fixed-rate 221,194 379,645 267,350 439,545 257,745 1,565,479 Variable-rate 49,352 — — — — 49,352 Investment securities 7,284 41,952 111,682 61,245 22,536 244,699 Mortgage loans: Adjustable-rate 28,076 11,935 42,733 12,071 29 94,844 Fixed-rate 301,506 563,189 512,980 1,039,564 659,026 3,076,265 Home equity loans: Adjustable-rate 423,282 — — — — 423,282 Fixed-rate 146,859 242,853 178,705 148,734 5,009 722,160 Consumer loans 777,908 989,699 154,749 2,744 15,256 1,940,356 Commercial real estate loans 2,051,832 632,829 137,318 9,262 22,339 2,853,580 Commercial loans 1,444,952 445,655 96,703 6,523 15,731 2,009,564 Total rate-sensitive assets 5,636,509 3,307,757 1,502,220 1,719,688 997,671 13,163,845 Rate-sensitive liabilities: Time deposits 2,548,387 108,797 18,702 1,734 25 2,677,645 Money market demand accounts 1,763,560 — — — 244,179 2,007,739 Savings deposits 409,107 535,952 535,952 690,240 — 2,171,251 Interest-bearing demand deposits 583,984 400,052 400,052 1,000,130 282,286 2,666,504 FHLB Advances — 100,000 75,000 — — 175,000 Collateral 34,850 — — — — 34,850 Other borrowings 22,323 — — — — 22,323 Trust Preferred Securities 129,834 — — — — 129,834 Subordinated debt 114,538 — — — — 114,538 Total rate-sensitive liabilities $ 5,606,583 1,144,801 1,029,706 1,692,104 526,490 9,999,684 Cumulative interest sensitivity gap $ 29,926 2,192,882 2,665,396 2,692,980 3,164,161 3,164,161 Cumulative interest sensitivity gap as a percentage of total assets 0.21 % 15.18 % 18.46 % 18.65 % 21.91 % 21.91 % Cumulative interest-earning assets as a percent of cumulative interest-bearing liabilities 100.53 % 132.48 % 134.25 % 128.43 % 131.64 % 131.64 % For comparison, at December 31, 2023, we had a cumulative interest sensitivity gap as a percentage of total assets of 23.09%.
Added
Amounts maturing or re-pricing Within 1 year Over 1-3 years Over 3-5 years Over 5-10 years Over 10 years Total (Dollars in thousands) Rate-sensitive assets: Interest-earning deposits $ 146,912 — — — — 146,912 Mortgage-backed securities: Fixed-rate 303,639 509,444 373,098 479,231 252,181 1,917,593 Variable-rate 49,432 — — — — 49,432 Investment securities 27,158 74,765 71,666 81,459 47,678 302,726 Mortgage loans: Adjustable-rate 137,869 36,482 14,672 2,059 — 191,082 Fixed-rate 317,856 575,981 512,068 976,837 523,814 2,906,556 Home equity loans: Adjustable-rate 670,237 — — — — 670,237 Fixed-rate 152,412 259,918 204,269 198,501 22,376 837,476 Consumer loans 991,084 1,269,769 216,812 1,203 18,332 2,497,200 Commercial real estate loans 2,246,563 761,281 228,062 53,890 48,060 3,337,856 Commercial loans 1,722,525 583,703 174,864 41,321 36,849 2,559,262 Total rate-sensitive assets 6,765,687 4,071,343 1,795,511 1,834,501 949,290 15,416,332 Rate-sensitive liabilities: Time deposits 2,829,346 71,243 14,736 1,366 7 2,916,698 Money market demand accounts 2,358,014 — — — 182,804 2,540,818 Savings deposits 423,118 613,372 613,372 716,651 — 2,366,513 Interest-bearing demand deposits 648,174 441,746 441,746 1,104,365 359,728 2,995,759 FHLB Advances 183,051 255,000 — — — 438,051 Other borrowings 8,232 — — — — 8,232 Trust Preferred Securities 130,093 — — — — 130,093 Subordinated debt 114,800 — — — — 114,800 Total rate-sensitive liabilities $ 6,694,828 1,381,361 1,069,854 1,822,382 542,539 11,510,964 Cumulative interest sensitivity gap $ 70,859 2,760,841 3,486,498 3,498,617 3,905,368 3,905,368 Cumulative interest sensitivity gap as a percentage of total assets 0.42 % 16.47 % 20.79 % 20.87 % 23.29 % 23.29 % Cumulative interest-earning assets as a percent of cumulative interest-bearing liabilities 101.06 % 134.18 % 138.12 % 131.90 % 133.93 % 133.93 % For comparison, at December 31, 2024, we had a cumulative interest sensitivity gap as a percentage of total assets of 21.91% .
Removed
Compared to 2023, the simulations showed decreased interest rate sensitivity in rising rate scenarios which was driven by an increase in floating rate commercial loans. Additionally, decreased interest rate sensitivity was driven by decreased deposit beta assumptions that were revised after most current down rate environment.
Added
The above assumptions are annual percentages based on remaining balances and should not be regarded as indicative of the actual prepayments and withdrawals that we may experience. Moreover, certain shortcomings are inherent in the analysis presented by the foregoing table.

Other NWBI 10-K year-over-year comparisons