Company: NWBI
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001471265-25-000161
Chunk: 136

Company: Northwest Bancshares, Inc.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 8
Chunk 136
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 closing (i.e., the “pull-through” amount, a significant unobservable input). The fair value of forward sale commitments is based on quoted prices from the secondary market based on the settlement date of the contracts. Interest Rate and Foreign Exchange Swap Agreements and Risk Participation AgreementsThe fair value of interest rate swaps is based upon the present value of the expected future cash flows using the SOFR discount curve, the basis for the underlying interest rate. To price interest rate swaps, cash flows are first projected for each payment date using the fixed rate for the fixed side of the swap and the forward rates for the floating side of the swap. These swap cash flows are then discounted to time zero using SOFR zero-coupon interest rates. The sum of the present value of both legs is the fair market value of the interest rate swap. These valuations have been derived from our third party vendor’s proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. The fair value of the foreign exchange swap is derived from proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. Risk participation agreements are entered into when Northwest Bank purchases a portion of a commercial loan that has an interest rate swap. Northwest Bank assumes credit risk on its portion of the interest rate swap should the borrower fail to pay as agreed. The value of risk participation agreements is determined based on the value of the swap after considering the credit quality, probability of default, and loss given default of the borrower. Off-Balance Sheet Financial Instruments These financial instruments generally are not sold or traded, and estimated fair values are not readily available. However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms. At September 30, 2025 and December 31, 2024, there was no significant unrealized appreciation or depreciation on these financial instruments.The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at September 30, 2025 (in thousands):CarryingamountEstimatedfair valueLevel 1Level 2Level 3Netting Adjustments (1)Financial assets:     Cash and cash equivalents$278,817 278,817 278,817 — —