Company: NWBI
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001471265-25-000016
Chunk: 9

Company: Northwest Bancshares, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 9
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 relationship, including commercial real estate, had an aggregate total exposure of $114.1 million as of December 31, 2024.  The largest component of this exposure is attributed to loans secured by student housing, which comprised $53.3 million of exposure at December 31, 2024, which additional loans secured by multi-family residential, commercial office, hotel and retail buildings. This relationship is also our largest commercial real estate loan relationship as of December 31, 2024, with $112.5 million of the exposure attributed to commercial real estate loans. All of the underlying loans were performing in accordance with their terms as of December 31, 2024. 

Multi-family commercial and commercial real estate loans are offered with both adjustable and fixed interest rates. The terms of each multi-family residential and commercial real estate loan are negotiated on a case-by-case basis. We generally originate multi-family commercial and commercial real estate loans in amounts up to 80% of the appraised value of the property collateralizing the loan. 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. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by multi-family commercial and commercial real estate is typically dependent upon the successful operation of the related real estate property. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

Commercial Loans. We offer commercial loans to finance various activities in our market area, some of which are secured in part by additional real estate collateral. At December 31, 2024, our largest commercial loan relationship had an aggregate total exposure of 

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$65.0 million, and operates in the manufacturing space. These loans were performing in accordance with their agreed upon terms as of December 31, 2024.

Commercial business loans are offered with both fixed and adjustable interest rates. Underwriting standards we employ for commercial business loans include a determination of the applicant’s ability to meet existing obligations and payments on the proposed loan from operating cash flows generated by the applicant’s business. The