Company: NWBI
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001471265-25-000161
Chunk: 101

Company: Northwest Bancshares, Inc.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 8
Chunk 101
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 stock29,408 Premises and equipment15,862 Core deposit intangible48,000 Other assets108,345 Deposits(1,617,611)Borrowings(394,135)Other liabilities(23,202)Total identifiable net assets$176,402 Goodwill$57,405 (1)  Amounts are estimates and subject to adjustment. Actual amounts are not expected to differ materially from the amounts shown.    We estimated the fair value of loans acquired from Penns Woods by utilizing a methodology wherein similar loans were aggregated into pools. Cash flows for each pool were determined by estimating future credit losses and the rate of prepayments. Projected monthly cash flows were then discounted to present value based on a market rate for similar loans. There was no carryover of Penns Woods allowance for credit losses associated with the loans we acquired as the loans were initially recorded at fair value. The unpaid principal balance of loans acquired was $1.9 billion with a fair value of $1.8 billion, net of a $71.5 million discount.

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Table of Contents

The core deposit intangible represents the future economic benefit of acquired customer deposits. The fair value of the core deposit intangible asset was estimated based on a discounted cash flow methodology that incorporated expected customer attrition rates, cost of deposit base, net maintenance cost associated with customer deposits, and the cost for alternative funding sources. The core deposit intangible asset recognized as part of the Penns Woods merger is being amortized over its estimated useful life of ten years utilizing an accelerated method. The goodwill, which is not amortized for book purposes, was assigned to our only segment, Banking and is not deductible for tax purposes. The fair values of savings and transaction deposit accounts acquired from Penns Woods were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificates of deposit were valued by projecting out the expected cash flows based on the contractual terms of the certificates of deposit. These cash flows were discounted based on a market rate for a certificate of deposit with a corresponding maturity.Direct costs related to the Penns Woods merger were expensed as incurred and were $36 million during the nine months ended September 30, 2025, which included technology and communications costs, professional services, marketing and advertising, severance expense and fixed asset disposals.The following table presents unaudited pro forma information as if the acquisition of Penns Woods had occurred on January 1,