Northwest Bancshares, Inc., a Maryland corporation, was incorporated in September
2009 to be the successor corporation to Northwest Bancorp, Inc., the former
stock holding company for Northwest Bank, upon completion of the mutual-to-stock
conversion of Northwest Bancorp, MHC.
Northwest Bank is a Pennsylvania-chartered stock savings bank headquartered
in Warren, Pennsylvania, which is located in northwestern Pennsylvania. Northwest
Bank is a community-oriented financial institution offering personal and business
banking solutions, investment management and trust services and insurance products.
Through a wholly-owned subsidiary, Northwest Consumer Discount Company, it also
offers consumer finance loans. Northwest Bank’s mutual savings bank predecessor
was founded in 1896.
Our principal lending activities are the origination of fixed-rate and, to
a lesser extent, adjustable-rate mortgage loans collateralized by one-to-four-family
residential real estate, shorter term consumer loans and the origination of
loans collateralized by multi-family residential and commercial real estate
and commercial business loans. Generally, we focus our lending activities in
the geographic areas where we maintain offices.
In an effort to manage interest rate risk, we have sought to make our interest-earning
assets more interest rate sensitive by originating adjustable-rate loans, such
as adjustable-rate residential mortgage loans and home equity lines of credit,
and by originating short-term and medium-term fixed-rate consumer loans. 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.
We also purchase mortgage-backed securities and other types of investment securities
that generally have short average lives and/or adjustable interest rates. Because
we originate a substantial amount of long-term fixed-rate mortgage loans collateralized
by one-to-four-family residential real estate, when possible, we originate and
underwrite loans according to standards that allow us to sell them into the
secondary mortgage market for purposes of managing interest-rate risk and liquidity.
The sale of mortgage loans supports our strategy to grow the consumer and commercial
loan portfolios by more than our portfolio of long-term fixed rate residential
mortgage loans. We currently sell low-yielding fixed rate residential mortgage
loans with maturities of more than 15 years, and on a more limited basis, those
with maturities of 15 years or less, while retaining all adjustable rate residential
mortgage loans. Although we sell a portion of the residential mortgage loans
that we originate, we continue to be a portfolio lender, and at any one time
hold few loans identified as held-for-sale. We currently retain servicing on
the mortgage loans we sell which generates monthly service fee income. We generally
retain in our portfolio all consumer loans that we originate while we periodically
sell participations in the multi-family residential, commercial real estate
or commercial business loans that we originate in an effort to reduce the concentration
of certain individual credits and the risk associated with certain businesses,
industries or geographies.
Upon receiving a retail loan application, we obtain a credit report and employment
verification to verify specific information relating to the applicant’s
employment, income, and credit standing. In the case of a real estate loan,
either an in-house appraiser, or an approved external appraiser, appraises the
real estate intended to secure the proposed loan. A loan processor checks the
loan document file for accuracy and completeness, and verifies the information
provided.
For our personal loans, including residential mortgage loans, home equity loans
and lines of credit, automobile loans, credit cards and other unsecured loans,
we have implemented a credit approval process based on a laddered individual
loan authority system. Real estate secured loans are underwritten by our licensed
mortgage loan originators. Non-real estate loans are underwritten by local loan
officers 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. As part of the approval process, we assign
independent credit officers to review the creditworthiness of all loans exceeding
$500,000. If the credit officer has concerns regarding a loan that has been
approved at a specific level, they have the authority to request that the loan
be reviewed and approved at the next higher level.
Our commercial loan policy assigns lending limits for our various commercial
loan officers and stacked authorities for commercial loan officers with the
approval of senior management. These individual and stacked authorities are
established by the Credit Committee. The Senior Loan Committee may approve extensions
of credit in excess of the stacked loan authorities. The Credit Committee meets
quarterly to review the assigned lending limits and to monitor our lending policies,
loan activity, economic conditions and concentrations of credit.
Our general policy is to make no loans either individually or in the aggregate
to one customer in excess of $20.0 million. Under certain circumstances; for
instance well qualified customers or customers with multiple individually qualified
projects, this limit may be exceeded subject to the approval of the Senior Loan
Committee. The Chief Credit Officer reviews any loans exceeding $20.0 million
or unusual loan requests with the Board of Directors. In addition, the Chief
Credit Officer has the authority to require that the Board of Directors review
any loan that has been approved by the Senior Loan Committee with which the
Chief Credit Officer has specific concerns. Also, all loans originated during
a calendar quarter of $5.0 million or more are reported to the Risk Management
Committee of the Board of Directors at the end of each quarter. Fire and casualty
insurance is required at the time the loan is made and throughout the term of
the loan, and flood insurance is required as determined by regulation.
137.16 %