Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2022

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Regulatory Capital Requirements

Regulatory Capital Requirements

We and our banking subsidiary are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices must be met. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Applicable regulations limit an organization’s capital distributions and certain discretionary bonus payments if the organization does not hold a “capital conservation buffer” consisting of 2.5% of Total Tier 1 and Common Equity Tier 1 (“CET1”) capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements.

Quantitative measures established by regulation to ensure capital adequacy require us and our banking subsidiary to maintain minimum amounts and ratios (set forth in the table below) of Total, Tier 1, and CET1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier I capital to average assets (as defined). As of December 31, 2022 and 2021, we and our banking subsidiary exceeded all capital adequacy requirements to which we were subject.

We have elected to phase the estimated impact of CECL into regulatory capital in accordance with the interim final rule of the Board of Governors of the Federal Reserve System (FRB) and other U.S. banking agencies that became effective on March 31, 2020. As a result, we delayed recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extended through December 31, 2021. Beginning on January 1, 2022, we were required to phase in 75% of the previously deferred estimated capital impact of CECL, with 50% to be phased in at the beginning of 2023, and 25% at the beginning of 2024, until fully phased in by the first quarter of 2025. Under the interim final rule, the estimated impact of CECL on regulatory capital that we will defer and later phase in is calculated as the entire day-one impact at adoption plus 25% of the subsequent change in allowance during the two-year deferral period.

As of December 15, 2022, the most recent assessment from FDIC, Northwest Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered “well-capitalized” for regulatory purposes. To be considered as “well capitalized,” Northwest Bank must maintain total risk-based, Tier 1 risk-based, CET 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the bank’s categories.

The actual, required, and well capitalized levels as of December 31, 2022 and 2021 were as follows:    

	At December 31, 2022
	Actual				Minimum capital requirements (1)				Well capitalized requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,745,701	16.363	%	$	1,120,216	10.500	%	$	1,066,872	10.000	%
Northwest Bank	1,568,202		14.712	%	1,119,214		10.500	%	1,065,918		10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,516,621		14.216	%	906,841		8.500	%	853,498		8.000	%
Northwest Bank	1,452,962		13.631	%	906,030		8.500	%	852,734		8.000	%
CET 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,391,296		13.041	%	746,810		7.000	%	693,467		6.500	%
Northwest Bank	1,452,962		13.631	%	746,143		7.000	%	692,847		6.500	%
Tier 1 capital (leverage to average assets)
Northwest Bancshares, Inc.	1,516,621		10.817	%	560,816		4.000	%	701,020		5.000	%
Northwest Bank	1,452,962		10.365	%	560,706		4.000	%	700,882		5.000	%

(1) Amounts and ratios include the 2022 capital conservation buffer of 2.5% with the exception of Tier 1 capital to average assets. For further information related to the capital conservation buffer, see “Item 1. Business - Supervision and Regulation”.                            

	At December 31, 2021
	Actual				Minimum capital requirements (1)				Well capitalized requirements
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk weighted assets)
Northwest Bancshares, Inc.	$	1,682,487	17.056	%	$	1,035,786	10.500	%	$	986,463	10.000	%
Northwest Bank	1,551,084		15.738	%	1,034,819		10.500	%	985,542		10.000	%
Tier 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,475,190		14.954	%	838,494		8.500	%	789,170		8.000	%
Northwest Bank	1,467,362		14.889	%	837,711		8.500	%	788,434		8.000	%
CET 1 capital (to risk weighted assets)
Northwest Bancshares, Inc.	1,350,125		13.687	%	690,524		7.000	%	641,201		6.500	%
Northwest Bank	1,467,362		14.889	%	689,879		7.000	%	640,602		6.500	%
Tier 1 capital (leverage to average assets)
Northwest Bancshares, Inc.	1,475,190		10.349	%	570,160		4.000	%	712,699		5.000	%
Northwest Bank	1,467,362		10.296	%	570,047		4.000	%	712,558		5.000	%

(1) Amounts and ratios include the 2021 capital conservation buffer of 2.5% with the exception of Tier 1 capital to average assets. For further information related to the capital conservation buffer, see Item 1. Business - “Supervision and Regulation”.