Unassociated Document

EXHIBIT 99.1

PRESS RELEASE OF NORTHWEST BANCSHARES, INC.

EARNINGS RELEASE

FOR IMMEDIATE RELEASE

Contact:

William J. Wagner, President and Chief Executive Officer (814) 726-2140

William W. Harvey, Jr., Executive Vice President and Chief Financial Officer (814) 726-2140

Northwest Bancshares, Inc. Announces Second Quarter

2011 Earnings and Dividend Declaration

Warren, Pennsylvania – July 25, 2011

Northwest Bancshares, Inc. (NasdaqGS: NWBI) announced net income for the quarter ended June 30, 2011 of $15.0 million, or $0.15 per diluted share. This represents a decrease of $1.1 million over the same quarter last year when net income was $16.1 million, or $0.15 per diluted share, and a decrease of $2.3 million over the quarter ended March 31, 2011 when net income was $17.3 million, or $0.16 per diluted share. The annualized returns on average shareholders’ equity and average assets for the current quarter were 4.81% and 0.74% compared to 4.95% and 0.79% for the same quarter last year and 5.39% and 0.86% for the quarter ended March 31, 2011.

The decrease in quarterly earnings when compared to the previous quarter and previous year primarily resulted from additional expense relating to the stock benefit plan that was approved by the Company’s shareholders in April, 2011. The plan was proposed in conjunction with the second-step stock conversion that was completed in December, 2009.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.11 per share payable on August 18, 2011, to shareholders of record as of August 4, 2011. This represents the 67th consecutive quarter in which the Company has paid a cash dividend.

In making this announcement, William J. Wagner, President and CEO, noted, “Absent the impact of the additional stock benefit expense, all other components of earnings exhibited favorable trends: net interest income increased $3.0 million, or 4.6%; income earned from fees, commissions and services increased $189,000; and noninterest expense increased only $1.3 million, or 2.8%. We are also pleased to report that our loan portfolio increased $2.6 million during the quarter while demand deposits grew $8.0 million. Finally, we continued to make progress on our announced stock buyback plan with the repurchase of 5,850,866 shares at an average price of $12.23 per share. To date, we have repurchased 8,986,989 of the 11,000,000 targeted shares at an average price of $12.14 per share.”

Net interest income increased by $3.0 million, or 4.6%, to $66.7 million for the quarter ended June 30, 2011, from $63.7 million for the quarter ended June 30, 2010, which was primarily attributable to a decrease in the cost of deposits. Interest expense on deposits decreased by $3.5 million, or 18.4%, to $15.5 million as a result of a decrease in market interest rates and a continued change in the mix of deposits as lower-cost transaction accounts grew more rapidly than other types of deposits.

The provision for loan losses increased by $471,000, or 6.0%, to $8.4 million for the quarter ended June 30, 2011, from $7.9 million for the quarter ended June 30, 2010. Charge-offs for the quarter ended June 30, 2011 were $9.4 million, including $3.0 million related to the exiting of a Maryland hotel credit during the quarter. As of June 30, 2011, the allowance for loan losses was $75.5 million, or 1.37% of total loans, compared to $75.4 million, or 1.36% of total loans, as of June 30, 2010. Loans 90 days or more delinquent were $115.8 million as of June 30, 2011, compared to $124.8 million as of March 31, 2011 and $107.5 million as of June 30, 2010.

Noninterest income decreased by $283,000, or 1.8%, to $15.3 million for the quarter ended June 30, 2011, from $15.5 million for the quarter ended June 30, 2010. Losses on real estate owned increased by $338,000, or 132.5%, to $593,000 for the quarter ended June 30, 2011 from $255,000 for the quarter ended June 30, 2010 as a result of write-downs on real estate owned in Maryland. Service charges and fees decreased by $581,000, or 5.9%, to $9.3 million for the quarter ended June 30, 2011 from $9.9 million for the quarter ended June 30, 2010 primarily as a result of lower deposit overdraft revenue. Other-than-temporary impairment losses on securities were $507,000 compared to $218,000 for the quarter ended June 30, 2010 related to further deterioration in the value of two investment securities. Partially offsetting these were an increase in insurance commission income, which increased by $497,000, or 38.4%, to $1.8 million for the quarter ended June 30, 2011 due to increased insurance revenues and increases in trust services income and mortgage banking income of $273,000 and $261,000, respectively.

Noninterest expense increased by $4.3 million, or 9.0%, to $52.5 million for the quarter ended June 30, 2011, from $48.2 million for the 2010 quarter. This increase is primarily a result of increases in compensation and employee benefits and professional services expenses, which were partially offset by decreases in marketing and other real estate owned expenses. Compensation and employee benefits expenses increased by $4.8 million, or 19.4%, to $29.8 million for the quarter ended June 30, 2011, primarily due to increases in health insurance expense and the aforementioned initial vesting of the stock benefit plans. In addition, full-time equivalent employees have increased by 42 since the beginning of the current year with staffing increases primarily in the areas of commercial lending, compliance and loan servicing. Professional services expenses increased by $706,000, or 121.1%, to $1.3 million for the quarter ended June 30, 2011 as a result of the outsourcing of the internal audit function and the continued engagement of regulatory compliance consultants. Marketing expense decreased by $1.2 million, or 36.0%, to $2.1 million for the quarter ended June 30, 2011 due to the timing of various campaigns and initiatives.

Net income for the six-month period ended June 30, 2011 of $32.3 million, or $0.31 per diluted share, represents an increase of $3.0 million, or 10.1% compared to net income of $29.3 million, or $0.27 per diluted share, for the six-month period ended June 30, 2010. The annualized returns on average shareholders’ equity and average assets were 5.07% and 0.79%, respectively, for the current six-month period compared to 4.49% and 0.73%, respectively, in the prior year.

Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Savings Bank. After closing our three offices in Florida as of June 30, 2011, we operate 169 community banking offices in Pennsylvania, New York, Ohio and Maryland. Northwest Savings Bank, founded in 1896, is a full-service financial institution offering a complete line of business and personal banking products as well as benefits and wealth management services. The Company also operates 52 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Company. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market. Additional information regarding Northwest Bancshares, Inc. can be accessed on-line at www.northwestsavingsbank.com.

# # #

Forward-Looking Statements - This press release may contain forward-looking statements with respect to the financial condition and results of operations of Northwest Bancshares, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans and non-performing loans. Management has no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this release.

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(Dollars in thousands, except per share amounts)

	(Unaudited)
	June 30,			December 31,
Assets	2011			2010
Cash and cash equivalents	$	80,889			40,708
Interest-earning deposits in other financial institutions		631,957			677,771
Federal funds sold and other short-term investments		633			632
Marketable securities available-for-sale (amortized cost of $1,023,829 and $945,791)		1,040,547			950,683
Marketable securities held-to-maturity (fair value of $284,685 and $354,126)		280,782			357,922
Total cash, interest-earning deposits and marketable securities		2,034,808			2,027,716

Loans held for sale		8,035			11,376
Residental mortgage loans		2,342,904			2,386,928
Home equity loans		1,083,301			1,092,606
Consumer loans		247,182			259,123
Commercial real estate loans		1,375,090			1,350,319
Commercial loans		432,666			433,653
Total loans receivable		5,489,178			5,534,005
Allowance for loan losses		(75,455	)		(76,412	)
Loans receivable, net		5,413,723			5,457,593

Federal Home Loan Bank stock, at cost		54,222			60,080
Accrued interest receivable		25,647			26,216
Real estate owned, net		21,389			20,780
Premises and Equipment, net		126,303			128,101
Bank owned life insurance		133,358			132,237
Goodwill		171,882			171,882
Other intangible assets		2,972			3,942
Other assets		103,041			119,608
Total assets	$	8,087,345			8,148,155

Liabilities and Shareholders' equity
Liabilities
Noninterest-bearing demand deposits	$	614,718			575,281
Interest-bearing demand deposits		796,482			782,257
Savings deposits		2,042,618			1,948,882
Time deposits		2,365,488			2,457,916
Total deposits		5,819,306			5,764,336
Borrowed funds		847,450			891,293
Advances by borrowers for taxes and insurance		30,371			22,868
Accrued interest payable		1,155			1,716
Other liabilities		58,828			57,398
Junior subordinated debentures		103,094			103,094
Total liabilities		6,860,204			6,840,705

Shareholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued		-			-
Common stock, $0.01 par value: 500,000,000 shares authorized, 103,266,045 shares
and 110,295,117 shares issued, respectively		1,033			1,103
Paid-in-capital		726,207			824,164
Retained earnings		533,229			523,089
Unallocated common stock of Employee Stock Ownership Plan		(26,639	)		(27,409	)
Accumulated other comprehensive loss		(6,689	)		(13,497	)
Total shareholders' equity		1,227,141			1,307,450
Total liabilities and shareholders' equity	$	8,087,345			8,148,155

Equity to assets		15.17	%		16.05	%
Tangible common equity to assets		13.30	%		14.19	%
Book value per share	$	11.88		$	11.85
Tangible book value per share	$	10.19		$	10.26
Closing market price per share	$	12.58		$	11.78
Full time equivalent employees		1,923			1,881
Number of banking offices		169			171

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income - Unaudited

(Dollars in thousands, except per share amounts)

	Three months ended
	June 30,						March 31,
	2011			2010			2011
Interest income:
Loans receivable	$	79,993			81,734		$	80,457
Mortgage-backed securities		6,073			6,706			6,756
Taxable investment securities		594			599			398
Tax-free investment securities		2,992			2,853			3,074
Interest-earning deposits		489			512			407
Total interest income		90,141			92,404			91,092

Interest expense:
Deposits		15,473			18,973			16,063
Borrowed funds		7,989			9,704			7,989
Total interest expense		23,462			28,677			24,052

Net interest income		66,679			63,727			67,040
Provision for loan losses		8,367			7,896			7,244
Net interest income after provision
for loan losses		58,312			55,831			59,796

Noninterest income:
Impairment losses on securities		(577	)		(1,824	)		-
Noncredit related losses on securities not expected
to be sold (recognized in other comprehensive income)		70			1,606			-
Net impairment losses		(507	)		(218	)		-
Gain on sale of investments, net		45			94			4
Service charges and fees		9,321			9,902			8,928
Trust and other financial services income		2,185			1,912			1,910
Insurance commission income		1,790			1,293			1,380
Loss on real estate owned, net		(593	)		(255	)		(27	)
Income from bank owned life insurance		1,716			1,474			1,166
Mortgage banking income		290			29			197
Other operating income		1,015			1,314			768
Total noninterest income		15,262			15,545			14,326

Noninterest expense:
Compensation and employee benefits		29,804	*		24,960			25,353
Premises and occupancy costs		5,650			5,340			6,191
Office operations		3,255			2,934			3,100
Processing expenses		5,687			5,552			5,767
Marketing expenses		2,108			3,294			1,959
Federal deposit insurance premiums		2,355			2,148			2,427
Professional services		1,289			583			1,256
Amortization of intangible assets		333			759			637
Real estate owned expense		249			712			431
Other expense		1,760			1,875			2,257
Total noninterest expense		52,490			48,157			49,378

Income before income taxes		21,084			23,219			24,744
Income tax expense		6,081			7,078			7,491

Net income	$	15,003			16,141			17,253

Basic earnings per share	$	0.15		$	0.15		$	0.16

Diluted earnings per share	$	0.15		$	0.15		$	0.16

Annualized return on average equity		4.81	%		4.95	%		5.39	%
Annualized return on average assets		0.74	%		0.79	%		0.86	%

Basic common shares outstanding		102,216,892			108,227,678			106,571,262
Diluted common shares outstanding		102,536,202			108,960,333			107,258,320

* -	Includes $2.8 million of stock benefit plan expense related to awards granted in May, 2011.
	Approximately 40% of the awards approved by shareholders in April, 2011 were awarded in May, 2011.
	Awards vest over a ten year period with the first vesting occurring on the date of grant. It is anticipated that the remaining 60% of the awards will be granted over the next six years.

Northwest Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income - Unaudited

(Dollars in thousands, except per share amounts)

	Six months ended
	June 30,
	2011			2010
Interest income:
Loans receivable	$	160,450			162,480
Mortgage-backed securities		12,829			12,851
Taxable investment securities		992			1,597
Tax-free investment securities		6,066			5,537
Interest-earning deposits		896			1,077
Total interest income		181,233			183,542

Interest expense:
Deposits		31,536			40,377
Borrowed funds		15,978			19,404
Total interest expense		47,514			59,781

Net interest income		133,719			123,761
Provision for loan losses		15,611			16,697
Net interest income after provision
for loan losses		118,108			107,064

Noninterest income:
Impairment losses on securities		(577	)		(1,921	)
Noncredit related losses on securities not expected
to be sold (recognized in other comprehensive income)		70			1,606
Net impairment losses		(507	)		(315	)
Gain on sale of investments, net		49			2,177
Service charges and fees		18,249			18,804
Trust and other financial services income		4,095			3,745
Insurance commission income		3,170			2,435
Loss on real estate owned, net		(620	)		(279	)
Income from bank owned life insurance		2,882			2,640
Mortgage banking income		487			21
Other operating income		1,783			2,174
Total noninterest income		29,588			31,402

Noninterest expense:
Compensation and employee benefits		55,157			50,816
Premises and occupancy costs		11,841			11,342
Office operations		6,355			6,171
Processing expenses		11,454			11,248
Marketing expenses		4,067			4,737
Federal deposit insurance premiums		4,782			4,296
Professional services		2,545			1,311
Amortization of intangible assets		970			1,541
Real estate owned expense		680			1,611
Other expense		4,017			3,688
Total noninterest expense		101,868			96,761

Income before income taxes		45,828			41,705
Income tax expense		13,572			12,411

Net income		32,256			29,294

Basic earnings per share	$	0.31		$	0.27

Diluted earnings per share	$	0.31		$	0.27

Annualized return on average equity		5.07	%		4.49	%
Annualized return on average assets		0.79	%		0.73	%

Basic common shares outstanding		104,381,955			108,278,912
Diluted common shares outstanding		104,884,123			108,982,981

Northwest Bancshares, Inc. and Subsidiaries

Asset quality

(Dollars in thousands)

	Three months ended							Six months ended
	June 30,							June 30,
	2011				2010			2011			2010
Allowance for loan losses
Beginning balance	$	76,450				74,836			76,412			70,403
Provision		8,367				7,896			15,611			16,697
Charge-offs residential mortgage		(829	)			(600	)		(2,034	)		(1,275	)
Charge-offs home equity		(893	)			(1,120	)		(3,148	)		(1,721	)
Charge-offs consumer		(1,277	)			(1,674	)		(2,509	)		(2,934	)
Charge-offs commercial real estate		(2,269	)			(1,900	)		(4,545	)		(3,135	)
Charge-offs commercial		(4,874	)			(2,518	)		(5,915	)		(3,617	)
Recoveries		780		#		497			1,583			999
Ending balance	$	75,455				75,417			75,455			75,417

Net charge-offs to average loans, annualized		0.68	%			0.54	%		0.60	%		0.43	%

	June 30,						December 31,
	2011			2010			2010			2009
Nonperforming loans	$	161,115			130,329			148,391			124,626
Real estate owned, net		21,389			22,191			20,780			20,257
Nonperforming assets	$	182,504			152,520			169,171			144,883

Nonperforming loans to total loans		2.94	%		2.35	%		2.68	%		2.35	%

Nonperforming assets to total assets		2.26	%		1.87	%		2.08	%		1.81	%

Allowance for loan losses to total loans		1.37	%		1.36	%		1.38	%		1.33	%

Allowance for loan losses to nonperforming loans		46.83	%		57.87	%		51.49	%		56.49	%

Northwest Bancshares, Inc. and Subsidiaries

Delinquency

(Dollars in thousands)

Loan delinquency schedule
(Number of loans and dollar amount of loans)
	June 30,							December 31,
	2011				*			2010				*			2009				*
Loans delinquent 30 days to 59 days:
Residential mortgage loans		84	$	4,627		0.2	%		427	$	35,329		1.5	%		350	$	27,998		1.2	%
Home equity loans		174	$	5,763		0.5	%		230	$	7,317		0.7	%		177	$	6,928		0.7	%
Consumer loans		825		3,816		1.5	%		1,008		5,318		2.1	%		923		4,298		1.5	%
Commercial real estate loans		58		7,902		0.6	%		82		16,287		1.2	%		85		16,152		1.3	%
Commercial loans		40		2,264		0.5	%		48		6,590		1.5	%		48		3,293		0.9	%
Total loans delinquent 30 days to 59 days		1,181	$	24,372		0.4	%		1,795	$	70,841		1.3	%		1,583	$	58,669		1.1	%

Loans delinquent 60 days to 89 days:
Residential mortgage loans		84	$	8,044		0.3	%		106	$	9,848		0.4	%		85	$	6,772		0.3	%
Home equity loans		60	$	2,602		0.2	%		81	$	3,249		0.3	%		44	$	1,603		0.2	%
Consumer loans		349		1,195		0.5	%		356		1,331		0.5	%		348		1,426		0.5	%
Commercial real estate loans		23		3,348		0.2	%		39		14,365		1.1	%		35		5,811		0.5	%
Commercial loans		22		3,887		0.9	%		9		1,678		0.4	%		26		2,474		0.7	%
Total loans delinquent 60 days to 89 days		538	$	19,076		0.3	%		591	$	30,471		0.6	%		538	$	18,086		0.3	%

Loans delinquent 90 days or more:
Residential mortgage loans		268	$	30,594		1.3	%		275	$	29,751		1.2	%		279	$	29,373		1.3	%
Home equity loans		173	$	9,069		0.8	%		190	$	10,263		0.9	%		181	$	9,769		0.9	%
Consumer loans		314		1,825		0.7	%		374		2,565		1.0	%		546		2,775		1.0	%
Commercial real estate loans		151		55,512		4.0	%		181		44,965		3.3	%		199		49,594		4.0	%
Commercial loans		55		18,802		4.3	%		111		12,877		3.0	%		124		18,269		4.9	%
Total loans delinquent 90 days or more		961	$	115,802		2.1	%		1,131	$	100,421		1.8	%		1,329	$	109,780		2.1	%

* - Represents delinquency, in dollars, divided by the respective total amount of that type of loan outstanding.

Northwest Bancshares, Inc. and Subsidiaries

Analysis of loan portfolio by geographic location as of June 30, 2011 - unaudited:

(Dollars in thousands)

Loans outstanding:																Commercial
	Residental					Home										Real estate					Commercial
	mortgage		(1)			equity		(2)			Consumer		(3)			loans		(4)			loans		(5)			Total		(6)

Pennsylvania	$	1,915,898		81.4	%		924,463		85.3	%		225,296		91.2	%		813,236		59.1	%		279,894		64.7	%		4,158,787		75.8	%
New York		158,728		6.8	%		102,441		9.5	%		11,317		4.6	%		322,890		23.5	%		63,785		14.7	%		659,161		12.0	%
Ohio		20,198		0.9	%		11,459		1.1	%		2,804		1.1	%		35,090		2.6	%		8,822		2.0	%		78,373		1.4	%
Maryland		180,739		7.7	%		34,084		3.1	%		1,414		0.6	%		114,382		8.3	%		22,455		5.2	%		353,074		6.4	%
Florida		29,697		1.3	%		8,893		0.8	%		1,807		0.7	%		46,301		3.4	%		23,187		5.4	%		109,885		2.0	%
All other		45,679		1.9	%		1,961		0.2	%		4,544		1.8	%		43,191		3.1	%		34,523		8.0	%		129,898		2.4	%
Total	$	2,350,939		100.0	%		1,083,301		100.0	%		247,182		100.0	%		1,375,090		100.0	%		432,666		100.0	%		5,489,178		100.0	%

(1) - Percentage of total residential mortgage loans

(2) - Percentage of total home equity loans

(3) - Percentage of total consumer loans

(4) - Percentage of total commercial real estate loans

(5) - Percentage of total commercial loans

(6) - Percentage of total loans

Loans 90 or more past due:																Commercial
	Residental					Home										Real estate					Commercial
	mortgage		(7)			equity		(8)			Consumer		(9)			loans		(10)			loans		(11)			Total		(12)

Pennsylvania	$	18,487		1.0	%		6,663		0.7	%		1,648		0.7	%		26,022		3.2	%		5,114		1.8	%		57,934		1.4	%
New York		1,050		0.7	%		561		0.5	%		48		0.4	%		7,728		2.4	%		8,950		14.0	%		18,337		2.8	%
Ohio		310		1.5	%		54		0.5	%		-		0.0	%		-		0.0	%		-		0.0	%		364		0.5	%
Maryland		5,471		3.0	%		1,352		4.0	%		-		0.0	%		8,447		7.4	%		153		0.7	%		15,423		4.4	%
Florida		4,629		15.6	%		404		4.5	%		5		0.3	%		6,002		13.0	%		4,010		17.3	%		15,050		13.7	%
All other		760		1.7	%		37		1.9	%		8		0.2	%		7,313		16.9	%		576		1.7	%		8,694		6.7	%
Total	$	30,707		1.3	%		9,071		0.8	%		1,709		0.7	%		55,512		4.0	%		18,803		4.3	%		115,802		2.1	%

(7) - Percentage of total residental mortgage loans in that geographic area

(8) - Percentage of total home equity loans in that geographic area

(9) - Percentage of total consumer loans in that geographic area

(10) - Percentage of total commercial real estate loans in that geographic area

(11) - Percentage of total commercial loans in that geographic area

(12) - Percentage of total loans in that geographic area

Northwest Bancshares, Inc. and Subsidiaries

Investment portfolio

(Dollars in thousands)

Marketable securities available-for-sale as of June 30, 2011:
			Gross		Gross
			unrealized		unrealized
	Amortized		holding		holding			Market
	cost		gains		losses			value
Debt issued by the U.S. government and agencies:
Due in one year or less	$	63		-		-			63

Debt issued by government sponsored enterprises:
Due in one year or less		1,995		46		-			2,041
Due in one year - five years		64,298		350		-			64,648
Due in five years - ten years		35,200		612		(107	)		35,705
Due after ten years		9,952		-		(56	)		9,896

Equity securities		6,218		395		(1	)		6,612

Municipal securities:
Due in one year - five years		7,122		258		-			7,380
Due in five years - ten years		30,210		1,124		-			31,334
Due after ten years		164,405		2,317		(1,520	)		165,202

Corporate trust preferred securities:
Due in one year or less		500		-		-			500
Due after ten years		25,384		338		(4,933	)		20,789

Mortgage-backed securities:
Fixed rate pass-through		115,138		7,275		(6	)		122,407
Variable rate pass-through		150,022		6,837		(4	)		156,855
Fixed rate non-agency CMO		11,329		178		(639	)		10,868
Fixed rate agency CMO		135,274		3,095		(1	)		138,368
Variable rate non-agency CMO		1,577		-		(136	)		1,441
Variable rate agency CMO		265,142		1,750		(454	)		266,438

Total mortgage-backed securities		678,482		19,135		(1,240	)		696,377

Total marketable securities available-for-sale	$	1,023,829		24,575		(7,857	)		1,040,547

Marketable securities held-to-maturity as of June 30, 2011:
			Gross		Gross
			unrealized		unrealized
	Amortized		holding		holding			Market
	cost		gains		losses			value

Municipal securities:
Due in five years - ten years	$	1,086		16		-			1,102
Due after ten years		76,735		477		(270	)		76,942

Mortgage-backed securities:
Fixed rate pass-through		27,564		743		-			28,307
Variable rate pass-through		9,530		69		-			9,599
Fixed rate agency CMO		147,066		2,614		(65	)		149,615
Variable rate agency CMO		18,801		319		-			19,120

Total mortgage-backed securities		202,961		3,745		(65	)		206,641

Total marketable securities held-to-maturity	$	280,782		4,238		(335	)		284,685

Issuers of mortgage-backed securities as of June 30, 2011:
Fannie Mae	$	341,283		9,727		(200	)		350,810
Ginnie Mae		180,537		3,646		(81	)		184,102
Freddie Mac		325,235		9,318		(243	)		334,310
SBA		20,746		11		-			20,757
Non-agency		13,642		178		(781	)		13,039
Total	$	881,443		22,880		(1,305	)		903,018

Northwest Bancshares, Inc. and Subsidiaries

Municipal Securities Portfolio

(Dollars in thousands)

	Book		As a %
	Value		of Book
	6/30/2011		Value
Municipal securities by state:
Pennsylvania
School districts	$	135,151		48.34	%
General obligations		53,008		18.96	%
Revenue bonds		14,060		5.03	%
Total Pennsylvania		202,219		72.34	%
New York		33,927		12.14	%
Ohio		6,426		2.30	%
All other states		36,986		13.23	%
	$	279,558

Average Balance Sheet - unaudited

(Dollars in thousands)

The following table sets forth certain information relating to the Company's average balance sheet and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are calculated using daily averages.

	Three months ended June 30,
	2011					2010
	Average		Interest		Avg.	Average		Interest	Avg.
	Balance				Yield/	Balance			Yield/
					Cost				Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,484,194		80,389	5.86%		5,465,373	81,866	6.03%
Mortgage-backed securities (c)		917,748		6,073	2.65%		792,412	6,706	3.39%
Investment securities (c) (d)		392,963		5,196	5.29%		376,206	4,989	5.30%
FHLB stock		55,100		-	-		63,242	-	-
Other interest-earning deposits		705,568		489	0.27%		845,947	512	0.24%

Total interest-earning assets		7,555,573		92,147	4.87%		7,543,180	94,073	5.02%

Noninterest earning assets (e)		556,085					584,203

Total assets	$	8,111,658					8,127,383

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,093,539		1,275	0.47%		1,033,707	2,236	0.87%
Interest-bearing demand accounts		813,179		246	0.12%		785,619	319	0.16%
Money market accounts		933,288		1,059	0.46%		901,439	1,630	0.73%
Certificate accounts		2,372,039		12,893	2.18%		2,470,706	14,788	2.40%
Borrowed funds (f)		841,835		6,569	3.13%		895,650	8,283	3.71%
Junior subordinated debentures		103,094		1,420	5.45%		103,094	1,421	5.45%

Total interest-bearing liabilities		6,156,974		23,462	1.53%		6,190,215	28,677	1.86%

Noninterest bearing liabilities		708,310					632,037

Total liabilities		6,865,284					6,822,252

Shareholders' equity		1,246,374					1,305,131

Total liabilities and shareholders' equity	$	8,111,658					8,127,383

Net interest income/ Interest rate spread				68,685	3.34%			65,396	3.16%

Net interest-earning assets/ Net interest margin	$	1,398,599			3.64%		1,352,965		3.47%

Ratio of interest-earning assets to
interest-bearing liabilities		1.23X					1.22X

(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.

(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.

(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

Average Balance Sheet - unaudited

(Dollars in thousands)

	Six months ended June 30,
	2011					2010
	Average		Interest		Avg.	Average		Interest		Avg.
	Balance				Yield/	Balance				Yield/
					Cost					Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,500,134		161,237	5.88%		5,406,464		163,188	6.07%
Mortgage-backed securities (c)		922,024		12,829	2.78%		764,690		12,851	3.36%
Investment securities (c) (d)		373,870		10,324	5.52%		367,856		10,116	5.50%
FHLB stock		56,962		-	-		63,242		-	-
Other interest-earning deposits		695,717		896	0.26%		896,321		1,077	0.24%

Total interest-earning assets		7,548,707		185,286	4.92%		7,498,573		187,232	5.02%

Noninterest earning assets (e)		574,662					576,136

Total assets	$	8,123,369					8,074,709

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,078,700		2,704	0.51%		997,126		4,269	0.86%
Interest-bearing demand accounts		793,526		478	0.12%		769,531		718	0.19%
Money market accounts		924,383		2,214	0.48%		871,291		3,467	0.80%
Certificate accounts		2,401,829		26,140	2.19%		2,526,314		31,923	2.55%
Borrowed funds (f)		844,793		13,153	3.14%		898,169		16,578	3.72%
Junior subordinated debentures		103,094		2,825	5.45%		103,094		2,826	5.45%

Total interest-bearing liabilities		6,146,325		47,514	1.56%		6,165,525		59,781	1.96%

Noninterest bearing liabilities		705,098					604,859

Total liabilities		6,851,423					6,770,384

Shareholders' equity		1,271,946					1,304,325

Total liabilities and shareholders' equity	$	8,123,369					8,074,709

Net interest income/ Interest rate spread				137,772	3.36%				127,451	3.06%

Net interest-earning assets/ Net interest margin	$	1,402,382			3.65%		1,333,048			3.40%

Ratio of interest-earning assets to
interest-bearing liabilities		1.23X					1.22X

(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.

(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.

(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.

Average Balance Sheet - unaudited

(Dollars in thousands)

	Three months ended					Three months ended
	June 30, 2011					March 31, 2011
	Average		Interest		Avg.	Average		Interest		Avg.
	Balance				Yield/	Balance				Yield/
					Cost					Cost
Assets:
Interest-earning assets:
Loans receivable (a) (b) (d)	$	5,484,194		80,389	5.86	$	5,516,254		80,847	5.89
Mortgage-backed securities (c)		917,748		6,073	2.65		926,349		6,756	2.92
Investment securities (c) (d)		392,963		5,196	5.29		354,786		5,128	5.78
FHLB stock		55,100		-	-		58,845		-	-
Other interest-earning deposits		705,568		489	0.27		685,864		407	0.24

Total interest-earning assets		7,555,573		92,147	4.87		7,542,098		93,138	4.96

Noninterest earning assets (e)		556,085					592,981

Total assets	$	8,111,658				$	8,135,079

Liabilities and shareholders' equity:
Interest-bearing liabilities:
Savings accounts	$	1,093,539		1,275	0.47	$	1,063,696		1,429	0.55
Interest-bearing demand accounts		813,179		246	0.12		773,633		232	0.12
Money market accounts		933,288		1,059	0.46		915,768		1,155	0.51
Certificate accounts		2,372,039		12,893	2.18		2,431,952		13,247	2.21
Borrowed funds (f)		841,835		6,569	3.13		847,784		6,584	3.15
Junior subordinated debentures		103,094		1,420	5.45		103,094		1,405	5.45

Total interest-bearing liabilities		6,156,974		23,462	1.53		6,135,927		24,052	1.59

Noninterest bearing liabilities		708,310					701,633

Total liabilities		6,865,284					6,837,560

Shareholders' equity		1,246,374					1,297,519

Total liabilities and shareholders' equity	$	8,111,658				$	8,135,079

Net interest income/ Interest rate spread				68,685	3.34				69,086	3.37

Net interest-earning assets/ Net interest margin	$	1,398,599			3.64	$	1,406,171			3.66

Ratio of interest-earning assets to
interest-bearing liabilities		1.23X					1.23X

(a) Average gross loans receivable includes loans held as available-for-sale and loans placed on nonaccrual status.

(b) Interest income includes accretion/ amortization of deferred loan fees/ expenses, which was not material.

(d) Interest income on tax-free investment securities and tax-free loans are presented on a fully taxable equivalent basis.

(e) Average balances include the effect of unrealized gains or losses on securities held as available-for-sale.

(f) Average balances include FHLB borrowings, securities sold under agreements to repurchase and other borrowings.