Northwest Bancshares, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
NWBI$15.24-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001471265-26-000032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001471265-26-000049
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 145 current paragraphs.
109 unchanged; 33 reworded; 3 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
•volatility in fuel prices and resulting macroeconomic impacts;
Current report
Additionally, the Company saw an increase in classified loans of $16 million to $469 million, or 3.50% of total loans, at September 30, 2026 compared to $453 million , or 3.49% of total loans, at December 31, 2025. This increase was driven by an increase in classified loans within our commercial real estate portfolio which increased $15 million driven by acquired loans to borrowers whose updated financial statements indicated financial deterioration.
Current report
Noninterest income for the nine months ended September 30, 2026 was $103 million, an increase of $11 million from the nine months ended September 30, 2025, driven by an increase of $4 million in service charges and fees and a $4 million increase in trust and other financial services income driven by the same factors discussed above.
Removed paragraphs (2)
Previous report
• the possibility that any of the anticipated benefits of the Merger (as defined below) will not be realized or will not be realized within the expected time period; the effect of the Merger on the combined company’s customer and employee relationships and operating results; and other factors that may affect the results of operations and financial condition of the combined company;
Previous report
Additionally, the Company saw an increase in classified loans to $524 million, or 3.96% of total loans, at June 30, 2026 from $518 million, or 4.57% of total loans, at June 30, 2025 and $498 million, or 3.81% of total loans, at March 31, 2026. The increase from the prior year was primarily due to classified loans acquired in the Penns Woods acquisition. The increase from the prior quarter was due to changes in our commercial real estate portfolio.
Reworded paragraphs (33)
Previous wording
In addition to historical information, this document may contain certain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, as they reflect management’s analysis only as of the date of this report. We have no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this report.
Current wording
In addition to historical information, this document may contain certain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, as they reflect management’s analysis only as of the date of this report. We expressly disclaim any obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this report, unless required by law.
Previous wording
• changes in laws, government regulations or supervision, examination and enforcement priorities affecting financial institutions, including as part of the regulatory reform agenda of the Trump administration, as well as changes in regulatory fees and capital requirements;
Current wording
• changes in laws, regulations or supervision, examination and enforcement priorities affecting financial institutions, including as part of the regulatory reform agenda of the Trump administration or in light of Congressional oversight and priorities, as well as changes in regulatory fees and capital requirements;
Previous wording
• cyber-security concerns, including an interruption or breach in the security of our website or other information systems;
Current wording
• cyber-security concerns, including an interruption or breach in the security of our website or other information systems and increased risks due to artificial intelligence used by us or our customers;
Previous wording
• the effect of global or national war, conflict, or terrorism;
Current wording
• the effect of global or national war, geopolitical uncertainty, conflict, or terrorism;
Previous wording
The Penns Woods results of operations are included in the Company’s consolidated results since the date of acquisition. Therefore, the Company’s second quarter 2026 results reflect increased levels of average balances, net interest income, and noninterest expense compared to the second quarter 2025 results. After purchase accounting fair value adjustments, the acquisition added $2.2 billion of total assets, including $1.8 billion of loans, $160 million of investments, of which $82 million were immediately sold, as well as $2.0 billion of total liabilities, primarily consisting of $1.6 billion in deposits. The Company recorded goodwill of $64 million and core deposit intangibles of $42 million related to the acquisition.
Current wording
The Penns Woods results of operations are included in the Company’s consolidated results since the date of acquisition. Therefore, the Company’s third quarter 2026 results reflect increased levels of average balances, net interest income, and noninterest expense compared to the third quarter 2025 results. After purchase accounting fair value adjustments, the acquisition added $2.2 billion of total assets, including $1.8 billion of loans, $160 million of investments, of which $82 million were immediately sold, as well as $2.0 billion of total liabilities, primarily consisting of $1.6 billion in deposits. The Company recorded goodwill of $64 million and core deposit intangibles of $42 million related to the acquisition.
Previous wording
Total assets at June 30, 2026 were $17.2 billion, an increase of $441 million from December 31, 2025. A discussion of significant changes follows.
Current wording
Total assets at September 30, 2026 were $17.3 billion, an increase of $543 million from December 31, 2025. A discussion of significant changes follows.
Previous wording
Cash and cash equivalents increased by $15 million, or 6%, to $248 million at June 30, 2026, from $234 million at December 31, 2025 due to growth in our deposits and borrowings exceeding the growth in loans and securities.
Current wording
Cash and cash equivalents decreased by $10 million, or 4%, to $223 million at September 30, 2026, from $234 million at December 31, 2025 due to growth in our loans and securities exceeding the growth in deposits and borrowings.
Previous wording
Total marketable securities increased to $2.5 billion at June 30, 2026, increasing by $190 million, or 8%, from December 31, 2025. Available-for-sale securities increased by $243 million, this was driven by the purchase of additional securities. Held-to-maturity securities declined $53 million, driven by maturities and recurring monthly cash flows.
Current wording
Total marketable securities increased to $2.4 billion at September 30, 2026, increasing by $95 million, or 4%, from December 31, 2025. Available-for-sale securities increased by $165 million, this was driven by the purchase of additional securities. Held-to-maturity securities declined $71 million, driven by maturities and recurring monthly cash flows.
Previous wording
Gross loans receivable was $13.2 billion at June 30, 2026, increasing $222 million from December 31, 2025. This increase is attributed to net growth of commercial and industrial (C&I) and vehicle loans. Our total personal banking loan portfolio increased by $170 million, to $7.3 billion at June 30, 2026, while our total commercial banking loans increased by $52 million, to $5.9 billion at June 30, 2026.
Current wording
Gross loans receivable was $13.4 billion at September 30, 2026, increasing $386 million from December 31, 2025. This increase is attributed to net growth of commercial and industrial (C&I) and vehicle loans. Our total personal banking loan portfolio increased by $227 million, to $7.4 billion at September 30, 2026, while our total commercial banking loans increased by $159 million, to $6.0 billion at September 30, 2026.
Previous wording
Total deposits increased by $219 million, to $14.2 billion at June 30, 2026, from $13.9 billion at December 31, 2025. This increase was driven primarily by an increase in the balance of money market and savings deposits of $226 million and $93 million, respectively, partly due to customers shifting funds to these products as their time deposits matured. This is partially offset by a decrease in interest-bearing checking and time deposits of $79 million and $89 million, respectively.
Current wording
Total deposits increased by $332 million, to $14.3 billion at September 30, 2026, from $13.9 billion at December 31, 2025. This increase was driven primarily by an increase in the balance of money market and savings deposits of $290 million and $72 million, respectively, partly due to customers shifting funds to these products as their time deposits matured. This is partially offset by a decrease in time deposits of $119 million.
Previous wording
As of June 30, 2026, we had $236 million of brokered deposits, which made up 9% of our time deposits and 2% of our total deposit balance at quarter end. As of December 31, 2025, we had $193 million of brokered deposits, which made up 7% of our time deposits and 1% of our total deposit balance at year end. The brokered deposits had an average original term of 7 and 8.5 months, respectively.
Current wording
As of September 30, 2026, we had $272 million of brokered deposits, which made up 9% of our time deposits and 2% of our total deposit balance at quarter end. As of December 31, 2025, we had $193 million of brokered deposits, which made up 7% of our time deposits and 1% of our total deposit balance at year end. The brokered deposits had an average original term of 5 and 8.5 months, respectively.
Previous wording
In addition, we had $901 million and $941 million of deposits through our participation in the IntraFi Network Deposits and R&T Insured Deposit programs as of June 30, 2026 and December 31, 2025, respectively. These deposits are part of a reciprocal program that allows our depositors to receive expanded FDIC coverage by placing multiple interest-bearing demand accounts at other member banks and Northwest Bank receives an equal amount of deposits from other member banks. The balance carried an average cost of 3.03% as of June 30, 2026 and 3.00% as of December 31, 2025.
Current wording
In addition, we had $1.0 billion and $941 million of deposits through our participation in the IntraFi Network Deposits and R&T Insured Deposit programs as of September 30, 2026 and December 31, 2025, respectively. These deposits are part of a reciprocal program that allows our depositors to receive expanded FDIC coverage by placing multiple interest-bearing demand accounts at other member banks and Northwest Bank receives an equal amount of deposits from other member banks. The balance carried an average cost of 3.41% as of September 30, 2026 and 3.00% as of December 31, 2025.
Previous wording
At June 30, 2026 and December 31, 2025, we had total deposits in excess of $250,000 (the limit for FDIC insurance) of $2.1 billion and $1.9 billion, respectively. At those dates, we had no deposits that were uninsured for any other reason. The following table presents details regarding the Company's uninsured deposits portfolio:
Current wording
At September 30, 2026 and December 31, 2025, we had total deposits in excess of $250,000 (the limit for FDIC insurance) of $2.2 billion and $1.9 billion, respectively. At those dates, we had no deposits that were uninsured for any other reason. The following table presents details regarding the Company's uninsured deposits portfolio:
Previous wording
Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $185 million, or 1.3% of total deposits, as of June 30, 2026. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $404 million, or 2.9%, of total deposits, as of June 30, 2026. The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $344,187 as of June 30, 2026.
Current wording
Our largest uninsured depositor, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $236 million, or 1.7% of total deposits, as of September 30, 2026. Our top ten largest uninsured depositors, excluding intercompany and collateralized deposit accounts, had an aggregate uninsured deposit balance of $443 million, or 3.1%, of total deposits, as of September 30, 2026. The average uninsured deposit account balance, excluding intercompany and collateralized accounts, was $361,392 as of September 30, 2026.
Previous wording
Total shareholders’ equity increased to $1.9 billion, or $13.17 per share, at June 30, 2026 compared to $12.94 per share at December 31, 2025, increasing by $37 million in the current year. The increase was the result of year-to-date earnings of $104 million, partially offset by $59 million of cash dividend payments and an increase in accumulated other comprehensive loss of $12 million, or 17%, due to an increase in unrealized loss in the available-for-sale investment portfolio.
Current wording
Total shareholders’ equity increased to $1.9 billion, or $12.91 per share, at September 30, 2026 compared to $12.94 per share at December 31, 2025, increasing by $2 million in the current year. The increase was the result of year-to-date earnings of $155 million, partially offset by $88 million of cash dividend payments and an increase in accumulated other comprehensive loss of $71 million, or 101%, due to an increase in unrealized loss in the available-for-sale investment portfolio.
Previous wording
Northwest Bank is required to maintain a sufficient level of liquid assets, as determined by management and reviewed for adequacy by the FDIC and the Pennsylvania Department of Banking and Securities during their regular examinations. Northwest frequently monitors its liquidity position primarily using the ratio of unencumbered available-for-sale liquid assets as a percentage of deposits and borrowings (“liquidity ratio”). Northwest Bank’s liquidity ratio at June 30, 2026 was 23.56% compared to 18.44% as of December 31, 2025. Northwest Bank adjusts liquidity levels in order to meet funding needs for deposit outflows, payment of real estate taxes and insurance on mortgage loan escrow accounts, repayment of borrowings and loan commitments. At June 30, 2026, Northwest had $4.3 billion of additional borrowing capacity available with the FHLB, including $250 million on an overnight line of credit, which had a drawn balance of $227 million as of June 30, 2026, as well as $1.9 billion of borrowing capacity available with the Federal Reserve Bank and $419 million with five correspondent banks.
Current wording
Northwest Bank is required to maintain a sufficient level of liquid assets, as determined by management and reviewed for adequacy by the FDIC and the Pennsylvania Department of Banking and Securities during their regular examinations. Northwest frequently monitors its liquidity position primarily using the ratio of unencumbered available-for-sale liquid assets as a percentage of deposits and borrowings (“liquidity ratio”). Northwest Bank’s liquidity ratio at September 30, 2026 was 20.09% compared to 18.44% as of December 31, 2025. Northwest Bank adjusts liquidity levels in order to meet funding needs for deposit outflows, payment of real estate taxes and insurance on mortgage loan escrow accounts, repayment of borrowings and loan commitments. At September 30, 2026, Northwest had $4.8 billion of additional borrowing capacity available with the FHLB, including $250 million on an overnight line of credit, which had a drawn balance of $206 million as of September 30, 2026, as well as $2.1 billion of borrowing capacity available with the Federal Reserve Bank and $419 million with five correspondent banks.
Previous wording
We paid $29 million in cash dividends during the quarter ended June 30, 2026 compared to $26 million for the quarter ended June 30, 2025. The common stock dividend payout ratio (dividends declared per share divided by net income per diluted share) for the quarters ended June 30, 2026 and 2025 was 55.6% and 76.9%, respectively, on dividends of $0.20 per share. On July 22, 2026, the Board of Directors declared a cash dividend of $0.20 per share payable on August 18, 2026 to shareholders of record as of August 6, 2026. This represents the 127 th consecutive quarter we have paid a cash dividend.
Current wording
We paid $30 million in cash dividends during the quarter ended September 30, 2026 compared to $29 million for the quarter ended September 30, 2025. The common stock dividend payout ratio (dividends declared per share divided by net income per diluted share) for the quarters ended September 30, 2026 and 2025 was 58.8% and 1000.0%, respectively, on dividends of $0.20 per share. On October 22, 2026, the Board of Directors declared a cash dividend of $0.20 per share payable on November 17, 2026 to shareholders of record as of November 5, 2026. This represents the 128 th consecutive quarter we have paid a cash dividend.
Previous wording
We utilize a structured methodology each period when analyzing the adequacy of the allowance for credit losses and the related provision for credit losses, which the ACL Committee assesses regularly for appropriateness. As part of the analysis as of June 30, 2026, we considered the most recent economic conditions and forecasts available which incorporated the impact of material recent economic events. In addition, we considered the overall trends in asset quality, reserves on individually assessed loans, historical loss rates and collateral valuations. The ACL decreased by $1 million to $149 million, or 1.13% of total loans at June 30, 2026, which is a slight decrease from 1.15% at December 31, 2025. This decrease was primarily driven by our loan portfolio mix. The provision for credit losses for the quarter ended June 30, 2026 was $7 million, driven by growth in our commercial lending portfolio, including unfunded commitments, compared to $9 million for the quarter ended June 30, 2025.
Current wording
We utilize a structured methodology each period when analyzing the adequacy of the allowance for credit losses and the related provision for credit losses, which the ACL Committee assesses regularly for appropriateness. As part of the analysis as of September 30, 2026, we considered the most recent economic conditions and forecasts available which incorporated the impact of material recent economic events. In addition, we considered the overall trends in asset quality, reserves on individually assessed loans, historical loss rates and collateral valuations. The ACL decreased by $1 million to $150 million, or 1.12% of total loans at September 30, 2026, which is a slight decrease from 1.15% at December 31, 2025. This decrease was primarily driven by our loan portfolio mix. The provision for credit losses for the quarter ended September 30, 2026 was $9 million, driven by growth in our commercial lending portfolio, including unfunded commitments, compared to $31 million for the quarter ended September 30, 2025, primarily driven by the Day 1 initial provision from the Penns Woods acquisition of $20.6 million.
Previous wording
Total classified loans increased by $71 million to $524 million at June 30, 2026 compared to $453 million at December 31, 2025. This increase was driven by net increases in our C&I and commercial real estate portfolios which increased $26 million and $44 million, respectively. The increase in classified loans was driven by acquired loans to borrowers whose updated financial statements indicated financial deterioration.
Current wording
Total classified loans increased by $16 million to $469 million at September 30, 2026 compared to $453 million at December 31, 2025. This increase was driven by an increase in classified loans within our commercial real estate portfolio which increased $15 million driven by acquired loans to borrowers whose updated financial statements indicated financial deterioration.
Previous wording
We also consider how the levels of nonaccrual loans and historical charge-offs have influenced the required amount of allowance for credit losses. Nonaccrual loans of $91 million at June 30, 2026 decreased by $16 million, or 15%, from $107 million at December 31, 2025, or 0.69% of total loans receivable as of June 30, 2026 and 0.82% of total loans receivable as of December 31, 2025. As a percentage of average loans, annualized net charge-offs were 0.15% for the three months ended June 30, 2026 compared to 0.25% for the year ended December 31, 2025.
Current wording
We also consider how the levels of nonaccrual loans and historical charge-offs have influenced the required amount of allowance for credit losses. Nonaccrual loans of $99 million at September 30, 2026 decreased by $9 million, or 8%, from $107 million at December 31, 2025, or 0.74% of total loans receivable as of September 30, 2026 and 0.82% of total loans receivable as of December 31, 2025. As a percentage of average loans, annualized net charge-offs were 0.15% for the three months ended September 30, 2026 compared to 0.25% for the year ended December 31, 2025.
Previous wording
Net income for the quarter ended June 30, 2026 was $54 million, or $0.36 per diluted share, an increase of $20 million, or 59%, from net income of $34 million, or $0.26 per diluted share, for the quarter ended June 30, 2025. This increase in net income resulted primarily from an increase in net interest income of $27 million which was driven by the increase in interest income on loans receivable of $28 million. This was offset by an increase in noninterest expense of $7 million which was driven by an increase in compensation and employee benefits and processing expenses of $8 million and $4 million, respectively. Net income for the quarter ended June 30, 2026 represents annualized returns on average equity and average assets of 11.20% and 1.27%, respectively, compared to 8.26% and 0.93% for the same quarter last year.
Current wording
Net income for the quarter ended September 30, 2026 was $51 million, or $0.34 per diluted share, an increase of $48 million, from net income of $3 million, or $0.02 per diluted share, for the quarter ended September 30, 2025. This increase in net income resulted primarily from a decrease in noninterest expense of $25 million, which was driven by the decrease in acquisition expense of $31 million, and a decrease in provision for credit losses of $22 million, primarily driven by the Day 1 initial provision from the Penns Woods acquisition of $20.6 million in the prior year. This was offset by an increase in income tax expense of $16 million which was driven by change in income before income taxes. Net income for the quarter ended September 30, 2026 represents annualized returns on average equity and average assets of 10.42% and 1.18%, respectively, compared to 0.69% and 0.08% for the same quarter last year.
Previous wording
Net interest income for the second quarter of 2026 was $147 million which increased $27 million, or 23%, from the second quarter of 2025. Net interest income (FTE) was $148 million for the quarter ended June 30, 2026 and net interest margin (FTE) was 3.75%. Compared to the same quarter of the prior year, net interest income (FTE) increased $27 million and net interest margin (FTE) increased by nineteen basis points. The increase in net interest income (FTE) and net interest margin (FTE) was primarily driven by a higher average balance of earnings assets and interest bearing liabilities acquired from the Penns Woods acquisition.
Current wording
Net interest income for the third quarter of 2026 was $149 million which increased $13 million, or 10%, from the third quarter of 2025. Net interest income (FTE) was $150 million for the quarter ended September 30, 2026 and net interest margin (FTE) was 3.70%. Compared to the same quarter of the prior year, net interest income (FTE) increased $13 million and net interest margin (FTE) increased by five basis points. The increase in net interest income (FTE) and net interest margin (FTE) was primarily driven by a higher average balance of earnings assets and interest bearing liabilities acquired from the Penns Woods acquisition.
Previous wording
Average loans receivable increased $1.8 billion, or 16%, from the quarter ended June 30, 2025. This increase was driven by the acquisition of Penns Woods which resulted in an additional $1.8 billion in loans. Interest income on loans receivable increased by $28 million, or 18%, from the same quarter in the prior year, driven by the Penns Woods acquisition and a loan mix shift towards higher yielding commercial loans.
Current wording
Average loans receivable increased $734 million, or 6%, from the quarter ended September 30, 2025. This increase was driven by the acquisition of Penns Woods which resulted in an additional $1.8 billion in loans. Interest income on loans receivable increased by $9 million, or 5%, from the same quarter in the prior year driven by the Penns Woods acquisition.
Previous wording
Average investments increased 23% from the second quarter of 2025 driven by the Penns Woods acquisition and a targeted increase in the overall securities portfolio. Interest income on investment securities increased by $7 million, or 50%, from the quarter ended June 30, 2025. The increase is due to the increase in the average balance of investments and the increase in average yield on investments (FTE) to 3.27% for the quarter ended June 30, 2026.
Current wording
Average investments increased 23% from the third quarter of 2025 driven by a targeted increase in the overall securities portfolio. Interest income on investment securities increased by $7 million, or 48%, from the quarter ended September 30, 2025. The increase is due to the increase in the average balance of investments and the increase in average yield on investments (FTE) to 3.34% for the quarter ended September 30, 2026.
Previous wording
Average deposits grew 16% from the quarter ended June 30, 2025 driven by deposits acquired from the Penns Woods merger. Our average money market, interest-bearing checking, and time deposit accounts grew by $608 million, $364 million, $283 million respectively, from the quarter ended June 30, 2025 partly due to acquisition and higher use of brokered CDs. Interest expense on deposits increased by $4 million, or 8% from the quarter ended June 30, 2025, primarily attributable to an increase in average balance of deposits partially offset by lower cost of funds.
Current wording
Average deposits grew 6% from the quarter ended September 30, 2025 driven by deposits acquired from the Penns Woods merger. Our average money market, interest-bearing checking, and noninterest-bearing checking accounts grew by $410 million, $178 million, $170 million respectively, from the quarter ended September 30, 2025 primarily due to the acquisition. Interest expense on deposits decreased by $1 million, or 1% from the quarter ended September 30, 2025, primarily attributable to an increase in average balance of deposits partially offset by lower cost of funds.
Previous wording
Compared to the quarter ended June 30, 2025, average borrowings saw an 82% increase. This increase was attributable to the acquisition of long-term borrowings from Penns Woods. The increase in the average balance of borrowings resulted in an increase in interest expense on borrowings of $3 million from the quarter ended June 30, 2025.
Current wording
Compared to the quarter ended September 30, 2025, average borrowings saw a 78% increase. This increase was attributable to the acquisition of long-term borrowings from Penns Woods coupled with average loan and investment growth exceeding the rate of average deposit growth. The increase in the average balance of borrowings resulted in an increase in interest expense on borrowings of $3 million from the quarter ended September 30, 2025.
Previous wording
(g)Average cost of deposits were 1.43% and 1.55%, respectively.
Current wording
(g)Average cost of deposits were 1.44% and 1.55%, respectively.
Previous wording
(g)Average cost of deposits were 1.45% and 1.57%, respectively.
Current wording
(g)Average cost of deposits were 1.45% and 1.56%, respectively.
Previous wording
The provision for credit losses decreased by $2 million from the quarter ended June 30, 2025. This decrease included a $7 million decrease in the provision for credit losses - loans, as well as a $5 million increase in the provision for credit losses - unfunded commitments. The current year provision was driven by growth in our commercial lending portfolio. The prior year provision for credit losses - loans was driven by downgrades within our commercial real estate portfolio offset by changes in the economic forecasts. This increase in provision for unfunded was due to an increase in timing of undrawn commitments and increased uncertainty in the economic outlook.
Current wording
The provision for credit losses decreased by $22 million from the quarter ended September 30, 2025. This decrease included a $26 million decrease in the provision for credit losses - loans, as well as a $4 million increase in the provision for credit losses - unfunded commitments. The current year provision was driven by growth in our commercial lending portfolio. The prior year provision for credit losses - loans was driven by the initial Day 1 provision from the Penns Woods acquisition of $20.6 million. Excluding the Day 1 provision for credit losses from the acquisition, the provision for credit losses for the quarter ended September 30, 2025 was $10.5 million, which was driven by an increase in net charge offs coupled with an increase due to individually assessed loans. This increase in provision for unfunded was due to growth in our undrawn commitments.
Previous wording
Noninterest income for the quarter ended June 30, 2026 was $34 million, an increase of $3 million from the quarter ended June 30, 2025, and an increase of $8 million from the six months ended June 30, 2025 driven by an increase in service charges and fees driven by deposit related fees based on customer activity related to the Penns Woods acquisition and trust and other financial services income driven by an increase in our wealth management business.
Current wording
Noninterest income for the quarter ended September 30, 2026 was $36 million, an increase of $4 million from the quarter ended September 30, 2025, driven by an increase $1 million in service charges and fees driven by deposit related fees based on customer activity related to the Penns Woods acquisition and a $2 million increase in trust and other financial services income driven by an increase in our wealth management business.
Previous wording
Noninterest expense increased by $7 million, or 7%, from the quarter ended June 30, 2025 and $19 million, or 10% from the six months ended June 30, 2025. The increase from the prior year quarter was primarily attributable an increase in compensation and employee benefits expense of $8 million, or 15%, to $63 million for the quarter ended June 30, 2026 driven by an increase in core compensation and benefits expense due to the addition of Penns Woods employees. Additional increases included an increase in processing expenses of $4 million for the quarter ended June 30, 2026, due to the addition of the Penns Woods branches to our footprint and an increase of $2 million in amortization of intangible expense related to the acquisition. This was partially offset by a decrease in acquisition expenses of $6 million and a decrease in FDIC insurance premiums of $3 million related to prior period assessment rate changes.
Current wording
Noninterest expense decreased by $25 million, or 18%, from the quarter ended September 30, 2025 and $5 million, or 2% from the nine months ended September 30, 2025. The decrease from the prior year quarter was primarily attributable a decrease in acquisition expense of $31 million to $238 thousand for the quarter ended September 30, 2026 driven by the Penns Woods acquisition in the prior year. This decrease was partially offset by an increase in processing expenses of $2 million for the quarter ended September 30, 2026, and a $1 million increase in operating expense due to the addition of the Penns Woods branches to our footprint.
Previous wording
The increase from the six months ended June 30, 2025 was driven by an increase in compensation and employee benefits expense of $12 million, an increase in processing expense of $7 million and an increase in amortization in intangible expense of $3 million. These increases were offset by a decrease in acquisition expenses of $6 million and FDIC insurance premiums of $2 million. These fluctuations were driven by the same reasons noted above.
Current wording
The decrease from the nine months ended September 30, 2025 was driven by decrease in acquisition expenses of $37 million and a decrease in FDIC insurance expense of $2 million related to prior period assessment rate changes. These decreases were partially offset by an increase in compensation and employee benefits expense of $13 million, due to the addition of Penns Woods employees, and an increase in processing expense of $9 million and in amortization in intangible expense of $4 million due to the addition of the Penns Woods branches to our footprint.
Previous wording
The provision for income taxes increased by $6 million from the quarter ended June 30, 2025 and $9 million for the six months ended June 30, 2025. These increases were driven by higher income before taxes, primarily resulting from increased interest income associated with the acquisition, which expanded our loan portfolio.
Current wording
The provision for income taxes increased by $16 million from the quarter ended September 30, 2025 and $25 million from the nine months ended September 30, 2025. These increases were driven by higher income before taxes, primarily resulting from increased interest income associated with the acquisition, which expanded our loan portfolio.