Northwest Bancshares (NWBI) risk factors, FY2024 10-K

Risks Related to our Lending Activities

1. 01Our commercial loan portfolio is increasing and the inherently higher risk of loss may lead to additional provisions for credit losses or charge-offs, which would negatively impact earnings and capital
2. 02The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny
3. 03If the allowance for credit losses is not sufficient to cover actual credit losses, our earnings could decrease
4. 04The foreclosure process may adversely impact our recoveries on non-performing loans

Risks Related to Laws and Regulations

1. 05Changes in laws and regulations and the cost of compliance with new laws and regulations may adversely affect our operations and our income
2. 06Non-compliance with the Bank Secrecy Act, as amended, and its implementing regulations, or other laws and regulations could result in fines or sanctions
3. 07We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to material penalties and other sanctions
4. 08We could become subject to more stringent capital requirements, which could adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares
5. 09The Federal Reserve Board may require us to commit capital resources to support Northwest Bank
6. 10Legal and regulatory proceedings and related matters could adversely affect us or the financial services industry in general
7. 11Data privacy and cybersecurity are areas of heightened legislative and regulatory scrutiny

Risks Related to Market Interest Rates

1. 12The reversal of the historically low interest rate environment has and may continue to adversely affect our net interest income and profitability
2. 13Changes in interest rates could adversely affect our results of operations and financial condition
3. 14Hedging against interest rate exposure may adversely affect our earnings

Risks Related to Economic Conditions

1. 15A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings
2. 16The monetary policies of the Federal Reserve Board could adversely affect our business, financial condition and results of operations
3. 17Inflation can have an adverse impact on our business and on our customers
4. 18We could be adversely affected by the soundness of other financial institutions and other third parties we rely on
5. 19perceptions about the Company. These perceptions about the Company could cause its business to be negatively affected and exacerbate the other risks that the Company faces
6. 20A lack of liquidity could adversely affect the Company’s financial condition and results of operations

Risks Related to our Business Strategy

1. 21Acquisitions may disrupt our business and dilute stockholder value
2. 22Our continued pace of growth may require us to raise additional capital during unfavorable market conditions
3. 23New lines of business or new products and services may subject us to additional risks
4. 24Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively
5. 25Uncertainties associated with increased loan originations may result in errors in our judgment of collectability, which may lead to additional provisions for credit losses or charge-offs, which would negatively affect our operations

Risk Related to Competitive Matters

1. 26Strong competition may limit growth and profitability
2. 27We may be subject to intellectual property-related disputes or may fail to effectively obtain, maintain, defend, or enforce our intellectual property rights

Risks Related to Operational Matters

1. 28Risks associated with system failures, interruptions, or cybersecurity breaches could negatively affect our earnings
2. 29Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses
3. 30Our board of directors relies to a large degree on management and outside consultants in overseeing cybersecurity risk management
4. 31Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes

Risks Related to Environmental and Other Global Matters

1. 32We are subject to environmental liability risk associated with lending activities
2. 33A slowdown in economic growth or a resumption of recessionary economic conditions due to global events could have an adverse effect on our business in the future
3. 34Climate-related risks could adversely affect our business and performance, including indirectly through impacts on our customers
4. 35Our business, financial condition, and results of operations could be adversely affected by natural disasters, health epidemics, and other catastrophic events

Risks Related to Accounting Matters

1. 36If our intangible assets, including goodwill, are either partially or fully impaired in the future, it would decrease earnings
2. 37Changes in management’s estimates and assumptions may have a material impact on our Consolidated Financial Statements and our financial condition or operating results

Risks Related to Investment Activities

1. 38We could record future losses on our investment securities portfolio
2. 39Our exposure to municipalities may lead to operating losses
3. 40The financial services sector represents a significant concentration within our investment portfolio
4. 41Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings and financial condition

Risks Related to Our Debit and Credit Activities

1. 42Changes in card network rules or standards could adversely affect our business
2. 43Changes in card network fees could impact our operations
3. 44Our business could suffer if there is a decline in the use of debit cards as a payment mechanism or if there are adverse developments with respect to the financial services industry in general
4. 45Other Risks Related to Our Business
5. 46Our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance
6. 47If our government banking deposits were lost within a short period of time, this could negatively impact our liquidity and earnings
7. 48Our funding sources may prove insufficient to replace deposits at maturity and support our future growth
8. 49A protracted government shutdown may result in reduced loan originations and related gains on sale and could negatively affect our financial condition and results of operations
9. 50Our inability to tailor our retail delivery model to respond to consumer preferences in banking may negatively affect earnings