Acquisition Impact - The acquisition of Penns Woods added $2.2 billion in total assets, including $1.8 billion in loans and $160 million in investments[150]. - Total assets increased to $16.4 billion as of September 30, 2025, up $2.0 billion from December 31, 2024, primarily due to the Penns Woods acquisition[152]. - Gross loans receivable rose to $12.9 billion, an increase of $1.8 billion attributed to the Penns Woods acquisition[154]. - Total deposits increased by $1.6 billion to $13.7 billion as of September 30, 2025, driven by the acquisition[156]. - The company recorded preliminary goodwill of $57 million and core deposit intangibles of $48 million related to the acquisition[151]. - Average loans receivable increased by $1.3 billion, or 12%, from the quarter ended September 30, 2024, primarily due to the Penns Woods acquisition[195]. - Average deposits grew by 10% from the quarter ended September 30, 2024, driven by the Penns Woods merger[197]. - Average borrowings increased by 57% compared to the quarter ended September 30, 2024, due to the acquisition of long-term borrowings from Penns Woods[198]. - The provision for credit losses increased by $26 million from the quarter ended September 30, 2024, primarily due to the initial Day 1 provision from the Penns Woods acquisition of $20.6 million[217]. - Noninterest expense increased by $43 million, or 47%, from the quarter ended September 30, 2024, primarily due to merger and restructuring expenses related to the Penns Woods acquisition[228]. Financial Performance - Net income for the quarter ended September 30, 2025, was $3 million, a decrease of $31 million, or 91%, from $34 million for the same quarter in 2024[188]. - Net interest income for the third quarter of 2025 was $136 million, an increase of $25 million, or 22%, from the third quarter of 2024[192]. - Noninterest income for the quarter ended September 30, 2025 was $32 million, an increase of $4 million from the same quarter in 2024, driven by gains on equity method investments[224]. - The net interest income (GAAP) for the quarter ended September 30, 2025 was $135.974 million, compared to $111.302 million for the same quarter in 2024[234]. - The projected percentage decrease in net income due to a 300 bps increase in interest rates is estimated at 11.4%[241]. Asset and Liability Management - Total liabilities increased to $14,133,045, up from $12,778,772, marking a growth of 10.6% year-over-year[202]. - Total classified loans rose by $255 million to $527 million at September 30, 2025, driven by changes in the commercial real estate portfolio and the Penns Woods acquisition[184]. - Classified loans increased to $527 million, or 4.07% of total loans, at September 30, 2025, up from $320 million, or 2.83% of total loans, at September 30, 2024[219]. - Nonaccrual loans increased by $67 million, or 109%, to $128 million at September 30, 2025, representing 0.99% of total loans receivable[185]. - The allowance for credit losses (ACL) increased by $41 million to $157 million, representing 1.22% of total loans as of September 30, 2025, up from 1.04% at December 31, 2024[183]. Capital and Equity - Total shareholders' equity increased to $1.9 billion, or $12.70 per share, as of September 30, 2025, up from $12.52 per share at December 31, 2024, primarily due to a $259 million increase from common stock issuance related to the Penns Woods acquisition[161]. - The total capital to risk-weighted assets ratio for Northwest Bancshares, Inc. was 15.45% as of September 30, 2025, exceeding the minimum requirement of 10.50%[165]. - Tier 1 capital to risk-weighted assets ratio for Northwest Bancshares, Inc. was 12.22% as of September 30, 2025, above the minimum requirement of 8.50%[165]. Liquidity and Deposits - The liquidity ratio at Northwest Bank was 12.95% as of September 30, 2025, indicating a strong liquidity position[170]. - Cash dividends paid during the quarter ended September 30, 2025, totaled $29 million, compared to $25 million for the quarter ended June 30, 2024, with a dividend payout ratio of 1000.0%[171]. - As of September 30, 2025, brokered deposits were $115 million, making up 4% of time deposits and 1% of total deposits[157]. - Uninsured deposits totaled $3.75 million, representing 27.4% of total deposits as of September 30, 2025[159]. - The average uninsured deposit account balance was $323,353 as of September 30, 2025[160]. Interest Income and Margin - Interest income on investment securities increased by $2 million, or 19%, from the quarter ended September 30, 2024[196]. - The net interest margin (FTE) was 3.65% for the quarter ended September 30, 2025, reflecting an increase of thirty-two basis points compared to the same quarter of the prior year[192]. - The average yield on interest-earning assets improved to 5.22%, up from 5.11% year-over-year[202]. - The average cost of interest-bearing liabilities decreased to 2.13%, down from 2.39% in the same quarter last year[202]. - Net interest margin (FTE) improved to 3.65%, compared to 3.33% in the previous year[202]. Risk Management - The company aims to limit exposure to interest rate risk by increasing core deposits and emphasizing short-term fixed-rate loans[235].

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Core Insights - The S&P 500 index will see changes with Solstice Advance Materials and Qnity Electronics joining the index, replacing CarMax and Eastman Chemical respectively [1][3][7] Company Changes - Solstice Advance Materials, using the ticker "SOLS," is a spinoff from Honeywell International, which will remain in the S&P 500 [2] - Qnity Electronics, with the ticker "Q," is a spinoff from DuPont de Nemours, which will also continue to be part of the index [2] Index Adjustments - These changes mark the first updates to the S&P 500 since September, when several companies were replaced [4][7] - CarMax and Eastman Chemical will move to the S&P 600 index, which includes smaller companies [3][4]

Financial Data and Key Metrics Changes - Total assets reached $16.4 billion, total deposits were $13.7 billion, and total loans amounted to $12.9 billion [7] - Revenue for the third quarter was a record $168 million, reflecting over 20% year-over-year growth [7][11] - Net interest margin improved by nine basis points quarter-over-quarter to 3.65% [7][10] - GAAP EPS for the nine months ended September 30, 2025, increased by $0.08 or 15%, while adjusted EPS rose by $0.16 or 21% [8] Business Line Data and Key Metrics Changes - Commercial and industrial loan growth exceeded 25% year-over-year [7] - Non-interest income increased by $1.3 million or 4% quarter-over-quarter, driven by service charges [11][19] - Adjusted pre-tax, pre-provision net revenue rose to almost $66 million, an 11.5% increase quarter-over-quarter [12] Market Data and Key Metrics Changes - The company has over 150 financial centers across Pennsylvania, New York, Ohio, and Indiana, with plans to open three new centers in the Columbus market [4][5] - The company was named a top 50 SBA lender nationally by volume [7] Company Strategy and Development Direction - The merger with Penns Woods Bancorp was completed, enhancing balance sheet scale and expected to achieve full cost savings by the second quarter of 2026 [3][25] - The company is focusing on organic growth and de novo branching in high-growth markets, particularly Columbus and Indianapolis [5][54] - Management emphasized maintaining tight cost controls and risk management discipline while pursuing sustainable growth [10][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining net interest margin levels in the mid-360s and expects to see continued growth in loan pipelines [24] - The company is managing credit risk tightly, with no direct exposure to companies with recent credit issues [8][22] - Future guidance for non-interest income is expected to be between $32 million to $33 million for the fourth quarter [24] Other Important Information - The company declared a quarterly dividend of $0.20 per share, representing an annualized yield of approximately 6.5% [9] - The liquidity position is strong, with available sources covering approximately 250% of uninsured deposits [14] Q&A Session Summary Question: Loan growth expectations and impact of new branches - Management indicated that while the acquisition had a significant impact on loan growth, they expect to hold the balance sheet stable and look for growth opportunities in the fourth quarter [30][31] Question: Expense management and future guidance - Management aims to manage positive operating leverage while investing for growth, with expectations of holding expenses at current levels [34][36] Question: Capital management and targets - The company is comfortable with its capital levels and will consider opportunities for buybacks or acquisitions as they arise [43] Question: Trends in the consumer portfolio and deposit accounts - Management noted elevated delinquencies due to administrative issues from the acquisition but remains comfortable with the overall consumer exposure [50][51] Question: Scaling the bank and future growth strategies - The focus is on maximizing integration and efficiency from the Penns Woods merger while considering both organic growth and M&A opportunities [52][54] Question: Funding loan growth and securities portfolio - Management expressed confidence in their ability to fund loan growth through deposits and securities, with a flexible approach to managing their funding mix [60][64]

Financial Data and Key Metrics Changes - Total assets reached $16.4 billion, total deposits were $13.7 billion, and total loans amounted to $12.9 billion, reflecting significant growth [7][11] - Revenue for the third quarter was a record $168 million, representing over 20% year-over-year growth [7][11] - Net interest margin improved by nine basis points quarter-over-quarter to 3.65% [7][11] - GAAP EPS increased by $0.08 or 15% for the nine months ended September 30, 2025, while adjusted EPS rose by $0.16 or 21% for the same period [8][11] Business Line Data and Key Metrics Changes - Commercial and industrial loan growth exceeded 25% year-over-year, with strong progress in specialty verticals and SBA lending [7][11] - Non-interest income increased by $1.3 million or 4% quarter-over-quarter, driven primarily by service charges [11][19] - Adjusted pre-tax, pre-provision net revenue was nearly $66 million, an 11.5% increase quarter-over-quarter [12] Market Data and Key Metrics Changes - The company has over 150 financial centers across Pennsylvania, New York, Ohio, and Indiana, with plans to open additional centers in high-growth markets [4][5] - The company was named a top 50 SBA lender nationally by volume, indicating strong market positioning [7] Company Strategy and Development Direction - The merger with Penns Woods Bancorp was completed, enhancing the company's scale and operational efficiency [3][13] - The company is focused on sustainable, responsible, and profitable growth, with plans to open new financial centers in key locations [4][5][10] - The management team is actively recruiting for leadership roles to support expansion and enhance service offerings [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining net interest margin levels in the mid-360s and anticipates continued growth in loan portfolios [24] - The company is managing credit risk tightly, with no direct exposure to companies facing significant credit issues [8][22] - Future guidance for non-interest income and expenses was provided, indicating stable expectations for the upcoming quarters [24][25] Other Important Information - The company declared a quarterly dividend of $0.20 per share, representing an annualized yield of approximately 6.5% [9] - The integration of the Penns Woods acquisition is progressing well, with expected cost savings to be fully realized by the second quarter of 2026 [25][86] Q&A Session Summary Question: Loan growth expectations and impact of new branches - Management indicated that loan growth is expected to stabilize, with opportunities for growth in the fourth quarter and beyond, particularly from new branches [30][31][32] Question: Expense management and future guidance - Management emphasized a focus on positive operating leverage while continuing to invest for growth, with expectations for expenses to remain stable [34][35][36] Question: Capital management post-acquisition - Management expressed comfort with current capital levels, indicating a preference for maintaining a strong capital base while exploring growth opportunities [43][44] Question: Consumer portfolio trends and deposit activity - Management noted elevated delinquencies due to administrative issues from the acquisition but remains confident in the overall health of the consumer portfolio [50][51] Question: Scaling the bank and future growth strategies - Management is focused on maximizing integration and efficiency from the Penns Woods merger while considering both organic growth and M&A opportunities for future scaling [52][54] Question: Funding loan growth and deposit strategies - Management indicated strong funding capacity for loan growth, with expectations for deposit growth from new branches and existing customer relationships [61][62] Question: Overall loan yields and competitive landscape - Management reported that overall loan yields are in the low sevens, with expectations for some pressure on yields due to competitive market conditions [78][79]

Northwest Bancshares (NasdaqGS:NWBI) Q3 2025 Earnings Call October 28, 2025 09:00 AM ET Speaker2Hello and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Northwest Bancshares Inc. Q3 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, t ...

Financial Performance - The company's total assets reached $164 billion in 3Q25[9], with total deposits of $137 billion and total loans of $129 billion[6] - Total revenue for 3Q25 was a record $1681 million, a 208% year-over-year increase[9] - Net interest income increased by 222% year-over-year[9], reaching $1360 million in 3Q25, a 139% increase QoQ[12] - Diluted EPS was $002, while adjusted diluted EPS was $029[6]; Year-to-date EPS growth was 15% (GAAP) and 21% (Adjusted)[9] - The net interest margin improved to 365%, benefiting from higher average loan yields and purchase accounting accretion[13] Merger and Acquisition - Successfully completed the merger with Penns Woods on July 25, 2025, adding balance sheet scale with $164 billion in assets, $129 billion in loans, and $137 billion in deposits[19] - Total consideration paid for Penns Woods was $2338 million[18] - The merger is expected to achieve 234% EPS accretion in 2026[18] - Loan marks from the Penns Woods acquisition were $776 million, and core deposit intangibles were $480 million[18] Loan and Deposit Portfolio - Average loans grew by $132 billion QoQ, with commercial loans increasing by $177 million, or 84% QoQ and $460 million, or 253% YoY[30] - Average total deposits grew by $114 billion QoQ[37] - Cost of deposits remained flat at 155%[37] Outlook - The company expects to maintain a net interest margin in the mid-360s bps level in 4Q25, including projected contractual purchase accounting loan accretion of $19 million[89] - Noninterest income is expected to be in the range of $32 million to $33 million in 4Q25[89] - Noninterest expense is expected to be in the range of $102 million to $104 million in 4Q25[89]