Northwest Bancshares(US:NWBI)2025-11-10 20:09Acquisition 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].