Northwest Bancshares(NWBI) - 2025 Q3 - Earnings Call Transcript

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 [6][10] - Revenue for the third quarter was a record $168 million, reflecting over 20% year-over-year growth [6][10] - Net interest margin improved by nine basis points quarter-over-quarter to 3.65% [6][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% [7][10] Business Line Data and Key Metrics Changes - Commercial and industrial loan growth exceeded 25% year-over-year [6] - Non-interest income increased by $1.3 million or 4% quarter-over-quarter, driven by service charges [10][18] - Adjusted pre-tax, pre-provision net revenue rose to almost $66 million, an 11.5% increase quarter-over-quarter [10] 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 [6] 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][24] - The company is focusing on organic growth through de novo branches and potential M&A opportunities in high-growth markets [45][46] - The strategy includes maintaining tight cost controls and risk management discipline while investing in talent for future growth [9][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining net interest margin levels in the mid-360s and reaffirmed guidance for the fourth quarter [23] - The company is managing criticized and classified assets, which may impact loan growth but is expected to improve over time [30][39] - Management noted no direct exposure to companies with recent credit issues and emphasized strong risk management practices [7][21] Other Important Information - The company declared a quarterly dividend of $0.20 per share, representing an annualized yield of approximately 6.5% [8] - The liquidity position is strong, with sources covering approximately 250% of uninsured deposits [12] 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 [26][27] Question: Expense management and future guidance - Management aims to maintain positive operating leverage while investing for growth, with no significant increase in expenses expected from current levels [31][32] Question: Capital management post-acquisition - The company is comfortable with its capital levels and will consider opportunities for buybacks or acquisitions while maintaining a strong capital base [37] Question: Trends in consumer portfolio and deposit activity - Management noted elevated delinquencies due to administrative issues from the acquisition but remains comfortable with the overall consumer exposure [43][44] Question: Scaling the bank and future growth strategies - The focus is on maximizing integration and efficiency from the Penns Woods merger while pursuing organic growth and potential M&A opportunities [45][46]