Northwest Bancshares, Inc. Q2 FY2025 earnings call

• Completed the Penns Woods merger, with customer and data conversion underway and financial centers rebranded. Key merger metrics, including cost reductions, are on target or better than expectations.
• Reported Q2 2025 revenue of $150 million, a 53.5% increase year-over-year (GAAP). GAAP net income was $33.7 million, with adjusted non-GAAP net income of $38.2 million.
• Drove a 19% increase in average C&I loans, continued deposit gathering with near best-in-class deposit franchise and reduced cost of funds.
• Declared a quarterly dividend of $0.20 per share to shareholders of record as of August 8, 2025.

In the second quarter of 2025, Northwest Bancshares reported total revenue of $150 million. GAAP net income was $33.7 million, with earnings per diluted share of $0.26. On a non-GAAP basis, net income was $38.2 million and earnings per diluted share was $0.30, representing a 10% increase compared to the second quarter of 2024. The net interest margin was 3.56% for the quarter. Average C&I loans increased 19% compared to the same period last year. Deposits remained strong with a fourth consecutive quarter of reduced cost of funds, maintaining a near best-in-class deposit franchise. Credit costs were in line with expectations, with net charge-offs below guidance range and no increase in total delinquency percentage.

• Fourth quarter 2025 net interest income expected in the range of $139 million to $141 million; noninterest income in the range of $32 million to $33 million; noninterest expense in the range of $103 million to $105 million.
• Net charge-offs expected to be $9 million to $11 million per quarter in Q4 2025, with full-year 2025 net charge-offs to average loans slightly below the previously disclosed range of 25 to 35 basis points.
• Expect to achieve 100% of cost savings from the Penns Woods acquisition by the second quarter of 2026, with 75% of savings realized in 2025.

• Macro factors: Uncertainties in tariffs and industry-specific headwinds affecting larger C&I borrowers.
• CRE market: Excess supply in the Columbus market impacting multifamily construction projects, with monitoring of loan to values and debt coverage ratios needed.

Q: About cost savings timing and remaining savings A: Douglas M. Schosser stated they'll provide fuller guidance in January when releasing fourth quarter earnings, originally expecting 40% cost savings from the transaction, with 75% expected in 2025 and the remainder by Q2 2026 Q: Deposit growth prospects A: Douglas M. Schosser said the mix shift has started to stabilize, with relatively low but consistent deposit growth since the beginning of the year, and a less competitive deposit market Q: Classified loans on construction projects A: T.K. Creal commented that the multifamily construction projects in Columbus have loan to values and debt coverage ratios being monitored, with equity still present and expectations of market absorption over time