Northwest Bancshares, Inc. Q3 FY2025 earnings call

• Completed the Penns Woods merger, the largest transaction in company history, with deal synergies on target and financial impacts on track. - Welcomed new leadership team members, including Chief Legal Officer, Treasurer, and Head of Wealth Management. - Had an official groundbreaking ceremony for the first de novo financial center in the Columbus market, with plans to open additional new financial centers in key locations. - Third quarter financial performance was strong with record revenue, improved net interest margin, and progress in credit management. - Declared a quarterly dividend of $0.20 per share, with an annualized dividend yield of approximately 6.5% based on market value as of September 30, 2025.

At quarter end, Northwest Bancshares had $16.4 billion in total assets, $13.7 billion in deposits, and $12.9 billion in loans. The third quarter resulted in a record $168 million in revenue, representing over 20% year-over-year revenue growth. Net interest margin improved 9 basis points quarter-over-quarter to 3.65%, benefiting from higher average loan yields and purchase accounting accretion. GAAP EPS for the 9 months ended September 30, 2025, was up $0.08 or 15%, and adjusted EPS increased $0.16 or 21% for the same period.

• Expect to maintain net interest margin at the third quarter 2025 level of the mid-360s. - Noninterest income expected to be $32 million to $33 million in the fourth quarter of 2025. - Noninterest expense expected to be in the range of $102 million to $104 million in the fourth quarter of 2025. - Tax rate expected to remain flat at the 2024 tax rate. - Net charge-offs to average loans expected to end the year at the low end of the 25 to 35 basis point range, potentially up to $13 million in the fourth quarter of 2025. - Expect to achieve 100% of merger cost savings by second quarter 2026.

• Industry credit issues, with no direct or known indirect exposure to high-profile companies referenced in media, but monitoring credit risk. - Administrative consumer delinquencies due to customer conversion processes. - Volatility in net interest margin due to prepayments of acquired loans affecting purchase accounting accretion.

Q: Daniel Tamayo asked about loan growth expectations and new de novo branches and how they fit into loan growth guidance.

A: Douglas Schosser said they look to hold the balance sheet stable next quarter but have good pipelines, and Lou Torchio mentioned de novo strategy with hiring and plans for growth in-market using national verticals.

Q: Brian Foran inquired about tangible common equity ratio, CET1, margin commentary, and credit slide.

A: Douglas Schosser discussed capital levels well above regulatory minimums, margin volatility due to purchase accounting, and credit charge-offs being a mix of mathematical statement and work through larger resolutions.

Q: Timothy Switzer asked about scaling up the bank and target size.

A: Lou Torchio talked about maximizing Penns Woods merger integration, dual strategy of organic growth and M&A, and focus on de novo branching and complementary M&A.

Q: David Bishop asked about funding mix, loan growth funding, and security trends.

A: Douglas Schosser discussed short duration of CD portfolio, funding capacity for loan growth, and security position depending on opportunities.

Q: Matthew Breese asked about deposit betas, pipeline, and loan yields.

A: Douglas Schosser and Lou Torchio talked about deposit betas in mid-20s, strong pipelines in national verticals, and loan yields in low 7s with forward curve impact.

Q: Daniel Cardenas asked about de novo expansion talent and Penns Woods transaction runoff.

A: Lou Torchio said talent search in progress for de novo offices, and Douglas Schosser stated Penns Woods transaction runoff is in line with expectations, steady with no significant concerns