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Northwest Bancshares (NWBI)
NASDAQ:NWBI
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Northwest Bancshares
(NASDAQ:NWBI)
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Rating:68Neutral
Price Target:
$14.00
â–²(10.85% Upside)
Action:DowngradedDate:02/26/26
The score is driven by improving earnings and a de-risked balance sheet plus constructive 2026 guidance and cost-savings visibility. This is partially offset by weak/volatile 2025 operating cash flow and credit-related watch items (delinquencies/ACL), while a supportive valuation (moderate P/E and high dividend yield) and modestly positive technicals provide additional support.
Positive Factors
Balance sheet de-risking
Leverage moving to a conservative ~0.24 and materially higher equity provides a durable capital buffer. That stronger capital base supports loss absorption, regulatory flexibility, dividend continuity and measured growth funding without relying excessively on volatile wholesale funding.
Successful acquisition integration
Timely, on-budget integration of Penns Woods that added scale and 20 branches expands franchise and revenue base. Realizing merger cost savings ahead of schedule improves long-term efficiency and supports operating leverage as combined franchise benefits persist beyond the near term.
Loan growth & NII momentum
Sustained loan growth, driven by commercial and C&I increases, materially expands interest-earning assets. Combined with modest NIM expansion drivers (higher loan yields and securities yields) and a growing SBA business, this supports recurring net interest income and durable fee channels.
Negative Factors
Weak operating cash flow
Sharp decline in operating cash flow and a ~48% drop in free cash flow point to volatility in cash generation versus reported earnings. Persistent cash flow weakness would constrain self-funding for growth, capital returns or reserve builds and raises scrutiny on earnings quality.
Elevated credit metrics
Higher quarterly charge-offs, lower allowance coverage and rising delinquencies signal lingering asset-quality pressure, including legacy CRE/classified balances. If credit stress persists, it could require higher provisions, compress net income and erode capital over multiple quarters.
Funding repricing risk
A concentrated CD maturity wall in Q1 2026 exposes the bank to re-pricing and competition risk; management expects some cost relief but outcomes depend on deposit competition and the Fed path. This concentrated funding schedule makes NIM and liquidity sensitive to market conditions.
Northwest Bancshares (NWBI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.85B
Dividend Yield6.48%
Average Volume (3M)1.08M
Price to Earnings (P/E)14.0
Beta (1Y)0.64
Revenue Growth15.86%
EPS Growth16.50%
CountryUS
Employees1,996
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.33
Shares Outstanding146,139,470
10 Day Avg. Volume942,994
30 Day Avg. Volume1,075,176
Financial Highlights & Ratios
PEG Ratio0.79
Price to Book (P/B)0.93
Price to Sales (P/S)2.01
P/FCF Ratio55.52
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue2.32
Enterprise Value/Gross Profit3.39
Enterprise Value/Ebitda12.20
Forecast
1Y Price Target
$13.00Price Target Upside2.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.31
Revenue Forecast (FY)$714.98M
Northwest Bancshares Business Overview & Revenue Model
Company DescriptionNorthwest Bancshares, Inc. operates as the holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans and loans collateralized by multi-family residential and commercial real estate; commercial business loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by deposit accounts. The company also offers investment management and trust services. As of December 31, 2021, it operated 170 community-banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.
How the Company Makes MoneyNorthwest Bancshares generates revenue primarily through net interest income and non-interest income. The key revenue stream is net interest income, which is derived from the difference between the interest earned on loans and investments and the interest paid on deposits and borrowings. This includes various loan products such as commercial, residential, and consumer loans. Additionally, the company earns non-interest income through fees from wealth management services, insurance products, and transaction fees associated with deposit accounts. Significant partnerships with local businesses and community organizations enhance its customer base and service offerings, contributing to overall earnings growth.
Northwest Bancshares Earnings Call Summary
Earnings Call Date:Jan 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 27, 2026
Earnings Call Sentiment Positive
The call highlighted a successful transformational year driven by the Penns Woods acquisition, record full-year revenue, solid quarterly earnings improvement, strong loan and deposit growth, margin expansion, SBA business momentum, and improved efficiency with planned cost savings realized ahead of schedule. Headwinds included an elevated one-time charge-off that pushed quarterly net charge-offs higher, a decline in ACL coverage, a rise in total delinquencies, some year-over-year noninterest income weakness due to nonrecurring prior-year gains, and near-term CD repricing risk (43% maturing in Q1 2026). Management provided a constructive 2026 outlook (revenues $710M-$730M, NIM in low 3.70s, low-to-mid single-digit loan growth) and emphasized disciplined, prudent growth and integration execution. Overall, positive operational and financial momentum appears to outweigh the manageable credit and expense-related headwinds.Q4-2025 Updates
Positive Updates
Record Full-Year Revenue
Reported record full-year revenue of $655 million for 2025, with total fourth-quarter revenue up $11.8 million or 7% quarter-over-quarter.
Successful Acquisition and Integration of Penns Woods
Closed and integrated Penns Woods (closed July 25), adding 20 financial centers, moving Northwest into the top 100 U.S. banks by assets; merger conversion completed on time and on budget with seamless integration at scale.
Earnings Per Share Improvement
GAAP Q4 EPS of $0.31 and adjusted EPS of $0.33, an adjusted increase of $0.04 from the prior quarter (adjusted EPS up ~13.8% from $0.29 to $0.33).
Net Interest Income and Margin Expansion
Net interest income grew $6.2 million or 4.6% quarter-over-quarter; net interest margin increased to 3.69% in Q4 (up 4 basis points quarter-over-quarter), helped by higher loan yields, purchase accounting accretion (~4 bps), and improved securities yields.
Loan Growth and Commercial Momentum
Average loans grew $414 million Q/Q; end-of-period loans rose $66 million in Q4 to $13.0 billion. Average commercial loans increased $162 million or 7.1% Q/Q and $509 million or 26% year-over-year; C&I average loan growth of 26% year-over-year.
Deposit Strength and Lower Cost of Funds
Average total deposits grew $475 million Q/Q; customer nonbrokered average deposits increased $507 million Q/Q. Cost of deposits declined 2 basis points to 1.53% and brokered deposits decreased by $32 million Q/Q.
Securities Portfolio and Liquidity
Purchased $363 million of securities in the quarter while keeping weighted average life at 4.9 years; securities portfolio yield increased 29 basis points to 3.11%, supporting liquidity and earning asset growth.
Expense Discipline and Efficiency Improvement
Adjusted efficiency ratio improved to 59.5% in Q4, improving 10 basis points Q/Q and 9 basis points year-over-year despite a full quarter impact from the acquisition; management expects to realize 100% of merger cost savings by Q1 2026 (ahead of schedule).
SBA Business Build-Out and Rankings
Material growth in SBA lending in 2025, reaching top 50 (later referenced as top 40) originators nationally; management intends to both balance-sheet and sell SBA loans to capture fee income and yield.
Shareholder Returns and Corporate Recognition
Returned more than half of profits via a quarterly dividend of $0.20 per share; maintained 125th consecutive quarter of cash dividend. Recognized by Newsweek as one of America's best regional banks for the third consecutive year.
2026 Financial Guidance
Management provided 2026 guidance targeting loan growth in low- to mid-single digits, deposit growth in low single digits, revenues of $710M-$730M, NIM in the low 3.70% range, noninterest income $125M-$130M, noninterest expense $420M-$430M, and net charge-offs of 20-27 bps.
Negative Updates
Elevated Q4 Net Charge-Offs and Specific Large Charge-Off
Annualized net charge-offs in the quarter were 40 basis points, elevated by a $9.2 million charge-off of a legacy student housing loan; 2025 full-year net charge-offs were 25 basis points (at the bottom end of the 25-35 bps guidance).
ACL Coverage Decline
Allowance for credit losses (ACL) coverage declined to 1.15% from the prior quarter, driven in part by net charge-offs in the period.
Increase in Overall Delinquencies
Total delinquency rose from 1.10% to 1.50% quarter-over-quarter, primarily due to mortgage loans in 31-day month at quarter end (though 90+ day delinquencies declined from 0.64% to 0.51% and NPAs fell by $21 million Q/Q).
Year-over-Year Noninterest Income Decline
Noninterest income decreased $2.3 million year-over-year because the prior-year quarter included nonrecurring gains (gain on sale of Visa B shares and gain on LIHTC) that did not recur in 2025.
Higher Expenses from Acquisition and Incentive Compensation
Noninterest expense (excluding merger/restructuring) was higher Q/Q and YoY due to a full quarter impact from the Penns Woods acquisition and increased performance-based incentive compensation, even though adjusted efficiency improved.
Concentration of CD Maturities in Q1 2026
43% of the CD portfolio matures in Q1 2026 at a weighted average rate of 3.60%, creating near-term re-pricing risk (management expects to reprice many at lower rates and sees a potential ~10–15 bps decline in CD costs, subject to competition).
CRE and Classified Loan Pressure (Improving but Present)
CRE-related criticized/classified assets contributed to past pressures; while classified loans declined in Q4 (both percentage and absolute) and CRE improvements were noted, management still faces the task of further reducing legacy classified balances acquired in the merger.
Guidance Assumptions Dependent on Rate Path
NIM guidance assumes normal contractual purchase accounting accretion and management’s internal view of additional rate cuts (guidance incorporates expectation of two more cuts beyond what has occurred), introducing sensitivity to actual Fed action and prepayment behavior.
Company Guidance
For 2026 management provided a full-year outlook calling for loan growth in the low- to mid-single digits and deposit growth in the low single digits; total revenues of $710 million to $730 million; net interest margin in the low 3.70% range (including normal contractual purchase‑accounting accretion and management’s internal view of rate moves); noninterest income of $125 million to $130 million; noninterest expense of $420 million to $430 million (with 100% of merger cost savings expected in Q1 2026); net charge‑offs of 20–27 basis points; and a tax rate roughly flat to 2025 at ~23%, with management expecting to drive positive operating leverage.Northwest Bancshares Financial Statement Overview
Summary
Income statement and balance sheet trends are generally solid (improving 2025 revenue and net income; de-risking leverage and higher equity), but cash flow is a major weak spot as operating cash flow fell sharply in 2025, raising questions about consistency and earnings quality.Income Statement
Revenue growth improved meaningfully in 2025 (up 3.63% vs. near-flat in 2024), and profitability also strengthened with higher net income ($126.0M vs. $100.3M). However, margins remain well below the 2021–2023 peak period (net margin 14.4% in 2025 vs. ~19–29% historically), suggesting earnings power has not fully recovered even as top-line momentum improves.72
Positive
Balance Sheet
Leverage looks conservative for the period shown, with debt-to-equity improving to ~0.24 in 2025 from a much higher 2022 level (~0.62), while equity increased materially (to $1.89B). Returns on equity are steady but not standout (mid-6% in 2024–2025 vs. ~9–10% in 2021–2022), indicating a solid capital position but only moderate profitability on that capital.78
Positive
Cash Flow
Cash generation weakened sharply in 2025: operating cash flow fell to $31.7M from $127.7M in 2024, driving a large free cash flow decline (about -48%). While free cash flow still roughly matched net income in 2025 (per the provided free-cash-flow-to-net-income figure), the year-over-year volatility and lower cash inflow raise questions about earnings quality and the consistency of internally generated funding.38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 876.99M | 754.09M | 700.05M | 557.84M | 534.14M |
| Gross Profit | 599.13M | 495.96M | 524.94M | 501.41M | 522.68M |
| EBITDA | 164.77M | 150.89M | 199.57M | 180.14M | 207.76M |
| Net Income | 126.01M | 100.28M | 134.96M | 133.67M | 154.32M |
Balance Sheet | |||||
| Total Assets | 16.77B | 14.41B | 14.42B | 14.11B | 14.50B |
| Cash, Cash Equivalents and Short-Term Investments | 1.82B | 1.40B | 1.17B | 1.36B | 2.83B |
| Total Debt | 446.28M | 444.70M | 642.66M | 924.32M | 391.72M |
| Total Liabilities | 14.88B | 12.81B | 12.87B | 12.62B | 12.92B |
| Stockholders Equity | 1.89B | 1.60B | 1.55B | 1.49B | 1.58B |
Cash Flow | |||||
| Free Cash Flow | 31.71M | 125.36M | 84.33M | 171.11M | 187.94M |
| Operating Cash Flow | 31.71M | 127.67M | 92.89M | 175.43M | 205.46M |
| Investing Cash Flow | -3.48M | 174.97M | -239.68M | -917.42M | -232.97M |
| Financing Cash Flow | -108.98M | -136.52M | 129.69M | -397.90M | 570.49M |
Northwest Bancshares Technical Analysis
Neutral
12.63
Price Trends
12.51
Positive
12.18
Positive
12.09
Positive
Market Momentum
<0.01
Positive
47.35
Neutral
47.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWBI, the sentiment is Neutral. The current price of 12.63 is below the 20-day moving average (MA) of 12.92, above the 50-day MA of 12.51, and above the 200-day MA of 12.09, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 47.35 is Neutral, neither overbought nor oversold. The STOCH value of 47.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NWBI.
Northwest Bancshares Risk Analysis
Northwest Bancshares disclosed 48 risk factors in its most recent earnings report. Northwest Bancshares reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Northwest Bancshares Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $1.99B | 11.28 | 23.62% | 0.27% | 7.80% | 19.38% | |
73 Outperform | $1.74B | 13.12 | 16.42% | 2.65% | 6.09% | 11.49% | |
72 Outperform | $1.82B | 11.38 | 9.71% | 3.11% | 3.80% | -6.23% | |
71 Outperform | $1.73B | 9.31 | 14.82% | 2.73% | 3.98% | 6.75% | |
68 Neutral | $1.85B | 13.97 | 7.22% | 6.48% | 15.86% | 16.50% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
NWBI
Northwest Bancshares
12.63
1.19
10.41%
CHCO
City Holding Company
121.40
8.86
7.88%
FCF
First Commonwealth
17.85
2.64
17.33%
CASH
Pathward Financial
91.45
18.89
26.03%
OFG
OFG Bancorp
40.34
0.63
1.58%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.