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Northwest Bancshares (NWBI)
NASDAQ:NWBI
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Northwest Bancshares
(NASDAQ:NWBI)
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Rating:71Outperform
Price Target:
$14.00
â–²(8.70% Upside)
Overall score reflects solid underlying financial performance and a supportive earnings outlook, balanced against weakening cash-flow trends and identified credit/funding risks. Valuation is a notable positive (high dividend yield with a moderate P/E), while technicals are mildly constructive but not strongly bullish.
Positive Factors
Merger Integration
Completed integration of Penns Woods delivers durable scale and operational synergies, expanding deposit and loan mix across new markets. Realized data and customer conversions reduce execution risk and improve cross-sell opportunities, supporting sustainable revenue and cost benefits.
Sustained Revenue Growth
Consistent, double-digit revenue growth reflects accretive acquisition effects and organic loan and fee growth, enhancing earnings power. This provides a stronger base to absorb credit volatility, invest in branches and digital channels, and support medium-term profitability expansion.
Strong Capital and Liquidity
Well-above-regulatory CET1 and robust uninsured deposit coverage give durable loss-absorbing capacity and funding resilience. This strengthens the bank's ability to lend, meet regulatory expectations, pursue measured growth, and sustain dividends during multi-quarter stress scenarios.
Negative Factors
Declining Operating Cash Flow
Significant declines in operating cash flow and sharply negative free cash flow growth signal weakening internal funding, raising reliance on external funding or deposit growth. Over months, this can constrain loan growth, capital allocation flexibility, and funding for investments or dividends.
Rising Non-Performing Assets
An increase in NPAs to ~1.0% of loans plus OREO indicates growing credit stress, including acquired loan issues. Persistent elevated NPAs require higher provisioning, compress margins, and can limit risk appetite for new lending until asset quality trends stabilize.
Merger-Related Charges & Charge-off Risk
Merger and restructuring expenses depress reported earnings and integration-related credit work may produce elevated charge-offs. Potential multi-quarter charge-off volatility increases earnings uncertainty and can erode tangible equity if credit trends worsen, stressing capital deployment decisions.
Northwest Bancshares (NWBI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.88B
Dividend Yield6.48%
Average Volume (3M)827.53K
Price to Earnings (P/E)14.0
Beta (1Y)0.59
Revenue Growth15.86%
EPS Growth16.50%
CountryUS
Employees1,996
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.33
Shares Outstanding146,099,980
10 Day Avg. Volume1,113,868
30 Day Avg. Volume827,532
Financial Highlights & Ratios
PEG Ratio-0.66
Price to Book (P/B)1.05
Price to Sales (P/S)2.22
P/FCF Ratio13.36
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue1.95
Enterprise Value/Gross Profit2.93
Enterprise Value/Ebitda10.89
Forecast
1Y Price Target
$13.00Price Target Upside0.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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
Solid profitability and modest TTM revenue growth (3.34%) support the score, and leverage appears moderate (debt-to-equity 0.33) with a strong capital structure. Offsetting this, cash flow metrics weakened materially (operating cash flow down; free cash flow growth -47.4%) and margins show some pressure, which raises liquidity/earnings durability concerns.Income Statement
Northwest Bancshares shows a stable revenue growth trend with a 3.34% increase in TTM. The company maintains healthy profit margins, with a net profit margin of 13.87% and an EBIT margin of 25.18%. However, there is a noticeable decline in gross profit margin from previous years, indicating potential cost pressures.75
Positive
Balance Sheet
The company's debt-to-equity ratio is moderate at 0.33, suggesting a balanced approach to leverage. Return on equity is reasonable at 6.72%, though it has decreased from previous years. The equity ratio remains strong, reflecting a solid capital structure.70
Positive
Cash Flow
Operating cash flow has decreased significantly, impacting the operating cash flow to net income ratio. Free cash flow growth is negative at -47.4%, which could signal cash management challenges. However, the free cash flow to net income ratio remains high at 95.25%, indicating efficient cash conversion.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 846.27M | 754.09M | 700.05M | 557.84M | 534.14M | 563.06M |
| Gross Profit | 561.72M | 495.96M | 524.94M | 501.41M | 522.68M | 436.74M |
| EBITDA | 151.39M | 150.89M | 199.57M | 180.14M | 207.76M | 97.26M |
| Net Income | 113.05M | 100.28M | 134.96M | 133.67M | 154.32M | 74.85M |
Balance Sheet | ||||||
| Total Assets | 16.38B | 14.41B | 14.42B | 14.11B | 14.50B | 13.81B |
| Cash, Cash Equivalents and Short-Term Investments | 301.61M | 1.40B | 1.17B | 1.36B | 2.83B | 2.14B |
| Total Debt | 613.07M | 444.70M | 642.66M | 924.32M | 391.72M | 411.84M |
| Total Liabilities | 14.53B | 12.81B | 12.87B | 12.62B | 12.92B | 12.27B |
| Stockholders Equity | 1.86B | 1.60B | 1.55B | 1.49B | 1.58B | 1.54B |
Cash Flow | ||||||
| Free Cash Flow | 60.92M | 125.36M | 84.33M | 171.11M | 187.94M | 128.18M |
| Operating Cash Flow | 70.25M | 127.67M | 92.89M | 175.43M | 205.46M | 140.44M |
| Investing Cash Flow | 311.13M | 174.97M | -239.68M | -917.42M | -232.97M | -560.58M |
| Financing Cash Flow | -329.45M | -136.52M | 129.69M | -397.90M | 570.49M | 1.10B |
Northwest Bancshares Technical Analysis
Positive
12.88
Price Trends
12.31
Positive
12.18
Positive
12.11
Positive
Market Momentum
0.14
Negative
59.82
Neutral
65.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWBI, the sentiment is Positive. The current price of 12.88 is above the 20-day moving average (MA) of 12.40, above the 50-day MA of 12.31, and above the 200-day MA of 12.11, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 59.82 is Neutral, neither overbought nor oversold. The STOCH value of 65.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.00B | 10.99 | 23.62% | 0.27% | 7.80% | 19.38% | |
78 Outperform | $1.77B | 13.78 | 16.42% | 2.65% | 6.09% | 11.49% | |
76 Outperform | $1.87B | 12.26 | 9.71% | 3.11% | 3.80% | -6.23% | |
73 Outperform | $1.77B | 8.80 | 14.82% | 2.73% | 3.98% | 6.75% | |
71 Outperform | $1.88B | 14.00 | 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
12.88
0.75
6.15%
CHCO
City Holding Company
123.09
9.62
8.47%
FCF
First Commonwealth
18.03
2.18
13.78%
CASH
Pathward Financial
90.29
11.34
14.37%
OFG
OFG Bancorp
40.30
-0.89
-2.17%
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.