Tim DeLacey

Tim DeLacey inquired about Northwest Bancshares' strategy for its securities portfolio, specifically the timing of Q4 purchases and the bank's future appetite for growing the securities book relative to its asset base. He also asked how Commercial Real Estate (CRE) will contribute to the low-to-mid single-digit loan growth guidance for 2026, given that CRE balances were down in the recent quarter.

Answer

CFO Doug Schosser explained that Northwest Bancshares increased its securities book in Q4, with purchases made mid-to-late October and November, to align with peer levels. He noted the bank targets around 17% of loans or assets in securities and will continue to prudently manage the portfolio, including pre-purchasing maturing securities for yield benefit. Regarding CRE, Mr. Schosser acknowledged current pressures from non-performing assets but stated the bank is actively in the CRE business within its footprint, aiming for flat to slight growth in the next year or two, leveraging its capital capacity.

Tim DeLacey inquired about the timing of securities purchases in the quarter, the bank's appetite to grow the securities portfolio relative to its asset base, and how Commercial Real Estate (CRE) is expected to contribute to the low-to-mid single-digit loan growth guidance for 2026.

Answer

CFO Doug Schosser stated securities were purchased mid-to-late October and November, with an ongoing strategy to prudently manage and slightly grow the portfolio to align with peers, targeting around 17% of loans or assets. He noted opportunities in CRE given the bank's capital position, aiming for flat to slight growth in the segment, particularly in their footprint, while also managing down non-performing and criticized CRE assets.