Northwest Bancshares (NWBI)·Q4 2025 Earnings Summary

Northwest Bancshares Posts Record Revenue as Penns Woods Integration Drives 17% Growth

January 26, 2026 · by Fintool AI Agent

Northwest Bancshares (NWBI) delivered record quarterly revenue of $180 million in Q4 2025, up 17% year-over-year, as the Penns Woods acquisition completed in July 2025 contributed a full quarter of results. Net income reached $46 million ($0.31 per diluted share), a 40% increase from $33 million ($0.26 per share) in Q4 2024. The stock rose 1.4% during regular trading and climbed an additional 2.8% in after-hours to $13.01.

Did Northwest Bancshares Beat Earnings?

Revenue: BEAT — $169 million in total revenue (estimate-analysis basis) vs. consensus of $166 million, a 1.7% beat.* The company reported record total revenue of $180 million when including net interest income of $142.2 million plus noninterest income of $37.8 million.

EPS: MIXED — GAAP EPS of $0.31 came in flat vs. some estimates, while adjusted (non-GAAP) EPS of $0.33 beat the prior year by 22%. The estimate-analysis consensus showed $0.31 expected vs. $0.29 reported on a normalized basis.

*Values retrieved from S&P Global.

What Drove the Quarter?

The Penns Woods Bancorp acquisition, which closed in late July 2025, was the dominant factor:

Net Interest Income Expansion — Net interest income increased $28 million YoY to $142 million, driven by:

• Higher average earning assets (+$2B from Penns Woods)
• Loan yields improving to 5.65% from 5.56% YoY
• Cost of deposits decreased 2 bps to 1.53%
• Loan fair value accretion of $4.6 million from the acquisition
• 43% of the CD portfolio matures in Q1 2026 at a weighted-average rate of 3.60%, with new volumes at lower rates expected to drive further cost declines

Balance Sheet Growth — Average loans increased 15.9% YoY to $13.0 billion, with commercial loans leading the mix shift toward higher-yielding assets.

What Changed From Last Quarter?

Q3 2025 was heavily distorted by $31 million in merger expenses and a $20.6 million Day 1 CECL provision for Penns Woods non-PCD loans. Q4 2025 represents the first "clean" quarter post-acquisition:

Credit Quality Improved — Classified loans decreased to $453 million (3.49% of total loans) from $527 million (4.07%) in Q3, driven by improvements in commercial real estate. Net charge-offs were 0.40% annualized vs. 0.29% in Q3.

What Did Management Say?

CEO Louis Torchio struck an optimistic tone:

"2025 was a transformational year for Northwest Bank. We closed on a significant acquisition, drove record revenue of $655 million for the full year, and continued to expand the firm's net interest margin."

"I am excited at our prospects in 2026, and anticipate another year of record revenue growth, as we build out our consumer franchise in Columbus, deepen relationships in our existing core markets, and continue to build market share in our commercial lines of business."

Full Year 2025 Performance

Capital Return and Dividend

Northwest declared a quarterly dividend of $0.20 per share, payable February 18, 2026, marking the 125th consecutive quarterly dividend. At the December 31 closing price of $12.00, this represents a 6.7% annualized yield.

Capital ratios remain well above regulatory minimums:

• Total Capital Ratio: 15.36% (vs. 10.50% required)
• Tier 1 Capital Ratio: 12.32% (vs. 8.50% required)
• Common Equity Tier 1: 12.32% (vs. 7.00% required)

How Did the Stock React?

NWBI shares rose 1.4% during regular trading on January 26, closing at $12.66, and climbed an additional 2.8% in after-hours to $13.01. The positive reaction reflects relief at clean execution post-acquisition and margin expansion.

Historical Earnings Reactions — NWBI has shown muted stock reactions to earnings over the past year, typically moving 1-3% on results. The after-hours move to $13.01 brings shares within 4% of the 52-week high.

Credit Quality: What to Watch

While credit metrics improved sequentially, some areas warrant monitoring:

NPLs remain elevated vs. pre-acquisition levels largely due to acquired Penns Woods loans. Commercial real estate loans 90+ days past due were $32.7 million, down from $56.5 million in Q3.

CRE Concentration Improving — Regulatory CRE concentration declined to 140% of target Tier 1 + ACL, down from 156% in the prior quarter. Within classified CRE, 5+ Unit Dwelling loans fell from ~$50 million in Q2 2025 to $21.7 million in Q4 2025 as earlier downgrades showed improved performance. Nursing home outstandings continued declining to $243 million from $321 million at Q2 2025.

Forward Catalysts

1. 2026 Revenue Growth — Management expects another record year driven by Columbus consumer banking expansion and commercial market share gains

2. Integration Synergies — Q4 showed merger expenses declining to $4.2M from $31.3M in Q3, with further cost savings expected as integration completes

3. Net Interest Margin — Continued NIM expansion possible if deposit costs continue to decline faster than asset yields

4. Dividend Sustainability — 125 consecutive quarters of dividends with strong capital ratios suggests continued 6%+ yield

What Did Management Guide for 2026?

Management provided detailed 2026 guidance, projecting another record year:

Key Guidance Takeaways:

• Revenue growth of 8-11% driven by continued loan growth and stable NIM
• Expense increase reflects full-year Penns Woods operations, partially offset by synergies
• Credit outlook improved: 20-27 bps NCOs vs. 25 bps in 2025
• NIM expected to hold steady in the low 370s despite rate environment

Q&A Highlights: What Analysts Asked

Expense Seasonality (Jeff Rulis, D.A. Davidson) — CFO Doug Schasser confirmed Q1 will see typical seasonal increases from FICA resets and Q2 will have merit increases. However, Q1 expenses should be below Q4 levels as some Q4 performance-based incentive true-ups were one-time in nature.

NIM and Rate Assumptions (Jeff Rulis) — The low 370s NIM guidance includes purchase accounting accretion and assumes 3 rate cuts in 2026. One cut was received in January instead of December, so effectively 2 more cuts are expected. However, the NIM guidance "isn't contingent on those rate cuts" as the bank is neutrally positioned.

SBA Business Strategy (Tim Switzer, KBW) — Northwest reached the top 40 SBA originators by volume and recently closed a significant funding in Columbus. The strategy is to balance sheet in-footprint SBA loans while selling some for fee income nationally. CEO Torchio emphasized they're "in the early innings of scaling this business" and have invested heavily in infrastructure and underwriting.

Cost Savings Timing — Management confirmed cost savings are on track for 100% achievement in Q1 2026, ahead of original schedule. This is fully reflected in the 2026 guidance.

M&A Appetite (Matthew Breese, Stephens) — CEO Torchio stated the focus is on "successful accretion and driving organic growth in 2026." While open to conversations, nothing is imminent. The bank wants to "string together several quarters of strong results" before entertaining M&A, with any future deal needing to fit culturally and geographically in their four-state footprint.

CRE Outlook — While CRE loans declined this quarter, management expects to "turn that CRE business around to get it to more flat, to slight growth" over the next year as criticized/classified assets continue to resolve.

CD Repricing Opportunity (Matthew Breese) — CFO Schasser sees a 10-15 basis point opportunity on CD repricing as 43% of the portfolio matures in Q1 at higher rates.

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Related Links:

• Northwest Bancshares Company Profile
• View Q4 2025 Earnings Documents
• Prior Quarter: Q3 2025 Earnings