Northwest Bancshares (NWBI) Q4 2024 earnings summary

Executive summary

• Delivered solid Q4 2024 results with improved net interest margin, efficiency ratio, and disciplined credit management, reflecting a focus on sustainable and profitable growth.

• Maintained a stable funding base through deposit gathering and low cost of funds.

• Announced agreement to acquire Penns Woods Bancorp, the largest merger in company history, expected to close in Q3 2025, positioning among the top 100 U.S. banks.

• Declared a quarterly dividend of $0.20 per share for shareholders of record as of February 3, 2025, marking the 121st consecutive quarterly dividend.

• Noninterest income rose sharply due to gains on Visa B share sale and a low-income housing tax credit investment.

Financial highlights

• Q4 2024 net income was $33 million, or $0.26 per diluted share; adjusted net income was $35 million, or $0.27 per diluted share.

• Net interest margin expanded to 3.42%, aided by non-accrual loan recovery; net interest income increased 3% QoQ.

• Deposit balances grew 2% year-over-year; cost of funds decreased by 10 bps to 1.68%.

• Noninterest income increased $12 million, including $6 million from Visa B share sale and $4 million from a low-income housing tax credit gain.

• Noninterest expense rose 5% year-over-year, with efficiency ratio improving to 59.6%.

Outlook and guidance

• 2025 guidance calls for low single-digit loan and deposit growth, with a focus on commercial lending.

• Noninterest income expected between $124 million and $129 million for 2025, excluding Penns Woods impact.

• Expense growth to remain in low single digits; net charge-offs projected to normalize at 25-35 bps.

• Net interest margin expected to remain in the 3.30-3.40% range, with modest expansion possible.

• Guidance excludes impacts from the pending Penns Woods acquisition.