In This Article:
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Net Income: $33 million or $0.26 per diluted share.
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Net Interest Margin: Expanded by 13 basis points to 3.42%.
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Deposit Balances Growth: Increased by 8% compared to the fourth quarter a year ago.
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Noninterest Income: Increased by $12 million for the quarter.
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Noninterest Expense: Increased by 5% or approximately $3 million from the third quarter.
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Allowance Coverage: Decreased to 1.04% of loans from 1.11% last quarter.
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Tier 1 Capital Ratio: Estimated at 13.8% as of December 31.
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Commercial and Industrial Loans Growth: Increased by 6.2% since last quarter and 23.5% year-over-year.
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Residential Mortgages Decline: Decreased by 6.6% since last year.
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Cost of Deposits: Stands at 1.68%, down 10 basis points from the third quarter.
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Efficiency Ratio: Improved to 59.5%.
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Nonperforming Assets: Held steady at 0.54%.
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Classified Loans: Decreased to 2.44% of total loans.
Release Date: January 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Northwest Bancshares Inc (NASDAQ:NWBI) reported a net income of $33 million or $0.26 per diluted share for the fourth quarter of 2024.
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The net interest margin expanded by 13 basis points to 3.42%, indicating improved financial performance.
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Deposit balances grew by 8% compared to the fourth quarter a year ago, with a decrease in the cost of funds.
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The company announced an agreement to acquire Penns Woods Bancorp, expected to be completed in the third quarter of 2025, marking its largest merger to date.
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Credit quality remained strong with a decrease in classified loans and an improvement in the coverage ratio on nonperforming loans.
Negative Points
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Noninterest expense increased by 5% or approximately $3 million from the third quarter.
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The residential mortgage portfolio declined by 6.6% since last year, indicating a shift away from this segment.
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Noninterest income included one-time gains, such as a $6 million gain on the sale of shares, which may not be sustainable.
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The commercial real estate portfolio shrank by 0.4% since last quarter, reflecting a cautious approach in this segment.
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The allowance coverage decreased to 1.04% of loans from 1.11% last quarter, which could indicate a potential risk if credit conditions worsen.
Q & A Highlights
Q: Can you clarify if the noninterest income outlook excludes the impact of Penns Woods and what's driving that growth? A: Yes, all guidance excludes the impact from Penns Woods. We are focused on driving better and more consistent fee income performance strategically within the firm. This includes transparency about our fee income targets due to unique items like securities restructuring.