Northwest Bancshares, Inc. · NASDAQ:NWBI
Northwest Bancshares — Q4 2024 Earnings Presentation
18 slides from Northwest Bancshares's earnings presentation, Jan 24, 2025
Slide 1: Fourth Quarter 2024 Earnings Conference Call
Fourth Quarter 2024 Earnings Conference Call January 24, 2025 Louis J. Torchio T.K. Creal President and Chief Executive Officer Chief Credit Officer Douglas M. Schosser Michael D. Perry Chief Financial Officer Investor Relations Corporate Development & Strategy Sean P. Morrow Treasurer
Slide 2: Forward-looking Statements and Additional Information
Forward-looking Statements and Additional Information The information contained in this presentation may contain forward-looking statements. When used or incorporated by reference in disclosure documents, the words “believe,” “anticipate,” “estimate,” “expect,” “project,” “target,” “goal” and simila
Slide 3: Northwest Bancshares At-A-Glance
Northwest Bancshares At-A-Glance For the quarter ended December 31, 2024 FINANCIAL CENTERS 130 FOUNDED 1896 TOTAL ASSETS TOTAL LOANS TOTAL DEPOSITS $14.4B $11.3B $12.1B ROA ROE Diluted EPS NIM(1) 0.91% 8.2% $0.26 3.42% (1) Non-GAAP measure- see slides 17-18 for reconciliation 3
Slide 4: 4Q 2024 Highlights
4Q 2024 Highlights: Balance Sheet Management Results in Solid Performance • Loan growth muted with focus on re-mixing portfolio and profitable growth Balance Sheet • Average commercial loans increased 6% QoQ and 24% YoY • Average deposits flat QoQ and up 2% YoY • Improved 9 bps QoQ due to lower cost
Slide 5: Loan Balances
Loan Balances 11,500 Summary Comments Change in Loan Mix 11,400 • Average loans flat QoQ, portfolio mix continued to become more 11,300 commercially weighted 11,224 113 11,205 11,200 • Company focused on profitable growth to drive margin (71) (12) 11,100 expansion (38) $ millions (11) 11,000 +6% • A
Slide 6: Deposit Balances
Deposit Balances Summary Comments 12,400 Change in Deposit Mix 12,300 • Deposit balances remained strong as average total 69 14 1 deposits were stable QoQ and grew 2% versus 4Q23 12,200 12,097 7 • Customer (non-brokered) average deposits declined $28 12,100 12,028 million QoQ, while brokered deposit
Slide 7: Net Interest Margin
Net Interest Margin Summary Comments Net Interest Income (FTE) and NIM Trends • Net interest income increased 3% with NIM expanding to 3.42% 116.0 115.0 3.75 from 3.33% in the previous quarter, inclusive of 6 bps benefit due to 114.0 112.2 3.65 112.0 a non-accrual loan payoff in 4Q 3.55 110.0 107.7
Slide 8: Earning Asset & Funding Mix
Earning Asset & Funding Mix Earning Asset Mix Funding Mix Ending balances Floating Periodic Ending balances 4Q24 Total % Fixed % 4Q24 Total % < 1 Year * > 1 Year * ($ Millions) % % ($ Millions) Securities 1,860 14% 96% 0% 4% Demand 2,621 21% 100% 0% Residential mortgage 3,178 24% 97% 2% 1% Interest-
Slide 9: Securities Portfolio
Securities Portfolio Summary Comments Securities Portfolio Municipal, 4% Treasury/Agency, • Securities Portfolio yield continues to increase as we reinvest cash flow 8% at higher yields than the runoff portfolio Corporate, 1% • Securities Portfolio yield increased 3 bps to 2.58% in the quarter • Por
Slide 10: Noninterest Income
Noninterest Income Summary Comments Noninterest Income Trend 45.00 • Noninterest income increased $12.2MM QoQ, driven by an increase in other operating income that included a $5.9MM gain on sale of Visa B 40.06 shares and a $4.3MM gain related to a low-income housing tax credit (LIHTC) investment 35
Slide 11: Noninterest Expense
Noninterest Expense Summary Comments Expense Mix and Efficiency Trend • Excluding merger and restructuring expenses, noninterest expense increased 4Q23 1Q24 2Q24 3Q24 4Q24 2% QoQ and 5% YoY 120.0 200.0% Efficiency Ratio 66.9% 68.6% 94.3% 65.2% 61.8% • Compensation and benefits decrease vs 3Q24, attr
Slide 12: Allowance for Credit Losses
Allowance for Credit Losses Summary Comments Total Loans and Allowance 11,600 1.40% • Overall ALLL coverage remains strong, decreasing to 1.04% due to 11,501 1.35% 11,500 the reduction in our criticized and classified loan portfolio 11,415 1.30% 11,400 11,354 • Net charge-offs of 87 bps increased vs
Slide 13: Credit Quality
Credit Quality Summary Comments 30 Day Loan Delinquency • Disciplined underwriting focus has resulted in credit risk metrics 120.0 100.0 1.90% remaining steady and below pre-pandemic as well as national levels 100.0 93.3 90.3 79.0 1.40% 68.3 0.90% • 4Q24 decrease in classified loans was primarily dr
Slide 14: Commercial/CRE Loan Distribution
Commercial/CRE Loan Distribution Summary Comments Commercial Commitments By Industry • Diverse portfolio has allowed Northwest to avoid material industry issues; Immaterial large metro office or rent controlled multi-family concentrations • Health care sector is a focus, see detail on slide 15 Real
Slide 15: Commercial Real Estate Concentration
Commercial Real Estate Concentration Regulatory CRE Concentration 160% of T1+ACL Est. Retail Building, 13.4% Nursing Home Quarterly Change • Outstandings reduced 16% or $59MM, from $362MM to 5 or More Unit Dwelling, 13.3% $303MM • Classified outstandings reduced from 22% to 14% • .WARR of portfolio
Slide 16: 2025 Outlook
2025 Outlook Net Interest Income: Increasing 1-3% YoY Net Interest Margin: Maintaining current levels between 3.30-3.40% Noninterest Income: Growing to $124-129MM Noninterest Expense: Increasing 2-4% YoY Tax Rate: Remaining flat to 2024 tax rate Net charge-offs: Trend towards normalized between 25bp
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation *Dollars in thousands, except per share amounts 17
Slide 18: Non-GAAP Reconciliation – Continued
Non-GAAP Reconciliation – Continued *Dollars in thousands 18