Northwest Bancshares, Inc. (NWBI) | Investment Case

1. Company Snapshot

1.a. Company Description

Northwest Bancshares, Inc.operates as the holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions.The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts.

It also offers loan products comprising one-to-four-family residential real estate loans and loans collateralized by multi-family residential and commercial real estate; commercial business loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by deposit accounts.The company also offers investment management and trust services.As of December 31, 2021, it operated 170 community-banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana.

Northwest Bancshares, Inc.was founded in 1896 and is headquartered in Columbus, Ohio.

Show Full description

1.b. Last Insights on NWBI

The recent 3-month performance of Northwest Bancshares, Inc. was negatively impacted by a shareholder investigation into potential fiduciary duty breaches by the company's directors. This investigation, led by Purcell & Lefkowitz LLP, has raised concerns about the company's corporate actions. Additionally, the announcement of a shareholder investigation may have created uncertainty and volatility in the market.

1.c. Company Highlights

Last Price	12.17
Change Percentage	-1.38%
Open	12.25
Previous Close	12.34
Market Cap ( Millions)	1778
Volume	622835
Year High	14.64
Year Low	10.75
M A 50	12.08
M A 200	12.27

FCF Yield	6.51%
Dividend Yield	6.57%
ROE	6.72%
Debt / Equity	32.97%
Net Debt / EBIDTA	220.10%
Price To Book	0.92
Price Earnings Ratio	15.2
Price To FCF	15.35
Price To sales	2.18
EV / EBITDA	13.91

2. Stable Financial Performance with Growth Prospects

The company's financial performance was stable, with actual EPS coming in at $0.29, in line with estimates. Revenue growth is expected to be 8.8% next year, indicating a positive outlook. The net interest margin was maintained at a stable level, with management expressing confidence in maintaining a 360 bps core margin. The company's capital position is strong, with regulatory minimums comfortably exceeded, and a tangible common equity ratio that is considered healthy.

Publication Date: Nov -23

                                    📋 Highlights
                                    Loan Growth Strategy:
                                                Anticipating 2026 loan growth aligned with GDP, with strategic rebalancing and portfolio optimization as key drivers.
De Novo Branch Expansion:
                                                3 new Columbus financial centers planned (summer 2024), plus ongoing development in Indianapolis and Fishers, Indiana.
SBA Lending Recognition:
                                                Ranked among top 50 SBA lenders nationally by volume, reflecting strong small business loan performance.
Deposit Funding Flexibility:
                                                Over 90% of short-term CDs maturing by mid-2024, with deposit costs at 1.55% and beta in the mid-20s.
Specialty Verticals Contribution:
                                                National verticals (sports, franchise finance) account for ~20% of C&I loans, showing scalable growth potential.

                                

Loan Growth and Portfolio Rebalancing

Loan growth was influenced by the acquisition and strategic rebalancing of the portfolio. Management expects loan growth to be comparable to GDP growth in the next year, driven by growth in specialty verticals, commercial deposits, and SBA lending. The company's SBA lending business was recognized as one of the top 50 SBA lenders nationally by volume, highlighting its expertise in this area. As Douglas Schosser mentioned, "we're expecting to see loan growth comparable to GDP growth in '26."

Expansion Plans and De Novo Branching

The company is expanding its presence in high-growth markets through de novo branching, with new branches in Indianapolis and Columbus. The first de novo financial center in New Albany, Ohio, has already broken ground, and three more are planned for the Columbus market. This expansion is expected to drive growth and profitability for the company. Louis Torchio stated that they are "focused on maximizing integration and efficiency from the Penns Woods merger" and will continue to look at de novo branching opportunities.

Valuation and Dividend Yield

The company's Price-to-Tangible Book Value (P/TBV) can be derived from the given P/B Ratio of 0.89, indicating a relatively reasonable valuation. The Dividend Yield is 6.8%, which is attractive for income investors. With a P/E Ratio of 14.69, the market expects stable earnings growth. The Net Interest Margin (NIM) is a key metric for banks, and the company's ability to maintain a stable NIM is a positive sign.

3. NewsRoom

Northwest Bancshares: Undervalued And 7% Yield Make It A Buy

Oct -30

Source: seekingalpha.com

Northwest Bancshares, Inc. (NWBI) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

Compared to Estimates, Northwest Bancshares (NWBI) Q3 Earnings: A Look at Key Metrics

Oct -28

Source: zacks.com

Northwest Bancshares (NWBI) Q3 Earnings Meet Estimates

Oct -27

Source: zacks.com

Continue To Own Northwest Bancshares For Juicy Income

Oct -27

Source: seekingalpha.com

Northwest Bancshares, Inc. Announces Third Quarter 2025 GAAP net income of $3 million, or $0.02 per diluted share

Oct -27

Source: prnewswire.com

Northwest Bancshares (NWBI) Reports Next Week: Wall Street Expects Earnings Growth

Oct -20

Source: zacks.com

Northwest Bancshares, Inc. Announces Third Quarter 2025 Earnings Call Details

Oct -06

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Banking and Related Activities

Expected Growth: 5.0%

Northwest Bancshares, Inc.'s 5.0% growth in Banking and Related Activities is driven by strategic acquisitions, expansion of commercial lending, and increased deposit growth. Additionally, the company's focus on digital transformation, cost savings initiatives, and a favorable interest rate environment have contributed to its growth momentum.

7. Detailed Products

Consumer Banking

Provides personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Offers financial solutions to businesses, including cash management, commercial lending, and treasury management services.

Wealth Management

Provides investment and wealth management services, including brokerage, trust, and insurance services.

Mortgage Banking

Originates and services residential mortgage loans, providing financing options for homebuyers and homeowners.

Insurance Services

Offers a range of insurance products, including life, disability, and long-term care insurance.

8. Northwest Bancshares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Northwest Bancshares, Inc. operates in a highly competitive industry, with many substitutes available to customers. However, the company's strong brand recognition and customer loyalty help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Northwest Bancshares, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong relationships with its customers help to reduce the threat of customer bargaining power.

Bargaining Power Of Suppliers

Northwest Bancshares, Inc. has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position also gives it the ability to negotiate favorable terms with its suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and significant capital requirements. This makes it difficult for new entrants to enter the market, reducing the threat of new entrants to Northwest Bancshares, Inc.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Northwest Bancshares, Inc. faces intense competition from larger banks and fintech companies, which increases the intensity of rivalry in the industry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	29.49%
Debt Cost	6.99%
Equity Weight	70.51%
Equity Cost	6.99%
WACC	6.99%
Leverage	41.82%

11. Quality Control: Northwest Bancshares, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

BayCom

A-Score: 6.7/10

Value: 6.7

Growth: 7.0

Quality: 6.9

Yield: 4.0

Momentum: 7.5

Volatility: 8.0

1-Year Total Return ->

City Holding

A-Score: 6.6/10

Value: 4.5

Growth: 6.3

Quality: 7.6

Yield: 6.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

First Commonwealth Financial

A-Score: 6.5/10

Value: 6.4

Growth: 5.6

Quality: 7.0

Yield: 7.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

Northwest Bancshares

A-Score: 6.3/10

Value: 6.1

Growth: 3.7

Quality: 6.2

Yield: 10.0

Momentum: 3.5

Volatility: 8.3

1-Year Total Return ->

First Community Bankshares

A-Score: 6.1/10

Value: 5.9

Growth: 4.4

Quality: 8.1

Yield: 9.0

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

First Busey

A-Score: 6.0/10

Value: 5.2

Growth: 5.2

Quality: 5.6

Yield: 8.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

2.29%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.99%

Northwest Bancshares, Inc. - US6673401039

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on NWBI

1.c. Company Highlights

Higher Yield

Stable Momentum

Average Growth

Earnings Beats

Revenues Beats

Medium Volatility

Revenues Miss

Average Quality

Lower Growth

Fairly Valued

Weak Momentum

2. Stable Financial Performance with Growth Prospects

Loan Growth and Portfolio Rebalancing

Expansion Plans and De Novo Branching

Valuation and Dividend Yield

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Banking and Related Activities

Expected Growth: 5.0%

7. Detailed Products

Consumer Banking

Commercial Banking

Wealth Management

Mortgage Banking

Insurance Services

8. Northwest Bancshares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Northwest Bancshares, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.17$

Current Price

12.17$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA