Third Quarter 2026
Filed Oct 26, 2026Northwest Bancshares, Inc. Announces Third Quarter 2026 GAAP net income of $51 million, or $0.34 per diluted share; record total revenue and net interest income
Net interest income, noninterest income, loans and deposits increased from the prior-year quarter, while reported net income remained near the prior quarter despite higher credit-loss provisioning and noninterest expense. Credit quality remained strong, although net interest margin declined sequentially and borrowings increased.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total interest incomeGAAP | $210.2M | 2.5 % | 8.0 % |
| Total interest expenseGAAP | $61.22M | 5.2 % | 4.3 % |
| Net interest incomeGAAP | $148.9M | 1.4 % | 9.5 % |
| Net interest margin FTEother | 3.70 % | – | – |
| Total noninterest incomeGAAP | $35.93M | 5.0 % | 11.6 % |
| Service charges and feesGAAP | $17.93M | 6.1 % | 6.1 % |
| Trust and other financial services incomeGAAP | $10.11M | 7.0 % | 25.7 % |
| Gain on sale of investmentsGAAP | $313K | (6.8) % | 769.4 % |
| Gain on sale of SBA loansGAAP | $1.08M | (11.2) % | 217.0 % |
| Gain on real estate owned, netGAAP | $315K | 1475.0 % | 138.6 % |
| Income from bank-owned life insuranceGAAP | $2.22M | 10.4 % | 26.9 % |
| Mortgage banking incomeGAAP | $363K | (50.8) % | (63.8) % |
| Other operating incomeGAAP | $3.59M | 1.2 % | (9.9) % |
| Provision for credit losses - loansGAAP | $5.22M | 22.0 % | (83.4) % |
| Provision for credit losses - unfunded commitmentsGAAP | $3.90M | 65.3 % | 2161.4 % |
| Total provision for credit losses expenseGAAP | $9.12M | 37.4 % | (70.8) % |
| Total noninterest expenseGAAP | $109.0M | 4.5 % | (18.4) % |
| Personnel expenseGAAP | $63.93M | 0.7 % | 1.5 % |
| Non-personnel expenseGAAP | $45.04M | 10.4 % | (36.1) % |
| Income before income taxesGAAP | $66.79M | (4.9) % | 1825.3 % |
| Income tax expenseGAAP | $16.07M | (3.8) % | 5221.5 % |
| Net incomeGAAP | $50.72M | (5.3) % | 1501.5 % |
| Diluted earnings per shareGAAP | $ 0.34 | – | – |
| Adjusted net incomenon-GAAP | $50.89M | – | – |
| Diluted adjusted earnings per sharenon-GAAP | $ 0.35 | – | – |
| Annualized return on average equityGAAP | 10.42 % | – | – |
| Annualized return on average assetsGAAP | 1.18 % | – | – |
| Efficiency ratioGAAP | 58.94 % | – | – |
| Efficiency ratio, excluding certain itemsnon-GAAP | 57.79 % | – | – |
| Average loans receivableother | $13.30B | 1.6 % | 5.8 % |
| Average investmentsother | $2.60B | 2.9 % | 23.3 % |
| Average depositsother | $14.14B | — % | 6.3 % |
| Average borrowed fundsother | $617.5M | 62.8 % | 77.8 % |
| Total loans receivableother | $13.39B | – | – |
| Total depositsother | $14.28B | – | – |
| Total assetsother | $17.31B | – | – |
| Cash and cash equivalentsother | $223.3M | – | – |
| Borrowed fundsother | $786.7M | – | – |
| Junior subordinated debenturesother | $130.3M | – | – |
| Total shareholders' equityother | $1.89B | – | – |
| Nonperforming loansother | $99.17M | – | – |
| Nonperforming loans to total loansother | 0.74 % | – | – |
| Net charge-offs to average loans, annualizedother | 0.15 % | – | – |
| Allowance for credit losses to total loansother | 1.12 % | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Quarterly cash dividend of $0.20 per share payable on November 17, 2026 to shareholders of record as of November 5, 2026.
- This is the 128th consecutive quarter in which the Company has paid a cash dividend.
- Annualized dividend yield of approximately 5.4% based on the market value of the Company's common stock as of September 30, 2026.
What drove it
- Average loans receivable increased $208 million from the quarter ended June 30, 2026, driven by growth in commercial and industrial and consumer loan portfolios, partly offset by a decline in the commercial real estate portfolio.
- Average deposits increased $6 million from the quarter ended June 30, 2026, primarily driven by higher non-interest bearing and money market deposit account balances as customers shifted funds when time deposits matured.
- Net interest income increased $2 million sequentially as growth in average interest-earning balances outweighed lower yields on average interest-earning assets and higher interest expense.
- Service charges and fees increased $1 million sequentially, driven by loan and deposit related fees based on customer activity.
- Trust and other financial services income increased $1 million sequentially due to growth in the wealth management business.
- Classified loans decreased $55 million sequentially, driven by changes in the commercial real estate portfolio primarily due to the payoff of classified loans during the quarter.
Concerns
- Net interest margin FTE declined to 3.70 % from 3.75 % in the prior quarter.
- Total provision for credit losses expense increased to $ 9,116 (dollars in thousands) from $ 6,637 (dollars in thousands) in the prior quarter, primarily driven by commercial lending portfolio growth, including unfunded commitments.
- Noninterest expense increased to $ 108,971 (dollars in thousands) from $ 104,283 (dollars in thousands) in the prior quarter, including a $3 million increase in FDIC insurance premium expense.
- Average borrowed funds increased $238 million from the prior quarter because average loan and investment growth exceeded the rate of average deposit growth.
- Nonperforming loans to total loans were 0.74 % at September 30, 2026, compared with 0.69 % at June 30, 2026.
What to watch
- Net interest margin FTE after the sequential decline to 3.70 % and the increase in average cost of interest-bearing deposits to 1.85 % from 1.83 %.
- Commercial and industrial loan growth, which management described as 31% average growth from the prior year.
- Provision for credit losses and unfunded commitments after total provision for credit losses expense increased to $ 9,116 (dollars in thousands).
- Borrowing needs following the increase in average borrowed funds to $ 617,533 (dollars in thousands).
- Credit performance in commercial real estate and commercial and industrial portfolios, including nonperforming loans and classified loans.
- Expense discipline following the sequential increase in FDIC insurance premium expense and the reported 58.94 % efficiency ratio.
Balance sheet and cash flow
- Cash and cash equivalents were $ 223,310 (dollars in thousands) as of September 30, 2026.
- Total deposits were $ 14,275,038 (dollars in thousands) as of September 30, 2026.
- Borrowed funds were $ 786,715 (dollars in thousands) as of September 30, 2026.
- Total shareholders' equity was $ 1,892,234 (dollars in thousands) as of September 30, 2026.
- Equity to assets was 10.93 % as of September 30, 2026.
- Tangible common equity to tangible assets was 8.40 % as of September 30, 2026.
- Northwest Bancshares, Inc. estimated total capital ratio was 14.39 % and common equity tier 1 capital ratio was 12.17 % at September 30, 2026.
Analysis
Northwest reported third-quarter GAAP net income of $ 50,719 (dollars in thousands), or $ 0.34 per diluted share, compared with $ 3,167 (dollars in thousands), or $ 0.02 per diluted share, in the prior-year quarter and $ 53,546 (dollars in thousands), or $ 0.36 per diluted share, in the prior quarter. Adjusted net income was $ 50,890 (dollars in thousands), or $ 0.35 per diluted share. The sequential decline in adjusted net income was attributed to higher credit-loss provision and noninterest expense, partly offset by higher net interest income and noninterest income.
Core revenue trends were positive. Net interest income increased to $ 148,950 (dollars in thousands) from $ 135,974 (dollars in thousands) a year earlier and $ 146,938 (dollars in thousands) in the prior quarter. Average loans receivable rose to $ 13,302,278 (dollars in thousands), while average deposits were $ 14,139,954 (dollars in thousands). The quarter also benefited from higher service charges and fees and higher trust and other financial services income. The sequential margin tradeoff deserves attention: net interest margin FTE was 3.70 %, down from 3.75 %, as the average yield on interest-earning assets declined to 5.22 % from 5.23 % and the average cost of interest-bearing deposits increased to 1.85 % from 1.83 %.
The balance-sheet mix continued to shift toward commercial and consumer lending and securities. Management said average loan growth was driven by commercial and industrial and consumer portfolios, while commercial real estate declined. Average investments increased to $ 2,604,899 (dollars in thousands), and average borrowed funds rose to $ 617,533 (dollars in thousands) as loan and investment growth exceeded deposit growth. At period end, total loans receivable were $ 13,393,296 (dollars in thousands), deposits were $ 14,275,038 (dollars in thousands), and borrowed funds were $ 786,715 (dollars in thousands).
Credit indicators were generally favorable relative to the prior-year quarter. Nonperforming loans were $ 99,171 (dollars in thousands), and nonperforming loans to total loans were 0.74 %, compared with 1.00 % a year earlier. Classified loans declined to $ 468,968 (dollars in thousands) from $ 527,040 (dollars in thousands) a year earlier. However, the total provision for credit losses expense increased sequentially to $ 9,116 (dollars in thousands) from $ 6,637 (dollars in thousands), and nonperforming loans to total loans rose from 0.69 % in the prior quarter. Net charge-offs to average loans, annualized, were 0.15 %.
Expenses improved substantially from the prior-year period, when merger, asset disposition and restructuring expense was $ 31,260 (dollars in thousands), but increased sequentially. Total noninterest expense was $ 108,971 (dollars in thousands), with the sequential change reflecting a $3 million increase in FDIC insurance premium expense. The GAAP efficiency ratio was 58.94 % and the non-GAAP efficiency ratio was 57.79 %. Capital remained above stated minimum and well-capitalized requirements, and the board declared a quarterly cash dividend of $0.20 per share. The filing provided no numerical forward guidance.
Management, verbatim
The Northwest Team delivered yet another quarter of strong performance, with record total revenue and net interest income, and a balanced and consistent performance across the whole bank.
Louis J. Torchio, President and CEO, Northwest Bancshares
We drove 31% year-over-year average loan growth in our C&I business, with continued growth in our national specialty business verticals and middle market portfolio, and benefited from the strength of our retail deposit franchise and low deposit costs, one of the best-in-class among our peers.
Louis J. Torchio, President and CEO, Northwest Bancshares
Not in the filing
stated, not guessed- Numerical total revenue line item
- Operating income
- Gross margin
- Operating cash flow
- Free cash flow
- Share repurchases
- Forward numerical guidance
- Previous-release outlook for guidance comparison
- Effective tax rate
- Segment revenue reporting
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.