Regional banking company Northwest Bancshares (NASDAQ: NWBI) announced better-than-expected revenue in Q3 CY2025, with sales up 20.9% year on year to $168.2 million. Its non-GAAP profit of $0.29 per share was 5.9% below analysts’ consensus estimates.
Is now the time to buy Northwest Bancshares? Find out by accessing our full research report, it’s free for active Edge members.
Northwest Bancshares (NWBI) Q3 CY2025 Highlights:
- Net Interest Income: $136 million vs analyst estimates of $132.7 million (22.2% year-on-year growth, 2.5% beat)
- Net Interest Margin: 3.7% vs analyst estimates of 3.5% (11.8 basis point beat)
- Revenue: $168.2 million vs analyst estimates of $164.6 million (20.9% year-on-year growth, 2.2% beat)
- Efficiency Ratio: 79.4% vs analyst estimates of 61.1% (1,829.2 basis point miss)
- Adjusted EPS: $0.29 vs analyst expectations of $0.31 (5.9% miss)
- Tangible Book Value per Share: $9.37 vs analyst estimates of $9.18 (1.1% year-on-year decline, 2.1% beat)
- Market Capitalization: $1.84 billion
Louis J. Torchio, President and CEO, Northwest Bancshares commented, "I am pleased with our first quarter of performance as a combined company. The team completed merger integration activities on time, while staying focused on executing our strategy, and delivering on our commitment to sustainable, responsible, and profitable growth. The benefits of the additional scale from the merger are already evident. We delivered a record $168 million in revenue for the quarter, more than 25% year over year average commercial C&I loan growth continuing our strategic re-balancing, and drove a strong 3Q net interest margin of 3.65% as we maintained our loan yield and low-cost, high-quality, stable funding base. "
Company Overview
Founded in 1896 and operating across Pennsylvania, New York, Ohio, and Indiana, Northwest Bancshares (NASDAQ: NWBI) is a bank holding company that operates Northwest Bank, providing personal and business banking, investment management, and trust services.
Sales Growth
Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities. Regrettably, Northwest Bancshares’s revenue grew at a mediocre 4.2% compounded annual growth rate over the last five years. This was below our standard for the banking sector and is a poor baseline for our analysis.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Northwest Bancshares’s annualized revenue growth of 5.5% over the last two years is above its five-year trend, suggesting some bright spots. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Northwest Bancshares reported robust year-on-year revenue growth of 20.9%, and its $168.2 million of revenue topped Wall Street estimates by 2.2%.
Net interest income made up 78.7% of the company’s total revenue during the last five years, meaning lending operations are Northwest Bancshares’s largest source of revenue.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.
Northwest Bancshares’s TBVPS was flat over the last five years. However, TBVPS growth has accelerated recently, growing by 3.5% annually over the last two years from $8.74 to $9.37 per share.
Over the next 12 months, Consensus estimates call for Northwest Bancshares’s TBVPS to grow by 3.6% to $9.71, paltry growth rate.
Key Takeaways from Northwest Bancshares’s Q3 Results
It was encouraging to see Northwest Bancshares beat analysts’ net interest income expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its EPS missed. Overall, this was a weaker quarter. The stock traded down 3.3% to $12.09 immediately following the results.
Is Northwest Bancshares an attractive investment opportunity at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
