NWBI - Northwest Bancshares: Securities Portfolio Begins To Materialize Losses (Rating Downgrade)

2024-04-24 21:25:32 ET

Summary

• The rising cost of deposits is leading to a decline in net interest income/margin for Northwest Bancshares.
• The bank has decided to sell some fixed-rate securities at a loss, indicating a need to improve profitability.
• While the dividend is currently sustainable, the company's low growth prospects and potential earnings distress raise concerns about its long-term sustainability.

My last article regarding Northwest Bancshares ( NWBI ) was almost a year ago, and a lot has changed since then. The cost of deposits was rising but was not a concern at all; today, however, it is because it is not being offset by rising asset yields. All this is leading to a decline in net interest income/margin....

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