Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Northwest Bancshares (NASDAQ:NWBI) and its peers.
Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.
The 22 thrifts & mortgage finance stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 18.5%.
In light of this news, share prices of the companies have held steady as they are up 4.3% on average since the latest earnings results.
Best Q1: Northwest Bancshares (NASDAQ:NWBI)
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.
Northwest Bancshares reported revenues of $156.2 million, up 19% year on year. This print exceeded analysts’ expectations by 9.9%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EPS and net interest income estimates.
Louis J. Torchio, President and CEO, Northwest Bancshares commented, "Our strong performance, with record earnings for a first quarter and one of the best quarters in Northwest's history, is a result of the Northwest team's continued rigorous focus on execution, and cost control and risk management discipline. We continue to enhance our capabilities, expand our footprint, and provide personalized services and expertise to our consumers, companies, and the communities we serve. "
Interestingly, the stock is up 13% since reporting and currently trades at $13.34.
Is now the time to buy Northwest Bancshares? Access our full analysis of the earnings results here, it’s free.
Apollo Commercial Real Estate Finance (NYSE:ARI)
Launched during the aftermath of the 2008 financial crisis to capitalize on disruption in commercial real estate lending, Apollo Commercial Real Estate Finance (NYSE:ARI) is a real estate investment trust that originates and invests in commercial mortgage loans and other real estate debt.
Apollo Commercial Real Estate Finance reported revenues of $65.82 million, down 18.3% year on year, outperforming analysts’ expectations by 5%. The business had a very strong quarter with a decent beat of analysts’ EPS estimates.
The market seems happy with the results as the stock is up 9.6% since reporting. It currently trades at $9.95.
Is now the time to buy Apollo Commercial Real Estate Finance? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Dynex Capital (NYSE:DX)
Operating in the financial markets since 1988 with a focus on capital preservation during economic turbulence, Dynex Capital (NYSE:DX) is a mortgage real estate investment trust that invests primarily in government-backed residential mortgage securities to generate income for shareholders.
Dynex Capital reported revenues of $17.13 million, up 637% year on year, falling short of analysts’ expectations by 22.4%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
The stock is flat since the results and currently trades at $12.41.
Read our full analysis of Dynex Capital’s results here.
Two Harbors Investment (NYSE:TWO)
Operating in the complex world of mortgage finance since 2009, Two Harbors Investment (NYSE:TWO) is a real estate investment trust that invests in mortgage servicing rights and agency residential mortgage-backed securities.
Two Harbors Investment reported weak. This number lagged analysts' expectations by 125%. Overall, it was a softer quarter as it also recorded a significant miss of analysts’ EPS estimates.
Two Harbors Investment had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 7.5% since reporting and currently trades at $11.09.
Read our full, actionable report on Two Harbors Investment here, it’s free.
AGNC Investment (NASDAQ:AGNC)
Born during the 2008 financial crisis when mortgage markets were in turmoil, AGNC Investment (NASDAQ:AGNC) is a real estate investment trust that primarily invests in mortgage-backed securities guaranteed by U.S. government agencies or enterprises.
AGNC Investment reported revenues of $78 million, down 83.3% year on year. This result came in 73.6% below analysts' expectations. It was a slower quarter as it also logged a slight miss of analysts’ tangible book value per share estimates.
The stock is up 15% since reporting and currently trades at $9.40.
Read our full, actionable report on AGNC Investment here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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