Northwest Bancshares’ (NWBI) Q1 2024 earnings report revealed a significant deterioration in profitability, primarily driven by rising interest expenses and a shift in deposits towards higher-cost time deposits. Despite a modest increase in net interest income, the bank’s net interest margin has continued to decline due to the faster pace of increase in interest expenses. Management’s decision to sell underperforming securities at a loss, while aimed at improving future profitability, will result in realized losses in the income statement. While the dividend remains sustainable for now, its long-term sustainability is questionable, given the need to distribute a large portion of earnings to shareholders and the potential for earnings to decline further in the current macroeconomic environment.