Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Q4 2021 Earnings Presentation
32 slides from Western New England Bancorp's earnings presentation, January 2022
Slide 1: Investor Presentation Fourth Quarter 2021
INVESTOR PRESENTATION FOURTH QUARTER 2021 Local banking is better than ever.
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS We may, from time to time, make written or oral “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements contained in our filings with the Securities and Exchange Commission (the “SEC”), our reports to sh
Slide 3: Who We Are
WHO WE ARE Every day, we focus on showing Westfield Bank customers “what better banking is all about.” For us, the idea of better banking starts with putting customers first, while adhering to our core values. Our Core Values: • Integrity • Enhance Shareholder Value • Customer Focus • Community Focu
Slide 4: Senior Management Team
SENIOR MANAGEMENT TEAM James C. Hagan, President & Chief Executive Officer Guida R. Sajdak, Executive Vice President, Chief Financial Officer & Treasurer Allen J. Miles III, Executive Vice President & Chief Lender Officer Kevin C. O’Connor, Executive Vice President & Chief Banking Officer Louis O. G
Slide 5: 4Q2021 Quarterly Earnings
4Q2021 QUARTERLY EARNINGS ($ in thousands, except EPS) 4Q2021 3Q2021 2Q2021 1Q2021 4Q2020 Net interest income $ 18,582 $ 18,765 $ 17,804 $ 18,026 $ 18,795 Provision (credit) for loan losses 300 (100) (1,200) 75 500 Non-interest income 3,856 3,295 2,409 3,004 2,462 Non-interest expense 13,923 14,018
Slide 6: Net Interest Income and Net Interest Margin
NET INTEREST INCOME ($) AND NET INTEREST MARGIN (%) $19.0 3.70% $18.8 $18.8 $18.8 $18.6 3.50% $18.6 3.30% $18.4 3.24% 3.30% 3.18% $18.2 3.06% 3.08% 3.19% $18.0 3.10% $18.0 $17.8 3.03% $17.8 2.99% 2.97% 2.90% 2.98% $17.6 2.70% $17.4 $17.2 2.50% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Net interest income N
Slide 7: Total Loans
TOTAL LOANS Average Loans Outstanding Period-end Loans Outstanding (excludes PPP loans) $1,950 $167 $170 $106 $25 $2,000 $1,900 $59 4.40% $1,850 $1,900 $1,787 $1,809 $1,800 $1,748 $1,757 $1,756 4.20% $1,800 $1,700 4.00% $1,750 $1,600 3.94% $1,700 3.80% $1,838 3.88% $1,650 $1,500 3.82% $1,771 $1,786
Slide 8: CARES Act Modifications as of December 31, 2021
CARES ACT MODIFICATIONS AS OF DECEMBER 31, 2021 Remaining Loan Segment % of Loan Modification # of Loans Balance Segment Loan Segment (1)(2) Balance Modified Outstanding Balance Modified Commercial real estate $ 41.9 7 $ 980.0 4.3% Commercial and industrial (3) 0.6 2 201.3 0.3% Residential real esta
Slide 9: Commercial and Industrial Loan Trends
COMMERCIAL AND INDUSTRIAL LOAN TRENDS Commercial and industrial loans (“C&I”), including $400 $170 PPP loans, of $226.7 million decreased $152.4 $167 million, or 40.2%, from December 31, 2020, driven by $350 a decrease in PPP loans of $141.9 million, or 84.9%. $106 $300 Commercial line of credit usa
Slide 10: Commercial Line of Credit Utilization
COMMERCIAL LINE OF CREDIT UTILIZATION The table below breaks out the commercial line utilization for the periods noted: Balance 12/31/2020 3/31/2021 6/30/2021 9/30/2021 12/31/2021 Pass-rated $ 32.9 $ 38.9 $ 52.9 $ 45.1 $ 52.1 Classified 15.3 9.1 9.5 10.0 6.6 Total: $ 48.2 $ 48.0 $ 62.4 $ 55.1 $ 58.7
Slide 11: C&I Portfolio - COVID-19 Modifications Granted
C&I PORTFOLIO - COVID-19 MODIFICATIONS GRANTED Modified Loan Segment Modified Accounts Balance Loan Segment % of Balance Remaining Modified Industry Balance (1) Total Loans (2) Remaining (#) (%) Manufacturing $ 35.8 1.9% $ - - - Wholesale trade 36.8 2.0% - - - Educational services 17.5 1.0% - - - He
Slide 12: Small Business Administration - Paycheck Protection Program
SMALL BUSINESS ADMINISTRATION – PAYCHECK PROTECTION PROGRAM As of December 31, 2021, the Company had received funding approval from the Small Business Administration for 2,146 applications totaling $302.2 million and processed 1,982 loan forgiveness applications totaling $276.9 million. Original Loa
Slide 13: Commercial Real Estate Loan Trends
COMMERCIAL REAL ESTATE LOAN TRENDS Period-end Loans Outstanding $1,000 $980 • Commercial real estate (“CRE”) loans of $975 $980.0 million increased $146.0 million, or 17.5%, from December 31, 2020. $950 $925 $918 • At December 31, 2021, there were $41.9 million, or 4.3% of the total CRE $900 portfol
Slide 14: Commercial Real Estate Loans - COVID-19 Modifications Granted
COMMERCIAL REAL ESTATE LOANS – COVID-19 MODIFICATIONS GRANTED Loan Modified Segment Accounts Balance Loan Segment % of Modified Remaining Modified Property Type Balance (1) Total Loans (2) Balance Remaining (#) (%) Apartment $ 188.1 10.2% $ - - - Office 185.3 10.1% - - - Industrial/Warehouse 140.2 7
Slide 15: Residential and Consumer Loan Trends
RESIDENTIAL AND CONSUMER LOAN TRENDS Residential and Consumer Loans Period-end Loans Outstanding Residential loans, including home equity loans, and $720 $714 consumer loans decreased $57.5 million, or 8.1%, from $700 $689 December 31, 2020. During the twelve months ended $680 $680 $668 December 31,
Slide 16: Total Deposits
TOTAL DEPOSITS PERIOD-END CORE DEPOSITS PERIOD-END TIME DEPOSITS $1,900 $1,849 $700 $1,806 $1,800 $590 $1,727 $600 $1,700 $523 $1,631 $500 $454 $1,600 $419 $402 $1,500 $1,448 $400 $1,400 $300 $1,300 $200 $1,200 $1,100 $100 $1,000 $- 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 4Q2020 1Q2021 2Q2021 3Q2021 4Q20
Slide 17: Average Total Deposits
AVERAGE TOTAL DEPOSITS Average Deposits and Rates 0.50% $2,100 0.44% 0.45% $1,900 $1,520 $1,587 0.40% $1,561 $1,606 $1,700 0.34% $1,489 0.35% $1,500 0.27% 0.30% $1,300 0.22% 0.25% $1,100 0.19% 0.20% $900 0.15% $603 $615 $654 $700 $562 0.10% $535 $500 0.05% $300 0.00% 4Q2020 1Q2021 2Q2021 3Q2021 4Q20
Slide 18: Average Core Deposits
AVERAGE CORE DEPOSITS Average Core Deposits and Rates 0.23% 0.25% $2,400 0.21% 0.19% 0.20% $2,200 0.16% 0.15% $2,000 0.15% $1,850 $1,800 $1,757 $1,676 0.10% $1,600 $1,515 $1,404 0.05% $1,400 $1,200 0.00% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Average core deposits, including non-interest bearing deposit
Slide 19: Average Time Deposits
AVERAGE TIME DEPOSITS Average Time Deposits and Rates $700 1.25% $620 $600 $567 $488 1.05% Average time deposits of $410.1 million decreased $35.2 $500 $445 $410 0.92% million, or 7.9%, from the linked quarter. The cost of time $400 0.85% 0.67% deposits decreased eight basis points for the same peri
Slide 20: Loan-to-Deposit Ratio
LOAN-TO-DEPOSIT RATIO Period-end Loan-to-Deposit Ratio Core Deposits and Time Deposits as a % of Total Deposits 96% 95% 90% 82% 94% 79% 81% 80% 76% 92% 71% 90% 89% 70% 88% 60% 86% 86% 50% 84% 83% 83% 40% 29% 82% 30% 24% 21% 19% 80% 18% 20% 78% 10% 76% 0% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 4Q2020 1Q2
Slide 21: Deposit Market Share in Hampden County, MA
DEPOSIT MARKET SHARE IN HAMPDEN COUNTY, MA AS OF JUNE 30, 2021 Total Deposit Deposits in Rank 2021 Parent Company Name Market ($000) Market Share # of Branches 1 TD Bank 2,086,558 14.9% 16 2 Westfield Bank 1,963,689 1,762,519 14.0% 13.1% 20 20 3 PeoplesBank 1,936,864 13.8% 15 4 Bank of America 1,851
Slide 22: Total Borrowings
TOTAL BORROWINGS Federal Home Loan Bank Advances (“FHLB”) $70 Period-end Balance Outstanding $58 $60 $50 $43 $40 $30 $20 $10 $5 $4 $3 $- 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 At December 31, 2021, total FHLB advances decreased $55.2 million, or 95.4%, from $57.9 million at December 31, 2020, to $2.7 mi
Slide 23: Asset Quality
ASSET QUALITY Nonperforming Loans ($ in millions) The Company has taken actions to identify, assess and monitor its COVID-19 related credit exposures based on asset class and borrower type. The Company $10.0 1.00% implemented a customer forbearance program to assist $7.8 both consumer and business b
Slide 24: Asset Quality Indicators
ASSET QUALITY INDICATORS 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Total loans modified under the CARES Act $76.9M $66.9M $57.0M $42.8M $42.5M Loans modified as a % of total loans (1) 4.4% 3.8% 3.2% 2.4% 2.3% Total delinquent loans $ $13.5M $9.3M $4.4M $3.1M $2.1M Delinquent loans as a % of total loans (1)
Slide 25: Asset Quality
ASSET QUALITY 4Q2020 4Q2021 Loans ALLL/ ALLL/ Outstanding Total Loan Loans Total Loan ALLL (2) (1)(2) Segment ALLL (2) Outstanding (2) Segment Commercial and industrial $ 3,630 $211,823 1.71% $ 2,643 $201,340 1.31% Commercial real estate (2) 13,020 833,949 1.56% 12,970 979,969 1.32% Residential 4,24
Slide 26: Asset Quality
ASSET QUALITY ($ in Millions) 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Special Mention $39.9 $38.4 $41.1 $38.0 $24.2 Special Mention - Hotel $52.2 $38.6 $25.8 $26.2 $27.3 Total Special Mention $92.1 $77.0 $66.9 $64.2 $51.5 % of Total Loans (1) 5.2% 4.4% 3.8% 3.6% 2.8% Substandard $55.0 $43.0 $37.5 $32.2 $
Slide 27: Hotels - $57.2 Million, or 3.1% of Total Loans
HOTELS - $57.2 MILLION, OR 3.1% OF TOTAL LOANS (1) The hotel industry has been significantly impacted by the COVID-19 pandemic and the widespread travel restrictions. We continue to maintain close contact with our borrowers and monitor industry updates. We performed a review of the hotel portfolio a
Slide 28: Capital Management
CAPITAL MANAGEMENT We are well-capitalized with excess capital. Consolidated Consolidated Ratio Capital Leverage Ratio 8.8% $221.7 Common Equity Tier 1 Ratio 12.1% $221.7 Tier 1 Capital Ratio 12.1% $221.7 Total Capital Ratio 14.3% $261.1 Excess Well Bank Over Well- Westfield Bank Ratio Capitalized E
Slide 29: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS Share Repurchases Dividends Year # of Shares Year Annual Dividends per Share 2018 2,189,276 2018 $0.16 2019 1,938,667 2019 $0.20 2020 1,391,496 2020 $0.20 1Q2021 $0.05 1Q2021 708,434 2Q2021 $0.05 2Q2021 635,921 3Q2021 $0.05 3Q2021 1,221,618 4Q2021 $0.05 4Q2021 192,078
Slide 30: Capital Management
CAPITAL MANAGEMENT Book Value per Share Tangible Book Value per Share $9.87 $9.56 $9.29 $9.21 $9.07 $8.97 $8.89 $8.66 $8.44 $8.36 Book Value Tangible Book Value 30
Slide 31: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON-GAAP TO GAAP RECONCILIATION Reconciliation of Non-GAAP to GAAP Financial Measures The Company believes that certain non-GAAP financial measures provide information to investors that is useful in understanding its financial condition. Because not all companies use the same calculation,
Slide 32: Westfield Bank
WESTFIELD BANK “WHAT BETTER BANKING’S ALL ABOUT” James C. Hagan, President and Chief Executive Officer 141 Elm Street, Westfield, MA Guida R. Sajdak, Executive Vice President and Chief Financial Officer Meghan Hibner, Vice President and Investor Relations Officer 32
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