Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Investor Presentation (August 2021)
37 slides from Western New England Bancorp's investor presentation, Aug 6, 2021
Slide 1: Local banking is better than ever. Investor Presentation
Local banking is better than ever. INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS 1 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 report
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
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
Slide 5: Connecticut Strategy
CONNECTICUT STRATEGY With the opening of the Bank’s West Hartford Financial Services Center and Bloomfield Branch in 2020 , the Bank is well - positioned with four Hartford County, Connecticut locations . Continued mergers and consolidations throughout the state have created increased demand for a l
Slide 6: Connecticut Strategy: West Hartford Financial Services Center
CONNECTICUT STRATEGY The West Hartford Financial Services Center, located in West Hartford Center, serves as the Bank’s regional hub in Connecticut . In addition to a full - service branch, it includes a suite of offices to support Residential Lending, Commercial Lending, Business & Government Depos
Slide 7: Connecticut Strategy
CONNECTICUT STRATEGY 7 Congratulations to Matthew Cuddy, Vice President and Connecticut Regional Manager, on being recognized by the Connecticut Bankers Association as one of just fourteen 2021 New Leaders in Banking Award Recipients!
Slide 8: Connecticut Strategy: Bloomfield Branch
CONNECTICUT STRATEGY The Bloomfield branch , located in the Copaco Shopping Center, is a full - service branch and includes drive - through teller and safe deposit services . The Copaco Shopping Center is composed of national and local brands and is a major shopping destination for the greater Bloom
Slide 9: Connecticut Strategy: New Granby Branch
CONNECTICUT STRATEGY Earlier this year, the Bank announced plans for the construction of a new branch office in Granby, Connecticut to replace its current location at the Granby Village Shops. The new standalone branch is located on East Granby Road (Route 20), a major travel rou te for both residen
Slide 10: Q2021 Earnings
2 Q2021 EARNINGS 10 ($ in thousands , except EPS) 2Q2021 1Q2021 4Q2020 3Q2020 2Q2020 Net interest income $ 17,804 $ 18,026 $ 18,795 $ 15,990 $ 15,092 (Credit) p rovision for loan losses (1,200) 75 500 2,725 2,450 Non - interest income 2,409 3,004 2,462 2,177 2,087 Non - interest expense 13,674 13,32
Slide 11: Net Interest Income
NET INTEREST INCOME 11 $15.1 $16.0 $18.8 $18.0 $17.8 2.74% 2.81% 3.30% 3.24% 3.06% 2.72% 2.86% 3.19% 3.03% 2.98% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.70% 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 $20.0 Net interest income Net interest margin (%) Adjus
Slide 12: Loans
LOANS 12 $1,807 $1,771 $1,748 $1,757 $1,756 3.97% 4.02% 3.94% 3.88% 3.82% 3.70% 3.80% 3.90% 4.00% 4.10% 4.20% 4.30% 4.40% 4.50% 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 Average Loans Outstanding (excludes PPP loans) Average Loans
Slide 13: CARES Act Modifications as of June 30, 2021
CARES ACT MODIFICATIONS AS OF JUNE 30, 2021 13 Loan Segment (1)(2) Remaining Modification Balance # of Loans Modified Loan Segment Balance Outstanding % of Loan Segment Balance Modified Commercial real estate $ 53.4 13 $ 876.7 6.1% Commercial and industrial ( 3 ) 2.5 5 215.4 1.2% Residential real es
Slide 14: Commercial and Industrial Loan Trends
COMMERCIAL AND INDUSTRIAL LOAN TRENDS 14 $231 $222 $212 $205 $215 $222 $223 $167 $170 $106 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $100 $150 $200 $250 $300 $350 $400 $450 $500 Commercial and Industrial Loans C&I Loans PPP Loans Commercial and industrial loans (“C&I”) of $ 320 . 9 million decreased $ 58 .
Slide 15: Commercial Line of Credit Utilization
COMMERCIAL LINE OF CREDIT UTILIZATION 15 The table below breaks out the commercial line utilization since June 30, 2020. Balance 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 Pass - rated $ 42.6 $ 39.7 $ 32.9 $ 38.9 $ 52.9 Classified 20.1 16.9 15.3 9.1 9.5 Total: $ 62.7 $ 56.6 $ 48.2 $ 48.0 $ 6
Slide 16: C&I Portfolio - COVID Modifications Granted
C&I PORTFOLIO - COVID - 19 MODIFICATIONS GRANTED 16 Industry Loan Segment Balance (1) % of Total Loans (2) Modified Balance Remaining Modified Accounts Remaining (#) Loan Segment Balance Modified (%) Manufacturing $ 45.0 2.5% $ - - - Wholesale trade 38.2 2.2% - - - Educational services 19.6 1.1% - -
Slide 17: Small Business Administration - Paycheck Protection Program
SMALL BUSINESS ADMINISTRATION – PAYCHECK PROTECTION PROGRAM 17 Balance as of June 30, 2021 ( $ in millions) Original Loan Amount Original # of Loans Balance Outstanding # of Loans Remaining Round 1 and 2 $223.1 1,386 $33.6 140 Round 3 79.1 760 71.9 665 Total $302.2 2,146 $105.5 805 As of June 30, 20
Slide 18: Commercial Real Estate Loan Trends
COMMERCIAL REAL ESTATE LOAN TRENDS 18 $833 $812 $834 $861 $877 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $775 $800 $825 $850 $875 $900 • Commercial real estate (“CRE”) loans of $ 876 . 7 million increased $ 42 . 7 million, or 5 . 1 % , from December 31 , 2020 . • At June 30 , 2021 , there were $ 53 . 4 mil
Slide 19: Commercial Real Estate Loans - COVID Modifications Granted
COMMERCIAL REAL ESTATE LOANS – COVID - 19 MODIFICATIONS GRANTED 19 Property Type Loan Segment Balance (1) % of Total Loans (2) Modified Balance Remaining Modified Accounts Remaining (#) Loan Segment Balance Modified (%) Apartment $ 177.9 10.0% $ - - - Office 143.6 8.1% - - - Industrial/Warehouse 126
Slide 20: Residential and Consumer Loan Trends
RESIDENTIAL AND CONSUMER LOAN TRENDS 20 $716 $718 $714 $689 $680 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $660 $670 $680 $690 $700 $710 $720 $730 Residential and Consumer Loans Period - end Loans Outstanding Residential loans, including home equity loans, and consumer loans decreased $ 34 . 1 million, or
Slide 21: Total Deposits
TOTAL DEPOSITS 21 $1,319 $1,363 $1,448 $1,631 $1,727 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $550 $750 $950 $1,150 $1,350 $1,550 $1,750 $1,950 PERIOD - END CORE DEPOSITS Period - end core deposits of $ 1 . 7 billion increased $ 279 . 2 million, or 19 . 3 % , from year - end, while time deposits of $ 453
Slide 22: Average Total Deposits
AVERAGE TOTAL DEPOSITS 22 $1,368 $1,421 $1,489 $1,520 $1,561 $505 $529 $535 $562 $603 0.82% 0.65% 0.44% 0.34% 0.27% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Deposits and Rates
Slide 23: Average Core Deposits
AVERAGE CORE DEPOSITS 23 $1,233 $1,325 $1,404 $1,515 $1,676 0.27% 0.25% 0.23% 0.21% 0.19% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 Average Core Deposits and Rates Average core deposits, including non - interest bear
Slide 24: Average Time Deposits
AVERAGE TIME DEPOSITS 24 $640 $625 $620 $567 $488 1.87% 1.50% 0.92% 0.67% 0.56% 0.25% 1.25% 2.25% 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $- $100 $200 $300 $400 $500 $600 $700 Average Time Deposits and Rates Average time deposits of $ 487 . 7 million decreased $ 79 . 4 m illion , or 14 . 0 % , from the l
Slide 25: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 25 103% 98% 95% 89% 86% 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 75% 80% 85% 90% 95% 100% 105% Period - end Loan - to - Deposit Ratio 68% 68% 71% 76% 79% 32% 32% 29% 24% 21% 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Core Deposits and Time Deposits
Slide 26: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2020. Note: Total number of Westfield Bank branches shown includes the Big E seasonal branch and online deposit channel. Three Wes tfi eld branches are located in Hampshire County, MA and four Westfield branches are located in Hartford County, CT outside
Slide 27: Total Borrowings and Subordinated Debt
TOTAL BORROWINGS AND SUBORDINATED DEBT 27 $197 $151 $58 $43 $5 $ - $ - $ - $ - $20 $26 $ - $ - $ - $ - 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 $- $50 $100 $150 $200 $250 Period - end FHLB, Subordinated Debt & Payroll Protection Program Liquidity Facility FHLB Subordinated debt PPPLF ($ in millions) At Ju
Slide 28: Asset Quality
ASSET QUALITY 28 $10.4 $9.2 $7.8 $6.8 $6.0 0.59% 0.53% 0.45% 0.39% 0.34% 0.00% 0.20% 0.40% 0.60% 0.80% $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 Non - performing Loans ($ in millions) Non-performing loans Non-performing loans/Total Loans Excluding PPP Loans The Company has taken actions to identify, assess
Slide 29: Asset Quality Indicators
ASSET QUALITY INDICATORS 29 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 Total loans modified under the CARES Act $261.0M $66.3M $76.9M $66.9M $57.0M Loans modified as a % of total loans (1) 14.7% 3.8% 4.4% 3.8% 3.2% Total delinquent loans $ $12.0M $6.7M $13.5M $9.3M $4.4M Delinquent loans as a % of total loa
Slide 30: Asset Quality
ASSET QUALITY 30 • Management believes it prudent to proactively increase the allowance for loan losses given the significant stress experienced in the economy due to continued business shutdowns and interruptions related to COVID - 19 , coupled with the Company’s belief that these stresses will con
Slide 31: Asset Quality: Watch List Loans
ASSET QUALITY 31 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 Special Mention $46.2 $43.5 $39.9 $38.4 $41.1 Special Mention - Hotel $50.1 $51.3 $52.2 $38.6 $25.8 Total Special Mention $96.3 $94.8 $92.1 $77.0 $66.9 % of Total Loans (1) 5.4% 5.4% 5.2% 4.4% 3.8% Substandard $55.4 $52.6 $55.0 $43.0 $37.5 % of Tot
Slide 32: Hotels - $57.4 Million, or 3.2% of Total Loans
HOTELS - $57.4 MILLION, OR 3.2% OF TOTAL LOANS (1) 32 The hotel industry has been significantly impacted by the 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 and t
Slide 33: Capital Management
CAPITAL MANAGEMENT 33 We are well - capitalized with excess capital. Consolidated Ratio Consolidated Capital Leverage Ratio 9.0% $222.4 Common Equity Tier 1 Ratio 12.9% $222.4 Tier 1 Capital Ratio 12.9% $222.4 Total Capital Ratio 15.2% $261.9 x From a regulatory standpoint, we are well - capitalized
Slide 34: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 34 Year # of Shares 2018 2,189,276 2019 1,938,667 2020 1,391,496 1Q2021 708,434 2Q2021 635,921 Total : 1,344,355 Year Annual Dividends per Share 2018 $0.16 2019 $0.20 2020 $0.20 1Q2021 $0.05 2Q2021 $0.05 Share Repurchases Dividends On October 27 , 2020 , the Company an
Slide 35: Capital Management: Book Value per Share
CAPITAL MANAGEMENT 35 $9.29 $9.07 $8.97 $8.99 $8.95 $8.66 $8.44 $8.36 $8.39 $8.34 Book Value per Share Tangible Book Value per Share Book Value Tangible Book Value
Slide 36: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 36 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 i ts financial condition. Because not all companies use the same cal
Slide 37: Westfield Bank - What Better Banking's All About
WESTFIELD BANK “WHAT BETTER BANKING’S ALL ABOUT” James C. Hagan , President and Chief Executive Officer Guida R. Sajdak , Executive Vice President and Chief Financial Officer Meghan Hibner , Vice President and Investor Relations Officer 37 141 Elm Street, Westfield, MA
Western New England Bancorp — Investor Presentation (August 2021) on 6ix