Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Westfield Financial — Stifel Nicolaus Bank Conference 2011
34 slides from Western New England Bancorp's conference presentation, Nov 4, 2011
Slide 1: Westfield Financial Inc. Stifel Nicolaus Bank Conference
WESTFIELD FINANCIAL INC. NASDAQ: WFD STIFEL NICOLAUS BANK CONFERENCE NOVEMBER 2, 2011
Slide 2: Forward-Looking Statements
FORWARD – LOOKING STATEMENTS Today’s presentation may contain “forward-looking statements” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” and “potential.” Examples of forward-looking statements include, but are not limited to,
Slide 3: Highlights
HIGHLIGHTS Very well capitalized. Stockholders’ equity/total asset ratio of 18.20% High credit quality. Nonperforming loans of 0.51% Deposits increased by $27.2 million, or 3.9% for the twelve months ended September 30, 2011. Total loans increased by 11.9%, with residential mortgages increasing by $
Slide 4: Overview
OVERVIEW Headquartered in Westfield, MA 11 branches offices located throughout Hampden County Preferred SBA Lender Capital Ratios among the highest in Massachusetts. Did not participate in TARP.
Slide 5: Strategy
STRATEGY Main focus on Commercial & Industrial and Commercial Real Estate portfolios by targeting businesses in Western Massachusetts and Northern Connecticut. C & I relationships include transactional deposit account relationships. Growth in residential real estate portfolio to diversify risk and d
Slide 6: Electronic Banking
ELECTRONIC BANKING Enhanced electronic banking capabilities including mobile banking and financial management tools. Added billing and invoice, payroll and online merchant service processing options for small businesses. Expanded ATM network with 5 new machines, 3 of which are on a university campus
Slide 7: Total Assets
TOTAL ASSETS 997 1,040 1,109 1,191 1,239 1,263 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Sep-11 Millions 7
Slide 8: Total Return Performance
TOTAL RETURN PERFORMANCE* *Source: SNL Financial
Slide 9: Strong Credit Quality
STRONG CREDIT QUALITY Sept 30, 2011 Dec 31, 2010 Allowance loan loss as a 1.30% 1.36% percentage to total loans Nonperforming loans as a 0.51% 0.63% percentage of total loans Nonperforming assets as a 0.31% 0.28% percentage of total assets
Slide 10: Asset Quality Ratios
ASSET QUALITY RATIOS 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Percentage Allowance for loan loass as percent of total loans Nonperforming loans as a percent of total loans Nonperforming assets as a percentage of total assets
Slide 11: Nonperforming & Delinquent Loans
NONPERFORMING & DELINQUENT LOANS Nonperforming loans of $2.8 million or 0.51% of total loans Primarily made up of 3 borrowers totaling $1.9 million Loans delinquent 30-89 days totaling $7.6 million
Slide 12: Nonperforming Loans
NONPERFORMING LOANS (DOLLARS IN MILLIONS) Residential Real Estate $0.87 31% Commercial & Industrial $0.15 5% Commercial Real Estate $1.78 64%
Slide 13: Capital Management
CAPITAL MANAGEMENT Possible uses of capital: Pay dividends to shareholders Repurchase shares of our common stock Fund organic growth or leverage the balance sheet Finance acquisitions of other financial institutions or other businesses related to banking
Slide 14: Dividends Declared
DIVIDENDS DECLARED 2011 Regular Dividends $ 0.24 Special Dividends 0.30 Calendar Year 2011 $ 0.54 2010 Regular Dividends $ 0.22 Special Dividends 0.30 Calendar Year 2010 $ 0.52 2009 Regular Dividends $ 0.20 Special Dividends 0.30 Calendar Year 2009 $ 0.50
Slide 15: Stock Repurchase Plan
STOCK REPURCHASE PLAN On May 25, 2010 the Board of Directors authorized a second repurchase for up to 2.9 million shares (10% of our outstanding shares). There were 1.9 million shares purchased under this plan as of September 30, 2011.
Slide 16: Stockholder's Equity/Total Assets
STOCKHOLDER’S EQUITY/TOTAL ASSETS The decrease in equity was primarily due to stock repurchases, along with regular and special dividends 29.03 27.56 23.44 20.76 17.85 18.20 0.00% 10.00% 20.00% 30.00% 40.00% Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Sep-11 Percentage
Slide 17: Equity Capital Massachusetts Banks
4 Banks 15% and over 9 banks 12.5% - 14.99% 13 Banks 10% - 12.49% 27 Banks Under 10% EQUITY CAPITAL MASSACHUSETTS BANKS ASSETS OF $500 MILLION - $5 BILLION AS OF SEPTEMBER 30, 2011* *Source: Massachusetts Bankers Association Westfield Bank over 17%
Slide 18: Total Loan Portfolio
TOTAL LOAN PORTFOLIO (DOLLARS IN MILLIONS) Commercial real estate (owner occupied) $96.9 17% Commercial real estate (non-owner occupied) $123.9 23% Consumer loans $2.6 1% Residential real estate $156.2 29% Home equity $36.7 7% Commercial and industrial $127.2 23%
Slide 19: Market Segment Breakdown
MARKET SEGMENT BREAKDOWN (DOLLARS IN MILLIONS) Manufacturing $56.1 16% Wholesale Trade $39.6 11% Retail Trade $27.4 8% Real Estate, Rental & Leasing $112.7 32% Professional, Scientific & Technical $27.1 8% Educational & Health Care $23.8 7% Arts, Entertainment & Recreation $25.1 7% Other $36.7 10%
Slide 20: Commercial Loan Relationships
COMMERCIAL LOAN RELATIONSHIPS (DOLLARS IN MILLIONS) $6 Million & <= $15 million $134.6 38% Over $15 million $54.9 15% Under $6 Million $167.9 47%
Slide 21: Net Loan Portfolio
NET LOAN PORTFOLIO 385 415 472 469 502 537 $350 $425 $500 $575 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Sep-11 Millions
Slide 22: Commercial & Industrial Loans
COMMERCIAL & INDUSTRIAL LOANS 100 117 154 145 135 127 $0 $30 $60 $90 $120 $150 $180 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Sep-11 Millions
Slide 23: Residential Loans (Including Home Equity)
RESIDENTIAL LOANS (INCLUDING HOME EQUITY) 109 108 98 99 149 193 $0 $30 $60 $90 $120 $150 $180 $210 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Sep-11 Millions
Slide 24: Residential Loan Program
RESIDENTIAL LOAN PROGRAM We process substantially all of our originations of residential real estate loans through a third-party mortgage company. Residential real estate borrowers submit applications to us, but the loan is approved by and closed on the books of the mortgage company. In recent month
Slide 25: Residential Real Estate Loans Purchased
RESIDENTIAL REAL ESTATE LOANS PURCHASED OCTOBER 2010 – SEPTEMBER 30, 2011 Loan applications originated by: Westfield Bank $37.9 million 45.8% Third Party Mortgage Co. $44.8 million 54.2% Total $82.7 million Weighted Average LTV: 69.4%
Slide 26: Securities Portfolio
SECURITIES PORTFOLIO (DOLLARS IN MILLIONS) Government Sponsored Enterprise Debt $28.7 4.6% Equity Securities $5.5 0.9% Private Label Mortgage Backed Securities $1.7 0.3% GSE Mortgage Backed Securities $546.3 87% Massachusetts Municipal Bonds $45.7 7.2%
Slide 27: Securities Portfolio Private Label MBS
SECURITIES PORTFOLIO PRIVATE LABEL MBS AMORTIZED COST: $2.2 MILLION MARKET VALUE: $1.7 MILLION 91.8% 0.3% 6.5% 0.3% 0.4% 0.9% Treasury/Agency AAA AA & A Less than A Split Ratings Not Rated
Slide 28: Total Deposits
TOTAL DEPOSITS In 2007 and 2008 management placed less emphasis on gathering time deposits in favor of lower cost alternative funding
Slide 29: Deposit Mix
DEPOSIT MIX (DOLLARS IN MILLIONS) December 31, 2007 Total deposits grew by $117.8 million, 19.5% Non-maturity deposits grew by $148.4 million, 59.5% September 30, 2011 Time $353.4 59% Savings/ Money Market $121.6 20% Int. Bearing Checking $42.4 7% Non-interest Checking $85.3 14% Time $322.8 45% Savi
Slide 30: Short and Long Term Borrowings
SHORT AND LONG TERM BORROWINGS $375 $300 $225 $150 $75 $0 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Sep-11 73 137 223 288 301 303
Slide 31: Net Interest Margin
NET INTEREST MARGIN (fully taxable equivalent basis) 4.00% 3.00% 2.00% 1.00% 0.00% 20 '10 30 '10 40 '10 10 '11 20 '11 30 '11 2.70 2.58 2.40 2.72 2.75 2.64
Slide 32: Net Income
NET INCOME Millions $0 $2 $4 $6 $6 $8 $10 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Sep-11 4.7 8.7 6.7 5.5 3.0 4.3
Slide 33: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE $0.00 $0.10 $0.20 $0.30 $0.40 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Sep-11 0.15 0.28 0.22 0.18 0.11 0.16
Slide 34: Thank You
Thank Your
Westfield Financial — Stifel Nicolaus Bank Conference 2011 on 6ix