Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Q2 2022 Earnings Presentation
28 slides from Western New England Bancorp's earnings presentation, Jul 26, 2022
Slide 1: Investor Presentation Second Quarter 2022
Local banking is better than ever. INVESTOR PRESENTATION SECOND QUARTER 2022
Slide 2: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS 2 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 Update
5 CONNECTICUT STRATEGY UPDATE The Bank is well - positioned with four Hartford County, Connecticut locations . Continued mergers and consolidations throughout the state have created increased demand for a local, full - service, community - oriented bank, supporting the Bank’s deposit and loan growth
Slide 6: Connecticut Strategy Update
6 CONNECTICUT STRATEGY UPDATE Congratulations to the West Hartford Financial Services Center team on being recognized as “Best Bank/Financial Institution” in the annual Best of West Hartford , marking two consecutive years that the Bank has earned the top spot.
Slide 7: 2Q2022 Quarterly Earnings
2Q2022 QUARTERLY EARNINGS 7 ($ in thousands , except EPS) 2Q2022 1Q2022 4Q2021 3Q2021 2Q2021 Net interest income $ 19,392 $ 18,698 $ 18,582 $ 18,765 $ 17,804 Provision (credit) for loan losses 300 (425) 300 (100) (1,200) Non - interest income 2,741 2,348 3,856 3,295 2,409 Non - interest expense ____
Slide 8: Net Interest Income and Net Interest Margin
NET INTEREST INCOME ($) AND NET INTEREST MARGIN (%) 8 $17.8 $18.8 $18.6 $18.7 $19.4 3.06% 3.18% 3.08% 3.18% 3.24% 2.98% 2.99% 2.97% 3.10% 3.23% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 $16.5 $17.5 $18.5 $19.5 $20.5 $21.5 $22.5 $23.5 $24.5 N
Slide 9: Total Loans
TOTAL LOANS 9 $1,756 $1,787 $1,809 $1,880 $1,946 3.81% 3.75% 3.75% 3.75% 3.79% 3.20% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 $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 Outstanding Average
Slide 10: Commercial and Industrial Loan Trends
COMMERCIAL AND INDUSTRIAL LOAN TRENDS 10 $215 $201 $201 $210 $215 $106 $59 $25 $6 $3 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 $100 $150 $200 $250 $300 $350 C&I Loans (excluding PPP loans) PPP Loans Excluding PPP loans, commercial and industrial loans (“ C&I) of $ 215 . 2 million at June 30 , 2022 increase
Slide 11: C&I Portfolio
C&I PORTFOLIO (1) 11 (1) % of total C&I loans as of June 30, 2022, excluding PPP loans Manufacturing 18% Wholesale trade 21% Educational services 12% Hotels 1% Heavy and civil engineering construction 7% Specialty trade , 6% All other C&I 35%
Slide 12: Commercial Real Estate Loan Trends
COMMERCIAL REAL ESTATE LOAN TRENDS 12 $877 $918 $980 $1,039 $1,075 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 • Commercial real estate (“CRE”) loans of $ 1 . 1 billion at June 30 , 2022 increased $ 94 . 9 million, or 9 . 7 % , from December 31 , 2021 . • At June
Slide 13: Commercial Real Estate Loans
COMMERCIAL REAL ESTATE LOANS (1) 13 (1) % of total commercial real estate loans at June 30, 2022 At June 30, 2022, there was one loan totaling $9.0 million, or 0.8% of the CRE portfolio, remaining under CARES Act modification. Apartment 16% Office 20% Industrial/Warehouse 15% Student Housing 3% Reta
Slide 14: Residential and Consumer Loan Trends
RESIDENTIAL AND CONSUMER LOAN TRENDS 14 $680 $668 $656 $669 $681 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 $640 $650 $660 $670 $680 $690 Residential and Consumer Loans Period - end Loans Outstanding Residential loans, including home equity loans, and consumer loans increased $ 24 . 4 million, or 3 . 7 % ,
Slide 15: Total Deposits
TOTAL DEPOSITS 15 $1,727 $1,806 $1,855 $1,899 $1,952 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 PERIOD - END CORE DEPOSITS At June 30 , 2022 , core deposits increased $ 96 . 6 million, or 5 . 2 % , from $ 1 . 9 billion at December
Slide 16: Average Total Deposits
AVERAGE TOTAL DEPOSITS 16 $1,561 $1,587 $1,606 $1,618 $1,639 $603 $615 $654 $633 $636 0.27% 0.22% 0.19% 0.18% 0.17% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Deposits and Rates Interest-bearing d
Slide 17: Average Core and Time Deposits
AVERAGE CORE AND TIME DEPOSITS 17 $1,676 $1,757 $1,850 $1,862 $1,909 0.19% 0.16% 0.15% 0.14% 0.15% 0.00% 0.02% 0.04% 0.06% 0.08% 0.10% 0.12% 0.14% 0.16% 0.18% 0.20% $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 Average Core Deposits and Rates Average core deposits, including non - interest bearin
Slide 18: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 18 86% 83% 83% 85% 86% 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 81% 82% 83% 84% 85% 86% 87% Period - end Loan - to - Deposit Ratio 79% 81% 82% 83% 85% 21% 19% 18% 17% 15% 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Core Deposits and Time Deposits as
Slide 19: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2021 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 20: Asset Quality Indicators
ASSET QUALITY INDICATORS 20 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 Total loans modified under the CARES Act $57.0M $42.8M $42.5M $12.1M $9.1M Loans modified as a % of total loans (1) 3.2% 2.4% 2.3% 0.6% 0.5% Total delinquent loans $4.4M $3.1M $2.1M $2.8M $2.2M Delinquent loans as a % of total loans (1)
Slide 21: Asset Quality
ASSET QUALITY 21 Management continues to assess the exposure of the Company’s loan portfolio to the COVID - 19 pandemic, economic trends and their potential effect on asset quality . The Company has deferred the adoption of the Current Expected Credit Loss Model , as permitted by its classification
Slide 22: Asset Quality
ASSET QUALITY 22 ($ in Millions) 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 Special Mention $41.1 $38.0 $24.2 $28.1 $22.0 Special Mention - Hotel $25.8 $26.2 $27.3 $27.1 $18.3 Total Special Mention $66.9 $64.2 $51.5 $55.2 $40.3 % of Total Loans (1) 3.8% 3.6% 2.8% 2.9% 2.0% Substandard $37.5 $32.2 $31.1 $30.
Slide 23: Capital Management
CAPITAL MANAGEMENT 23 We are well - capitalized with excess capital. Consolidated Ratio at June 30, 2022 Leverage Ratio 8.91% Common Equity Tier 1 Ratio 11.68% Tier 1 Capital Ratio 11.68% Total Capital Ratio 13.69% x From a regulatory standpoint, we are well - capitalized with excess capital. x We t
Slide 24: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 24 Year # of Shares 2018 2,189,276 2019 1,938,667 2020 1,391,496 2021 2,758,051 1Q2022 112,674 2Q2022 293,173 Year Annual Dividends per Share 2018 $0.16 2019 $0.20 2020 $0.20 2021 $0.20 1Q2022 $0.06 2Q2022 $0.06 Share Repurchases Dividends On April 27 , 2021 , the Boar
Slide 25: Capital Management
CAPITAL MANAGEMENT 25 $9.29 $9.56 $9.87 $9.63 $9.58 $8.66 $8.89 $9.21 $8.97 $8.92 Book Value per Share Tangible Book Value per Share (non - GAAP) (1) Book Value Tangible Book Value (non-GAAP) Book value per share was $ 9.58 at June 30, 2022 compared to $9.87 at December 31, 2021. Tangible book value
Slide 26: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 26 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 27: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 27 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 28: 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 28 141 Elm Street, Westfield, MA
Western New England Bancorp — Q2 2022 Earnings Presentation on 6ix