Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Westfield Financial — KBW 13th Annual Community Bank Investor Conference 2012
27 slides from Western New England Bancorp's conference presentation, Jul 30, 2012
Slide 1: Westfield Financial Inc. KBW 13th Annual Community Bank Investor Conference
W ESTFIELD F INANCIAL I NC . NASDAQ: WFD KBW 13 TH ANNUAL C OMMUNITY B ANK INVESTOR C ONFERENCE J ULY 31, 2012 – A UGUST 1, 2012
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: Overview
OVERVIEW • $1.3 billion asset bank holding company headquartered in Westfield, MA with 11 branches throughout Hampden County in Western Massachusetts; Strong lending culture and historical focus on commercial business lending; - Key differentiator from other legacy mutual thrifts; - 21% C&I loans an
Slide 4: Strategy
STRATEGY• Our markets are poised for significant recovery as the economy improves; • Large banks are not focused on small and mid-sized consumers and businesses; • Grow our business focusing on our strengths, and leveraging our capital: - Continue attracting top bankers and targeting high growth and
Slide 5: Branch Footprint
BRANCH FOOTPRINT cA Northfield Colrain Royalston ree Greenfield Athol a i Ashfield Mantague Whately Chesterfield Fa enhiaesé Becket Northampton Easthampton poo = Chicopee Westfie! rs bi pr@Bield @ of Ware as bad Huntington Great Batrington ‘todiow” Sheffiold Monson Weatogue 2 Enfield Somers Statford
Slide 6: Characteristics of Our Target Markets (Springfield & Greater Hartford)
CHARACTERISTICS OF OUR TARGET MARKETS (SPRINGFIELD & GREATER HARTFORD) Unemployment Rate March 2012 Bismarck ND Pittsburgh PA Albany-Schenectady Philadelphia Hartford CT Springfield MA Boston MA Greater NYC-NJ-CT Worcester MA-CT Providence RI Washington DC Minneapolis-St Paul Chicago Los Angeles CA
Slide 7: Our Current Deposit Market: Cities & Towns Where We Have Branches
OUR CURRENT DEPOSIT MARKET CITIES & TOWNS WHERE WE HAVE BRANCHES Deposits Market Bank Name Branches 06/30/2011 Share 1 TD BANK NATIONAL ASSN 14 $ 958,694 17.83% 2 UNITED BANK 11 768,511 14.29% 3 WESTFIELD BANK 11 711,701 13.24% 4 PEOPLESBANK 9 636,852 11.85% 5 BANK OF AMERICA NA 15 586,739 10.91% 6
Slide 8: Our Current Deposit Market: Hampden County, Massachusetts
OUR CURRENT DEPOSIT MARKET HAMPDEN COUNTY, MASSACHUSETTS Out of market banks, 35% Local banks, 48% Credit unions, 17% By amount of deposits 2011 June 2011 One Year Five Years Ten Years Branches Deposits Growth $ Growth % Growth $ Growth % Growth $ Growth % Out-of state owned banks 80 3,400,109 86,66
Slide 9: Total Deposits
TOTAL DEPOSITS 40045050055060065070075080020072008200920102011Jun 12603 588 648 700 733 748 $ in millions 9
Slide 10: Focus on Core Deposits
FOCUS ON CORE DEPOSITS TOTAL DEPOSITS GREW $144.9 MILLION (24.03%) NON-MATURITY DEPOSITS GREW $184.4 MILLION (75.25%) Non interest checking, 14% NOW, 7% Savings and MMDA, 20% Time, 59% Non interest checking, 14% NOW, 8% Savings and MMDA, 36% Time, 42% 10
Slide 11: Total Loans
TOTAL LOANS 300 350 400 450 500 550 600 2007 2008 2009 2010 2011 Jun 12 421 481 477 509 554 584 11
Slide 12: Commercial Business Lending
COMMERCIAL BUSINESS LENDING OUR ROBUST C&I BUSINESS DIFFERENTIATES WESTFIELD FROM OTHER CONVERTED THRIFTS C&I Loans as % of Total Loans All banks in the Northeast (1) with $10 billion in assets and below that have converted since June 2001 (date of Westfield’s MHC conversion) and remain independent
Slide 13: Experienced Lending Team
EXPERIENCED LENDING TEAM Years Lending Years with Westfield Bank Prior Experience James Hagan President and CEO 28 18 Fleet Bank Allen Miles EVP and Senior Lender 24 14 Westbank, Bank of New England Dennis Keefe 33 1 Berkshire Bank, Fleet Bank Richard Hanchett 26 5 New Alliance Bank Bruce Eger 25 13
Slide 14: Diversified Loan Portfolio as of June 30, 2012
Commercial real estate (owner occupied) $109.2 19% Commercial real estate (non-owner occupied) $125 21% Consumer loans $2.1 1% Residential real estate $187.0 32% Home equity $35.8 6% Commercial and industrial $123.7 21% DIVERSIFIED LOAN PORTFOLIO AS OF JUNE 30, 2012 14
Slide 15: Commercial Loan Portfolio by Market Segment
15% Wholesale Trade $39.3 11% Retail Trade $30.3 8% Real Estate, Rental & Leasing $115.0 32% Professional, Scientific & Technical $26.9 7% Educational & Health Care $38.4 11% Arts, Entertainment, Recreation & Accommodations $24.8 7% Other $30.9 9% 15 COMMERCIAL LOAN PORTFOLIO BY MARKET SEGMENT AS OF
Slide 16: Granularity of Commercial Loan Relationships
GRANULARITY OF COMMERCIAL LOAN RELATIONSHIPS AS OF JUNE 30, 2012 16
Slide 17: Credit Quality Metrics
Jun 30, 2012 Dec 31, 2011 Allowance for loan losses as a 1.38% 1.40% percentage of total loans Nonperforming loans as a 0.47% 0.53% percentage of total loans Nonperforming assets as a 0.29% 0.32% percentage of total assets 17
Slide 18: Technology
TECHNOLOGY We’re leveraging technology to fulfill our customers needs for alternative ways to bank. 2nd Quarter 2012 – A new App for iPad, iPhone and Droid phones. Easier login to Mobile Banking and a map function for locating and getting directions to Bank branches. Customers can also view account
Slide 19: Effectively Leveraging Capital
EFFECTIVELY LEVERAGING CAPITAL SHAREHOLDERS’ EQUITY TO ASSETS 0.00%5.00%10.00%15.00%20.00%25.00%30.00%20072008200920102011Jun 1227.56% 23.44% 20.76% 17.85% 17.34% 16.03% 19
Slide 20: Stable and Consistent Net Interest Margin
STABLE AND CONSISTENT NET INTEREST MARGIN FULLY TAXABLE EQUIVALENT BASIS 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 2.72% 2.73% 2.64% 2.60% 2.55% 2.58% 20
Slide 21: Conservative Securities Portfolio
CONSERVATIVE SECURITIES PORTFOLIO AS OF JUNE 30, 2012 Government Sponsored Enterprise Debt $34.1 5.3% Equity Securities $7.3 1.1% Corporate Bonds $47.1 7.4% GSE Mortgage Backed Securities $509.5 79.7% Massachusetts Municipal Bonds $41.7 6.5%21
Slide 22: Strong Underlying Credit in Securities Portfolio
STRONG UNDERLYING CREDIT IN SECURITIES PORTFOLIO AS OF JUNE 30, 2012 Treasury/AgencyAAAAA & ALess than ASplit RatingsNot Rated22
Slide 23: Capital Management
CAPITAL MANAGEMENT We try to effectively r in repurchases and dividends A COMBINATION OF FOUR INITIATIVES We try to effectively balance leveraging our capital to earn a return on our shareholders’ investment versus returning the capital dollar-for-dollar in repurchases and dividends 23
Slide 24: Capital Management: Cumulative Return of Capital
CAPITAL MANAGEMENT CUMULATIVE RETURN OF CAPITAL SINCE SECOND STEP CONVERSION In December 2011, the Board of Directors authorized our current repurchase program of 1.3 million shares, or 5% of shares outstanding, which commenced in January 2012. 24
Slide 25: Dividend Policy
DIVIDEND POLICY $0.00 2009 2010 2011 YID2Q11 YTD 2Q12 © Regular dividends Special dividends 2008 2009 YTD20 11 YTD 20 12 Regular dividends $0. $0.20 $0.20 $0. 80. $0.12 80.12 Dividend payoul™ 90.9% 111.1% .0% : 109.1% 85.7% Dividend yield 1.9% 2.4% \ 3.0% 3.2% “Total dividends K $0.60 $0.50 . 5 $0.2
Slide 26: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE 26
Slide 27: Total Return Performance
TOTAL RETURN PERFORMANCE * TWO YEAR TOTAL RETURN VERSUS SNL THRIFT INDEX 27
Westfield Financial — KBW 13th Annual Community Bank Investor Conference 2012 on 6ix