Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Investor Presentation (August 2020)
38 slides from Western New England Bancorp's investor presentation, Aug 12, 2020
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 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 Leo R
Slide 5: Connecticut Strategy
CONNECTICUT STRATEGY On Monday, July 6 th , the Bank’s Bloomfield branch officially opened for business . This was followed closely by the Bank’s West Hartford Financial Services Center, which opened on Tuesday, July 21 st . These openings marked the Bank’s 24 th and 25 th branch locations, and esta
Slide 6: Connecticut Strategy
CONNECTICUT STRATEGY The West Hartford Financial Services Center, located in West Hartford Center, will serve 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 D
Slide 7: Connecticut Strategy
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 shopping center is composed of national and local brands and is a major shopping destination for the greater Bloomfield a
Slide 8: 2Q2020 Earnings
2Q2020 EARNINGS 8 ($ in millions, except EPS) 2Q2020 1Q2020 2Q2019 Net interest income $ 15,092 $ 14,553 $ 14,201 Provision for loan losses 2,450 2,100 350 Non - interest income 2,087 2,525 2,517 Non - interest expense 12,245 12,314 12,140 Income tax expense 463 584 971 Net income $ 2,021 $ 2,080 $
Slide 9: Loans
LOANS 9 $1,689 $1,739 $1,774 $1,783 $1,960 4.38% 4.39% 4.36% 4.26% 3.92% $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 3.00% 3.50% 4.00% 4.50% Average Loans Outstanding Average Loans Outstanding Total Average Loan Yield $1,722 $1,752 $1,776 $1,804 $2,000 2Q2019 3Q2019
Slide 10: Loan Portfolio Trends
LOAN PORTFOLIO TRENDS 10 Loan Segment Modification Balance # of Loans Modified Balance as a % of Total Loan Segment Balances Returned to P&I and Made First Payment (2) % Returned to P&I and Made First Payment # of Loans Returne d to P&I (2) Commercial real estate $ 200.0 131 24.0% $ 71.6 35.8% 54 Co
Slide 11: Commercial and Industrial Loan Trends
COMMERCIAL AND INDUSTRIAL LOAN TRENDS 11 $238 $242 $249 $257 $231 $222 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $100 $150 $200 $250 $300 $350 $400 $450 $500 Commercial and Industrial Loans C&I Loans PPP Loans $453 Commercial and industrial loans (C&I) of $ 453 million increased $ 215 million, or 90 . 3 %
Slide 12: Commercial and Industrial Loans (Excludes PPP)
COMMERCIAL AND INDUSTRIAL LOANS (EXCLUDES PPP) 12 Auto Sales , 0.4% Educational Services , 1.0% Healthcare , 0.7% Heavy and Civil Engineering Construction , 0.8% Manufacturing , 3.0% Other , 3.4% Specialty Trade , 0.7% Transportation , 0.7% Wholesale Trade , 2.4% % of total loans, excluding PPP, at
Slide 13: Total COVID-Modifications – C&I Portfolio
TOTAL COVID - 19 MODIFICATIONS – C&I PORTFOLIO 13 Industry Balance (1) % of Total Loans (1) Modified Balance # of Modified Accounts % of Balance Modified Manufacturing $ 54 M 3% $ 2 M 18 5% Wholesale Trade 42 M 2% 666 K 3 2% Specialty Trade 13 M 1% - - - Heavy and Civil Engineering Construction 13 M
Slide 14: Commercial Line of Credit Utilization
COMMERCIAL LINE OF CREDIT UTILIZATION 14 The table below breaks out the commercial line utilization since December 31, 2019. Balance 6/30/2020 3/31/2020 12/31/2019 Pass - rated $ 43 M $ 78 M $ 65 M Classified 20 M 21 M 20 M Total: $ 63 M $ 99 M $ 85 M Utilization 22% 37% 33% Commercial commitment ut
Slide 15: Small Business Protection Loans – Paycheck Protection Program
SMALL BUSINESS PROTECTION LOANS – PAYCHECK PROTECTION PROGRAM 15 Loan Amount Total Balance # of Loans Fee (%) Fee ($) $150K and under $ 42 M 1,085 5% $ 2.1 M $151K - $350K 34 M 145 5% 1.7 M $351K - $2.0M 90 M 113 3% 2.7 M Over $2.1M 56 M 15 1% 559 K Total: $ 222 M 1,358 $ 7.1 M As of June 30 , 2020
Slide 16: Commercial Real Estate Loan Trends
COMMERCIAL REAL ESTATE LOAN TRENDS 16 $803 $821 $817 $836 $833 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $780 $790 $800 $810 $820 $830 $840 Commercial real estate loans of $ 833 million decreased $ 3 . 0 million, or 0 . 4 % , from the linked quarter, but increased $ 30 million, or 3 . 7 % , year - over - y
Slide 17: Commercial Real Estate Loans – COVID-Modifications Granted
COMMERCIAL REAL ESTATE LOANS – COVID - 19 MODIFICATIONS GRANTED 17 Property Type Balance % of Total Loans (1) Modified Balance Modified Loans (#) Balance Modified (%) Apartment $ 174 M 9.7% $ 36 M 15 21% Office 132 M 7.3% 17 M 15 11% Retail/Shopping 116 M 6.5% 46 M 24 39% Industrial 110 M 5.8% 8 M 8
Slide 18: Residential and Consumer Loan Trends
RESIDENTIAL AND CONSUMER LOAN TRENDS 18 $677 $684 $706 $708 $716 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $660 $670 $680 $690 $700 $710 $720 $730 Residential and Consumer Loans Period - end Loans Outstanding Residential, including home equity loans, and consumer loans increased $ 8 million from the linked
Slide 19: Total Deposits
TOTAL DEPOSITS 19 $967 $1,013 $1,025 $1,057 $1,319 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 Period - end Core Deposits Period - end core deposits of $ 1 . 3 billion increased $ 352 million , or 36 . 4 % , year - over - year and increased $
Slide 20: Average Deposits
AVERAGE DEPOSITS 20 $1,274 $1,268 $1,287 $1,300 $1,368 $363 $369 $388 $389 $505 1.07% 1.08% 1.05% 1.01% 0.82% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Deposits and Rates Interest-bearing deposts
Slide 21: Average Core Deposits
AVERAGE CORE DEPOSITS 21 $957 $970 $1,021 $1,037 $1,233 0.31% 0.32% 0.34% 0.33% 0.27% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Core Deposits and Rates Interest-bearing deposts Averag
Slide 22: Average Time Deposits
AVERAGE TIME DEPOSITS 22 $680 $667 $654 $651 $640 2.14% 2.18% 2.15% 2.08% 1.87% 1.70% 1.80% 1.90% 2.00% 2.10% 2.20% 2.30% 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $500 $550 $600 $650 $700 $750 $800 Average Time Deposits and Rates Interest-bearing deposts Average deposit cost Average time deposits of $ 640
Slide 23: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 23 105% 105% 106% 106% 103% 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 97% 98% 99% 100% 101% 102% 103% 104% 105% 106% 107% Loan - to - Deposit Ratio $ in millions 59% 61% 61% 62% 68% 41% 39% 39% 38% 32% 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 0% 10% 20% 30% 40% 50% 60% 70% 80% Core Depo
Slide 24: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2019. Note: Total number of Westfield Bank branches shown includes the Big E seasonal branch and online deposit channel. Two Westf iel d branches are located in Hampshire County, MA and two Westfield branches are located in Hartford County, CT outside of
Slide 25: FHLB and PPPLF Funding
FHLB AND PPPLF FUNDING 25 $226 $241 $241 $222 $197 $26 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $- $50 $100 $150 $200 $250 $300 Period - end FHLB and PPPLF FHLB PPPLF We have been reducing our reliance on FHLB borrowings as we continue to focus on low - cost core deposits . FHLB borrowings decreased $ 29
Slide 26: Net Interest Income
NET INTEREST INCOME 26 $14.2 $14.5 $14.9 $14.6 $15.1 2.92% 2.91% 2.93% 2.89% 2.76% 2.65% 2.70% 2.75% 2.80% 2.85% 2.90% 2.95% 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $10.0 $12.0 $14.0 $16.0 $18.0 $20.0 Net interest income ($) Net interest margin (%) Net interest income increased $ 891 , 000 , or 6 . 3 % ,
Slide 27: Non-Interest Income
NON - INTEREST INCOME 27 $2,517 $2,611 $2,406 $2,525 $2,087 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $1,500 $2,000 $2,500 $3,000 Non-interest income Non - interest income decreased $ 430 , 000 , or 17 . 1 % , year - over - year and decreased $ 438 , 000 , or 17 . 3 % , from the linked quarter . • Deposit
Slide 28: Non-Interest Expense
NON - INTEREST EXPENSE 28 $12,140 $11,740 $11,905 $12,314 $12,245 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $10,000 $11,000 $12,000 $13,000 $14,000 Non-interest expense Non - interest expense increased $ 105 , 000 , or 0 . 9 % , year - over - year, but decreased $ 69 , 000 , or 0 . 6 % , from the linked qu
Slide 29: Asset Quality
ASSET QUALITY 29 $14.9 $11.1 $9.9 $9.7 $10.4 0.87% 0.63% 0.56% 0.54% 0.59% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 $5.0 $10.0 $15.0 $20.0 Non - performing Loans ($ in millions) Non-performing loans Non-performing loans/Total Loans Excluding PPP Loans The Company has ta
Slide 30: Asset Quality
ASSET QUALITY 30 We entered the pandemic with strong asset quality and we continue to work with our borrowers during these uncertain times. 6/30/2020 3/31/2020 12/31/2019 Total Delinquency $12.0 million $12.4 million $13.8 million Delinquency as a % of total loans 0.60% 0.69% 0.78% Non - performing
Slide 31: Asset Quality
ASSET QUALITY 31 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Special Mention $31.1 $26.5 $25.9 $35.9 $96.3 % of Total Loans (1) 1.8% 1.5% 1.5% 2.0% 5.4% Substandard $56.3 $60.9 $57.3 $59.6 $55.4 % of Total Loans (1) 3.3% 3.5% 3.2% 3.3% 3.1% Total Watch List Loans $87.4 $87.4 $83.2 $95.5 $151.7 % of Total Loa
Slide 32: Asset Quality
ASSET QUALITY 32 Allowance for loan losses (ALLL) = $18.3 million • $4.2 million, or 29.4%, increase in the allowance for loan losses reflected increases of $3.5 million in commercial real estate ALLL. • Allowance coverage for commercial real estate loans of 1.23% increased from 0.83% in 4Q2019. • A
Slide 33: Hotels - $55.1 Million, or 3.1% of Total Loans
HOTELS - $55.1 MILLION, OR 3.1% OF TOTAL LOANS (1) 33 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 34: Capital Management
CAPITAL MANAGEMENT 34 We are well - capitalized with excess capital. Consolidated Ratio Well Capitalized Excess Consolidated Capital Leverage Ratio 9.5% - - $220.5 Common Equity Tier 1 Ratio 12.9% - - $220.5 Tier 1 Capital Ratio 12.9% - - $220.5 Total Capital Ratio 14.0% - - $238.7 x From a regulato
Slide 35: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 35 Year # of Shares 2017 606,391 2018 2,189,276 2019 1,938,667 2020 1,009,731 Year Annualized Dividend per Share 2017 $0.12 2018 $0.16 2019 $0.20 2020 $0.20 Share Repurchases Dividends Historically, the Company has been active with share repurchases . During the six mo
Slide 36: Capital Management
CAPITAL MANAGEMENT 36 $8.95 $8.88 $8.74 $8.73 $8.60 $8.34 $8.27 $8.14 $8.14 $8.00 Book Value per Share Tangible Book Value per Share Book Value Tangible Book Value
Slide 37: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 37 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 38: 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 38 141 Elm Street, Westfield, MA
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