Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Westfield Financial — Stifel Nicolaus Capital Markets Southwest Massachusetts & Northern Connecticut Client Meet (May 2012)
24 slides from Western New England Bancorp's conference presentation, May 7, 2012
Slide 1: Westfield Financial Inc. Stifel Nicolaus Client Meetings
WESTFIELD FINANCIAL INC. NASDAQ: WFD STIFEL NICOLAUS CAPITAL MARKETS SOUTHWEST MASSACHUSETTS & NORTHERN CONNECTICUT CLIENT MEETINGS MAY 7, 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, Massachusetts –11 branch offices located throughout Hampden County #3 ranked deposit market share in cities where we have branches (#5 in Hampden county) rowth in loans of 8.8% in 2011 over 2010, and 3.0% (annualized) in fi
Slide 4: Strategy
STRATEGY Our markets are poised for significant recovery as the economy improves, and large banks are not focusing on our target market of small and mid-sized consumers and businesses; The best way to serve our shareholders is to grow our business focusing on our strengths, and to leverage our capit
Slide 5: Our Current Deposit Market: Cities & Towns Where We Have Branches
OUR CURRENT DEPOSIT MARKET CITIES & TOWNS WHERE WE HAVE BRANCHES $ in thousands Source: SNL Financial
Slide 6: 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 7: Characteristics of Our Target Markets
CHARACTERISTICS OF OUR TARGET MARKETS Unemployment Rate March 2012 (60.0) (50.0) (40.0) (30.0) (20.0) (10.0) 0.0 10.0 20.0 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
Slide 8: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 2007 2008 2009 2010 2011 Mar 11 Mar 12
Slide 9: Effectively Leveraging Capital: Shareholders' Equity to Assets
EFFECTIVELY LEVERAGING CAPITAL SHAREHOLDERS’ EQUITY TO ASSETS 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 2007 2008 2009 2010 2011 Mar 12 27.56% 23.44% 20.76% 17.85% 17.34% 16.66%
Slide 10: Total Assets
TOTAL ASSETS 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 2007 2008 2009 2010 2011 Mar 12 $ in millions
Slide 11: Total Deposits
TOTAL DEPOSITS 400 450 500 550 600 650 700 750 800 2007 2008 2009 2010 2011 Mar 12 $ in millions
Slide 12: Focus on Core Deposits
FOCUS ON CORE DEPOSITS TOTAL DEPOSITS GREW $145.9 MILLION (24.2%) NON-MATURITY DEPOSITS GREW $183.3 MILLION (73.5%) March 31, 2012 December 31, 2007 Non interest checking, 14% NOW, 9% Savings and MMDA, 35% Time, 42% Non interest checking, 14% NOW, 7% Savings and MMDA, 20% Time, 59% $ in millions
Slide 13: Total Loans
TOTAL LOANS 400 420 440 460 480 500 520 540 560 580 600 2007 2008 2009 2010 2011 Mar 12 421 481 477 509 554 558 6.9% compound annual growth $ in millions
Slide 14: Diversified Loan Portfolio
DIVERSIFIED LOAN PORTFOLIO AS OF MARCH 31, 2012 Commercial real estate (owner occupied) $110.4 20% Commercial real estate (non-owner occupied) $123.5 22% Consumer loans $2.3 1% Residential real estate $165.4 30% Home equity $36.6 6% Commercial and industrial $120.3 21% $ in millions
Slide 15: Commercial Loan Portfolio by Market Segment
COMMERCIAL LOAN PORTFOLIO BY MARKET SEGMENT AS OF MARCH 31, 2012 Manufacturing $56.4 16% Wholesale Trade $35.1 10% Retail Trade $29.4 8% Real Estate, Rental & Leasing $113.0 32% Professional, Scientific & Technical $26.8 8% Educational & Health Care $35.2 10% Arts, Entertainment, Recreation & Accomm
Slide 16: Granularity of Commercial Loan Relationships
GRANULARITY OF COMMERCIAL LOAN RELATIONSHIPS AS OF MARCH 31, 2012 $6 million to $15 million $191.9 million 54% Over $15 million $18.5 million 5% Under $6 million $143.5 million 41% $ in millions
Slide 17: Consistently Strong Credit Quality
Mar 31, 2012 Dec 31, 2011 Allowance loan losses as a 1.40% 1.40% percentage of total loans Nonperforming loans as a 0.49% 0.53% percentage of total loans Nonperforming assets as a 0.30% 0.32% percentage of total assets 17 CONSISTENTLY STRONG CREDIT QUALITY
Slide 18: 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% 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2.40% 2.72% 2.75% 2.64% 2.60% 2.55%
Slide 19: Conservative Securities Portfolio
CONSERVATIVE SECURITIES PORTFOLIO AS OF MARCH 31, 2012 Government Sponsored Enterprise Debt $33.7 5.2% Equity Securities $6.7 1.0% Corporate Bonds $13.2 2.1% GSE Mortgage Backed Securities $546.6 84.6% Massachusetts Municipal Bonds $45.7 7.1% $ in millions
Slide 20: Strong Underlying Credit in Securities Portfolio
STRONG UNDERLYING CREDIT IN SECURITIES PORTFOLIO AS OF MARCH 31, 2012 89.9% 0.2% 8.6% 0.3% 1.0% Treasury/Agency AAA AA & A Split Ratings Not Rated
Slide 21: Capital Management
CAPITAL MANAGEMENT Fund organic growth. Finance acquisitions. Repurchase shares of our common stock. Pay dividends to shareholders. A COMBINATION OF FOUR INITIATIVES We try to effectively balance leveraging our capital to earn a returnon our shareholders’ investment versus returning the capital doll
Slide 22: Capital Management: Cumulative Return of Capital
CAPITAL MANAGEMENT CUMULATIVE RETURN OF CAPITAL SINCE SECOND STEP CONVERSION 0 25,000 50,000 75,000 100,000 125,000 150,000 2007 2008 2009 2010 2011 1Q ' 12 12,075 30,020 44,615 58,910 73,215 74744 0 10,483 24,173 40,300 50,371 54,332 Dividends Repurchases Percentages at top of bars represent cumula
Slide 23: Dividend Policy
DIVIDEND POLICY $0.00 $0.20 $0.40 $0.60 2007 2008 2009 2010 2011 YTD 2Q 11 YTD 2Q 12 $0.20 $0.20 $0.20 $0.22 $0.24 $0.12 $0.12 $0.20 $0.40 $0.30 $0.30 $0.30 $0.15 $0.10 Regular dividends Special dividends * Based on average analyst consensus for second quarter 2012 EPS of $0.05
Slide 24: Total Return Performance
TOTAL RETURN PERFORMANCE * (30.00) (25.00) (20.00) (15.00) (10.00) (5.00) 0.00 5.00 10.00 WFD SNL U.S. Thrift TWO YEAR TOTAL RETURN VERSUS SNL THRIFT INDEX * Source: SNL Financial