Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Westfield Financial — Sandler O'Neill & Partners Investor Meeting (March 2013)
31 slides from Western New England Bancorp's conference presentation, Mar 19, 2013
Slide 1: Sandler O'Neill & Partners Investor Meeting
WESTFIELD FINANCIAL INC. NASDAQ: WFD SANDLER O’NEILL & PARTNERS, LP INVESTOR MEETING MARCH 19, 2013
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 A bank holding company headquartered in Westfield, MA with $1.3 billion in assets and 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 lo
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 by focusing on our strengths, and leveraging our capital: -continue attracting top bankers and targeting high growth and de
Slide 5: Branch Footprint
BRANCH FOOTPRINT Granby Banking Cente
Slide 6: Granby Banking Center
GRANBY BANKING CENTER Full service banking center in Farmington Valley area. Commercial lending reach into Bloomfield, East Granby, Windsor, greater Hartford. Targeting areas with more affluent customers, including the Farmington Valley, which offers a strong residential lending opportunity. We comp
Slide 7: Granby Target Areas
GRANBY TARGET AREAS 7 The map shows the market 3, 5, and 10 miles from the Granby banking center
Slide 8: Characteristics of Our Target Markets
$ in millions Source: Bureau of Labor Statistics; Federal Housing Finance Agency 8 CHARACTERISTICS OF OUR TARGET MARKETS (SPRINGFIELD & GREATER HARTFORD) Unemployment Rate November 2012 (60.0)(50.0)(40.0)(30.0)(20.0)(10.0)0.010.020.0Bismarck ND Pittsburgh PA Albany-Schenectady Philadelphia Hartford
Slide 9: Our Current Deposit Market: Cities & Towns Where We Have Branches
$ in thousands Source: SNL Financial 9 OUR CURRENT DEPOSIT MARKET CITIES & TOWNS WHERE WE HAVE BRANCHES Deposits Market Bank Name Branches 06/30/2012 Share 1 TD Bank National Association 13 1,045,617 18.26% 2 United Bank 11 796,686 13.91% 3 Westfield Bank 11 748,216 13.07% 4 PeoplesBank 10 713,799 1
Slide 10: Our Current Deposit Market: Hampden County
RBS Citizens NA 11 149,688 2.61% 11 Sovereign Bank NA 3 90,301 1.58% 12 Nuvo Bank & Trust Co 1 90,119 1.57% 13 Webster Bank, NA 4 69,181 1.21% 14 Easthampton Savings Bank 2 66,326 1.16% 15 Chicopee Savings Bank 1 48,295 0.84% $ in thousands Source: SNL Financial 10 OUR CURRENT DEPOSIT MARKET HAMPDEN
Slide 11: Total Deposits
TOTAL DEPOSITS $ in millions 400450500550600650700750800200720082009201020112012603 588 648 700 733 753 December 31, 2007 December 31, 2012
Slide 12: Focus on Core Deposits
FOCUS ON CORE DEPOSITS TOTAL DEPOSITS GREW $150.2 MILLION (24.9%) NON-MATURITY DEPOSITS GREW $177.6 MILLION (71.2%) Non interest checking, 14% NOW, 7% Savings and MMDA, 20% Time, 59% Non interest checking, 15% NOW, 7% Savings and MMDA, 35% Time, 43%
Slide 13: Total Loans
$ in millions 13 TOTAL LOANS 300350400450500550600200720082009201020112012421 481 477 509 554 595 7.6% CAGR
Slide 14: Commercial Business Lending
0.005.0010.0015.0020.0025.00CXBTKTHNEBTCWFDCBNKFBNKNWYFMBVTUBNKSIFICMTVBNFIRCKBSALHBNKMedianFNLCNVSLCNBKABHBCACWASHPNBKCATCNHTBNBEBSBPEOPBLMTHIFS(1) As of 12/31/ 2012 or the most recent quarter for which regulatory filings are available; excludes NBN which has unique business plan Source: Company SE
Slide 15: Price to Tangible Book Value
PRICE TO TANGIBLE BOOK VALUE . . . BUT OUR VALUATION DOES NOT REFLECT OUR STRONG COMMERCIAL PLATFORM AND FOCUS 15 All public banks and thrifts in New England between $500 million and $5 billion in total assets (1) As of 12/31/ 2012 or the most recent quarter for which regulatory filings are availabl
Slide 16: Experienced Commercial Lending Team
EXPERIENCED COMMERCIAL LENDING TEAM 16 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 Br
Slide 17: Diversified Loan Portfolio
DIVERSIFIED LOAN PORTFOLIO AS OF DECEMBER 31, 2012 $ in millions Owner Occupied Commercial Real Estate $113.1 19% Non Owner Occupied Commercial Real Estate $132.7 23% Consumer Loans $1.8 1% Home equity $34.3 5% Residential Real Estate $185.4 31% Commercial & Industrial $126.1 21%
Slide 18: Commercial Loan Portfolio by Market Segment
COMMERCIAL LOAN PORTFOLIO BY MARKET SEGMENT AS OF DECEMBER 31, 2012 $ in millions Manufacturing $57.5 15% Wholesale Trade $35.0 9% Retail Trade $28.7 8% Real Estate, Rental & Leasing $118.4 32% Professional, Scientific & Technical $29.1 8% Educational & Health Care $34.0 9% Arts, Entertainment & Rec
Slide 19: Granularity of Commercial Loan Relationships
GRANULARITY OF COMMERCIAL LOAN RELATIONSHIPS AS OF DECEMBER 31, 2012 > $6 Million & < $15 Million $188.4 Million 51% Over $15 Million $61.7 Million 16% Under $6 Million $121.8 Million 33% Dec 31, 2012 Dec 31, 2011 Allowance for loan losses as a 1.31% 1.40% percentage of total loans Nonperforming loa
Slide 20: Consistently Strong Credit Quality
CONSISTENTLY STRONG CREDIT QUALITY Allowance for loan losses as a percentage of total loans Nonperforming loans as a percentage of total loans Nonperforming assets as a percentage of total assets Dec 31, 2012 Dec 31, 2011 1.31% 0.51% 0.31% 1.40% 0.53% 0.32%
Slide 21: Leveraging Technology
LEVERAGING TECHNOLOGY ?We’re leveraging technology to fulfill our customers needs for alternative ways to bank. ?Mobile App for iPhone, iPad, & Android introduced in 2012 Customers can also view account balances and transaction history, transfer money between accounts and pay bills all from their sm
Slide 22: Effectively Leveraging Capital
EFFECTIVELY LEVERAGING CAPITAL SHAREHOLDERS’ EQUITY TO ASSETS 0.00%5.00%10.00%15.00%20.00%25.00%30.00%20072008200920102011201227.56% 23.44% 20.76% 17.85% 17.34% 14.50%
Slide 23: Stable and Consistent Net Interest Margin
STABLE AND CONSISTENT NET INTEREST MARGIN FULLY TAXABLE EQUIVALENT BASIS 1.00%1.50%2.00%2.50%3.00%3Q 114Q 111Q 122Q 123Q 124Q 122.64% 2.64% 2.55% 2.58% 2.52% 2.47%
Slide 24: Conservative Securities Portfolio
CONSERVATIVE SECURITIES PORTFOLIO AS OF DECEMBER 31, 2012 $ in millions GSE Mortgage Backed Securities $458.8 73.8% Massachusetts Municipal Bonds $40.8 6.6% Government Sponsored Enterprise Debt $62.1 10.0% Equity Securities $7.5 1.2% Corporate Bonds $52.3 8.4%
Slide 25: Strong Underlying Credit in Securities Portfolio
STRONG UNDERLYING CREDIT IN SECURITIES PORTFOLIO AS OF DECEMBER 31, 2012 = Treasury/Agency =@AAA AA&A Less than A = Split Ratings = Not Rated
Slide 26: Strong Underlying Credit in Securities Portfolio
STRONG UNDERLYING CREDIT IN SECURITIES PORTFOLIO AS OF DECEMBER 31, 2012 81.8% 0.2% 14.1% 1.5% 0.9% 1.5% Treasury/AgencyAAAAA & ALess than ASplit RatingsNot Rated ?Fund organic growth. ?Repurchase shares of our common stock. ?Pay dividends to shareholders. ?Finance acquisitions.
Slide 27: Capital Management
CAPITAL MANAGEMENT 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. A COMBINATION OF FOUR INITIATIVES In December 2012, the Board of Directors authorized our current repu
Slide 28: Effective Price Execution of Repurchases
EFFECTIVE PRICE EXECUTION OF REPURCHASES SHARES REPURCHASED BY QUARTER AND P/TBV OF REPURCHASES 70%80%90%100%110%120%05001,0001,5002,0002,5001Q 102Q 103Q 104Q 101Q 112Q 113Q 114Q 111Q 122Q 123Q 124Q 12Shares Repurchased (000)Avg Repurch Price to Last Quarter TBVTBV P/TBV of repurch Shares Repurch (0
Slide 29: Dividend History
DIVIDEND HISTORY $0.00$0.20$0.40$0.60200720082009201020112012$0.20 $0.20 $0.20 $0.22 $0.24 $0.24 $0.20 $0.40 $0.30 $0.30 $0.30 $0.20 Regular dividendsSpecial dividends2007 2008 2009 2010 2011 2012 Regular dividends $0.20 $0.20 $0.20 $0.22 $0.24 $0.24 Dividend payout 71.4% 90.9% 111.1% 200.0% 109.1%
Slide 30: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE $0.00$0.05$0.10$0.15$0.20$0.25$0.30200720082009201020112012$0.28 $0.22 $0.18 $0.11 $0.22 $0.26 * Source: SNL Financial, data as of close of business March 15, 2013.
Slide 31: Total Return Performance
TOTAL RETURN PERFORMANCE * TWO YEAR TOTAL RETURN VERSUS SNL THRIFT INDEX (30.00)(25.00)(20.00)(15.00)(10.00)(5.00)0.005.0010.0015.00WFDSNL U.S. Thrift
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