Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Westfield Financial — Stifel Nicolaus Investor Round Table Meeting (May 2011)
34 slides from Western New England Bancorp's conference presentation, May 6, 2011
Slide 1: Stifel Nicolaus Investor Round Table Meeting
Westfield Financial Inc. NASDAQ: WFD Stifel Nicolaus Investor Round Table Meeting May 6, 2011 1
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 •Headquartered in Westfield, MA •11 branches offices located throughout Hampden County •Preferred SBA Lender •Did not participate in TARP 3
Slide 4: Strategy
STRATEGY •Main focus on Commercial & Industrial and Commercial Real Estate portfolios by targeting businesses in Western Massachusetts and Northern Connecticut. •C & I relationships include transactional deposit account relationships. •Growth in residential real estate portfolio to diversify risk an
Slide 5: Highlights
HIGHLIGHTS •Very well capitalized. Stockholders’ equity/total asset ratio of 17.70% •High credit quality. Nonperforming loans of 0.75% •Deposits increased by $46.2 million, or 7% for the twelve months ended March 31, 2011. •Total loans increased by 13%, with residential mortgages increasing by $71.4
Slide 6: Highlights
HIGHLIGHTS •Hired new head of Branch Administration/Retail Banking in January 2010. •25 years experience in commercial bank environment •Developed business development skills of Branch Managers: •Business Banking Calling Programs •Introduced Bank @ Work program •Enhanced the bank-at-college program
Slide 7: Electronic Banking
ELECTRONIC BANKING •Enhanced electronic banking capabilities including mobile banking and financial management tools. •Added billing and invoice, payroll and online merchant service processing options for small businesses. •Expanded ATM network with 5 new machines, 3 of which are on a university cam
Slide 8: Total Assets
TOTAL ASSETS 997 1,040 1,109 1,191 1,239 1,241 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Mar-11 Millions 8
Slide 9: Total Return Performance
TOTAL RETURN PERFORMANCE 9 25507510012515017512/31/0512/31/0612/31/0712/31/0812/31/0912/31/10Index Value Westfield Financial, Inc.Russell 2000NASDAQ Bank
Slide 10: Strong Credit Quality
STRONG CREDIT QUALITY March 31, 2011 Allowance loan loss as a 1.33% percentage to total loans Nonperforming loans as a 0.75% percentage of total loans Nonperforming assets as a 0.34% percentage of total assets 10
Slide 11: Asset Quality Ratios
ASSET QUALITY RATIOS 0.00%0.50%1.00%1.50%2.00%2.50%Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Percentage Allowance forloan loass aspercent of totalloansNonperformingloans as apercent of totalloansNonperformingassets as apercentage oftotal assets11
Slide 12: Nonperforming & Delinquent Loans
NONPERFORMING & DELINQUENT LOANS •Nonperforming loans of $3.9 million or 0.75% of total loans •Primarily made up of 4 borrowers totaling $3.2 million •Loans delinquent 30-89 days totaling $20.6 million •Primarily made up of one borrower totaling $15.0 million 12
Slide 13: Nonperforming Loans
NONPERFORMING LOANS (DOLLARS IN MILLIONS) Residential Real Estate $0.7 18% Commercial & Industrial $1.3 33% Commercial Real Estate $1.9 49% 13
Slide 14: Capital Management
CAPITAL MANAGEMENT Possible uses of capital: • Pay dividends to shareholders • Repurchase shares of our common stock •Fund organic growth or leverage the balance sheet •Finance acquisitions of other financial institutions or other businesses related to banking 14
Slide 15: Dividends to Shareholders
DIVIDENDS TO SHAREHOLDERS 2011 Regular Dividends $ 0.06 Special Dividends 0.15 Calendar Year 2011 $ 0.21 2010 Regular Dividends $ 0.22 Special Dividends 0.30 Calendar Year 2010 $ 0.52 2009 Regular Dividends $ 0.20 Special Dividends 0.30 Calendar Year 2009 $ 0.50 15
Slide 16: Stock Repurchase Plan
STOCK REPURCHASE PLAN On May 25, 2010 the Board of Directors authorized a second repurchase for up to 2.9 million shares (10% of our outstanding shares). There were 1.5 million shares purchased under this plan as of March 31, 2011. 16
Slide 17: Stockholder's Equity/Total Assets
STOCKHOLDER’S EQUITY/TOTAL ASSET The decrease in equity was primarily due to stock repurchases, along with regular and special dividends 29.03 27.56 23.44 20.76 17.85 17.70 0.00%10.00%20.00%30.00%40.00%Dec-06Dec-07Dec-08Dec-09Dec-10Mar-11Percentage 17
Slide 18: Total Loan Portfolio
TOTAL LOAN PORTFOLIO (DOLLARS IN MILLIONS) Commercial real estate (owner occupied) $104.4 20% Commercial real estate (non-owner occupied) $115.9 21% Consumer loans $2.8 1% Residential real estate $134.0 26% Home equity $36.4 7% Commercial and industrial $131.0 25% 18
Slide 19: Market Segment Breakdown
MARKET SEGMENT BREAKDOWN (DOLLARS IN MILLIONS) 19 Manufacturing $60.5 17% Wholesale Trade $38.8 11% Retail Trade $27.0 8% Real Estate, Rental & Leasing $112.8 32% Professional, Scientific & Technical $27.8 8% Educational & Health Care $24.4 7% Arts, Entertainment & Recreation $25.4 7% Other $34.6 10
Slide 20: Commercial Loan Relationships
COMMERCIAL LOAN RELATIONSHIPS (DOLLARS IN MILLIONS) $6 Million & <= $15 million $138.2 39% Over $15 million $56.4 17% Under $6 Million $156.7 44% 20
Slide 21: Net Loan Portfolio
NET LOAN PORTFOLIO 385 415 472 469 502 518 $300$350$400$450$500$550Dec-06Dec-07Dec-08Dec-09Dec-10Mar-11Millions 21
Slide 22: Commercial & Industrial Loans
COMMERCIAL & INDUSTRIAL LOANS 100 117 154 145 135 131 $0 $30 $60 $90 $120 $150 $180 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Mar-11 Millions 22
Slide 23: Residential Loans (Including Home Equity)
RESIDENTIAL LOANS (INCLUDING HOME EQUITY) 109 108 98 99 149 170 $0 $40 $80 $120 $160 $200 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Mar-11 Millions 23
Slide 24: Residential Loan Program
RESIDENTIAL LOAN PROGRAM •We process substantially all of our originations of residential real estate loans through a third-party mortgage company. Residential real estate borrowers submit applications to us, but the loan is approved by and closed on the books of the mortgage company. •In recent mon
Slide 25: Residential Real Estate Loans Purchased October 2010 – March 2011
RESIDENTIAL REAL ESTATE LOANS PURCHASED OCTOBER 2010 – MARCH 2011 Loan applications originated by: Westfield Bank $25.8 million 48% Third Party Mortgage Co. $27.8 million 52% Total $53.6 million Weighted Average LTV: 71.35% 25
Slide 26: Securities Portfolio
SECURITIES PORTFOLIO (DOLLARS IN MILLIONS) Government Sponsored Enterprise Debt $26.1 4% Equity Securities $5.3 1% Private Label Mortgage Backed Securities $7.1 1% GSE Mortgage Backed Securities $541.7 87% Massachusetts Municipal Bonds $43.2 7% 26
Slide 27: Securities Portfolio: Private Label MBS
SECURITIES PORTFOLIO PRIVATE LABEL MBS AMORTIZED COST: $7.7 MILLION MARKET VALUE: $7.1 MILLION 27 91.1% 0.3% 6.2% 0.9% 0.6% 0.9% Treasury/Agency AAA AA & A Less than A Split Ratings Not Rated
Slide 28: Total Deposits
TOTAL DEPOSITS In 2007 and 2008 management placed less emphasis on gathering time deposits in favor of lower cost alternative funding 28
Slide 29: Deposit Mix
DEPOSIT MIX (DOLLARS IN MILLIONS) December 31, 2007 Total deposits grew by $104.7 million, 17.3% Non-maturity deposits grew by $116.3 million, 46.5% March 31, 2011 29 Time $353.4 59% Savings/ Money Market $121.6 20% Int. Bearing Checking $42.4 7% Non-interest Checking $85.3 14% Time $341.8 48% Savin
Slide 30: Short and Long Term Borrowings
SHORT AND LONG TERM BORROWINGS 30
Slide 31: Net Interest Margin
NET INTEREST MARGIN (fully taxable equivalent basis) 31
Slide 32: Net Income
a = = = = Z WES TT Fie it FINANCIAL, ING. NET INCOME 8.7 6.7 5.5 4.7 3.0 | ; Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Mar-I1
Slide 33: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE 0.150.290.230.180.110.05$0.00$0.10$0.20$0.30$0.40Dec-06Dec-07Dec-08Dec-09Dec-10Mar-1133
Slide 34: Thank You
Thank You 34
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