Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Q3 2022 Earnings Presentation
29 slides from Western New England Bancorp's earnings presentation, Oct 25, 2022
Slide 1: Local banking is better than ever. Investor Presentation Third Quarter 2022
Local banking is better than ever. INVESTOR PRESENTATION THIRD QUARTER 2022
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 Louis
Slide 5: Connecticut Strategy Update
5 CONNECTICUT STRATEGY UPDATE The Bank continues to execute on its Connecticut Strategy, achieving strong momentum with new customer acquisition, deposit and loan growth, and brand recognition . The West Hartford Financial Services Center, located in West Hartford Center, serves as the Bank’s region
Slide 6: Connecticut Strategy Update
6 CONNECTICUT STRATEGY UPDATE The Bank welcomed Jamie Garcia, Senior Vice President and Commercial Loan Officer. Jamie brings extensive commercial lending experience in the Connecticut market.
Slide 7: Connecticut Strategy Update
7 CONNECTICUT STRATEGY UPDATE Westfield Bank was recently named a FAST50 lender by The Commercial Record, adding another accolade to its growing list ! Westfield Bank was ranked 18th for growth in the number of commercial loans category between June 2021 and June 2022.
Slide 8: Quarterly Earnings
3 Q2022 QUARTERLY EARNINGS 8 ($ in thousands , except EPS) 3Q2022 2Q2022 1Q2022 4Q2021 3Q2021 Net interest income $ 20,288 $ 19,392 $ 18,698 $ 18,582 $ 18,765 Provision (credit) for loan losses 675 300 (425) 300 (100) Non - interest income 2,590 2,741 2,348 3,856 3,295 Non - interest expense 14,343
Slide 9: Net Interest Income and Net Interest Margin
NET INTEREST INCOME AND NET INTEREST MARGIN 9 $18.8 $18.6 $18.7 $19.4 $20.3 3.18% 3.08% 3.18% 3.24% 3.35% 2.99% 2.97% 3.10% 3.23% 3.35% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 $16.5 $17.5 $18.5 $19.5 $20.5 $21.5 $22.5 $23.5 $24.5 Net inter
Slide 10: Total Loans
TOTAL LOANS 10 $1,787 $1,809 $1,880 $1,946 $1,971 3.75% 3.75% 3.75% 3.79% 3.93% 3.20% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 Average Loans Outstanding (excludes PPP loans) Average Loans Outstanding Average
Slide 11: Commercial and Industrial Loans
COMMERCIAL AND INDUSTRIAL LOANS 11 $201 $201 $210 $215 $230 $59 $25 $6 $3 $2 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 $100 $120 $140 $160 $180 $200 $220 $240 $260 $280 C&I Loans (excluding PPP loans) PPP Loans Excluding PPP loans, commercial and industrial loans (“ C&I”) of $ 230 . 0 million at September
Slide 12: C&I Portfolio
C&I PORTFOLIO (1) 12 (1) % of total C&I loans as of September 30, 2022 Manufacturing 18% Sand and Gravel Mining 8% Wholesale trade 19% Educational services 7% Hotels 1% Heavy and civil engineering construction , 10% Specialty trade 6% All other C&I 31%
Slide 13: Commercial Real Estate Loans
COMMERCIAL REAL ESTATE LOANS 13 $918 $980 $1,039 $1,075 $1,082 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 • Commercial real estate (“CRE”) loans of $ 1 . 1 billion at September 30 , 2022 increased $ 101 . 7 million, or 10 . 4 % , from December 31 , 2021 . • At S
Slide 14: Commercial Real Estate Loans
COMMERCIAL REAL ESTATE LOANS (1) 14 (1) % of total commercial real estate loans at September 30, 2022 Adult Care/Assisted Living 4% Apartment 15% Auto Sales 4% College/School 2% Hotel 5% Industrial/Warehouse 15% Mixed - use 3% Office 21% Other 7% Residential Non - Owner 6% Retail/Shopping 16% Studen
Slide 15: Residential and Consumer Loans
RESIDENTIAL AND CONSUMER LOANS 15 $668 $656 $669 $681 $691 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 $630 $640 $650 $660 $670 $680 $690 $700 Residential and Consumer Loans Period - end Loans Outstanding At September 30 , 2022 , residential loans, including home equity loans, and consumer loans increased $
Slide 16: Total Deposits
TOTAL DEPOSITS 16 $1,806 $1,855 $1,899 $1,952 $1,944 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 PERIOD - END CORE DEPOSITS At September 30 , 2022 , core deposits of $ 1 . 9 billion increased $ 89 . 6 million, or 4 . 8 % , from Dece
Slide 17: Average Total Deposits
AVERAGE TOTAL DEPOSITS 17 $1,587 $1,606 $1,618 $1,639 $1,615 $615 $654 $633 $636 $659 0.22% 0.19% 0.18% 0.17% 0.20% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Deposits and Rates Interest-bearing deposit
Slide 18: Average Core and Time Deposits
AVERAGE CORE AND TIME DEPOSITS 18 $1,757 $1,850 $1,862 $1,909 $1,934 0.16% 0.15% 0.14% 0.15% 0.19% 0.00% 0.02% 0.04% 0.06% 0.08% 0.10% 0.12% 0.14% 0.16% 0.18% 0.20% $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 Average Core Deposits and Rates Average core deposits, including non - interest bearin
Slide 19: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 19 83% 83% 85% 86% 88% 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 80% 81% 82% 83% 84% 85% 86% 87% 88% 89% Period - end Loan - to - Deposit Ratio 81% 82% 83% 85% 85% 19% 18% 17% 15% 15% 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Core Deposits and Time
Slide 20: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2022. Note: Total number of Westfield Bank branches shown includes the Big E seasonal branch and online deposit channel. Three Wes tfi eld branches are located in Hampshire County, MA and four Westfield branches are located in Hartford County, CT outside
Slide 21: Asset Quality Indicators
ASSET QUALITY INDICATORS 21 3Q2021 (1) 4Q2021 (1) 1Q2022 (1) 2Q2022 (1) 3Q2022 (2) Total loans modified under the CARES Act $42.8M $42.5M $12.1M $9.1M $ - Loans modified as a % of total loans 2.4% 2.3% 0.6% 0.5% - % Total delinquent loans $3.1M $2.1M $2.8M $2.2M $3.3M Delinquent loans as a % of tota
Slide 22: Asset Quality
ASSET QUALITY 22 Management continues to assess the exposure of the Company’s loan portfolio to the COVID - 19 pandemic, economic trends and their potential effect on asset quality . The Company has deferred the adoption of the Current Expected Credit Loss Model , as permitted by its classification
Slide 23: Asset Quality
ASSET QUALITY 23 ($ in Millions) 3Q2021 (1) 4Q2021 (1) 1Q2022 (1) 2Q2022 (1) 3Q2022 (2) Special Mention $38.0 $24.2 $28.1 $22.0 $39.8 Special Mention - Hotel $26.2 $27.3 $27.1 $18.3 $17.6 Total Special Mention $64.2 $51.5 $55.2 $40.3 $57.4 % of Total Loans 3.6% 2.8% 2.9% 2.0% 2.9% Substandard $32.2
Slide 24: Capital Management
CAPITAL MANAGEMENT 24 We are well - capitalized with excess capital. Consolidated Ratio at September 30, 2022 Leverage Ratio 9.01% Common Equity Tier 1 Ratio 11.76% Tier 1 Capital Ratio 11.76% Total Capital Ratio 13.79% x From a regulatory standpoint, we are well - capitalized with excess capital. x
Slide 25: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 25 Year # of Shares 2018 2,189,276 2019 1,938,667 2020 1,391,496 2021 2,758,051 1Q2022 112,674 2Q2022 293,173 3Q2022 236,302 Year Annual Dividends per Share 2018 $0.16 2019 $0.20 2020 $0.20 2021 $0.20 1Q2022 $0.06 2Q2022 $0.06 3Q2022 $0.06 Share Repurchases Dividends O
Slide 26: Capital Management
CAPITAL MANAGEMENT 26 $9.56 $9.87 $9.63 $9.58 $9.52 $8.89 $9.21 $8.97 $8.92 $8.85 Book Value per Share Tangible Book Value per Share (non - GAAP) (1) Book Value Tangible Book Value (non-GAAP) Book value per share decreased $0.36, or 3.6%, from $9.87 at December 31, 2021 to $ 9.52 at September 30, 20
Slide 27: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 27 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 28: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 28 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 29: 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 29 141 Elm Street, Westfield, MA
Western New England Bancorp — Q3 2022 Earnings Presentation on 6ix