Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Shareholder Meeting (May 2018)
31 slides from Western New England Bancorp's shareholder meeting presentation, May 15, 2018
Slide 1: Annual Meeting of Shareholders May 15, 2018
Annual Meeting of Shareholders May 15, 2018
Slide 2: Forward-looking statements
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 reports to shareholders and in other
Slide 3: Strategic Foundation
Strategic Foundation 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 •
Slide 4: Building Value for WNEB
Building Value for WNEB • Grow loans organically and diversify the mix • Grow deposits with a focus on low - cost core deposits • Grow non - interest income with a focus on wealth management, cash management services and municipal deposit program • Control expenses and improve efficiency • Continue
Slide 5: Key Notes
Key Notes • The financial results for 2017 reflect a full year of combined operations following the completion of the merger of Chicopee Bancorp, Inc . (“Chicopee”) into WNEB on October 21 , 2016 . The fourth quarter financial results for 2016 reflect the results of the merger with Chicopee on Octob
Slide 6: Balance Sheet Transformation
Balance Sheet Transformation Securities Loans Deposits Borrowings 2013 $538 $637 $817 $297 2014 $494 $723 $834 $326 2015 $421 $814 $900 $282 2016 $300 $1,562 $1,518 $297 2017 $288 $1,626 $1,506 $309 $538 $637 $817 $297 $494 $723 $834 $326 $421 $814 $900 $282 $300 $1,562 $1,518 $297 $288 $1,626 $1,50
Slide 7: Loan Growth and Diversification
Loan Growth and Diversification C&I CRE Residential & Consumer 2013 $136 $264 $237 2014 $166 $278 $279 2015 $168 $303 $343 2016 $222 $721 $619 2017 $238 $733 $655 $136 $264 $237 $166 $278 $279 $168 $303 $343 $222 $721 $619 $238 $733 $655 $- $100 $200 $300 $400 $500 $600 $700 $800 Data as of December
Slide 8: Loan Growth and Diversification
Loan Growth and Diversification CRE - Owner 12.5% CRE - Non - Owner 32.5% Residential 34.3% HELOC 5.7% C&I 14.7% Consumer 0.3% $1.6 Billion in Total Loans as of 12/31/2017 At December 31, 2017, the Company’s CRE concentration as a percentage of risk - based capital was 199%, compared to regulatory g
Slide 9: Asset Quality Indicators Continue to be Strong
Asset Quality Indicators Continue to be Strong Non-performing Loans/Total Loans Non-performing Assets/ Total Assets 2013 0.41% 0.20% 2014 1.22% 0.67% 2015 0.99% 0.60% 2016 0.90% 0.69% 2017 0.78% 0.63% 0.41% 0.20% 1.22% 0.67% 0.99% 0.60% 0.90% 0.69% 0.78% 0.63% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.2
Slide 10: Asset Quality Indicators Continue to be Strong
ALLL/Total Loans ALLL/Non-performing Loans 2013 1.17% 2.88% 2014 1.10% 0.90% 2015 1.09% 1.09% 2016 0.64% 0.72% 2017 0.66% 0.85% 1.17% 2.88% 1.10% 0.90% 1.09% 1.09% 0.64% 0.72% 0.66% 0.85% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% Allowance for Loan Losses as a Percentage of Total Loans & Non -
Slide 11: Low Net Charge-off History
0.01% 0.16% 0.05% - 0.06% 0.04% -0.10% -0.05% 0.00% 0.05% 0.10% 0.15% 0.20% Net Charge - offs as a Percentage of Average Loans Data as of December 31 st 2016: Net recoveries were $ 653,000 for the year ended December 31, 2016. This was comprised of $1.1 million in recoveries primarily on one commerc
Slide 12: Growing and Strengthening Balance Sheet
Growing and Strengthening Balance Sheet 49.9% 54.8% 60.8% 75.2% 78.1% 40% 50% 60% 70% 80% 90% Loan to Asset Ratio 78.0% 86.7% 90.4% 102.9% 108.0% 70% 80% 90% 100% 110% Loan to Deposit Ratio Data as of December 31 st 42.1% 37.4% 31.4% 14.5% 13.8% 10% 20% 30% 40% 50% Securities to Asset Ratio 23.2% 24
Slide 13: Deposit Growth and Diversification
Deposit Growth and Diversification Core Deposits Time Deposits 2013 $476 $341 2014 $476 $358 2015 $504 $396 2016 $945 $573 2017 $949 $557 $476 $341 $476 $358 $504 $396 $945 $573 $949 $557 $- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Data as of December 31 st (in millions)
Slide 14: Deposit Diversification
Deposit Diversification $145 $136 $158 $304 $312 18% 16% 18% 20% 21% 0% 5% 10% 15% 20% 25% $100 $150 $200 $250 $300 $350 Demand Deposits as a Percentage of Total Deposits Demand Deposits % of total deposits Data as of December 31 st (in millions)
Slide 15: Funding Costs
Funding Costs 0.84% 0.76% 0.75% 0.77% 0.70% 0.65% 0.67% 0.69% 0.71% 0.73% 0.75% 0.77% 0.79% 0.81% 0.83% 0.85% Cost of Deposits 0.93% 0.88% 0.91% 0.86% 0.81% 0.80% 0.82% 0.84% 0.86% 0.88% 0.90% 0.92% 0.94% Total Funding Costs, Includes Demand Accounts The Company has been successful in managing its c
Slide 16: Deposit Growth and Diversification
Deposit Growth and Diversification Interest - bearing demand accounts 6% Demand deposits 21% Savings accounts 9% Money market accounts 27% Time deposits of $250,000 or over 9% Time deposits under $250,000 28% $1.5 Billion in Total Deposits as of 12/31/2017
Slide 17: Largest Community Bank in Hampden County
Largest Community Bank in Hampden County 2017 RankInstitution (ST) # of Branches Deposits in Market ($000) Market Share (%) 1Toronto-Dominion Bank 16 1,409,215 13.42 2Bank of America Corp. (NC) 10 1,398,900 13.32 3 Western New England Bancorp (MA) 19 1,398,526 13.32 4PeoplesBancorp MHC (MA) 15 1,258
Slide 18: Top 5 Deposit Market Share in Springfield MSA
2017 RankInstitution (ST) # of Branches Deposits in Market ($000) Market Share (%) 1Bank of America Corp. (NC) 12 2,049,454 13.61 2Toronto-Dominion Bank 19 1,696,606 11.26 3PeoplesBancorp MHC (MA) 20 1,659,826 11.02 4 Western New England Bancorp (MA) 21 1,439,037 9.55 5Berkshire Hills Bancorp Inc. (
Slide 19: 2017 Financial Highlights
2017 Financial Highlights ▪ The Tax Cuts and Jobs Act enacted on December 22, 2017 negatively impacted the Company’s reported net income and capital in 2017. The Company reported a $4.0 million DTA write - down, which impacted EPS by $0.13; however, the Company’s net income will positively benefit f
Slide 20: Improving Net Interest Margin
Improving Net Interest Margin 2.58% 2.60% 2.53% 2.70% 3.12% 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 3.20% Data as of December 31 st
Slide 21: Improved Profitability
Improved Profitability 0.53% 0.48% 0.42% 0.54% 0.72% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% Core ROAA 4.04% 4.18% 4.10% 4.94% 5.97% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% Core ROAE $0.34 $0.34 $0.33 $0.41 $0.50 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 Core EPS
Slide 22: Improved Efficiency
Improved Efficiency 76.80% 73.60% 75.50% 72.60% 65.30% 58% 60% 62% 64% 66% 68% 70% 72% 74% 76% 78% Data as of December 31 st
Slide 23: Strong Capital Ratios
Strong Capital Ratios 2013 2014 2015 2016 2017 Total Risk-Based Capital (Min. 10.0%) 21.2% 18.7% 17.2% 15.1% 15.5% Tier 1 Risk-Based Capital (Min. 8.0%) 20.2% 17.7% 16.2% 14.5% 14.9% Common Equity Tier 1 Capital (Min. 6.5%) 16.2% 14.5% 14.9% Tier 1 Leverage Capital (Min. 5.0%) 12.3% 11.3% 11.2% 12.2
Slide 24: Tangible Book Value
Tangible Book Value $7.65 $7.61 $7.63 $7.25 $7.57 $7.00 $7.10 $7.20 $7.30 $7.40 $7.50 $7.60 $7.70 Data as of December 31 st
Slide 25: Capital Management
Capital Management Total Repurchased Weighted Average Price 2013 2,703,053 $7.54 2014 1,405,878 $7.27 2015 515,604 $7.58 2016 201,296 $9.11 2017 903,813 $10.14 Regular Dividend History Special Dividend History 2013 $0.24 $0.05 2014 $0.21 - 2015 $0.12 - 2016 $0.12 - 2017 $0.12 - “On January 30 , 2018
Slide 26: Competitive Shareholder Returns
Competitive Shareholder Returns Three Year Total Return (30.00) (20.00) (10.00) 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 WNEB SNL U.S. Bank and Thrift S&P 500
Slide 27: 1st Quarter of 2018
1 st Quarter of 2018 ▪ Net income of $ 3 . 5 million, or $ 0 . 12 per share, compared to a net loss of $ 353 , 000 , or $ 0 . 01 loss per share, in the fourth quarter 2017 which includes the $ 4 . 0 million deferred tax write - down . Excluding the $ 4 . 0 million write - down, net income was $ 3 .
Slide 28: 1st Quarter of 2018
1 st Quarter of 2018 1Q2018 4Q2017 1Q2017 EPS $0.12 $(0.01) $0.17 “Core” EPS $0.11 $0.09 $0.11 Earnings per Share 1Q2018 4Q2017 1Q2017 ROAA 0.69% (0.07)% 1.00% “Core” ROAA 0.69% 0.70% 0.74% Return on Average Assets Return on Average Equity 1Q2018 4Q2017 1Q2017 ROAE 5.82% (0.56)% 8.51% “Core” ROAE 5.
Slide 29: 1st Quarter of 2018
1 st Quarter of 2018 March 31, 2018 December 31, 2017 Change in $ Change in % Total Loans $1.65 billion $1.63 billion $16.3 million 4.0% annualized growth Total Deposits $1.55 billion $1.51 billion $48.0 million 12.0% annualized growth Balance Sheet Growth March 31, 2018 December 31, 2017 TCE/TA 10.
Slide 30: Western New England Bancorp
Western oY New England Bancorp
Slide 31: Reconciliation of Non-GAAP to GAAP Financial Measures
Reconciliation of Non - GAAP to GAAP Financial Measures March 31, December 31, March 31, December 31, 2018 2017 2017 2017 2016 Net Income: Net income (loss), as presented 3,519$ (353)$ 5,103$ 12,320$ 4,834$ Merger related expenses, net of tax (1) - - 293 377 3,274 Tax benefits impact (2) (15) - (1,6
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