Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Investor Presentation (November 2020)
38 slides from Western New England Bancorp's investor presentation, Nov 16, 2020
Slide 1: Local banking is better than ever. Investor Presentation
Local banking is better than ever. INVESTOR PRESENTATION
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 Leo R
Slide 5: Connecticut Strategy
CONNECTICUT STRATEGY On Monday, July 6 th , the Bank’s Bloomfield branch officially opened for business . This was followed closely by the opening of the Bank’s West Hartford Financial Services Center, which opened on Tuesday, July 21 st . These openings marked the Bank’s 24 th and 25 th branch loca
Slide 6: Connecticut Strategy: West Hartford Financial Services Center
CONNECTICUT STRATEGY The West Hartford Financial Services Center, located in West Hartford Center, will serve as the Bank’s regional hub in Connecticut . In addition to a full - service branch, it includes a suite of offices to support Residential Lending, Commercial Lending, Business & Government D
Slide 7: Connecticut Strategy: Bloomfield Branch
CONNECTICUT STRATEGY The Bloomfield branch, located in the Copaco Shopping Center, is a full - service branch and includes drive - through teller and safe deposit services . The Copaco Shopping Center is composed of national and local brands and is a major shopping destination for the greater Bloomf
Slide 8: 3Q2020 Earnings
3Q2020 EARNINGS 8 ($ in thousands, except EPS) 3Q2020 2Q2020 1Q2020 3Q2019 Net interest income $ 15,990 $ 15,092 $ 14,553 $ 14,528 Provision for loan losses 2,725 2,450 2,100 1,275 Non - interest income 2,177 2,087 2,525 2,611 Non - interest expense 12,853 12,245 12,314 11,740 Income before taxes 2,
Slide 9: 3Q2020 Highlights
9 • Revenues (1) : Total revenue of $18.2 million, increased $1.0 million, or 5.8%. • Pre - provision, pre - tax income: Increased $380,000, or 7.7%, to $5.3 million. • Net interest income: Increased $898,000, or 6.0% (Excluding Paycheck Protection Program (“PPP”) income and prepayment penalties, ne
Slide 10: Net Interest Income
NET INTEREST INCOME 10 $14.5 $14.9 $14.6 $13.8 $14.4 2.88% 2.90% 2.87% 2.74% 2.81% 2.88% 2.90% 2.87% 2.70% 2.81% 2.25% 2.35% 2.45% 2.55% 2.65% 2.75% 2.85% 2.95% 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $12.0 $13.0 $14.0 $15.0 $16.0 $17.0 $18.0 $19.0 $20.0 Net interest income, excludes PPP and prepayment f
Slide 11: Loans
LOANS 11 $1,739 $1,774 $1,783 $1,807 $1,771 3.98% 4.02% 4.39% 4.36% 4.26% 3.92% 3.88% 3.70% 3.90% 4.10% 4.30% 4.50% 4.70% 4.90% 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 Average Loans Outstanding (Excludes PPP Loans) Average Loans Outstanding Average Loan Yield wit
Slide 12: CARES Act Modifications
CARES ACT MODIFICATIONS 12 Loan Segment (1)(2) Remaining Modification Balance # of Loans Modified % of Total Loan Segment Balance Commercial real estate $53.6 19 6.6% Commercial and industrial ( 2 ) 6.4 6 2.9% Residential real estate ( 3 ) 6.3 25 0.9% Consumer - - - Total $66.3 50 3.8% ( 1) Data as
Slide 13: Loan Portfolio Trends – CARES Act 2020
LOAN PORTFOLIO TRENDS – CARES ACT 2020 13 Commercial Real Estate Loans : Through June 30 , 2020 , the Company granted 131 commercial real estate loan modifications under the CARES Act totaling $ 200 . 0 million, representing 24 . 0 % of total commercial real estate loans . At September 30 , 2020 , $
Slide 14: Commercial and Industrial Loan Trends
COMMERCIAL AND INDUSTRIAL LOAN TRENDS 14 $242 $249 $257 $231 $222 $222 $223 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $100 $150 $200 $250 $300 $350 $400 $450 $500 Commercial and Industrial Loans C&I Loans PPP Loans Commercial and industrial loans (“C&I”) of $ 445 . 4 million increased $ 203 . 7 million, or
Slide 15: Commercial Line of Credit Utilization
COMMERCIAL LINE OF CREDIT UTILIZATION 15 The table below breaks out the commercial line utilization since December 31, 2019. Balance 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Pass - rated $ 39.7M $ 42.6M $ 77.6M $ 65.4 M Classified 16.9M 20.1M 20.7M 20.2 M Total: $56.6M $ 62.7M $ 98.3M $ 85.6 M Utili
Slide 16: Commercial and Industrial Loans (Excludes PPP)
COMMERCIAL AND INDUSTRIAL LOANS (EXCLUDES PPP) (1) 16 Auto Sales , 0.4% Educational Services , 0.6% Healthcare , 0.6% Heavy and Civil Engineering Construction , 0.8% Manufacturing , 2.8% Other , 3.5% Specialty Trade , 0.9% Transportation , 0.6% Wholesale Trade , 2.5% (1) % of total loans, excluding
Slide 17: Total COVID Modifications – C&I Portfolio
TOTAL COVID - 19 MODIFICATIONS – C&I PORTFOLIO 17 Industry Balance (1) % of Total Loans 9/30/20 Modified Balance 9/30/2020 # of Modified Accounts 9/30/20 % of Balance Modified 09/30/20 Modified Balance 6/30/2020 # of Modified Accounts 6/30/20 Manufacturing $ 49.2M 2.8% $ - - - $2.0M 18 Wholesale Tra
Slide 18: Small Business Protection Loans – Paycheck Protection Program
SMALL BUSINESS PROTECTION LOANS – PAYCHECK PROTECTION PROGRAM 18 Loan Amount Total Balance at 09 - 30 - 20 # of Loans at 9 - 30 - 20 Fee (%) Fee ($) $50,000 and under $15.4M 799 5% $770K $51,000 - $150,000 28.0M 314 5% 1.4M $151,000 - $350,000 33.6M 145 5% 1.7M $351,000 - $2.0 million 90.2M 113 3% 2
Slide 19: Commercial Real Estate Loan Trends
COMMERCIAL REAL ESTATE LOAN TRENDS 19 $821 $817 $836 $833 $812 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $800 $825 $850 • Commercial real estate (“CRE”) loans of $ 812 . 1 million decreased $ 20 . 6 million, or 2 . 5 % , from the linked quarter, and decreased $ 9 . 2 million, or 1 . 1 % , year - over - yea
Slide 20: Commercial Real Estate Loans – COVID Modifications Granted
COMMERCIAL REAL ESTATE LOANS – COVID - 19 MODIFICATIONS GRANTED (1) 20 Property Type Balance % of Total Loans (2) Modified Balance 9/30/2020 Modified Loans (#) Balance Modified (%) Modified Balance 6/30/2020 Modified Loans (#) Apartment $ 154.5M 8.8% $468k 2 0.3% $35.6M 15 Office 137.7M 7.9% - - - 1
Slide 21: Residential and Consumer Loan Trends
RESIDENTIAL AND CONSUMER LOAN TRENDS 21 $684 $706 $708 $716 $718 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $660 $670 $680 $690 $700 $710 $720 $730 Residential and Consumer Loans Period - end Loans Outstanding Residential loans, including home equity loans, and consumer loans increased $ 2 . 0 million, or 0
Slide 22: Total Deposits
TOTAL DEPOSITS 22 $1,013 $1,025 $1,057 $1,319 $1,363 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Period - End Core Deposits Period - end core deposits of $ 1 . 4 billion increased $ 350 . 0 million, or 34 . 6 % , year - over - year and increased $ 44 . 0 mil
Slide 23: Average Total Deposits
AVERAGE TOTAL DEPOSITS 23 $1,268 $1,287 $1,300 $1,368 $1,421 $369 $388 $389 $505 $529 1.08% 1.05% 1.01% 0.82% 0.65% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Deposits and Rates Interest-bearing d
Slide 24: Average Core Deposits
AVERAGE CORE DEPOSITS 24 $970 $1,021 $1,037 $1,233 $1,325 0.32% 0.34% 0.33% 0.27% 0.25% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Core Deposits and Rates Interest-bearing deposits Ave
Slide 25: Average Time Deposits
AVERAGE TIME DEPOSITS 25 $667 $654 $651 $640 $625 2.18% 2.15% 2.08% 1.87% 1.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $500 $550 $600 $650 $700 $750 $800 Average Time Deposits and Rates Interest-bearing deposits Average deposit cost Average time deposits of $ 624 . 7
Slide 26: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 26 105% 106% 106% 103% 98% 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 94% 96% 98% 100% 102% 104% 106% 108% Loan - to - Deposit Ratio $ in millions 61% 61% 62% 68% 68% 39% 39% 38% 32% 32% 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 0% 10% 20% 30% 40% 50% 60% 70% 80% Core Deposits and Time De
Slide 27: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2020. 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 28: FHLB and Payroll Protection Program Liquidity Facility
FEDERAL HOME LOAN BANK (“FHLB”) AND PAYROLL PROTECTION PROGRAM LIQUIDITY FACILITY 28 $241 $241 $222 $197 $151 $ - $ - $ - $26 $ - 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 $- $50 $100 $150 $200 $250 $300 Period - end FHLB and Payroll Protection Program Liquidity Facility FHLB PPPLF We have been reducing ou
Slide 29: Asset Quality
ASSET QUALITY 29 $11.1 $9.9 $9.7 $10.4 $9.2 0.63% 0.56% 0.54% 0.58% 0.53% 0.45% 0.50% 0.55% 0.60% 0.65% $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 Non - performing Loans ($ in millions) Non-performing loans Non-performing loans/Total Loans Excluding PPP Loans The Company has taken actions to identify, asses
Slide 30: Asset Quality Indicators
ASSET QUALITY INDICATORS 30 3Q2020 2Q2020 1Q2020 4Q2019 3Q2019 Total loans modified under the CARES Act $66.3M $261.0M - - - Loans modified as a % of total loans (1) 3.8% 14.7% - - - Total delinquent loans $ $6.7M $12.0M $12.4M $13.8M $13.4M Delinquent loans as a % of total loans (1) 0.38% 0.68% 0.6
Slide 31: Asset Quality
ASSET QUALITY 31 Allowance for loan losses (ALLL) = $ 20 . 7 million • Management believes it prudent to proactively increase the allowance for loan losses given the significant stress experienced in the economy due to continued business shutdowns and interruptions related to COVID - 19 , coupled wi
Slide 32: Asset Quality
ASSET QUALITY 32 3Q2020 2Q2020 1Q2020 4Q2019 3Q2019 2Q2019 Special Mention $94.8 $96.3 $35.9 $25.9 $26.5 $31.1 % of Total Loans (1) 5.4% 5.4% 2.0% 1.5% 1.5% 1.8% Substandard $52.6 $55.4 $59.6 $57.3 $60.9 $56.3 % of Total Loans (1) 3.0% 3.1% 3.3% 3.2% 3.5% 3.3% Total Watch List Loans $147.4 $151.7 $9
Slide 33: Hotels - $54 Million, or 3.1% of Total Loans
HOTELS - $54 MILLION, OR 3.1% OF TOTAL LOANS (1) 33 The hotel industry has been significantly impacted by the pandemic and the widespread travel restrictions . We continue to maintain close contact with our borrowers and monitor industry updates . We performed a review of the hotel portfolio and the
Slide 34: Capital Management
CAPITAL MANAGEMENT 34 We are well - capitalized with excess capital. Consolidated Ratio Consolidated Capital Leverage Ratio 9.3% $221.4 Common Equity Tier 1 Ratio 13.2% $221.4 Tier 1 Capital Ratio 13.2% $221.4 Total Capital Ratio 14.4% $242.1 x From a regulatory standpoint, we are well - capitalized
Slide 35: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 35 Year # of Shares 2017 606,391 2018 2,189,276 2019 1,938,667 2020 1,126,866 Year Annualized Dividend per Share 2017 $0.12 2018 $0.16 2019 $0.20 2020 $0.20 Share Repurchases Dividends Historically, the Company has been active with share repurchases . During the three
Slide 36: Capital Management
CAPITAL MANAGEMENT 36 $8.99 $8.95 $8.88 $8.74 $8.73 $8.60 $8.39 $8.34 $8.27 $8.14 $8.14 $8.00 Book Value per Share Tangible Book Value per Share Book Value Tangible Book Value
Slide 37: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 37 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 its financial condition. Because not all companies use the same calc
Slide 38: 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 38 141 Elm Street, Westfield, MA
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