Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Q4 2022 Earnings Presentation
26 slides from Western New England Bancorp's earnings presentation, Jan 24, 2023
Slide 1: Local banking is better than ever. Investor Presentation Fourth Quarter 2022
Local banking is better than ever. INVESTOR PRESENTATION FOURTH 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: Quarterly Earnings
4 Q2022 QUARTERLY EARNINGS 5 ($ in thousands , except EPS) 4Q2022 3Q2022 2Q2022 1Q2022 4Q2021 Net interest income $ 20,854 $ 20,288 $ 19,392 $ 18,698 $ 18,582 Provision (credit) for loan losses 150 675 300 (425) 300 Non - interest income 5,653 2,590 2,741 2,348 3,856 Non - interest expense 14,003 14
Slide 6: Net Interest Income and Net Interest Margin
NET INTEREST INCOME AND NET INTEREST MARGIN 6 $18.6 $18.7 $19.4 $20.3 $20.9 3.08% 3.18% 3.24% 3.35% 3.44% 2.97% 3.10% 3.23% 3.35% 3.44% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $16.5 $17.5 $18.5 $19.5 $20.5 $21.5 $22.5 $23.5 $24.5 Net inter
Slide 7: Total Loans
TOTAL LOANS 7 $1,809 $1,880 $1,946 $1,971 $1,992 3.75% 3.75% 3.79% 3.93% 4.23% 3.20% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $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 8: Commercial and Industrial Loans
COMMERCIAL AND INDUSTRIAL LOANS 8 $201 $210 $215 $230 $218 $25 $6 $3 $2 $2 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $100 $120 $140 $160 $180 $200 $220 $240 C&I Loans (excluding PPP loans) PPP Loans Excluding PPP loans, commercial and industrial loans (“ C&I”) of $ 217 . 6 million at December 31 , 2022 inc
Slide 9: C&I Portfolio
C&I PORTFOLIO (1) 9 (1) % of total C&I loans as of December 31, 2022 Manufacturing 16% Sand and Gravel Mining 8% Wholesale trade 21% Educational services 8% Hotels 1% Heavy and civil engineering construction , 9% Specialty trade 5% All other C&I 32%
Slide 10: Commercial Real Estate Loans
COMMERCIAL REAL ESTATE LOANS 10 $980 $1,039 $1,075 $1,082 $1,069 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 • Commercial real estate (“CRE”) loans of $ 1 . 1 billion at December 31 , 2022 increased $ 89 . 4 million, or 9 . 1 % , from December 31 , 2021 . • At De
Slide 11: Commercial Real Estate Loans by Type
COMMERCIAL REAL ESTATE LOANS (1) 11 (1) % of total commercial real estate loans at December 31, 2022 Adult Care/Assisted Living 3% Apartment 14% Auto Sales 4% College/School 2% Hotel 5% Industrial/Warehouse 16% Mixed - use 3% Office 22% Other 7% Residential Non - Owner 5% Retail/Shopping 16% Student
Slide 12: Residential and Consumer Loans
RESIDENTIAL AND CONSUMER LOANS 12 $656 $669 $681 $691 $700 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $630 $640 $650 $660 $670 $680 $690 $700 $710 Residential and Consumer Loans Period - end Loans Outstanding At December 31 , 2022 , residential loans, including home equity loans, and consumer loans increase
Slide 13: Total Deposits
TOTAL DEPOSITS 13 $1,855 $1,899 $1,952 $1,944 $1,818 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $1,750 $1,800 $1,850 $1,900 $1,950 $2,000 PERIOD - END CORE DEPOSITS At December 31 , 2022 , core deposits, which the Company defines as all deposits except time deposits, of $ 1 . 8 billion decreased $ 37 . 1 mi
Slide 14: Average Total Deposits
AVERAGE TOTAL DEPOSITS 14 $1,606 $1,618 $1,639 $1,615 $1,594 $654 $633 $636 $659 $664 0.19% 0.18% 0.17% 0.20% 0.39% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 0.45% 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Deposits and Rates
Slide 15: Average Core and Time Deposits
AVERAGE CORE AND TIME DEPOSITS 15 $1,850 $1,862 $1,909 $1,934 $1,898 0.15% 0.14% 0.15% 0.19% 0.34% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% $1,820 $1,840 $1,860 $1,880 $1,900 $1,920 $1,940 Average Core Deposits and Rates Average core deposits, including non - interest bearing deposits, decrea
Slide 16: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 16 83% 85% 86% 88% 89% 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 78% 80% 82% 84% 86% 88% 90% Period - end Loan - to - Deposit Ratio 82% 83% 85% 85% 82% 18% 17% 15% 15% 18% 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Core Deposits and Time Deposits as
Slide 17: 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 18: Asset Quality Indicators
ASSET QUALITY INDICATORS 18 4Q2021 (1) 1Q2022 (1) 2Q2022 (1) 3Q2022 (2) 4Q2022 (2) Total loans modified under the CARES Act $42.5M $12.1M $9.1M $ - $ - Loans modified as a % of total loans 2.3% 0.6% 0.5% - % - % Total delinquent loans $2.1M $2.8M $2.2M $3.3M $4.5M Delinquent loans as a % of total lo
Slide 19: Asset Quality
ASSET QUALITY 19 Management continues to remain attentive to any signs of deterioration in borrowers’ financial conditions and is proactive in taking the appropriate steps to mitigate risk . The allowance for loan losses as a percentage of total loans was 1 . 00 % at December 31 , 2022 , compared to
Slide 20: Asset Quality
ASSET QUALITY 20 ($ in Millions) 4Q2021 (1) 1Q2022 (1) 2Q2022 (1) 3Q2022 (2) 4Q2022 (2) Special Mention $24.2 $28.1 $22.0 $39.8 $14.1 Special Mention - Hotel $27.3 $27.1 $18.3 $17.6 $ 7.6 Total Special Mention $51.5 $55.2 $40.3 $57.4 $21.7 % of Total Loans 2.8% 2.9% 2.0% 2.9% 1.1% Substandard $31.1
Slide 21: Capital Management
CAPITAL MANAGEMENT 21 We are well - capitalized with excess capital. Consolidated Ratio at December 31, 2022 Leverage Ratio 9.27% Common Equity Tier 1 Ratio 12.18% Tier 1 Capital Ratio 12.18% Total Capital Ratio 14.20% x From a regulatory standpoint, we are well - capitalized with excess capital. x
Slide 22: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 22 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 4Q2022 78,826 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 4Q2022 $0.06 Sh
Slide 23: Capital Management
CAPITAL MANAGEMENT 23 $9.87 $9.63 $9.58 $9.52 $10.27 $9.21 $8.97 $8.92 $8.85 $9.61 Book Value per Share Tangible Book Value per Share (non - GAAP) (1) Book Value Tangible Book Value (non-GAAP) Book value per share increased $0.40, or 4.3%, from $9.87 at December 31, 2021 to $10.27 at December 31, 20
Slide 24: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 24 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 25: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 25 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 26: 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 26 141 Elm Street, Westfield, MA
Western New England Bancorp — Q4 2022 Earnings Presentation on 6ix