Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Q2 2024 Earnings Presentation
33 slides from Western New England Bancorp's earnings presentation, Jul 23, 2024
Slide 1: Local banking is better than ever. Investor Presentation 2nd Quarter 2024
Local banking is better than ever. INVESTOR PRESENTATION 2ND QUARTER 2024
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: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS 3 • changes in business conditions and inflation ; • operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity, technological changes, vendor issues, bus
Slide 4: 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 5: 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 Lending Officer Kevin C . O’Connor, Executive Vice President & Chief Banking Officer Danie
Slide 6: Quarterly Earnings
2 Q2024 QUARTERLY EARNINGS 6 2Q2023 (3) 3Q2023 (2) 4Q2023 1Q2024 2Q2024 (1) ($ in thousands , except EPS) $ 16,846 $ 16,383 $ 16,176 $ 15,346 $ 14,470 Net interest income 420 354 486 (550) (294) (R eversal of) provision for credit losses 1,592 3,612 2,714 2,674 3,834 Non - interest income 14,551 14,
Slide 7: Net Interest Income and Net Interest Margin
NET INTEREST INCOME AND NET INTEREST MARGIN 7 $16.8 $16.4 $16.2 $15.3 $14.5 2.81% 2.70% 2.64% 2.57% 2.42% 2.20% 2.40% 2.60% 2.80% 3.00% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 Net interest income ($) Net interest margin (%) On a sequential quarter basis, net interest inc
Slide 8: Total Loans
TOTAL LOANS 8 $2,007 $2,007 $2,017 $2,022 $2,017 4.49% 4.66% 4.73% 4.84% 4.88% 4.20% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.90% 5.00% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $1,900 $1,920 $1,940 $1,960 $1,980 $2,000 $2,020 $2,040 Average Loans Outstanding Average Loans Outstanding Average Loan Yield, Tax-
Slide 9: Commercial and Industrial Loans
COMMERCIAL AND INDUSTRIAL LOANS 9 $227 $213 $217 $207 $216 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $195 $200 $205 $210 $215 $220 $225 $230 Total commercial and industrial (“C&I”) loans decreased $ 1 . 1 million, or 0 . 5 % , to $ 216 . 3 million at June 30 , 2024 , from $ 217 . 4 million at December 31 ,
Slide 10: Commercial & Industrial Portfolio
COMMERCIAL & INDUSTRIAL PORTFOLIO (1) 10 (1) % of total loans as of June 30, 2024 1.6% , Manufacturing 1.6% , Merchant Wholesalers 0.1% , Hotels 1.1% , Construction, Sand and Gravel Mining 4.3% , All other C&I 0.6% , Healthcare 1.4% , Educational Services
Slide 11: Commercial Real Estate Loans
COMMERCIAL REAL ESTATE LOANS 11 $1,075 $1,080 $1,080 $1,084 $1,057 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $1,040 $1,045 $1,050 $1,055 $1,060 $1,065 $1,070 $1,075 $1,080 $1,085 $1,090 Total commercial real estate (“CRE”) loans decreased $ 23 . 2 million, or 2 . 1 % , to $ 1 . 1 billion from December 31 ,
Slide 12: Commercial Real Estate Loans by Property Type
COMMERCIAL REAL ESTATE LOANS 12 ($ in thousands) (1) Due to loan classifications, the percentage of Total Bank Risk - Based Capital (“RBC”) may differ from the Call Report. At June 30, 2024, the commercial real estate portfolio totaled $1.1 billion, and represented 52.2% of total gross loans. Of the
Slide 13: Commercial Real Estate – Non-Owner Occupied
COMMERCIAL REAL ESTATE – NON - OWNER OCCUPIED 13 At June 30, 2024, the non - owner occupied CRE portfolio totaled $864.6 million, or 318.2% of Total Bank RBC. Of the $864.6 millio n, $445.8 million, or 51.6% of non - owner occupied CRE, was concentrated in Massachusetts and $261.3 million, or 30.2%
Slide 14: Commercial Real Estate – Office Buildings
COMMERCIAL REAL ESTATE – OFFICE BUILDINGS 14 ($ in thousands) % of Total Bank RBC % of Office Portfolio Total Owner Occupied Non - Owner Occupied By Collateral Type 34.8% 40.6% $ 94,614 $ 13,805 $ 80,809 Office 45.1% 52.6% 122,689 20,795 101,894 Office - Medical 1.5% 1.7% 3,929 - 3,929 Office - Reta
Slide 15: Residential Real Estate Loans and Consumer Loans
RESIDENTIAL REAL ESTATE LOANS AND CONSUMER LOANS 15 $711 $720 $728 $732 $751 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $690 $700 $710 $720 $730 $740 $750 $760 Residential real estate loans , including home equity loans, and consumer loans increased $ 23 . 1 million , or 3 . 2 % , to $ 750 . 7 million, from
Slide 16: Investment Portfolio
INVESTMENT PORTFOLIO 16 The held - to - maturity (“HTM”) and available - for - sale (“AFS”) securities portfolio represented 13 . 6 % of total assets at June 30 , 2024 and 14 . 1 % of total assets, at December 31 , 2023 . Unrealized losses from the HTM securities portfolio totaled $ 40 . 2 million .
Slide 17: Total Deposits
TOTAL DEPOSITS 17 $1,623 $1,594 $1,532 $1,501 $1,500 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $1,420 $1,440 $1,460 $1,480 $1,500 $1,520 $1,540 $1,560 $1,580 $1,600 $1,620 $1,640 PERIOD - END CORE DEPOSITS Total deposits increased $ 28 . 1 million, or 1 . 3 % , from $ 2 . 1 billion at December 31 , 2023 to
Slide 18: Average Total Deposits
AVERAGE TOTAL DEPOSITS 18 $1,556 $1,559 $1,588 $1,576 $1,589 $591 $592 $589 $558 $549 1.13% 1.42% 1.60% 1.75% 1.94% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 Average Deposits and Rates Interest-bearing deposits Non-interest-bear
Slide 19: Average Core and Time Deposits
AVERAGE CORE AND TIME DEPOSITS 19 $1,645 $1,588 $1,573 $1,506 $1,488 0.64% 0.70% 0.76% 0.76% 0.87% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 Average Core Deposits and Rates Average core deposits, including non - interest bearin
Slide 20: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 20 93.4% 92.6% 94.6% 94.5% 93.3% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 92% 92% 93% 93% 94% 94% 95% 95% Period - end Loan - to - Deposit Ratio 75.0% 73.2% 71.5% 70.0% 69.1% 25.0% 26.8% 28.5% 30.0% 30.9% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 0% 10% 20% 30% 40% 50% 60% 70% 80% Core
Slide 21: Wholesale Funding
WHOLESALE FUNDING 21 $148 $150 $156 $152 $155 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $50 $70 $90 $110 $130 $150 $170 Wholesale Funding (Includes $20 million in Subordinated Debt) The Bank is considered to be well - capitalized as defined by regulators ( see slide 27 ) . The Bank’s Tier 1 Leverage Ratio
Slide 22: Liquidity Position
22 The Company’s liquidity position remains strong with solid core deposit relationships, cash, unencumbered securities and access to diversified borrowing sources . At June 30 , 2024 , the Company had available borrowing capacity with the FHLB of $ 437 . 4 million, including its overnight Ideal Way
Slide 23: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2023. 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 24: Asset Quality Indicators
ASSET QUALITY INDICATORS 24 2Q2024 1Q2024 4Q2023 3Q2023 2Q2023 $5.6M $4.7M $6.0M $5.6M $5.4M Total delinquent loans 0.27% 0.23% 0.30% 0.28% 0.27% Delinquent loans as a % of total loans $5.8M $5.8M $6.4M $6.3M $5.8M Nonperforming loans (NPL) 0.29% 0.29% 0.32% 0.31% 0.29% NPL as a % of total loans 0.2
Slide 25: Asset Quality
ASSET QUALITY 25 Management continues to remain attentive to any signs of deterioration in borrowers’ financial conditions and is proactive in taking the appropriate steps to mitigate risk . The allowance for credit losses as a percentage of total loans was 0 . 96 % at June 30 , 2024 , compared to 1
Slide 26: Asset Quality – Watch List Loans
ASSET QUALITY 26 2Q2024 1Q2024 4Q2023 3Q2023 2Q2023 ($ in millions) $14.6 $15.2 $5.8 $12.0 $11.8 Special Mention 0.7% 0.8% 0.3% 0.6% 0.6% % of Total Loans $22.1 $21.6 $33.7 $33.6 $37.7 Substandard 1.1% 1.1% 1.7% 1.7% 1.9% % of Total Loans $36.7 $36.8 $39.5 $45.6 $49.5 Total Watch List Loans 1.8% 1.8
Slide 27: Capital Management
CAPITAL MANAGEMENT 27 We are well - capitalized with excess capital. Ratio at December 31, 2023 Ratio at June 30, 2024 Consolidated 9.40% 9.56% Leverage Ratio 12.59% 12.66% Common Equity Tier 1 Ratio 12.59% 12.66% Tier 1 Capital Ratio 14.67% 14.70% Total Capital Ratio As of June 30 , 2024 , the Bank
Slide 28: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 28 # of Shares Year 2,189,276 2018 1,938,667 2019 1,391,496 2020 2,758,051 2021 720,975 2022 649,744 2023 200,000 1Q - 2024 269,841 2Q - 2024 Annual Dividends per Share Year $0.16 2018 $0.20 2019 $0.20 2020 $0.20 2021 $0.24 2022 $0.28 2023 $0.07 1Q - 2024 $0.07 2Q - 20
Slide 29: Capital Management – Book Value per Share
CAPITAL MANAGEMENT 29 $10.60 $10.53 $10.96 $10.90 $11.07 $9.94 $9.87 $10.30 $10.25 $10.41 Book Value per Share Tangible Book Value per Share (non - GAAP) (1) Book Value Tangible Book Value (non-GAAP) Book value per share increased $0.11, or 1.1%, from $10.96 at December 31, 2023 to $11.07 at June 30
Slide 30: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 30 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 31: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 31 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 32: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 32 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 33: 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 , First Vice President and Investor Relations Officer 33 141 Elm Street, Westfield, MA
Western New England Bancorp — Q2 2024 Earnings Presentation on 6ix