Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Westfield Financial — Merger or Acquisition (April 2016)
18 slides from Western New England Bancorp's merger presentation, Apr 6, 2016
Slide 1: A Compelling Strategic Combination
Connecticut Massachusetts April 4, 2016 A Compelling Strategic Combination First In - Market Merger in Over 25 Years – Creating One of the Largest Community Banks in Hampden County and the Springfield MSA What better banking’s all about tm . NASDAQ: WFD Western New England Bancorp, Inc. (NASDAQ: WNE
Slide 2: Disclaimer
Disclaimer This presentation contains some statements that may constitute forward - looking statements . Forward - looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not histor
Slide 3: Safe Harbor and Legend
Safe Harbor and Legend This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval . In connection with the merger, Westfield will file with the Securities and Exchange Commission (“SEC”) a registration state
Slide 4: Compelling Strategic & Financial Combination Creates A Leading Western New England Bank Franchise
Compelling Strategic & Financial Combination 4 Creates A Leading Western New England Bank Franchise ▪ First in - market merger in Hampden County in over 25 years, creating the largest community bank in the county with 17 branches (21 total branches in pro forma footprint) and a solid #2 deposit mark
Slide 5: Transaction Overview
Transaction Overview 5 Merger Consideration ▪ 100% stock – fixed exchange ratio of 2.425 shares ▪ Stock options converted to Westfield options ▪ Aggregate value of approximately $110 million, or $20.42 per share* Pro Forma Ownership ▪ Approximately 59% Westfield / 41% Chicopee of fully diluted share
Slide 6: Creating Value for Both Sets of Shareholders
Creating Value for Both Sets of Shareholders 6 Double Digit Earnings Accretion Greater Franchise Value Better Positioned for Future Growth Potential for Stock Upside Improved Stock Liquidity Retain Strong Capital Base Double Digit Earnings Accretion Greater Franchise Value Better Positioned for Futu
Slide 7: Westfield Financial, Inc. and Chicopee Bancorp, Inc.: Companies with Similar Profiles
Westfield Financial, Inc. Companies with Similar Profiles… 7 ________ Source: SNL Financial as of 12/31/2015 Note: Market data as of April 4 , 2016 ▪ HQ: Westfield, MA ▪ Founded: 1853 ▪ Ticker: WFD ▪ Market Cap: $153.8 mm ▪ Assets: $1.3 bn ▪ Loans: $818 mm ▪ Deposits: $900 mm ▪ Branches: 13 ▪ MRQ RO
Slide 8: Combining to Create one of the Largest Community Banks in Hampden County and Springfield MSA
14% 12% 12% 10% 8% 8% 7% 7% 7% 6% 4% 0% 2% 4% 6% 8% 10% 12% 14% 16% …Combining to Create one of the Largest Community Banks in Hampden County and Springfield MSA 8 Largest Community Bank in Hampden County, MA ________ Source: SNL Financial as of 6 /30/2015 Note: Two Westfield branches are located in
Slide 9: Extends Footprint and Enhances Scale and Density in Springfield MSA and the Knowledge Corridor
Extends Footprint and Enhances Scale and Density in Springfield MSA and the “Knowledge Corridor” ________ Source: westernmassedc.com; masslive.com; reuters.com; SNL Financial Note: Two Westfield branches are located in Hartford County, CT outside of Springfield MSA Springfield MSA Hampden County Ham
Slide 10: Diversified Loan and Deposit Mix
Diversified Loan and Deposit Mix 10 ________ Source: SNL Financial balances as of 12/31/2015 Westfield Chicopee Pro Forma Loans Deposits Total: $818.2 Yield: 4.02% Total: $586.9 Yield: 4.16% Total: $1,405.1 Yield: 4.08% Total: $900.3 Cost: 0.64% Loans/Deposits: 91% Total: $507.1 Cost: 0.56% Loans/De
Slide 11: Strong Pro Forma Financial Metrics
Strong Pro Forma Financial Metrics 11 ________ All balances and ratios as of December 31, 2015; market data as of April 4, 2016. Pro Forma combined performance ratios estimated full year 2017. Pro forma combined market data based on exchange ratio of 2.425; WFD stock price at April 4, 2016; estimate
Slide 12: Key Merger Assumptions
Key Merger Assumptions 12 Credit Mark ▪ Gross loan mark projected to be 1.75% of total loans Cost Savings ▪ Cost savings estimated at $7 million (15% of combined banks’ 2015 FY expense base) ▪ Phased in at 50% of the run - rate for the first six months post closing and 100% thereafter Revenue Synerg
Slide 13: Financial Impact
Financial Impact 13 EPS Impact ▪ Accretive to earnings per share by approximately 14% beginning in first full year (2017) Tangible Book Value Impact ▪ TBV dilution of approximately 6% with earn back in approximately 4.7 years using the crossover method, and 4.6 years using the incremental EPS method
Slide 14: Investment Merits – A Compelling Strategic Combination
Investment Merits – A Compelling Strategic Combination 14 In - Market Combination Creating Largest Locally Owned Bank in Hampden County ▪ Not moving resources out of the market, but intensifying resources in our core market ▪ Strong brand dedicated to outstanding customer service and giving back to
Slide 15: Reconciliation of Tangible Book Value Dilution and Earn Back
Reconciliation of Tangible Book Value Dilution and Earn Back 15 12/31/2015 9/30/2016 Actual Projected Westfield Stand Alone Tangible Book Value (in thousands) Shareholders' equity 139,466 142,453 Shares outstanding 18,268 18,268 Tangible book value $7.63 $7.80 Deal value (in thousands) including net
Slide 16: Reconciliation of Tangible Book Value Dilution and Earn Back
16 Includes ALL one - time and restructuring costs related to the transaction, regardless of when incurred, and does NOT include any share repurchase activity (1) Other adjustments include tax benefit from ESOP unwind, gain on Chicopee shares owned by Westfield, and retirement of Wes tfi eld shares
Slide 17: Notes on cost savings and tangible book value earn back analysis
17 ▪ I n our analysis described in the investor presentation, cost savings are phased in at 50% of run rate for the first six months p ost closing and 100% thereafter ▪ Our analysis of tangible book value dilution using the crossover method compares the projected stand alone performance, and resulta
Slide 18: Western New England Bancorp, Inc.
Connecticut Massachusetts What better banking’s all about tm . NASDAQ: WFD Western New England Bancorp, Inc. (NASDAQ: WNEB)* *To take effect at close NASDAQ: CBNK
Westfield Financial — Merger or Acquisition (April 2016) on 6ix