Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Westfield Financial — Sterne Agee Financial Institutions Investor Conference 2011
33 slides from Western New England Bancorp's conference presentation, Feb 17, 2011
Slide 1: Sterne Agee Financial Institutions Investor Conference Investor Handouts
Sterne Agee Financial Institutions Investor Conference Investor Handouts February 17 & 18, 2011 1
Slide 2: Forward-Looking Statements
FORWARD – LOOKING STATEMENTS Today’s presentation may contain “forward-looking statements” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” and “potential.” Examples of forward-looking statements include, but are not limited to,
Slide 3: Overview
3 OVERVIEW Headquartered in Westfield, MA 11 branches offices located throughout Hampden County Preferred SBA Lender Did not participate in TARP
Slide 4: Strategy
4 STRATEGY Main focus on Commercial & Industrial and Commercial Real Estate portfolios by targeting businesses in Western Massachusetts and Northern Connecticut. C & I relationships include transactional deposit account relationships. Growth in residential real estate portfolio to diversify risk and
Slide 5: 2010 Highlights
5 2010 HIGHLIGHTS Very well capitalized. Stockholders’ equity/total asset ratio of 17.85% High credit quality. Nonperforming loans of 0.63% Deposits increased by $52.3 million, or 8% Total loans increased by 7%, with residential mortgages increasing by $49.7 million
Slide 6: 2010 Highlights
2010 HIGHLIGHTS Hired new head of Branch Administration/Retail Banking in January 2010. 25 years experience in commercial bank environment Developed business development skills of Branch Managers: Business Banking Calling Programs Introduced Bank @ Work program Enhanced the bank-at-college program R
Slide 7: Electronic Banking
ELECTRONIC BANKING Enhanced electronic banking capabilities including mobile banking and financial management tools. Added billing and invoice, payroll and online merchant service processing options for small businesses. Expanded ATM network with 5 new machines, 3 of which are on a university campus
Slide 8: Total Assets
TOTAL ASSETS 805 997 1,040 1,109 1,191 1,239 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 8
Slide 9: Total Return Performance
TOTAL RETURN PERFORMANCE 9 25 50 75 100 125 150 175 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 Index Value Westfield Financial, Inc. Russell 2000 NASDAQ Bank
Slide 10: Positive Trends in Credit
POSITIVE TRENDS IN CREDIT December 31, 2010 2009 Allowance loan loss as a 1.36% 1.60% percentage to total loans Nonperforming loans as a 0.63% 1.15% percentage of total loans Nonperforming assets as a 0.28% 0.60% percentage of total assets 10
Slide 11: Asset Quality Ratios
ASSET QUALITY RATIOS 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Percentage Allowance for loan loass as percent of total loans Percent of total loans Nonperforming assets as a percentage of total assets 11
Slide 12: Nonperforming & Delinquent Loans
NONPERFORMING & DELINQUENT LOANS Nonperforming loans of $3.2 million or 0.63% of total loans Primarily made up of 3 borrowers totaling $2.4 million Loans delinquent 30-89 days totaling $16.8 million Primarily made up of one borrower totaling $15.0 million 12
Slide 13: Nonperforming Loans
NONPERFORMING LOANS (DOLLARS IN MILLIONS) Residential $0.8 25% Commercial & Industrial $0.5 16% Commercial Real Estate $1.9 59% 13
Slide 14: Capital Management
CAPITAL MANAGEMENT Possible uses of capital: Pay dividends to shareholders Repurchase shares of our common stock Fund organic growth or leverage the balance sheet Finance acquisitions of other financial institutions or other businesses related to banking 14
Slide 15: Dividends Paid to Shareholders
DIVIDENDS PAID TO SHAREHOLDERS 2010 Regular Dividends $ 0.22 Special Dividends 0.30 Calendar Year 2010 $ 0.52 2009 Regular Dividends $ 0.20 Special Dividends 0.30 Calendar Year 2009 $ 0.50 15
Slide 16: Stock Repurchase Plan
STOCK REPURCHASE PLAN On May 25, 2010 the Board of Directors authorized a second repurchase for up to 2.9 million shares (10% of our outstanding shares). There were 1.4 million shares purchased under this plan as of December 31, 2010. 16
Slide 17: Stockholder's Equity/Total Asset
STOCKHOLDER’S EQUITY/TOTAL ASSET The decrease in equity was primarily due to stock repurchases, along with regular and special dividends 14.39 29.03 27.56 23.44 20.76 17.85 0.00% 10.00% 20.00% 30.00% 40.00% Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Percentage 17
Slide 18: Total Loan Portfolio
TOTAL LOAN PORTFOLIO (DOLLARS IN MILLIONS) Commercial real estate (owner occupied) $100.0 21% Commercial real estate (non-owner occupied) $114.6 23% Consumer loans $2.9 1% Residential real estate $112.7 22% Home equity $36.1 7% Commercial and industrial $135.3 27% 18
Slide 19: Market Segment Breakdown
MARKET SEGMENT BREAKDOWN (DOLLARS IN MILLIONS) Manufacturing $59.6 17% Wholesale Trade $40.6 11% Retail Trade $26.8 7% Real Estate, Rental & Leasing $113.5 32% Professional, Scientific & Technical $29.7 8% Educational & Health Care $27.3 8% Arts, Entertainment & Recreation $25.3 7% Other $35.1 10% 1
Slide 20: Commercial Loan Relationships
COMMERCIAL LOAN RELATIONSHIPS (DOLLARS IN MILLIONS) $6 Million & < $15 million $133.2 37% Over $15 million $57.3 16% Under $6 Million $167.4 47% 20
Slide 21: Total Loan Portfolio
TOTAL LOAN PORTFOLIO 379 385 415 474 469 502 $300 $350 $400 $450 $500 $550 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Millions 21
Slide 22: Commercial & Industrial Loans
COMMERCIAL & INDUSTRIAL LOANS 100 100 117 154 145 135 $0 $30 $60 $90 $120 $150 $180 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Millions 22
Slide 23: Residential Loans (Including Home Equity)
RESIDENTIAL LOANS (INCLUDING HOME EQUITY) 107 109 108 98 99 149 $0 $40 $80 $120 $160 $200 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Millions 23
Slide 24: Securities Portfolio
SECURITIES PORTFOLIO (DOLLARS IN MILLIONS) Government Sponsored Enterprise Debt $17.9 3% Equity Securities $6.9 1% Private Label Mortgage Backed Securities $7.6 1% GSE Mortgage Backed Securities $568.7 88% Massachusetts Municipal Bonds $43.1 7% 24
Slide 25: Securities Portfolio: Private Label MBS
SECURITIES PORTFOLIO PRIVATE LABEL MBS AMORTIZED COST: $8.3 MILLION MARKET VALUE: $7.6 MILLION 25 Treasury/Agency AAA AA & A Less than A Split Ratings Not Rated 0.3% 5.7% 1.3% 0.6% 1.0% 91.1%
Slide 26: Total Deposits
TOTAL DEPOSITS In 2007 and 2008 management placed less emphasis on gathering time deposits in favor of lower cost alternative funding 26 623 627 603 588 648 700 $570 $600 $630 $660 $690 $720 Millions Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10
Slide 27: Deposit Mix
DEPOSIT MIX (DOLLARS IN MILLIONS) December 31, 2007 Total deposits grew by $97.6 million, 16.2% Core deposits grew by $41.1 million, 32.2% December 31, 2010 27 Int. Bearing Checking $42.4 7% Non-interest Checking $85.3 14% Time $353.4 59% Savings/Money Market $121.6 20% Time $354 51% Savings/Money M
Slide 28: Short and Long Term Borrowings
SHORT AND LONG TERM BORROWINGS 59 73 137 173 288 301 $0 $75 $150 $225 $300 $375 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Millions 28
Slide 29: Net Income
NET INCOME $10 $8 $6 $4 $2 $0 6.2 4.7 8.7 6.7 5.5 3.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 29 Millions
Slide 30: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE 30 0.20 0.15 0.29 0.23 0.18 0.11 $0.00 $0.10 $0.20 $0.30 $0.40 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10
Slide 31: Margin Pressure in 2010 But Trending Positive Into 2011
MARGIN PRESSURE IN 2010 BUT TRENDING POSITIVE INTO 2011 Faced margin pressure in 2010 resulting from declining rate environment. Historically low mortgage rates lead to heavy prepayments in mortgage-backed securities which were reinvested in a lower rate environment, thus reducing yields. As rates i
Slide 32: Net Interest Margin
NET INTEREST MARGIN (fully taxable equivalent basis) 32 4.00% 3.00% 2.00% 1.00% 0.00% 3.07 2.99 2.81 2.70 2.58 2.40 3Q 4Q ’09 1Q ’10 2Q ’10 3Q ’10 4Q ‘10
Slide 33: Thank You
Thank You 33
Westfield Financial — Sterne Agee Financial Institutions Investor Conference 2011 on 6ix