Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Q4 2021 Earnings Presentation
32 slides from Western New England Bancorp's earnings presentation, Jan 25, 2022
Slide 1: Investor Presentation Fourth Quarter 2021
Local banking is better than ever. INVESTOR PRESENTATION FOURTH QUARTER 2021
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 Q2021 QUARTERLY EARNINGS 5 ($ in thousands , except EPS) 4Q2021 3Q2021 2Q2021 1Q2021 4Q2020 Net interest income $ 18,582 $ 18,765 $ 17,804 $ 18,026 $ 18,795 Provision (credit) for loan losses 300 (100) (1,200) 75 500 Non - interest income 3,856 3,295 2,409 3,004 2,462 Non - interest expense 13,923
Slide 6: Net Interest Income and Net Interest Margin
NET INTEREST INCOME ($) AND NET INTEREST MARGIN (%) 6 $18.8 $18.0 $17.8 $18.8 $18.6 3.30% 3.24% 3.06% 3.18% 3.08% 3.19% 3.03% 2.98% 2.99% 2.97% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.70% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $17.2 $17.4 $17.6 $17.8 $18.0 $18.2 $18.4 $18.6 $18.8 $19.0 Net interest income
Slide 7: Total Loans
TOTAL LOANS 7 $1,748 $1,757 $1,756 $1,787 $1,809 3.94% 3.88% 3.82% 3.76% 3.76% 3.20% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $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: CARES Act Modifications as of December 31, 2021
CARES ACT MODIFICATIONS AS OF DECEMBER 31, 2021 8 Loan Segment (1)(2) Remaining Modification Balance # of Loans Modified Loan Segment Balance Outstanding % of Loan Segment Balance Modified Commercial real estate $ 41.9 7 $ 980.0 4.3% Commercial and industrial ( 3 ) 0.6 2 201.3 0.3% Residential real
Slide 9: Commercial and Industrial Loan Trends
COMMERCIAL AND INDUSTRIAL LOAN TRENDS 9 $212 $205 $215 $201 $201 $167 $170 $106 $59 $25 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $100 $150 $200 $250 $300 $350 $400 C&I Loans PPP Loans Commercial and industrial loans (“C&I ”), including PPP loans, of $ 226 . 7 million decreased $ 152 . 4 million , or 40 .
Slide 10: Commercial Line of Credit Utilization
COMMERCIAL LINE OF CREDIT UTILIZATION 10 The table below breaks out the commercial line utilization for the periods noted: Balance 12/31/2020 3/31/2021 6/30/2021 9/30/2021 12/31/2021 Pass - rated $ 32.9 $ 38.9 $ 52.9 $ 45.1 $ 52.1 Classified 15.3 9.1 9.5 10.0 6.6 Total: $ 48.2 $ 48.0 $ 62.4 $ 55.1 $
Slide 11: C&I Portfolio - COVID Modifications Granted
C&I PORTFOLIO - COVID - 19 MODIFICATIONS GRANTED 11 Industry Loan Segment Balance (1) % of Total Loans (2) Modified Balance Remaining Modified Accounts Remaining (#) Loan Segment Balance Modified (%) Manufacturing $ 35.8 1.9% $ - - - Wholesale trade 36.8 2.0% - - - Educational services 17.5 1.0% - -
Slide 12: Small Business Administration - Paycheck Protection Program
SMALL BUSINESS ADMINISTRATION – PAYCHECK PROTECTION PROGRAM 12 (1) Balance as of December 31, 2021 ($ in millions) (2) ($ in thousands) Original Loan Amount (1) Original # of Loans Balance Outstanding (1) # of Loans Remaining Round 1 and 2 $223.1 1,386 $1.8 17 Round 3 79.1 760 23.5 147 Total $302.2
Slide 13: Commercial Real Estate Loan Trends
COMMERCIAL REAL ESTATE LOAN TRENDS 13 $834 $861 $877 $918 $980 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $750 $775 $800 $825 $850 $875 $900 $925 $950 $975 $1,000 • Commercial real estate (“CRE”) loans of $ 980 . 0 million increased $ 146 . 0 million, or 17 . 5 % , from December 31 , 2020 . • At December 31
Slide 14: Commercial Real Estate Loans - COVID Modifications Granted
COMMERCIAL REAL ESTATE LOANS – COVID - 19 MODIFICATIONS GRANTED 14 Property Type Loan Segment Balance (1) % of Total Loans (2) Modified Balance Remaining Modified Accounts Remaining (#) Loan Segment Balance Modified (%) Apartment $ 188.1 10.2% $ - - - Office 185.3 10.1% - - - Industrial/Warehouse 14
Slide 15: Residential and Consumer Loan Trends
RESIDENTIAL AND CONSUMER LOAN TRENDS 15 $714 $689 $680 $668 $656 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $620 $640 $660 $680 $700 $720 Residential and Consumer Loans Period - end Loans Outstanding Residential loans, including home equity loans, and consumer loans decreased $ 57 . 5 million, or 8 . 1 % ,
Slide 16: Total Deposits
TOTAL DEPOSITS 16 $1,448 $1,631 $1,727 $1,806 $1,849 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 PERIOD - END CORE DEPOSITS Period - end core deposits of $ 1 . 8 billion increased $ 401 . 5 million, or 27 . 7 % , from prior year - end, whi
Slide 17: Average Total Deposits
AVERAGE TOTAL DEPOSITS 17 $1,489 $1,520 $1,561 $1,587 $1,606 $535 $562 $603 $615 $654 0.44% 0.34% 0.27% 0.22% 0.19% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 0.45% 0.50% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Deposits and
Slide 18: Average Core Deposits
AVERAGE CORE DEPOSITS 18 $1,404 $1,515 $1,676 $1,757 $1,850 0.23% 0.21% 0.19% 0.16% 0.15% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 Average Core Deposits and Rates Average core deposits, including non - interest bearing de
Slide 19: Average Time Deposits
AVERAGE TIME DEPOSITS 19 $620 $567 $488 $445 $410 0.92% 0.67% 0.56% 0.47% 0.39% 0.25% 0.45% 0.65% 0.85% 1.05% 1.25% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $- $100 $200 $300 $400 $500 $600 $700 Average Time Deposits and Rates Average time deposits of $ 410 . 1 million decreased $ 35 . 2 m illion , or 7 .
Slide 20: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 20 95% 89% 86% 83% 83% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 76% 78% 80% 82% 84% 86% 88% 90% 92% 94% 96% Period - end Loan - to - Deposit Ratio 71% 76% 79% 81% 82% 29% 24% 21% 19% 18% 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Core Deposits and T
Slide 21: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2021 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 22: Total Borrowings
TOTAL BORROWINGS 22 $58 $43 $5 $4 $3 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 $- $10 $20 $30 $40 $50 $60 $70 Federal Home Loan Bank Advances (“FHLB”) Period - end Balance Outstanding ($ in millions) At December 31 , 2021 , total FHLB advances decreased $ 55 . 2 million, or 95 . 4 % , from $ 57 . 9 million
Slide 23: Asset Quality
ASSET QUALITY 23 $7.8 $6.8 $6.0 $5.6 $5.0 0.45% 0.39% 0.34% 0.32% 0.27% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% $- $2.0 $4.0 $6.0 $8.0 $10.0 Nonperforming Loans ($ in millions) Nonperforming loans Nonperforming loans/Total Loans Excluding PPP Loans The Company has taken actions to identify, assess and m
Slide 24: Asset Quality Indicators
ASSET QUALITY INDICATORS 24 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Total loans modified under the CARES Act $76.9M $66.9M $57.0M $42.8M $42.5M Loans modified as a % of total loans (1) 4.4% 3.8% 3.2% 2.4% 2.3% Total delinquent loans $ $13.5M $9.3M $4.4M $3.1M $2.1M Delinquent loans as a % of total loans
Slide 25: Asset Quality
ASSET QUALITY 25 Management continues to assess the exposure of the Company’s loan portfolio to the COVID - 19 pandemic, economic trends and their potential effect on asset quality . The Company has deferred the adoption of the Current Expected Credit Loss Impairments Model, as permitted by its clas
Slide 26: Asset Quality
ASSET QUALITY 26 ($ in Millions) 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Special Mention $39.9 $38.4 $41.1 $38.0 $24.2 Special Mention - Hotel $52.2 $38.6 $25.8 $26.2 $27.3 Total Special Mention $92.1 $77.0 $66.9 $64.2 $51.5 % of Total Loans (1) 5.2% 4.4% 3.8% 3.6% 2.8% Substandard $55.0 $43.0 $37.5 $32.
Slide 27: Hotels - $57.2 Million, or 3.1% of Total Loans
HOTELS - $57.2 MILLION, OR 3.1% OF TOTAL LOANS (1) 27 The hotel industry has been significantly impacted by the COVID - 19 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 port
Slide 28: Capital Management
CAPITAL MANAGEMENT 28 We are well - capitalized with excess capital. Consolidated Ratio Consolidated Capital Leverage Ratio 8.8% $221.7 Common Equity Tier 1 Ratio 12.1% $221.7 Tier 1 Capital Ratio 12.1% $221.7 Total Capital Ratio 14.3% $261.1 x From a regulatory standpoint, we are well - capitalized
Slide 29: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 29 Year # of Shares 2018 2,189,276 2019 1,938,667 2020 1,391,496 1Q2021 708,434 2Q2021 635,921 3Q2021 1,221,618 4Q2021 192,078 Total : 2,758,051 Year Annual Dividends per Share 2018 $0.16 2019 $0.20 2020 $0.20 1Q2021 $0.05 2Q2021 $0.05 3Q2021 $0.05 4Q2021 $0.05 Share R
Slide 30: Capital Management
CAPITAL MANAGEMENT 30 $9.87 $9.56 $9.29 $9.07 $8.97 $9.21 $8.89 $8.66 $8.44 $8.36 Book Value per Share Tangible Book Value per Share Book Value Tangible Book Value
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: 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 32 141 Elm Street, Westfield, MA
Western New England Bancorp — Q4 2021 Earnings Presentation on 6ix