Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Investor Presentation (May 2021)
39 slides from Western New England Bancorp's investor presentation, May 6, 2021
Slide 1: Local banking is better than ever. Investor Presentation
Local banking is better than ever. INVESTOR PRESENTATION
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: Connecticut Strategy
CONNECTICUT STRATEGY With the opening of the Bank’s West Hartford Financial Services Center and Bloomfield Branch in 2020 , the Bank is well - positioned with four Hartford County, Connecticut locations . Continued mergers and consolidations throughout the state have created increased demand for a l
Slide 6: Connecticut Strategy: West Hartford Financial Services Center
CONNECTICUT STRATEGY The West Hartford Financial Services Center, located in West Hartford Center, will serve as the Bank’s regional hub in Connecticut . In addition to a full - service branch, it includes a suite of offices to support Residential Lending, Commercial Lending, Business & Government D
Slide 7: Connecticut Strategy: New Leaders in Banking Award
CONNECTICUT STRATEGY 7 Congratulations to Matthew Cuddy, Vice President and Connecticut Area Manager, on being recognized by the Connecticut Bankers Association as one of just fourteen 2021 New Leaders in Banking Award Recipients!
Slide 8: Winner: Best Bank/Financial Institution
WINNER Best Bank/Financial Institution
Slide 9: Connecticut Strategy: Bloomfield Branch
CONNECTICUT STRATEGY The Bloomfield branch , located in the Copaco Shopping Center, is a full - service branch and includes drive - through teller and safe deposit services . The Copaco Shopping Center is composed of national and local brands and is a major shopping destination for the greater Bloom
Slide 10: 1Q2021 Earnings
1Q2021 EARNINGS 10 ($ in thousands , except EPS) 1Q2021 4Q2020 3Q2020 2Q2020 1Q2020 Net interest income $ 18,026 $ 18,795 $ 15,990 $ 15,092 $ 14,553 Provision for loan losses 75 500 2,725 2,450 2,100 Non - interest income 3,004 2,462 2,177 2,087 2,525 Non - interest expense 13,327 14,338 12,853 12,2
Slide 11: 1Q2021 Highlights
11 • Revenues (1) : Total revenue of $20.6 million, a decrease of $646,000, or 3.0% (excluding Paycheck Protection Program (“PPP”) income, purchase accounting adjustments and prepayment penalties, total revenue increased $483,000, or 2.7%). • Pre - provision, pre - tax income: Increased $784,000, or
Slide 12: Net Interest Income
NET INTEREST INCOME 12 $14.6 $15.1 $16.0 $18.8 $18.0 2.87% 2.74% 2.81% 3.30% 3.24% 2.85% 2.71% 2.80% 2.95% 3.03% 2.25% 2.45% 2.65% 2.85% 3.05% 3.25% 3.45% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 $20.0 Net interest income, excludes PPP, Purchase Accou
Slide 13: Loans
LOANS 13 $1,783 $1,807 $1,771 $1,748 $1,757 4.26% 3.97% 4.02% 3.94% 3.88% 4.26% 3.92% 3.88% 4.24% 4.05% 3.70% 3.90% 4.10% 4.30% 4.50% 4.70% 4.90% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 Average Loans Outstanding (excludes PPP loans ) Average Loans Outstanding Ave
Slide 14: CARES Act Modifications as of March 31, 2021
CARES ACT MODIFICATIONS AS OF MARCH 31, 2021 14 Loan Segment (1)(2) Remaining Modification Balance # of Loans Modified % of Total Loan Segment Balance Modified Commercial real estate $ 57.0 16 6.6% Commercial and industrial ( 3 ) 7.9 7 3.9% Residential real estate ( 4 ) 2.0 6 0.3% Consumer - - - Tot
Slide 15: Commercial and Industrial Loan Trends
COMMERCIAL AND INDUSTRIAL LOAN TRENDS 15 $257 $231 $222 $212 $205 $222 $223 $167 $170 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $100 $150 $200 $250 $300 $350 $400 $450 $500 Commercial and Industrial Loans C&I Loans PPP Loans Commercial and industrial loans (“C&I”) of $ 375 . 2 million increased $ 118 . 5 m
Slide 16: Commercial Line of Credit Utilization
COMMERCIAL LINE OF CREDIT UTILIZATION 16 The table below breaks out the commercial line utilization since March 31, 2020. Balance 3/31/2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 Pass - rated $ 77.6 $ 42.6 $ 39.7 $ 32.9 $ 38.9 Classified 20.7 20.1 16.9 15.3 9.1 Total: $ 98.3 $ 62.7 $ 56.6 $ 48.2 $
Slide 17: Total COVID Modifications – C&I Portfolio
TOTAL COVID - 19 MODIFICATIONS – C&I PORTFOLIO 17 Industry Balance (1) % of Total Loans Modified Balance Remaining # of Modified Accounts % of Segment Balance Modified Manufacturing $ 46.5 2.6% $ 0.1 1 0.3% Wholesale Trade 31.2 1.8% Specialty Trade 11.6 0.7% Heavy and Civil Engineering Construction
Slide 18: Small Business Administration – Paycheck Protection Program
SMALL BUSINESS ADMINISTRATION – PAYCHECK PROTECTION PROGRAM 18 Loan Amount Total Balance # of Loans Fee (%) $150,000 and under $30.8 796 5% $151,000 - $350,000 24.0 108 5% $351,000 - $2.0 million 62.5 82 3% Over $2.1 million 52.8 14 1% Total: $170.1 1,000 Balance as of March 31, 2021 ( $ in millions
Slide 19: Commercial Real Estate Loan Trends
COMMERCIAL REAL ESTATE LOAN TRENDS 19 $836 $833 $812 $834 $861 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $775 $800 $825 $850 $875 • Commercial real estate (“CRE”) loans of $ 861 . 4 million increased $ 27 . 5 million, or 3 . 3 % , from the linked quarter, and increased $ 25 . 6 million, or 3 . 1 % , year -
Slide 20: Commercial Real Estate Loans – COVID Modifications Granted
COMMERCIAL REAL ESTATE LOANS – COVID - 19 MODIFICATIONS GRANTED (1) 20 Property Type Balance % of Total Loans (2) Modified Balance Modified Loans (#) Balance Modified (%) Apartment $ 175.9 10.0% $ - - - Office 148.6 8.5% - - - Retail/Shopping 111.1 6.3% - - - Industrial/Warehouse 122.3 7.0% 4.5 2 3.
Slide 21: Residential and Consumer Loan Trends
RESIDENTIAL AND CONSUMER LOAN TRENDS 21 $708 $716 $718 $714 $689 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $670 $675 $680 $685 $690 $695 $700 $705 $710 $715 $720 $725 Residential and Consumer Loans Period - end Loans Outstanding Residential loans, including home equity loans, and consumer loans decreased $
Slide 22: Total Deposits
TOTAL DEPOSITS 22 $1,057 $1,319 $1,363 $1,448 $1,631 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $550 $750 $950 $1,150 $1,350 $1,550 $1,750 Period - End Core Deposits Period - end core deposits of $ 1 . 6 billion increased $ 574 . 3 million , or 54 . 3 % , year - over - year and increased $ 183 . 5 million,
Slide 23: Average Total Deposits
AVERAGE TOTAL DEPOSITS 23 $1,300 $1,368 $1,421 $1,489 $1,520 $389 $505 $529 $535 $562 1.01% 0.82% 0.65% 0.44% 0.34% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $300 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Deposits and Rates Interest-bearing d
Slide 24: Average Core Deposits
AVERAGE CORE DEPOSITS 24 $1,037 $1,233 $1,325 $1,404 $1,515 0.33% 0.27% 0.25% 0.23% 0.21% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 Average Core Deposits and Rates Interest-bearing deposits Average depo
Slide 25: Average Time Deposits
AVERAGE TIME DEPOSITS 25 $651 $640 $625 $620 $567 2.08% 1.87% 1.50% 0.92% 0.67% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $500 $550 $600 $650 $700 $750 $800 Average Time Deposits and Rates Interest-bearing deposits Average deposit cost Average time deposits of $ 567 . 1
Slide 26: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 26 106% 103% 98% 95% 89% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 80% 85% 90% 95% 100% 105% 110% Loan - to - Deposit Ratio 62% 68% 68% 71% 76% 38% 32% 32% 29% 24% 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 0% 10% 20% 30% 40% 50% 60% 70% 80% Core Deposits and Time Deposits as a % of Total
Slide 27: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2020. 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 28: FHLB and Payroll Protection Program Liquidity Facility
FHLB AND PAYROLL PROTECTION PROGRAM LIQUIDITY FACILITY 28 $222 $197 $151 $58 $43 $ - $26 $ - $ - $ - 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 $- $50 $100 $150 $200 $250 Period - end FHLB and Payroll Protection Program Liquidity Facility FHLB PPPLF ($ in millions) At March 31 , 2021, FHLB advances decrease
Slide 29: Asset Quality
ASSET QUALITY 29 $9.7 $10.4 $9.2 $7.8 $6.8 0.54% 0.59% 0.53% 0.45% 0.39% 0.00% 0.20% 0.40% 0.60% 0.80% $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 Non - performing Loans ($ in millions) Non-performing loans Non-performing loans/Total Loans Excluding PPP Loans The Company has taken actions to identify, assess
Slide 30: Asset Quality Indicators
ASSET QUALITY INDICATORS 30 1Q2021 4Q2020 3Q2020 2Q2020 1Q2020 Total loans modified under the CARES Act $66.9M $76.9M $66.3M $261.0M - Loans modified as a % of total loans (1) 3.8% 4.4% 3.8% 14.7% - Total delinquent loans $ $9.3M $13.5M $6.7M $12.0M $12.4M Delinquent loans as a % of total loans (1)
Slide 31: Asset Quality: Allowance for Loan Losses
ASSET QUALITY 31 ALLL = $ 21 . 2 million • Management believes it prudent to proactively increase the allowance for loan losses given the significant stress experienced in the economy due to continued business shutdowns and interruptions related to COVID - 19 , coupled with the Company’s belief that
Slide 32: Asset Quality: Watch List Loans
ASSET QUALITY 32 1Q2021 4Q2020 3Q2020 2Q2020 1Q2020 Special Mention $38.4 $39.9 $43.5 $46.2 $31.8 Special Mention - Hotel $38.6 $52.2 $51.3 $50.1 $4.0 Total Special Mention $77.0 $92.1 $94.8 $96.3 $35.9 % of Total Loans (1) 4.4% 5.2% 5.4% 5.4% 2.0% Substandard $43.0 $55.0 $52.6 $55.4 $59.6 % of Tota
Slide 33: Hotels – $57.1 Million, or 3.3% of Total Loans
HOTELS - $57.1 MILLION, OR 3.3% OF TOTAL LOANS (1) 33 The hotel industry has been significantly impacted by the 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 portfolio and t
Slide 34: Capital Management
CAPITAL MANAGEMENT 34 We are well - capitalized with excess capital. Consolidated Ratio Consolidated Capital Leverage Ratio 9.3% $222.7 Common Equity Tier 1 Ratio 13.4% $222.7 Tier 1 Capital Ratio 13.4% $222.7 Total Capital Ratio 14.6% $243.5 x From a regulatory standpoint, we are well - capitalized
Slide 35: Subordinated Debt
SUBORDINATED DEBT 35 On April 20 , 2021 , the Company completed an offering of $ 20 million in aggregate principal amount of its 4 . 875 % fixed - to - floating rate subordinated notes (the “Notes”) to certain qualified institutional buyers in a private placement transaction . The Company intends to
Slide 36: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 36 Year # of Shares 2018 2,189,276 2019 1,938,667 2020 1,391,496 1Q2021 708,434 Year Annual Dividends per Share 2018 $0.16 2019 $0.20 2020 $0.20 1Q2021 $0.05 Share Repurchases Dividends On October 27 , 2020 , the Board of Directors authorized a stock repurchase plan (t
Slide 37: Capital Management: Book Value per Share
CAPITAL MANAGEMENT 37 $9.07 $8.97 $8.99 $8.95 $8.88 $8.44 $8.36 $8.39 $8.34 $8.27 Book Value per Share Tangible Book Value per Share Book Value Tangible Book Value
Slide 38: Appendix: Non-GAAP to GAAP Reconciliation
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 38 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 39: 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 39 141 Elm Street, Westfield, MA
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