Western New England Bancorp, Inc. · NASDAQ:WNEB
Western New England Bancorp — Q3 2024 Earnings Presentation
33 slides from Western New England Bancorp's earnings presentation, Oct 23, 2024
Slide 1: Local banking is better than ever. Investor Presentation 3rd Quarter 2024
Local banking is better than ever. INVESTOR PRESENTATION 3RD 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
3 Q2024 QUARTERLY EARNINGS 6 ($ in thousands , except EPS ) 3Q2024 2Q2024 (1) 1Q2024 4Q2023 3Q2023 (2) (3) Net interest income $ 14,728 $ 14,470 $ 15,346 $ 16,176 $ 16,383 P rovision for (reversal of) credit losses 941 (294) (550) 486 354 Non - interest income 3,141 3,834 2,674 2,714 3,612 Non - int
Slide 7: Net Interest Income and Net Interest Margin
NET INTEREST INCOME AND NET INTEREST MARGIN 7 $16.4 $16.2 $15.3 $14.5 $14.7 2.70% 2.64% 2.57% 2.42% 2.40% 2.20% 2.40% 2.60% 2.80% 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 $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 income, o
Slide 8: Total Loans
TOTAL LOANS 8 $2,007 $2,017 $2,022 $2,017 $2,039 4.66% 4.73% 4.84% 4.88% 4.93% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00% 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 $1,900 $1,920 $1,940 $1,960 $1,980 $2,000 $2,020 $2,040 $2,060 $2,080 $2,100 Average Loans Outstanding Average Loans Outstanding Average Loan Yield, T
Slide 9: Commercial and Industrial Loans
COMMERCIAL AND INDUSTRIAL LOANS 9 $213 $217 $207 $216 $210 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 $202 $204 $206 $208 $210 $212 $214 $216 $218 Total commercial and industrial (“C&I”) loans decreased $ 7 . 0 million, or 3 . 2 % , to $ 210 . 4 million at September 30 , 2024 , from $ 217 . 4 million at Dec
Slide 10: Commercial & Industrial Portfolio
COMMERCIAL & INDUSTRIAL PORTFOLIO (1) 10 (1) % of total loans as of September 30, 2024. Manufacturing, 2.2% Merchant Wholesalers, 1.3% Construction, Sand & Gravel Mining, 1.1% All other C&I, 4.0% Healthcare, 0.5% Educational Services, 1.2%
Slide 11: Commercial Real Estate Loans
COMMERCIAL REAL ESTATE LOANS 11 $1,080 $1,080 $1,084 $1,057 $1,083 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 $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 increased $ 3 . 0 million, or 0 . 3 % , to $ 1 . 1 billion from December 31 ,
Slide 12: Commercial Real Estate Loans (CRE)
COMMERCIAL REAL ESTATE LOANS (CRE) (1) 12 ($ in thousands) (1) As of September 30, 2024. (2) The total RBC ratio is based on Westfield Bank’s capital and due to loan classifications, the percentage of total RBC ma y d iffer from the Call Report. At September 30 , 2024, the commercial real estate por
Slide 13: Commercial Real Estate – Non-Owner Occupied
COMMERCIAL REAL ESTATE – NON - OWNER OCCUPIED (1) 13 At September 30, 2024, the non - owner occupied CRE portfolio totaled $ 878.3 million, or 323.7% of total RBC. Of the $878.3 million, $455.2 million , or 51.8% of non - owner occupied CRE, was concentrated in Massachusetts and $ 264.6 million, or
Slide 14: Commercial Real Estate – Office Buildings
COMMERCIAL REAL ESTATE – OFFICE BUILDINGS (1) 14 ($ in thousands) (1) As of September 30, 2024. (2) The total RBC ratio is based on Westfield Bank’s capital. Non - Owner Occupied Owner Occupied Total % of Office Portfolio % of Total Bank RBC (2) By Collateral Type Office/Medical $ 107,718 $ 20,849 $
Slide 15: Residential Real Estate Loans and Consumer Loans
RESIDENTIAL REAL ESTATE LOANS AND CONSUMER LOANS 15 $720 $728 $732 $751 $753 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 $700 $710 $720 $730 $740 $750 $760 Residential real estate loans , including home equity loans, and consumer loans increased $ 25 . 6 million , or 3 . 5 % , to $ 753 . 2 million, from Dece
Slide 16: Investment Portfolio
INVESTMENT PORTFOLIO 16 The held - to - maturity (“HTM”) and available - for - sale (“AFS”) securities portfolio represented 14 . 0 % of total assets at September 30 , 2024 and 14 . 1 % of total assets, at December 31 , 2023 . The HTM unrealized losses were approximately $ 30 . 7 million, or 14 . 4
Slide 17: Total Deposits
TOTAL DEPOSITS 17 $1,594 $1,532 $1,501 $1,500 $1,524 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 $1,440 $1,460 $1,480 $1,500 $1,520 $1,540 $1,560 $1,580 $1,600 $1,620 PERIOD - END CORE DEPOSITS Total deposits increased $ 80 . 5 million, or 3 . 8 % , from $ 2 . 1 billion at December 31 , 2023 to $ 2 . 2 billi
Slide 18: Average Total Deposits
AVERAGE TOTAL DEPOSITS 18 $1,559 $1,588 $1,576 $1,589 $1,621 $592 $589 $558 $549 $559 1.42% 1.60% 1.75% 1.94% 2.04% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 $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 $1,588 $1,573 $1,506 $1,488 $1,492 0.70% 0.76% 0.76% 0.87% 0.93% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 Average Core Deposits and Rates During the three months ended September 30 , 2024 , average core
Slide 20: Loan-to-Deposit Ratio
LOAN - TO - DEPOSIT RATIO 20 92.6% 94.6% 94.5% 93.3% 92.1% 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 91% 91% 92% 92% 93% 93% 94% 94% 95% 95% Period - end Loan - to - Deposit Ratio 73.2% 71.5% 70.0% 69.1% 68.5% 26.8% 28.5% 30.0% 30.9% 31.5% 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 0% 10% 20% 30% 40% 50% 60% 70% 8
Slide 21: Wholesale Funding
WHOLESALE FUNDING 21 $150 $156 $152 $155 $152 4.81% 4.83% 4.91% 5.00% 5.05% 4.65% 4.70% 4.75% 4.80% 4.85% 4.90% 4.95% 5.00% 5.05% 5.10% 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 $100 $110 $120 $130 $140 $150 $160 $170 Wholesale Funding (Includes $20 million in Subordinated Debt) FHLB Advances Average COF T
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 September 30 , 2024 , the Company had available borrowing capacity with the FHLB of $ 452 . 0 million, including its overnight Idea
Slide 23: Deposit Market Share in Hampden County, MA
________ Source: SNL Financial as of June 30, 2024 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 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 Total delinquent loans $5.6M $6.0M $4.7M $5.6M $4.3M Delinquent loans as a % of total loans 0.28% 0.30% 0.23% 0.27% 0.21% Nonperforming loans (NPL) $6.3M $6.4M $5.8M $5.8M $4.9M NPL as a % of total loans 0.31% 0.32% 0.29% 0.29% 0.24% NPL
Slide 25: Asset Quality
ASSET QUALITY 25 Management continues to remain attentive to any signs of deterioration in borrowers’ financial conditions and is proactive in taking the appropriate steps to mitigate risk . The allowance for credit losses as a percentage of total loans was 0 . 97 % at September 30 , 2024 , compared
Slide 26: Asset Quality
ASSET QUALITY 26 ($ in millions) 3Q2023 4Q2023 1Q2024 2Q2024 3Q2024 Special Mention $12.0 $5.8 $15.2 $14.6 $21.3 % of Total Loans 0.6% 0.3% 0.8% 0.7% 1.0% Substandard $33.6 $33.7 $21.6 $22.1 $21.9 % of Total Loans 1.7% 1.7% 1.1% 1.1% 1.1% Total Classified Loans $45.6 $39.5 $36.8 $36.7 $43.2 % of Tot
Slide 27: Capital Management
CAPITAL MANAGEMENT 27 We are well - capitalized with excess capital. Consolidated Ratio at September 30, 2024 Ratio at December 31, 2023 Leverage Ratio 9.40% 9.40% Common Equity Tier 1 Ratio 12.39% 12.59% Tier 1 Capital Ratio 12.39% 12.59% Total Capital Ratio 14.44% 14.67% As of September 30 , 2024
Slide 28: Capital Return to Shareholders
CAPITAL RETURN TO SHAREHOLDERS 28 Year # of Shares 2018 2,189,276 2019 1,938,667 2020 1,391,496 2021 2,758,051 2022 720,975 2023 649,744 1Q - 2024 200,000 2Q - 2024 269,841 3Q - 2024 244,441 Year Annual Dividends per Share 2018 $0.16 2019 $0.20 2020 $0.20 2021 $0.20 2022 $0.24 2023 $0.28 1Q - 2024 $
Slide 29: Capital Management
CAPITAL MANAGEMENT 29 $10.53 $10.96 $10.90 $11.07 [VALUE] $9.87 $10.30 $10.25 $10.41 [VALUE] Book Value per Share Tangible Book Value per Share (non - GAAP) (1) Book Value Tangible Book Value (non-GAAP) Book value per share increased $0.44, or 4.0%, from $10.96 at December 31, 2023 to $11.40 at Sept
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 — Q3 2024 Earnings Presentation on 6ix