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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 23, 2024
WESTERN
NEW ENGLAND BANCORP, INC.
(Exact
name of registrant as specified in its charter)
Massachusetts |
|
001-16767 |
|
73-1627673 |
(State
or other jurisdiction of incorporation) |
|
(Commission
File Number) |
|
(I.R.S.
Employer
Identification No.) |
141
Elm Street |
|
Westfield,
Massachusetts |
01085 |
(Address
of principal executive offices) |
(zip
code) |
Registrant's
telephone number, including area code: (413)
568-1911
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
Trading
Symbol |
Name
of each exchange on which registered |
Common
Stock, $0.01 par value per share |
WNEB |
NASDAQ |
Indicate
by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
On July
23, 2024, Western New England Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the
quarter and six months ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated
by reference into this Item 2.02.
| Item 7.01. | Regulation FD Disclosure. |
On July 23, 2024, the Company
made available an investor presentation to be used during investor meetings. The slide show for the investor presentation is attached
to this report as Exhibit 99.2.
The information
contained in this Item 7.01 and Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to
the liabilities of that section, nor will such information or exhibits be deemed incorporated by reference into any filing made by the
Company under the Exchange Act or the Securities Act of 1933, as amended, whether made before or after the date hereof and regardless
of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such filing.
The furnishing of the information included in Item 7.01 of this Current Report on Form 8-K shall
not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation
FD.
| Item 9.01. | Financial Statements and Exhibits. |
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits.
The exhibits required by this item are set forth on the Exhibit Index
attached hereto.
Exhibit
Number |
|
Description |
99.1 |
|
Press Release of Western New England Bancorp, Inc. dated July 23, 2024. |
99.2 |
|
Investor Presentation dated July 23, 2024 for Western New England Bancorp, Inc. |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
WESTERN NEW ENGLAND BANCORP, INC. |
|
|
|
|
|
|
|
By: |
/s/ Guida R. Sajdak |
|
|
Guida R. Sajdak |
|
|
Chief Financial Officer |
Dated: July 23, 2024
WESTERN NEW ENGLAND BANCORP, INC. 8-K
Exhibit 99.1
|
For further information contact: |
|
James C. Hagan, President and CEO |
|
Guida R. Sajdak, Executive Vice President and CFO |
|
Meghan Hibner, First Vice President and Investor Relations Officer |
|
413-568-1911 |
WESTERN NEW ENGLAND BANCORP, INC. REPORTS RESULTS
FOR THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND DECLARES QUARTERLY CASH DIVIDEND
Westfield, Massachusetts, July 23, 2024:
Western New England Bancorp, Inc. (the “Company” or “WNEB”) (NasdaqGS: WNEB), the holding company for Westfield
Bank (the “Bank”), announced today the unaudited results of operations for the three and six months ended June 30, 2024. For
the three months ended June 30, 2024, the Company reported net income of $3.5 million, or $0.17 per diluted share, compared to net income
of $2.8 million, or $0.13 per diluted share, for the three months ended June 30, 2023. On a linked quarter basis, net income was $3.5
million, or $0.17 per diluted share, as compared to net income of $3.0 million, or $0.14 per diluted share, for the three months ended
March 31, 2024. For the six months ended June 30, 2024, net income was $6.5 million, or $0.31 per diluted share, compared to net income
of $8.1 million, or $0.37 per diluted share, for the six months ended June 30, 2023.
The Company also announced that the Board
of Directors declared a quarterly cash dividend of $0.07 per share on the Company’s common stock. The dividend will be payable on
or about August 21, 2024 to shareholders of record on August 7, 2024.
James C. Hagan, President and Chief Executive
Officer, commented, “It has been widely publicized that the economy and the banking industry is in the midst of the longest inverted
yield curve in U.S. history, which continues to create net interest margin compression and funding challenges for banks across the country,
including Western New England Bancorp. We believe our Company continues to be well positioned with strong capital and access to liquidity
to sustain us through this unprecedented interest rate cycle. Our quarterly financial performance has been largely impacted by higher
funding costs in response to the sustained increase in interest rates over the last 18-24 months. As we continue to manage the balance
sheet in this uncertain environment, we are also focused on expense management initiatives to mitigate top line pressures and improve
efficiencies over the long-term. The Company also continues to focus on our loan and deposit growth initiatives and retention of our customers.
Total deposits increased $28.1 million, or 1.3%, from year-end and our asset quality remains strong, with nonperforming loans to total
loans of 0.29% at June 30, 2024.”
Hagan concluded, “The Company is considered
to be well-capitalized as defined by the regulators and we remain disciplined in our capital management strategies. During the six months
ended June 30, 2024, we repurchased approximately 470,000 shares of the Company’s common stock at an average price per share of
$7.32. We continue to believe that buying back shares represents a prudent use of the Company’s capital and we are pleased to be
able to continue to return value to shareholders through share repurchases. On May 22, 2024, as previously announced, the Board of Directors
authorized a new repurchase plan under which the Company may purchase up to 1.0 million shares, or approximately 4.6%, of the Company’s
outstanding shares. We remain focused and well positioned to serve our community today and in the future and to enhance shareholder value.”
Key Highlights:
Loans and Deposits
At June 30, 2024, total loans were $2.0 billion
and decreased $1.1 million, or 0.1%, from December 31, 2023. The decrease in total loans was due to a decrease in commercial real estate
loans of $23.2 million, or 2.1%, a decrease in commercial and industrial loans of $1.1 million, or 0.5%, partially offset by an increase
in residential real estate loans, including home equity loans, of $23.8 million, or 3.3%.
At June 30, 2024, total deposits were $2.2
billion and increased $28.1 million, or 1.3%, from December 31, 2023. Core deposits, which the Company defines as all deposits except
time deposits, decreased $32.3 million, or 2.1%, from $1.5 billion, or 71.5% of total deposits, at December 31, 2023, to $1.5 billion,
or 69.1% of total deposits at June 30, 2024. The loan-to-deposit ratio decreased from 94.6% at December 31, 2023 to 93.3% at June 30,
2024.
Liquidity
The Company’s liquidity position remains
strong with solid core deposit relationships, cash, unencumbered securities, a diversified deposit base and access to diversified borrowing
sources. At June 30, 2024, the Company had $1.1 billion in immediately available liquidity, compared to $574.4 million in uninsured deposits,
or 26.4% of total deposits, representing a coverage ratio of 186%. Uninsured deposits of the Bank’s customers are eligible for FDIC
pass-through insurance if the customer opens an IntraFi Insured Cash Sweep (“ICS”) account or a reciprocal time deposit through
the Certificate of Deposit Account Registry System (“CDARS”). IntraFi allows for up to $250.0 million per customer of pass-through
FDIC insurance, which would more than cover each of the Bank’s deposit customers if such customer desired to have such pass-through
insurance.
Allowance for Loan Losses and Credit Quality
At June 30, 2024, the allowance for credit
losses was $19.4 million, or 0.96% of total loans and 332.7% of nonperforming loans, compared to $20.3 million, or 1.00% of total loans
and 315.6% of nonperforming loans at December 31, 2023. At June 30, 2024, nonperforming loans totaled $5.8 million, or 0.29% of total
loans, compared to $6.4 million, or 0.32% of total loans, at December 31, 2023. Total delinquent loans decreased $449,000, or 7.4%, from
$6.0 million, or 0.30% of total loans, at December 31, 2023 to $5.6 million, or 0.27% of total loans, at June 30, 2024. At June 30, 2024
and December 31, 2023, the Company did not have any other real estate owned.
Net Interest Margin
The net interest margin was 2.42% for the
three months ended June 30, 2024 compared to 2.57% for the three months ended March 31, 2024. The net interest margin, on a tax-equivalent
basis, was 2.44% for the three months ended June 30, 2024, compared to 2.59% for the three months ended March 31, 2024.
Stock Repurchase Program
On June 10, 2024, the Company announced the
completion of its previously authorized stock repurchase plan (the “2022 Plan”) pursuant to which the Company was authorized
to repurchase up to 1.1 million shares, or approximately 5% of its outstanding common stock, as of the date the 2022 Plan was adopted.
On May 22, 2024, the Board of Directors authorized a new stock repurchase plan (the “2024 Plan”) under which the Company may
repurchase up to 1.0 million shares, or approximately 4.6%, of the Company’s outstanding shares of common stock. During the three
months ended June 30, 2024, the Company repurchased 206,600 shares of common stock under the 2022 Plan, with an average price per share
of $6.64 and 63,241 shares of common stock under the 2024 Plan, with an average price per share of $6.57. During the six months ended
June 30, 2024, the Company repurchased 469,841 shares of common stock with an average price per share of $7.32. As of June 30, 2024, there
were 936,759 shares of common stock available for repurchase under the 2024 Plan.
The table below breaks out the shares repurchased
under the 2022 Plan and 2024 Plan for the period noted:
| |
Shares
Repurchased | |
Price per
Share | |
Shares Available
Under Plan(s) |
Three months ended March 31, 2024: | |
| |
| |
|
2022 Plan | |
| 200,000 | | |
$ | 8.26 | | |
| 206,600 | |
| |
| | | |
| | | |
| | |
Three months ended June 30, 2024: | |
| | | |
| | | |
| | |
2022 Plan | |
| 206,600 | | |
$ | 6.64 | | |
| — | |
2024 Plan | |
| 63,241 | | |
| 6.57 | | |
| 936,759 | |
Total | |
| 269,841 | | |
$ | 6.62 | | |
| 936,759 | |
Total for the six months ended June 30, 2024: | |
| 469,841 | | |
$ | 7.32 | | |
| 936,759 | |
The repurchase of shares under the stock
repurchase program is administered through an independent broker. The shares of common stock repurchased under the 2024 Plan have been
and will continue to be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions,
or otherwise, depending upon market conditions. There is no guarantee as to the exact number, or value, of shares that will be repurchased
by the Company, and the Company may discontinue repurchases at any time that the Company’s management (“Management”)
determines additional repurchases are not warranted. The timing and amount of additional share repurchases under the 2024 Plan will depend
on a number of factors, including the Company’s stock price performance, ongoing capital planning considerations, general market
conditions, and applicable legal requirements.
Book Value and Tangible Book Value
The Company’s book value per share
was $11.07 at June 30, 2024 compared to $10.96 at December 31, 2023, while tangible book value per share, a non-GAAP financial measure,
increased $0.11, or 1.1%, from $10.30 at December 31, 2023 to $10.41 at June 30, 2024. See pages 18-20 for the related tangible book value
calculation and a reconciliation of GAAP to non-GAAP financial measures.
Net Income for the Three Months Ended
June 30, 2024 Compared to the Three Months Ended March 31, 2024
The Company reported net income of $3.5 million,
or $0.17 per diluted share, for the three months ended June 30, 2024, compared to net income of $3.0 million, or $0.14 per diluted share,
for the three months ended March 31, 2024. Net interest income decreased $876,000, or 5.7%, the reversal of credit losses decreased $256,000,
or 46.5%, non-interest income increased $1.2 million, or 43.4%, and non-interest expense decreased $468,000, or 3.2%. Return on average
assets and return on average equity were 0.55% and 6.03%, respectively, for the three months ended June 30, 2024, compared to 0.47% and
5.04%, respectively, for the three months ended March 31, 2024.
Net Interest Income and Net Interest Margin
On a sequential quarter basis, net interest
income, our primary driver of revenues, decreased $876,000, or 5.7%, to $14.5 million for the three months ended June 30, 2024, from $15.3
million for the three months ended March 31, 2024. The decrease in net interest income was primarily due to an increase in interest expense
of $1.1 million, or 9.5%, partially offset by an increase in interest income of $198,000, or 0.7%. The increase in interest expense was
a result of competitive pricing on deposits due to the continued high interest rate environment and the unfavorable shift in the deposit
mix from low cost core deposits to high cost time deposits.
The net interest margin was 2.42%, for the
three months ended June 30, 2024, compared to 2.57% for the three months ended March 31, 2024. The net interest margin, on a tax-equivalent
basis, was 2.44% for the three months ended June 30, 2024, compared to 2.59% for the three months ended March 31, 2024. The decrease in
the net interest margin was primarily due to an increase in the average cost of interest-bearing liabilities, which was partially offset
by an increase in the average yield on interest-earning assets.
The average yield on interest-earning assets,
without the impact of tax-equivalent adjustments, was 4.49% for the three months ended June 30, 2024, compared to 4.45% for the three
months ended March 31, 2024. The average loan yield, without the impact of tax-equivalent adjustments, was 4.85% for the three months
ended June 30, 2024, compared to 4.82% for the three months ended March 31, 2024. During the three months ended June 30, 2024, average
interest-earning assets decreased $2.5 million, or 0.1% to $2.4 billion, primarily due to an decrease in average loans of $4.6 million,
or 0.2% and a decrease in average securities of $4.6 million, or 1.3%, partially offset by an increase in short-term investments, consisting
of cash and cash equivalents, of $4.9 million, or 52.7%, and an increase in average other investments of $1.8 million, or 14.7%.
The average cost of total funds, including
non-interest bearing accounts and borrowings, increased 19 basis points from 1.97% for the three months ended March 31, 2024 to 2.16%
for the three months ended June 30, 2024. The average cost of core deposits, which the Company defines as all deposits except time deposits,
increased 11 basis points to 0.87% for the three months ended June 30, 2024, from 0.76% for the three months ended March 31, 2024. The
average cost of time deposits increased 27 basis points from 4.12% for the three months ended March 31, 2024 to 4.39% for the three months
ended June 30, 2024. The average cost of borrowings, including subordinated debt, increased nine basis points from 4.91% for the three
months ended March 31, 2024 to 5.00% for the three months ended June 30, 2024. Average demand deposits, an interest-free source of funds,
decreased $8.9 million, or 1.6%, from $557.7 million, or 26.1% of total average deposits, for the three months ended March 31, 2024, to
$548.8 million, or 25.7% of total average deposits, for the three months ended June 30, 2024.
Provision for (Reversal of) Credit Losses
During the three months ended June, 30, 2024,
the Company recorded a reversal of credit losses of $294,000, compared to a reversal for credit losses of $550,000 during the three months
ended March 31, 2024. The provision for credit losses includes a $430,000 reversal of credit losses on loans and a $136,000 provision
for unfunded commitments, primarily due to the impact of increased unfunded loan commitments. Total unfunded loan commitments increased
$11.9 million, or 7.9%, to $161.8 million at June 30, 2024 from $149.9 million at March 31, 2024. The increase was primarily
due to changes in the economic environment and related adjustments to the quantitative components of the CECL methodology. The provision
for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio,
changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the
Federal Reserve’s actions to control inflation. Management continues to monitor macroeconomic variables related to increasing interest
rates, inflation and the concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
During the three months ended June 30, 2024,
the Company recorded net charge-offs of $10,000, compared to net recoveries of $67,000, for the three months ended March 31, 2024.
Non-Interest Income
On a sequential quarter basis, non-interest
income increased $1.2 million, or 43.4%, to $3.8 million for the three months ended June 30, 2024, from $2.7 million for the three months
ended March 31, 2024. Service charges and fees on deposits increased $122,000, or 5.5%, from the three months ended March 31, 2024 to
$2.3 million for the three months ended June 30, 2024. Income from bank-owned life insurance (“BOLI”) increased $49,000, or
10.8%, from the three months ended March 31, 2024 to $502,000, for the three months ended June 30, 2024. During the three months ended
June 30, 2024, the Company reported a gain on non-marketable equity investments of $987,000 and did not have comparable gains or losses
from non-marketable equity investments during the three months ended March 31, 2024. During the three months ended June 30, 2024, the
Company reported an unrealized gain on marketable equity securities of $4,000, compared to an unrealized gain of $8,000 during the three
months ended March 31, 2024.
Non-Interest Expense
For the three months ended June 30, 2024,
non-interest expense decreased $468,000, or 3.2%, to $14.3 million from $14.8 million for the three months ended March 31, 2024. Salaries
and employee benefits decreased $343,000, or 4.2%, to $7.9 million. Occupancy expense decreased $145,000, or 10.6%, due to a decrease
in snow removal costs of $110,000, software related expenses decreased $133,000, or 19.0%, data processing expense decreased $16,000,
or 1.9%, FDIC insurance expense decreased $87,000, or 21.2%, advertising expense decreased $10,000, or 2.9%, and furniture and equipment
expense decreased $1,000, or 0.2%. Debit card and ATM processing fees increased $91,000, or 16.5%, professional fees increased $12,000,
or 2.1%, and other non-interest expense increased $164,000, or 13.1%, during the same period.
For the three months ended June 30, 2024,
the efficiency ratio was 78.2%, compared to 82.0% for the three months ended March 31, 2024. The decrease in the efficiency ratio was
driven by the gain on non-marketable equity investments of $987,000 recognized during the three months ended June 30, 2024. For the three
months ended June 30, 2024, the adjusted efficiency ratio, a non-GAAP financial measure, was 82.7% compared to 82.0% for the three months
ended March 31, 2024. The increase in the non-GAAP efficiency ratio was driven by lower revenues, defined as the sum of net interest income
and non-interest income, during the three months ended June 30, 2024, compared to the three months ended March 31, 2024. See pages 18-20
for the related ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.
Income Tax Provision
Income tax expense for the three months ended
June 30, 2024 was $771,000, or an effective tax rate of 18.0%, compared to $827,000, or an effective tax rate of 21.8%, for the three
months ended March 31, 2024.
Net Income for the Three Months Ended
June 30, 2024 Compared to the Three Months Ended June 30, 2023.
The Company reported net income of $3.5 million,
or $0.17 per diluted share, for the three months ended June 30, 2024, compared to net income of $2.8 million, or $0.13 per diluted share,
for the three months ended June 30, 2023. Net interest income decreased $2.4 million, or 14.1%, non-interest income increased $2.2 million,
non-interest expense decreased $237,000, or 1.6%, and provision for credit losses decreased $714,000, during the same period. Return on
average assets and return on average equity were 0.55% and 6.03%, respectively, for the three months ended June 30, 2024, compared to
0.43% and 4.72%, respectively, for the three months ended June 30, 2023.
Net Interest Income and Net Interest Margin
Net interest income decreased $2.4 million,
or 14.1%, to $14.5 million, for the three months ended June 30, 2024, from $16.8 million for the three months ended June 30, 2023. The
decrease in net interest income was due to an increase in interest expense of $4.4 million, or 54.9%, partially offset by an increase
in interest and dividend income of $2.0 million, or 8.0%. Interest expense on deposits increased $4.3 million, or 70.3%, and interest
expense on borrowings increased $103,000, or 5.4%. The increase in interest expense was a result of competitive pricing on deposits due
to the continued higher interest rate environment and the unfavorable shift in the deposit mix from low cost core deposits to high cost
time deposits.
The net interest margin was 2.42% for the
three months ended June 30, 2024, compared to 2.81% for the three months ended June 30, 2023. The net interest margin, on a tax-equivalent
basis, was 2.44% for the three months ended June 30, 2024, compared to 2.83% for the three months ended June 30, 2023. The decrease in
the net interest margin was primarily due to an increase in the average cost of interest-bearing liabilities and the unfavorable shift
in the deposit mix from low cost core deposits to high cost time deposits, which was partially offset by an increase in the average yield
on interest-earning assets.
The average yield on interest-earning assets,
without the impact of tax-equivalent adjustments, was 4.49% for the three months ended June 30, 2024, compared to 4.14% for the three
months ended June 30, 2023. The average loan yield, without the impact of tax-equivalent adjustments, was 4.85% for the three months ended
June 30, 2024, compared to 4.49% for the three months ended June 30, 2023. During the three months ended June 30, 2024, average interest-earning
assets decreased $4.4 million, or 0.2% to $2.4 billion, primarily due to a decrease in average securities of $19.7 million, or 5.3%, partially
offset by an increase in average loans of $10.2 million, or 0.5%, an increase in short-term investments, consisting of cash and cash equivalents,
of $4.0 million, or 38.8%, and an increase in average other investments of $1.0 million, or 7.5%.
The average cost of total funds, including
non-interest bearing accounts and borrowings, increased 77 basis points from 1.39% for the three months ended June 30, 2023 to 2.16% for
the three months ended June 30, 2024. The average cost of core deposits, which the Company defines as all deposits except time deposits,
increased 23 basis points to 0.87% for the three months ended June 30, 2024, from 0.64% for the three months ended June 30, 2023. The
average cost of time deposits increased 165 basis points from 2.74% for the three months ended June 30, 2023 to 4.39% for the three months
ended June 30, 2024. The average cost of borrowings, including subordinated debt, increased 12 basis points from 4.88% for the three months
ended June 30, 2023 to 5.00% for the three months ended June 30, 2024. Average demand deposits, an interest-free source of funds, decreased
$42.7 million, or 7.2%, from $591.4 million, or 27.6% of total average deposits, for the three months ended June 30, 2023, to $548.8 million,
or 25.7% of total average deposits, for the three months ended June 30, 2024.
Provision for (Reversal of) Credit Losses
During the three months ended June, 30, 2024,
the Company recorded a reversal of credit losses of $294,000, compared to a provision for credit losses of $420,000, during the three
months ended June 30, 2023. The decrease was primarily due to changes in the economic environment and related adjustments to the quantitative
components of the CECL methodology. The provision for credit losses was determined by a number of factors: the continued strong credit
performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing
economic conditions and the economic outlook from the Federal Reserve’s actions to control inflation. Management continues to monitor
macroeconomic variables related to increasing interest rates, inflation and the concerns of an economic downturn, and believes it is appropriately
reserved for the current economic environment.
The Company recorded net charge-offs of $10,000
for the three months ended June 30, 2024, as compared to net recoveries of $25,000 for the three months ended June 30, 2023.
Non-Interest Income
Non-interest income increased $2.2 million,
or 140.8%, to $3.8 million for the three months ended June 30, 2024, from $1.6 million for the three months ended June 30, 2023. During
the three months ended June 30, 2024, service charges and fees on deposits increased $100,000, or 4.5%, income from BOLI increased $8,000,
or 1.6%, from $494,000 for the three months ended June 30, 2023 to $502,000 for the three months ended June 30, 2024. During the three
months ended June 30, 2024, the Company reported an unrealized gain on marketable equity securities of $4,000. The Company did not have
comparable gains or losses during the same period in 2023. During the three months ended June 30, 2024, the Company reported a gain of
$987,000 on non-marketable equity investments and did not have comparable gains or losses during the same period in 2023. During the three
months ended June 30, 2023, the Company recorded a non-recurring final termination expense of $1.1 million related to the defined benefit
pension plan (the “DB Plan”) termination.
Non-Interest Expense
For the three months ended June 30, 2024,
non-interest expense decreased $237,000, or 1.6%, to $14.3 million from $14.6 million, for the three months ended June 30, 2023. The decrease
in non-interest expense was due to a decrease in professional fees of $222,000, or 27.6%, a decrease in salaries and benefits of $188,000,
or 2.3%, a decrease in other non-interest expense of $75,000, or 5.1%, and a decrease in furniture and equipment expense of $9,000, or
1.8%. These decreases were partially offset by an increase in debit card and ATM processing fees of $115,000, or 21.8%, an increase in
data processing expense of $54,000, or 6.8%, an increase in software expense of $40,000, or 7.6%, an increase in FDIC insurance expense
of $33,000, or 11.4%, and an increase in occupancy expense of $15,000, or 1.2%.
For the three months ended June 30, 2024,
the efficiency ratio was 78.2%, compared to 78.9% for the three months ended June 30, 2023. For the three months ended June 30, 2024,
the adjusted efficiency ratio, a non-GAAP financial measure, was 82.7% compared to 74.3% for the three months ended June 30, 2023. The
adjusted efficiency ratio increase was driven by lower revenues, defined as the sum of net interest income and non-interest income, during
the three months ended June 30, 2024 compared to the three months ended June 30, 2023. See pages 18-20 for the related ratio calculation
and a reconciliation of GAAP to non-GAAP financial measures.
Income Tax Provision
Income tax expense for the three months ended
June 30, 2024 was $771,000, or an effective tax rate of 18.0%, compared to $704,000, or an effective tax rate of 20.3%, for the three
months ended June 30, 2023.
Net Income for the Six Months Ended June
30, 2024 Compared to the Six Months Ended June 30, 2023
For the six months ended June 30, 2024, the
Company reported net income of $6.5 million, or $0.31 per diluted share, compared to $8.1 million, or $0.37 per diluted share, for the
six months ended June 30, 2023. Return on average assets and return on average equity were 0.51% and 5.53% for the six months ended June
30, 2024, respectively, compared to 0.64% and 6.98% for the six months ended June 30, 2023, respectively.
Net Interest Income and Net Interest Margin
During the six months ended June 30, 2024,
net interest income decreased $5.5 million, or 15.7%, to $29.8 million, compared to $35.4 million for the six months ended June 30, 2023.
The decrease in net interest income was due to an increase in interest expense of $10.5 million, or 80.1%, partially offset by an increase
in interest and dividend income of $5.0 million, or 10.2%. The $10.5 million, or 80.1%, increase in interest expense was primarily due
to an increase in interest expense on deposits of $9.5 million, or 93.0%.
The net interest margin for the six months
ended June 30, 2024 was 2.50%, compared to 2.97% during the six months ended June 30, 2023. The net interest margin, on a tax-equivalent
basis, was 2.52% for the six months ended June 30, 2024, compared to 2.99% for the six months ended June 30, 2023. The decrease in the
net interest margin was primarily due to an increase in the average cost of interest-bearing liabilities and the unfavorable shift in
the deposit mix from low cost core to high cost time deposits, which was partially offset by an increase in the average yield on interest-earning
assets.
The average yield on interest-earning assets,
without the impact of tax-equivalent adjustments, was 4.47% for the six months ended June 30, 2024, compared to 4.07% for the six months
ended June 30, 2023. The average loan yield, without the impact of tax-equivalent adjustments, was 4.84% for the six months ended June
30, 2024, compared to 4.41% for the six months ended June 30, 2023. During the six months ended June 30, 2024, average interest-earning
assets increased $2.5 million, or 0.1%, to $2.4 billion, from the same period in 2023. The increase was primarily due to an increase in
average loans of $19.4 million, or 1.0%, and an increase in average short-term investments, consisting of cash and cash equivalents, of
$3.7 million, or 45.8%, partially offset by a decrease in average securities of $21.3 million, or 5.6%.
The average cost of total funds, including
non-interest bearing accounts and borrowings, increased 92 basis points from 1.15% for the six months ended June 30, 2023 to 2.07% for
the six months ended June 30, 2024. The average cost of core deposits, which the Company defines as all deposits except time deposits,
increased 24 basis points to 0.82% for the six months ended June 30, 2024, from 0.58% for the six months ended June 30, 2023. The average
cost of time deposits increased 199 basis points from 2.27% for the six months ended June 30, 2023 to 4.26% for the six months ended June
30, 2024. The average cost of borrowings, including subordinated debt, increased 10 basis points from 4.86% for the six months ended June
30, 2023 to 4.96% for the six months ended June 30, 2024. Average demand deposits, an interest-free source of funds, decreased $61.9 million,
or 10.1%, from $615.2 million, or 28.3% of total average deposits, for the six months ended June 30, 2023, to $553.2 million, or 25.9%
of total average deposits, for the six months ended June 30, 2024.
Provision for (Reversal of) Credit Losses
During the six months ended June 30, 2024,
the Company recorded a reversal of credit losses of $844,000, compared to a provision for credit losses of $32,000 during the six months
ended June 30, 2023. The decrease was primarily due to changes in the loan mix as well as economic environment and related adjustments
to the quantitative components of the CECL methodology. The provision for credit losses was determined by a number of factors: the continued
strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration
of existing economic conditions and the economic outlook from the Federal Reserve’s actions to control inflation. Management continues
to monitor macroeconomic variables related to increasing interest rates, inflation and the concerns of an economic downturn, and believes
it is appropriately reserved for the current economic environment.
The Company recorded net recoveries of $57,000
for the six months ended June 30, 2024, as compared to net charge-offs of $1.8 million for the six months ended June 30, 2023.
Non-Interest Income
For the six months ended June 30, 2024, non-interest
income increased $1.9 million, or 42.4%, from $4.6 million during the six months ended June 30, 2023 to $6.5 million. During the same
period, service charges and fees on deposits increased $132,000, or 3.0%, and income from BOLI increased $21,000, or 2.2%. During the
six months ended June 30, 2024, the Company reported a gain of $987,000 on non-marketable equity investments, compared to a gain of $352,000,
during the six months ended June 30, 2023. During the six months ended June 30, 2024, the Company reported a loss on the disposal of premises
and equipment of $6,000 and did not have a comparable gain or loss during the six months ended June 30, 2023. In addition, during the
six months ended June 30, 2024, the Company reported unrealized gains on marketable equity securities of $12,000, and did not have comparable
gains or losses during the six months ended June 30, 2023. Gains and losses from the investment portfolio vary from quarter to quarter
based on market conditions, as well as the related yield curve and valuation changes. During the six months ended June 30, 2023, the Company
recorded a $1.1 million final termination expense related to the DB Plan termination. The Company did not have comparable income or expense
during the six months ended June 30, 2024.
Non-Interest Expense
For the six months ended June 30, 2024, non-interest
expense decreased $351,000, or 1.2%, to $29.1 million, compared to $29.4 million for the six months ended June 30, 2023. The decrease
in non-interest expense was primarily due to a decrease in professional fees of $410,000, or 26.3%, a decrease in salaries and employee
benefits of $375,000, or 2.3%, a decrease in other non-interest expense of $173,000, or 6.1%, a decrease in advertising expense of $68,000,
or 9.0%, and a decrease in furniture and equipment expense of $11,000, or 1.1%. These decreases were partially offset by an increase in
software related expense of $225,000, or 21.7%, an increase in debit card and ATM processing fees of $177,000, or 17.4%, an increase in
data processing expense of $163,000, or 10.6%, an increase in FDIC insurance expense of $91,000, or 14.2%, and an increase in occupancy
expense of $30,000, or 1.2%. During the six months ended June 30, 2023, other non-interest expense included $154,000 in expense related
to the DB Plan termination.
For the six months ended June 30, 2024, the
efficiency ratio was 80.1%, compared to 73.8% for the six months ended June 30, 2023. For the six months ended June 30, 2024, the adjusted
efficiency ratio, a non-GAAP financial measure, was 82.4%, compared to 72.3% for the six months ended June 30, 2023. The increase in the
efficiency ratio and the adjusted efficiency ratio was driven by lower revenues, defined as the sum of net interest income and non-interest
income, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The adjusted efficiency ratio is a
non-GAAP measure. See pages 18-20 for the related efficiency ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.
Income Tax Provision
Income tax expense for the six months ended
June 30, 2024 was $1.6 million, representing an effective tax rate of 19.8%, compared to $2.4 million, representing an effective tax rate
of 22.7%, for six months ended June 30, 2023, due to lower projected pre-tax income for the twelve months ended December 31, 2024.
Balance Sheet
At June 30, 2024, total assets were $2.6
billion, an increase of $21.5 million, or 0.8%, from December 31, 2023. The increase in total assets was primarily due to an increase
in cash and cash equivalents of $24.6 million, or 85.4%, partially offset by a decrease in investment securities of $7.7 million, or 2.1%,
and a decrease in total loans of $1.1 million, or 0.1%.
Investments
At June 30, 2024, the investment securities
portfolio totaled $353.0 million, or 13.6% of total assets, compared to $360.7 million, or 14.1%, of total assets, at December 31, 2023.
At June 30, 2024, the Company’s available-for-sale (“AFS”) securities portfolio, recorded at fair market value, decreased
$2.0 million, or 1.5%, from $137.1 million at December 31, 2023 to $135.1 million. The held-to-maturity (“HTM”) securities
portfolio, recorded at amortized cost, decreased $5.8 million, or 2.6%, from $223.4 million at December 31, 2023 to $217.6 million at
June 30, 2024.
At June 30, 2024, the Company reported unrealized
losses on the AFS securities portfolio of $31.7 million, or 19.0% of the amortized cost basis of the AFS securities portfolio, compared
to unrealized losses of $29.2 million, or 17.5% of the amortized cost basis of the AFS securities at December 31, 2023. At June 30, 2024,
the Company reported unrealized losses on the HTM securities portfolio of $40.2 million, or 18.5%, of the amortized cost basis of the
HTM securities portfolio, compared to $35.7 million, or 16.0% of the amortized cost basis of the HTM securities portfolio at December
31, 2023.
The securities in which the Company may invest
are limited by regulation. Federally chartered savings banks have authority to invest in various types of assets, including U.S. Treasury
obligations, securities of various government-sponsored enterprises, mortgage-backed securities, certain certificates of deposit of insured
financial institutions, repurchase agreements, overnight and short-term loans to other banks, corporate debt instruments and marketable
equity securities. The securities, with the exception of $4.3 million in corporate bonds, are issued by the United States government or
government-sponsored enterprises and are therefore either explicitly or implicitly guaranteed as to the timely payment of contractual
principal and interest. These positions are deemed to have no credit impairment, therefore, the disclosed unrealized losses with the securities
portfolio relate primarily to changes in prevailing interest rates. In all cases, price improvement in future periods will be realized
as the issuances approach maturity.
Management regularly reviews the portfolio
for securities in an unrealized loss position. At June 30, 2024 and December 31, 2023, the Company did not record any credit impairment
charges on its securities portfolio and attributed the unrealized losses primarily due to fluctuations in general interest rates or changes
in expected prepayments and not due to credit quality. The primary objective of the Company’s investment portfolio is to provide
liquidity and to secure municipal deposit accounts while preserving the safety of principal. The Company expects to strategically redeploy
available cash flows from the securities portfolio to fund loan growth and deposit outflows.
Total Loans
At June 30, 2024, total loans decreased $1.1
million, or 0.1%, from December 31, 2023, to $2.0 billion. Commercial real estate loans decreased $23.2 million, or 2.1%, commercial and
industrial loans decreased $1.1 million, or 0.5%, while residential real estate loans, including home equity loans, increased $23.8 million,
or 3.3%.
The following table presents the summary of the loan portfolio by the major
classification of the loan at the periods indicated:
| |
June 30, 2024 | |
December 31, 2023 |
| |
(Dollars in thousands) |
| |
|
Commercial real estate loans: | |
| |
|
Non-owner occupied | |
$ | 864,603 | | |
$ | 881,643 | |
Owner-occupied | |
| 191,936 | | |
| 198,108 | |
Total commercial real estate loans | |
| 1,056,539 | | |
| 1,079,751 | |
| |
| | | |
| | |
Residential real estate loans: | |
| | | |
| | |
Residential | |
| 631,997 | | |
| 612,315 | |
Home equity | |
| 113,970 | | |
| 109,839 | |
Total residential real estate loans | |
| 745,967 | | |
| 722,154 | |
| |
| | | |
| | |
Commercial and industrial loans | |
| 216,300 | | |
| 217,447 | |
| |
| | | |
| | |
Consumer loans | |
| 4,715 | | |
| 5,472 | |
Total gross loans | |
| 2,023,521 | | |
| 2,024,824 | |
Unamortized premiums and net deferred loans fees and costs | |
| 2,705 | | |
| 2,493 | |
Total loans | |
$ | 2,026,226 | | |
$ | 2,027,317 | |
Credit Quality
Management continues to closely monitor the
loan portfolio for any signs of deterioration in borrowers’ financial condition and also in light of speculation that commercial
real estate values may deteriorate as the market continues to adjust to higher vacancies and interest rates. We continue to proactively
take steps to mitigate risk in our loan portfolio.
Total delinquency was $5.6 million, or 0.27%
of total loans, at June 30, 2024, compared to $6.0 million, or 0.30% of total loans at December 31, 2023. At June 30, 2024, nonperforming
loans totaled $5.8 million, or 0.29% of total loans, compared to $6.4 million, or 0.32% of total loans, at December 31, 2023. Total nonperforming
assets totaled $5.8 million, or 0.23% of total assets, at June 30, 2024, compared to $6.4 million, or 0.25% of total assets, at December
31, 2023. At June 30, 2024 and December 31, 2023, there were no loans 90 or more days past due and still accruing interest. At June 30,
2024 and December 31, 2023, the Company did not have any other real estate owned.
At June 30, 2024, the allowance for credit
losses as a percentage of total loans was 0.96%, compared to 1.00% at December 31, 2023. At June 30, 2024, the allowance for credit losses
as a percentage of nonperforming loans was 332.7%, compared to 315.6% at December 31, 2023.
Total classified loans, defined as special
mention and substandard loans, decreased $2.8 million, or 7.1%, from $39.5 million, or 1.9% of total loans, at December 31, 2023 to $36.7
million, or 1.8%, of total loans at June 30, 2024. We continue to maintain diversity among property types and within our geographic footprint.
More details on the diversification of the loan portfolio are available in the supplementary earnings presentation.
Deposits
Total deposits increased $28.1 million, or
1.3%, from $2.1 billion at December 31, 2023 to $2.2 billion at June 30, 2024. Core deposits, which the Company defines as all deposits
except time deposits, decreased $32.3 million, or 2.1%, from $1.5 billion, or 71.5% of total deposits, at December 31, 2023, to $1.5 billion,
or 69.1% of total deposits, at June 30, 2024. Non-interest-bearing deposits decreased $26.3 million, or 4.5%, to $553.3 million, money
market accounts decreased $22.9 million, or 3.6%, to $611.5 million, savings accounts decreased $1.2 million, or 0.7%, to $186.2 million
and interest-bearing checking accounts increased $18.1 million, or 13.8%, to $149.1 million. Time deposits increased $60.3 million, or
9.9%, from $611.4 million at December 31, 2023 to $671.7 million at June 30, 2024. Brokered time deposits, which are included in time
deposits, totaled $1.7 million at June 30, 2024 and December 31, 2023.
The table below is a summary of our deposit balances
for the periods noted:
| |
June 30, 2024 | |
March 31, 2024 | |
December 31, 2023 |
| |
(Dollars in thousands) |
Core Deposits: | |
| |
| |
|
Demand accounts | |
$ | 553,329 | | |
$ | 559,928 | | |
$ | 579,595 | |
Interest-bearing accounts | |
| 149,100 | | |
| 125,377 | | |
| 131,031 | |
Savings accounts | |
| 186,171 | | |
| 190,732 | | |
| 187,405 | |
Money market accounts | |
| 611,501 | | |
| 624,474 | | |
| 634,361 | |
Total Core Deposits | |
$ | 1,500,101 | | |
$ | 1,500,511 | | |
$ | 1,532,392 | |
Time Deposits: | |
| 671,708 | | |
| 643,236 | | |
| 611,352 | |
Total Deposits: | |
$ | 2,171,809 | | |
$ | 2,143,747 | | |
$ | 2,143,744 | |
During the six months ended June 30, 2024,
the Company continued to experience an unfavorable shift in deposit mix from low cost core deposits to high cost time deposits as customers
continue to migrate to higher deposit rates. The Company continues to focus on the maintenance, development, and expansion of its core
deposit base to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term customer relationship base by
competing for and retaining deposits in our local market. At June 30, 2024, the Bank’s uninsured deposits represented 26.4% of total
deposits, compared to 26.8% at December 31, 2023.
FHLB and Subordinated Debt
At June 30, 2024, total borrowings decreased
$1.9 million, or 1.2%, from $156.5 million at December 31, 2023 to $154.6 million. Short-term borrowings decreased $9.5 million, or 59.2%,
to $6.6 million, compared to $16.1 million at December 31, 2023. Long-term borrowings increased $7.7 million, or 6.3%, from $120.6 million
at December 31, 2023 to $128.3 million at June 30, 2024.
The Company utilized the Bank Term Funding Program
(“BTFP”), which was created in March 2023 to enhance banking system liquidity by allowing institutions to pledge certain securities
at par value and borrow at a rate of ten basis points over the one-year overnight index swap rate. The BTFP was available to federally
insured depository institutions in the U.S., with advances having a term of up to one year with no prepayment penalties. The BTFP ceased
extending new advances in March 2024. At December 31, 2023, the Company’s outstanding balance under the BTFP was $90.0 million.
There were no outstanding balance under the BTFP at June 30, 2024.
At June 30, 2024 and December 31, 2023, borrowings
also consisted of $19.7 million in fixed-to-floating rate subordinated notes. As of June 30, 2024, the Company had $437.4 million
of additional borrowing capacity at the Federal Home Loan Bank, $403.8 million of additional borrowing capacity under the Federal Reserve
Bank Discount Window and $25.0 million of other unsecured lines of credit with correspondent banks.
Capital
At June 30, 2024, shareholders’ equity
was $236.5 million, or 9.1% of total assets, compared to $237.4 million, or 9.3% of total assets, at December 31, 2023. The decrease was
primarily attributable to an increase in accumulated other comprehensive loss of $1.9 million, cash dividends paid of $3.0 million, repurchase
of shares at a cost of $3.6 million, partially offset by net income of $6.5 million. At June 30, 2024, total shares outstanding were 21,357,849.
The Company’s regulatory capital ratios
continue to be strong and in excess of regulatory minimum requirements to be considered well-capitalized as defined by regulators and
internal Company targets. Total Risk-Based Capital Ratio was 14.7% at June 30, 2024 and December 31, 2023. The Bank’s Tier
1 Leverage Ratio to adjusted average assets was 9.78% at June 30, 2024 and 9.62% at December 31, 2023.
Dividends
Although the Company has historically paid
quarterly dividends on its common stock and currently intends to continue to pay such dividends, the Company’s ability to pay such
dividends depends on a number of factors, including restrictions under federal laws and regulations on the Company’s ability to
pay dividends, and as a result, there can be no assurance that dividends will continue to be paid in the future.
About Western New England Bancorp, Inc.
Western New England Bancorp, Inc. is a Massachusetts-chartered
stock holding company and the parent company of Westfield Bank, CSB Colts, Inc., Elm Street Securities Corporation, WFD Securities, Inc.
and WB Real Estate Holdings, LLC. Western New England Bancorp, Inc. and its subsidiaries are headquartered in Westfield, Massachusetts
and operate 25 banking offices throughout western Massachusetts and northern Connecticut. To learn more, visit our website at www.westfieldbank.com.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, with respect to the Company’s financial condition, liquidity, results of operations, future performance,
and business. Forward-looking statements 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, estimates with respect to our financial condition, results of operations and business that are subject
to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not
limited to:
• | | unpredictable changes in general economic conditions, financial markets, fiscal, monetary
and regulatory policies, including actual or potential stress in the banking industry; |
• | | the duration and scope of potential pandemics, including the emergence of new variants and
the response thereto; |
• | | unstable political and economic conditions which could materially impact credit quality trends
and the ability to generate loans and gather deposits; |
• | | inflation and governmental responses to inflation, including recent sustained increases and
potential future increases in interest rates that reduce margins; |
• | | the effect on our operations of governmental legislation and regulation, including changes
in accounting regulation or standards, the nature and timing of the adoption and effectiveness of new requirements under the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010, Basel guidelines, capital requirements and other applicable laws and regulations; |
• | | significant changes in accounting, tax or regulatory practices or requirements; |
• | | new legal obligations or liabilities or unfavorable resolutions of litigation; |
• | | disruptive technologies in payment systems and other services traditionally provided by banks; |
• | | the highly competitive industry and market area in which we operate; |
• | | 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, business interruption, and fraud risks; |
• | | failure or circumvention of our internal controls or procedures; |
• | | changes in the securities markets which affect investment management revenues; |
• | | increases in Federal Deposit Insurance Corporation deposit insurance premiums and assessments; |
• | | the soundness of other financial services institutions which may adversely affect our credit
risk; |
• | | certain of our intangible assets may become impaired in the future; |
• | | new lines of business or new products and services, which may subject us to additional risks; |
• | | changes in key management personnel which may adversely impact our operations; |
• | | severe weather, natural disasters, acts of war or terrorism and other external events which
could significantly impact our business; and |
• | | other risk factors detailed from time to time in our SEC filings. |
Although we believe that the expectations reflected
in such forward-looking statements are reasonable, actual results may differ materially from the results discussed in these forward-looking
statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
We do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events, except to the extent required by law.
WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Net Income and Other
Data
(Dollars in thousands, except per share data)
(Unaudited)
| |
Three Months Ended | |
Six Months Ended |
| |
June 30, | |
March 31, | |
December 31, | |
September 30, | |
June 30, | |
June 30, |
| |
2024 | |
2024 | |
2023 | |
2023 | |
2023 | |
2024 | |
2023 |
INTEREST AND DIVIDEND INCOME: | |
| |
| |
| |
| |
| |
| |
|
Loans | |
$ | 24,340 | | |
$ | 24,241 | | |
$ | 23,939 | | |
$ | 23,451 | | |
$ | 22,450 | | |
$ | 48,581 | | |
$ | 43,779 | |
Securities | |
| 2,141 | | |
| 2,114 | | |
| 2,094 | | |
| 2,033 | | |
| 2,094 | | |
| 4,255 | | |
| 4,243 | |
Other investments | |
| 148 | | |
| 136 | | |
| 140 | | |
| 166 | | |
| 146 | | |
| 284 | | |
| 252 | |
Short-term investments | |
| 173 | | |
| 113 | | |
| 597 | | |
| 251 | | |
| 119 | | |
| 286 | | |
| 173 | |
Total interest and dividend income | |
| 26,802 | | |
| 26,604 | | |
| 26,770 | | |
| 25,901 | | |
| 24,809 | | |
| 53,406 | | |
| 48,447 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
INTEREST EXPENSE: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Deposits | |
| 10,335 | | |
| 9,293 | | |
| 8,773 | | |
| 7,704 | | |
| 6,069 | | |
| 19,628 | | |
| 10,172 | |
Short-term borrowings | |
| 186 | | |
| 283 | | |
| 123 | | |
| 117 | | |
| 646 | | |
| 469 | | |
| 1,349 | |
Long-term debt | |
| 1,557 | | |
| 1,428 | | |
| 1,444 | | |
| 1,444 | | |
| 995 | | |
| 2,985 | | |
| 1,069 | |
Subordinated debt | |
| 254 | | |
| 254 | | |
| 254 | | |
| 253 | | |
| 253 | | |
| 508 | | |
| 507 | |
Total interest expense | |
| 12,332 | | |
| 11,258 | | |
| 10,594 | | |
| 9,518 | | |
| 7,963 | | |
| 23,590 | | |
| 13,097 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net interest and dividend income | |
| 14,470 | | |
| 15,346 | | |
| 16,176 | | |
| 16,383 | | |
| 16,846 | | |
| 29,816 | | |
| 35,350 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
(REVERSAL OF) PROVISION FOR CREDIT LOSSES | |
| (294 | ) | |
| (550 | ) | |
| 486 | | |
| 354 | | |
| 420 | | |
| (844 | ) | |
| 32 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net interest and dividend income after (reversal of) provision for credit losses | |
| 14,764 | | |
| 15,896 | | |
| 15,690 | | |
| 16,029 | | |
| 16,426 | | |
| 30,660 | | |
| 35,318 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
NON-INTEREST INCOME: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Service charges and fees on deposits | |
| 2,341 | | |
| 2,219 | | |
| 2,283 | | |
| 2,145 | | |
| 2,241 | | |
| 4,560 | | |
| 4,428 | |
Income from bank-owned life insurance | |
| 502 | | |
| 453 | | |
| 432 | | |
| 454 | | |
| 494 | | |
| 955 | | |
| 934 | |
Unrealized gain (loss) on marketable equity securities | |
| 4 | | |
| 8 | | |
| (1 | ) | |
| — | | |
| — | | |
| 12 | | |
| — | |
Gain on non-marketable equity investments | |
| 987 | | |
| — | | |
| — | | |
| 238 | | |
| — | | |
| 987 | | |
| 352 | |
Loss on disposal of premises and equipment | |
| — | | |
| (6 | ) | |
| — | | |
| (3 | ) | |
| — | | |
| (6 | ) | |
| — | |
Loss on defined benefit plan termination | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,143 | ) | |
| — | | |
| (1,143 | ) |
Gain on bank-owned life insurance death benefit | |
| — | | |
| — | | |
| — | | |
| 778 | | |
| — | | |
| — | | |
| — | |
Total non-interest income | |
| 3,834 | | |
| 2,674 | | |
| 2,714 | | |
| 3,612 | | |
| 1,592 | | |
| 6,508 | | |
| 4,571 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
NON-INTEREST EXPENSE: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Salaries and employees benefits | |
| 7,901 | | |
| 8,244 | | |
| 7,739 | | |
| 7,955 | | |
| 8,089 | | |
| 16,145 | | |
| 16,520 | |
Occupancy | |
| 1,218 | | |
| 1,363 | | |
| 1,198 | | |
| 1,159 | | |
| 1,203 | | |
| 2,581 | | |
| 2,551 | |
Furniture and equipment | |
| 483 | | |
| 484 | | |
| 494 | | |
| 482 | | |
| 492 | | |
| 967 | | |
| 978 | |
Data processing | |
| 846 | | |
| 862 | | |
| 788 | | |
| 824 | | |
| 792 | | |
| 1,708 | | |
| 1,545 | |
Software | |
| 566 | | |
| 699 | | |
| 598 | | |
| 529 | | |
| 526 | | |
| 1,265 | | |
| 1,040 | |
Debit/ATM card processing expense | |
| 643 | | |
| 552 | | |
| 559 | | |
| 562 | | |
| 528 | | |
| 1,195 | | |
| 1,018 | |
Professional fees | |
| 581 | | |
| 569 | | |
| 674 | | |
| 643 | | |
| 803 | | |
| 1,150 | | |
| 1,560 | |
FDIC insurance | |
| 323 | | |
| 410 | | |
| 338 | | |
| 341 | | |
| 290 | | |
| 733 | | |
| 642 | |
Advertising | |
| 339 | | |
| 349 | | |
| 377 | | |
| 362 | | |
| 339 | | |
| 688 | | |
| 756 | |
Other | |
| 1,414 | | |
| 1,250 | | |
| 2,020 | | |
| 1,261 | | |
| 1,489 | | |
| 2,664 | | |
| 2,837 | |
Total non-interest expense | |
| 14,314 | | |
| 14,782 | | |
| 14,785 | | |
| 14,118 | | |
| 14,551 | | |
| 29,096 | | |
| 29,447 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
INCOME BEFORE INCOME TAXES | |
| 4,284 | | |
| 3,788 | | |
| 3,619 | | |
| 5,523 | | |
| 3,467 | | |
| 8,072 | | |
| 10,442 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
INCOME TAX PROVISION | |
| 771 | | |
| 827 | | |
| 1,108 | | |
| 1,033 | | |
| 704 | | |
| 1,598 | | |
| 2,375 | |
NET INCOME | |
$ | 3,513 | | |
$ | 2,961 | | |
$ | 2,511 | | |
$ | 4,490 | | |
$ | 2,763 | | |
$ | 6,474 | | |
$ | 8,067 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic earnings per share | |
$ | 0.17 | | |
$ | 0.14 | | |
$ | 0.12 | | |
$ | 0.21 | | |
$ | 0.13 | | |
$ | 0.31 | | |
$ | 0.37 | |
Weighted average shares outstanding | |
| 21,056,173 | | |
| 21,180,968 | | |
| 21,253,452 | | |
| 21,560,940 | | |
| 21,634,683 | | |
| 21,118,571 | | |
| 21,666,713 | |
Diluted earnings per share | |
$ | 0.17 | | |
$ | 0.14 | | |
$ | 0.12 | | |
$ | 0.21 | | |
$ | 0.13 | | |
$ | 0.31 | | |
$ | 0.37 | |
Weighted average diluted shares outstanding | |
| 21,163,762 | | |
| 21,271,323 | | |
| 21,400,664 | | |
| 21,680,113 | | |
| 21,648,235 | | |
| 21,217,543 | | |
| 21,682,402 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Other Data: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Return on average assets (1) | |
| 0.55 | % | |
| 0.47 | % | |
| 0.39 | % | |
| 0.70 | % | |
| 0.43 | % | |
| 0.51 | % | |
| 0.64 | % |
Return on average equity (1) | |
| 6.03 | % | |
| 5.04 | % | |
| 4.31 | % | |
| 7.60 | % | |
| 4.72 | % | |
| 5.53 | % | |
| 6.98 | % |
Efficiency ratio | |
| 78.20 | % | |
| 82.03 | % | |
| 78.27 | % | |
| 70.61 | % | |
| 78.92 | % | |
| 80.10 | % | |
| 73.76 | % |
Adjusted efficiency ratio (2) | |
| 82.68 | % | |
| 82.04 | % | |
| 78.26 | % | |
| 74.38 | % | |
| 74.31 | % | |
| 82.35 | % | |
| 72.33 | % |
Net interest margin | |
| 2.42 | % | |
| 2.57 | % | |
| 2.64 | % | |
| 2.70 | % | |
| 2.81 | % | |
| 2.50 | % | |
| 2.97 | % |
Net interest margin, on a fully tax-equivalent basis | |
| 2.44 | % | |
| 2.59 | % | |
| 2.66 | % | |
| 2.72 | % | |
| 2.83 | % | |
| 2.52 | % | |
| 2.99 | % |
(2) | | The adjusted efficiency ratio (non-GAAP) represents the ratio of operating expenses divided
by the sum of net interest and dividend income and non-interest income, excluding realized and unrealized gains and losses on securities,
gain on non-marketable equity investments, loss on disposal of premises and equipment, and loss on defined benefit plan termination. |
WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
| |
June 30, | |
March 31, | |
December 31, | |
September 30, | |
June 30, |
| |
2024 | |
2024 | |
2023 | |
2023 | |
2023 |
Cash and cash equivalents | |
$ | 53,458 | | |
$ | 22,613 | | |
$ | 28,840 | | |
$ | 62,267 | | |
$ | 31,689 | |
Securities available-for-sale, at fair value | |
| 135,089 | | |
| 138,362 | | |
| 137,115 | | |
| 130,709 | | |
| 141,481 | |
Securities held to maturity, at amortized cost | |
| 217,632 | | |
| 221,242 | | |
| 223,370 | | |
| 225,020 | | |
| 222,900 | |
Marketable equity securities, at fair value | |
| 233 | | |
| 222 | | |
| 196 | | |
| — | | |
| — | |
Federal Home Loan Bank of Boston and other restricted stock - at cost | |
| 7,143 | | |
| 3,105 | | |
| 3,707 | | |
| 3,063 | | |
| 3,226 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Loans | |
| 2,026,226 | | |
| 2,025,566 | | |
| 2,027,317 | | |
| 2,014,820 | | |
| 2,015,593 | |
Allowance for credit losses | |
| (19,444 | ) | |
| (19,884 | ) | |
| (20,267 | ) | |
| (19,978 | ) | |
| (19,647 | ) |
Net loans | |
| 2,006,782 | | |
| 2,005,682 | | |
| 2,007,050 | | |
| 1,994,842 | | |
| 1,995,946 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Bank-owned life insurance | |
| 76,100 | | |
| 75,598 | | |
| 75,145 | | |
| 74,713 | | |
| 75,554 | |
Goodwill | |
| 12,487 | | |
| 12,487 | | |
| 12,487 | | |
| 12,487 | | |
| 12,487 | |
Core deposit intangible | |
| 1,625 | | |
| 1,719 | | |
| 1,813 | | |
| 1,906 | | |
| 2,000 | |
Other assets | |
| 75,521 | | |
| 76,206 | | |
| 74,848 | | |
| 79,998 | | |
| 77,001 | |
TOTAL ASSETS | |
$ | 2,586,070 | | |
$ | 2,557,236 | | |
$ | 2,564,571 | | |
$ | 2,585,005 | | |
$ | 2,562,284 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total deposits | |
$ | 2,171,809 | | |
$ | 2,143,747 | | |
$ | 2,143,744 | | |
$ | 2,176,303 | | |
$ | 2,157,974 | |
Short-term borrowings | |
| 6,570 | | |
| 11,470 | | |
| 16,100 | | |
| 8,890 | | |
| 7,190 | |
Long-term debt | |
| 128,277 | | |
| 120,646 | | |
| 120,646 | | |
| 121,178 | | |
| 121,178 | |
Subordinated debt | |
| 19,731 | | |
| 19,722 | | |
| 19,712 | | |
| 19,702 | | |
| 19,692 | |
Securities pending settlement | |
| 102 | | |
| — | | |
| 140 | | |
| 2,253 | | |
| — | |
Other liabilities | |
| 23,104 | | |
| 25,855 | | |
| 26,820 | | |
| 25,765 | | |
| 22,252 | |
TOTAL LIABILITIES | |
| 2,349,593 | | |
| 2,321,440 | | |
| 2,327,162 | | |
| 2,354,091 | | |
| 2,328,286 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
TOTAL SHAREHOLDERS' EQUITY | |
| 236,477 | | |
| 235,796 | | |
| 237,409 | | |
| 230,914 | | |
| 233,998 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | |
$ | 2,586,070 | | |
$ | 2,557,236 | | |
$ | 2,564,571 | | |
$ | 2,585,005 | | |
$ | 2,562,284 | |
WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
Other Data
(Dollars in thousands, except per share data)
(Unaudited)
| |
Three
Months Ended |
| |
June
30, | |
March
31, | |
December
31, | |
September
30, | |
June
30, |
| |
2024 | |
2024 | |
2023 | |
2023 | |
2023 |
Shares
outstanding at end of period | |
| 21,357,849 | | |
| 21,627,690 | | |
| 21,666,807 | | |
| 21,927,242 | | |
| 22,082,403 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Operating
results: | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
interest income | |
$ | 14,470 | | |
$ | 15,346 | | |
$ | 16,176 | | |
$ | 16,383 | | |
$ | 16,846 | |
(Reversal
of) provision for credit losses | |
| (294 | ) | |
| (550 | ) | |
| 486 | | |
| 354 | | |
| 420 | |
Non-interest
income | |
| 3,834 | | |
| 2,674 | | |
| 2,714 | | |
| 3,612 | | |
| 1,592 | |
Non-interest
expense | |
| 14,314 | | |
| 14,782 | | |
| 14,785 | | |
| 14,118 | | |
| 14,551 | |
Income
before income provision for income taxes | |
| 4,284 | | |
| 3,788 | | |
| 3,619 | | |
| 5,523 | | |
| 3,467 | |
Income
tax provision | |
| 771 | | |
| 827 | | |
| 1,108 | | |
| 1,033 | | |
| 704 | |
Net
income | |
| 3,513 | | |
| 2,961 | | |
| 2,511 | | |
| 4,490 | | |
| 2,763 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Performance
Ratios: | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
interest margin | |
| 2.42 | % | |
| 2.57 | % | |
| 2.64 | % | |
| 2.70 | % | |
| 2.81 | % |
Net
interest margin, on a fully tax-equivalent basis | |
| 2.44 | % | |
| 2.59 | % | |
| 2.66 | % | |
| 2.72 | % | |
| 2.83 | % |
Interest
rate spread | |
| 1.66 | % | |
| 1.85 | % | |
| 1.96 | % | |
| 2.07 | % | |
| 2.27 | % |
Interest
rate spread, on a fully tax-equivalent basis | |
| 1.67 | % | |
| 1.86 | % | |
| 1.98 | % | |
| 2.09 | % | |
| 2.29 | % |
Return
on average assets | |
| 0.55 | % | |
| 0.47 | % | |
| 0.39 | % | |
| 0.70 | % | |
| 0.43 | % |
Return
on average equity | |
| 6.03 | % | |
| 5.04 | % | |
| 4.31 | % | |
| 7.60 | % | |
| 4.72 | % |
Efficiency
ratio (GAAP) | |
| 78.20 | % | |
| 82.03 | % | |
| 78.27 | % | |
| 70.61 | % | |
| 78.92 | % |
Adjusted
efficiency ratio (non-GAAP) (1) | |
| 82.68 | % | |
| 82.04 | % | |
| 78.26 | % | |
| 74.38 | % | |
| 74.31 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Per
Common Share Data: | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic
earnings per share | |
$ | 0.17 | | |
$ | 0.14 | | |
$ | 0.12 | | |
$ | 0.21 | | |
$ | 0.13 | |
Earnings
per diluted share | |
| 0.17 | | |
| 0.14 | | |
| 0.12 | | |
| 0.21 | | |
| 0.13 | |
Cash
dividend declared | |
| 0.07 | | |
| 0.07 | | |
| 0.07 | | |
| 0.07 | | |
| 0.07 | |
Book
value per share | |
| 11.07 | | |
| 10.90 | | |
| 10.96 | | |
| 10.53 | | |
| 10.60 | |
Tangible
book value per share (non-GAAP) (2) | |
| 10.41 | | |
| 10.25 | | |
| 10.30 | | |
| 9.87 | | |
| 9.94 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Asset
Quality: | |
| | | |
| | | |
| | | |
| | | |
| | |
30-89
day delinquent loans | |
$ | 3,270 | | |
$ | 3,000 | | |
$ | 4,605 | | |
$ | 4,097 | | |
$ | 4,092 | |
90
days or more delinquent loans | |
| 2,280 | | |
| 1,716 | | |
| 1,394 | | |
| 1,527 | | |
| 1,324 | |
Total
delinquent loans | |
| 5,550 | | |
| 4,716 | | |
| 5,999 | | |
| 5,624 | | |
| 5,416 | |
Total
delinquent loans as a percentage of total loans | |
| 0.27 | % | |
| 0.23 | % | |
| 0.30 | % | |
| 0.28 | % | |
| 0.27 | % |
Nonperforming
loans | |
$ | 5,845 | | |
$ | 5,837 | | |
$ | 6,421 | | |
$ | 6,290 | | |
$ | 5,755 | |
Nonperforming
loans as a percentage of total loans | |
| 0.29 | % | |
| 0.29 | % | |
| 0.32 | % | |
| 0.31 | % | |
| 0.29 | % |
Nonperforming
assets as a percentage of total assets | |
| 0.23 | % | |
| 0.23 | % | |
| 0.25 | % | |
| 0.24 | % | |
| 0.22 | % |
Allowance
for credit losses as a percentage of nonperforming loans | |
| 332.66 | % | |
| 340.65 | % | |
| 315.64 | % | |
| 317.62 | % | |
| 341.39 | % |
Allowance
for credit losses as a percentage of total loans | |
| 0.96 | % | |
| 0.98 | % | |
| 1.00 | % | |
| 0.99 | % | |
| 0.97 | % |
Net
loan charge-offs (recoveries) | |
$ | 10 | | |
$ | (67 | ) | |
$ | 136 | | |
$ | 78 | | |
$ | (25 | ) |
Net
loan charge-offs (recoveries) as a percentage of average loans | |
| 0.00 | % | |
| 0.00 | % | |
| 0.01 | % | |
| 0.00 | % | |
| 0.00 | % |
(1) |
|
The adjusted efficiency ratio (non-GAAP) represents the ratio of operating expenses divided by the sum of net interest and dividend income and non-interest income, excluding realized and unrealized gains and losses on securities, gain on non-marketable equity investments, loss on disposal of premises and equipment, and loss on defined benefit plan termination. |
(2) |
|
Tangible book value per share (non-GAAP) represents the value of the Company’s tangible assets divided by its current outstanding shares. |
The following table sets forth the information relating to our average
balances and net interest income for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023 and reflects the average yield
on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated.
| |
Three Months Ended |
| |
June 30, 2024 | |
March 31, 2024 | |
June 30, 2023 |
| |
Average | |
| |
Average Yield/ | |
Average | |
| |
Average Yield/ | |
Average | |
| |
Average Yield/ |
| |
Balance | |
Interest | |
Cost(8) | |
Balance | |
Interest | |
Cost(8) | |
Balance | |
Interest | |
Cost(8) |
| |
(Dollars in thousands) |
ASSETS: | |
| |
| |
| |
| |
| |
| |
| |
| |
|
Interest-earning assets | |
| |
| |
| |
| |
| |
| |
| |
| |
|
Loans(1)(2) | |
$ | 2,017,127 | | |
$ | 24,454 | | |
| 4.88 | % | |
$ | 2,021,713 | | |
$ | 24,351 | | |
| 4.84 | % | |
$ | 2,006,909 | | |
$ | 22,572 | | |
| 4.51 | % |
Securities(2) | |
| 354,850 | | |
| 2,141 | | |
| 2.43 | | |
| 359,493 | | |
| 2,114 | | |
| 2.37 | | |
| 374,513 | | |
| 2,094 | | |
| 2.24 | |
Other investments | |
| 14,328 | | |
| 148 | | |
| 4.15 | | |
| 12,494 | | |
| 136 | | |
| 4.38 | | |
| 13,329 | | |
| 146 | | |
| 4.39 | |
Short-term investments(3) | |
| 14,328 | | |
| 173 | | |
| 4.86 | | |
| 9,386 | | |
| 113 | | |
| 4.84 | | |
| 10,326 | | |
| 119 | | |
| 4.62 | |
Total interest-earning assets | |
| 2,400,633 | | |
| 26,916 | | |
| 4.51 | | |
| 2,403,086 | | |
| 26,714 | | |
| 4.47 | | |
| 2,405,077 | | |
| 24,931 | | |
| 4.16 | |
Total non-interest-earning assets | |
| 156,701 | | |
| | | |
| | | |
| 154,410 | | |
| | | |
| | | |
| 154,490 | | |
| | | |
| | |
Total assets | |
$ | 2,557,334 | | |
| | | |
| | | |
$ | 2,557,496 | | |
| | | |
| | | |
$ | 2,559,567 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
LIABILITIES AND EQUITY: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest-bearing liabilities | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest-bearing checking accounts | |
$ | 131,449 | | |
| 253 | | |
| 0.77 | | |
$ | 135,559 | | |
| 234 | | |
| 0.69 | | |
$ | 143,547 | | |
| 248 | | |
| 0.69 | |
Savings accounts | |
| 185,690 | | |
| 51 | | |
| 0.11 | | |
| 186,125 | | |
| 39 | | |
| 0.08 | | |
| 208,983 | | |
| 56 | | |
| 0.11 | |
Money market accounts | |
| 622,062 | | |
| 2,930 | | |
| 1.89 | | |
| 626,267 | | |
| 2,587 | | |
| 1.66 | | |
| 701,116 | | |
| 2,330 | | |
| 1.33 | |
Time deposit accounts | |
| 650,054 | | |
| 7,101 | | |
| 4.39 | | |
| 627,699 | | |
| 6,433 | | |
| 4.12 | | |
| 502,062 | | |
| 3,435 | | |
| 2.74 | |
Total interest-bearing deposits | |
| 1,589,255 | | |
| 10,335 | | |
| 2.62 | | |
| 1,575,650 | | |
| 9,293 | | |
| 2.37 | | |
| 1,555,708 | | |
| 6,069 | | |
| 1.56 | |
Borrowings | |
| 160,484 | | |
| 1,997 | | |
| 5.00 | | |
| 160,802 | | |
| 1,965 | | |
| 4.91 | | |
| 155,826 | | |
| 1,894 | | |
| 4.88 | |
Interest-bearing liabilities | |
| 1,749,739 | | |
| 12,332 | | |
| 2.83 | | |
| 1,736,452 | | |
| 11,258 | | |
| 2.61 | | |
| 1,711,534 | | |
| 7,963 | | |
| 1.87 | |
Non-interest-bearing deposits | |
| 548,781 | | |
| | | |
| | | |
| 557,711 | | |
| | | |
| | | |
| 591,437 | | |
| | | |
| | |
Other non-interest-bearing liabilities | |
| 24,453 | | |
| | | |
| | | |
| 27,078 | | |
| | | |
| | | |
| 21,832 | | |
| | | |
| | |
Total non-interest-bearing liabilities | |
| 573,234 | | |
| | | |
| | | |
| 584,789 | | |
| | | |
| | | |
| 613,269 | | |
| | | |
| | |
Total liabilities | |
| 2,322,973 | | |
| | | |
| | | |
| 2,321,241 | | |
| | | |
| | | |
| 2,324,803 | | |
| | | |
| | |
Total equity | |
| 234,361 | | |
| | | |
| | | |
| 236,255 | | |
| | | |
| | | |
| 234,764 | | |
| | | |
| | |
Total liabilities and equity | |
$ | 2,557,334 | | |
| | | |
| | | |
$ | 2,557,496 | | |
| | | |
| | | |
$ | 2,559,567 | | |
| | | |
| | |
Less: Tax-equivalent adjustment(2) | |
| | | |
| (114 | ) | |
| | | |
| | | |
| (110 | ) | |
| | | |
| | | |
| (122 | ) | |
| | |
Net interest and dividend income | |
| | | |
$ | 14,470 | | |
| | | |
| | | |
$ | 15,346 | | |
| | | |
| | | |
$ | 16,846 | | |
| | |
Net interest rate spread(4) | |
| | | |
| | | |
| 1.66 | % | |
| | | |
| | | |
| 1.85 | % | |
| | | |
| | | |
| 2.27 | % |
Net interest rate spread, on a tax-equivalent basis(5) | |
| | | |
| | | |
| 1.67 | % | |
| | | |
| | | |
| 1.86 | % | |
| | | |
| | | |
| 2.29 | % |
Net interest margin(6) | |
| | | |
| | | |
| 2.42 | % | |
| | | |
| | | |
| 2.57 | % | |
| | | |
| | | |
| 2.81 | % |
Net interest margin, on a tax-equivalent basis(7) | |
| | | |
| | | |
| 2.44 | % | |
| | | |
| | | |
| 2.59 | % | |
| | | |
| | | |
| 2.83 | % |
Ratio of average
interest-earning assets to average interest-bearing liabilities | |
| | | |
| | | |
| 137.20 | % | |
| | | |
| | | |
| 138.39 | % | |
| | | |
| | | |
| 140.52 | % |
The following tables set forth the information relating to our average
balances and net interest income for the six months ended June 30, 2024 and 2023 and reflect the average yield on interest-earning assets
and average cost of interest-bearing liabilities for the periods indicated.
| |
Six Months Ended June 30, |
| |
2024 | |
2023 |
| |
Average Balance | |
Interest | |
Average
Yield/ Cost(8) | |
Average Balance | |
Interest | |
Average
Yield/ Cost(8) |
| |
(Dollars in thousands) |
ASSETS: | |
| |
| |
| |
| |
| |
|
Interest-earning assets | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Loans(1)(2) | |
$ | 2,019,420 | | |
$ | 48,805 | | |
| 4.86 | % | |
$ | 2,000,055 | | |
$ | 44,018 | | |
| 4.44 | % |
Securities(2) | |
| 357,171 | | |
| 4,255 | | |
| 2.40 | | |
| 378,421 | | |
| 4,243 | | |
| 2.26 | |
Other investments | |
| 13,411 | | |
| 284 | | |
| 4.26 | | |
| 12,717 | | |
| 252 | | |
| 4.00 | |
Short-term investments(3) | |
| 11,857 | | |
| 286 | | |
| 4.85 | | |
| 8,130 | | |
| 173 | | |
| 4.29 | |
Total interest-earning assets | |
| 2,401,859 | | |
| 53,630 | | |
| 4.49 | | |
| 2,399,323 | | |
| 48,686 | | |
| 4.09 | |
Total non-interest-earning assets | |
| 155,555 | | |
| | | |
| | | |
| 153,520 | | |
| | | |
| | |
Total assets | |
$ | 2,557,414 | | |
| | | |
| | | |
$ | 2,552,843 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
LIABILITIES AND EQUITY: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest-bearing liabilities | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest-bearing checking accounts | |
$ | 133,504 | | |
| 488 | | |
| 0.74 | % | |
$ | 141,662 | | |
| 511 | | |
| 0.73 | % |
Savings accounts | |
| 185,907 | | |
| 90 | | |
| 0.10 | | |
| 213,863 | | |
| 101 | | |
| 0.10 | |
Money market accounts | |
| 624,164 | | |
| 5,517 | | |
| 1.78 | | |
| 739,182 | | |
| 4,325 | | |
| 1.18 | |
Time deposit accounts | |
| 638,970 | | |
| 13,533 | | |
| 4.26 | | |
| 465,184 | | |
| 5,235 | | |
| 2.27 | |
Total interest-bearing deposits | |
| 1,582,545 | | |
| 19,628 | | |
| 2.49 | | |
| 1,559,891 | | |
| 10,172 | | |
| 1.32 | |
Short-term borrowings and long-term debt | |
| 160,643 | | |
| 3,962 | | |
| 4.96 | | |
| 121,285 | | |
| 2,925 | | |
| 4.86 | |
Total interest-bearing liabilities | |
| 1,743,188 | | |
| 23,590 | | |
| 2.72 | | |
| 1,681,176 | | |
| 13,097 | | |
| 1.57 | |
Non-interest-bearing deposits | |
| 553,246 | | |
| | | |
| | | |
| 615,168 | | |
| | | |
| | |
Other non-interest-bearing liabilities | |
| 25,672 | | |
| | | |
| | | |
| 23,572 | | |
| | | |
| | |
Total non-interest-bearing liabilities | |
| 578,918 | | |
| | | |
| | | |
| 638,740 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total liabilities | |
| 2,322,106 | | |
| | | |
| | | |
| 2,319,916 | | |
| | | |
| | |
Total equity | |
| 235,308 | | |
| | | |
| | | |
| 232,927 | | |
| | | |
| | |
Total liabilities and equity | |
$ | 2,557,414 | | |
| | | |
| | | |
$ | 2,552,843 | | |
| | | |
| | |
Less: Tax-equivalent adjustment (2) | |
| | | |
| (224 | ) | |
| | | |
| | | |
| (239 | ) | |
| | |
Net interest and dividend income | |
| | | |
$ | 29,816 | | |
| | | |
| | | |
$ | 35,350 | | |
| | |
Net interest rate spread (4) | |
| | | |
| | | |
| 1.75 | % | |
| | | |
| | | |
| 2.50 | % |
Net interest rate spread, on a tax-equivalent basis (5) | |
| | | |
| | | |
| 1.77 | % | |
| | | |
| | | |
| 2.52 | % |
Net interest margin (6) | |
| | | |
| | | |
| 2.50 | % | |
| | | |
| | | |
| 2.97 | % |
Net interest margin, on a tax-equivalent basis (7) | |
| | | |
| | | |
| 2.52 | % | |
| | | |
| | | |
| 2.99 | % |
Ratio of average interest-earning | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
assets to average interest-bearing liabilities | |
| | | |
| | | |
| 137.79 | % | |
| | | |
| | | |
| 142.72 | % |
| (1) | Loans, including nonaccrual loans, are net of deferred loan origination costs and unadvanced
funds. |
| (2) | Loan and securities income are presented on a tax-equivalent basis using a tax rate of 21%. The tax-equivalent
adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported on the consolidated statements
of net income. |
| (3) | Short-term investments include federal funds sold. |
| (4) | Net interest rate spread represents the difference between the weighted average yield on interest-earning
assets and the weighted average cost of interest-bearing liabilities. |
| (5) | Net interest rate spread, on a tax-equivalent basis, represents the difference between the tax-equivalent
weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. |
| (6) | Net interest margin represents net interest and dividend income as a percentage of average interest-earning
assets. |
| (7) | Net interest margin, on a tax-equivalent basis, represents tax-equivalent net interest and dividend income
as a percentage of average interest-earning assets. |
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 its results of operations and financial condition. Because
not all companies use the same calculation, this presentation may not be comparable to other similarly titled measures calculated by other
companies. A reconciliation of these non-GAAP financial measures is provided below.
| |
For the quarter ended |
| |
6/30/2024 | |
3/31/2024 | |
12/31/2023 | |
9/30/2023 | |
6/30/2023 |
| |
(Dollars in thousands) |
| |
| |
| |
| |
| |
|
Loan interest (no tax adjustment) | |
$ | 24,340 | | |
$ | 24,241 | | |
$ | 23,939 | | |
$ | 23,451 | | |
$ | 22,450 | |
Tax-equivalent adjustment | |
| 114 | | |
| 110 | | |
| 113 | | |
| 117 | | |
| 122 | |
Loan interest (tax-equivalent basis) | |
$ | 24,454 | | |
$ | 24,351 | | |
$ | 24,052 | | |
$ | 23,568 | | |
$ | 22,572 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net interest income (no tax adjustment) | |
$ | 14,470 | | |
$ | 15,346 | | |
$ | 16,176 | | |
$ | 16,383 | | |
$ | 16,846 | |
Tax equivalent adjustment | |
| 114 | | |
| 110 | | |
| 113 | | |
| 117 | | |
| 122 | |
Net interest income (tax-equivalent basis) | |
$ | 14,584 | | |
$ | 15,456 | | |
$ | 16,289 | | |
$ | 16,500 | | |
$ | 16,968 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Average interest-earning assets | |
$ | 2,400,633 | | |
$ | 2,403,086 | | |
$ | 2,427,112 | | |
$ | 2,402,987 | | |
$ | 2,405,077 | |
Net interest margin (no tax adjustment) | |
| 2.42 | % | |
| 2.57 | % | |
| 2.64 | % | |
| 2.70 | % | |
| 2.81 | % |
Net interest margin, tax-equivalent | |
| 2.44 | % | |
| 2.59 | % | |
| 2.66 | % | |
| 2.72 | % | |
| 2.83 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Book Value per Share (GAAP) | |
$ | 11.07 | | |
$ | 10.90 | | |
$ | 10.96 | | |
$ | 10.53 | | |
$ | 10.60 | |
Non-GAAP adjustments: | |
| | | |
| | | |
| | | |
| | | |
| | |
Goodwill | |
| (0.58 | ) | |
| (0.58 | ) | |
| (0.58 | ) | |
| (0.57 | ) | |
| (0.57 | ) |
Core deposit intangible | |
| (0.08 | ) | |
| (0.07 | ) | |
| (0.08 | ) | |
| (0.09 | ) | |
| (0.09 | ) |
Tangible Book Value per Share (non-GAAP) | |
$ | 10.41 | | |
$ | 10.25 | | |
$ | 10.30 | | |
$ | 9.87 | | |
$ | 9.94 | |
| |
For the quarter ended |
| |
6/30/2024 | |
3/31/2024 | |
12/31/2023 | |
9/30/2023 | |
6/30/2023 |
| |
(Dollars in thousands) |
| |
| |
| |
| |
| |
|
Efficiency Ratio: | |
| | | |
| | | |
| | | |
| | | |
| | |
Non-interest Expense (GAAP) | |
$ | 14,314 | | |
$ | 14,782 | | |
$ | 14,785 | | |
$ | 14,118 | | |
$ | 14,551 | |
Non-interest Expense for Adjusted Efficiency Ratio (non-GAAP) | |
$ | 14,314 | | |
$ | 14,782 | | |
$ | 14,785 | | |
$ | 14,118 | | |
$ | 14,551 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net Interest Income (GAAP) | |
$ | 14,470 | | |
$ | 15,346 | | |
$ | 16,176 | | |
$ | 16,383 | | |
$ | 16,846 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Non-interest Income (GAAP) | |
$ | 3,834 | | |
$ | 2,674 | | |
$ | 2,714 | | |
$ | 3,612 | | |
$ | 1,592 | |
Non-GAAP adjustments: | |
| | | |
| | | |
| | | |
| | | |
| | |
Unrealized (gains) losses on marketable equity securities | |
| (4 | ) | |
| (8 | ) | |
| 1 | | |
| — | | |
| — | |
Gain on non-marketable equity investments | |
| (987 | ) | |
| — | | |
| — | | |
| (238 | ) | |
| — | |
Loss on disposal of premises and equipment | |
| — | | |
| 6 | | |
| — | | |
| 3 | | |
| — | |
Gain on bank-owned life insurance death benefit | |
| — | | |
| — | | |
| — | | |
| (778 | ) | |
| — | |
Loss on defined benefit plan termination | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,143 | |
Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) | |
$ | 2,843 | | |
$ | 2,672 | | |
$ | 2,715 | | |
$ | 2,599 | | |
$ | 2,735 | |
Total Revenue for Adjusted Efficiency Ratio (non-GAAP) | |
$ | 17,313 | | |
$ | 18,018 | | |
$ | 18,891 | | |
$ | 18,982 | | |
$ | 19,581 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Efficiency Ratio (GAAP) | |
| 78.20 | % | |
| 82.03 | % | |
| 78.27 | % | |
| 70.61 | % | |
| 78.92 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Adjusted Efficiency Ratio (Non-interest Expense for Adjusted Efficiency Ratio (non-GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) | |
| 82.68 | % | |
| 82.04 | % | |
| 78.26 | % | |
| 74.38 | % | |
| 74.31 | % |
| |
For the six months ended |
| |
6/30/2024 | |
6/30/2023 |
| |
(Dollars in thousands) |
| |
| |
|
Loan income (no tax adjustment) | |
$ | 48,581 | | |
$ | 43,779 | |
Tax-equivalent adjustment | |
| 224 | | |
| 239 | |
Loan income (tax-equivalent basis) | |
$ | 48,805 | | |
$ | 44,018 | |
| |
| | | |
| | |
Net interest income (no tax adjustment) | |
$ | 29,816 | | |
$ | 35,350 | |
Tax equivalent adjustment | |
| 224 | | |
| 239 | |
Net interest income (tax-equivalent basis) | |
$ | 30,040 | | |
$ | 35,589 | |
| |
| | | |
| | |
Average interest-earning assets | |
$ | 2,401,859 | | |
$ | 2,399,323 | |
Net interest margin (no tax adjustment) | |
| 2.50 | % | |
| 2.97 | % |
Net interest margin, tax-equivalent | |
| 2.52 | % | |
| 2.99 | % |
| |
| | | |
| | |
Adjusted Efficiency Ratio: | |
| | | |
| | |
Non-interest Expense (GAAP) | |
$ | 29,096 | | |
$ | 29,447 | |
Non-interest Expense for Adjusted Efficiency Ratio (non-GAAP) | |
$ | 29,096 | | |
$ | 29,447 | |
| |
| | | |
| | |
Net Interest Income (GAAP) | |
$ | 29,816 | | |
$ | 35,350 | |
| |
| | | |
| | |
Non-interest Income (GAAP) | |
$ | 6,508 | | |
$ | 4,571 | |
Non-GAAP adjustments: | |
| | | |
| | |
Unrealized gains on marketable equity securities | |
| (12 | ) | |
| — | |
Loss on disposal of premises and equipment, net | |
| 6 | | |
| — | |
Gain on non-marketable equity investments | |
| (987 | ) | |
| (352 | ) |
Loss on defined benefit plan curtailment | |
| — | | |
| 1,143 | |
Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) | |
$ | 5,515 | | |
$ | 5,362 | |
Total Revenue for Adjusted Efficiency Ratio (non-GAAP) | |
$ | 35,331 | | |
$ | 40,712 | |
| |
| | | |
| | |
Efficiency Ratio (GAAP) | |
| 80.10 | % | |
| 73.76 | % |
| |
| | | |
| | |
Adjusted Efficiency Ratio (Non-interest Expense for Adjusted Efficiency Ratio (non-GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) | |
| 82.35 | % | |
| 72.33 | % |
WESTERN NEW ENGLAND BANCORP, INC. 8-K
Exhibit 99.2
Local banking is better than ever. INVESTOR PRESENTATION 2ND QUARTER 2024
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 reports to shareholders and in other communications by us . This Investor Presentation contains “forward - looking statements” with respect to the Company’s financial condition, liquidity , results of operations, future performance, and business . Forward - looking statements 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, estimates with respect to our financial condition, results of operations and business that are subject to various factors which could cause actual results to differ materially from these estimates . These factors include, but are not limited to : • unpredictable changes in general economic conditions, financial markets, fiscal, monetary and regulatory policies, including actual or potential stress in the banking industry ; • the duration and scope of potential pandemics, including the emergence of new variants and the response thereto ; • unstable political and economic conditions which could materially impact credit quality trends and the ability to generate loans and gather deposits ; • inflation and governmental responses to inflation, including recent sustained increases and potential future increases in interest rates that reduce margins ; • the effect on our operations of governmental legislation and regulation, including changes in accounting regulation or standards, the nature and timing of the adoption and effectiveness of new requirements under the Dodd - Frank Wall Street Reform and Consumer Protection Act of 2010 , Basel guidelines, capital requirements and other applicable laws and regulations ; • significant changes in accounting, tax or regulatory practices or requirements ; • new legal obligations or liabilities or unfavorable resolutions of litigation ; • disruptive technologies in payment systems and other services traditionally provided by banks ; • the highly competitive industry and market area in which we operate ;
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, business interruption, and fraud risks ; • f ailure or circumvention of our internal controls or procedures ; • c hanges in the securities markets which affect investment management revenues ; • i ncreases in Federal Deposit Insurance Corporation deposit insurance premiums and assessments ; • the soundness of other financial services institutions which may adversely affect our credit risk; • certain of our intangible assets may become impaired in the future; • new lines of business or new products and services, which may subject us to additional risks; • changes in key management personnel which may adversely impact our operations; • severe weather, natural disasters, acts of war or terrorism and other external events which could significantly impact our business; and • other risk factors detailed from time to time in our SEC filings. Although we believe that the expectations reflected in such forward - looking statements are reasonable, actual results may differ materially from the results discussed in these forward - looking statements. You are cautioned not to place undue reliance on the se forward - looking statements, which speak only as of the date hereof. We do not undertake any obligation to republish revised for ward - looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events , except to the extent required by law.
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 Focus Our Core Mission : Our purpose is to help customers succeed in our community, while creating and increasing shareholder value . The Company’s purpose drives the outcome we envision for Western New England Bancorp . 4 70 Center Street, Chicopee, MA.
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 Daniel A . Marini , Senior Vice President, Retail Banking & Marketing Leo R . Sagan, Jr . , Senior Vice President & Chief Risk Officer Filipe Goncalves, Senior Vice President & Chief Credit Officer Darlene Libiszewski , Senior Vice President & Chief Information Officer John E . Bonini , Senior Vice President & General Counsel Christine Phillips , Senior Vice President, Human Resources Director 5
2 Q2024 QUARTERLY EARNINGS 6 2Q2023 (3) 3Q2023 (2) 4Q2023 1Q2024 2Q2024 (1) ($ in thousands , except EPS) $ 16,846 $ 16,383 $ 16,176 $ 15,346 $ 14,470 Net interest income 420 354 486 (550) (294) (R eversal of) provision for credit losses 1,592 3,612 2,714 2,674 3,834 Non - interest income 14,551 14,118 14,785 14,782 14,314 Non - interest expense 3,467 5,523 3,619 3,788 4,284 Income before taxes 704 1,033 1,108 827 771 Income tax expense $ 2,763 $ 4,490 $ 2,511 $ 2,961 $ 3,513 Net income $ 0.13 $ 0.21 $ 0.12 $ 0.14 $ 0.17 Diluted earnings per share (EPS) 0.43% 0.70% 0.39% 0.47% 0.55% Return on average assets (ROA) 4.72% 7.60% 4.31% 5.04% 6.03% Return on average equity (ROE) 2.81% 2.70% 2.64% 2.57% 2.42% Net interest margin 2.83% 2.72% 2.66% 2.59% 2.44% Net interest margin, on a tax - equivalent basis (1) Non - interest income includes a $987,000 gain on non - marketable equity investments. (2) Non - interest income includes a non - taxable $778,000 gain on bank - owned life insurance death benefits. (3) Non - interest income includes a one - time, non - recurring final termination expense of $1.1 million, due to the termination of the defined benefit pension plan .
NET INTEREST INCOME AND NET INTEREST MARGIN 7 $16.8 $16.4 $16.2 $15.3 $14.5 2.81% 2.70% 2.64% 2.57% 2.42% 2.20% 2.40% 2.60% 2.80% 3.00% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $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, our primary source of revenues, decreased $ 876 , 000 , or 5 . 7 % , to $ 14 . 5 million for the three months ended June 30 , 2024 , from $ 15 . 3 million for the three months ended March 31 , 2024 . The decrease in net interest income was primarily due to an increase in interest expense of $ 1 . 1 million, or 9 . 5 % , partially offset by an increase in interest income of $ 198 , 000 , or 0 . 7 % . The increase in interest expense was a result of competitive pricing on deposits due to the continued high interest rate environment and the unfavorable shift in the deposit mix from low cost core deposits to high cost time deposits . The net interest margin was 2 . 42 % for the three months ended June 30 , 2024 compared to 2 . 57 % for the three months ended March 31 , 2024 . The decrease in net interest income and the net interest margin was primarily due to an increase in the average cost of interest - bearing liabilities, which was partially offset by an increase in the average yield on interest - earning assets . ($ in millions)
TOTAL LOANS 8 $2,007 $2,007 $2,017 $2,022 $2,017 4.49% 4.66% 4.73% 4.84% 4.88% 4.20% 4.30% 4.40% 4.50% 4.60% 4.70% 4.80% 4.90% 5.00% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $1,900 $1,920 $1,940 $1,960 $1,980 $2,000 $2,020 $2,040 Average Loans Outstanding Average Loans Outstanding Average Loan Yield, Tax-Equivalent Basis $2,016 $2,015 $2,027 $2,026 $2,026 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $2,008 $2,010 $2,012 $2,014 $2,016 $2,018 $2,020 $2,022 $2,024 $2,026 $2,028 Period - end Loans Outstanding At June 30 , 2024 , total loans decreased $ 1 . 1 million, or 0 . 1 % , to $ 2 . 0 billion from December 31 , 2023 . C ommercial real estate loans decreased $ 23 . 2 million, or 2 . 1 % , commercial and industrial loans decreased $ 1 . 1 million, or 0 . 5 % , while residential real estate loans, including home equity loans, increased $ 23 . 8 million , or 3 . 3 % . ($ in millions)
COMMERCIAL AND INDUSTRIAL LOANS 9 $227 $213 $217 $207 $216 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $195 $200 $205 $210 $215 $220 $225 $230 Total commercial and industrial (“C&I”) loans decreased $ 1 . 1 million, or 0 . 5 % , to $ 216 . 3 million at June 30 , 2024 , from $ 217 . 4 million at December 31 , 2023 . At June 30 , 2024 , total delinquent C&I loans totaled $ 172 , 000 , or 0 . 08 % , of total C&I loans . ($ in millions)
COMMERCIAL & INDUSTRIAL PORTFOLIO (1) 10 (1) % of total loans as of June 30, 2024 1.6% , Manufacturing 1.6% , Merchant Wholesalers 0.1% , Hotels 1.1% , Construction, Sand and Gravel Mining 4.3% , All other C&I 0.6% , Healthcare 1.4% , Educational Services
COMMERCIAL REAL ESTATE LOANS 11 $1,075 $1,080 $1,080 $1,084 $1,057 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $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 decreased $ 23 . 2 million, or 2 . 1 % , to $ 1 . 1 billion from December 31 , 2023 to June 30 , 2024 . At June 30 , 2024 , total CRE delinquency was $ 1 . 1 million, or 0 . 10 % of total CRE loans . ($ in millions)
COMMERCIAL REAL ESTATE LOANS 12 ($ in thousands) (1) Due to loan classifications, the percentage of Total Bank Risk - Based Capital (“RBC”) may differ from the Call Report. At June 30, 2024, the commercial real estate portfolio totaled $1.1 billion, and represented 52.2% of total gross loans. Of the $1.1 billion, $864.6 million, or 81.8%, were categorized as non - owner occupied CRE and $ 192.0 million, or 18.2%, were categorized as owner - occupied CRE. % of Total Bank RBC % of Total Loans % of CRE Portfolio Total Owner Occupied Non - Owner Occupied Property Type 85.9% 11.5% 22.1% $ 233,309 $ 36,711 $ 196,598 Office Portfolio 68.7% 9.2% 17.7% 186,755 59,896 126,859 Industrial and Warehouse 65.4% 8.8% 16.8% 177,792 - 177,792 Apartment 41.5% 5.6% 10.7% 112,783 8,748 104,035 Retail 21.5% 2.9% 5.6% 58,692 34,705 23,987 Other 19.0% 2.5% 4.9% 51,520 - 51,520 Shopping Center 16.2% 2.2% 4.2% 43,897 - 43,897 Hotel 13.5% 1.8% 3.5% 36,777 34,282 2,495 Auto Sales 12.4% 1.7% 3.2% 33,563 1,016 32,547 Residential one - to - four family 11.8% 1.6% 3.0% 32,027 - 32,027 Adult Care/Assisted Living 8.9% 1.2% 2.3% 24,310 - 24,310 Student Housing 8.6% 1.2% 2.2% 23,440 4,897 18,543 Mixed Use 8.6% 1.1% 2.2% 23,264 11,307 11,957 College 6.8% 0.9% 1.7% 18,410 374 18,036 Self Storage 388.8% 52.2% 100.0% 1,056,539 191,936 $ 864,603 Total commercial real estate loans 388.8% 70.6% 318.2% % of Total Bank Risk - Based Capital 18.2% 81.8% % of Total CRE Loans
COMMERCIAL REAL ESTATE – NON - OWNER OCCUPIED 13 At June 30, 2024, the non - owner occupied CRE portfolio totaled $864.6 million, or 318.2% of Total Bank RBC. Of the $864.6 millio n, $445.8 million, or 51.6% of non - owner occupied CRE, was concentrated in Massachusetts and $261.3 million, or 30.2% of non - owner occupied CRE, was concentrated in Connecticut. At June 30, 2024, the office portfolio represented the largest concentration of non - owner occupied CRE at 72.3% of Total Bank RBC with a weighted average loan - to - value (“LTV”) of 64.9%. Apartments represented 65.4 % of Total Bank RBC with a weighted average LTV of 55.8%. ($ in thousands) (1) Due to loan classifications, the percentage of Total Bank RBC may differ from the Call Report. (2) Weighted average LTV is based on the original appraisal and the current loan exposure. Weighted Average LTV % of Total Bank RBC Total Other RI NH CT MA Property Type 64.9% 72.3% $ 196,598 $ 13,277 $ - $ 40,841 $ 64,659 $ 77,821 Office Portfolio 55.8% 65.4% 177,792 - 42,093 4,998 35,262 95,439 Apartment 59.8% 46.7% 126,859 4,559 13,076 - 37,039 72,185 Industrial and Warehouse 60.0% 38.3% 104,035 10,988 6,292 2,608 50,044 34,103 Retail 51.4% 19.0% 51,520 - - 11,819 11,594 28,107 Shopping Center 52.5% 16.2% 43,897 - - - 22,732 21,165 Hotel 57.8% 12.0% 32,547 130 - - 1,262 31,155 Residential one - to - four family 55.0% 11.8% 32,027 - - - 16,635 15,392 Adult Care/Assisted Living 68.9% 9.0% 24,310 5,097 - - 15,452 3,761 Student Housing 50.5% 8.8% 23,987 - - - 5,985 18,002 Other 54.8% 6.8% 18,543 - 935 - 626 16,982 Mixed Use 62.3% 6.6% 18,036 - - 790 - 17,246 Self Storage 45.4% 4.4% 11,957 - - - - 11,957 College 47.4% 0.9% 2,495 - - - - 2,495 Auto Sales 58.7% 318.2% $ 864,603 $ 34,051 $ 62,396 $ 61,056 $ 261,290 $ 445,810 Total Non - Owner CRE
COMMERCIAL REAL ESTATE – OFFICE BUILDINGS 14 ($ in thousands) % of Total Bank RBC % of Office Portfolio Total Owner Occupied Non - Owner Occupied By Collateral Type 34.8% 40.6% $ 94,614 $ 13,805 $ 80,809 Office 45.1% 52.6% 122,689 20,795 101,894 Office - Medical 1.5% 1.7% 3,929 - 3,929 Office - Retail 2.1% 2.4% 5,610 2,111 3,499 Office – Mixed 2.4 % 2.7% 6,467 - 6,467 Office – Warehouse 85.9% 100.0% $ 233,309 $ 36,711 $ 196,598 Total Office Portfolio % of Total Bank RBC % of Office Portfolio Total Owner Occupied Non - Owner Occupied By State 40.6% 47.3% $ 110,242 $ 32,421 $ 77,821 Massachusetts 25.4% 29.6% 68,949 4,290 64,659 Connecticut 15.0% 17.5% 40,841 - 40,841 New Hampshire 4.9% 5.6% 13,277 - 13,277 Other 85.9% 100.0% $ 233,309 $ 36,711 $ 196,598 Total Office Portfolio % of Total Bank RBC % of Office Portfolio Total Owner Occupied Non - Owner Occupied By Risk Rating 85.2% 99.2% $ 231,521 $ 35,196 $ 196,325 Pass 0.5% 0.5% 1,165 1,085 80 Special Mention 0.2% 0.3% 623 430 193 Substandard 85.9% 100.0% $ 233,309 $ 36,711 $ 196,598 Total Office Portfolio • As of June 30 , 2024 , the total office CRE portfolio totaled $ 233 . 3 million, or 22 . 1 % of total CRE loans and 85 . 9 % of Total Bank RBC . • Non - owner occupied office totaled $ 196 . 6 million, or 84 . 3 % of the total office portfolio and owner - occupied office totaled $ 36 . 7 million, or 15 . 7 % of the total office portfolio . • Office exposure is concentrated in medical - office, totaling $ 122 . 7 million, or 52 . 6 % , of the office portfolio . • Of the $ 233 . 3 million in total office, 47 . 3 % is concentrated in Massachusetts and 29 . 6 % is concentrated in Connecticut . The Company does not have any exposure in greater Boston or New York . • Of the $ 233 . 3 million in total office, 99 . 2 % of the office portfolio is in the pass - rated category . • There is approximately $ 37 . 4 million, or 16 . 0 % of the total office portfolio, maturing by the end of 2026 .
RESIDENTIAL REAL ESTATE LOANS AND CONSUMER LOANS 15 $711 $720 $728 $732 $751 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $690 $700 $710 $720 $730 $740 $750 $760 Residential real estate loans , including home equity loans, and consumer loans increased $ 23 . 1 million , or 3 . 2 % , to $ 750 . 7 million, from December 31 , 2023 to June 30 , 2024 . At June 30 , 2024 , the Company serviced $ 70 . 0 million in loans sold to the secondary market, with servicing retained, which are not included on the Company’s balance sheet under residential real estate loans . At June 30 , 2024 , total delinquent residential real estate loans and consumer loans totaled $ 4 . 3 million, or 0 . 57 % of total residential real estate loans and consumer loans . ($ in millions)
INVESTMENT PORTFOLIO 16 The held - to - maturity (“HTM”) and available - for - sale (“AFS”) securities portfolio represented 13 . 6 % of total assets at June 30 , 2024 and 14 . 1 % of total assets, at December 31 , 2023 . Unrealized losses from the HTM securities portfolio totaled $ 40 . 2 million . The HTM unrealized losses were approximately 18 . 5 % of the total HTM amortized cost basis . If the HTM losses were included in capital, the losses would represent 15 . 9 % of Tier 1 capital and negatively impact tangible common equity ( 2 ) (“TCE”), a non - GAAP financial measure, by 1 . 1 % . Unrealized losses from the AFS securities portfolio totaled $ 31 . 7 million . The AFS unrealized losses were approximately 19 . 0 % of the total AFS amortized cost basis . As a percentage of Tier 1 capital, the AFS unrealized losses represented 12 . 6 % of Tier 1 capital and negatively impacted TCE, a non - GAAP financial measure, by 0 . 9 % . (1) Tier 1 Capital represents Bank Tier 1 Capital as of June 30, 2024. (2) Impact to TCE is net of tax. TCE is a non - GAAP measure. See slides 30 - 32 for the related TCE calculation and a reconciliation of GAAP to non - GAAP financial measures . The table below displays the investment portfolio as of June 30 , 2024 Impact to TCE (2) Loss % of Tier 1 Capital (1) Loss as a % of Amortized Cost Basis Unrealized Loss Fair Value % of Investment Portfolio’s Amortized Cost Basis Amortized Cost Basis At June 30, 2024 (Dollars in millions) - 1.1% - 15.9% - 18.5% ($ 40.2) $ 177.4 57% $217.6 HTM - 0.9% - 12.6% - 19.0% ($31.7) $ 135.1 43% $ 166.8 AFS - 2.0% - 28.5% - 18.7% ($ 71.9) $ 312.5 100% $ 384.4 Total Investments
TOTAL DEPOSITS 17 $1,623 $1,594 $1,532 $1,501 $1,500 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $1,420 $1,440 $1,460 $1,480 $1,500 $1,520 $1,540 $1,560 $1,580 $1,600 $1,620 $1,640 PERIOD - END CORE DEPOSITS Total deposits increased $ 28 . 1 million, or 1 . 3 % , from $ 2 . 1 billion at December 31 , 2023 to $ 2 . 2 billion at June 30 , 2024 . Core deposits, which the Company defines as all deposits except time deposits, decreased $ 32 . 3 million, or 2 . 1 % , from $ 1 . 5 billion, or 71 . 5 % of total deposits, at December 31 , 2023 , to $ 1 . 5 billion, or 69 . 1 % of total deposits, at June 30 , 2024 . Time deposits increased $ 60 . 3 million, or 9 . 9 % , from $ 611 . 4 million at December 31 , 2023 to $ 671 . 7 million at June 30 , 2024 . At June 30 , 2024 and December 31 , 2023 , uninsured deposits represented 26 . 4 % and 26 . 8 % , of total deposits, respectively . $535 $583 $611 $643 $672 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $- $100 $200 $300 $400 $500 $600 $700 $800 PERIOD - END TIME DEPOSITS (1) ($ in millions) (1) Includes $1.7 million in brokered deposits beginning with the quarter ended June 30, 2023.
AVERAGE TOTAL DEPOSITS 18 $1,556 $1,559 $1,588 $1,576 $1,589 $591 $592 $589 $558 $549 1.13% 1.42% 1.60% 1.75% 1.94% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 Average Deposits and Rates Interest-bearing deposits Non-interest-bearing deposits Average deposit cost Average deposits, consisting of interest - bearing and non - interest bearing deposits, were $ 2 . 1 billion as of June 30 , 2024 , an increase of $ 4 . 7 million, or 0 . 2 % , from December 31 , 2023 . The average cost of deposits increased 19 basis points, from 1 . 75 % for the quarter ended March 31 , 2024 to 1 . 94 % for the quarter ended June 30 , 2024 . ($ in millions)
AVERAGE CORE AND TIME DEPOSITS 19 $1,645 $1,588 $1,573 $1,506 $1,488 0.64% 0.70% 0.76% 0.76% 0.87% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 Average Core Deposits and Rates Average core deposits, including non - interest bearing deposits, decreased $ 17 . 7 million, or 1 . 2 % , from the linked quarter . Average time deposits were $ 650 . 1 million, an increase of $ 22 . 4 million, or 3 . 6 % , from the linked quarter . During the quarter - ended June 30 , 2024 , the average cost of core deposits, including non - interest bearing demand deposits, increased 11 basis points from from the linked quarter, while the cost of time deposits increased 27 basis points during the same period . ($ in millions) $502 $563 $604 $628 $650 2.74% 3.46% 3.78% 4.12% 4.39% 0.25% 0.75% 1.25% 1.75% 2.25% 2.75% 3.25% 3.75% 4.25% 4.75% $300 $350 $400 $450 $500 $550 $600 $650 $700 Average Time Deposits and Rates
LOAN - TO - DEPOSIT RATIO 20 93.4% 92.6% 94.6% 94.5% 93.3% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 92% 92% 93% 93% 94% 94% 95% 95% Period - end Loan - to - Deposit Ratio 75.0% 73.2% 71.5% 70.0% 69.1% 25.0% 26.8% 28.5% 30.0% 30.9% 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 0% 10% 20% 30% 40% 50% 60% 70% 80% Core Deposits and Time Deposits as a % of Total Deposits Core deposits/Total deposits Time deposits/Total deposits
WHOLESALE FUNDING 21 $148 $150 $156 $152 $155 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 $50 $70 $90 $110 $130 $150 $170 Wholesale Funding (Includes $20 million in Subordinated Debt) The Bank is considered to be well - capitalized as defined by regulators ( see slide 27 ) . The Bank’s Tier 1 Leverage Ratio to adjusted average assets was 9 . 78 % at June 30 , 2024 and 9 . 62 % at December 31 , 2023 . In addition, The Bank’s TCE Ratio ( 1 ) , a non - GAAP financial measure, exceeds the Federal Home Loan Bank of Boston (“FHLB”) requirements to continue to utilize the FHLB as a funding source . At June 30 , 2024 , total borrowings decreased $ 1 . 9 million, or 1 . 2 % , from $ 156 . 5 million at December 31 , 2023 to $ 154 . 6 million . Short - term borrowings decreased $ 9 . 5 million, or 59 . 2 % , to $ 6 . 6 million , at June 30 , 2024 , compared to $ 16 . 1 million at December 31 , 2023 , while long - term borrowings increased $ 7 . 7 million, or 6 . 3 % , during the same period . The Company utilized the Bank Term Funding Program (“BTFP”), which was created in March 2023 to enhance banking system liquidity by allowing institutions to pledge certain securities at par value and borrow at a rate of ten basis points over the one - year overnight index swap rate . The BTFP was available to federally insured depository institutions in the U . S . , with advances having a term of up to one year with no prepayment penalties . The BTFP ceased extending new advances in March 2024 . At December 31 , 2023 , the Company’s outstanding balance under the BTFP was $ 90 . 0 million . There were no outstanding balances under the BTFP at June 30 , 2024 . At June 30 , 2024 , borrowings also consisted of $ 19 . 7 million in fixed - to - floating rate subordinated notes . (1) TCE is a non - GAAP measure. See slides 30 - 32 for the related TCE calculation and a reconciliation of GAAP to non - GAAP financial measures .
22 The Company’s liquidity position remains strong with solid core deposit relationships, cash, unencumbered securities and access to diversified borrowing sources . At June 30 , 2024 , the Company had available borrowing capacity with the FHLB of $ 437 . 4 million, including its overnight Ideal Way Line of Credit . In addition, at June 30 , 2024 , the Company had available borrowing capacity of $ 403 . 8 million from the Federal Reserve Discount Window, with no outstanding borrowings . At June 30 , 2024 , the Company also had available borrowing capacity of $ 25 . 0 million from two unsecured credit lines with correspondent banks, with no outstanding borrowings . At June 30 , 2024 , the Company had $ 1 . 1 billion in immediately available liquidity, compared to $ 574 . 4 million in uninsured deposits, or 26 . 4 % of total deposits, representing a coverage ratio of 185 . 9 % . Lastly, the Company has access to the brokered deposit market with approval from the Board of Directors to purchase brokered deposits in an amount not to exceed 10 % of total assets . At June 30 , 2024 , the Company had $ 1 . 7 million in brokered deposits included within time deposits on the balance sheet . LIQUIDITY Net Available Amount in Use at June 30, 2024 Total Available ($ in millions) Internal Sources: $53.5 - $53.5 Cash and cash equivalents $130.2 - $130.2 Unpledged securities $18.0 - $18.0 Excess pledged securities External Sources: $437.4 $153.6 $591.0 FHLB $403.8 - $403.8 FRB Discount Window Other Unsecured: $25.0 - $25.0 Correspondent banks $1,067.9 $153.6 $1,221.5 Total Liquidity $574.4 Uninsured deposits 185.9% Liquidity/Total
________ Source: SNL Financial as of June 30, 2023. 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 of Springfield MSA. DEPOSIT MARKET SHARE IN HAMPDEN COUNTY, MA AS OF JUNE 30, 2023 23 Total Deposit Rank 2023 Parent Company Name Deposits in Market ($000) Market Share # of Branches 1 PeoplesBank 2,271,591 16.96% 13 1,762,519 13.1% 20 3 Westfield Bank 1,878,809 14.03% 20 2 TD Bank 2,029,147 15.15 % 16 4 M&T Bank 1,143,383 8.54% 14 5 Berkshire Bank 1,142,092 8.53% 11 6 KeyBank 932,631 6.96% 7 7 Citizens Bank 557,490 4.16% 12 8 Monson Savings Bank 526,226 3.93% 4 9 Country Bank 514,307 3.84% 4 10 New Valley Bank & Trust 256,410 1.91% 3
ASSET QUALITY INDICATORS 24 2Q2024 1Q2024 4Q2023 3Q2023 2Q2023 $5.6M $4.7M $6.0M $5.6M $5.4M Total delinquent loans 0.27% 0.23% 0.30% 0.28% 0.27% Delinquent loans as a % of total loans $5.8M $5.8M $6.4M $6.3M $5.8M Nonperforming loans (NPL) 0.29% 0.29% 0.32% 0.31% 0.29% NPL as a % of total loans 0.23% 0.23% 0.25% 0.24% 0.22% NPL as a % of total assets 0.96% 0.98% 1.00% 0.99% 0.97% Allowance for credit losses % of total loans 333% 341% 316% 318% 341% Allowance for credit losses % of NPL $10K ($67K) $136K $78K ($25K) Net charge - offs (recoveries) 0.00% 0.00% 0.01% 0.00% 0.00% Net charge - offs (recoveries) as a % average loans 1Q2024 4Q2023 3Q2023 2Q2023 During the three months ended June 30 , 2024 , the Company recorded net charge - offs of $ 10 , 000 compared to net recoveries of $ 67 , 000 for the three months ended March 31 , 2024 . Nonperforming loans to total loans were 0 . 29 % at June 30 , 2024 compared to 0 . 32 % at December 31 , 2023 .
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 . 96 % at June 30 , 2024 , compared to 1 . 00 % at December 31 , 2023 . At June 30 , 2024 , the allowance for credit losses as a percentage of nonperforming loans was 332 . 7 % , compared to 315 . 6 % at December 31 , 2023 . December 31, 2023 June 30, 2024 ACL / Total Loan Segment Loans Outstanding (1) ACL (1) ACL / Total Loan Segment Loans Outstanding (1) ACL (1) 1.17% $ 217,447 $ 2,537 1.18% $ 216,300 $ 2,552 Commercial and industrial 1.40% 1,079,751 15,141 1.36% 1,056,539 14,331 Commercial real estate 0.35% 722,154 2,548 0.33% 745,967 2,444 Residential (2) 0.75% 5,472 41 2.48% 4,715 117 Consumer - - - - - - Unallocated 1.00% $ 2,024,824 $ 20,267 0.96% $ 2,023,521 $ 19,444 Total Loans (1) ( $ in thousands) (2) Includes home equity loans and home equity lines of credit .
ASSET QUALITY 26 2Q2024 1Q2024 4Q2023 3Q2023 2Q2023 ($ in millions) $14.6 $15.2 $5.8 $12.0 $11.8 Special Mention 0.7% 0.8% 0.3% 0.6% 0.6% % of Total Loans $22.1 $21.6 $33.7 $33.6 $37.7 Substandard 1.1% 1.1% 1.7% 1.7% 1.9% % of Total Loans $36.7 $36.8 $39.5 $45.6 $49.5 Total Watch List Loans 1.8% 1.8% 1.9% 2.3% 2.5% % of Total Loans At June 30 , 2024 , total Watch List loans totaled $ 36 . 7 million, or 1 . 8 % of total loans, representing a decrease of $ 2 . 8 million , or 7 . 1 % , from December 31 , 2023 .
CAPITAL MANAGEMENT 27 We are well - capitalized with excess capital. Ratio at December 31, 2023 Ratio at June 30, 2024 Consolidated 9.40% 9.56% Leverage Ratio 12.59% 12.66% Common Equity Tier 1 Ratio 12.59% 12.66% Tier 1 Capital Ratio 14.67% 14.70% Total Capital Ratio As of June 30 , 2024 , the Bank’s Tier 1 Leverage Ratio was 9 . 78 % . The Bank’s TCE ratio ( 1 ) , a non - GAAP financial measure, was 8 . 86 % at June 30 , 2024 , and after factoring in $ 23 . 6 million in net AOCI unrealized losses, the TCE ratio was 7 . 94 % . If the HTM net unrealized losses of $ 28 . 9 million were factored in, the TCE ratio would decrease to 7 . 74 % . Well Capitalized Ratio at December 31, 2023 Ratio at June 30, 2024 Westfield Bank 5.0% 9.62% 9.78% Leverage Ratio 6.5% 12.88% 12.96% Common Equity Tier 1 Ratio 8.0% 12.88% 12.96% Tier 1 Capital Ratio 10.0% 13.94% 13.98% Total Capital Ratio (1) TCE is a non - GAAP measure. See slides 30 - 32 for the related TCE calculation and a reconciliation of GAAP to non - GAAP financial measures . x From a regulatory standpoint, we are well - capitalized with excess capital . x We take a prudent approach to capital management .
CAPITAL RETURN TO SHAREHOLDERS 28 # of Shares Year 2,189,276 2018 1,938,667 2019 1,391,496 2020 2,758,051 2021 720,975 2022 649,744 2023 200,000 1Q - 2024 269,841 2Q - 2024 Annual Dividends per Share Year $0.16 2018 $0.20 2019 $0.20 2020 $0.20 2021 $0.24 2022 $0.28 2023 $0.07 1Q - 2024 $0.07 2Q - 2024 Share Repurchases Dividends On June 10 , 2024 , the Company announced the completion of its previously authorized stock repurchase plan (the “ 2022 Plan”) pursuant to which the Company was authorized to repurchase up to 1 . 1 million shares, or approximately 5 % of its outstanding common stock, as of the date the 2022 Plan was adopted . On May 22 , 2024 , the Board of Directors authorized a new stock repurchase plan (the “ 2024 Plan”) under which the Company may repurchase up to 1 . 0 million shares, or approximately 4 . 6 % , of the Company’s outstanding shares of common stock . During the three months ended June 30 , 2024 , the Company repurchased 206 , 600 shares of common stock under the 2022 Plan, with an average price per share of $ 6 . 64 and 63 , 241 shares of common stock under the 2024 Plan, with an average price per share of $ 6 . 57 . During the six months ended June 30 , 2024 , the Company repurchased 469 , 841 shares of common stock with an average price per share of $ 7 . 32 . As of June 30 , 2024 , there were 936 , 759 shares of common stock available for repurchase under the 2024 Plan .
CAPITAL MANAGEMENT 29 $10.60 $10.53 $10.96 $10.90 $11.07 $9.94 $9.87 $10.30 $10.25 $10.41 Book Value per Share Tangible Book Value per Share (non - GAAP) (1) Book Value Tangible Book Value (non-GAAP) Book value per share increased $0.11, or 1.1%, from $10.96 at December 31, 2023 to $11.07 at June 30, 2024. Tangible book value per share, a non - GAAP measure, increased $0.11, or 1.1%, from $10.30 at December 31, 2023 to $10.41 at June 30, 2024. ( 1) Tangible book value is a non - GAAP measure. See slides 30 - 32 for the related tangible book value calculation and a reconcilia tion of GAAP to non - GAAP financial measures.
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 30 Reconciliation of Non - GAAP to GAAP Financial Measures The Company believes that certain non - GAAP financial measures provide information to investors that is useful in understanding i ts financial condition. Because not all companies use the same calculation, this presentation may not be comparable to other similarly title d measures calculated by other companies. A reconciliation of these non - GAAP financial measures is provided below. 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Loan interest (no tax adjustment) 24,340$ 24,241$ 23,939$ 23,451$ 22,450$ Tax-equivalent adjustment 114 110 113 117 122 Loan interest (tax-equivalent basis) 24,454$ 24,351$ 24,052$ 23,568$ 22,572$ Net interest income (no tax adjustment) 14,470$ 15,346$ 16,176$ 16,383$ 16,846$ Tax equivalent adjustment 114 110 113 117 122 Net interest income (tax-equivalent basis) 14,584$ 15,456$ 16,289$ 16,500$ 16,968$ Average interest-earning assets 2,400,633$ 2,403,086$ 2,427,112$ 2,402,987$ 2,405,077$ Net interest margin (no tax adjustment) 2.42% 2.57% 2.64% 2.70% 2.81% Net interest margin, tax-equivalent 2.44% 2.59% 2.66% 2.72% 2.83% Book Value per Share (GAAP) 11.07$ 10.90$ 10.96$ 10.53$ 10.60$ Non-GAAP adjustments: Goodwill (0.58) (0.58) (0.58) (0.57) (0.57) Core deposit intangible (0.08) (0.07) (0.08) (0.09) (0.09) Tangible Book Value per Share (non-GAAP) 10.41$ 10.25$ 10.30$ 9.87$ 9.94$ Total Bank Equity (GAAP) 241,867$ 241,480$ 242,780$ 234,612$ 240,041$ Non-GAAP adjustments: Goodwill (12,487) (12,487) (12,487) (12,487) (12,487) Core deposit intangible net of associated deferred (1,168) (1,236) (1,303) (1,370) (1,438) Tangible Capital (non-GAAP) 228,212$ 227,757$ 228,990$ 220,755$ 226,116$ For the quarter ended (Dollars in thousands)
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 calculation, this presentation may not be comparable to other similarly title d measures calculated by other companies. A reconciliation of these non - GAAP financial measures is provided below. 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Tangible Capital (non-GAAP) 228,212$ 227,757$ 228,990$ 220,755$ 226,116$ Unrealized losses on HTM securities net of tax (28,869) (28,441) (25,649) (34,622) (27,286) Adjusted Tangible Capital For Impact of Unrealized Losses on HTM Securities Net of Tax (non-GAAP) 199,343$ 199,316$ 203,341$ 186,133$ 198,830$ Tangible Capital (non-GAAP) 228,212$ 227,757$ 228,990$ 220,755$ 226,116$ Unrealized losses on AFS securities net of tax (23,637) (23,637) (21,744) (28,686) (23,224) Adjusted Tangible Capital For Impact of Unrealized Losses on AFS Securities Net of Tax (non-GAAP) 204,575$ 204,120$ 207,246$ 192,069$ 202,892$ Common Equity Tier (CET) 1 Capital 251,849$ 251,394$ 250,734$ 249,441$ 249,340$ Unrealized losses on HTM securities net of tax (28,869) (28,441) (25,649) (34,622) (27,286) Unrealized losses on defined benefit plan net of tax - - - - - Adjusted CET 1 Capital For Impact of Net AFS Securities Losses (non-GAAP) 222,980$ 222,953$ 225,085$ 214,819$ 222,054$ Total Assets for Leverage Ratio (non-GAAP) 2,575,093$ 2,572,525$ 2,607,260$ 2,574,402$ 2,572,583$ Tier 1 Leverage Ratio 9.78% 9.77% 9.62% 9.69% 9.69% Tangible Common Equity (non-GAAP) =Tangible Capital (non-GAAP)/Total Assets for Leverage Ratio (non- GAAP) 8.86% 8.85% 8.78% 8.58% 8.79% Adjusted Common Equity Tier 1 for AFS Impact (non- GAAP) = Adjusted CET 1 Capital For Impact of Net AFS Securities Losses (non-GAAP)/Total Assets for Leverage Ratio (non-GAAP) 8.66% 8.67% 8.63% 8.34% 8.63% Adjusted Tangible Common Equity for AFS Impact (non- GAAP) = Adjusted Tangible Capital For Impact of Unrealized Losses on AFS Securities Net of Tax (non- GAAP)/Total Assets for Leverage Ratio) (non-GAAP) 7.94% 7.93% 7.95% 7.46% 7.89% Adjusted Tangible Common Equity for HTM Impact (non-GAAP) = Adjusted Tangible Capital For Impact of Unrealized Losses on HTM Securities Net of Tax (non- GAAP)/Total Assets for Leverage Ratio) (non-GAAP) 7.74% 7.75% 7.80% 7.23% 7.73% For the quarter ended (Dollars in thousands)
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 calculation, this presentation may not be comparable to other similarly title d measures calculated by other companies. A reconciliation of these non - GAAP financial measures is provided below. 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Efficiency Ratio: Non-interest Expense (GAAP) 14,314$ 14,782$ 14,785$ 14,118$ 14,551$ Non-Interest Expense for Adjusted Efficiency Ratio (non-GAAP) $ 14,314 $ 14,782 $ 14,785 $ 14,118 $ 14,551 Net Interest Income (GAAP) 14,470$ 15,346$ 16,176$ 16,383$ 16,846$ Non-Interest Income (GAAP) 3,834$ 2,674$ 2,714$ 3,612$ 1,592$ Non-GAAP adjustments: Loss on securities, net - - - - - Unrealized (gains) losses on marketable equity securities (4) (8) 1 - - Loss on interest rate swap termination - - - - - Gain on non-marketable equity investments (987) - - (238) - Loss on disposal of premises and equipment - 6 - 3 - Loss on defined benefit plan termination - - - - 1,143 Gain on bank-owned life insurance death benefit - - - (778) - Non-Interest Income for Adjusted Efficiency Ratio (non- GAAP) $ 2,843 $ 2,672 $ 2,715 $ 2,599 $ 2,735 Total Revenue for Adjusted Efficiency Ratio (non-GAAP) $ 17,313 $ 18,018 $ 18,891 $ 18,982 $ 19,581 Efficiency Ratio (GAAP) 78.20% 82.03% 78.27% 70.61% 78.92% Adjusted Efficiency Ratio (Non-interest Expense for Efficiency Ratio (non-GAAP)/Total Revenue for Efficiency Ratio (non-GAAP)) 82.68% 82.04% 78.26% 74.38% 74.31% For the quarter ended (Dollars in thousands)
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
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