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 twelve months ended December 31, 2024. For the three
months ended December 31, 2024, the Company reported net income of
$3.3 million, or $0.16 per diluted share, compared to net income of
$2.5 million, or $0.12 per diluted share, for the three months
ended December 31, 2023. On a linked quarter basis, net income was
$3.3 million, or $0.16 per diluted share, for the three months
ended December 31, 2024, as compared to net income of $1.9 million,
or $0.09 per diluted share, for the three months ended September
30, 2024. For the twelve months ended December 31, 2024, net income
was $11.7 million, or $0.56 per diluted share, compared to net
income of $15.1 million, or $0.70 per diluted share, for the twelve
months ended December 31, 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 February 26, 2025 to shareholders of record on February 12,
2025.
James C. Hagan, President and Chief Executive
Officer, commented, “I am pleased to report the results for the
fourth quarter of 2024. Our strong, diversified, core deposit base
was integral in effectively managing our funding costs over the
last two years during a rising rate environment. Our disciplined
approach to managing our funding costs resulted in an increase in
net interest income for the second consecutive quarter in 2024.
As we continue to manage the balance sheet, we
remain focused on identifying initiatives to mitigate top line
pressures and improve efficiencies over the Company’s long-term. In
2024, total deposits increased $118.9 million, or 5.6%, and core
deposits represented 68.9% of total deposits as compared to 2023.
The loan-to-deposit ratio decreased to 91.5%. We continue to focus
on extending credit within our markets and servicing the needs of
our existing customer base while ensuring new opportunities present
the appropriate levels of risk and return.
Our asset quality remains strong, with
nonaccrual loans at 0.26% of total loans, and classified loans,
which we define as special mention and substandard loans, at 1.9%
of total loans as of December 31, 2024. Our loan portfolio
continues to perform well and we continue to proactively identify
and manage credit risk within the loan portfolio, consistent with
our prudent credit culture.
The Company is considered to be well-capitalized
and we remain disciplined in our capital management strategies.
During the twelve months ended December 31, 2024, we repurchased
934,282 shares of the Company’s common stock at an average price
per share of $7.94. We continue to believe that buying back shares
represents a prudent use of the Company’s capital. We are pleased
to be able to continue to return value to shareholders through
share repurchases. Although the banking environment has been
challenged, our capital management strategies have been critical to
sustaining growth in book value per share, which increased to
$11.30, while tangible book value per share, a non-GAAP financial
measure, increased $0.33, or 3.2%, to $10.63 at December 31,
2024.”
Hagan concluded, “Over the last few years, the
banking industry as a whole experienced challenging headwinds,
however, our team remains focused on serving our customers and
supporting our community. Our commitment to strong capital and
liquidity levels gives us a strong foundation to take advantage of
opportunities in the markets we serve and to enhance shareholder
value in the long term.”
Key Highlights:
Loans and Deposits
Total loans increased $42.9 million, or 2.1%,
from $2.0 billion at December 31, 2023 to $2.1 billion at December
31, 2024. Residential real estate loans, including home equity
loans, increased $53.5 million, or 7.4%, commercial real estate
loans decreased $4.0 million, or 0.4%, commercial and industrial
loans decreased $5.7 million, or 2.7%, and consumer loans decreased
$1.1 million, or 19.8%.
Total deposits increased $118.9 million, or
5.6%, from $2.1 billion at December 31, 2023 to $2.3 billion at
December 31, 2024. Core deposits, which the Company defines as all
deposits except time deposits, increased $26.7 million, or 1.7%,
from $1.5 billion, or 71.5% of total deposits, at December 31,
2023, to $1.6 billion, or 68.9% of total deposits, at December 31,
2024. Time deposits increased $92.2 million, or 15.1%, from $611.4
million at December 31, 2023 to $703.6 million at December 31,
2024. Brokered time deposits, which are included in time deposits,
totaled $1.7 million at December 31, 2024 and at December 31, 2023.
The loan-to-deposit ratio decreased from 94.6% at December 31, 2023
to 91.5% at December 31, 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 December 31, 2024, the Company had $1.1
billion in immediately available liquidity, compared to $643.6
million in uninsured deposits, or 28.4% of total deposits,
representing a coverage ratio of 171.8%.
Uninsured deposits of the Bank’s customers are
eligible for FDIC pass-through insurance if the customer opens an
IntraFi Insured Cash Sweep account or a reciprocal time deposit
through the Certificate of Deposit Account Registry System. 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 Credit Losses and Credit
Quality
At December 31, 2024, the allowance for credit
losses was $19.5 million, or 0.94% of total loans and 362.9% 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
December 31, 2024, nonperforming loans totaled $5.4 million, or
0.26% of total loans, compared to $6.4 million, or 0.32% of total
loans, at December 31, 2023. Total delinquent loans decreased $1.0
million, or 16.7%, from $6.0 million, or 0.30% of total loans, at
December 31, 2023 to $5.0 million, or 0.24% of total loans, at
December 31, 2024. At December 31, 2024 and December 31, 2023, the
Company did not have any other real estate owned.
Net Interest Margin
The net interest margin was 2.41% for the three
months ended December 31, 2024, compared to 2.40% for the three
months ended September 30, 2024. The net interest margin, on a
tax-equivalent basis, was 2.43% for the three months ended December
31, 2024, compared to 2.42% for the three months ended September
30, 2024.
Stock Repurchase Program
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 then-outstanding shares of
common stock.
During the three months ended December 31, 2024,
the Company repurchased 220,000 shares of common stock under the
2024 Plan, with an average price per share of $9.00. During the
twelve months ended December 31, 2024, the Company repurchased
934,282 shares of common stock under the 2024 Plan and the
previously existing share repurchase plan, as applicable, with an
average price per share of $7.94. As of December 31, 2024, there
were 472,318 shares of common stock available for repurchase under
the 2024 Plan.
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 $11.30 at
December 31, 2024, compared to $10.96 at December 31, 2023, while
tangible book value per share, a non-GAAP financial measure,
increased $0.33, or 3.2%, from $10.30 at December 31, 2023 to
$10.63 at December 31, 2024. See pages 20-22 for the related
tangible book value calculation and a reconciliation of GAAP to
non-GAAP financial measures.
Net Income for the Three Months Ended
December 31, 2024 Compared to the Three Months Ended September 30,
2024
The Company reported an increase in net income
of $1.4 million, or 72.7%, from $1.9 million, or $0.09 per diluted
share, for the three months ended September 30, 2024, to $3.3
million, or $0.16 per diluted share, for the three months ended
December 31, 2024. Net interest income increased $545,000, or 3.7%,
the provision for credit losses decreased $1.7 million,
non-interest income increased $113,000, or 3.6%, and non-interest
expense increased $520,000, or 3.6%. Return on average assets and
return on average equity were 0.49% and 5.48%, respectively, for
the three months ended December 31, 2024, compared to 0.29% and
3.19%, respectively, for the three months ended September 30,
2024.
Net Interest Income and Net Interest
Margin
On a sequential quarter basis, net interest
income, our primary driver of revenues, increased $545,000, or
3.7%, to $15.3 million for the three months ended December 31,
2024, from $14.7 million for the three months ended September 30,
2024. The increase in net interest income was primarily due to an
increase in interest income of $746,000, or 2.7%, partially offset
by an increase in interest expense of $201,000, or 1.5%.
The net interest margin was 2.41% for the three
months ended December 31, 2024, compared to 2.40% for the three
months ended September 30, 2024. The net interest margin, on a
tax-equivalent basis, was 2.43% for the three months ended December
31, 2024, compared to 2.42% for the three months ended September
30, 2024. During the three months ended December 31, 2024 and
during the three months ended September 30, 2024, the Company had a
fair value hedge which contributed to an increase in the net
interest margin of one basis point for the three months ended
December 31, 2024, compared to an increase of seven basis points
during the three months ended September 30, 2024. Excluding the
interest income attributed to the fair value hedge, the net
interest margin increased seven basis points from 2.33% for the
three months ended September 30, 2024 to 2.40% for the three months
ended December 31, 2024, respectively. The fair value hedge matured
in October of 2024.
The average yield on interest-earning assets,
without the impact of tax-equivalent adjustments, was 4.52% for the
three months ended December 31, 2024, compared to 4.54% for the
three months ended September 30, 2024. Excluding the impact of the
fair value hedge discussed above, the average yield on
interest-earnings assets, without the impact of tax-equivalent
adjustments, increased four basis points to 4.51% during the three
months ended December 31, 2024, compared to 4.47% during the three
months ended September 30, 2024. The average loan yield, without
the impact of tax-equivalent adjustments, was 4.86% for the three
months ended December 31, 2024, compared to 4.90% for the three
months ended September 30, 2024. Excluding the impact of the fair
value hedge discussed above, the average yield on loans, without
the impact of tax-equivalent adjustments, increased two basis
points to 4.84% during the three months ended December 31, 2024,
compared to 4.82% during the three months ended September 30, 2024.
During the three months ended December 31, 2024, average
interest-earning assets increased $75.8 million, or 3.1% to $2.5
billion, primarily due to an increase in average loans of $24.2
million, or 1.2%, an increase in average short-term investments,
consisting of cash and cash equivalents, of $44.8 million, or
139.7%, and an increase in average securities of $6.8 million, or
1.9%.
The average cost of total funds, including
non-interest bearing accounts and borrowings, decreased four basis
points from 2.24% for the three months ended September 30, 2024 to
2.20% for the three months ended December 31, 2024. The average
cost of core deposits, which the Company defines as all deposits
except time deposits, increased five basis points to 0.98% for the
three months ended December 31, 2024, from 0.93% for the three
months ended September 30, 2024. The average cost of time deposits
decreased 13 basis points from 4.44% for the three months ended
September 30, 2024, to 4.31% for the three months ended December
31, 2024. The average cost of borrowings, including subordinated
debt, decreased one basis point from 5.05% for the three months
ended September 30, 2024 to 5.04% for the three months ended
December 31, 2024. Average demand deposits, an interest-free source
of funds, increased $20.0 million, or 3.6%, from $559.2 million, or
25.7% of total average deposits, for the three months ended
September 30, 2024, to $579.2 million, or 25.6% of total average
deposits, for the three months ended December 31, 2024.
Provision for (Reversal of) Credit
Losses
During the three months ended December 31, 2024,
the Company recorded a reversal of credit losses of $762,000,
compared to a provision for credit losses of $941,000 during the
three months ended September 30, 2024. The provision for credit
losses includes a reversal of credit losses on loans of $553,000
and a reversal of credit losses on unfunded loan commitments of
$209,000. The reversal of credit losses on loans was due to changes
in the economic environment and related adjustments to the
quantitative components of the CECL methodology as well as changes
in the loan portfolio mix. 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. The decrease in reserves on unfunded
loan commitments was due to an decrease in commercial real estate
unfunded loan commitments of $19.5 million, or 10.0%, from $195.3
million at September 30, 2024 to $175.8 million at December
31, 2024. 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 December 31, 2024,
the Company recorded net recoveries of $128,000, compared to net
charge-offs of $98,000 for the three months ended September 30,
2024.
Non-Interest Income
On a sequential quarter basis, non-interest
income increased $113,000, or 3.6%, to $3.3 million for the three
months ended December 31, 2024, from $3.1 million for the three
months ended September 30, 2024. During the three months ended
December 31, 2024, service charges and fees on deposits decreased
$40,000, or 1.7%, to $2.3 million from the three months ended
September 30, 2024. Income from bank-owned life insurance (“BOLI”)
increased $16,000, or 3.4%, from the three months ended September
30, 2024 to $486,000 for the three months ended December 31, 2024.
During the three months ended December 31, 2024, the Company
reported $187,000 in other income from loan-level swap fees on
commercial loans, compared to $74,000 during the three months ended
September 30, 2024. During the three months ended December 31,
2024, the Company reported a loss of $11,000 from mortgage banking
activities, compared to income from mortgage banking activities of
$246,000, during the three months ended September 30, 2024. During
the three months ended December 31, 2024, the Company reported
unrealized losses on marketable equity securities of $9,000,
compared to unrealized gains of $10,000, during the three months
ended September 30, 2024. During the three months ended December
31, 2024, the Company reported gains on non-marketable equity
investments of $300,000 and did not have comparable income during
the three months ended September 30, 2024.
Non-Interest Expense
For the three months ended December 31, 2024,
non-interest expense increased $520,000, or 3.6%, to $14.9 million
from $14.4 million for the three months ended September 30, 2024.
Salaries and related benefits increased $317,000, or 3.9%,
primarily related to incentive compensation accrual adjustments due
to revised payout estimates and an increase in health insurance
benefits. FDIC insurance expense increased $51,000, or 15.1%,
occupancy expense increased $39,000, or 3.2%, primarily due to snow
removal costs of $47,000, advertising expense increased $39,000, or
14.4%, data processing expense increased $31,000, or 3.6%, software
expenses increased $30,000, or 4.9%, furniture and equipment
expense increased $22,000, or 4.6%, and other non-interest expense
increased $116,000, or 8.8%. These increases were partially offset
by a decrease in professional fees of $69,000, or 12.8%, and a
decrease in debit card processing and ATM network costs of $56,000,
or 8.6%.
For the three months ended December 31, 2024 and
the three months ended September 30, 2024, the efficiency ratio was
80.6%. For the three months ended December 31, 2024, the adjusted
efficiency ratio, a non-GAAP financial measure, was 81.9% compared
to 80.7% for the three months ended September 30, 2024. The
increase in the adjusted efficiency ratio was driven by higher
expenses during the three months ended December 31, 2024. See pages
20-22 for the related adjusted efficiency ratio calculation and a
reconciliation of GAAP to non-GAAP financial measures.
Income Tax Provision
Income tax expense for the three months ended
December 31, 2024 was $1.1 million, with an effective tax rate of
24.6%, compared to $618,000, with an effective tax rate of 24.5%,
for the three months ended September 30, 2024.
Net Income for the Three Months Ended
December 31, 2024 Compared to the Three Months Ended December 31,
2023
The Company reported net income of $3.3 million,
or $0.16 per diluted share, for the three months ended December 31,
2024, compared to net income of $2.5 million, or $0.12 per diluted
share, for the three months ended December 31, 2023. Net interest
income decreased $903,000, or 5.6%, provision for credit losses
decreased $1.2 million, non-interest income increased $540,000, or
19.9%, and non-interest expense increased $141,000, or 1.0%, during
the same period. Return on average assets and return on average
equity were 0.49% and 5.48%, respectively, for the three months
ended December 31, 2024, compared to 0.39% and 4.31%, respectively,
for the three months ended December 31, 2023.
Net Interest Income and Net Interest
Margin
Net interest income decreased $903,000, or 5.6%,
to $15.3 million, for the three months ended December 31, 2024,
from $16.2 million for the three months ended December 31, 2023.
The decrease in net interest income was due to an increase in
interest expense of $2.7 million, or 25.7%, partially offset by an
increase in interest and dividend income of $1.8 million, or 6.8%.
During the three months ended December 31, 2024 and the three
months ended December 31, 2023, the Company had a fair value hedge
which contributed $74,000 to interest income during the three
months ended December 31, 2024, compared to $459,000 during the
three months ended December 31, 2023. The fair value hedge matured
in October of 2024. 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 2.41% for the three
months ended December 31, 2024, compared to 2.64% for the three
months ended December 31, 2023. The net interest margin, on a
tax-equivalent basis, was 2.43% for the three months ended December
31, 2024, compared to 2.66% for the three months ended December 31,
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. During
the three months ended December 31, 2024, the Company had a fair
value hedge which contributed to an increase in the net interest
margin of one basis point, compared to an increase of eight basis
points during the three months ended December 31, 2023. The fair
value hedge matured in October of 2024.
The average yield on interest-earning assets,
without the impact of tax-equivalent adjustments, was 4.52% for the
three months ended December 31, 2024, compared to 4.38% for the
three months ended December 31, 2023. The average loan yield,
without the impact of tax-equivalent adjustments, was 4.86% for the
three months ended December 31, 2024, compared to 4.71% for the
three months ended December 31, 2023. During the three months ended
December 31, 2024, average interest-earning assets increased $89.9
million, or 3.7%, to $2.5 billion, primarily due to an increase in
average loans of $45.7 million, or 2.3%, an increase in average
short-term investments, consisting of cash and cash equivalents, of
$34.0 million, or 79.3%, an increase in average securities of $6.4
million, or 1.8%, and an increase in average other investments of
$3.8 million, or 31.4%.
The average cost of total funds, including
non-interest bearing accounts and borrowings, increased 39 basis
points from 1.81% for the three months ended December 31, 2023, to
2.20% for the three months ended December 31, 2024. The average
cost of core deposits, which the Company defines as all deposits
except time deposits, increased 22 basis points to 0.98% for the
three months ended December 31, 2024, from 0.76% for the three
months ended December 31, 2023. The average cost of time deposits
increased 53 basis points from 3.78% for the three months ended
December 31, 2023 to 4.31% for the three months ended December 31,
2024. The average cost of borrowings, including subordinated debt,
increased 21 basis points from 4.83% for the three months ended
December 31, 2023 to 5.04% for the three months ended December 31,
2024. Average demand deposits, an interest-free source of funds,
decreased $9.6 million, or 1.6%, from $588.7 million, or 27.0% of
total average deposits, for the three months ended December 31,
2023, to $579.2 million, or 25.6% of total average deposits, for
the three months ended December 31, 2024.
Provision for (Reversal of) Credit
Losses
During the three months ended December 31, 2024,
the Company recorded a reversal of credit losses of $762,000,
compared to a provision for credit losses of $486,000 during the
three months ended December 31, 2023. The decrease was primarily
due to a decrease in unfunded commercial real estate loan
commitments, as well as 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 recoveries of $128,000
for the three months ended December 31, 2024, as compared to net
charge-offs of $136,000 for the three months ended December 31,
2023.
Non-Interest Income
Non-interest income increased $540,000, or
19.9%, from $2.7 million for the three months ended December 31,
2023, to $3.3 million for the three months ended December 31, 2024.
Service charges and fees on deposits increased $18,000, or 0.8%,
and income from BOLI increased $54,000, or 12.5%, from the three
months ended December 31, 2023 to the three months ended December
31, 2024. During the three months ended December 31, 2024, the
Company reported $187,000 in other income from loan-level swap fees
on commercial loans and did not have comparable income during the
three months ended December 31, 2023. During the three months ended
December 31, 2024, the Company reported a loss of $11,000 from
mortgage banking activities and did not have comparable loss during
the three months ended December 31, 2023. During the three months
ended December 31, 2024 and the three months ended December 31,
2023, the Company reported $9,000 and $1,000, respectively, in
unrealized losses on marketable equity securities. During the three
months ended December 31, 2024, the Company reported a gain on
non-marketable equity investments of $300,000 and did not have
comparable non-interest income during the three months ended
December 31, 2023.
Non-Interest Expense
For the three months ended December 31, 2024,
non-interest expense increased $141,000, or 1.0%, to $14.9 million
from $14.8 million for the three months ended December 31, 2023.
During the three months ended December 31, 2023, the Company
reached an agreement-in-principle to settle purported class action
lawsuits concerning the Company’s deposit products and related
disclosures, specifically involving overdraft fees and insufficient
funds fees. This agreement-in-principle reflects our business
decision to avoid the costs, uncertainties and distractions of
further litigation. Excluding the legal settlement accrual of
$510,000 during the three months ended December 31, 2023,
non-interest expense increased $651,000, or 4.6%, from $14.3
million for the three months ended December 31, 2023 to $14.9
million for the three months ended December 31, 2024.
Salaries and related benefits increased
$690,000, or 8.9%, to $8.4 million, primarily related to incentive
compensation accrual adjustments due to revised payout estimates
and annual merit increases. Data processing expense increased
$112,000, or 14.2%, occupancy expense increased $58,000, or 4.8%,
FDIC insurance expense increased $51,000, or 15.1%, software
related expenses increased $44,000, or 7.4%, debit card processing
and ATM network costs increased $34,000, or 6.0%, and furniture and
equipment related expenses increased $11,000, or 2.2%. These
increases were partially offset by a decrease in professional fees
of $203,000, or 30.1%, a decrease in advertising expense of
$67,000, or 17.8%, and a decrease in other non-interest expense of
$589,000, or 29.1%. Excluding the $510,000 legal settlement
accrual, other non-interest expense decreased $79,000, or 5.2%.
For the three months ended December 31, 2024,
the efficiency ratio was 80.6%, compared to 78.3% for the three
months ended December 31, 2023. For the three months ended December
31, 2024, the adjusted efficiency ratio, a non-GAAP financial
measure, was 81.9% compared to 78.3% for the three months ended
December 31, 2023. The increase in the efficiency ratio and the
non-GAAP adjusted efficiency ratio was primarily driven by lower
revenues during the three months ended December 31, 2024, compared
to the three months ended December 31, 2023. See pages 20-22 for
the related adjusted efficiency ratio calculation and a
reconciliation of GAAP to non-GAAP financial measures.
Income Tax Provision
For the three months ended December 31, 2024,
income tax expense was $1.1 million, with an effective tax rate of
24.6%, compared to $1.1 million, with an effective tax rate of
30.6%, for the three months ended December 31, 2023. For the three
months ended December 31, 2023, the effective tax rate was
negatively impacted by discrete items totaling $285,000.
Net Income for the Twelve Months Ended
December 31, 2024 Compared to the Twelve Months Ended December 31,
2023
For the twelve months ended December 31, 2024,
the Company reported net income of $11.7 million, or $0.56 per
diluted share, compared to $15.1 million, or $0.70 per diluted
share, for the twelve months ended December 31, 2023. Net interest
income decreased $8.1 million, or 11.9%, provision for credit
losses decreased $1.5 million, non-interest income increased $2.0
million, or 18.4%, and non-interest expense increased $78,000, or
0.1%, during the same period in 2023. Return on average assets and
return on average equity were 0.45% and 4.93% for the twelve months
ended December 31, 2024, respectively, compared to 0.59% and 6.47%
for the twelve months ended December 31, 2023, respectively.
Net Interest Income and Net Interest
Margin
During the twelve months ended December 31,
2024, net interest income decreased $8.1 million, or 11.9%, to
$59.8 million, compared to $67.9 million for the twelve months
ended December 31, 2023. The decrease in net interest income was
primarily due to an increase in interest expense of $16.8 million,
or 50.6%, partially offset by an increase in interest and dividend
income of $8.7 million, or 8.6%.
The net interest margin for the twelve months
ended December 31, 2024 was 2.45%, compared to 2.82% for the twelve
months ended December 31, 2023. The net interest margin, on a
tax-equivalent basis, was 2.47% for the twelve months ended
December 31, 2024, compared to 2.84% for the twelve months ended
December 31, 2023.
The average yield on interest-earning assets,
without the impact of tax-equivalent adjustments, increased 30
basis points from 4.20% for the twelve months ended December 31,
2023 to 4.50% for the twelve months ended December 31, 2024. The
average yield on loans, without the impact of tax-equivalent
adjustments, increased 32 basis points from 4.54% for the twelve
months ended December 31, 2023 to 4.86% for the twelve months ended
December 31, 2024. During the twelve months ended December 31,
2024, average interest-earning assets increased $33.5 million, or
1.4%, to $2.4 billion, compared to the twelve months ended December
31, 2023, primarily due to an increase in average loans of $29.0
million, or 1.4%, an increase in average short-term investments,
consisting of cash and cash equivalents, of $12.8 million, or
62.5%, and an increase in average other investments of $2.2
million, or 18.1%, partially offset by a decrease in average
securities of $10.6 million, or 2.9%.
During the twelve months ended December 31,
2024, the average cost of funds, including non-interest-bearing
demand accounts and borrowings, increased 70 basis points from
1.44% for the twelve months ended December 31, 2023 to 2.14%. For
the twelve months ended December 31, 2024, the average cost of core
deposits, including non-interest-bearing demand deposits, increased
24 basis points from 0.65% for the twelve months ended December 31,
2023, to 0.89%. The average cost of time deposits increased 129
basis points from 3.03% for the twelve months ended December 31,
2023 to 4.32% for the twelve months ended December 31, 2024. The
average cost of borrowings, which include borrowings and
subordinated debt, increased 16 basis points from 4.84% for the
twelve months ended December 31, 2023 to 5.00% for the twelve
months ended December 31, 2024.
For the twelve months ended December 31, 2024,
average demand deposits, an interest-free source of funds,
decreased $41.4 million, or 6.9%, from $602.7 million, or 27.8% of
total average deposits, for the twelve months ended December 31,
2023, to $561.3 million, or 25.8% of total average deposits.
Provision for (Reversal of) Credit
Losses
During the twelve months ended December 31,
2024, the Company recorded a reversal of credit losses of $665,000,
compared to a provision for credit losses of $872,000 during the
twelve months ended December 31, 2023. The decrease in reserves was
primarily due to changes in the economic environment and related
adjustments to the quantitative components of the CECL methodology.
During the twelve months ended December 31, 2024, the Company
recorded net recoveries of $87,000, compared to net charge-offs of
$2.0 million for the twelve months ended December 31, 2023. The
charge-offs during the twelve months ended December 31, 2023 were
related to one commercial relationship acquired in October 2016
from Chicopee Bancorp, Inc. Specifically, the Company recorded a
$1.9 million charge-off on the acquired commercial relationship,
which represented the non-accretable credit mark that was required
to be grossed-up to the loan’s amortized cost basis with a
corresponding increase to the allowance for credit losses under the
CECL implementation.
The decrease in the provision for credit losses
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.
Non-Interest Income
For the twelve months ended December 31, 2024,
non-interest income increased $2.0 million, or 18.4%, from $10.9
million for the twelve months ended December 31, 2023 to $12.9
million. During the twelve months ended December 31, 2023, the
Company recorded a non-recurring final termination expense of $1.1
million related to the defined benefit pension plan termination.
During the twelve months ended, December 31, 2023, the Company also
recorded a non-taxable gain of $778,000 on BOLI death benefits and
did not have a comparable gain during the twelve months ended
December 31, 2024. Excluding the defined benefit pension plan
termination expense and the BOLI death benefit, non-interest income
increased $1.6 million, or 14.6%.
During the twelve months ended December 31,
2024, service charges and fees increased $346,000, or 3.9%, and
income from BOLI increased $91,000, or 5.0%, from $1.8 million for
the twelve months ended December 31, 2023 to $1.9 million. During
the twelve months ended December 31, 2024, the Company recorded
other income from loan-level swap fees on commercial loans of
$261,000 and did not have comparable income during the twelve
months ended December 31, 2023. During the twelve months ended
December 31, 2024, the Company reported a gain of $1.3 million on
non-marketable equity investments, compared to a gain of $590,000
during the twelve months ended December 31, 2023. During the twelve
months ended December 31, 2024, the Company reported a loss on the
disposal of premises and equipment of $6,000, compared to a loss of
$3,000 during the twelve months ended December 31, 2023. During the
twelve months ended December 31, 2023, the Company also reported
unrealized losses on marketable equity securities of $1,000,
compared to unrealized gains on marketable equity securities of
$13,000 during the twelve months ended December 31, 2024.
Non-Interest Expense
For the twelve months ended December 31, 2024,
non-interest expense increased $78,000, or 0.1%, to $58.4 million
from the twelve months ended December 31, 2023. During the twelve
months ended December 31, 2023, the Company reached an
agreement-in-principle to settle purported class action lawsuits
concerning the Company’s deposit products and related disclosures,
specifically involving overdraft fees and insufficient funds fees.
This agreement-in-principle reflects our business decision to avoid
the costs, uncertainties and distractions of further litigation.
Excluding the legal settlement accrual of $510,000, non-interest
expense increased $588,000, or 1.0%, from $57.8 million for the
twelve months ended December 31, 2023 to $58.4 million for the
twelve months ended December 31, 2024.
During the same period, salaries and related
benefits increased $472,000, or 1.5%, software expenses increased
$208,000, or 9.0%, data processing expense increased $320,000, or
10.1%, debit card processing and ATM network costs increased
$298,000, or 13.9%, occupancy expense increased $146,000, or 3.0%,
due to higher repair and maintenance costs, real estate taxes, and
depreciation expense. FDIC insurance expense increased $139,000, or
10.5%. These increases were partially offset by a decrease in
professional fees of $571,000, or 20.9%, which is comprised of
legal fees, audit and other professional fees. During the three
months ended December 31, 2023, professional fees included legal
fees related to the settlement of the purported class action
lawsuits. Advertising expense decreased $226,000, or 15.1%, and
other non-interest expense, excluding the $510,000 legal settlement
accrual, decreased $199,000, or 3.5%.
For the twelve months ended December 31, 2024,
the efficiency ratio was 80.4%, compared to 74.0% for the twelve
months ended December 31, 2023. For the twelve months ended
December 31, 2024, the adjusted efficiency ratio, a non-GAAP
financial measure, was 81.8%, compared to 74.3% for the twelve
months ended December 31, 2023. See pages 20-22 for the related
efficiency ratio calculations and a reconciliation of GAAP to
non-GAAP financial measures.
Income Tax Provision
For the twelve months ended December 31, 2024,
income tax expense was $3.3 million, with an effective tax rate of
22.0%, compared to $4.5 million, with an effective tax rate of
23.1%, for twelve months ended December 31, 2023. The decrease in
income tax expense for the twelve months ended December 31, 2024
compared to the twelve months December 31, 2023 was due to lower
income before taxes in 2024.
Balance Sheet
At December 31, 2024, total assets were $2.7
billion, an increase of $88.5 million, or 3.5%, from December 31,
2023. The increase in total assets was primarily due to an increase
in total loans of $42.9 million, or 2.1%, an increase in cash and
cash equivalents of $37.6 million, or 130.4%, and an increase in
investment securities of $5.5 million, or 1.5%.
Investments
At December 31, 2024, the investment securities
portfolio totaled $366.1 million, or 13.8% of total assets,
compared to $360.7 million, or 14.1% of total assets, at December
31, 2023. At December 31, 2024, the Company’s available-for-sale
securities portfolio, recorded at fair market value, increased
$23.6 million, or 17.2%, from $137.1 million at December 31, 2023
to $160.7 million. The held-to-maturity securities portfolio,
recorded at amortized cost, decreased $18.4 million, or 8.2%, from
$223.4 million at December 31, 2023 to $205.0 million at December
31, 2024.
At December 31, 2024, the Company reported
unrealized losses on the available-for-sale securities portfolio of
$31.2 million, or 16.2% of the amortized cost basis of the
available-for-sale securities portfolio, compared to unrealized
losses of $29.2 million, or 17.5% of the amortized cost basis of
the available-for-sale securities at December 31, 2023. At December
31, 2024, the Company reported unrealized losses on the
held-to-maturity securities portfolio of $39.4 million, or 19.2% of
the amortized cost basis of the held-to-maturity securities
portfolio, compared to $35.7 million, or 16.0% of the amortized
cost basis of the held-to-maturity 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 $4.6 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 December 31, 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 available-for-sale and
held-to-maturity portfolios are both eligible for pledging to the
Federal Home Loan Bank (“FHLB”) as collateral for borrowings. The
portfolios are comprised of high-credit quality investments and
both portfolios generated cash flows monthly from interest,
principal amortization and payoffs, which support’s the Bank's
objective to provide liquidity.
Total Loans
Total loans increased $42.9 million, or 2.1%,
from December 31, 2023, to $2.1 billion at December 31, 2024. The
increase in total loans was due to an increase in residential real
estate loans, including home equity loans, of $53.5 million, or
7.4%, partially offset by a decrease in commercial real estate
loans of $4.0 million, or 0.4%, a decrease in commercial and
industrial loans of $5.7 million, or 2.7% and a decrease in
consumer loans of $1.1 million, or 19.8%. During the twelve months
ended December 31, 2024, the Company sold $20.1 million in fixed
rate residential loans to the secondary market with servicing
retained.
The following table presents the summary of the
loan portfolio by the major classification of the loan at the
periods indicated:
|
|
December 31, 2024 |
|
December 31, 2023 |
|
|
(Dollars in thousands) |
|
|
|
|
Commercial real estate loans: |
|
|
|
|
Non-owner occupied |
$ |
880,828 |
|
$ |
881,643 |
|
Owner-occupied |
|
194,904 |
|
|
198,108 |
|
Total commercial real estate loans |
|
1,075,732 |
|
|
1,079,751 |
|
|
|
|
|
|
Residential real estate loans: |
|
|
|
|
Residential |
|
653,802 |
|
|
612,315 |
|
Home equity |
|
121,857 |
|
|
109,839 |
|
Total residential real estate loans |
|
775,659 |
|
|
722,154 |
|
|
|
|
|
|
Commercial and industrial loans |
|
211,656 |
|
|
217,447 |
|
|
|
|
|
|
Consumer loans |
|
4,391 |
|
|
5,472 |
|
Total gross loans |
|
2,067,438 |
|
|
2,024,824 |
|
Unamortized premiums and net deferred loans fees and costs |
|
2,751 |
|
|
2,493 |
|
Total loans |
$ |
2,070,189 |
|
$ |
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 $5.0 million, or 0.24% of
total loans, at December 31, 2024, compared to $6.0 million, or
0.30% of total loans at December 31, 2023. At December 31, 2024,
nonperforming loans totaled $5.4 million, or 0.26% of total loans,
compared to $6.4 million, or 0.32% of total loans, at December 31,
2023. At December 31, 2024 and December 31, 2023, there were no
loans 90 or more days past due and still accruing interest. Total
nonperforming assets totaled $5.4 million, or 0.20% of total
assets, at December 31, 2024, compared to $6.4 million, or 0.25% of
total assets, at December 31, 2023. At December 31, 2024 and
December 31, 2023, the Company did not have any other real estate
owned. At December 31, 2024, the allowance for credit losses was
$19.5 million, or 0.94% of total loans and 362.9% of nonperforming
loans, compared to $20.3 million, or 1.00% of total loans and
315.6% of nonperforming loans, at December 31, 2023. Total
classified loans, defined as special mention and substandard loans,
decreased $1.1 million, or 2.8%, from $39.5 million, or 1.9% of
total loans, at December 31, 2023 to $38.4 million, or 1.9% of
total loans, at December 31, 2024. Our commercial real estate
portfolio is comprised of diversified property types and primarily
within our geographic footprint. At December 31, 2024, the
commercial real estate portfolio totaled $1.1 billion, and
represented 52.0% of total loans. Of the $1.1 billion, $880.8
million, or 81.9%, was categorized as non-owner occupied commercial
real estate and represented 325.2% of the Bank’s total risk-based
capital. More details on the diversification of the loan portfolio
are available in the supplementary earnings presentation.
Deposits
Total deposits increased $118.9 million, or
5.6%, from $2.1 billion at December 31, 2023 to $2.3 billion at
December 31, 2024. Core deposits, which the Company defines as all
deposits except time deposits, increased $26.7 million, or 1.7%,
from $1.5 billion, or 71.5% of total deposits, at December 31,
2023, to $1.6 billion, or 68.9% of total deposits, at December 31,
2024. Non-interest-bearing deposits decreased $14.0 million, or
2.4%, to $565.6 million, and represent 25.0% of total deposits,
money market accounts increased $27.1 million, or 4.3%, to $661.5
million, savings accounts decreased $5.8 million, or 3.1%, to
$181.6 million and interest-bearing checking accounts increased
$19.3 million, or 14.7%, to $150.3 million.
Time deposits increased $92.2 million, or 15.1%,
from $611.4 million at December 31, 2023 to $703.6 million at
December 31, 2024. Brokered time deposits, which are included in
time deposits, totaled $1.7 million at December 31, 2024 and at
December 31, 2023. The Company has experienced growth and movement
in both money market accounts and time deposits as a result of
relationship pricing, the current interest rate environment, and
customer behaviors, as opposed to time deposit specials or interest
rate adjustments. We continue our disciplined and focused approach
to core relationship management and customer outreach 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 December 31, 2024,
the Bank’s uninsured deposits represented 28.4% of total deposits,
compared to 26.8% at December 31, 2023.
The table below is a summary of our deposit
balances for the periods noted:
|
|
|
December 31, 2024 |
|
September 30, 2024 |
|
December 31, 2023 |
|
|
|
(Dollars in thousands) |
|
Core Deposits: |
|
|
|
|
|
|
|
Demand accounts |
|
$ |
565,620 |
|
$ |
568,685 |
|
$ |
579,595 |
|
Interest-bearing accounts |
|
|
150,348 |
|
|
140,332 |
|
|
131,031 |
|
Savings accounts |
|
|
181,618 |
|
|
179,214 |
|
|
187,405 |
|
Money market accounts |
|
|
661,478 |
|
|
635,824 |
|
|
634,361 |
|
Total Core Deposits |
|
$ |
1,559,064 |
|
$ |
1,524,055 |
|
$ |
1,532,392 |
|
Time Deposits: |
|
|
703,583 |
|
|
700,151 |
|
|
611,352 |
|
Total Deposits: |
|
$ |
2,262,647 |
|
$ |
2,224,206 |
|
$ |
2,143,744 |
FHLB and Subordinated Debt
At December 31, 2024, total borrowings decreased
$33.4 million, or 21.3%, from $156.5 million at December 31, 2023
to $123.1 million. At December 31, 2024, short-term borrowings
decreased $10.7 million, or 66.5%, to $5.4 million, compared to
$16.1 million at December 31, 2023. Long-term borrowings decreased
$22.6 million, or 18.8%, from $120.6 million at December 31, 2023
to $98.0 million at December 31, 2024. At December 31, 2024 and
December 31, 2023, borrowings also consisted of $19.8 million and
$19.7 million, respectively, in fixed-to-floating rate subordinated
notes.
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 was no outstanding balance under the BTFP
at December 31, 2024.
As of December 31, 2024, the Company had
$461.6 million of additional borrowing capacity at the Federal
Home Loan Bank, $382.9 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 December 31, 2024, shareholders’ equity was
$235.9 million, or 8.9% of total assets, compared to $237.4
million, or 9.3% of total assets, at December 31, 2023. The change
was primarily attributable to an increase in accumulated other
comprehensive loss of $1.5 million, cash dividends paid of $5.9
million, repurchase of shares at a cost of $7.8 million, partially
offset by net income of $11.7 million. At December 31, 2024, total
shares outstanding were 20,875,713. 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.
|
|
December 31, 2024 |
|
December 31, 2023 |
|
|
Company |
|
Bank |
|
Company |
|
Bank |
|
Total Capital (to Risk Weighted Assets) |
14.38 |
% |
|
13.65 |
% |
|
14.67 |
% |
|
13.94 |
% |
|
Tier 1 Capital (to Risk Weighted Assets) |
12.37 |
% |
|
12.64 |
% |
|
12.59 |
% |
|
12.88 |
% |
|
Common Equity Tier 1 Capital (to Risk Weighted Assets) |
12.37 |
% |
|
12.64 |
% |
|
12.59 |
% |
|
12.88 |
% |
|
Tier 1 Leverage Ratio (to Adjusted Average Assets) |
9.14 |
% |
|
9.34 |
% |
|
9.40 |
% |
|
9.62 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 or political
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;
- 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 |
Twelve Months Ended |
|
|
|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
December 31, |
|
|
|
2024 |
2024 |
2024 |
2024 |
2023 |
2024 |
2023 |
|
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
25,183 |
|
$ |
25,134 |
|
$ |
24,340 |
|
$ |
24,241 |
|
$ |
23,939 |
|
$ |
98,898 |
|
$ |
91,169 |
|
|
Securities |
|
|
2,273 |
|
|
2,121 |
|
|
2,141 |
|
|
2,114 |
|
|
2,094 |
|
|
8,649 |
|
|
8,370 |
|
|
Other investments |
|
|
214 |
|
|
189 |
|
|
148 |
|
|
136 |
|
|
140 |
|
|
687 |
|
|
558 |
|
|
Short-term investments |
|
|
916 |
|
|
396 |
|
|
173 |
|
|
113 |
|
|
597 |
|
|
1,598 |
|
|
1,021 |
|
|
Total interest and dividend income |
|
|
28,586 |
|
|
27,840 |
|
|
26,802 |
|
|
26,604 |
|
|
26,770 |
|
|
109,832 |
|
|
101,118 |
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
11,443 |
|
|
11,165 |
|
|
10,335 |
|
|
9,293 |
|
|
8,773 |
|
|
42,236 |
|
|
26,649 |
|
|
Short-term borrowings |
|
|
60 |
|
|
71 |
|
|
186 |
|
|
283 |
|
|
123 |
|
|
600 |
|
|
1,589 |
|
|
Long-term debt |
|
|
1,557 |
|
|
1,622 |
|
|
1,557 |
|
|
1,428 |
|
|
1,444 |
|
|
6,164 |
|
|
3,957 |
|
|
Subordinated debt |
|
|
253 |
|
|
254 |
|
|
254 |
|
|
254 |
|
|
254 |
|
|
1,015 |
|
|
1,014 |
|
|
Total interest expense |
|
|
13,313 |
|
|
13,112 |
|
|
12,332 |
|
|
11,258 |
|
|
10,594 |
|
|
50,015 |
|
|
33,209 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest and dividend income |
|
|
15,273 |
|
|
14,728 |
|
|
14,470 |
|
|
15,346 |
|
|
16,176 |
|
|
59,817 |
|
|
67,909 |
|
|
|
|
|
|
|
|
|
|
|
|
(REVERSAL OF) PROVISION FOR CREDIT LOSSES |
|
|
(762 |
) |
|
941 |
|
|
(294 |
) |
|
(550 |
) |
|
486 |
|
|
(665 |
) |
|
872 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest and dividend income after (reversal of) provision for
credit losses |
|
|
16,035 |
|
|
13,787 |
|
|
14,764 |
|
|
15,896 |
|
|
15,690 |
|
|
60,482 |
|
|
67,037 |
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
|
|
Service charges and fees on deposits |
|
|
2,301 |
|
|
2,341 |
|
|
2,341 |
|
|
2,219 |
|
|
2,283 |
|
|
9,202 |
|
|
8,856 |
|
|
Income from bank-owned life insurance |
|
|
486 |
|
|
470 |
|
|
502 |
|
|
453 |
|
|
432 |
|
|
1,911 |
|
|
1,820 |
|
|
Unrealized (loss) gain on marketable equity securities |
|
|
(9 |
) |
|
10 |
|
|
4 |
|
|
8 |
|
|
(1 |
) |
|
13 |
|
|
(1 |
) |
|
(Loss) gain on sale of mortgages |
|
|
(11 |
) |
|
246 |
|
|
- |
|
|
- |
|
|
- |
|
|
235 |
|
|
- |
|
|
Gain on non-marketable equity investments |
|
|
300 |
|
|
- |
|
|
987 |
|
|
- |
|
|
- |
|
|
1,287 |
|
|
590 |
|
|
Loss on disposal of premises and equipment |
|
|
- |
|
|
- |
|
|
- |
|
|
(6 |
) |
|
- |
|
|
(6 |
) |
|
(3 |
) |
|
Loss on defined benefit plan termination |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(1,143 |
) |
|
Gain on bank-owned life insurance death benefit |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
778 |
|
|
Other income |
|
|
187 |
|
|
74 |
|
|
- |
|
|
- |
|
|
- |
|
|
261 |
|
|
- |
|
|
Total non-interest income |
|
|
3,254 |
|
|
3,141 |
|
|
3,834 |
|
|
2,674 |
|
|
2,714 |
|
|
12,903 |
|
|
10,897 |
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
Salaries and employees benefits |
|
|
8,429 |
|
|
8,112 |
|
|
7,901 |
|
|
8,244 |
|
|
7,739 |
|
|
32,686 |
|
|
32,214 |
|
|
Occupancy |
|
|
1,256 |
|
|
1,217 |
|
|
1,218 |
|
|
1,363 |
|
|
1,198 |
|
|
5,054 |
|
|
4,908 |
|
|
Furniture and equipment |
|
|
505 |
|
|
483 |
|
|
483 |
|
|
484 |
|
|
494 |
|
|
1,955 |
|
|
1,954 |
|
|
Data processing |
|
|
900 |
|
|
869 |
|
|
846 |
|
|
862 |
|
|
788 |
|
|
3,477 |
|
|
3,157 |
|
|
Software |
|
|
642 |
|
|
612 |
|
|
566 |
|
|
699 |
|
|
598 |
|
|
2,519 |
|
|
2,311 |
|
|
Debit/ATM card processing expense |
|
|
593 |
|
|
649 |
|
|
643 |
|
|
552 |
|
|
559 |
|
|
2,437 |
|
|
2,139 |
|
|
Professional fees |
|
|
471 |
|
|
540 |
|
|
581 |
|
|
569 |
|
|
674 |
|
|
2,161 |
|
|
2,732 |
|
|
FDIC insurance |
|
|
389 |
|
|
338 |
|
|
323 |
|
|
410 |
|
|
338 |
|
|
1,460 |
|
|
1,321 |
|
|
Advertising |
|
|
310 |
|
|
271 |
|
|
339 |
|
|
349 |
|
|
377 |
|
|
1,269 |
|
|
1,495 |
|
|
Other |
|
|
1,431 |
|
|
1,315 |
|
|
1,414 |
|
|
1,250 |
|
|
2,020 |
|
|
5,410 |
|
|
6,119 |
|
|
Total non-interest expense |
|
|
14,926 |
|
|
14,406 |
|
|
14,314 |
|
|
14,782 |
|
|
14,785 |
|
|
58,428 |
|
|
58,350 |
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
|
|
4,363 |
|
|
2,522 |
|
|
4,284 |
|
|
3,788 |
|
|
3,619 |
|
|
14,957 |
|
|
19,584 |
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX PROVISION |
|
|
1,075 |
|
|
618 |
|
|
771 |
|
|
827 |
|
|
1,108 |
|
|
3,291 |
|
|
4,516 |
|
|
NET INCOME |
|
$ |
3,288 |
|
$ |
1,904 |
|
$ |
3,513 |
|
$ |
2,961 |
|
$ |
2,511 |
|
$ |
11,666 |
|
$ |
15,068 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.16 |
|
$ |
0.09 |
|
$ |
0.17 |
|
$ |
0.14 |
|
$ |
0.12 |
|
$ |
0.56 |
|
$ |
0.70 |
|
|
Weighted average shares outstanding |
|
|
20,561,749 |
|
|
20,804,162 |
|
|
21,056,173 |
|
|
21,180,968 |
|
|
21,253,452 |
|
|
20,899,573 |
|
|
21,535,888 |
|
|
Diluted earnings per share |
|
$ |
0.16 |
|
$ |
0.09 |
|
$ |
0.17 |
|
$ |
0.14 |
|
$ |
0.12 |
|
$ |
0.56 |
|
$ |
0.70 |
|
|
Weighted average diluted shares outstanding |
|
|
20,701,276 |
|
|
20,933,833 |
|
|
21,163,762 |
|
|
21,271,323 |
|
|
21,400,664 |
|
|
21,016,358 |
|
|
21,610,329 |
|
|
|
|
|
|
|
|
|
|
|
|
Other Data: |
|
|
|
|
|
|
|
|
|
Return on average assets (1) |
|
|
0.49 |
% |
|
0.29 |
% |
|
0.55 |
% |
|
0.47 |
% |
|
0.39 |
% |
|
0.45 |
% |
|
0.59 |
% |
|
Return on average equity (1) |
|
|
5.48 |
% |
|
3.19 |
% |
|
6.03 |
% |
|
5.04 |
% |
|
4.31 |
% |
|
4.93 |
% |
|
6.47 |
% |
|
Efficiency ratio |
|
|
80.56 |
% |
|
80.62 |
% |
|
78.20 |
% |
|
82.03 |
% |
|
78.27 |
% |
|
80.35 |
% |
|
74.04 |
% |
|
Adjusted efficiency ratio (2) |
|
|
81.85 |
% |
|
80.67 |
% |
|
82.68 |
% |
|
82.04 |
% |
|
78.26 |
% |
|
81.80 |
% |
|
74.25 |
% |
|
Net interest margin |
|
|
2.41 |
% |
|
2.40 |
% |
|
2.42 |
% |
|
2.57 |
% |
|
2.64 |
% |
|
2.45 |
% |
|
2.82 |
% |
|
Net interest margin, on a fully tax-equivalent basis |
|
|
2.43 |
% |
|
2.42 |
% |
|
2.44 |
% |
|
2.59 |
% |
|
2.66 |
% |
|
2.47 |
% |
|
2.84 |
% |
|
(1) Annualized. |
|
|
|
|
|
|
(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,
loss on defined benefit plan termination and gain on bank-owned
life insurance death benefit. |
|
WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Dollars in
thousands) (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
|
2024 |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
Cash and cash equivalents |
|
$ |
66,450 |
|
|
$ |
72,802 |
|
|
$ |
53,458 |
|
|
$ |
22,613 |
|
|
$ |
28,840 |
|
|
Securities available-for-sale, at fair value |
|
|
160,704 |
|
|
|
155,889 |
|
|
|
135,089 |
|
|
|
138,362 |
|
|
|
137,115 |
|
|
Securities held to maturity, at amortized cost |
|
|
205,036 |
|
|
|
213,266 |
|
|
|
217,632 |
|
|
|
221,242 |
|
|
|
223,370 |
|
|
Marketable equity securities, at fair value |
|
|
397 |
|
|
|
252 |
|
|
|
233 |
|
|
|
222 |
|
|
|
196 |
|
|
Federal Home Loan Bank of Boston and other restricted stock - at
cost |
|
|
5,818 |
|
|
|
7,143 |
|
|
|
7,143 |
|
|
|
3,105 |
|
|
|
3,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
|
2,070,189 |
|
|
|
2,049,002 |
|
|
|
2,026,226 |
|
|
|
2,025,566 |
|
|
|
2,027,317 |
|
|
Allowance for credit losses |
|
|
(19,529 |
) |
|
|
(19,955 |
) |
|
|
(19,444 |
) |
|
|
(19,884 |
) |
|
|
(20,267 |
) |
|
Net loans |
|
|
2,050,660 |
|
|
|
2,029,047 |
|
|
|
2,006,782 |
|
|
|
2,005,682 |
|
|
|
2,007,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank-owned life insurance |
|
|
77,056 |
|
|
|
76,570 |
|
|
|
76,100 |
|
|
|
75,598 |
|
|
|
75,145 |
|
|
Goodwill |
|
|
12,487 |
|
|
|
12,487 |
|
|
|
12,487 |
|
|
|
12,487 |
|
|
|
12,487 |
|
|
Core deposit intangible |
|
|
1,438 |
|
|
|
1,531 |
|
|
|
1,625 |
|
|
|
1,719 |
|
|
|
1,813 |
|
|
Other assets |
|
|
73,044 |
|
|
|
71,492 |
|
|
|
75,521 |
|
|
|
76,206 |
|
|
|
74,848 |
|
|
TOTAL ASSETS |
|
$ |
2,653,090 |
|
|
$ |
2,640,479 |
|
|
$ |
2,586,070 |
|
|
$ |
2,557,236 |
|
|
$ |
2,564,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
$ |
2,262,647 |
|
|
$ |
2,224,206 |
|
|
$ |
2,171,809 |
|
|
$ |
2,143,747 |
|
|
$ |
2,143,744 |
|
|
Short-term borrowings |
|
|
5,390 |
|
|
|
4,390 |
|
|
|
6,570 |
|
|
|
11,470 |
|
|
|
16,100 |
|
|
Long-term debt |
|
|
98,000 |
|
|
|
128,277 |
|
|
|
128,277 |
|
|
|
120,646 |
|
|
|
120,646 |
|
|
Subordinated debt |
|
|
19,751 |
|
|
|
19,741 |
|
|
|
19,731 |
|
|
|
19,722 |
|
|
|
19,712 |
|
|
Securities pending settlement |
|
|
8,622 |
|
|
|
2,513 |
|
|
|
102 |
|
|
|
- |
|
|
|
- |
|
|
Other liabilities |
|
|
22,770 |
|
|
|
20,697 |
|
|
|
23,104 |
|
|
|
25,855 |
|
|
|
26,960 |
|
|
TOTAL LIABILITIES |
|
|
2,417,180 |
|
|
|
2,399,824 |
|
|
|
2,349,593 |
|
|
|
2,321,440 |
|
|
|
2,327,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
|
|
235,910 |
|
|
|
240,655 |
|
|
|
236,477 |
|
|
|
235,796 |
|
|
|
237,409 |
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
2,653,090 |
|
|
$ |
2,640,479 |
|
|
$ |
2,586,070 |
|
|
$ |
2,557,236 |
|
|
$ |
2,564,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
Other Data (Dollars in thousands, except
per share data) (Unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
|
2024 |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
Shares outstanding at end of period |
20,875,713 |
|
21,113,408 |
|
21,357,849 |
|
21,627,690 |
|
21,666,807 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating results: |
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ 15,273 |
|
$ 14,728 |
|
$ 14,470 |
|
$ 15,346 |
|
$ 16,176 |
|
(Reversal of) provision for credit losses |
(762) |
|
941 |
|
(294) |
|
(550) |
|
486 |
|
Non-interest income |
3,254 |
|
3,141 |
|
3,834 |
|
2,674 |
|
2,714 |
|
Non-interest expense |
14,926 |
|
14,406 |
|
14,314 |
|
14,782 |
|
14,785 |
|
Income before income provision for income taxes |
4,363 |
|
2,522 |
|
4,284 |
|
3,788 |
|
3,619 |
|
Income tax provision |
1,075 |
|
618 |
|
771 |
|
827 |
|
1,108 |
|
Net income |
3,288 |
|
1,904 |
|
3,513 |
|
2,961 |
|
2,511 |
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
Net interest margin |
2.41% |
|
2.40% |
|
2.42% |
|
2.57% |
|
2.64% |
|
Net interest margin, on a fully tax-equivalent basis |
2.43% |
|
2.42% |
|
2.44% |
|
2.59% |
|
2.66% |
|
Interest rate spread |
1.63% |
|
1.60% |
|
1.66% |
|
1.85% |
|
1.96% |
|
Interest rate spread, on a fully tax-equivalent basis |
1.65% |
|
1.62% |
|
1.67% |
|
1.86% |
|
1.98% |
|
Return on average assets |
0.49% |
|
0.29% |
|
0.55% |
|
0.47% |
|
0.39% |
|
Return on average equity |
5.48% |
|
3.19% |
|
6.03% |
|
5.04% |
|
4.31% |
|
Efficiency ratio (GAAP) |
80.56% |
|
80.62% |
|
78.20% |
|
82.03% |
|
78.27% |
|
Adjusted efficiency ratio (non-GAAP) (1) |
81.85% |
|
80.67% |
|
82.68% |
|
82.04% |
|
78.26% |
|
|
|
|
|
|
|
|
|
|
|
|
Per Common Share Data: |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ 0.16 |
|
$ 0.09 |
|
$ 0.17 |
|
$ 0.14 |
|
$ 0.12 |
|
Earnings per diluted share |
0.16 |
|
0.09 |
|
0.17 |
|
0.14 |
|
0.12 |
|
Cash dividend declared |
0.07 |
|
0.07 |
|
0.07 |
|
0.07 |
|
0.07 |
|
Book value per share |
11.30 |
|
11.40 |
|
11.07 |
|
10.90 |
|
10.96 |
|
Tangible book value per share (non-GAAP) (2) |
10.63 |
|
10.73 |
|
10.41 |
|
10.25 |
|
10.30 |
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality: |
|
|
|
|
|
|
|
|
|
|
30-89 day delinquent loans |
$ 3,694 |
|
$ 3,059 |
|
$ 3,270 |
|
$ 3,000 |
|
$ 4,605 |
|
90 days or more delinquent loans |
1,301 |
|
1,253 |
|
2,280 |
|
1,716 |
|
1,394 |
|
Total delinquent loans |
4,995 |
|
4,312 |
|
5,550 |
|
4,716 |
|
5,999 |
|
Total delinquent loans as a percentage of total loans |
0.24% |
|
0.21% |
|
0.27% |
|
0.23% |
|
0.30% |
|
Nonperforming loans |
$ 5,381 |
|
$ 4,873 |
|
$ 5,845 |
|
$ 5,837 |
|
$ 6,421 |
|
Nonperforming loans as a percentage of total loans |
0.26% |
|
0.24% |
|
0.29% |
|
0.29% |
|
0.32% |
|
Nonperforming assets as a percentage of total assets |
0.20% |
|
0.18% |
|
0.23% |
|
0.23% |
|
0.25% |
|
Allowance for credit losses as a percentage of nonperforming
loans |
362.93% |
|
409.50% |
|
332.66% |
|
340.65% |
|
315.64% |
|
Allowance for credit losses as a percentage of total loans |
0.94% |
|
0.97% |
|
0.96% |
|
0.98% |
|
1.00% |
|
Net loan (recoveries) charge-offs |
$ (128) |
|
$ 98 |
|
$ 10 |
|
$ (67) |
|
$ 136 |
|
Net loan (recoveries) charge-offs as a percentage of average
loans |
(0.01)% |
|
0.00% |
|
0.00% |
|
0.00% |
|
0.01% |
____________________________
- 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,
loss on defined benefit plan termination and gain on bank-owned
life insurance death benefit.
- 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 December 31, 2024, September 30, 2024 and
December 31, 2023 and reflects the average yield on
interest-earning assets and average cost of interest-bearing
liabilities for the periods indicated.
|
|
|
Three Months Ended |
|
|
|
December 31, 2024 |
|
September 30, 2024 |
|
December 31, 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) |
|
$ |
2,062,822 |
|
$ |
25,311 |
|
|
4.88 |
% |
|
$ |
2,038,593 |
|
$ |
25,253 |
|
|
4.93 |
% |
|
$ |
2,017,089 |
|
$ |
24,052 |
|
|
4.73 |
% |
|
Securities(2) |
|
|
361,476 |
|
|
2,273 |
|
|
2.50 |
|
|
|
354,696 |
|
|
2,121 |
|
|
2.38 |
|
|
|
355,078 |
|
|
2,094 |
|
|
2.34 |
|
|
Other investments |
|
|
15,924 |
|
|
214 |
|
|
5.35 |
|
|
|
15,904 |
|
|
189 |
|
|
4.73 |
|
|
|
12,119 |
|
|
140 |
|
|
4.58 |
|
|
Short-term investments(3) |
|
|
76,795 |
|
|
916 |
|
|
4.75 |
|
|
|
32,043 |
|
|
396 |
|
|
4.92 |
|
|
|
42,826 |
|
|
597 |
|
|
5.53 |
|
|
Total interest-earning assets |
|
|
2,517,017 |
|
|
28,714 |
|
|
4.54 |
|
|
|
2,441,236 |
|
|
27,959 |
|
|
4.56 |
|
|
|
2,427,112 |
|
|
26,883 |
|
|
4.39 |
|
|
Total non-interest-earning assets |
|
|
155,538 |
|
|
|
|
|
|
|
153,585 |
|
|
|
|
|
|
|
158,435 |
|
|
|
|
|
|
Total assets |
|
$ |
2,672,555 |
|
|
|
|
|
|
$ |
2,594,821 |
|
|
|
|
|
|
$ |
2,585,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
|
$ |
149,231 |
|
|
264 |
|
|
0.70 |
|
|
$ |
131,133 |
|
|
271 |
|
|
0.82 |
|
|
$ |
139,894 |
|
|
260 |
|
|
0.74 |
|
|
Savings accounts |
|
|
179,122 |
|
|
38 |
|
|
0.08 |
|
|
|
179,844 |
|
|
38 |
|
|
0.08 |
|
|
|
187,047 |
|
|
39 |
|
|
0.08 |
|
|
Money market accounts |
|
|
654,965 |
|
|
3,553 |
|
|
2.16 |
|
|
|
621,340 |
|
|
3,172 |
|
|
2.03 |
|
|
|
657,407 |
|
|
2,716 |
|
|
1.64 |
|
|
Time deposit accounts |
|
|
700,324 |
|
|
7,588 |
|
|
4.31 |
|
|
|
688,797 |
|
|
7,684 |
|
|
4.44 |
|
|
|
603,860 |
|
|
5,758 |
|
|
3.78 |
|
|
Total interest-bearing deposits |
|
|
1,683,642 |
|
|
11,443 |
|
|
2.70 |
|
|
|
1,621,114 |
|
|
11,165 |
|
|
2.74 |
|
|
|
1,588,208 |
|
|
8,773 |
|
|
2.19 |
|
|
Borrowings |
|
|
147,748 |
|
|
1,870 |
|
|
5.04 |
|
|
|
153,317 |
|
|
1,947 |
|
|
5.05 |
|
|
|
149,585 |
|
|
1,821 |
|
|
4.83 |
|
|
Interest-bearing liabilities |
|
|
1,831,390 |
|
|
13,313 |
|
|
2.89 |
|
|
|
1,774,431 |
|
|
13,112 |
|
|
2.94 |
|
|
|
1,737,793 |
|
|
10,594 |
|
|
2.42 |
|
|
Non-interest-bearing deposits |
|
|
579,168 |
|
|
|
|
|
|
|
559,224 |
|
|
|
|
|
|
|
588,748 |
|
|
|
|
|
|
Other non-interest-bearing liabilities |
|
|
23,380 |
|
|
|
|
|
|
|
23,466 |
|
|
|
|
|
|
|
27,847 |
|
|
|
|
|
|
Total non-interest-bearing liabilities |
|
|
602,548 |
|
|
|
|
|
|
|
582,690 |
|
|
|
|
|
|
|
616,595 |
|
|
|
|
|
|
Total liabilities |
|
|
2,433,938 |
|
|
|
|
|
|
|
2,357,121 |
|
|
|
|
|
|
|
2,354,388 |
|
|
|
|
|
|
Total equity |
|
|
238,617 |
|
|
|
|
|
|
|
237,700 |
|
|
|
|
|
|
|
231,159 |
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
2,672,555 |
|
|
|
|
|
|
$ |
2,594,821 |
|
|
|
|
|
|
$ |
2,585,547 |
|
|
|
|
|
|
Less: Tax-equivalent adjustment(2) |
|
|
|
|
(128 |
) |
|
|
|
|
|
|
|
(119 |
) |
|
|
|
|
|
|
|
(113 |
) |
|
|
|
|
Net interest and dividend income |
|
|
|
$ |
15,273 |
|
|
|
|
|
|
|
$ |
14,728 |
|
|
|
|
|
|
|
$ |
16,176 |
|
|
|
|
|
Net interest rate spread(4) |
|
|
|
|
|
1.63 |
% |
|
|
|
|
|
1.60 |
% |
|
|
|
|
|
1.96 |
% |
|
Net interest rate spread, on a tax-equivalent basis(5) |
|
|
|
|
|
1.65 |
% |
|
|
|
|
|
1.62 |
% |
|
|
|
|
|
1.98 |
% |
|
Net interest margin(6) |
|
|
|
|
|
2.41 |
% |
|
|
|
|
|
2.40 |
% |
|
|
|
|
|
2.64 |
% |
|
Net interest margin, on a tax-equivalent basis(7) |
|
|
|
|
|
2.43 |
% |
|
|
|
|
|
2.42 |
% |
|
|
|
|
|
2.66 |
% |
| Ratio of average
interest-earning assets to average interest-bearing
liabilities |
|
|
|
|
|
137.44 |
% |
|
|
|
|
|
137.58 |
% |
|
|
|
|
|
139.67 |
% |
The following tables set forth the information
relating to our average balances and net interest income for the
twelve months ended December 31, 2024 and 2023 and reflect the
average yield on interest-earning assets and average cost of
interest-bearing liabilities for the periods indicated.
|
|
Twelve Months Ended December 31, |
|
|
2024 |
|
2023 |
|
|
Average Balance |
|
Interest |
|
AverageYield/ Cost |
|
Average Balance |
|
Interest |
|
AverageYield/ Cost |
|
|
|
|
(Dollars in thousands) |
|
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans(1)(2) |
$ |
2,035,149 |
|
$ |
99,369 |
|
|
4.88 |
% |
|
$ |
2,006,166 |
|
$ |
91,640 |
|
|
4.57 |
% |
|
Securities(2) |
|
357,631 |
|
|
8,649 |
|
|
2.42 |
|
|
|
368,201 |
|
|
8,371 |
|
|
2.27 |
|
|
Other investments |
|
14,669 |
|
|
687 |
|
|
4.68 |
|
|
|
12,425 |
|
|
558 |
|
|
4.49 |
|
|
Short-term investments(3) |
|
33,254 |
|
|
1,598 |
|
|
4.81 |
|
|
|
20,459 |
|
|
1,021 |
|
|
4.99 |
|
|
Total interest-earning assets |
|
2,440,703 |
|
|
110,303 |
|
|
4.52 |
|
|
|
2,407,251 |
|
|
101,590 |
|
|
4.22 |
|
|
Total non-interest-earning assets |
|
155,056 |
|
|
|
|
|
|
|
155,511 |
|
|
|
|
|
|
Total assets |
$ |
2,595,759 |
|
|
|
|
|
|
$ |
2,562,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking accounts |
$ |
136,861 |
|
|
1,022 |
|
|
0.75 |
% |
|
$ |
142,005 |
|
|
1,041 |
|
|
0.73 |
% |
|
Savings accounts |
|
182,678 |
|
|
166 |
|
|
0.09 |
|
|
|
202,354 |
|
|
181 |
|
|
0.09 |
|
|
Money market accounts |
|
631,197 |
|
|
12,242 |
|
|
1.94 |
|
|
|
697,621 |
|
|
9,529 |
|
|
1.37 |
|
|
Time deposit accounts |
|
666,917 |
|
|
28,806 |
|
|
4.32 |
|
|
|
524,827 |
|
|
15,898 |
|
|
3.03 |
|
|
Total interest-bearing deposits |
|
1,617,653 |
|
|
42,236 |
|
|
2.61 |
|
|
|
1,566,807 |
|
|
26,649 |
|
|
1.70 |
|
|
Short-term borrowings and long-term debt |
|
155,560 |
|
|
7,779 |
|
|
5.00 |
|
|
|
135,532 |
|
|
6,560 |
|
|
4.84 |
|
|
Total interest-bearing liabilities |
|
1,773,213 |
|
|
50,015 |
|
|
2.82 |
|
|
|
1,702,339 |
|
|
33,209 |
|
|
1.95 |
|
|
Non-interest-bearing deposits |
|
561,264 |
|
|
|
|
|
|
|
602,652 |
|
|
|
|
|
|
Other non-interest-bearing liabilities |
|
24,541 |
|
|
|
|
|
|
|
24,885 |
|
|
|
|
|
|
Total non-interest-bearing liabilities |
|
585,805 |
|
|
|
|
|
|
|
627,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
2,359,018 |
|
|
|
|
|
|
|
2,329,876 |
|
|
|
|
|
|
Total equity |
|
236,741 |
|
|
|
|
|
|
|
232,886 |
|
|
|
|
|
|
Total liabilities and equity |
$ |
2,595,759 |
|
|
|
|
|
|
$ |
2,562,762 |
|
|
|
|
|
|
Less: Tax-equivalent adjustment (2) |
|
|
|
(471 |
) |
|
|
|
|
|
|
|
(472 |
) |
|
|
|
|
Net interest and dividend income |
|
|
$ |
59,817 |
|
|
|
|
|
|
|
$ |
67,909 |
|
|
|
|
|
Net interest rate spread (4) |
|
|
|
|
1.68 |
% |
|
|
|
|
|
2.25 |
% |
|
Net interest rate spread, on a tax-equivalent basis (5) |
|
|
|
|
1.70 |
% |
|
|
|
|
|
2.27 |
% |
|
Net interest margin (6) |
|
|
|
|
2.45 |
% |
|
|
|
|
|
2.82 |
% |
|
Net interest margin, on a tax-equivalent basis (7) |
|
|
|
|
2.47 |
% |
|
|
|
|
|
2.84 |
% |
| Ratio of average
interest-earning assets to average interest-bearing
liabilities |
|
|
|
137.64 |
% |
|
|
|
|
|
141.41 |
% |
|
(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. |
|
(8) |
Annualized. |
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 |
|
|
12/31/2024 |
|
9/30/2024 |
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Loan interest (no tax adjustment) |
$ |
25,183 |
|
|
$ |
25,134 |
|
|
$ |
24,340 |
|
|
$ |
24,241 |
|
|
$ |
23,939 |
|
|
Tax-equivalent adjustment |
|
128 |
|
|
|
119 |
|
|
|
114 |
|
|
|
110 |
|
|
|
113 |
|
|
Loan interest (tax-equivalent basis) |
$ |
25,311 |
|
|
$ |
25,253 |
|
|
$ |
24,454 |
|
|
$ |
24,351 |
|
|
$ |
24,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (no tax adjustment) |
$ |
15,273 |
|
|
$ |
14,728 |
|
|
$ |
14,470 |
|
|
$ |
15,346 |
|
|
$ |
16,176 |
|
|
Tax equivalent adjustment |
|
128 |
|
|
|
119 |
|
|
|
114 |
|
|
|
110 |
|
|
|
113 |
|
|
Net interest income (tax-equivalent basis) |
$ |
15,401 |
|
|
$ |
14,847 |
|
|
$ |
14,584 |
|
|
$ |
15,456 |
|
|
$ |
16,289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (no tax adjustment) |
$ |
15,273 |
|
|
$ |
14,728 |
|
|
$ |
14,470 |
|
|
$ |
15,346 |
|
|
$ |
16,176 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Fair value hedge interest income |
|
74 |
|
|
|
434 |
|
|
|
447 |
|
|
|
443 |
|
|
|
459 |
|
|
Adjusted net interest income (non-GAAP) |
$ |
15,199 |
|
|
$ |
14,294 |
|
|
$ |
14,023 |
|
|
$ |
14,903 |
|
|
$ |
15,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average interest-earning assets |
$ |
2,517,017 |
|
|
$ |
2,441,236 |
|
|
$ |
2,400,633 |
|
|
$ |
2,403,086 |
|
|
$ |
2,427,112 |
|
|
Net interest margin (no tax adjustment) |
|
2.41 |
% |
|
|
2.40 |
% |
|
|
2.42 |
% |
|
|
2.57 |
% |
|
|
2.64 |
% |
|
Net interest margin, tax-equivalent |
|
2.43 |
% |
|
|
2.42 |
% |
|
|
2.44 |
% |
|
|
2.59 |
% |
|
|
2.66 |
% |
|
Adjusted net interest margin, excluding fair value hedge interest
income (non-GAAP) |
|
2.40 |
% |
|
|
2.33 |
% |
|
|
2.35 |
% |
|
|
2.50 |
% |
|
|
2.57 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Book Value per Share (GAAP) |
$ |
11.30 |
|
|
$ |
11.40 |
|
|
$ |
11.07 |
|
|
$ |
10.90 |
|
|
$ |
10.96 |
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
(0.60 |
) |
|
|
(0.59 |
) |
|
|
(0.58 |
) |
|
|
(0.58 |
) |
|
|
(0.58 |
) |
|
Core deposit intangible |
|
(0.07 |
) |
|
|
(0.08 |
) |
|
|
(0.08 |
) |
|
|
(0.07 |
) |
|
|
(0.08 |
) |
|
Tangible Book Value per Share (non-GAAP) |
$ |
10.63 |
|
|
$ |
10.73 |
|
|
$ |
10.41 |
|
|
$ |
10.25 |
|
|
$ |
10.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended |
|
|
12/31/2024 |
|
9/30/2024 |
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio: |
|
|
|
|
|
|
|
|
|
|
Non-interest Expense (GAAP) |
$ |
14,926 |
|
|
$ |
14,406 |
|
|
$ |
14,314 |
|
|
$ |
14,782 |
|
|
$ |
14,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income (GAAP) |
$ |
15,273 |
|
|
$ |
14,728 |
|
|
$ |
14,470 |
|
|
$ |
15,346 |
|
|
$ |
16,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest Income (GAAP) |
$ |
3,254 |
|
|
$ |
3,141 |
|
|
$ |
3,834 |
|
|
$ |
2,674 |
|
|
$ |
2,714 |
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Unrealized losses (gains) on marketable equity securities |
|
9 |
|
|
|
(10 |
) |
|
|
(4 |
) |
|
|
(8 |
) |
|
|
1 |
|
|
Gain on non-marketable equity investments |
|
(300 |
) |
|
|
- |
|
|
|
(987 |
) |
|
|
- |
|
|
|
- |
|
|
Loss on disposal of premises and equipment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6 |
|
|
|
- |
|
|
Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) |
$ |
2,963 |
|
|
$ |
3,131 |
|
|
$ |
2,843 |
|
|
$ |
2,672 |
|
|
$ |
2,715 |
|
|
Total Revenue for Adjusted Efficiency Ratio (non-GAAP) |
$ |
18,236 |
|
|
$ |
17,859 |
|
|
$ |
17,313 |
|
|
$ |
18,018 |
|
|
$ |
18,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio (GAAP) |
|
80.56 |
% |
|
|
80.62 |
% |
|
|
78.20 |
% |
|
|
82.03 |
% |
|
|
78.27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total
Revenue for Adjusted Efficiency Ratio (non-GAAP)) |
|
81.85 |
% |
|
|
80.67 |
% |
|
|
82.68 |
% |
|
|
82.04 |
% |
|
|
78.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the twelve months ended |
|
|
12/31/2024 |
|
12/31/2023 |
|
|
(Dollars in thousands) |
|
|
|
|
|
|
Loan income (no tax adjustment) |
$ 98,898 |
|
$ 91,169 |
|
Tax-equivalent adjustment |
471 |
|
472 |
|
Loan income (tax-equivalent basis) |
$ 99,369 |
|
$ 91,641 |
|
|
|
|
|
|
Net interest income (no tax adjustment) |
$ 59,817 |
|
$ 67,909 |
|
Tax equivalent adjustment |
471 |
|
472 |
|
Net interest income (tax-equivalent basis) |
$ 60,288 |
|
$ 68,381 |
|
|
|
|
|
|
Net interest income (no tax adjustment) |
$ 59,817 |
|
$ 67,909 |
|
Less: |
|
|
|
|
Fair value hedge interest income |
1,398 |
|
1,085 |
|
Adjusted net interest income (non-GAAP) |
$ 58,419 |
|
$ 66,824 |
|
|
|
|
|
|
Average interest-earning assets |
$ 2,440,703 |
|
$ 2,407,251 |
|
Net interest margin (no tax adjustment) |
2.45% |
|
2.82% |
|
Net interest margin, tax-equivalent |
2.47% |
|
2.84% |
|
Adjusted net interest margin, excluding fair value hedge interest
income (non-GAAP) |
2.39% |
|
2.77% |
|
|
|
|
|
|
Adjusted Efficiency Ratio: |
|
|
|
|
Non-interest Expense (GAAP) |
$ 58,428 |
|
$ 58,350 |
|
|
|
|
|
|
Net Interest Income (GAAP) |
$ 59,817 |
|
$ 67,909 |
|
|
|
|
|
|
Non-interest Income (GAAP) |
$ 12,903 |
|
$ 10,897 |
|
Non-GAAP adjustments: |
|
|
|
|
Unrealized gains on marketable equity securities |
(13) |
|
1 |
|
Loss on disposal of premises and equipment, net |
6 |
|
3 |
|
Gain on bank-owned life insurance |
- |
|
(778) |
|
Gain on non-marketable equity investments |
(1,287) |
|
(590) |
|
Loss on defined benefit plan curtailment |
- |
|
1,143 |
|
Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) |
$ 11,609 |
|
$ 10,676 |
|
Total Revenue for Adjusted Efficiency Ratio (non-GAAP) |
$ 71,426 |
|
$ 78,585 |
|
|
|
|
|
|
Efficiency Ratio (GAAP) |
80.35% |
|
74.04% |
|
|
|
|
|
|
Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total
Revenue for Adjusted Efficiency Ratio (non-GAAP)) |
81.80% |
|
74.25% |
For further information
contact:James C. Hagan, President and CEOGuida R. Sajdak,
Executive Vice President and CFOMeghan Hibner, First Vice President
and Investor Relations Officer413-568-1911
Western New England Banc... (NASDAQ:WNEB)
과거 데이터 주식 차트
부터 1월(1) 2025 으로 2월(2) 2025
Western New England Banc... (NASDAQ:WNEB)
과거 데이터 주식 차트
부터 2월(2) 2024 으로 2월(2) 2025
