Western New England Bancorp, Inc. Reports Results for Three Months and Year Ended December 31, 2023 and Declares Quarterly Cash Dividend
- None.
- Decrease in net income for both three and twelve months compared to the previous year
Insights
The reported net income of Western New England Bancorp, Inc. for both the quarterly and annual periods shows a significant decline when compared to the previous year's figures. This downward trend is a critical metric for evaluating the company's profitability and, by extension, its financial health. The year-over-year decrease in net income from $9.0 million to $2.5 million for the quarter and from $25.9 million to $15.1 million for the full year, represents a substantial drop in earnings. Such a decline may raise concerns among investors regarding the bank's operational efficiency, cost management and revenue generation capabilities.
Additionally, the consistency of the net income between the linked quarters at $2.5 million could indicate that the factors affecting the bank's performance are not merely seasonal but could be due to more systemic issues. The declaration of a quarterly cash dividend of $0.07 per share, despite the decrease in earnings, suggests that the Board of Directors is attempting to maintain investor confidence and provide a return to shareholders. However, this strategy could potentially impact the bank's ability to reinvest in growth or shore up reserves.
The banking sector is heavily influenced by macroeconomic factors, interest rates and regulatory changes. The performance of Western New England Bancorp, Inc. must be contextualized within these broader market conditions. If the decline in net income is in line with sector-wide trends, it may be less concerning. However, if WNEB's performance deviates significantly from its peers, it could indicate competitive disadvantages or strategic missteps.
Furthermore, the stock market typically reacts to earnings reports. A decline as reported by WNEB could lead to a negative investor sentiment, potentially affecting the stock's price. It is essential for investors to monitor subsequent quarters to discern if this is a temporary setback or indicative of a longer-term trend. The market's response to the dividend announcement in light of reduced earnings will also be telling of investor confidence in the bank's future earnings potential and management strategy.
From an economic standpoint, the performance of regional banks like Western New England Bancorp, Inc. can serve as an indicator of the local economic environment. A reduction in net income could suggest a cooling of economic activity in the regions the bank serves, potential increases in default rates, or tightening of net interest margins. The latter is particularly relevant in periods of fluctuating interest rates, as banks must carefully manage the spread between the interest they pay on deposits and the interest they earn on loans.
Moreover, the bank's decision to maintain dividend payments in spite of reduced earnings could reflect an assessment of future economic conditions. This decision may indicate the bank's confidence in its ability to navigate economic headwinds or a commitment to maintaining shareholder relations. Conversely, it could also raise questions about the sustainability of such dividends should the bank's income continue to decline.
WESTFIELD, Mass., Jan. 23, 2024 (GLOBE NEWSWIRE) -- 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, 2023. For the three months ended December 31, 2023, the Company reported net income of
The Company also announced that the Board of Directors declared a quarterly cash dividend of
James C. Hagan, President and Chief Executive Officer, commented, “We are pleased with our fourth quarter results, showing loan growth with increasing loan yields. Total loans increased
Additionally, during the twelve months ended December 31, 2023, we repurchased 649,744 shares of our common stock at an average price per share of
Hagan concluded, “Our team remains committed to our community and to our existing and new customers. We continue to be focused on true relationship banking, while providing continued access to local decision makers in order to meet the financial needs of all our customers. We believe our various growth, customer and expense initiatives are creating positive impacts to our performance and are positioning the Company for future growth and increased profitability.”
Key Highlights:
Loans and Deposits
At December 31, 2023, total loans of
At December 31, 2023, total deposits were
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, 2023, the Company had
Allowance for Credit Losses and Credit Quality
At December 31, 2023, the allowance for credit losses was
Net Interest Margin
The net interest margin was
Stock Repurchase Program
On July 26, 2022, the Board of Directors authorized a stock repurchase plan (the “2022 Plan”), pursuant to which the Company is authorized to repurchase up to 1.1 million shares, representing approximately
The repurchase of shares under the stock repurchase program is administered through an independent broker. The shares of common stock repurchased under the 2022 Plan are 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 2022 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
Westfield Bank Defined Benefit Pension Plan
The Board of Directors previously announced the termination of the Westfield Bank Defined Benefit Plan (the “DB Plan”) on October 31, 2022, subject to required regulatory approval. At December 31, 2022, the Company reversed
Net Income for the Three Months Ended December 31, 2023 Compared to the Three Months Ended September 30, 2023
The Company reported net income of
Net Interest Income and Net Interest Margin
On a sequential quarter basis, net interest income, our primary source of revenues, decreased
The net interest margin was
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was
The average cost of total funds, including non-interest bearing accounts and borrowings, increased 17 basis points from
Provision for Credit Losses
During the three months ended December 31, 2023, the Company recorded a provision for credit losses of
During the three months ended December 31, 2023, the Company recorded net charge-offs of
Non-Interest Income
On a sequential quarter basis, non-interest income decreased
During the three months ended September 30, 2023, non-interest income included a non-taxable gain of
Non-Interest Expense
For the three months ended December 31, 2023, non-interest expense increased
During the three months ended December 31, 2023, occupancy expense increased
For the three months ended December 31, 2023, the efficiency ratio was
Income Tax Provision
Income tax expense for the three months ended December 31, 2023 was
Net Income for the Three Months Ended December 31, 2023 Compared to the Three Months Ended December 31, 2022
The Company reported net income of
Net Interest Income and Net Interest Margin
Net interest income decreased
The net interest margin was
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 48 basis points from
The average cost of funds, including non-interest-bearing demand accounts and borrowings, increased 134 basis points, from
The average cost of core deposits, which the Company defines as all deposits except time deposits and which include non-interest-bearing demand accounts, increased 42 basis points, from
Provision for Credit Losses
During the three months ended December 31, 2023, the Company recorded a provision for credit losses of
Non-Interest Income
Non-interest income decreased
During the three months ended December 31, 2023, service charges and fees on deposits decreased
Non-Interest Expense
For the three months ended December 31, 2023, non-interest expense increased
For the three months ended December 31, 2023, compared to the three months ended December 31, 2022, advertising expense increased
For the three months ended December 31, 2023, the efficiency ratio was
Income Tax Provision
Income tax expense for the three months ended December 31, 2023 was
Net Income for the Twelve Months Ended December 31, 2023 Compared to the Twelve Months Ended December 31, 2022
For the twelve months ended December 31, 2023, the Company reported net income of
Net Interest Income and Net Interest Margin
During the twelve months ended December 31, 2023, net interest income decreased
The net interest margin for the twelve months ended December 31, 2023 was
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 62 basis points from
During the twelve months ended December 31, 2023, the average cost of funds, including non-interest-bearing demand accounts and borrowings, increased 115 basis points from
For the twelve months ended December 31, 2023, average demand deposits, an interest-free source of funds, decreased
Provision for Credit Losses
During the twelve months ended December 31, 2023, the Company recorded a provision for credit losses of
Non-Interest Income
For the twelve months ended December 31, 2023, non-interest income decreased
During the twelve months ended December 31, 2023, service charges and fees decreased
Non-Interest Expense
For the twelve months ended December 31, 2023, non-interest expense increased
During the same period, FDIC insurance expense increased
For the twelve months ended December 31, 2023, the efficiency ratio was
Income Tax Provision
Income tax expense for the twelve months ended December 31, 2023 was
Balance Sheet
At December 31, 2023, total assets were
Investments
At December 31, 2023, the available-for-sale (“AFS”) and held-to-maturity (“HTM”) securities portfolio represented
At December 31, 2023, the Company reported unrealized losses on the AFS securities portfolio of
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
Management regularly reviews the portfolio for securities in an unrealized loss position. At December 31, 2023 and December 31, 2022, the Company did not record any 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 December 31, 2023, total loans increased
The following table is a summary of our outstanding loan balances for the periods indicated:
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Commercial real estate loans | $ | 1,079,751 | $ | 1,080,361 | $ | 1,075,429 | $ | 1,079,664 | $ | 1,069,323 | |||||||||
| Residential real estate loans: | |||||||||||||||||||
| Residential | 612,315 | 606,221 | 597,812 | 595,097 | 589,503 | ||||||||||||||
| Home equity | 109,839 | 107,561 | 107,044 | 105,801 | 105,557 | ||||||||||||||
| Total residential real estate loans | 722,154 | 713,782 | 704,856 | 700,898 | 695,060 | ||||||||||||||
| Commercial and industrial loans: | |||||||||||||||||||
| PPP loans | 756 | 1,415 | 1,864 | 2,129 | 2,274 | ||||||||||||||
| Commercial and industrial loans | 216,691 | 211,162 | 225,229 | 215,971 | 217,574 | ||||||||||||||
| Total commercial and industrial loans | 217,447 | 212,577 | 227,093 | 218,100 | 219,848 | ||||||||||||||
| Consumer loans | 5,472 | 5,768 | 5,986 | 5,667 | 5,045 | ||||||||||||||
| Total gross loans | 2,024,824 | 2,012,488 | 2,013,364 | 2,004,329 | 1,989,276 | ||||||||||||||
| Unamortized PPP loan fees | (27 | ) | (70 | ) | (78 | ) | (99 | ) | (109 | ) | |||||||||
| Unamortized premiums and net deferred loans fees and costs | 2,520 | 2,402 | 2,307 | 2,269 | 2,233 | ||||||||||||||
| Total loans | $ | 2,027,317 | $ | 2,014,820 | $ | 2,015,593 | $ | 2,006,499 | $ | 1,991,400 | |||||||||
Credit Quality
Credit quality remains sound and our loan portfolio continues to perform well. Total delinquency was
Deposits
Total deposits decreased
The table below is a summary of our deposit balances for the periods noted:
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Core Deposits: | |||||||||||||||||||
| Demand accounts | $ | 579,595 | $ | 593,601 | $ | 584,511 | $ | 625,656 | $ | 645,571 | |||||||||
| Interest bearing accounts | 131,031 | 152,886 | 162,823 | 133,727 | 148,670 | ||||||||||||||
| Savings accounts | 187,405 | 192,321 | 203,376 | 218,800 | 222,436 | ||||||||||||||
| Money market accounts | 634,361 | 654,909 | 672,483 | 721,219 | 801,076 | ||||||||||||||
| Total Core Deposits | $ | 1,532,392 | $ | 1,593,717 | $ | 1,623,193 | $ | 1,699,402 | $ | 1,817,753 | |||||||||
| Time Deposits: | |||||||||||||||||||
| Time deposits less than | $ | 412,761 | $ | 384,472 | $ | 338,667 | $ | 300,907 | $ | 279,953 | |||||||||
| Time deposits of | 198,591 | 198,114 | 196,114 | 156,819 | 131,737 | ||||||||||||||
| Total Time Deposits: | 611,352 | 582,586 | 534,781 | 457,726 | 411,690 | ||||||||||||||
| Total Deposits: | $ | 2,143,744 | $ | 2,176,303 | $ | 2,157,974 | $ | 2,157,128 | $ | 2,229,443 | |||||||||
During the twelve months ended December 31, 2023, the Company experienced a higher level of competition not only from local competitors but also from money market funds and Treasury notes that were offering higher returns. In addition, the Company also saw a challenging shift in deposit mix from low cost core deposits to high cost time deposits as customers migrated to higher yields.
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 efficiently competing for and retaining deposits in our local market. At December 31, 2023, the Bank’s uninsured deposits represented
Borrowings
At December 31, 2023, total borrowings increased
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. On March 12, 2023, the Federal Reserve made available the BTFP, which enhances the ability of banks to borrow greater amounts against certain high-quality, unencumbered investments at par value.
During the twelve months ended December 31, 2023, the Company participated in the BTFP, which enabled the Company to pay off higher rate FHLB advances. With the BTFP, the Company has the ability to pay off the BTFP advance prior to maturity without incurring a penalty or termination fee. The Company advanced
At December 31, 2023, the Company had available borrowing capacity with the FHLB of
Hedging Program
During the twelve months ended December 31, 2023, the Company executed a
Capital
At December 31, 2023, shareholders’ equity was
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 at December 31, 2023 was
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;
- changes in 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 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 Act 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 | Twelve Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| INTEREST AND DIVIDEND INCOME: | |||||||||||||||||||||
| Loans | $ | 23,939 | $ | 23,451 | $ | 22,450 | $ | 21,329 | $ | 21,274 | $ | 91,169 | $ | 77,264 | |||||||
| Securities | 2,094 | 2,033 | 2,094 | 2,149 | 2,174 | 8,370 | 8,296 | ||||||||||||||
| Other investments | 140 | 166 | 146 | 106 | 75 | 558 | 177 | ||||||||||||||
| Short-term investments | 597 | 251 | 119 | 54 | 62 | 1,021 | 191 | ||||||||||||||
| Total interest and dividend income | 26,770 | 25,901 | 24,809 | 23,638 | 23,585 | 101,118 | 85,928 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||||||
| Deposits | 8,773 | 7,704 | 6,069 | 4,103 | 2,206 | 26,649 | 5,352 | ||||||||||||||
| Short-term borrowings | 123 | 117 | 646 | 703 | 272 | 1,589 | 330 | ||||||||||||||
| Long-term debt | 1,444 | 1,444 | 995 | 74 | - | 3,957 | - | ||||||||||||||
| Subordinated debt | 254 | 253 | 253 | 254 | 253 | 1,014 | 1,014 | ||||||||||||||
| Total interest expense | 10,594 | 9,518 | 7,963 | 5,134 | 2,731 | 33,209 | 6,696 | ||||||||||||||
| Net interest and dividend income | 16,176 | 16,383 | 16,846 | 18,504 | 20,854 | 67,909 | 79,232 | ||||||||||||||
| PROVISION FOR (REVERSAL OF) CREDIT LOSSES | 486 | 354 | 420 | (388 | ) | 150 | 872 | 700 | |||||||||||||
| Net interest and dividend income after provision for (reversal of) credit losses | 15,690 | 16,029 | 16,426 | 18,892 | 20,704 | 67,037 | 78,532 | ||||||||||||||
| NON-INTEREST INCOME: | |||||||||||||||||||||
| Service charges and fees | 2,283 | 2,145 | 2,241 | 2,187 | 2,329 | 8,856 | 9,072 | ||||||||||||||
| Income from bank-owned life insurance | 432 | 454 | 494 | 440 | 428 | 1,820 | 1,725 | ||||||||||||||
| Loss on sales of securities, net | - | - | - | - | - | - | (4 | ) | |||||||||||||
| Unrealized (loss) gain on marketable equity securities | (1 | ) | - | - | - | 19 | (1 | ) | (717 | ) | |||||||||||
| Loss on disposal of premises and equipment | - | (3 | ) | - | - | - | (3 | ) | - | ||||||||||||
| Gain on sale of mortgages | - | - | - | - | - | - | 2 | ||||||||||||||
| Gain on non-marketable equity investments | - | 238 | - | 352 | 70 | 590 | 422 | ||||||||||||||
| (Loss) gain on defined benefit plan termination | - | - | (1,143 | ) | - | 2,807 | (1,143 | ) | 2,807 | ||||||||||||
| Gain on bank-owned life insurance death benefit | - | 778 | - | - | - | 778 | - | ||||||||||||||
| Other income | - | - | - | - | - | - | 25 | ||||||||||||||
| Total non-interest income | 2,714 | 3,612 | 1,592 | 2,979 | 5,653 | 10,897 | 13,332 | ||||||||||||||
| NON-INTEREST EXPENSE: | |||||||||||||||||||||
| Salaries and employee benefits | 7,739 | 7,955 | 8,089 | 8,431 | 8,197 | 32,214 | 32,697 | ||||||||||||||
| Occupancy | 1,198 | 1,159 | 1,203 | 1,348 | 1,218 | 4,908 | 4,984 | ||||||||||||||
| Furniture and equipment | 494 | 482 | 492 | 486 | 479 | 1,954 | 2,026 | ||||||||||||||
| Data processing | 788 | 824 | 792 | 753 | 724 | 3,157 | 2,885 | ||||||||||||||
| Professional fees | 674 | 643 | 803 | 757 | 617 | 2,877 | 2,716 | ||||||||||||||
| FDIC insurance | 338 | 341 | 290 | 352 | 255 | 1,321 | 1,048 | ||||||||||||||
| Advertising | 377 | 362 | 339 | 417 | 178 | 1,495 | 1,408 | ||||||||||||||
| Other | 3,177 | 2,352 | 2,543 | 2,352 | 2,335 | 10,424 | 9,471 | ||||||||||||||
| Total non-interest expense | 14,785 | 14,118 | 14,551 | 14,896 | 14,003 | 58,350 | 57,235 | ||||||||||||||
| INCOME BEFORE INCOME TAXES | 3,619 | 5,523 | 3,467 | 6,975 | 12,354 | 19,584 | 34,629 | ||||||||||||||
| INCOME TAX PROVISION | 1,108 | 1,033 | 704 | 1,671 | 3,320 | 4,516 | 8,742 | ||||||||||||||
| NET INCOME | $ | 2,511 | $ | 4,490 | $ | 2,763 | $ | 5,304 | $ | 9,034 | $ | 15,068 | $ | 25,887 | |||||||
| Basic earnings per share | $ | 0.12 | $ | 0.21 | $ | 0.13 | $ | 0.24 | $ | 0.42 | $ | 0.70 | $ | 1.18 | |||||||
| Weighted average shares outstanding | 21,253,452 | 21,560,940 | 21,634,683 | 21,699,042 | 21,676,892 | 21,535,888 | 21,879,657 | ||||||||||||||
| Diluted earnings per share | $ | 0.12 | $ | 0.21 | $ | 0.13 | $ | 0.24 | $ | 0.42 | $ | 0.70 | $ | 1.18 | |||||||
| Weighted average diluted shares outstanding | 21,400,664 | 21,680,113 | 21,648,235 | 21,716,869 | 21,751,409 | 21,610,329 | 21,938,323 | ||||||||||||||
| Other Data: | |||||||||||||||||||||
| Return on average assets (1) | 0.39 | % | 0.70 | % | 0.43 | % | 0.84 | % | 1.40 | % | 0.59 | % | 1.02 | % | |||||||
| Return on average equity (1) | 4.31 | % | 7.60 | % | 4.72 | % | 9.31 | % | 16.67 | % | 6.47 | % | 11.85 | % | |||||||
| Efficiency ratio | 78.27 | % | 70.61 | % | 78.92 | % | 69.34 | % | 52.83 | % | 74.04 | % | 61.83 | % | |||||||
| Adjusted efficiency ratio (2) | 78.26 | % | 74.38 | % | 74.31 | % | 70.49 | % | 59.31 | % | 74.25 | % | 63.55 | % | |||||||
| Net interest margin | 2.64 | % | 2.70 | % | 2.81 | % | 3.14 | % | 3.44 | % | 2.82 | % | 3.31 | % | |||||||
| Net interest margin, on a fully tax-equivalent basis | 2.66 | % | 2.72 | % | 2.83 | % | 3.16 | % | 3.47 | % | 2.84 | % | 3.33 | % | |||||||
| (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, loss on disposal of premises and equipment, gain on non-marketable equity investments, gains and losses 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, | |||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Cash and cash equivalents | $ | 28,840 | $ | 62,267 | $ | 31,689 | $ | 23,230 | $ | 30,342 | |||||||||
| Available-for-sale securities, at fair value | 137,115 | 130,709 | 141,481 | 146,373 | 146,997 | ||||||||||||||
| Held-to-maturity securities, at amortized cost | 223,370 | 225,020 | 222,900 | 226,996 | 230,168 | ||||||||||||||
| Marketable equity securities, at fair value | 196 | - | - | 6,309 | 6,237 | ||||||||||||||
| Federal Home Loan Bank of Boston and other restricted stock - at cost | 3,707 | 3,063 | 3,226 | 7,173 | 3,352 | ||||||||||||||
| Loans | 2,027,317 | 2,014,820 | 2,015,593 | 2,006,499 | 1,991,400 | ||||||||||||||
| Allowance for credit losses(1) | (20,267 | ) | (19,978 | ) | (19,647 | ) | (19,031 | ) | (19,931 | ) | |||||||||
| Net loans | 2,007,050 | 1,994,842 | 1,995,946 | 1,987,468 | 1,971,469 | ||||||||||||||
| Bank-owned life insurance | 75,145 | 74,713 | 75,554 | 75,060 | 74,620 | ||||||||||||||
| Goodwill | 12,487 | 12,487 | 12,487 | 12,487 | 12,487 | ||||||||||||||
| Core deposit intangible | 1,813 | 1,906 | 2,000 | 2,094 | 2,188 | ||||||||||||||
| Other assets | 74,848 | 79,998 | 77,001 | 74,825 | 75,290 | ||||||||||||||
| TOTAL ASSETS | $ | 2,564,571 | $ | 2,585,005 | $ | 2,562,284 | $ | 2,562,015 | $ | 2,553,150 | |||||||||
| Total deposits | $ | 2,143,744 | $ | 2,176,303 | $ | 2,157,974 | $ | 2,157,128 | $ | 2,229,443 | |||||||||
| Short-term borrowings | 16,100 | 8,890 | 7,190 | 98,990 | 41,350 | ||||||||||||||
| Long-term debt | 120,646 | 121,178 | 121,178 | 31,178 | 1,178 | ||||||||||||||
| Subordinated debt | 19,712 | 19,702 | 19,692 | 19,682 | 19,673 | ||||||||||||||
| Securities pending settlement | 140 | 2,253 | - | - | 133 | ||||||||||||||
| Other liabilities | 26,820 | 25,765 | 22,252 | 21,815 | 33,230 | ||||||||||||||
| TOTAL LIABILITIES | 2,327,162 | 2,354,091 | 2,328,286 | 2,328,793 | 2,325,007 | ||||||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 237,409 | 230,914 | 233,998 | 233,222 | 228,143 | ||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,564,571 | $ | 2,585,005 | $ | 2,562,284 | $ | 2,562,015 | $ | 2,553,150 | |||||||||
| (1) The Company adopted ASU 2016-13 on January 1, 2023 with a modified retrospective approach. Accordingly, beginning with March 31, 2023, the allowance for credit losses was determined in accordance with ASC 326, “Financial Instruments-Credit Losses.” | |||||||||||||||||||
| 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, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||
| Shares outstanding at end of period | 21,666,807 | 21,927,242 | 22,082,403 | 22,209,347 | 22,216,789 | |||||||||||||||
| Operating results: | ||||||||||||||||||||
| Net interest income | $ | 16,176 | $ | 16,383 | $ | 16,846 | $ | 18,504 | $ | 20,854 | ||||||||||
| Provision for (reversal of) credit losses | 486 | 354 | 420 | (388) | 150 | |||||||||||||||
| Non-interest income | 2,714 | 3,612 | 1,592 | 2,979 | 5,653 | |||||||||||||||
| Non-interest expense | 14,785 | 14,118 | 14,551 | 14,896 | 14,003 | |||||||||||||||
| Income before income provision for income taxes | 3,619 | 5,523 | 3,467 | 6,975 | 12,354 | |||||||||||||||
| Income tax provision | 1,108 | 1,033 | 704 | 1,671 | 3,320 | |||||||||||||||
| Net income | 2,511 | 4,490 | 2,763 | 5,304 | 9,034 | |||||||||||||||
| Performance Ratios: | ||||||||||||||||||||
| Net interest margin, on a fully tax-equivalent basis | ||||||||||||||||||||
| Interest rate spread, on a fully tax-equivalent basis | ||||||||||||||||||||
| Return on average assets | ||||||||||||||||||||
| Return on average equity | ||||||||||||||||||||
| Adjusted efficiency ratio (non-GAAP)(1) | ||||||||||||||||||||
| Per Common Share Data: | ||||||||||||||||||||
| Basic earnings per share | $ | 0.12 | $ | 0.21 | $ | 0.13 | $ | 0.24 | $ | 0.42 | ||||||||||
| Per diluted share | 0.12 | 0.21 | 0.13 | 0.24 | 0.42 | |||||||||||||||
| Cash dividend declared | 0.07 | 0.07 | 0.07 | 0.07 | 0.06 | |||||||||||||||
| Book value per share | 10.96 | 10.53 | 10.60 | 10.50 | 10.27 | |||||||||||||||
| Tangible book value per share (non-GAAP) | 10.30 | 9.87 | 9.94 | 9.84 | 9.61 | |||||||||||||||
| Asset Quality: | ||||||||||||||||||||
| 30-89 day delinquent loans | $ | 4,605 | $ | 4,097 | $ | 4,092 | $ | 1,669 | $ | 2,578 | ||||||||||
| 90 days or more delinquent loans | 1,394 | 1,527 | 1,324 | 1,377 | 1,891 | |||||||||||||||
| Total delinquent loans | 5,999 | 5,624 | 5,416 | 3,046 | 4,469 | |||||||||||||||
| Total delinquent loans as a percentage of total loans | ||||||||||||||||||||
| Nonperforming loans | $ | 6,421 | $ | 6,290 | $ | 5,755 | $ | 5,794 | $ | 5,694 | ||||||||||
| Nonperforming loans as a percentage of total loans | ||||||||||||||||||||
| Nonperforming assets as a percentage of total assets | ||||||||||||||||||||
| Allowance for credit losses as a percentage of nonperforming loans | 315, | |||||||||||||||||||
| Allowance for credit losses as a percentage of total loans | ||||||||||||||||||||
| Net loan charge-offs (recoveries) | $ | 136 | $ | 78 | $ | (25) | $ | 1,850 | $ | 426 | ||||||||||
| Net loan charge-offs (recoveries) as a percentage of average loans | ||||||||||||||||||||
| (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, loss on disposal of premises and equipment, gain on non-marketable equity investments, gains and losses on defined benefit plan termination and gain on bank-owned life insurance death benefit. | ||||||||||||||||||||
The following table sets forth the information relating to our average balances and net interest income for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022 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, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||
| 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) | $ | 2,017,089 | $ | 24,052 | 4.73 | % | $ | 2,007,267 | $ | 23,568 | 4.66 | % | $ | 1,994,874 | $ | 21,403 | 4.26 | % | ||||||||||||
| Securities(2) | 355,078 | 2,094 | 2.34 | 361,216 | 2,033 | 2.23 | 388,529 | 2,175 | 2.22 | |||||||||||||||||||||
| Other investments | 12,119 | 140 | 4.58 | 12,155 | 166 | 5.42 | 10,638 | 75 | 2.80 | |||||||||||||||||||||
| Short-term investments(3) | 42,826 | 597 | 5.53 | 22,349 | 251 | 4.46 | 7,635 | 62 | 3.22 | |||||||||||||||||||||
| Total interest-earning assets | 2,427,112 | 26,883 | 4.39 | 2,402,987 | 26,018 | 4.30 | 2,401,676 | 23,715 | 3.92 | |||||||||||||||||||||
| Total non-interest-earning assets | 158,435 | 156,503 | 159,042 | |||||||||||||||||||||||||||
| Total assets | $ | 2,585,547 | $ | 2,559,490 | $ | 2,560,718 | ||||||||||||||||||||||||
| LIABILITIES AND EQUITY: | ||||||||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||||||||
| Interest-bearing checking accounts | $ | 139,894 | 260 | 0.74 | $ | 144,792 | 269 | 0.74 | $ | 149,928 | 206 | 0.55 | ||||||||||||||||||
| Savings accounts | 187,047 | 39 | 0.08 | 195,020 | 41 | 0.08 | 221,964 | 39 | 0.07 | |||||||||||||||||||||
| Money market accounts | 657,407 | 2,716 | 1.64 | 656,066 | 2,488 | 1.50 | 862,523 | 1,375 | 0.63 | |||||||||||||||||||||
| Time deposit accounts | 603,860 | 5,758 | 3.78 | 563,135 | 4,906 | 3.46 | 359,555 | 586 | 0.65 | |||||||||||||||||||||
| Total interest-bearing deposits | 1,588,208 | 8,773 | 2.19 | 1,559,013 | 7,704 | 1.96 | 1,593,970 | 2,206 | 0.55 | |||||||||||||||||||||
| Borrowings | 149,585 | 1,821 | 4.83 | 149,507 | 1,814 | 4.81 | 48,579 | 525 | 4.29 | |||||||||||||||||||||
| Interest-bearing liabilities | 1,737,793 | 10,594 | 2.42 | 1,708,520 | 9,518 | 2.21 | 1,642,549 | 2,731 | 0.66 | |||||||||||||||||||||
| Non-interest-bearing deposits | 588,748 | 591,933 | 663,814 | |||||||||||||||||||||||||||
| Other non-interest-bearing liabilities | 27,847 | 24,504 | 39,399 | |||||||||||||||||||||||||||
| Total non-interest-bearing liabilities | 616,595 | 616,437 | 703,213 | |||||||||||||||||||||||||||
| Total liabilities | 2,354,388 | 2,324,957 | 2,345,762 | |||||||||||||||||||||||||||
| Total equity | 231,159 | 234,533 | 214,956 | |||||||||||||||||||||||||||
| Total liabilities and equity | $ | 2,585,547 | $ | 2,559,490 | $ | 2,560,718 | ||||||||||||||||||||||||
| Less: Tax-equivalent adjustment(2) | (113 | ) | (117 | ) | (130 | ) | ||||||||||||||||||||||||
| Net interest and dividend income | $ | 16,176 | $ | 16,383 | $ | 20,854 | ||||||||||||||||||||||||
| Net interest rate spread(4) | 1.96 | % | 2.07 | % | 3.24 | % | ||||||||||||||||||||||||
| Net interest rate spread, on a tax-equivalent basis(5) | 1.98 | % | 2.09 | % | 3.26 | % | ||||||||||||||||||||||||
| Net interest margin(6) | 2.64 | % | 2.70 | % | 3.44 | % | ||||||||||||||||||||||||
| Net interest margin, on a tax-equivalent basis(7) | 2.66 | % | 2.72 | % | 3.47 | % | ||||||||||||||||||||||||
| Ratio of average interest-earning | ||||||||||||||||||||||||||||||
| assets to average interest-bearing liabilities | 139.67 | % | 140.65 | % | 146.22 | % | ||||||||||||||||||||||||
The following tables set forth the information relating to our average balances and net interest income for the twelve months ended December 31, 2023 and 2022 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, | |||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||
| Average Balance | Interest | Average Yield/ Cost | Average Balance | Interest | Average Yield/ Cost | ||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| ASSETS: | |||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||
| Loans(1)(2) | $ | 2,006,166 | $ | 91,640 | 4.57 | % | $ | 1,953,527 | $ | 77,758 | 3.98 | % | |||||||
| Securities(2) | 368,201 | 8,371 | 2.27 | 407,444 | 8,299 | 2.04 | |||||||||||||
| Other investments | 12,425 | 558 | 4.49 | 10,289 | 177 | 1.72 | |||||||||||||
| Short-term investments(3) | 20,459 | 1,021 | 4.99 | 25,712 | 191 | 0.74 | |||||||||||||
| Total interest-earning assets | 2,407,251 | 101,590 | 4.22 | 2,396,972 | 86,425 | 3.61 | |||||||||||||
| Total non-interest-earning assets | 155,511 | 152,941 | |||||||||||||||||
| Total assets | $ | 2,562,762 | $ | 2,549,913 | |||||||||||||||
| LIABILITIES AND EQUITY: | |||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||
| Interest-bearing checking accounts | $ | 142,005 | 1,041 | 0.73 | % | $ | 139,993 | 530 | 0.38 | % | |||||||||
| Savings accounts | 202,354 | 181 | 0.09 | 222,267 | 161 | 0.07 | |||||||||||||
| Money market accounts | 697,621 | 9,529 | 1.37 | 890,763 | 3,187 | 0.36 | |||||||||||||
| Time deposit accounts | 524,827 | 15,898 | 3.03 | 363,258 | 1,474 | 0.41 | |||||||||||||
| Total interest-bearing deposits | 1,566,807 | 26,649 | 1.70 | 1,616,281 | 5,352 | 0.33 | |||||||||||||
| Short-term borrowings and long-term debt | 135,532 | 6,560 | 4.84 | 31,556 | 1,344 | 4.26 | |||||||||||||
| Total interest-bearing liabilities | 1,702,339 | 33,209 | 1.95 | 1,647,837 | 6,696 | 0.41 | |||||||||||||
| Non-interest-bearing deposits | 602,652 | 647,971 | |||||||||||||||||
| Other non-interest-bearing liabilities | 24,885 | 35,615 | |||||||||||||||||
| Total non-interest-bearing liabilities | 627,537 | 683,586 | |||||||||||||||||
| Total liabilities | 2,329,876 | 2,331,423 | |||||||||||||||||
| Total equity | 232,886 | 218,490 | |||||||||||||||||
| Total liabilities and equity | $ | 2,562,762 | $ | 2,549,913 | |||||||||||||||
| Less: Tax-equivalent adjustment (2) | (472 | ) | (497 | ) | |||||||||||||||
| Net interest and dividend income | $ | 67,909 | $ | 79,232 | |||||||||||||||
| Net interest rate spread (4) | 2.25 | % | 3.18 | % | |||||||||||||||
| Net interest rate spread, on a tax-equivalent basis (5) | 2.27 | % | 3.20 | % | |||||||||||||||
| Net interest margin (6) | 2.82 | % | 3.31 | % | |||||||||||||||
| Net interest margin, on a tax-equivalent basis (7) | 2.84 | % | 3.33 | % | |||||||||||||||
| Ratio of average interest-earning | |||||||||||||||||||
| assets to average interest-bearing liabilities | 141.41 | % | 145.46 | % | |||||||||||||||
| (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 | |
| (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 | |||||||||||||||||||
| 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | |||||||||||||||
| (In thousands) | |||||||||||||||||||
| Loans (no tax adjustment) | $ | 23,939 | $ | 23,451 | $ | 22,450 | $ | 21,329 | $ | 21,274 | |||||||||
| Tax-equivalent adjustment | 113 | 117 | 122 | 120 | 129 | ||||||||||||||
| Loans (tax-equivalent basis) | $ | 24,052 | $ | 23,568 | $ | 22,572 | $ | 21,449 | $ | 21,403 | |||||||||
| Securities (no tax adjustment) | $ | 2,094 | $ | 2,033 | $ | 2,094 | $ | 2,149 | $ | 2,174 | |||||||||
| Tax-equivalent adjustment | - | - | - | - | 1 | ||||||||||||||
| Securities (tax-equivalent basis) | $ | 2,094 | $ | 2,033 | $ | 2,094 | $ | 2,149 | $ | 2,175 | |||||||||
| Net interest income (no tax adjustment) | $ | 16,176 | $ | 16,383 | $ | 16,846 | $ | 18,504 | $ | 20,854 | |||||||||
| Tax equivalent adjustment | 113 | 117 | 122 | 120 | 130 | ||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 16,289 | $ | 16,500 | $ | 16,968 | $ | 18,624 | $ | 20,984 | |||||||||
| Net interest income (no tax adjustment) | $ | 16,176 | $ | 16,383 | $ | 16,846 | $ | 18,504 | $ | 20,854 | |||||||||
| Less: | |||||||||||||||||||
| Purchase accounting adjustments | 3 | 4 | 5 | (62 | ) | 87 | |||||||||||||
| Prepayment penalties and fees | 7 | 14 | 43 | - | 134 | ||||||||||||||
| PPP Income | 46 | 12 | 26 | 15 | 18 | ||||||||||||||
| Adjusted net interest income (non-GAAP) | $ | 16,120 | $ | 16,353 | $ | 16,772 | $ | 18,551 | $ | 20,615 | |||||||||
| Average interest-earning assets | $ | 2,427,112 | $ | 2,402,987 | $ | 2,405,077 | $ | 2,393,504 | $ | 2,401,676 | |||||||||
| Average interest-earning assets, excluding average PPP loans | $ | 2,425,923 | $ | 2,401,460 | $ | 2,403,076 | $ | 2,391,305 | $ | 2,399,297 | |||||||||
| Net interest margin (no tax adjustment) | 2.64 | % | 2.70 | % | 2.81 | % | 3.14 | % | 3.44 | % | |||||||||
| Net interest margin, tax-equivalent | 2.66 | % | 2.72 | % | 2.83 | % | 3.16 | % | 3.47 | % | |||||||||
| For the quarter ended | |||||||||||||||||||
| 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | |||||||||||||||
| (In thousands) | |||||||||||||||||||
| Book Value per Share (GAAP) | $ | 10.96 | $ | 10.53 | $ | 10.60 | $ | 10.50 | $ | 10.27 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Goodwill | (0.58 | ) | (0.57 | ) | (0.57 | ) | (0.56 | ) | (0.56 | ) | |||||||||
| Core deposit intangible | (0.08 | ) | (0.09 | ) | (0.09 | ) | (0.10 | ) | (0.10 | ) | |||||||||
| Tangible Book Value per Share (non-GAAP) | $ | 10.30 | $ | 9.87 | $ | 9.94 | $ | 9.84 | $ | 9.61 | |||||||||
| Total Bank Equity (GAAP) | $ | 242,780 | $ | 234,612 | $ | 240,041 | $ | 238,887 | $ | 233,882 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Goodwill | (12,487 | ) | (12,487 | ) | (12,487 | ) | (12,487 | ) | (12,487 | ) | |||||||||
| Core deposit intangible net of associated deferred tax liabilities | (1,303 | ) | (1,370 | ) | (1,438 | ) | (1,505 | ) | (1,573 | ) | |||||||||
| Tangible Capital (non-GAAP) | $ | 228,990 | $ | 220,755 | $ | 226,116 | $ | 224,895 | $ | 219,822 | |||||||||
| Tangible Capital (non-GAAP) | $ | 228,990 | $ | 220,755 | $ | 226,116 | $ | 224,895 | $ | 219,822 | |||||||||
| Unrealized losses on HTM securities net of tax | (25,649 | ) | (34,622 | ) | (27,286 | ) | (25,825 | ) | (28,194 | ) | |||||||||
| Adjusted Tangible Capital for Impact of Unrealized Losses on HTM Securities Net of Tax (non-GAAP) | $ | 203,341 | $ | 186,133 | $ | 198,830 | $ | 199,070 | $ | 191,628 | |||||||||
| Common Equity Tier (CET) 1 Capital | $ | 250,734 | $ | 249,441 | $ | 249,340 | $ | 247,996 | $ | 244,864 | |||||||||
| Unrealized losses on HTM securities net of tax | (25,649 | ) | (34,622 | ) | (27,286 | ) | (25,825 | ) | (28,194 | ) | |||||||||
| Unrealized losses on defined benefit plan net of tax | - | - | - | (1,079 | ) | (1,079 | ) | ||||||||||||
| Adjusted CET 1 Capital for Impact of Net AFS Securities Losses (non-GAAP) | $ | 225,085 | $ | 214,819 | $ | 222,054 | $ | 221,092 | $ | 215,591 | |||||||||
| Total Assets for Leverage Ratio (non-GAAP) | $ | 2,607,260 | $ | 2,574,402 | $ | 2,572,583 | $ | 2,560,973 | $ | 2,579,141 | |||||||||
| Tier 1 Leverage Ratio | 9.62 | % | 9.69 | % | 9.69 | % | 9.68 | % | 9.49 | % | |||||||||
| Tangible Common Equity (non-GAAP) = Tangible Capital (non-GAAP)/Total Assets for Leverage Ratio (non-GAAP) | 8.78 | % | 8.58 | % | 8.79 | % | 8.78 | % | 8.52 | % | |||||||||
| Adjusted Tangible Common Equity 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) | 8.63 | % | 8.34 | % | 8.63 | % | 8.63 | % | 8.36 | % | |||||||||
| 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) | 7.80 | % | 7.23 | % | 7.73 | % | 7.77 | % | 7.43 | % | |||||||||
| For the quarter ended | |||||||||||||||||||
| 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | |||||||||||||||
| (In thousands) | |||||||||||||||||||
| Income Before Income Taxes (GAAP) | $ | 3,619 | $ | 5,523 | $ | 3,467 | $ | 6,975 | $ | 12,354 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Provision for (reversal of) credit losses | 486 | 354 | 420 | (388 | ) | 150 | |||||||||||||
| PPP Income | (46 | ) | (12 | ) | (26 | ) | (15 | ) | (18 | ) | |||||||||
| Loss (gain) on defined benefit plan termination | - | - | 1,143 | - | (2,807 | ) | |||||||||||||
| Gain on bank-owned life insurance death benefit | - | (778 | ) | - | - | - | |||||||||||||
| Income Before Taxes, Provision, PPP Income, Defined Benefit Termination and Bank-Owned Life Insurance Death Benefit (non-GAAP) | $ | 4,059 | $ | 5,087 | $ | 5,004 | $ | 6,572 | $ | 9,679 | |||||||||
| Efficiency Ratio: | |||||||||||||||||||
| Non-interest Expense (GAAP) | $ | 14,785 | $ | 14,118 | $ | 14,551 | $ | 14,896 | $ | 14,003 | |||||||||
| Non-interest Expense for Adjusted Efficiency Ratio (non-GAAP) | $ | 14,785 | $ | 14,118 | $ | 14,551 | $ | 14,896 | $ | 14,003 | |||||||||
| Net Interest Income (GAAP) | $ | 16,176 | $ | 16,383 | $ | 16,846 | $ | 18,504 | $ | 20,854 | |||||||||
| Non-interest Income (GAAP) | $ | 2,714 | $ | 3,612 | $ | 1,592 | $ | 2,979 | $ | 5,653 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Unrealized losses (gains) on marketable equity securities | 1 | - | - | - | (19 | ) | |||||||||||||
| Gain on non-marketable equity investments | - | (238 | ) | - | (352 | ) | (70 | ) | |||||||||||
| Loss on disposal of premises and equipment | - | 3 | - | - | - | ||||||||||||||
| Loss (gain) on defined benefit plan termination | - | - | 1,143 | - | (2,807 | ) | |||||||||||||
| Gain on bank-owned life insurance death benefit | - | (778 | ) | - | - | - | |||||||||||||
| Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) | $ | 2,715 | $ | 2,599 | $ | 2,735 | $ | 2,627 | $ | 2,757 | |||||||||
| Total Revenue for Adjusted Efficiency Ratio (non-GAAP) | $ | 18,891 | $ | 18,982 | $ | 19,581 | $ | 21,131 | $ | 23,611 | |||||||||
| Efficiency Ratio (GAAP) | 78.27 | % | 70.61 | % | 78.92 | % | 69.34 | % | 52.83 | % | |||||||||
| Adjusted Efficiency Ratio (Non-interest Expense for Adjusted Efficiency Ratio (non-GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) | 78.26 | % | 74.38 | % | 74.31 | % | 70.49 | % | 59.31 | % | |||||||||
| For the twelve months ended | |||||||
| 12/31/2023 | 12/31/2022 | ||||||
| (In thousands) | |||||||
| Loans (no tax adjustment) | $ | 91,169 | $ | 77,264 | |||
| Tax-equivalent adjustment | 471 | 494 | |||||
| Loans (tax-equivalent basis) | $ | 91,640 | $ | 77,758 | |||
| Securities (no tax adjustment) | $ | 8,370 | $ | 8,296 | |||
| Tax-equivalent adjustment | 1 | 3 | |||||
| Securities (tax-equivalent basis) | $ | 8,371 | $ | 8,299 | |||
| Net interest income (no tax adjustment) | $ | 67,909 | $ | 79,232 | |||
| Tax equivalent adjustment | 472 | 497 | |||||
| Net interest income (tax-equivalent basis) | $ | 68,381 | $ | 79,729 | |||
| Net interest income (no tax adjustment) | $ | 67,909 | $ | 79,232 | |||
| Less: | |||||||
| Purchase accounting adjustments | (50 | ) | 175 | ||||
| Prepayment penalties and fees | 64 | 281 | |||||
| PPP Income | 99 | 728 | |||||
| Adjusted net interest income (non-GAAP) | $ | 67,796 | $ | 78,048 | |||
| Average interest-earning assets | $ | 2,407,251 | $ | 2,396,972 | |||
| Average interest-earnings asset, excluding average PPP loans | $ | 2,405,525 | $ | 2,391,252 | |||
| Net interest margin (no tax adjustment) | 2.82 | % | 3.31 | % | |||
| Net interest margin, tax-equivalent | 2.84 | % | 3.33 | % | |||
| For the twelve months ended | |||||||
| 12/31/2023 | 12/31/2022 | ||||||
| (In thousands) | |||||||
| Income Before Income Taxes (GAAP) | $ | 19,584 | $ | 34,629 | |||
| Provision for credit losses | 872 | 700 | |||||
| PPP Income | (99 | ) | (728 | ) | |||
| Gain on bank-owned life insurance death benefit | (778 | ) | - | ||||
| Loss (gain) on defined benefit plan termination | 1,143 | (2,807 | ) | ||||
| Income Before Taxes, Provision, PPP Income, Bank-Owned Life Insurance Death Benefit and Defined Benefit Termination (non-GAAP) | $ | 20,722 | $ | 31,794 | |||
| Adjusted Efficiency Ratio: | |||||||
| Non-interest Expense (GAAP) | $ | 58,350 | $ | 57,235 | |||
| Non-interest Expense for Adjusted Efficiency Ratio (non-GAAP) | $ | 58,350 | $ | 57,235 | |||
| Net Interest Income (GAAP) | $ | 67,909 | $ | 79,232 | |||
| Non-interest Income (GAAP) | $ | 10,897 | $ | 13,332 | |||
| Non-GAAP adjustments: | |||||||
| Loss on disposal of premises and equipment | 3 | 4 | |||||
| Unrealized losses on marketable equity securities | 1 | 717 | |||||
| Gain on bank-owned life insurance death benefit | (778 | ) | - | ||||
| Gain on non-marketable equity investments | (590 | ) | (422 | ) | |||
| Loss (gain) on defined benefit plan curtailment | 1,143 | (2,807 | ) | ||||
| Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) | $ | 10,676 | $ | 10,824 | |||
| Total Revenue for Adjusted Efficiency Ratio (non-GAAP) | $ | 78,585 | $ | 90,056 | |||
| Efficiency Ratio (GAAP) | 74.04 | % | 61.83 | % | |||
| Adjusted Efficiency Ratio (Non-interest Expense for Adjusted Efficiency Ratio (non-GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) | 74.25 | % | 63.55 | % | |||
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
FAQ
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