INVESTOR PRESENTATION

THIRD QUARTER 2023

Local banking is better than ever.

FORWARD-LOOKING STATEMENTS

We may, from time to time, make written or oral "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements contained in our filings with the Securities and Exchange Commission (the "SEC"), our reports to shareholders and in other communications by us. This Investor Presentation contains "forward-looking statements" with respect to the Company's financial condition, liquidity, results of operations, future performance, and business. Forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," and "potential." Examples of forward-looking statements include, but are not limited to, estimates with respect to our financial condition, results of operations and business that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to:

  • unpredictable changes in general economic conditions, financial markets, fiscal, monetary and regulatory policies, including actual or potential stress in the banking industry;
  • the duration and scope of potential pandemics, including the emergence of new variants and the response thereto;
  • 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;

2

FORWARD-LOOKING STATEMENTS

  • 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.

3

WHO WE ARE

Every day, we focus on showing Westfield Bank customers "what better banking is all about." For us, the idea of better banking starts with putting customers first, while adhering to our core values.

Our Core Values:

  • Integrity
  • Enhance Shareholder Value
  • Customer Focus
  • Community Focus

Our Core Mission:

Our purpose is to help customers succeed in our community, while creating and increasing shareholder value.

The Company's purpose drives the outcome we envision for

Western New England Bancorp.

70 Center Street, Chicopee, MA.

4

SENIOR MANAGEMENT TEAM

James C. Hagan, President & Chief Executive Officer

Guida R. Sajdak, Executive Vice President, Chief Financial Officer & Treasurer

Allen J. Miles III, Executive Vice President & Chief Lender Officer Kevin C. O'Connor, Executive Vice President & Chief Banking Officer Daniel A. Marini, Senior Vice President, Retail Banking & Marketing

Leo R. Sagan, Jr., Senior Vice President & Chief Risk Officer

Filipe Goncalves, Senior Vice President & Chief Credit Officer Darlene Libiszewski, Senior Vice President & Chief Information Officer John Bonini, Senior Vice President & General Counsel

Christine Phillips, Senior Vice President, Human Resources Director

5

CELEBRATING 170 YEARS

On July 1, 2023, the Bank celebrated its 170th anniversary, proudly serving its customers and communities since 1853. The milestone marked 170 years of continued growth and expansion in the western Massachusetts and Connecticut marketplaces. Ongoing activities include special marketing, customer communications and events, and promotional offers.

Excerpt from message to all customers from

James C. Hagan, President & CEO:

We know you have choices.

Thank you sincerely for choosing to do business with Westfield Bank.

As we celebrate our 170th year with gratitude for the opportunity to serve our customers and communities,

I just want you to know we appreciate the choice you've made to work with Westfield Bank. With 25 branch offices, and digital tools that make mobile and online banking easy, Westfield Bank is never far away from where you are today-or where you're headed tomorrow. We are proud to be the regional community bank that's focused on you, your financial security, and these communities we share.

- James C. Hagan, President & CEO

6

3Q2023 QUARTERLY EARNINGS

($ in thousands, except EPS)

3Q2023 (1)(2)

2Q2023 (2)(3)

1Q2023 (2)

4Q2022 (4)

3Q2022

Net interest income

$

16,383

$

16,846

$

18,504

$

20,854

$

20,288

Provision for (reversal of) credit losses

354

420

(388)

150

675

Non-interest income

3,612

1,592

2,979

5,653

2,590

Non-interest expense

14,118

14,551

14,896

14,003

14,343

Income before taxes

5,523

3,467

6,975

12,354

7,860

Income tax expense

1,033

704

1,671

3,320

1,861

Net income

$

4,490

$

2,763

$

5,304

$

9,034

$

5,999

Diluted earnings per share (EPS)

$

0.21

$

0.13

$

0.24

$

0.42

$

0.28

Return on average assets (ROA)

0.70%

0.43%

0.84%

1.40%

0.93%

Return on average equity (ROE)

7.60%

4.72%

9.31%

16.67%

10.90%

Net interest margin

2.70%

2.81%

3.14%

3.44%

3.35%

Net interest margin, on a tax-equivalent basis

2.72%

2.83%

3.16%

3.47%

3.37%

  1. Non-interestincome includes a non-taxable $778,000 gain on bank-owned life insurance death benefits.
  2. The Company adopted ASU 2016-13 on January 1, 2023 with a modified retrospective approach. Accordingly, beginning at March 31, 2023, the allowance for credit losses was determined in accordance with ASC 326, "Financial Instruments-CreditLosses."
  3. Non-interestincome includes a one-time,non-recurring final termination expense of $1.1 million, due to the termination of the defined benefit plan.
  4. Non-interestincome includes a $2.8 million gain on the defined benefit plan termination.

7

NET INTEREST INCOME AND NET INTEREST MARGIN

$25.0

3.35%

3.44%

3.50%

$24.0

3.40%

$23.0

3.14%

3.30%

3.20%

$22.0

$20.9

3.10%

$21.0

$20.3

3.00%

$20.0

2.81%

2.90%

$19.0

$18.5

2.70%

2.80%

$18.0

2.70%

$16.8

$17.0

$16.4

2.60%

$16.0

2.50%

3Q2022

4Q2022

1Q2023

2Q2023

3Q2023

Net interest income ($)

Net interest margin (%)

On a sequential quarter basis, net interest income decreased $463,000, or 2.7%, to $16.4 million for the three months ended September 30, 2023, from $16.8 million for the three months ended June 30, 2023. The decrease in net interest income was primarily due to an increase in interest expense of $1.6 million, or 19.5%, partially offset by an increase in interest income of $1.1 million, or 4.4%.

The net interest margin was 2.70% for the three months ended September 30, 2023, compared to 2.81% for the three months ended June 30, 2023. The decrease in the Company's net interest margin was primarily due to an increase in the average cost of interest-bearing

liabilities, which was partially offset with an increase in the average yield on interest-earning assets.

8

($ in millions)

TOTAL LOANS

Average Loans Outstanding

$2,020

$2,007

$2,007

4.90%

$2,000

$1,995

$1,993

4.66% 4.70%

$1,980

4.49%

4.50%

$1,974

4.34%

4.30%

$1,960

4.23%

4.10%

$1,940

3.93%

3.90%

$1,920

3.70%

$1,900

3.50%

3Q2022

4Q2022

1Q2023

2Q2023

3Q2023

Average Loans Outstanding

Average Loan Yield

Period-end Loans Outstanding

$2,020

$2,016

$2,015

$2,015

$2,010

$2,006

$2,004

$2,005

$2,000

$1,995

$1,990

$1,989

$1,985

$1,980

$1,975

3Q2022

4Q2022

1Q2023

2Q2023

3Q2023

At September 30, 2023, total loans increased $23.4 million, or 1.2%, to $2.0 billion from December 31, 2022. Residential real estate loans, including home equity loans, increased $18.7 million, or 2.7%, commercial real estate loans increased $11.0 million, or 1.0%, while commercial and industrial loans decreased $7.3 million, or 3.3%.

9

($ in millions)

COMMERCIAL AND INDUSTRIAL LOANS

$235

$232

$230

$227

$225

$220

$220

$218

$215

$213

$210

$205

$200

3Q2022

4Q2022

1Q2023

2Q2023

3Q2023

Total commercial and industrial ("C&I") loans decreased $7.3 million, or 3.3%, from $219.8 million at December 31, 2022, to $212.5 million

at September 30, 2023. At September 30, 2023, total delinquent C&I loans totaled $311,000, or 0.15%, of total C&I loans.

10

($ in millions)

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Western New England Bancorp Inc. published this content on 24 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 October 2023 20:44:34 UTC.