{"id":840213,"date":"2025-04-22T16:24:23","date_gmt":"2025-04-22T20:24:23","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/western-new-england-bancorp-inc-reports-results-for-three-months-ended-march-31-2025-and-declares-quarterly-cash-dividend\/"},"modified":"2025-04-22T16:24:23","modified_gmt":"2025-04-22T20:24:23","slug":"western-new-england-bancorp-inc-reports-results-for-three-months-ended-march-31-2025-and-declares-quarterly-cash-dividend","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/western-new-england-bancorp-inc-reports-results-for-three-months-ended-march-31-2025-and-declares-quarterly-cash-dividend\/","title":{"rendered":"Western New England Bancorp, Inc. Reports Results for Three Months Ended March 31, 2025 and Declares Quarterly Cash Dividend"},"content":{"rendered":"

\nThe Company Also Announces a New Share Repurchase Plan
\n<\/h2>\n
\n

WESTFIELD, Mass., April 22, 2025 (GLOBE NEWSWIRE) — Western New England Bancorp, Inc. (the \u201cCompany\u201d or \u201cWNEB\u201d) (NasdaqGS: WNEB), the holding company for Westfield Bank (the \u201cBank\u201d), announced today the unaudited results of operations for the three months ended March 31, 2025. The Company reported net income of $2.3 million, or $0.11 per diluted share, for the three months ended March 31, 2025, compared to net income of $3.0 million, or $0.14 per diluted share, for the three months ended March 31, 2024. On a linked quarter basis, net income was $2.3 million, or $0.11 per diluted share, compared to net income of $3.3 million, or $0.16 per diluted share, for the three months ended December 31, 2024.<\/p>\n

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.07 per share on the Company\u2019s common stock. The dividend will be payable on or about May 21, 2025 to shareholders of record on May 7, 2025.<\/p>\n

In addition, the Company announced that its Board of Directors authorized a new stock repurchase plan (the \u201c2025 Plan\u201d), pursuant to which the Company may repurchase up to 1.0 million shares of the Company\u2019s common stock, or approximately 4.8% of the Company\u2019s outstanding common stock as of today. The 2025 Plan will commence upon the completion of the Company\u2019s existing share repurchase plan (the \u201c2024 Plan\u201d). The 2024 Plan was approved by the Board of Directors on May 21, 2024, and as of March 31, 2025, there were 265,609 shares of common stock available for repurchase under the 2024 Plan.<\/p>\n

James C. Hagan, President and Chief Executive Officer,<\/em> commented, \u201cI am pleased to report the results for the first quarter of 2025. Our strong, diversified core deposit base and our disciplined approach to managing our funding costs have resulted in an increase in net interest income for the third consecutive quarter. The net interest margin increased eight basis points to 2.49% compared to the preceding quarter. We will continue to proactively manage our funding costs and benefit from our liability sensitive balance sheet to support net interest margin growth. In the first quarter, core deposits increased $70.2 million, or 4.5%, and represented 70.0% of total deposits while the loan-to-deposit ratio decreased to 89.3%. During the same period, average funding costs decreased four basis points.<\/p>\n

\u201cWe 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. Consistent with our prudent credit culture, we continue to proactively identify and manage credit risk within the loan portfolio. Our asset quality remains strong, with nonaccrual loans at 0.29% of total loans as of March 31, 2025.<\/p>\n

\u201cThe Company is considered to be well-capitalized, as defined by regulators and internal Company targets, and we remain disciplined in our capital management strategies. We continue to believe that buying back shares represents a valuable use of the Company\u2019s capital. Today, we announced the 2025 Plan, which will commence upon the completion of the 2024 Plan. Our stock repurchase programs are an integral element of our capital management strategies. As such, we believe that repurchasing common stock enhances shareholder value. We are pleased to be able to continue to return value to shareholders through share repurchases.\u201d<\/p>\n

Hagan concluded,<\/em> \u201cOur commitment to strong capital and liquidity levels gives us a solid foundation to take advantage of opportunities in the markets we serve and to enhance shareholder value in the long term.\u201d<\/p>\n

\n Key Highlights:<\/strong>\n <\/p>\n

\n Loans and Deposits<\/strong>\n <\/p>\n

Total gross loans increased $9.3 million, or 0.4%, from $2.1 billion, or 77.9% of total assets, at December 31, 2024 to $2.1 billion, or 76.7% of total assets, at March 31, 2025. The increase in total gross loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $8.1 million, or 1.0%, and an increase in commercial and industrial loans of $4.7 million, or 2.2%. These increases were partially offset by a decrease in commercial real estate loans of $3.0 million, or 0.3%, and a decrease in consumer loans of $526,000, or 12.0%.<\/p>\n

At March 31, 2025, total deposits of $2.3 billion increased $66.0 million, or 2.9%, from December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $70.2 million, or 4.5%, from $1.6 billion, or 68.9% of total deposits, at December 31, 2024, to $1.6 billion, or 70.0% of total deposits, at March 31, 2025. Time deposits decreased $4.3 million, or 0.6%, from $703.6 million at December 31, 2024 to $699.3 million at March 31, 2025. Brokered time deposits, which are included in time deposits, totaled $1.7 million at March 31, 2025 and at December 31, 2024. The loan-to-deposit ratio decreased from 91.5% at December 31, 2024 to 89.3% at March 31, 2025.<\/p>\n

\n Liquidity <\/strong>\n <\/p>\n

The Company\u2019s liquidity position remains strong with solid core deposit relationships, cash, unencumbered securities, a diversified deposit base and access to diversified borrowing sources. At March 31, 2025, the Company had $1.1 billion in immediately available liquidity, compared to $665.6 million in uninsured deposits, or 28.6% of total deposits, representing a coverage ratio of 171.5%.<\/p>\n

Uninsured deposits of the Bank\u2019s 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\u2019s deposit customers if such customer desired to have such pass-through insurance.<\/p>\n

\n Allowance for Credit Losses and Credit Quality<\/strong>\n <\/p>\n

At March 31, 2025, the allowance for credit losses was $19.7 million, or 0.95% of total loans, compared to $19.5 million, or 0.94% of total loans, at December 31, 2024. The allowance for loan losses, as a percentage of nonaccrual loans, was 327.1% and 362.9% at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, nonaccrual loans totaled $6.0 million, or 0.29% of total loans, compared to $5.4 million, or 0.26% of total loans, at December 31, 2024. Total delinquent loans decreased from $5.0 million, or 0.24% of total loans, at December 31, 2024 to $4.5 million, or 0.22% of total loans, at March 31, 2025. At March 31, 2025 and December 31, 2024, the Company did not have any other real estate owned.<\/p>\n

\n Net Interest Margin<\/strong>\n <\/p>\n

The net interest margin increased eight basis points from 2.41% for the three months ended December 31, 2024 to 2.49% for the three months ended March 31, 2025. The net interest margin, on a tax-equivalent basis, increased eight basis points from 2.43% for the three months ended December 31, 2024, compared to 2.51% for the three months ended March 31, 2025.<\/p>\n

\n Stock Repurchase Program <\/strong>\n <\/p>\n

On May 21, 2024, the Board of Directors authorized the 2024 Plan under which the Company may repurchase up to 1.0 million shares of its common stock, or approximately 4.6%, of the Company\u2019s then-outstanding shares of common stock. During the three months ended March 31, 2025, the Company repurchased 206,709 shares of common stock under the 2024 Plan, with an average price per share of $9.12. As of March 31, 2025, there were 265,609 shares of common stock available for repurchase under the 2024 Plan.<\/p>\n

On April 22, 2025, the Board of Directors authorized the 2025 Plan, pursuant to which the Company may repurchase up to 1.0 million shares of common stock, or approximately 4.8% of the Company\u2019s outstanding shares as of the date the 2025 Plan was announced. Repurchases under the 2025 Plan will commence upon the completion of the 2024 Plan.<\/p>\n

The repurchase of shares\u00a0under the stock repurchase program is administered through an independent broker. The shares of common stock repurchased under both the 2024 Plan and the 2025 Plan have been and will continue to be, as applicable, 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\u2019s management (\u201cManagement\u201d) determines additional repurchases are not warranted. The timing and amount of additional share repurchases under both the 2024 Plan and the 2025 Plan will depend on a number of factors, including the Company\u2019s stock price performance, ongoing capital planning considerations, general market conditions, and applicable legal requirements.<\/p>\n

\n Book Value and Tangible Book Value<\/strong>\n <\/p>\n

At March 31, 2025, the Company\u2019s book value per share was $11.44, compared to $11.30 at December 31, 2024, while tangible book value per share, a non-GAAP financial measure, increased $0.15, or 1.4%, from $10.63 at December 31, 2024 to $10.78 at March 31, 2025. See pages 16-17 for the related tangible book value calculation and a reconciliation of GAAP to non-GAAP financial measures.<\/p>\n

\n Net Income for the Three Months Ended March 31, 2025 Compared to the Three Months Ended December 31, 2024.<\/strong>\n <\/p>\n

For the three months ended March 31, 2025, the Company reported a decrease in net income of $985,000, or 30.0%, from $3.3 million, or $0.16 per diluted share, for the three months ended December 31, 2024, to $2.3 million, or $0.11 per diluted share. Net interest income increased $261,000, or 1.7%, the provision for credit losses increased $904,000, non-interest income decreased $495,000, or 15.2%, and non-interest expense increased $258,000, or 1.7%. Return on average assets and return on average equity were 0.35% and 3.94%, respectively, for the three months ended March 31, 2025, compared to 0.49% and 5.48%, respectively, for the three months ended December 31, 2024.<\/p>\n

\n Net Interest Income and Net Interest Margin<\/strong>\n <\/p>\n

On a sequential quarter basis, net interest income, our primary driver of revenues, increased $261,000, or 1.7%, to $15.5 million for the three months ended March 31, 2025, from $15.3 million for the three months ended December 31, 2024. The increase in net interest income was primarily due to a decrease in interest expense of $410,000, or 3.1%, partially offset by a decrease in interest income of $149,000, or 0.5%.<\/p>\n

The net interest margin increased eight basis points from 2.41% for the three months ended December 31, 2024 to 2.49% for the three months ended March 31, 2025. The net interest margin, on a tax-equivalent basis, increased eight basis points from 2.43% for the three months ended December 31, 2024, compared to 2.51% for the three months ended March 31, 2025.<\/p>\n

The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.56% for the three months ended March 31, 2025, compared to 4.52% for the three months ended December 31, 2024. The average loan yield, without the impact of tax-equivalent adjustments, was 4.89% for the three months ended March 31, 2025, compared to 4.86% for the three months ended December 31, 2024. During the three months ended March 31, 2025, average interest-earning assets increased $12.7 million, or 0.5% to $2.5 billion, primarily due to an increase in average loans of $10.7 million, or 0.5%, and an increase in average securities of $3.9 million, or 1.1%.<\/p>\n

The average cost of total funds, including non-interest bearing accounts and borrowings, decreased four basis points from 2.20% for the three months ended December 31, 2024 to 2.16% for the three months ended March 31, 2025. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 10 basis points to 1.08% for the three months ended March 31, 2025, from 0.98% for the three months ended December 31, 2024. The average cost of time deposits decreased 20 basis points from 4.31% for the three months ended December 31, 2024, to 4.11% for the three months ended March 31, 2025. The average cost of borrowings, including subordinated debt, was 5.04% for the three months ended December 31, 2024 and for the three months ended March 31, 2025. Average demand deposits, an interest-free source of funds, decreased $9.6 million, or 1.6%, from $579.2 million, or 25.6% of total average deposits, for the three months ended December 31, 2024, to $569.6 million, or 24.8% of total average deposits, for the three months ended March 31, 2025.<\/p>\n

\n Provision for (Reversal of) Credit Losses<\/strong>\n <\/p>\n

During the three months ended March 31, 2025, the Company recorded a provision for credit losses of $142,000, compared to a reversal of credit losses of $762,000 during the three months ended December 31, 2024. The increase was primarily due to changes in the most recent macroeconomic forecast. The provision for credit losses was also determined by a number of factors: the continued strong credit performance of the Company\u2019s loan portfolio, changes in the loan portfolio mix and Management\u2019s consideration of existing economic conditions. Management will continue to monitor macroeconomic variables related to the interest rate environment, changing tariff policies and concerns of an economic downturn. Management believes it is appropriately reserved for the current economic environment.<\/p>\n

During the three months ended March 31, 2025, the Company recorded net charge-offs of $29,000, compared to net recoveries of $128,000 for the three months ended December 31, 2024.<\/p>\n

\n Non-Interest Income<\/strong>\n <\/p>\n

On a sequential quarter basis, non-interest income decreased $495,000, or 15.2%, to $2.8 million for the three months ended March 31, 2025, from $3.3 million for the three months ended December 31, 2024. During the three months ended March 31, 2025, service charges and fees on deposits decreased $17,000, or 0.7%, to $2.3 million from the three months ended December 31, 2024. Income from bank-owned life insurance (\u201cBOLI\u201d) decreased $13,000, or 2.7%, from the three months ended December 31, 2024 to $473,000 for the three months ended March 31, 2025. During the three months ended March 31, 2025, the Company reported a gain of $7,000 from mortgage banking activities, compared to a loss of $11,000 during the three months ended December 31, 2024. During the three months ended March 31, 2025, the Company reported unrealized losses on marketable equity securities of $5,000, compared to unrealized losses of $9,000, during the three months ended December 31, 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 March 31, 2025. 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 March 31, 2025.<\/p>\n

\n Non-Interest Expense<\/strong>\n <\/p>\n

For the three months ended March 31, 2025, non-interest expense increased $258,000, or 1.7%, to $15.2 million from $14.9 million for the three months ended December 31, 2024. Occupancy expense increased $156,000, or 12.4%, primarily due to snow removal costs of $143,000. Advertising expense increased $119,000, or 38.4%, professional fees increased $75,000, or 15.9%, FDIC insurance expense increased $42,000, or 10.8%, and software related expenses increased $17,000, or 2.6%. These increases were partially offset by a decrease in furniture and equipment expense of $18,000, or 3.6%, a decrease in data processing expense of $18,000, or 2.0%, a decrease in debit card processing and ATM network costs of $16,000, or 2.7%, a decrease in salaries and related benefits of $16,000, or 0.2%, and a decrease in other non-interest expense of $83,000, or 5.8%.<\/p>\n

For the three months ended March 31, 2025 and the three months ended December 31, 2024, the efficiency ratio was 83.0% and 80.6%, respectively. For the three months ended March 31, 2025, the adjusted efficiency ratio, a non-GAAP financial measure, was 83.0% compared to 81.9% for the three months ended December 31, 2024. The increases in the efficiency ratio and the adjusted efficiency ratio were driven by higher expenses and lower non-interest income during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. The Company\u2019s detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document. See pages 16-17 for the related adjusted efficiency ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.<\/p>\n

\n Income Tax Provision<\/strong>\n <\/p>\n

Income tax expense for the three months ended March 31, 2025 was $664,000, with an effective tax rate of 22.4%, compared to $1.1 million, with an effective tax rate of 24.6%, for the three months ended December 31, 2024.<\/p>\n

\n Net Income for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024.<\/strong>\n <\/p>\n

The Company reported net income of $2.3 million, or $0.11 per diluted share, for the three months ended March 31, 2025, compared to net income of $3.0 million, or $0.14 per diluted share, for the three months ended March 31, 2024. Net interest income increased $188,000, or 1.2%, provision for credit losses increased $692,000, non-interest income increased $85,000, or 3.2%, and non-interest expense increased $402,000, or 2.7%, during the same period. Return on average assets and return on average equity were 0.35% and 3.94%, respectively, for the three months ended March 31, 2025, compared to 0.47% and 5.04%, respectively, for the three months ended March 31, 2024.<\/p>\n

\n Net Interest Income and Net Interest Margin<\/strong>\n <\/p>\n

Net interest income increased $188,000, or 1.2%, to $15.5 million, for the three months ended March 31, 2025, from $15.3 million for the three months ended March 31, 2024. The increase in net interest income was due to an increase in interest and dividend income of $1.8 million, or 6.9%, partially offset by an increase in interest expense of $1.6 million, or 14.6%. The increase in interest expense was primarily due to an increase in average interest-bearing deposits of $156.1 million, or 9.9%, and an increase in the average cost of interest-bearing deposit accounts of 29 basis points from the three months ended March 31, 2024 to the three months ended March 31, 2025. As a result, the net interest margin decreased from 2.57% for the three months ended March 31, 2024, to 2.49% for the three months ended March 31, 2025. The net interest margin, on a tax-equivalent basis, was 2.51% for the three months ended March 31, 2025, compared to 2.59% for the three months ended March 31, 2024.<\/p>\n

The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 11 basis points from 4.45% for the three months ended March 31, 2024 to 4.56% for the three months ended March 31, 2025. The average loan yield, without the impact of tax-equivalent adjustments, was 4.89% for the three months ended March 31, 2025, compared to 4.82% for the three months ended March 31, 2024. During the three months ended March 31, 2025, average interest-earning assets increased $126.6 million, or 5.3%, to $2.5 billion, primarily due to an increase in average loans of $51.8 million, or 2.6%, an increase in average short-term investments, consisting of cash and cash equivalents, of $66.7 million, an increase in average securities of $5.9 million, or 1.6%, and an increase in average other investments of $2.3 million, or 18.6%.<\/p>\n

The average cost of total funds, including non-interest bearing accounts and borrowings, increased 19 basis points from 1.97% for the three months ended March 31, 2024, to 2.16% for the three months ended March 31, 2025. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 32 basis points from 0.76% for the three months ended March 31, 2024 to 1.08% for the three months ended March 31, 2025. The average cost of time deposits decreased one basis point from 4.12% for the three months ended March 31, 2024 to 4.11% for the three months ended March 31, 2025. The average cost of borrowings, including subordinated debt, increased 13 basis points from 4.91% for the three months ended March 31, 2024 to 5.04% for the three months ended March 31, 2025. Average demand deposits, an interest-free source of funds, increased $11.9 million, or 2.1%, from $557.7 million, or 26.1% of total average deposits, for the three months ended March 31, 2024, to $569.6 million, or 24.8% of total average deposits, for the three months ended March 31, 2025.<\/p>\n

\n Provision for (Reversal of) Credit Losses<\/strong>\n <\/p>\n

During the three months ended March 31, 2025, the Company recorded a provision for credit losses of $142,000, compared to a reversal of credit losses of $550,000 during the three months ended March 31, 2024. The increase was primarily due to changes in the most recent macroeconomic forecast. The provision for credit losses was also determined by a number of factors: the continued strong credit performance of the Company\u2019s loan portfolio, changes in the loan portfolio mix and Management\u2019s consideration of existing economic conditions. Management will continue to monitor macroeconomic variables related to the interest rate environment, the continued discussion on tariffs and the concerns of an economic downturn. Management believes it is appropriately reserved for the current economic environment.<\/p>\n

During the three months ended March 31, 2025, the Company recorded net charge-offs of $29,000, compared to net recoveries of $67,000 for the three months ended March 31, 2024.<\/p>\n

\n Non-Interest Income<\/strong>\n <\/p>\n

Non-interest income increased $85,000, or 3.2%, from $2.7 million, for the three months ended March 31, 2024 to $2.8 million for the three months ended March 31, 2025, primarily due to a $65,000, or 2.9%, increase in service charges and fees and an increase in income from BOLI of $20,000, or 4.4%.<\/p>\n

\n Non-Interest Expense<\/strong>\n <\/p>\n

Non-interest expense increased $402,000, or 2.7%, from $14.8 million for the three months ended March 31, 2024 to $15.2 million for the three months ended March 31, 2025. Salaries and benefits increased $169,000, or 2.0%, advertising expense increased $80,000, or 22.9%, occupancy expense increased $49,000, or 3.6%, debit card processing and ATM network costs increased $25,000, or 4.5%, FDIC insurance expense increased $21,000, or 5.1%, data processing expense increased $20,000, or 2.3%, furniture and equipment expense increased $3,000, or 0.6%, and other non-interest expense increased $98,000, or 7.8%. These increases were partially offset by a decrease in software related expenses of $40,000, or 5.7%, and a decrease in professional fees of $23,000, or 4.0%.<\/p>\n

For the three months ended March 31, 2025 and the three months ended March 31, 2024, the efficiency ratio was 83.0% and 82.0%, respectively. For the three months ended March 31, 2025, the adjusted efficiency ratio, a non-GAAP financial measure, was 83.0% compared to 82.0% for the three months ended March 31, 2024. The increases in the efficiency ratio and the adjusted efficiency ratio were driven by higher expenses during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. See pages 16-17 for the efficiency ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.<\/p>\n

\n Income Tax Provision<\/strong>\n <\/p>\n

For the three months ended March 31, 2025, income tax expense was $664,000, with an effective tax rate of 22.4%, compared to $827,000, with an effective tax rate of 21.8%, for the three months ended March 31, 2024.<\/p>\n

\n Balance Sheet<\/strong>\n <\/p>\n

At March 31, 2025, total assets were $2.7 billion, an increase of $56.2 million, or 2.1%, from December 31, 2024. The increase in total assets was primarily due to an increase in total gross loans of $9.3 million, or 0.4%, an increase in cash and cash equivalents of $44.1 million, or 66.4%, and an increase in investment securities of $3.6 million, or 1.0%.<\/p>\n

\n Investments <\/strong>\n <\/p>\n

At March 31, 2025, the investment securities portfolio totaled $369.8 million, or 13.6% of total assets, compared to $366.1 million, or 13.8% of total assets, at December 31, 2024. At March 31, 2025, the Company\u2019s available-for-sale securities portfolio, recorded at fair market value, increased $7.1 million, or 4.4%, from $160.7 million at December 31, 2024 to $167.8 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $3.4 million, or 1.7%, from $205.0 million at December 31, 2024 to $201.6 million at March 31, 2025.<\/p>\n

At March 31, 2025, the Company reported unrealized losses on the available-for-sale securities portfolio of $27.8 million, or 14.2% of the amortized cost basis of the available-for-sale securities portfolio, compared to unrealized losses of $31.2 million, or 16.2% of the amortized cost basis of the available-for-sale securities at December 31, 2024. At March 31, 2025, the Company reported unrealized losses on the held-to-maturity securities portfolio of $35.8 million, or 17.8% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2024.<\/p>\n

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 $8.7 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.<\/p>\n

Management regularly reviews the portfolio for securities in an unrealized loss position. At March 31, 2025 and December 31, 2024, 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\u2019s 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 (\u201cFHLB\u201d) 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\u2019s the Bank’s objective to provide liquidity.<\/p>\n

\n Total Loans<\/strong>\n <\/p>\n

Total gross loans increased $9.3 million, or 0.4%, from $2.1 billion, or 77.9% of total assets, at December 31, 2024 to $2.1 billion, or 76.7% of total assets, at March 31, 2025. The increase in total gross loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $8.1 million, or 1.0%, and an increase in commercial and industrial loans of $4.7 million, or 2.2%. These increases were partially offset by a decrease in commercial real estate loans of $3.0 million, or 0.3%, and a decrease in consumer loans of $526,000, or 12.0%.<\/p>\n

The following table presents a summary of the loan portfolio by the major classification of loans at the periods indicated:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\n March 31, 2025<\/strong>\n <\/td>\n\u00a0<\/td>\n\n December 31, 2024<\/strong>\n <\/td>\n<\/tr>\n
\u00a0<\/td>\n(Dollars in thousands)<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Commercial real estate loans:<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Non-owner occupied<\/td>\n$<\/td>\n881,105<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n880,828<\/td>\n\u00a0<\/td>\n<\/tr>\n
Owner-occupied<\/td>\n\u00a0<\/td>\n191,582<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n194,904<\/td>\n\u00a0<\/td>\n<\/tr>\n
Total commercial real estate loans<\/td>\n\u00a0<\/td>\n1,072,687<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n1,075,732<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Residential real estate loans:<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Residential<\/td>\n\u00a0<\/td>\n659,984<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n653,802<\/td>\n\u00a0<\/td>\n<\/tr>\n
Home equity<\/td>\n\u00a0<\/td>\n123,804<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n121,857<\/td>\n\u00a0<\/td>\n<\/tr>\n
Total residential real estate loans<\/td>\n\u00a0<\/td>\n783,788<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n775,659<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n
Commercial and industrial loans<\/td>\n		\u00a0<\/td>\n216,368<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n211,656<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Consumer loans<\/td>\n\u00a0<\/td>\n3,865<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n4,391<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n Total gross loans<\/strong>\n <\/td>\n\u00a0<\/td>\n2,076,708<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n2,067,438<\/td>\n\u00a0<\/td>\n<\/tr>\n
Unamortized premiums and net deferred loans fees and costs<\/td>\n\u00a0<\/td>\n2,853<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n2,751<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n Total loans<\/strong>\n <\/td>\n$<\/td>\n2,079,561<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n2,070,189<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/table>\n

\n Credit Quality<\/strong>\n <\/p>\n

Management continues to closely monitor the loan portfolio for any signs of deterioration in borrowers\u2019 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.<\/p>\n

Total delinquency was $4.5 million, or 0.22% of total loans, at March 31, 2025, compared to $5.0 million, or 0.24% of total loans at December 31, 2024. At March 31, 2025, nonaccrual loans totaled $6.0 million, or 0.29% of total loans, compared to $5.4 million, or 0.26% of total loans, at December 31, 2024. At March 31, 2025 and December 31, 2024, there were no loans 90 or more days past due and still accruing interest. Total nonaccrual assets totaled $6.0 million, or 0.22% of total assets, at March 31, 2025, compared to $5.4 million, or 0.20% of total assets, at December 31, 2024. At March 31, 2025 and December 31, 2024, the Company did not have any other real estate owned.<\/p>\n

At March 31, 2025, the allowance for credit losses was $19.7 million, or 0.95% of total loans and 327.1% of nonaccrual loans, compared to $19.5 million, or 0.94% of total loans and 362.9% of nonaccrual loans, at December 31, 2024. Total criticized loans, defined as special mention and substandard loans, decreased $2.1 million, or 5.5%, from $38.4 million, or 1.9% of total loans, at December 31, 2024 to $36.3 million, or 1.7% of total loans, at March 31, 2025.<\/p>\n

Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At March 31, 2025, the commercial real estate portfolio totaled $1.1 billion, and represented 51.7% of total loans. Of the $1.1 billion, $881.1 million, or 82.1%, was categorized as non-owner occupied commercial real estate and represented 325.8% of the Bank\u2019s total risk-based capital. More details on the diversification of the loan portfolio are available in the supplementary earnings presentation.<\/p>\n

\n Deposits<\/strong>\n <\/p>\n

At March 31, 2025, total deposits were $2.3 billion and increased $66.0 million, or 2.9%, from December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $70.2 million, or 4.5%, from $1.6 billion, or 68.9% of total deposits, at December 31, 2024, to $1.6 billion, or 70.0% of total deposits, at March 31, 2025. Non-interest-bearing deposits increased $24.4 million, or 4.3%, to $590.0 million, and represent 25.3% of total deposits, money market accounts increased $45.7 million, or 6.9%, to $707.2 million, savings accounts increased $9.8 million, or 5.4%, to $191.4 million and interest-bearing checking accounts decreased $9.6 million, or 6.4%, to $140.8 million.<\/p>\n

Time deposits decreased $4.3 million, or 0.6%, from $703.6 million at December 31, 2024 to $699.3 million at March 31, 2025. Brokered time deposits, which are included in time deposits, totaled $1.7 million at March 31, 2025 and at December 31, 2024. The Company has experienced growth and movement in both money market accounts and non-interest-bearing deposits as a result of seasonal customer behaviors, relationship pricing, and the current interest rate environment, 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 core customer relationship base by competing for and retaining deposits in our local market. At March 31, 2025, the Bank\u2019s uninsured deposits totaled $665.6 million, or 28.6% of total deposits, compared to $643.6 million, or 28.4% of total deposits, at December 31, 2024.<\/p>\n

The table below is a summary of our deposit balances for the periods noted:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\u00a0<\/td>\n\n March 31, 2025<\/strong>\n <\/td>\n\u00a0<\/td>\n\n December 31, 2024<\/strong>\n <\/td>\n\u00a0<\/td>\n\n March 31, 2024<\/strong>\n <\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n(Dollars in thousands)<\/td>\n<\/tr>\n
\n Core Deposits:<\/strong>\n <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
Demand accounts<\/td>\n\u00a0<\/td>\n$<\/td>\n589,996<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n565,620<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n559,928<\/td>\n\u00a0<\/td>\n<\/tr>\n
Interest-bearing accounts<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n140,769<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n150,348<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n125,377<\/td>\n\u00a0<\/td>\n<\/tr>\n
Savings accounts<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n191,398<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n181,618<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n190,732<\/td>\n\u00a0<\/td>\n<\/tr>\n
Money market accounts<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n707,153<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n661,478<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n624,474<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n Total Core Deposits<\/strong>\n <\/td>\n\u00a0<\/td>\n$<\/td>\n1,629,316<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n1,559,064<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n1,500,511<\/td>\n\u00a0<\/td>\n<\/tr>\n
Time Deposits:<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n699,277<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n703,583<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n643,236<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n Total Deposits:<\/strong>\n <\/td>\n\u00a0<\/td>\n$<\/td>\n2,328,593<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n2,262,647<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n2,143,747<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/table>\n

\n FHLB and Subordinated Debt<\/strong>\n <\/p>\n

At March 31, 2025, total borrowings decreased $860,000, or 0.7%, from $123.1 million at December 31, 2024 to $122.3 million. At March 31, 2025, short-term borrowings decreased $870,000, or 16.1%, to $4.5 million, compared to $5.4 million at December 31, 2024. Long-term borrowings were $98.0 million at March 31, 2025 and December 31, 2024. At March 31, 2025 and December 31, 2024, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes.<\/p>\n

As of March 31, 2025, the Company had $447.5\u00a0million of additional borrowing capacity at the FHLB, $378.5 million of additional borrowing capacity under the Federal Reserve Bank Discount Window and $25.0\u00a0million of other unsecured lines of credit with correspondent banks.<\/p>\n

\n Capital<\/strong>\n <\/p>\n

At March 31, 2025, shareholders\u2019 equity was $237.7 million, or 8.8% of total assets, compared to $235.9 million, or 8.9% of total assets, at December 31, 2024. The change was primarily attributable to a decrease in accumulated other comprehensive loss of $2.6 million, cash dividends paid of $1.4 million, repurchase of shares at a cost of $2.0 million, partially offset by net income of $2.3 million. At March 31, 2025, total shares outstanding were 20,774,319. The Company\u2019s 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.<\/p>\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\n March 31, 2025<\/strong>\n <\/td>\n\u00a0<\/td>\n\n December 31, 2024<\/strong>\n <\/td>\n<\/tr>\n
\u00a0<\/td>\n\n Company<\/strong>\n <\/td>\n\u00a0<\/td>\n\n Bank<\/strong>\n <\/td>\n\u00a0<\/td>\n\n Company<\/strong>\n <\/td>\n\u00a0<\/td>\n\n Bank<\/strong>\n <\/td>\n<\/tr>\n
Total Capital (to Risk Weighted Assets)<\/td>\n14.28<\/td>\n%<\/td>\n\u00a0<\/td>\n13.56<\/td>\n%<\/td>\n\u00a0<\/td>\n14.38<\/td>\n%<\/td>\n\u00a0<\/td>\n13.65<\/td>\n%<\/td>\n<\/tr>\n
Tier 1 Capital (to Risk Weighted Assets)<\/td>\n12.27<\/td>\n%<\/td>\n\u00a0<\/td>\n12.55<\/td>\n%<\/td>\n\u00a0<\/td>\n12.37<\/td>\n%<\/td>\n\u00a0<\/td>\n12.64<\/td>\n%<\/td>\n<\/tr>\n
Common Equity Tier 1 Capital (to Risk Weighted Assets)<\/td>\n12.27<\/td>\n%<\/td>\n\u00a0<\/td>\n12.55<\/td>\n%<\/td>\n\u00a0<\/td>\n12.37<\/td>\n%<\/td>\n\u00a0<\/td>\n12.64<\/td>\n%<\/td>\n<\/tr>\n
Tier 1 Leverage Ratio (to Adjusted Average Assets)<\/td>\n9.06<\/td>\n%<\/td>\n\u00a0<\/td>\n9.26<\/td>\n%<\/td>\n\u00a0<\/td>\n9.14<\/td>\n%<\/td>\n\u00a0<\/td>\n9.34<\/td>\n%<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/table>\n

\n Dividends<\/strong>\n <\/p>\n

Although the Company has historically paid quarterly dividends on its common stock and currently intends to continue to pay such dividends, the Company\u2019s ability to pay such dividends depends on a number of factors, including restrictions under federal laws and regulations on the Company\u2019s ability to pay dividends, and as a result, there can be no assurance that dividends will continue to be paid in the future.<\/p>\n

\n About Western New England Bancorp, Inc.<\/strong>\n <\/p>\n

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<\/u><\/a>.<\/p>\n

\n Forward-Looking Statements<\/strong>\n <\/p>\n

This press release contains \u201cforward-looking statements\u201d 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\u2019s financial condition, liquidity, results of operations, future performance, and business. Forward-looking statements may be identified by the use of such words as \u201cbelieve,\u201d \u201cexpect,\u201d \u201canticipate,\u201d \u201cshould,\u201d \u201cplanned,\u201d \u201cestimated,\u201d and \u201cpotential.\u201d\u00a0 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.\u00a0 These factors include, but are not limited to:<\/p>\n