• Western New England Bancorp, Inc. Reports Results for Three Months Ended March 31, 2021 and Declares Quarterly Cash Dividend

    Источник: Nasdaq GlobeNewswire / 27 апр 2021 15:05:01   America/Chicago

    WESTFIELD, Mass., April 27, 2021 (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 months ended March 31, 2021. The Company reported net income of $5.8 million, or $0.24 per diluted share, for the three months ended March 31, 2021, as compared to net income of $2.1 million, or $0.08 per diluted share, for the three months ended March 31, 2020. On a linked quarter basis, net income was $5.8 million, or $0.24 per diluted share, as compared to net income of $5.0 million, or $0.20 per diluted share, for the three months ended December 31, 2020.

    The Company also announced that the Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on or about May 26, 2021 to shareholders of record on May 12, 2021. In addition, the Board of Directors authorized a stock repurchase plan (the “2021 Plan”), pursuant to which the Company may repurchase up to 2.4 million shares, or approximately 10%, of the Company’s outstanding shares, upon the completion of the stock repurchase plan adopted in 2020 (the “2020 Plan”). The 2020 Plan was announced on October 27, 2020, and as of March 31, 2021, there were 326,936 shares available for purchase under the 2020 Plan.

    In addition, on April 20, 2021, the Company announced the completion of an offering of $20 million in aggregate principal amount of its 4.875% fixed-to-floating rate subordinated notes (the “Notes”) to certain qualified institutional buyers in a private placement transaction. The Company intends to use the net proceeds from this private placement for funding organic growth and the repurchase of the Company’s common stock.

    James C. Hagan, President and Chief Executive Officer, stated, “We are pleased to report that we generated strong earnings for the second consecutive quarter despite the business disruptions caused by the COVID-19 pandemic over the last twelve months. The positive results were primarily driven by the continued expansion of the net interest margin over the last few quarters, as well as income from the Paycheck Protection Program (“PPP”). The improved mix in our deposits and reductions in deposit costs led to our third consecutive quarter of core net interest margin expansion. Total deposits increased $116 million, or 6%, quarter-over-quarter and non-interest bearing deposits expanded to a record 28% of total deposits as of March 31, 2021. New customer relationships, government stimulus-related deposits, as well as PPP loan proceeds have all been valuable contributors to our deposit growth over the last few quarters. Year-over-year, total deposits increased $448 million, or 26%. Many factors were key in our growth, including the increase in our traditional market share due to the three new branches opened in 2020 as well as income from government stimulus programs. These results were achieved while also maintaining our historic solid asset quality during the pandemic. Our borrowers’ financial health continues to show improvements as indicated by our solid asset quality metrics and the decrease in loan deferrals from 14.7% on June 30, 2020 to 3.8% on March 31, 2021. Total delinquency and non-performing loans, excluding PPP loans, remain at acceptable levels of 0.53% and 0.39%, respectively.

    In order to preserve capital during the uncertainty driven by the pandemic, we paused our share repurchase activity during the second quarter of 2020. During the first quarter of 2021, we repurchased 708,434 shares at an average price per share of $8.12. We continue to believe that the stock repurchase plan is a solid investment for our shareholders and provides us with the opportunity to leverage our capital to improve earnings per share.

    We are also pleased to announce the recent successful completion of our $20.0 million subordinated debt offering in April. While the Company continues to be well capitalized, we believe the additional capital gives us the flexibility to take advantage of share repurchase and organic growth opportunities without diluting ownership of our shareholder base.

    After experiencing disruption and uncertainty in 2020 related to the ongoing global pandemic, we remain encouraged that we are well positioned for a more positive banking environment and continuing growth in 2021.”

    COVID-19 Response and Actions:

    As a Preferred Lender with the Small Business Administration (“SBA”), the Company was in a position to react immediately to the PPP component of the March 27, 2020 stimulus bill known as the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) launched by the U.S Department of the Treasury (“Treasury”) and the SBA. As of March 31, 2021, the Company received funding approval from the SBA for 2,046 applications totaling $294.7 million.

    The table below breaks out the PPP loans approved and funded and the balance as of March 31, 2021:

          March 31, 2021
      Original Loan
    Amount    		 Original # of
    Loans    		 Balance
    Outstanding    		 # of Loans
    Remaining
    ($ in millions)        
    Round 1 $223.1 1,386 $98.5 340
    Round 2  71.6 660  71.6 660
    Total $ 294.7 2,046 $ 170.1 1,000
               

    As of March 31, 2021, the Company processed 1,046 loan forgiveness applications totaling $124.6 million. Total PPP loans increased $2.8 million, or 1.7%, from $167.3 million at December 31, 2020 to $170.1 million at March 31, 2021.

    In addition to participating in the PPP, the Company granted deferred loan payments for impacted commercial, residential and consumer customers who experienced financial hardship due to COVID-19. Further deferrals will be re-evaluated on a customer-by-customer basis upon the expiration of the existing deferral period. As of June 30, 2020, the deferred loan payment modifications totaled $261.0 million (525 loans), for which principal and interest payments were deferred, and represented 14.7% of the total loan portfolio, excluding PPP loans. As of March 31, 2021, deferred loan payment modifications granted under the CARES Act declined 74% to $66.9 million (29 loans), or 3.8% of total loans, excluding PPP loans.

    The table below breaks out the remaining modifications granted under the CARES Act at March 31, 2021:

          March 31, 2021
          CARES Act Modifications



    Loan Segment    (1)(2)    		 Total Loan
    Segment
    Balance at
    March 31,
    2021    		 


    % of Total
    Loans    		 


    Modification
    Balance    		 


    # of Loans
    Modified    		 

    % of Loan
    Segment
    Balance
    ($ in millions)          
    Commercial real estate $861.4 49.1% $57.0 16 6.6%
    Commercial and industrial  205.1 11.7%  7.9 7 3.9%
    Residential real estate  684.2 39.0%  2.0 6 0.3%
    Consumer  4.8 0.2%  - - - 
    Total $ 1,755.5 100.0% $ 66.9 29 3.8%
                   

    _______________________________

    (1) Excludes PPP loans and deferred fees
    (2) Residential includes home equity loans and lines of credit

    The Company continues to monitor COVID-19’s impact on its business and its customers, however, the extent to which COVID-19 will impact its results and operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures.

    On March 18, 2021, Governor Baker announced that beginning on March 22, 2021, the Commonwealth of Massachusetts would transition to Phase IV of the State’s reopening plan, which also included the replacement of the Massachusetts Travel Order with a Travel Advisory. Phase IV will open a range of previously closed business sectors under tight capacity restrictions that are expected to be adjusted over time if favorable trends in the public health data continue. Gathering limits for event venues and in public settings will increase to 100 people indoors and 150 people outdoors. Outdoor gatherings at private residences and in private backyards will remain at a maximum of 25 people, with indoor house gatherings remaining at 10 people. In addition, large capacity sports and entertainment venues (indoor and outdoor stadiums, arenas, and ballparks) will be permitted to operate at a strict 12% capacity limit after submitting a plan to the Department of Public Health.

    Key Highlights:

    Loans and Deposits

    At March 31, 2021, total loans were $1.9 billion, a decrease of $2.5 million, or 0.1%, from December 31, 2020. Excluding PPP loans, total loans decreased $5.3 million, or 0.3%, from December 31, 2020. Total deposits increased $116.0 million, or 5.7%, from $2.0 billion at December 31, 2020 to $2.2 billion at March 31, 2021. Core deposits, which include non-interest bearing demand accounts, increased $183.5 million, or 12.7%, from $1.4 billion, or 71.0% of total deposits, at December 31, 2020, to $1.6 billion, or 75.7% of total deposits at March 31, 2021. The loan to deposit ratio decreased from 94.6% at December 31, 2020 to 89.4% at March 31, 2021.

    Allowance for Loan Losses and Credit Quality

    At March 31, 2021, excluding PPP loans of $170.1 million, the allowance for loan losses as a percentage of total loans and as a percentage of non-performing loans was 1.21% and 313.0%, respectively. At March 31, 2021, non-performing loans totaled $6.8 million, or 0.39% of total loans excluding PPP loans, compared to $7.8 million, or 0.45% of total loans excluding PPP loans, at December 31, 2020, and $9.7 million, or 0.54% of total loans, at March 31, 2020. Total delinquency decreased $4.2 million, or 31.4%, from 0.77% of total loans, excluding PPP loans, at December 31, 2020 to 0.53% of total loans, excluding PPP loans, at March 31, 2021, and 0.69% of total loans at March 31, 2020.

    Net Interest Margin

    The net interest margin was 3.24% for the three months ended March 31, 2021 compared to 3.30% for the three months ended December 31, 2020. The net interest margin, on a tax-equivalent basis, was 3.26% for the three months ended March 31, 2021, compared to 3.32% for the three months ended December 31, 2020.

    Repurchases

    On October 27, 2020, the Board of Directors authorized the 2020 Plan under which the Company was authorized to purchase up to 1.3 million shares, or 5% of its outstanding common stock. During the three months ended March 31, 2021, the Company repurchased 708,434 shares of common stock under the 2020 Plan at an average price per share of $8.12. At March 31, 2021, there were 326,936 shares available for purchase under the 2020 Plan.

    The shares purchased under the 2020 Plan will be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, or otherwise, depending upon market conditions. There is no guarantee as to the exact number, or value, of shares that will be repurchased by the Company, and the Company may discontinue repurchases at any time that management determines additional repurchases are not warranted. The timing and amount of share repurchases under the 2020 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.

    Net Income for the Three Months Ended March 31, 2021 Compared to the Three Months Ended December 31, 2020.

    The Company reported net income of $5.8 million, or $0.24 per diluted share, for the three months ended March 31, 2021, compared to net income of $5.0 million, or $0.20 per diluted share, for the three months ended December 31, 2020. Return on average assets and return on average equity were 0.98% and 10.35%, respectively, for the three months ended March 31, 2021, as compared to 0.83% and 8.62%, respectively, for the three months ended December 31, 2020.

    Net Interest Income and Net Interest Margin

    On a sequential quarter basis, net interest income decreased $769,000, or 4.1%, to $18.0 million for the three months ended March 31, 2021, from $18.8 million for the three months ended December 31, 2020. The decrease in net interest income was primarily due to a decrease of $1.7 million, or 7.7%, in interest and dividend income, partially offset by a decrease in interest expense of $906,000, or 31.1%. The decrease in interest expense was primarily due to a decrease of $523,000, or 23.2%, in interest expense on deposits and a decrease of $383,000, or 58.4%, in interest expense on Federal Home Loan Bank (“FHLB”) borrowings.

    During the three months ended March 31, 2021 and the three months ended December 31, 2020, interest and dividend income included PPP interest income and origination fees of $2.4 million and $2.3 million, respectively. During the three months ended December 31, 2020, the Company recorded $929,000 in positive purchase accounting adjustments and $193,000 in interest income and late charges from the full payoff of a $3.5 million credit-marked substandard classified loan, compared to negative purchase accounting adjustments of $45,000 during the three months ended March 31, 2021. In addition, during the three months ended December 31, 2020, interest and dividend income included prepayment penalties from commercial loan payoffs of $135,000, compared to $35,000 during the three months ended March 31, 2021. Excluding PPP income, prepayment penalties, purchase accounting adjustments and interest income from the commercial loan payoff, net interest income increased $360,000, or 2.4%, from the three months ended December 31, 2020 to the three months ended March 31, 2021.

    The net interest margin was 3.24% for the three months ended March 31, 2021 compared to 3.30% for the three months ended December 31, 2020. The net interest margin, on a tax-equivalent basis, was 3.26% for the three months ended March 31, 2021 compared to 3.32% for the three months ended December 31, 2020. Excluding PPP interest and origination fee income of $2.4 million, the net interest margin was 3.03% for the three months ended March 31, 2021, compared to 3.19% for the three months ended December 31, 2020. During the three months ended December 31, 2020, prepayment penalties totaled $135,000, which contributed to an increase in the net interest margin of 2 basis points, compared to $35,000, or 1 basis point, during the three months ended March 31, 2021. In addition, interest income for the three months ended December 31, 2020 included $929,000 in favorable purchase accounting adjustments and past due interest and late charges totaling $193,000 due to the full payoff of a $3.5 million credit-marked substandard classified loan, which contributed to an increase in the net interest margin of 22 basis points. During the three months ended March 31, 2021, the Company recorded $45,000 in negative purchase account adjustments which decreased the net interest margin by 1 basis point. Excluding the adjustments discussed above, the net interest margin increased from 2.95% during the three months ended December 31, 2020 to 3.03% during the three months ended March 31, 2021.

    The average yield on interest-earning assets was 3.62% for the three months ended March 31, 2021, compared to 3.83% for the three months ended December 31, 2020. The average loan yield was 4.05% for the three months ended March 31, 2021, compared to 4.24% for the three months ended December 31, 2020. Excluding the adjustments discussed above, the average yield on interest-earning assets decreased 9 basis points from 3.53% for the three months ended December 31, 2020 to 3.44% for the three months ended March 31, 2021, while the average loan yield decreased 6 basis points from 3.94% for the three months ended December 31, 2020 to 3.88% for the three months ended March 31, 2021. The decreases in average yields were primarily due to repricing of variable rate loans and lower average yields on new loan originations, including loans originated under the PPP. Total average loans were 85.3% of total average interest-earning assets for the three months ended March 31, 2021, compared to 86.3% for the three months ended December 31, 2020.

    During the three months ended March 31, 2021, average interest-earning assets decreased $8.1 million, or 0.4%, to $2.3 billion, primarily due to a decrease in average loans of $29.5 million, or 1.5%. Excluding average PPP loans of $166.6 million during the three months ended March 31, 2021 and $204.8 million during the three months ended December 31, 2020, average loans increased $8.7 million, or 0.5%, from the three months ended December 31, 2020 to the three months ended March 31, 2021.

    The average cost of funds, including non-interest bearing accounts and FHLB advances, decreased 16 basis points from 0.54% for the three months ended December 31, 2020 to 0.38% for the three months ended March 31, 2021. The average cost of core deposits, including non-interest bearing demand deposits, decreased two basis points to 0.21% for the three months ended March 31, 2021, from 0.23% for the three months ended December 31, 2020. The average cost of time deposits decreased 25 basis points from 0.92% for the three months ended December 31, 2020 to 0.67% for the three months ended March 31, 2021. The average cost of borrowings decreased 14 basis points from 2.24% for the three months ended December 31, 2020 to 2.10% for the three months ended March 31, 2021.

    Average borrowings decreased $64.1 million, or 54.9%, from $116.7 million for the three months ended December 31, 2020 to $52.7 million for the three months ended March 31, 2021. Average demand deposits, an interest-free source of funds, increased $26.8 million, or 5.0%, from $534.8 million, or 26.4% of total average deposits, for the three months ended December 31, 2020, to $561.6 million, or 27.0% of total average deposits, for the three months ended March 31, 2021.

    Provision for Loan Losses

    For the three months ended March 31, 2021, the provision for loan losses decreased $425,000, or 85.0%, to $75,000, from $500,000 for the three months ended December 31, 2020. The provision for loan losses during the three months ended March 31, 2021 represents management’s best estimate of the impact of the COVID-19 pandemic on the ability of the Company’s borrowers to repay their loans. Management continues to carefully assess the exposure of the Company’s loan portfolio to the COVID-19 pandemic related factors, economic trends and their potential effect on asset quality. The Company recorded net charge-offs of $5,000 for the three months ended March 31, 2021, as compared to net charge-offs of $35,000 for the three months ended December 31, 2020. At March 31, 2021, non-performing loans totaled $6.8 million, or 0.35% of total loans, and total delinquency as a percentage of total loans was 0.48%. Excluding PPP loans of $170.1 million for the three months ended March 31, 2021, non-performing loans to total loans was 0.39%, and total delinquency as a percentage of total loans was 0.53%. Excluding PPP loans of $167.3 million for the three months ended December 31, 2020, non-performing loans to total loans was 0.45% and total delinquency as a percentage of total loans was 0.77%. As of March 31, 2021, the Company’s delinquencies and nonperforming assets had not been materially impacted by the COVID-19 pandemic.

    Non-Interest Income

    On a sequential quarter basis, non-interest income increased $542,000, or 22.0%, to $3.0 million for the three months ended March 31, 2021, from $2.5 million for the three months ended December 31, 2020. The increase in non-interest income was due to a gain on non-marketable equity investments of $546,000 and income of $227,000 from mortgage banking activities due to the sale of fixed rate residential loans during the three months ended March 31, 2021. Service charges and fees on deposits decreased $87,000, or 4.4%, primarily due to decreases in overdraft and nonsufficient fund fees as a result of the significant increase in customer deposit balances. Unrealized losses on marketable equity securities increased to $89,000 during the three months ended March 31, 2021, from $24,000 during the three months ended December 31, 2020, and losses on the sale of securities was $62,000 during the three months ended March 31, 2021.

    Non-Interest Expense

    For the three months ended March 31, 2021, non-interest expense decreased $1.0 million, or 7.1%, to $13.3 million, from $14.3 million, for the three months ended December 31, 2020. During the three months ended December 31, 2020, the Company prepaid $50.0 million of FHLB borrowings. The transaction was accounted for as an early debt extinguishment resulting in a loss of $987,000. Excluding the loss, non-interest expense decreased $24,000, or 0.2%, from the three months ended December 31, 2020 to the three months ended March 31, 2021. Salaries and employee benefits expenses decreased $124,000, or 1.6%, to $7.7 million, other non-interest expense decreased $216,000, or 9.9%, and FDIC insurance expense decreased $2,000 or 0.7%. Occupancy expenses increased $128,000, or 11.0%, primarily due to an increase of $120,000 in seasonal snow removal costs. Furniture and equipment expenses increased $128,000, or 35.4%, data processing expenses increased $10,000, or 1.4%. During the three months ended December 31, 2020, the Company recorded $166,000 in legal fee reimbursements from the substandard commercial loan payoff discussed above. For the three months ended March 31, 2021, the efficiency ratio was 65.3%, compared to 67.4% for the three months ended December 31, 2020.

    Income Tax Provision

    Income tax expense for the three months ended March 31, 2021 was $1.8 million, or an effective tax rate of 24.1%, compared to $1.4 million, or an effective tax rate of 21.9%, for three months ended December 31, 2020. The increase in the effective tax rate is a result of higher pre-tax income.

    Net Income for the Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020.

    The Company reported net income of $5.8 million, or $0.24 per diluted share, for the three months ended March 31, 2021, compared to net income of $2.1 million, or $0.08 per diluted share, for the three months ended March 31, 2020. Return on average assets and return on average equity were 0.98% and 10.35%, respectively, for the three months ended March 31, 2021, as compared to 0.38% and 3.62%, respectively, for the three months ended March 31, 2020. The increase in net income of $3.7 million, or 178.4%, was primarily due to an increase in net interest income of $3.5 million, or 23.9%, a decrease of $2.0 million, or 96.4%, in the provision for loan losses, and an increase of $479,000, or 19.0%, in non-interest income, partially offset by an increase of $1.0 million, or 8.2%, in non-interest expense.

    Net Interest Income and Net Interest Margin

    Net interest income increased $3.5 million, or 23.9%, to $18.0 million, for the three months ended March 31, 2021, from $14.6 million for the three months ended March 31, 2020. The increase in net interest income was due to a decrease in interest expense of $3.8 million, or 65.6%, partially offset by a decrease in interest and dividend income of $357,000, or 1.8%. The decrease in interest expense was due to a decrease of $2.5 million, or 59.1%, in interest expense on deposits and a decrease of $1.3 million, or 82.9%, in interest expense on FHLB advances.

    Net interest income for the three months ended March 31, 2021 includes interest income and origination fees from PPP loans of $2.4 million. During the three months ended March 31, 2021 and the three months ended March 31, 2020, the Company recognized prepayment penalties of $35,000 and $6,000, respectively. In addition, interest income for the three months ended March 31, 2021 included $45,000 in negative purchase accounting adjustments, compared to $82,000 in positive purchase accounting adjustments during the three months ended March 31, 2020. Excluding the adjustments above, net interest income increased $1.2 million, or 8.0%, from $14.5 million during the three months ended March 31, 2020, to $15.6 million during the three months ended March 31, 2021.

    The net interest margin was 3.24% for the three months ended March 31, 2021, compared to 2.87%, for the three months ended March 31, 2020. The net interest margin, on a tax-equivalent basis, was 3.26% for the three months ended March 31, 2021, compared to 2.89% for the three months ended March 31, 2020. Excluding the adjustments discussed above, the net interest margin increased 18 basis points from 2.85% for the three months ended March 31, 2020 to 3.03% for the three months ended March 31, 2021. The increase in the net interest margin was primarily due to the continuing trend of lower deposit costs as interest rates continued to fall to historically low levels. The Company’s net interest margin was negatively impacted by higher average balances of cash and due from banks, interest-bearing deposits from banks and federal funds sold, which are lower yielding interest-earning assets. Average cash balances increased from 0.86% of total interest-earnings assets for the three months ended March 31, 2020 to 4.21% of total interest-earning assets during the three months ended March 31, 2021.

    The average loan yield decreased 21 basis points from 4.26% for the three months ended March 31, 2020 to 4.05% for the three months ended March 31, 2021. Excluding PPP loans, purchase accounting adjustments and prepayment penalties, the average loan yield decreased 38 basis points from 4.26% for the three months ended March 31, 2020 to 3.88% for the three months ended March 31, 2021. The fully tax-equivalent average yield on interest-earning assets decreased 42 basis points from 4.04% for the three months ended March 31, 2020 to 3.62% for the three months ended March 31, 2021. The decrease in average yields was primarily due to pay-offs of higher yielding loans, repricing of variable rate loans, and lower average yields on new loan originations, including loans originated under the PPP as well as the increase in average cash and due from bank balances which are lower yielding interest-earning assets.

    During the three months ended March 31, 2021, average interest-earning assets increased $212.7 million, or 10.4%, to $2.3 billion compared to the three months ended March 31, 2020. The increase was primarily due to an increase in average loans of $141.0 million, or 7.9%. Excluding average PPP loans of $166.6 million, average loans decreased $25.6 million, or 1.4%, from the three months ended March 31, 2020 to the three months ended March 31, 2021. Total average loans were 85.3% of total average interest-earning assets for the three months ended March 31, 2021, compared to 87.3% for the three months ended March 31, 2020.

    During the three months ended March 31, 2021, the average cost of funds, including non-interest bearing demand accounts and FHLB advances, decreased 84 basis points, from 1.22% for the three months ended March 31, 2020 to 0.38% for the three months ended March 31, 2021. The average cost of core deposits, including non-interest bearing demand deposits, decreased 12 basis points from 0.33% for the three months ended March 31, 2020 to 0.21% for the three months ended March 31, 2021. The average cost of time deposits decreased 141 basis points from 2.08% for the three months ended March 31, 2020 to 0.67% for the three months ended March 31, 2021, while the average cost of borrowings decreased 68 basis points during the same period. For the three months ended March 31, 2021, average demand deposits of $561.6 million, an interest-free source of funds, represented 27.0% of average total deposits, and increased $173.0 million, or 44.5%, from the three months ended March 31, 2020.

    Provision for Loan Losses

    The provision for loan losses decreased $2.0 million, or 96.4%, from $2.1 million for the three months ended March 31, 2020 to $75,000 for the three months ended March 31, 2021. The Company recorded net charge-offs of $5,000 for the three months ended March 31, 2021, as compared to net charges-offs of $365,000 for the three months ended March 31, 2020. The provision for loan losses during the three months ended March 31, 2021, as well as the allowance for loan losses as of March 31, 2021, represents management’s best estimate of the impact of the COVID-19 pandemic on the ability of the Company’s borrowers to repay their loans. Management continues to carefully assess the exposure of the Company’s loan portfolio to the COVID-19 pandemic related factors, economic trends and their potential effect on asset quality. As of March 31, 2021, the Company’s delinquencies and nonperforming assets had not been materially impacted by the COVID-19 pandemic.  

    Non-Interest Income

    Non-interest income increased $479,000, or 19.0%, to $3.0 million for the three months ended March 31, 2021, from $2.5 million for the three months ended March 31, 2020. The increase in non-interest income was due to a gain on non-marketable equity investments of $546,000, while service charges and fees on deposits increased $109,000, or 6.1%, and income from mortgage banking activities was $227,000 due to the sale of fixed rate residential loans during the three months ended March 31, 2021. Income from bank-owned life insurance of $441,000 remained unchanged from the three months ended March 31, 2020 to the three months ended March 31, 2021. During the three months ended March 31, 2021, unrealized losses on marketable equity securities were $89,000, compared to unrealized gains of $102,000 during the three months ended March 31, 2020. During the three months ended March 31, 2021, the Company reported realized losses on the sale of securities of $62,000, compared to realized gains of $23,000 during the three months ended March 31, 2020.

    Non-Interest Expense

    For the three months ended March 31, 2021, non-interest expense increased $1.0 million, or 8.2%, to $13.3 million from $12.3 million, for the three months ended March 31, 2020. Salaries and employee benefits expense increased $510,000, or 7.1%, to $7.7 million, primarily due to new hires and the Company’s expansion into Connecticut and increases due to annual merit increases and benefit costs. FDIC expense increased $147,000, or 97.4%, from $151,000 during the three months ended March 31, 2020 to $298,000 during the three months ended March 31, 2021. During the three months ended March 31, 2020, the FDIC applied small bank credits against the quarterly assessments. The Company fully utilized its small bank assessment credits during the three months ended March 31, 2020. Occupancy expense increased $122,000, or 10.5%, primarily due to the opening of three new branches in 2020 and an increase of $65,000, or 81.3%, in snow removal. Furniture and equipment increased $99,000, or 25.3%, advertising expenses increased $86,000, or 34.1%, and data processing related expenses increased $6,000, or 0.8%. Other non-interest expense increased $98,000, or 5.2%. These expenses were partially offset by a decrease in professional fees of $55,000, or 9.2%. The efficiency ratio was 65.3% for the three months ended March 31, 2021, compared to 72.6% for the three months ended March 31, 2020.

    Income Tax Provision

    Income tax expense for the three months ended March 31, 2021 was $1.8 million, or an effective tax rate of 24.1%, compared to $584,000, or an effective tax rate of 21.9%, for three months ended March 31, 2020. The increase in the effective tax rate is a result of higher pre-tax income.

    Balance Sheet

    At March 31, 2021, total assets were $2.5 billion, an increase of $97.6 million, or 4.1%, from December 31, 2020. During the three months ended March 31, 2021, cash and cash equivalents increased $44.7 million, or 51.1%, investment securities increased $57.5 million, or 26.9%, and total loans decreased $2.5 million, or 0.1%.

    Loans

    Total loans decreased $2.5 million, or 0.1%, from December 31, 2020, primarily due to a decrease in residential real estate loans of $24.5 million, or 3.5%, as well as a decrease in commercial and industrial loans of $3.9 million, or 1.0%. Excluding PPP loans of $170.1 million, commercial and industrial loans decreased $6.7 million, or 3.2%, from December 31, 2020. These decreases were partially offset by an increase in commercial real estate loans of $27.5 million, or 3.3%.

    In accordance with the Company’s asset/liability management strategy and in an effort to reduce interest rate risk, the Company sold $7.6 million of fixed rate, low coupon residential real estate loans originated in 2020 and 2021 to the secondary market. There were no loan sales during the three months ended December 31, 2020 or the three months ended March 31, 2020. As of March 31, 2021, the Company serviced $43.4 million in loans sold to the secondary market, compared to $38.1 million at December 31, 2020. Servicing rights will continue to be retained on all loans written and sold to the secondary market.

    The following table is a summary of our outstanding loan balances for the periods indicated:

     March 31, 2021 December 31, 2020
      
     (Dollars in thousands)
      
    Commercial real estate loans$861,418  $833,949 
        
    Residential real estate loans:   
    Residential 581,308   604,719 
    Home equity 102,842   103,905 
    Total residential real estate loans 684,150   708,624 
        
    Commercial and industrial loans   
    PPP loans 170,079   167,258 
    Commercial and industrial loans 205,086   211,823 
    Total commercial and industrial loans 375,165   379,081 
        
    Consumer loans 4,785   5,192 
    Total gross loans 1,925,518   1,926,846 
    Unamortized PPP loan fees (3,954)  (3,050)
    Unamortized premiums and net deferred loans fees and costs 3,304   3,587 
    Total loans$1,924,868  $1,927,383 
            

    Credit Quality

    Management continues to remain attentive to any signs of deterioration in borrowers’ financial conditions and is proactive in taking the appropriate steps to mitigate risk. At March 31, 2021, nonperforming loans totaled $6.8 million, or 0.39% of total loans, excluding PPP loans, compared to $7.8 million, or 0.45% of total loans, excluding PPP loans, at December 31, 2020. At March 31, 2021, there were no loans 90 or more days past due and still accruing interest. Nonperforming assets to total assets, excluding PPP loans, was 0.30% at March 31, 2021, compared to 0.36% at December 31, 2020. The allowance for loan losses as a percentage of total loans, excluding PPP loans, which do not require an allowance for loan losses, was 1.21% at March 31, 2021, compared to 1.20% at December 31, 2020. At March 31, 2021, the allowance for loan losses as a percentage of nonperforming loans was 313.0%, compared to 269.8% at December 31, 2020. As previously mentioned, the increase in the allowance coverage ratio is due to the increased risks in the portfolio as a result of the ongoing COVID-19 pandemic.

    The following table provides some insight into the composition of the Bank's loan portfolio and remaining loan modifications, excluding PPP loans, as of March 31, 2021:

    Commercial Real Estate Loans 
    % of
    Total
    Loans
    (1)    		 % of
    Bank
    Risk-
    Based
    Capital    		 
    % of
    Balance
    Modified
    (2)
    Apartment 10.0% 72.2% - 
    Office 8.5% 61.0% - 
    Industrial 7.0% 50.2% 3.7%
    Retail/Shopping 6.3% 45.6% - 
    Hotel 3.1% 22.3% 95.9%
    Residential non-owner 2.8% 20.5% - 
    Auto sales 2.3% 16.8% - 
    Mixed-use 2.1% 14.9% - 
    Adult care/Assisted living 2.1% 15.4% - 
    College/school 1.6% 11.4% - 
    Other 1.5% 10.5% 1.1%
    Auto service 0.6% 4.2% - 
    Gas station/convenience store 0.6% 4.5% - 
    Restaurant 0.6% 4.1% 3.3%
    Total commercial real estate loans 49.1%   6.6%
             


    Commercial and Industrial Loans 
    % of
    Total
    Loans
    (1)    		 % of
    Bank
    Risk-
    Based
    Capital    		 
    % of
    Balance
    Modified
    (2)
    Manufacturing 2.6% 19.1% 0.3%
    Wholesale trade 1.8% 12.8% - 
    Specialty trade 0.7% 4.7% - 
    Heavy and civil engineering construction 1.1% 7.7% 1.7%
    Educational services 0.6% 4.3% - 
    Transportation and warehouse 0.7% 4.8% 57.2%
    Healthcare and social assistance 0.3% 2.4% - 
    Auto sales 0.4% 2.8% - 
    Hotel 0.2% 1.2% 25.1%
    All other C&I (3) 3.3% 24.3% 0.1%
    Total commercial and industrial loans 11.7%   3.9%
             


    Residential and Consumer Loans % of
    Total
    Loans
    (1)    		 % of
    Bank
    Risk-
    Based
    Capital    		 
    % of
    Balance
    Modified
    (2)
    Residential real estate 39.0% 281.1% 0.3%
    Consumer 0.2% 2.0% - 
    Total residential and consumer loans 39.2%   0.3%
             


    Total Loan Portfolio 
    % of
    Total
    Loans
    (1)    		 % of
    Bank
    Risk-
    Based
    Capital    		 
    % of
    Balance
    Modified
    (2)
    Commercial real estate 49.1% 353.9% 6.6%
    Commercial and industrial 11.7% 84.3% 3.9%
    Residential real estate 39.0% 281.1% 0.3%
    Consumer 0.2% 2.0% - 
    Total  100.0%   3.8%
             

    ____________________________

    (1) Excludes PPP loans of $170.1 million as of March 31, 2021.
    (2) Modified balances as of March 31, 2021 (Commercial real estate loans $57.0 million; Commercial and industrial loans $7.9 million; and Residential loans $2.0 million).
    (3) Other consists of multiple industries.

    Although the Bank's loan portfolio contains impacted sectors and the commercial real estate and residential real estate sectors represent more than 100% of the Bank's total risk-based capital, the concentration limits remain acceptable. The Company monitors lending exposure by industry classification to determine potential risk associated with industry concentrations, if any, that could lead to additional credit loss exposure. As stated above, as a result of the COVID-19 pandemic, the Company identified sectors that have been materially impacted including, but not limited to: hospitality, transportation, retail, and restaurants and food service. These sectors potentially carry a higher level of credit risk, as many of these borrowers have incurred a significant negative impact to their businesses resulting from the governmental stay-at-home orders as well as travel limitations.

    Deposits

    At March 31, 2021, total deposits were $2.2 billion, an increase of $116.0 million, or 5.7%, from December 31, 2020, primarily due to an increase in core deposits of $183.5 million, or 12.7%. Core deposits, which the Company defines as all deposits except time deposits, increased from $1.4 billion, or 71.0% of total deposits, at December 31, 2020, to $1.6 billion, or 75.7% of total deposits, at March 31, 2021. Non-interest-bearing deposits increased $61.0 million, or 11.3%, to $602.8 million, interest-bearing checking accounts increased $1.7 million, or 1.8%, to $96.6 million, savings accounts increased $28.3 million, or 16.6%, to $198.6 million, and money market accounts increased $92.5 million, or 14.4%, to $733.3 million. The increase in core deposits can be attributed to the government stimulus for individuals, lower consumer spending over the last several months, PPP loan proceeds deposited into borrower checking accounts, as well as the three new branches opened in 2020.

    Time deposits decreased $67.5 million, or 11.4%, from $590.3 million at December 31, 2020 to $522.8 million at March 31, 2021. Brokered deposits, which are included within time deposits, were $40.3 million at March 31, 2021 and $55.3 million at December 31, 2020.

    FHLB and Federal Reserve Advances

    At March 31, 2021, FHLB advances decreased $15.2 million, or 26.2%, from $57.9 million at December 31, 2020, to $42.7 million.

    Capital

    At March 31, 2021, shareholders’ equity was $222.9 million, or 9.1% of total assets, compared to $226.6 million, or 9.6% of total assets, at December 31, 2020. The decrease in shareholders’ equity reflects $5.8 million for the repurchase of the Company’s common stock, the payment of regular cash dividends of $1.2 million and an increase in accumulated other comprehensive loss of $3.1 million, partially offset by net income of $5.8 million. Total shares outstanding as of March 31, 2021 were 24,583,958.

    Capital Management

    The Company’s book value per share was $9.07 at March 31, 2021, compared to $8.97 at December 31, 2020, while tangible book value per share increased $0.08, or 0.96%, from $8.36 at December 31, 2020 to $8.44 at March 31, 2021. As of March 31, 2021, the Company’s and the Bank’s regulatory capital ratios continued to exceed the levels required to be considered “well-capitalized” under federal banking regulations.

    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, business, measures being taken in response to the COVID-19 pandemic and the impact of the COVID-19 impact on the Company’s 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:

    • the duration and scope of the COVID-19 pandemic and the local, national and global impact of COVID-19;
    • actions governments, businesses and individuals take in response to the COVID-19 pandemic;
    • the pace of recovery when the COVID-19 pandemic subsides;
    • changes in the interest rate environment 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 (“Dodd-Frank Act”), Basel guidelines, capital requirements and other applicable laws and regulations;
    • the highly competitive industry and market area in which we operate;
    • general economic conditions, either nationally or regionally, resulting in, among other things, a deterioration in credit quality;
    • changes in business conditions and inflation;
    • changes in credit market conditions;
    • the inability to realize expected cost savings or achieve other anticipated benefits in connection with business combinations and other acquisitions;
    • changes in the securities markets which affect investment management revenues;
    • increases in Federal Deposit Insurance Corporation deposit insurance premiums and assessments;
    • changes in technology used in the banking business;
    • 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;
    • our controls and procedures may fail or be circumvented;
    • 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 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
     March 31,December 31,September 30,June 30,March 31,
      2021  2020  2020  2020  2020 
    INTEREST AND DIVIDEND INCOME:     
    Loans$19,120 $20,727 $19,364 $18,999 $18,747 
    Securities 854  825  953  1,165  1,399 
    Other investments 35  130  118  157  182 
    Short-term investments 24  26  12  9  62 
    Total interest and dividend income 20,033  21,708  20,447  20,330  20,390 
          
    INTEREST EXPENSE:     
    Deposits 1,734  2,257  3,190  3,817  4,236 
    Long-term debt 273  656  789  874  1,014 
    Short-term borrowings -  -  478  547  587 
    Total interest expense 2,007  2,913  4,457  5,238  5,837 
          
    Net interest and dividend income 18,026  18,795  15,990  15,092  14,553 
          
    PROVISION FOR LOAN LOSSES 75  500  2,725  2,450  2,100 
          
    Net interest and dividend income after provision for loan losses 17,951  18,295  13,265  12,642  12,453 
          
    NON-INTEREST INCOME:     
    Service charges and fees 1,883  1,970  1,764  1,559  1,774 
    Income from bank-owned life insurance 441  444  444  480  441 
    Gain (loss) on sales of securities, net (62) -  1,929  13  23 
    Unrealized (losses) gains on marketable equity securities (89) (24) (4) 35  102 
    Gain on sale of mortgages 227  -  -  -  - 
    Gain on non-marketable equity investments 546  -  -  -  - 
    Loss on interest rate swap termination -  -  (2,353) -  - 
    Other income 58  72  397  -  185 
    Total non-interest income 3,004  2,462  2,177  2,087  2,525 
          
    NON-INTEREST EXPENSE:     
    Salaries and employee benefits 7,682  7,806  7,204  7,167  7,172 
    Occupancy 1,289  1,161  1,120  1,072  1,167 
    Furniture and equipment 490  362  421  363  391 
    Data processing 721  711  768  707  715 
    Professional fees 544  521  615  637  599 
    FDIC insurance 298  300  293  288  151 
    Advertising 338  309  326  219  252 
    Loss on prepayment of borrowings -  987  -  -  - 
    Other 1,965  2,181  2,106  1,792  1,867 
    Total non-interest expense 13,327  14,338  12,853  12,245  12,314 
          
    INCOME BEFORE INCOME TAXES 7,628  6,419  2,589  2,484  2,664 
          
    INCOME TAX PROVISION 1,837  1,406  488  463  584 
    NET INCOME$5,791 $5,013 $2,101 $2,021 $2,080 
          
    Basic earnings per share$0.24 $0.20 $0.08 $0.08 $0.08 
    Weighted average shares outstanding 24,486,146  24,754,681  24,945,670  24,927,619  25,565,138 
    Diluted earnings per share$0.24 $0.20 $0.08 $0.08 $0.08 
    Weighted average diluted shares outstanding 24,543,554  24,763,022  24,945,670  24,927,619  25,617,920 
          
    Other Data:     
    Return on average assets (1) 0.98% 0.83% 0.35% 0.35% 0.38%
    Return on average equity (1) 10.35% 8.62% 3.61% 3.54% 3.62%
    Efficiency ratio (2) 65.30% 67.37% 69.11% 71.48% 72.64%
    Net interest margin, on a fully tax-equivalent basis 3.26% 3.32% 2.83% 2.76% 2.89%
    (1) Annualized.   
    (2) The efficiency ratio represents the ratio of operating expenses divided by the sum of net interest and dividend income and non-interest income, excluding realized and unrealized gains and losses on securities, gain on sale of mortgages, gain on non-marketable equity investments, loss on interest rate swap termination and loss on prepayment of borrowings.


    WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets
    (Dollars in thousands)
    (Unaudited)

     March 31, December 31, September 30, June 30, March 31,
      2021   2020   2020   2020  2020 (1)
    Cash and cash equivalents$132,124  $87,444  $172,112  $62,832  $26,675 
    Securities available-for-sale, at fair value 195,454   201,880   191,569   224,509   215,118 
    Securities held to maturity, at cost 63,960   -   -   -   - 
    Marketable equity securities, at fair value 11,906   11,968   6,965   6,941   6,875 
    Federal Home Loan Bank of Boston and other restricted stock - at cost 4,492   5,160   9,252   10,870   11,994 
              
    Loans 1,924,868   1,927,383   1,974,387   1,999,533   1,804,175 
    Allowance for loan losses (21,227)  (21,157)  (20,692)  (18,253)  (15,837)
    Net loans 1,903,641   1,906,226   1,953,695   1,981,280   1,788,338 
              
    Bank-owned life insurance 73,301   72,860   72,416   71,972   71,492 
    Goodwill 12,487   12,487   12,487   12,487   12,487 
    Core deposit intangible 2,844   2,937   3,031   3,125   3,219 
    Other assets 63,320   64,924   65,261   60,890   54,130 
    TOTAL ASSETS$2,463,529  $2,365,886  $2,486,788  $2,434,906  $2,190,328 
              
    Total deposits$2,154,133  $2,038,130  $2,011,291  $1,947,901  $1,705,984 
    Short-term borrowings -   -   -   35,000   45,000 
    Long-term debt 42,676   57,850   151,258   188,164   177,358 
    Securities pending settlement 152   160   57,226   -   - 
    Other liabilities 43,712   43,106   36,792   34,321   34,177 
    TOTAL LIABILITIES 2,240,673   2,139,246   2,256,567   2,205,386   1,962,519 
              
    TOTAL SHAREHOLDERS' EQUITY 222,856   226,640   230,221   229,520   227,809 
              
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$2,463,529  $2,365,886  $2,486,788  $2,434,906  $2,190,328 
              

    (1) There were no PPP loans outstanding at March 31, 2020.


    WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
    Other Data
    (Dollars in thousands, except per share data)
    (Unaudited)

     March 31, December 31, September 30, June 30, March 31,
      2021   2020   2020   2020   2020 
              
    Other Data:         
              
    Shares outstanding at end of period 24,583,958   25,276,193   25,595,557   25,644,334   25,644,334 
              
    Book value per share$9.07  $8.97  $8.99  $8.95  $8.88 
    Tangible book value per share 8.44   8.36   8.39   8.34   8.27 
    30-89 day delinquent loans 7,216   11,403   3,754   6,929   7,735 
    Total delinquent loans 9,274   13,522   6,678   12,041   12,448 
    Total delinquent loans as a percentage of total loans 0.48%  0.70%  0.34%  0.60%  0.69%
    Total delinquent loans as a percentage of total loans, excluding PPP loans 0.53%  0.77%  0.38%  0.68%  - 
    Nonperforming loans$6,782  $7,841  $9,208  $10,400  $9,664 
    Nonperforming loans as a percentage of total loans 0.35%  0.41%  0.47%  0.52%  0.54%
    Nonperforming loans as a percentage of total loans, excluding PPP loans 0.39%  0.45%  0.53%  0.59%  - 
    Nonperforming assets as a percentage of total assets 0.28%  0.33%  0.37%  0.43%  0.44%
    Nonperforming assets as a percentage of total assets, excluding PPP loans 0.30%  0.36%  0.41%  0.47%  - 
    Allowance for loan losses as a percentage of nonperforming loans 312.99%  269.83%  224.72%  175.51%  163.88%
    Allowance for loan losses as a percentage of total loans 1.10%  1.10%  1.05%  0.91%  0.88%
    Allowance for loan losses as a percentage of total loans, excluding PPP loans 1.21%  1.20%  1.18%  1.03%  - 


    The following table sets forth the information relating to our average balances and net interest income for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020 and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated.

     Three Months Ended
     March 31, 2021 December 31, 2020 March 31, 2020
     
    Average     		   Average
    Yield/    		 
    Average     		   Average
    Yield/    		 
    Average     		   Average
    Yield/
     Balance Interest(6) Cost Balance Interest(6) Cost Balance Interest(6) Cost
      
     (Dollars in thousands)
    ASSETS:                    
    Interest-earning assets                    
    Loans(1)(2)$1,923,477 $19,220  4.05% $1,952,947 $20,831  4.24% $1,782,500 $18,876  4.26%
    Securities(2) 227,330  854  1.52   195,752  827  1.68   225,933  1,404  2.50 
    Other investments 9,663  35  1.47   12,335  130  4.19   16,762  182  4.37 
    Short-term investments(3) 95,004  24  0.10   102,542  26  0.10   17,557  62  1.42 
    Total interest-earning assets 2,255,474  20,133  3.62   2,263,576  21,814  3.83   2,042,752  20,524  4.04 
    Total non-interest-earning assets 144,588       142,051       137,665     
    Total assets$2,400,062      $2,405,627      $2,180,417     
                         
    LIABILITIES AND EQUITY:                    
    Interest-bearing liabilities                    
    Interest-bearing checking accounts$90,503  105  0.47  $97,985  118  0.48  $70,209  75  0.43 
    Savings accounts 187,217  37  0.08   169,778  34  0.08   131,868  34  0.10 
    Money market accounts 675,662  653  0.39   601,267  664  0.44   446,234  753  0.68 
    Time deposit accounts 567,102  939  0.67   620,428  1,441  0.92   651,424  3,374  2.08 
    Total interest-bearing deposits 1,520,484  1,734  0.46   1,489,458  2,257  0.60   1,299,735  4,236  1.31 
    Short-term borrowings and long-term debt 52,670  273  2.10   116,721  656  2.24   231,989  1,601  2.78 
    Interest-bearing liabilities 1,573,154  2,007  0.52   1,606,179  2,913  0.72   1,531,724  5,837  1.53 
    Non-interest-bearing deposits 561,581       534,771       388,590     
    Other non-interest-bearing liabilities 38,360       33,353       29,466     
    Total non-interest-bearing liabilities 599,941       568,124       418,056     
    Total liabilities 2,173,095       2,174,303       1,949,780     
    Total equity 226,967       231,324       230,637     
    Total liabilities and equity$2,400,062      $2,405,627      $2,180,417     
    Less: Tax-equivalent adjustment(2)   (100)       (106)       (134)   
    Net interest and dividend income  $18,026       $18,795       $14,553    
    Net interest rate spread(4)    3.08%     3.09%     2.48%
    Net interest rate spread, on a tax-equivalent basis(5)    3.10%     3.11%     2.51%
    Net interest margin(6)    3.24%     3.30%     2.87%
    Net interest margin, on a tax-equivalent basis(7)    3.26%     3.32%     2.89%
    Ratio of average interest-earning                    
    assets to average interest-bearing liabilities    143.37%     140.93%     133.36%

    __________________________________________________

    (1) Loans, including non-accrual loans, are net of deferred loan origination costs and unadvanced funds.
    (2) Loan and securities income are presented on a tax-equivalent basis using a tax rate of 21%. The tax-equivalent adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported on the consolidated statements of net income.
    (3) Short-term investments include federal funds sold.
    (4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
    (5) Net interest rate spread, on a tax-equivalent basis, represents the difference between the tax-equivalent weighted average yield on interest-earning assets and the tax-equivalent 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) Acquired loans, time deposits and borrowings are recorded at fair value at the time of acquisition. The fair value marks on the loans, time deposits and borrowings acquired accrete and amortize into net interest income over time. For the three months ended March 31, 2021, December 31, 2020 and March 31, 2020, the loan accretion income and interest expense reduction on time deposits and borrowings (decreased) increased net interest income $(45,000), $929,000 and $82,000, respectively. Excluding these items, net interest margin for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020 was 3.27%, 3.16% and 2.87%, respectively.

    For further information contact:
    James C. Hagan, President and CEO
    Guida R. Sajdak, Executive Vice President and CFO
    Meghan Hibner, Vice President and Investor Relations Officer
    413-568-1911


    Primary Logo

Опубликовать