Financial Performance - For the three months ended September 30, 2024, net income was $1.9 million, or $0.09 per diluted share, a decrease from $4.5 million, or $0.21 per diluted share, for the same period in 2023[2]. - For the three months ended September 30, 2024, net income was $1.9 million, or $0.09 per diluted share, down from $4.5 million, or $0.21 per diluted share, for the same period in 2023, representing a decrease of 57.8%[22]. - Net interest income decreased by $1.7 million, or 10.1%, to $14.7 million for the three months ended September 30, 2024, primarily due to an increase in interest expense of $3.6 million, or 37.8%[23]. - Non-interest income decreased by $471,000, or 13.0%, to $3.1 million for the three months ended September 30, 2024, compared to $3.6 million for the same period in 2023[29]. - Non-interest expense increased by $288,000, or 2.0%, to $14.4 million for the three months ended September 30, 2024, from $14.1 million for the same period in 2023[30]. - Return on average assets and return on average equity for the nine months ended September 30, 2024, were 0.44% and 4.74%, respectively, down from 0.66% and 7.19% for the same period in 2023[34]. - Net interest income for the quarter was $14,728 thousand, compared to $14,470 thousand in the previous quarter, reflecting an increase of 1.8%[85]. - Net income decreased to $1,904 thousand for the quarter, down from $3,513 thousand in the prior quarter, a decline of 45.8%[85]. Asset and Deposit Growth - Total deposits increased by $80.5 million, or 3.8%, to $2.2 billion from year-end 2023, while total loans increased by $21.7 million, or 1.1%, to $2.0 billion[5][6]. - Total assets were $2.6 billion, an increase of $75.9 million, or 3.0%, from December 31, 2023[47]. - Total deposits rose to $2,224,206 thousand, up from $2,171,809 thousand, marking a growth of 2.4%[84]. - Total loans increased to $25,134 million, up from $24,340 million in the previous quarter, representing a growth of 3.3%[74]. Credit Quality - The allowance for credit losses was $20.0 million, or 0.97% of total loans, with nonperforming loans totaling $4.9 million, or 0.24% of total loans[8]. - The provision for credit losses was $941,000 for the three months ended September 30, 2024, compared to a reversal of $294,000 in the previous quarter[17]. - The provision for credit losses increased to $941,000 for the three months ended September 30, 2024, compared to $354,000 for the same period in 2023, reflecting a growing loan portfolio and economic conditions[27]. - Total delinquency was $4.3 million, or 0.21% of total loans, at September 30, 2024, down from $6.0 million, or 0.30% at December 31, 2023[55]. - Nonperforming loans totaled $4.9 million, or 0.24% of total loans, at September 30, 2024, compared to $6.4 million, or 0.32% at December 31, 2023[55]. Efficiency and Cost Management - The efficiency ratio for the three months ended September 30, 2024, was 80.6%, compared to 70.6% for the same period in 2023, indicating a decline in operational efficiency[31]. - The efficiency ratio increased to 80.3% for the nine months ended September 30, 2024, compared to 72.7% for the same period in 2023[45]. - The efficiency ratio improved to 80.62%, compared to 82.03% in the same quarter last year, indicating better cost management[82]. - The efficiency ratio (GAAP) increased to 80.62% from 78.20% in the prior quarter, indicating a decline in operational efficiency[85]. Interest Margin and Yield - The net interest margin was 2.40% for the three months ended September 30, 2024, compared to 2.42% for the previous quarter[9][14]. - The average yield on interest-earning assets increased to 4.54% for the three months ended September 30, 2024, compared to 4.28% for the same period in 2023[25]. - The net interest margin decreased to 2.40% for the three months ended September 30, 2024, compared to 2.70% for the same period in 2023, primarily due to increased interest expenses[24]. - The net interest margin for the nine months ended September 30, 2024, was 2.46%, down from 2.88% for the same period in 2023[36]. - The net interest rate spread for the three months ended September 30, 2024, was 1.60%, compared to 2.07% for the same period in 2023[89]. Shareholder Value - The Company repurchased 714,282 shares of common stock at an average price of $7.61 during the nine months ended September 30, 2024[4][10]. - Book value per share increased to $11.40 at September 30, 2024, up from $10.96 at December 31, 2023, while tangible book value per share increased to $10.73, a rise of 4.2%[11]. - Shareholders' equity was $240.7 million, or 9.1% of total assets, at September 30, 2024, compared to $237.4 million, or 9.3% at December 31, 2023[64]. - The Company's total Risk-Based Capital Ratio was 14.4% at September 30, 2024, down from 14.7% at December 31, 2023[64].

Financial Performance - Net income for Q2 2024 was $3.5 million, or $0.17 per diluted share, up from $2.8 million, or $0.13 per diluted share in Q2 2023, while net income for the first half of 2024 was $6.5 million, down from $8.1 million in the same period of 2023[153]. - Net income for the three months ended June 30, 2024, was $3.5 million, or $0.17 per diluted share, compared to $2.8 million, or $0.13 per diluted share, for the same period in 2023[199]. - Net income for the six months ended June 30, 2024, was $6.5 million, or $0.31 per diluted share, compared to $8.1 million, or $0.37 per diluted share, for the same period in 2023[216]. Interest Income and Expenses - Net interest income decreased by $2.4 million, or 14.1%, to $14.5 million in Q2 2024, primarily due to an increase in interest expense of $4.4 million, or 54.9%[154]. - Net interest income decreased by $2.4 million, or 14.1%, for the three months ended June 30, 2024[199]. - Interest expense increased by $4.4 million, or 54.9%, primarily due to a $4.3 million increase in interest expense on deposits, which rose by 70.3%[204]. - The average cost of total funds increased by 77 basis points to 2.16% for the three months ended June 30, 2024, from 1.39% for the same period in 2023[207]. - The average cost of time deposits increased by 165 basis points to 4.39% for the three months ended June 30, 2024, from 2.74% for the same period in 2023[207]. - The average cost of total funds increased by 92 basis points from 1.15% for the six months ended June 30, 2023, to 2.07% for the same period in 2024[224]. - The average cost of time deposits increased by 199 basis points from 2.27% for the six months ended June 30, 2023, to 4.26% for the same period in 2024[224]. Asset and Loan Management - Total assets increased by $21.5 million, or 0.8%, to $2.6 billion as of June 30, 2024, driven by an increase in cash and cash equivalents of $24.6 million, or 85.4%[159]. - Total loans decreased by $1.1 million, or 0.1%, to $2.0 billion as of June 30, 2024, with commercial real estate loans decreasing by $23.2 million, or 2.1%[165]. - The investment securities portfolio totaled $353.0 million, or 13.6% of total assets, as of June 30, 2024, down from $360.7 million, or 14.1% at December 31, 2023[160]. - Total deposits increased by $28.1 million, or 1.3%, from $2.1 billion at December 31, 2023, to $2.2 billion at June 30, 2024[191]. - Core deposits decreased by $32.3 million, or 2.1%, from $1.5 billion at December 31, 2023, to $1.5 billion at June 30, 2024, representing 69.1% of total deposits[191]. Credit Quality and Losses - Total delinquency was $5.6 million, or 0.27% of total loans, at June 30, 2024, down from $6.0 million, or 0.30% at December 31, 2023[166]. - The allowance for credit losses as a percentage of total loans was 0.96% at June 30, 2024, compared to 1.00% at December 31, 2023[166]. - The Company recorded a reversal of credit losses of $294,000 in Q2 2024, compared to a provision for credit losses of $420,000 in Q2 2023[156]. - The provision for credit losses recorded a reversal of $294,000 for the three months ended June 30, 2024, compared to a provision of $420,000 for the same period in 2023[209]. - The company recorded net charge-offs of $10,000 for the three months ended June 30, 2024, compared to net recoveries of $25,000 for the same period in 2023[210]. - The company recorded net recoveries of $57,000 for the six months ended June 30, 2024, compared to net charge-offs of $1.8 million for the same period in 2023[226]. Capital and Liquidity - Shareholders' equity at June 30, 2024, was $236.5 million, or 9.1% of total assets, compared to $237.4 million, or 9.3% of total assets, at December 31, 2023[197]. - The Company reported a total Risk-Based Capital Ratio of 14.7% at June 30, 2024, consistent with the ratio at December 31, 2023[197]. - The company had $1.1 billion in immediate available liquidity at June 30, 2024, compared to $574.4 million in uninsured deposits, representing a coverage ratio of 186%[196]. - The company had $437.4 million of additional borrowing capacity at the Federal Home Loan Bank as of June 30, 2024[195]. - Total capital to risk-weighted assets ratio was 14.70% as of June 30, 2024, exceeding the minimum requirement of 8.00%[253]. Commercial Real Estate Portfolio - The company's commercial real estate loan portfolio increased by 33.3% over the prior 36 months, totaling $1.1 billion[174]. - Non-owner occupied commercial real estate loans accounted for $864.6 million, or 42.7% of total gross loans, representing 318.2% of total bank risk-based capital as of June 30, 2024[180]. - The total commercial real estate loans as of June 30, 2024, were $1.056 billion, which is 52.2% of total gross loans[177]. - The owner-occupied CRE portfolio totaled $191.9 million, accounting for 70.6% of total bank risk-based capital, with a weighted average LTV of 56.5%[183]. - The total office portfolio includes $94.6 million in non-owner occupied loans, which is 40.6% of the office portfolio[186]. - The company has established internal maximum limits on CRE as an asset class and sub-limits by property class to manage exposure during changing economic conditions[176]. - The company maintains heightened risk management procedures and strong underwriting criteria for its commercial real estate portfolio[176]. Non-Interest Income and Expenses - Non-interest income increased by $2.2 million, or 140.8%, to $3.8 million for the three months ended June 30, 2024, compared to $1.6 million for the same period in 2023[211]. - Non-interest income increased by $1.9 million, or 42.4%, to $6.5 million for the six months ended June 30, 2024, compared to $4.6 million for the same period in 2023[227]. - Non-interest expense decreased by $237,000, or 1.6%, to $14.3 million for the three months ended June 30, 2024, from $14.6 million for the same period in 2023[213]. - Non-interest expense (GAAP) decreased to $14,314 thousand for the three months ended June 30, 2024, compared to $14,551 thousand for the same period in 2023, reflecting a reduction of 1.6%[236]. Efficiency and Ratios - The efficiency ratio was 78.2% for the three months ended June 30, 2024, compared to 78.9% for the same period in 2023[214]. - The efficiency ratio increased to 80.1% for the six months ended June 30, 2024, compared to 73.8% for the same period in 2023[230]. - The adjusted efficiency ratio (non-GAAP) improved to 82.68% for the three months ended June 30, 2024, compared to 74.31% in the prior year[237]. Market Risk and Commitments - The company has significant commitments to extend credit and provide financial guarantees, subject to strict credit control assessments[256]. - There are no off-balance sheet arrangements that materially affect the company's financial condition[257]. - The company has not identified any material changes in its sensitivity to market risk since the 2023 Annual Report[258].

Core Insights - Western New England Bancorp (WNEB) reported a revenue of $18.3 million for the quarter ended June 2024, which represents a decrease of 0.7% compared to the same period last year, while the EPS increased to $0.17 from $0.13 year-over-year [3] - The reported revenue exceeded the Zacks Consensus Estimate of $18.22 million by 0.45%, and the EPS surprise was notable at +54.55% against the consensus estimate of $0.11 [1] - Over the past month, WNEB shares have returned +35.7%, significantly outperforming the Zacks S&P 500 composite's +2% change, indicating strong market performance [4] Financial Metrics - The net interest margin for WNEB was reported at 2.4%, which is below the three-analyst average estimate of 2.6% [6] - The efficiency ratio was recorded at 78.2%, better than the average estimate of 81% based on three analysts [6] - Total non-interest income was reported at $3.83 million, surpassing the three-analyst average estimate of $2.72 million, while net interest income was $14.47 million, below the average estimate of $15.49 million [6]

Group 1: Earnings Performance - Western New England Bancorp reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and up from $0.13 per share a year ago, representing an earnings surprise of 54.55% [1] - The company posted revenues of $18.3 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.45%, although this is a slight decrease from year-ago revenues of $18.44 million [2] Group 2: Stock Performance - Shares of Western New England Bancorp have declined approximately 6.6% since the beginning of the year, contrasting with the S&P 500's gain of 16.7% [3] - The stock is currently rated Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [11] Group 3: Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $18.36 million, and for the current fiscal year, it is $0.49 on revenues of $73.46 million [5] - The estimate revisions trend for Western New England Bancorp is mixed, and future earnings expectations will depend on management's commentary during the earnings call [9][10] Group 4: Industry Context - The Banks - Foreign industry, to which Western New England Bancorp belongs, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [12]

WESTERN NEW ENGLAND BANCORP, INC. 8-K Exhibit 99.1 For further information contact: James C. Hagan, President and CEO Guida R. Sajdak, Executive Vice President and CFO Meghan Hibner, First Vice President and Investor Relations Officer 413-568-1911 WESTERN NEW ENGLAND BANCORP, INC. REPORTS RESULTS FOR THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND DECLARES QUARTERLY CASH DIVIDEND Westfield, Massachusetts, July 23, 2024: Western New England Bancorp, Inc. (the "Company" or "WNEB") (NasdaqGS: WNEB), the holding c ...

Shares of Western New England Bancorp have rallied for the fourth consecutive trading session. Encouraging inflation numbers and a rising unemployment rate are giving confidence to the Federal Reserve that prices will eventually come down toward the 2% target. So, market participants are predicting interest rate cuts as early as during the September FOMC meeting. This is a positive development for banks that have been reeling under the Fed's aggressive monetary tightening. As the rates come down, so will ba ...

Financial Performance - Net income for the three months ended March 31, 2024, was $3.0 million, or $0.14 per diluted share, down from $5.3 million, or $0.24 per diluted share for the same period in 2023[140]. - Net income for the three months ended March 31, 2024, was $3.0 million, or $0.14 per diluted share, down from $5.3 million, or $0.24 per diluted share for the same period in 2023, reflecting a decrease of 43.4%[161]. - Non-interest income decreased by $305,000, or 10.2%, to $2.7 million for the three months ended March 31, 2024, from $3.0 million in the same period of 2023[178]. - Non-interest expense decreased by $114,000, or 0.8%, to $14.8 million for the three months ended March 31, 2024, compared to $14.9 million for the same period in 2023[180]. - Income tax expense for the three months ended March 31, 2024, was $827,000, with an effective tax rate of 21.8%, compared to $1.7 million and 24.0% for the same period in 2023[182]. Interest Income and Expenses - Net interest income decreased by $3.2 million, or 17.1%, to $15.3 million for the three months ended March 31, 2024, compared to $18.5 million for the same period in 2023[141]. - The average yield on interest-earning assets increased by 44 basis points from 4.01% for the three months ended March 31, 2023, to 4.45% for the same period in 2024[172]. - The net interest margin was 2.57% for the three months ended March 31, 2024, down from 3.14% for the same period in 2023, indicating a decline in profitability[171]. - The average cost of funds increased by 106 basis points from 0.91% for the three months ended March 31, 2023, to 1.97% for the same period in 2024[173]. - Interest expense increased by $6.1 million, or 119.3%, while interest and dividend income rose by $3.0 million, or 12.5%, highlighting a significant rise in funding costs[170]. - The average cost of time deposits surged by 241 basis points from 1.71% for the three months ended March 31, 2023, to 4.12% for the same period in 2024[173]. Asset and Loan Management - Total assets as of March 31, 2024, were $2.6 billion, a decrease of $7.3 million, or 0.3%, from December 31, 2023[145]. - Total loans decreased by $1.8 million, or 0.1%, to $2.0 billion as of March 31, 2024, with commercial and industrial loans down by $10.1 million, or 4.7%[151]. - The allowance for credit losses as a percentage of total loans was 0.98% as of March 31, 2024, compared to 1.00% at December 31, 2023[153]. - Nonperforming loans totaled $5.8 million, or 0.29% of total loans, down from $6.4 million, or 0.32% of total loans, at December 31, 2023[152]. - The Company recorded a reversal of credit losses of $550,000 for the three months ended March 31, 2024, compared to a reversal of $388,000 for the same period in 2023[140]. - Net recoveries were $67,000 for the three months ended March 31, 2024, a significant improvement from net charge-offs of $1.9 million in the same period of 2023[176]. Capital and Equity - As of March 31, 2024, shareholders' equity was $235.8 million, representing 9.2% of total assets, a slight decrease from $237.4 million or 9.3% at December 31, 2023[159]. - The Bank's Total Risk-Based Capital Ratio remained strong at 14.7% as of March 31, 2024, consistent with the previous quarter[160]. - Total Capital to Risk Weighted Assets ratio for the Bank was 13.96% as of March 31, 2024, exceeding the minimum requirement of 8.00%[205]. - Tier 1 Capital to Risk Weighted Assets ratio for the Bank was 12.92% as of March 31, 2024, above the minimum requirement of 6.00%[205]. - Common Equity Tier 1 Capital to Risk Weighted Assets ratio for the Bank was 12.92% as of March 31, 2024, surpassing the minimum requirement of 4.50%[205]. - Tier 1 Leverage Ratio for the Bank was 9.77% as of March 31, 2024, exceeding the minimum requirement of 4.00%[205]. - The Company exceeded all applicable regulatory capital requirements as of March 31, 2024, categorized as "well-capitalized" under the regulatory framework[202]. Strategic Initiatives - The Company plans to grow its commercial loan portfolio and increase deposit relationships to enhance profitability and efficiency[140]. - The Company is considering growth through acquisitions to expand its market presence and product offerings[140]. - The Company does not anticipate any material capital expenditures during the calendar year 2024, except for strategic initiatives[201]. - The Company has significant commitments to extend credit and provide financial guarantees, subject to strict credit control assessments[205]. Market Risk and Sensitivity - There have been no material changes in the Company's assessment of sensitivity to market risk since the 2023 Annual Report[207]. - There are no off-balance sheet arrangements that could materially affect the Company's financial condition[206]. Borrowing and Commitments - At March 31, 2024, the company had $517.7 million in available borrowing capacity with the FHLB, down from $40.6 million in outstanding borrowings[190]. - The company had approximately $95.9 million in loan commitments and letters of credit to borrowers as of March 31, 2024[197]. - The Company completed an offering of $20 million in aggregate principal amount of its 4.875% Notes, with $19.7 million outstanding as of March 31, 2024[200].

WESTERN NEW ENGLAND BANCORP, INC. 8-K EXHIBIT 99.1 For further information contact: James C. Hagan, President and CEO Guida R. Sajdak, Executive Vice President and CFO Meghan Hibner, First Vice President and Investor Relations Officer 413-568-1911 WESTERN NEW ENGLAND BANCORP, INC. REPORTS RESULTS FOR THREE MONTHS ENDED MARCH 31, 2024 AND DECLARES QUARTERLY CASH DIVIDEND Westfield, Massachusetts, April 23, 2024: Western New England Bancorp, Inc. (the "Company" or "WNEB") (NasdaqGS: WNEB), the holding company ...

Branch and ATM Operations - As of December 31, 2023, Westfield Bank had 25 branches and 10 freestanding ATMs, serving Hampden and Hampshire Counties in Massachusetts and Hartford and Tolland Counties in Connecticut[18]. - As of December 31, 2023, Westfield Bank operates 25 branches and 10 freestanding ATMs, serving Hampden and Hampshire Counties in Massachusetts and Hartford and Tolland Counties in Connecticut[18]. Employee Demographics and Development - As of December 31, 2023, the total number of employees was 348, with an average employee tenure of 7.9 years[32]. - Approximately 64% of employees were women and 24% were ethnic minorities, veterans, or persons with disabilities as of December 31, 2023[29]. - In 2023, 27 employees successfully completed the Corporate Leadership Development Program aimed at enhancing leadership capabilities[34]. - The Company is committed to fostering a culture of diversity, equity, and inclusion, with initiatives such as the establishment of the Diversity Committee in 2023[30]. - By December 31, 2023, approximately 64% of the company's employees were women, and 24% were ethnic minorities, veterans, or persons with disabilities, reflecting its commitment to diversity[29]. - In 2023, the company established the Westfield Bank Culture and Diversity Committee to promote inclusivity and connection among employees[30]. Financial Performance and Loan Portfolio - Interest income on loans represented 90.2% of total interest income in 2023, up from 89.9% in 2022[39]. - The Bank's loan portfolio totaled $2.0 billion, accounting for 79.1% of total assets as of December 31, 2023, compared to 78.0% in 2022[39]. - Commercial real estate loans amounted to $1.1 billion, or 53.3% of total loans, as of December 31, 2023, down from 53.8% in 2022[45]. - The total commercial and industrial loan portfolio was $217.4 million, or 10.7% of total loans, as of December 31, 2023, compared to 11.0% in 2022[48]. - Home equity loans totaled $109.8 million, or 5.4% of total loans, as of December 31, 2023, slightly up from 5.3% in 2022[55]. - The residential real estate loan portfolio was $612.3 million, or 30.3% of total loans, as of December 31, 2023, compared to 29.6% in 2022[52]. - PPP loans decreased to $756,000 as of December 31, 2023, down from $2.3 million in 2022[49]. - The largest lending exposure was a $24.9 million commercial lending relationship, with $9.9 million outstanding as of December 31, 2023[44]. - The allowance for credit losses was $20.3 million as of December 31, 2023, compared to $19.9 million in 2022[58]. - Total gross loans increased to $2.024 billion as of December 31, 2023, from $1.989 billion in 2022[58]. - As of December 31, 2023, total loans amounted to $2,024,824,000, with net loans at $2,007,050,000 after accounting for deferred loan origination fees and credit losses[60]. - Criticized loans totaled $39.5 million, or 1.9% of total loans, down from $64.0 million, or 3.2% at the end of 2022[73]. - Classified loans were $33.7 million, or 1.7% of total loans, compared to $42.3 million, or 2.1% at the end of 2022[73]. - Nonaccrual loans stood at $6.4 million, or 0.32% of total loans, an increase from $5.7 million, or 0.29% at the end of 2022[76]. - The allowance for credit losses was $20,267,000, representing 1.00% of total loans outstanding, consistent with the previous year[79]. - Total impaired loans were $29.7 million, or 1.5% of total loans, as of December 31, 2023[74]. - The company reported net charge-offs of $2,039,000 for the year, with total loan charge-offs to daily average loans outstanding at 0.10%[79]. - The company recorded a provision for credit losses of $872,000 for the year ended December 31, 2023, primarily due to changes in the economic environment, with off-balance sheet unfunded commitment exposures decreasing by $46.8 million[95]. - The total allowance for credit losses allocated by loan category as of December 31, 2023, included $1,079,751 for commercial real estate loans, $612,315 for residential one-to-four family loans, and $217,447 for commercial and industrial loans[97]. - The Company has implemented a discounted cash flow method to estimate expected credit losses, utilizing a forward-looking macroeconomic forecast[89]. - The Company believes it is appropriately provisioned for the current economic environment as of December 31, 2023[95]. Securities and Deposits - As of December 31, 2023, the Company held $137.1 million in available-for-sale (AFS) securities and $223.4 million in held-to-maturity (HTM) securities[108]. - The Company reported unrealized losses on the AFS securities portfolio of $29.2 million, or 17.5% of the amortized cost basis, compared to $32.2 million, or 18.0% at December 31, 2022[109]. - The Company reported unrealized losses on the HTM securities portfolio of $35.7 million, or 16.0% of the amortized cost basis, compared to $39.2 million, or 17.0% at December 31, 2022[109]. - At December 31, 2023, uninsured deposits were 27% of total deposits, down from 31% at December 31, 2022[112]. - Core deposits represented 71.5% of total deposits at December 31, 2023, compared to 81.5% at December 31, 2022[113]. - The Company had $1.7 million in brokered deposits on the balance sheet at December 31, 2023, with no brokered deposits reported at December 31, 2022[111]. - Time deposits with remaining terms to maturity of less than one year amounted to $596.3 million at December 31, 2023[113]. - The Company participates in the IntraFi Network, providing depositors with FDIC pass-through insurance, with $28.7 million in CDARS deposits reported at December 31, 2023[115]. - Total deposits decreased to $2,169,459 thousand in 2023 from $2,264,252 thousand in 2022, reflecting a decline of 4.2%[116]. - Core deposits accounted for 75.8% of total deposits in 2023, down from 84.0% in 2022, indicating a shift in deposit composition[116]. - Time deposits increased significantly to $524,827 thousand in 2023, up from $363,258 thousand in 2022, representing a growth of 44.5%[116]. - The weighted average rate for total deposits rose to 1.23% in 2023 from 0.24% in 2022, marking a substantial increase[116]. Borrowings and Capital - Long-term borrowings surged to $120.6 million in 2023, up from $1.2 million in 2022, reflecting a 10,050% increase to replace deposit attrition[127]. - Total borrowings increased by $94.1 million, or 221.6%, from $42.6 million in 2022 to $136.7 million in 2023[127]. - The Company had immediate availability at the FHLB to borrow an additional $535.6 million based on qualified collateral as of December 31, 2023[128]. - The weighted average rate for short-term borrowings increased to 5.47% in 2023 from 4.37% in 2022[128]. - Total core deposits decreased to $449,522 thousand in 2023 from $590,224 thousand in 2022, a decline of 23.8%[118]. - The Company participated in the Bank Term Funding Program (BTFP) during 2023, allowing it to pay off higher rate FHLB advances[126]. Regulatory Compliance and Capital Requirements - Western New England Bancorp is a Massachusetts-chartered stock holding company and is subject to supervision by the Federal Reserve Board[139]. - The Bank's deposits are insured by the FDIC up to applicable limits, ensuring depositor protection[140]. - The minimum capital ratios under the Capital Rules require a Common Equity Tier 1 (CET1) ratio of at least 4.5% to risk-weighted assets[151]. - As of December 31, 2023, both the Company and the Bank are in compliance with the targeted capital ratios under the Capital Rules[156]. - The Capital Rules mandate a capital conservation buffer of 2.5% of CET1, resulting in minimum ratios of 7% CET1 to risk-weighted assets[151]. - The Company and the Bank evaluated the simplified Capital Rules and decided not to opt into the community bank leverage ratio framework[157]. - The Company is subject to extensive regulation under federal and state laws, which could materially affect its results[138]. - The OCC requires prior approval for capital distributions exceeding the Bank's net income for the year-to-date plus retained net income for the previous two years[146]. - The HOLA restricts business activities of savings and loan holding companies to those permitted for financial holding companies[142]. - The Company must act as a source of financial strength to its subsidiary savings associations, as mandated by the Dodd-Frank Act[145]. - As of December 31, 2023, the Bank was classified as "well-capitalized" under the PCA framework, meeting all required capital ratios[159]. - The Bank complied with the limitations on loans to one borrower, which is capped at 15% of unimpaired capital and surplus, with an additional 10% allowed if secured by readily marketable collateral[161]. - The Bank met the Qualified Thrift Lender test, maintaining at least 65% of its portfolio assets in qualified thrift investments over the past twelve months[166]. - The Bank received an "Outstanding" rating on its most recent Community Reinvestment Act examination, indicating strong performance in meeting credit needs[167]. - The Bank is subject to federal laws for consumer protection, including the Dodd-Frank Act, which centralizes responsibility for consumer financial protection[168]. - The Bank is a member of the Federal Home Loan Bank System and was in compliance with the requirement to hold shares of capital stock in the FHLB as of December 31, 2023[177]. - The FDIC's deposit insurance limit is $250,000 per depositor, per insured bank, ensuring protection for depositors[175]. - The Bank has implemented a Bank Secrecy Act and Patriot Act compliance program to combat money laundering and ensure regulatory compliance[182]. - The Bank's required reserves can be satisfied in the form of vault cash, with the current reserve requirement set to zero percent[178]. - The Bank is required to notify customers of security breaches under the Gramm-Leach Bliley Act, ensuring consumer data protection[181]. Competitive Environment - The Company expects increased competition in the financial services industry due to legislative, regulatory, and technological changes[26]. - The Company operates in a highly competitive environment, facing competition from local, regional, and national financial institutions, as well as credit unions[25]. - The Springfield Metropolitan area, where the company operates, is the sixth largest metropolitan area in New England, benefiting from a diverse economy[23]. - The company faces significant competition from local, regional, and national financial institutions, as well as credit unions and non-depository institutions[25]. - Legislative and regulatory initiatives may change the operating environment of the company, potentially increasing or decreasing the cost of doing business[190]. Acquisitions - The Company acquired Chicopee Bancorp, Inc. on October 21, 2016, which was a tax-free reorganization for federal income tax purposes[19]. - The company has loans acquired with evidence of credit deterioration from Chicopee Bancorp, Inc., which are now accounted for as purchased credit deteriorated loans under the new CECL framework[93]. Accounting and Financial Reporting - The Company adopted ASU 2016-13 on January 1, 2023, affecting the allowance for credit losses calculation[79]. - The Company adopted the CECL methodology on January 1, 2023, resulting in a $1.2 million increase to the allowance for credit losses and a $918,000 allowance for off-balance sheet credit exposures[81][82]. - As of December 31, 2023, the allowance for credit losses for loans held for investment was adjusted by a credit loss expense, with accrued interest receivable on loans held for investment at $7.5 million[83]. - The transition to ASC 326 resulted in a net increase to retained earnings of $9,000, including a net deferred tax liability of $4,000[82].

Financial Performance - Net income for Q3 2023 was $4.5 million, or $0.21 per diluted share, down from $6.0 million, or $0.28 per diluted share in Q3 2022, representing a decrease of 25%[158] - The Company reported net income of $4.5 million, or $0.21 per diluted share, for the three months ended September 30, 2023, compared to $6.0 million, or $0.28 per diluted share, for the same period in 2022[181] - Net income for the nine months ended September 30, 2023, was $12.6 million, or $0.58 per diluted share, down from $16.9 million, or $0.77 per diluted share, for the same period in 2022[203] Interest Income and Expenses - Net interest income decreased by $3.9 million, or 19.2%, to $16.4 million in Q3 2023, primarily due to an increase in interest expense of $8.1 million[158] - Net interest income decreased by $3.9 million, or 19.2%, to $16.4 million for the three months ended September 30, 2023, compared to $20.3 million for the same period in 2022[190] - For the nine months ended September 30, 2023, net interest income decreased by $6.7 million, or 11.4%, to $51.7 million compared to $58.4 million for the same period in 2022[213] - Interest expense increased by $18.7 million, or 470.4%, primarily due to a $14.7 million increase in interest expense on deposits, and a $3.9 million increase on borrowings[213] Asset and Loan Growth - Total assets increased by $31.8 million, or 1.3%, to $2.6 billion as of September 30, 2023, driven by a $23.4 million increase in total loans[164] - Total loans increased by $23.4 million, or 1.2%, to $2.0 billion, with residential real estate loans rising by $18.7 million, or 2.7%[169] - Average interest-earning assets increased by $5.2 million, or 0.2%, to $2.4 billion for the nine months ended September 30, 2023[214] Deposits and Borrowings - Total deposits decreased by $53.1 million, or 2.4%, to $2.2 billion, with core deposits declining by $224.0 million, or 12.3%[171] - Total borrowings increased by $87.6 million, or 140.8%, from $62.2 million at December 31, 2022, to $149.8 million[174] - As of September 30, 2023, total deposits were $2,176,303 thousand, a slight increase from $2,157,974 thousand in June 2023[172] Credit Quality - The allowance for credit losses as a percentage of total loans was 0.99% at September 30, 2023, compared to 1.00% at December 31, 2022[170] - Nonperforming loans totaled $6.3 million, or 0.31% of total loans, an increase from $5.7 million, or 0.29% at December 31, 2022[170] - The Company recorded net charge-offs of $1.9 million for the nine months ended September 30, 2023, compared to $129,000 for the same period in 2022[159] Efficiency and Ratios - The efficiency ratio increased to 70.6% for the three months ended September 30, 2023, compared to 62.7% for the same period in 2022[201] - The efficiency ratio for the nine months ended September 30, 2023, was 72.7%, up from 65.5% for the same period in 2022[220] - The Company's total Risk-Based Capital Ratio was 14.4% at September 30, 2023, compared to 14.2% at December 31, 2022, indicating strong capital levels[180] Strategic Initiatives - The Company plans to grow its commercial loan portfolio and expand retail banking deposit relationships as part of its growth strategy[158] - The Company is considering growth through acquisitions to enhance its product offerings and shareholder value[158] Market Sensitivity and Risk - The Company executed a $200 million fair value hedge on fixed-rate assets to reduce sensitivity to interest rates[178] - There have been no material changes in the Company's assessment of sensitivity to market risk since the last report[244] Other Financial Metrics - The average yield on interest-earning assets increased to 4.28% for the three months ended September 30, 2023, compared to 3.59% for the same period in 2022[192] - The average cost of total funds increased by 139 basis points to 1.64% for the three months ended September 30, 2023, from 0.25% for the same period in 2022[193] - Book value per share (GAAP) increased to $10.53 as of September 30, 2023, from $9.52 in the same period of 2022[226]