Western New England Bancorp(WNEB) - 2021 Q2 - Quarterly Report

Financial Performance - Net income for the three months ended June 30, 2021, was $5.6 million, or $0.24 diluted earnings per share, compared to $2.0 million, or $0.08 diluted earnings per share, for the same period in 2020[146] - Net income for the three months ended June 30, 2021, was $5.7 million, or $0.24 per diluted share, a 179.7% increase from $2.0 million, or $0.08 per diluted share, for the same period in 2020[179] - Net income for the six months ended June 30, 2021, was $11.4 million, or $0.47 diluted earnings per share, compared to $4.1 million, or $0.16 diluted earnings per share, for the same period in 2020[201] Interest Income and Margin - Net interest income increased by $2.7 million, or 18.0%, to $17.8 million for the three months ended June 30, 2021, from $15.1 million for the same period in 2020[147] - Net interest income for the six months ended June 30, 2021, was $35.8 million, up from $29.6 million in 2020[201] - The net interest margin was 3.06% for the three months ended June 30, 2021, compared to 2.74% for the same period in 2020[147] - The net interest margin for the six months ended June 30, 2021, was 3.15%, compared to 2.80% for the same period in 2020[204] Loan Loss Provision and Credit Quality - The provision for loan losses was a credit of $1.2 million for the three months ended June 30, 2021, compared to a provision of $2.5 million for the same period in 2020[146] - The provision for loan losses for the three months ended June 30, 2021, was a credit of $1.2 million, compared to a provision of $2.5 million for the same period in 2020, reflecting an improvement in economic forecasts[194] - Nonperforming loans totaled $6.0 million, or 0.34% of total loans, down from $7.8 million, or 0.45% at December 31, 2020[171] - The allowance for loan losses as a percentage of total loans was 1.12% at June 30, 2021, compared to 1.20% at December 31, 2020[171] Loan Portfolio and PPP Loans - Total PPP loans decreased by $61.7 million, or 36.9%, from $167.3 million at December 31, 2020, to $105.5 million at June 30, 2021[153] - The Company processed 1,341 PPP loan forgiveness applications totaling $196.7 million as of June 30, 2021[154] - Modifications granted under the CARES Act declined to $57.0 million, or 3.2% of total loans, excluding PPP loans, as of June 30, 2021[157] - The Company anticipates that the majority of the PPP loan portfolio will be repaid through forgiveness by the end of 2021[154] Assets and Deposits - As of June 30, 2021, total assets increased by $110.7 million, or 4.7%, to $2.5 billion compared to December 31, 2020[166] - Core deposits increased by $279.2 million, or 19.3%, from December 31, 2020, to $1.7 billion, or 79.2% of total deposits[172] - Average demand deposits increased by $98.4 million, or 19.5%, to $603.3 million, representing 27.9% of total average deposits[191] - Average demand deposits increased by $135.8 million, or 30.4%, from $446.7 million for the six months ended June 30, 2020, to $582.5 million for the same period in 2021[212] Expenses and Efficiency - Non-interest income increased by $322,000, or 15.4%, to $2.4 million for the three months ended June 30, 2021, with service charges and fees rising by $516,000, or 33.1%[196] - Non-interest expense rose by $1.4 million, or 11.7%, to $13.7 million for the three months ended June 30, 2021, driven by a $887,000 increase in salaries and benefits[199] - The efficiency ratio improved to 66.1% for the three months ended June 30, 2021, from 71.5% in the same period in 2020[199] - Non-interest expense increased by $2.4 million, or 9.9%, to $27.0 million for the six months ended June 30, 2021[220] Capital and Borrowing - Shareholders' equity was $223.7 million, or 9.0% of total assets, as of June 30, 2021, down from $226.6 million, or 9.6% at December 31, 2020[175] - The Company authorized a stock repurchase plan to repurchase up to 2.4 million shares, or 10% of its outstanding common stock[177] - Total Capital to Risk Weighted Assets for the consolidated entity was $261,914 thousand, representing a ratio of 15.19% as of June 30, 2021, exceeding the minimum requirement of 8.00%[230] - At June 30, 2021, the company had $511.7 million in available borrowing capacity with the FHLB[226] Tax and Other Considerations - The effective tax rate increased to 27.0% for the three months ended June 30, 2021, compared to 18.6% for the same period in 2020, due to higher pre-tax projected income[200] - Income tax expense for the six months ended June 30, 2021, was $3.9 million, with an effective tax rate of 25.5%[221] - The company reported no off-balance sheet arrangements that could materially affect its financial condition[233] - There have been no material changes in the company's assessment of sensitivity to market risk since the 2020 Annual Report[234]