Western New England Bancorp(WNEB) - 2024 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2024 was $1.9 million, or $0.09 per diluted share, a decrease of 57.8% from $4.5 million, or $0.21 per diluted share in Q3 2023[189] - Net income for the three months ended September 30, 2024, was $1.9 million, or $0.09 per diluted share, compared to $4.5 million, or $0.21 per diluted share, for the same period in 2023[245] - Net income for the nine months ended September 30, 2024, was $8.4 million, or $0.40 per diluted share, down from $12.6 million, or $0.58 per diluted share in the same period of 2023[262] Interest Income and Expenses - Net interest income decreased by $1.7 million, or 10.1%, to $14.7 million in Q3 2024, primarily due to a $3.6 million increase in interest expense, or 37.8%[190] - Net interest income decreased by $1.7 million, or 10.1%, for the three months ended September 30, 2024[245] - Net interest income decreased by $7.2 million, or 13.9%, to $44.5 million for the nine months ended September 30, 2024, compared to $51.7 million for the same period in 2023[270] - Interest expense increased by $3.6 million, or 37.8%, primarily due to competitive pricing on deposits and a shift from low-cost core deposits to high-cost time deposits[251] - Interest expense on deposits increased by $3.5 million, or 44.9%, for the three months ended September 30, 2024[251] Asset and Loan Growth - Total assets increased by $75.9 million, or 3.0%, to $2.6 billion as of September 30, 2024, driven by a 152.4% increase in cash and cash equivalents[195] - Total loans increased by $21.7 million, or 1.1%, to $2.0 billion, with residential real estate loans rising by $26.4 million, or 3.7%[201] - Average interest-earning assets increased by $38.2 million, or 1.6%, to $2.4 billion, driven by a $31.3 million increase in average loans[254] Credit Quality - Total delinquency decreased to $4.3 million, or 0.21% of total loans, down from $6.0 million, or 0.30% at the end of 2023[202] - The allowance for credit losses as a percentage of total loans was 0.97% as of September 30, 2024, compared to 1.00% at December 31, 2023[203] - The company recorded a provision for credit losses of $941,000 in Q3 2024, compared to $354,000 in Q3 2023[191] - Provision for credit losses was $941,000 for the three months ended September 30, 2024, compared to $354,000 for the same period in 2023, reflecting an increase in the loan portfolio[257] Capital and Liquidity - Shareholders' equity at September 30, 2024, was $240.7 million, or 9.1% of total assets, compared to $237.4 million, or 9.3% of total assets, at December 31, 2023[242] - The Total Risk-Based Capital Ratio was 14.4% at September 30, 2024, compared to 14.7% at December 31, 2023[243] - The Company had $1.1 billion in immediately available liquidity at September 30, 2024[241] - The company exceeded all applicable regulatory capital requirements and was categorized as "well-capitalized" under the regulatory framework[302] Deposits - Total deposits increased by $80.5 million, or 3.8%, from $2.1 billion at December 31, 2023, to $2.2 billion at September 30, 2024[235] - Core deposits decreased by $8.3 million, or 0.5%, from $1.5 billion, or 71.5% of total deposits, at December 31, 2023, to $1.5 billion, or 68.5% of total deposits, at September 30, 2024[235] - Uninsured deposits represented 27.7% of total deposits at September 30, 2024, compared to 26.8% at December 31, 2023[236] Efficiency and Expenses - Non-interest income decreased by $471,000, or 13.0%, from $3.6 million in Q3 2023 to $3.1 million in Q3 2024[259] - Non-interest expense increased by $288,000, or 2.0%, to $14.4 million in Q3 2024 from $14.1 million in Q3 2023[260] - The efficiency ratio rose to 80.6% in Q3 2024 compared to 70.6% in Q3 2023, indicating lower revenues[261] - 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[281] Tax and Other Expenses - Income tax expense for Q3 2024 was $618,000, with an effective tax rate of 24.5%, up from $1.0 million and 18.7% in Q3 2023[262] - Income tax expense for the nine months ended September 30, 2024, was $2.2 million, with an effective tax rate of 20.9%[282] Market and Regulatory Compliance - The bank's Tier 1 Leverage Ratio was 9.61% as of September 30, 2024, above the minimum requirement of 4.00%[306] - There have been no material changes in the company's assessment of market risk since the 2023 Annual Report[310] - The company has not identified any changes in internal control over financial reporting that materially affected its controls during the last fiscal quarter[312]