Western New England Bancorp(WNEB) - 2025 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2025 was $3.2 million, or $0.16 per diluted share, up from $1.9 million, or $0.09 per diluted share in Q3 2024, representing a 68.4% increase[166] - Net income for the three months ended September 30, 2025, was $3.2 million, or $0.16 per diluted share, compared to $1.9 million, or $0.09 per diluted share, for the same period in 2024[216] - For the nine months ended September 30, 2025, the company reported net income of $10.1 million, or $0.50 per diluted share, compared to $8.4 million, or $0.40 per diluted share for the same period in 2024[236] - Return on average assets and return on average equity were 0.50% and 5.64% for the nine months ended September 30, 2025, respectively, compared to 0.44% and 4.74% for the same period in 2024[236] Income and Expenses - Net interest income increased by $3.4 million, or 22.8%, to $18.1 million in Q3 2025, driven by a $112.6 million, or 4.6%, increase in average interest-earning assets[166] - Net interest income increased by $3.4 million, or 22.8%, while non-interest expense rose by $1.4 million, or 9.5%, year-over-year[216] - Non-interest income rose by $32,000, or 1.0%, to $3.2 million for the three months ended September 30, 2025[231] - Non-interest income decreased by $306,000, or 3.2%, to $9.3 million for the nine months ended September 30, 2025, from $9.6 million in 2024[252] - Non-interest expense increased by $3.1 million, or 7.2%, to $46.6 million for the nine months ended September 30, 2025, compared to $43.5 million in 2024[253] Asset and Loan Growth - Total assets rose by $82.4 million, or 3.1%, to $2.7 billion as of September 30, 2025, primarily due to a $60.8 million, or 2.9%, increase in total loans[171] - Total loans increased by $60.8 million, or 2.9%, with residential real estate loans rising by $52.3 million, or 6.7%[176] - Average interest-earning assets rose by $112.6 million, or 4.6%, to $2.6 billion, driven by a $73.8 million, or 3.6%, increase in average loans[226] Credit Quality and Provisions - The allowance for credit losses was $20.5 million, or 0.96% of total loans, compared to $19.5 million, or 0.94% of total loans at the end of 2024[178] - The company recorded a provision for credit losses of $1.3 million in Q3 2025, a 37.4% increase from $941,000 in Q3 2024, due to increased unfunded commitments[167] - Provision for credit losses increased by $352,000, or 37.4%, to $1.3 million in Q3 2025, primarily due to an increase in unfunded commitments and a slight deterioration in macroeconomic forecasts[229] - The Company recorded a provision for credit losses of $820,000 for the nine months ended September 30, 2025, an increase of $723,000 from $97,000 in the same period of 2024[249] Capital and Regulatory Ratios - At September 30, 2025, shareholders' equity was $243.6 million, maintaining 8.9% of total assets, with a net income contribution of $10.1 million[215] - As of September 30, 2025, the Bank is categorized as "well-capitalized" under regulatory requirements, exceeding all applicable capital ratios[270] - Total Capital to Risk Weighted Assets for the Bank was 13.58% as of September 30, 2025, above the minimum requirement of 8.00%[272] - Tier 1 Capital to Risk Weighted Assets for the Bank was 12.52% as of September 30, 2025, exceeding the minimum requirement of 6.00%[272] - Common Equity Tier 1 Capital to Risk Weighted Assets for the Bank was 12.52% as of September 30, 2025, above the minimum requirement of 4.50%[272] - Tier 1 Leverage Ratio for the Bank was 9.30% as of September 30, 2025, surpassing the minimum requirement of 4.00%[272] Deposits and Borrowings - As of September 30, 2025, total deposits increased by $87.2 million, or 3.9%, to $2.3 billion from December 31, 2024[210] - Core deposits rose by $97.4 million, or 6.3%, from $1.6 billion (68.9% of total deposits) to $1.7 billion (70.5% of total deposits) during the same period[210] - Non-interest-bearing deposits increased by $24.5 million, or 4.3%, to $590.2 million, representing 25.1% of total deposits[210] - Total borrowings decreased by $2.4 million, or 1.9%, to $120.7 million as of September 30, 2025[213] - The Company had $468.7 million of additional borrowing capacity at the FHLB as of September 30, 2025[214] Market and Risk Management - The company continues to monitor loans for credit quality deterioration due to market conditions, including increased interest rates and reduced occupancy[207] - The Board has implemented heightened risk management procedures and strong underwriting criteria for its commercial real estate portfolio[188] - The Company has no off-balance sheet arrangements that materially affect its financial condition[273] - There have been no material changes in the Company's assessment of market risk sensitivity since the 2024 Annual Report[275]