Western New England Bancorp, Inc 8-K, filed Oct 27, 2026
Western New England Bancorp, Inc. (WNEB)
About this 8-K
Western New England Bancorp, Inc filed this 8-K on October 27, 2026.
Western New England Bancorp reported third-quarter net income of $6.3 million, or $0.32 per diluted share, for three months ended September 30, 2026, declared a $0.07 per share dividend and authorized repurchase of up to 1.0 million shares. AI summary
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
On October 27, 2026, Western New England Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the quarter and nine months ended September 30, 2026. A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated by reference into this Item 2.02.
| Item 7.01. | Regulation FD Disclosure. |
On October 27, 2026, the Company made available an investor presentation to be used during investor meetings. The slide show for the investor presentation is attached to this report as Exhibit 99.2.
The information contained in this Item 7.01 and Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor will such information or exhibits be deemed incorporated by reference into any filing made by the Company under the Exchange Act or the Securities Act of 1933, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such filing. The furnishing of the information included in Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.
| Item 8.01. | Other Events. |
On October 27, 2026, the Board of Directors of the Company authorized a stock repurchase plan (the “2026 Plan”), pursuant to which the Company may repurchase up to 1.0 million shares of its common stock, which is approximately 5.0% of the Company’s outstanding shares of common stock as of the date the 2026 Plan was adopted. Repurchases under the 2026 Plan may commence upon the completion of the stock repurchase plan adopted in 2025 (the “2025 Plan”). The 2025 Plan was announced on April 22, 2025, and as of October 27, 2026, there were 276,465 shares of common stock available for repurchase under the 2025 Plan.
| Item 9.01. | Financial Statements and Exhibits. |
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits.
The exhibits required by this item are set forth on the Exhibit Index attached hereto.
|
Exhibit Number |
Description | |
| 99.1 | Press Release of Western New England Bancorp, Inc. dated October 27, 2026. | |
| 99.2 | Investor Presentation dated October 27, 2026 for Western New England Bancorp, Inc. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WESTERN NEW ENGLAND BANCORP, INC. |
| By: | /s/ Guida R. Sajdak |
| Guida R. Sajdak |
| Chief Financial Officer |
Dated: October 27, 2026
Western New England Bancorp, Inc.
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 NINE MONTHS
ENDED SEPTEMBER 30, 2026 AND DECLARES QUARTERLY CASH DIVIDEND
THE COMPANY ALSO ANNOUNCES A NEW 5% SHARE REPURCHASE PLAN
Westfield, Massachusetts, October 27, 2026: 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 and nine months ended September 30, 2026. For the three months ended September 30, 2026, the Company reported net income of $6.3 million, or $0.32 per diluted share, compared to net income of $3.2 million, or $0.16 per diluted share, for the three months ended September 30, 2025. On a linked quarter basis, net income was $6.3 million, or $0.32 per diluted share, as compared to net income of $3.6 million, or $0.18 per diluted share, for the three months ended June 30, 2026. For the nine months ended September 30, 2026, net income was $14.7 million, or $0.74 per diluted share, compared to net income of $10.1 million, or $0.50 per diluted share, for the nine months ended September 30, 2025.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.07 per share on the Company’s common stock. The dividend will be payable on or about November 25, 2026 to shareholders of record on November 11, 2026.
In addition, the Company announced that today its Board of Directors authorized a new stock repurchase plan (the “2026 Plan”), pursuant to which the Company may repurchase up to 1.0 million shares of the Company’s common stock, or approximately 5.0% of the Company’s outstanding common stock as of today. The 2026 Plan will commence upon the completion of the Company’s existing stock repurchase plan (the “2025 Plan”). The 2025 Plan was approved by the Board of Directors on April 22, 2025. At September 30, 2026, there were 276,465 shares of common stock available for repurchase under the 2025 Plan.
James C. Hagan, President and Chief Executive Officer, commented, “I am pleased to report the results for the third quarter of 2026. Our diversified loans and deposits, along with our disciplined approach to managing funding costs, resulted in an increase in the net interest margin to 3.07%. At September 30, 2026, core deposits and non-interest-bearing deposits represented 69.8% and 25.3% of total deposits, respectively, while the average cost of deposits stood at 1.73% for the three months ended September 30, 2026.
We continue to focus on extending credit within our markets and servicing the needs of our existing customer base while ensuring new opportunities present the appropriate risk-adjusted return. Consistent with our prudent credit culture, we continue to proactively identify and manage credit risk within the loan portfolio. At September 30, 2026, our asset quality remained strong, with total delinquency at 0.41% of total loans, and total nonaccrual loans at 0.36% of total loans.
We remain disciplined in our capital management strategies. During the nine months ended September 30, 2026, we repurchased 596,000 shares of common stock and have 276,465 shares of common stock available for repurchase under the 2025 Plan.”
Hagan concluded, “Today, we announced the 2026 Plan, which will commence upon the completion of the 2025 Plan. We continue to believe that repurchasing shares represents a valuable use of the Company’s capital and is an integral element of our capital management strategies. We are pleased to be able to continue to return value to shareholders through share repurchases and quarterly cash dividends. Our commitment to strong capital and strong liquidity levels gives us a solid foundation to take advantage of opportunities in the markets we serve and to enhance shareholder value in the long term.”
1
Key Highlights:
Loans and Deposits
At September 30, 2026, total loans increased $11.1 million, or 0.5%, from $2.2 billion, or 79.7% of total assets, at December 31, 2025, to $2.2 billion, or 79.8% of total assets. The increase was primarily driven by an increase in residential real estate loans, including home equity loans, of $57.3 million, or 6.7%, partially offset by a decrease in commercial real estate loans of $40.6 million, or 3.7%, and a decrease in commercial and industrial loans of $4.9 million, or 2.2%. At September 30, 2026, total deposits of $2.4 billion increased $67.2 million, or 2.8%, from December 31, 2025, primarily due to an increase in time deposits of $42.2 million, or 6.1%, and an increase in core deposits of $25.0 million, or 1.5%.
Allowance for Credit Losses and Credit Quality
At September 30, 2026, the allowance for credit losses was $19.6 million, or 0.89% of total loans, compared to $20.3 million, or 0.93% of total loans, at December 31, 2025. The allowance for credit losses, as a percentage of nonaccrual loans, was 248.4% and 393.2% at September 30, 2026, and December 31, 2025, respectively. At September 30, 2026, nonaccrual loans totaled $7.9 million, or 0.36% of total loans, compared to $5.2 million, or 0.24% of total loans, at December 31, 2025. Total delinquent loans increased from $3.1 million, or 0.14% of total loans, at December 31, 2025, to $9.1 million, or 0.41% of total loans, at September 30, 2026. Of the $9.1 million in past due loans, 74.1% are residential real estate loans. At September 30, 2026, and December 31, 2025, the Company did not have any other real estate owned.
Net Interest Margin
The net interest margin increased seven basis points from 3.00% for the three months ended June 30, 2026 to 3.07% for the three months ended September 30, 2026. The net interest margin, on a tax-equivalent basis (a non-GAAP financial measure), increased seven basis points from 3.02% for the three months ended June 30, 2026, to 3.09% for the three months ended September 30, 2026. See pages 20-22 for the related net interest margin calculations and a reconciliation of GAAP to non-GAAP financial measures.
Stock Repurchase Program
On April 22, 2025, the Board of Directors authorized the 2025 Plan, pursuant to which the Company may repurchase up to 1.0 million shares of its common stock, or approximately 4.8%, of the Company’s then-outstanding shares of common stock. During the three months ended September 30, 2026, the Company repurchased 215,000 shares of its common stock at an average price per share of $13.85. For the nine months ended September 30, 2026, the Company repurchased 596,000 shares of its common stock at an average price per share of $13.72. At September 30, 2026, there were 276,465 shares of common stock available for repurchase under the 2025 Plan.
Today the Board of Directors authorized the 2026 Plan, pursuant to which the Company may repurchase up to 1.0 million shares of common stock, or approximately 5.0% of the Company’s outstanding shares as of today the date the 2026 Plan was announced. Repurchases under the 2026 Plan will commence upon the completion of the 2025 Plan.
The repurchase of shares under the Company’s stock repurchase plans is administered through an independent broker. The shares of common stock repurchased under both the 2025 Plan and the 2026 Plan have been and will continue to be, as applicable, 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 the Company’s management (“Management”) determines additional repurchases are not warranted. The timing and amount of additional share repurchases under both the 2025 Plan and the 2026 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.
2
Book Value and Tangible Book Value
The Company’s book value per share was $12.34 at September 30, 2026, compared to $12.16 at December 31, 2025, while tangible book value per share, a non-GAAP financial measure, increased $0.18, or 1.6%, from $11.49 at December 31, 2025, to $11.67 at September 30, 2026. See pages 20-22 for the related tangible book value calculation and a reconciliation of GAAP to non-GAAP financial measures.
Net Income for the Three Months Ended September 30, 2026 Compared to the Three Months Ended June 30, 2026
For the three months ended September 30, 2026, the Company reported net income of $6.3 million, or $0.32 per diluted share, compared to $3.6 million, or $0.18 per diluted share, for the three months ended June 30, 2026. Net interest income increased $673,000, or 3.5%, the provision for credit losses decreased $2.5 million, non-interest income increased $512,000, or 15.1%, and non-interest expense increased $158,000, or 1.0%. Return on average assets and return on average equity were 0.91% and 10.1%, respectively, for the three months ended September 30, 2026, compared to 0.53% and 5.84%, respectively, for the three months ended June 30, 2026.
Net Interest Income and Net Interest Margin
Net interest income, our primary driver of revenues, increased $673,000, or 3.5%, from $19.3 million for the three months ended June 30, 2026, to $20.0 million for the three months ended September 30, 2026. The increase in net interest income was due to an increase in interest and dividend income of $522,000, or 1.7%, and a decrease in interest expense of $151,000, or 1.3%.
During the three months ended September 30, 2026, the net interest margin was 3.07%, compared to 3.00% for the three months ended June 30, 2026. The net interest margin, on a tax-equivalent basis (a non-GAAP financial measure), was 3.09% for the three months ended September 30, 2026, compared to 3.02% for the three months ended June 30, 2026. The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased four basis points from 4.77% for the three months ended June 30, 2026, to 4.81% for the three months ended September 30, 2026. The average loan yield, without the impact of tax-equivalent adjustments, increased four basis points from 5.12% for the three months ended June 30, 2026, to 5.16% for the three months ended September 30, 2026. See pages 20-22 for the related net interest margin calculations and a reconciliation of GAAP to non-GAAP financial measures.
For the three months ended September 30, 2026, the average cost of core deposits, which the Company defines as all deposits except time deposits, was 1.01% compared to 1.03% for the three months ended June 30, 2026. The average cost of time deposits decreased one basis point from 3.38% for the three months ended June 30, 2026, to 3.37% for the three months ended September 30, 2026. The average cost of borrowings, including subordinated debt, increased 71 basis points from 5.15% for the three months ended June 30, 2026, to 5.86% for the three months ended September 30, 2026. During the same period, average borrowings decreased $32.6 million, or 37.9%. Average demand deposits, an interest-free source of funds, increased $15.3 million, or 2.6%, from $593.1 million, or 24.9% of total average deposits, for the three months ended June 30, 2026, to $608.4 million, or 25.2% of total average deposits, for the three months ended September 30, 2026. For the three months ended September 30, 2026, the average cost of total funds, including non-interest-bearing accounts and borrowings, decreased four basis points to 1.82%.
Provision for (Reversal of) Credit Losses
The Company recorded a reversal of credit losses of $971,000 for the three months ended September 30, 2026, compared to a provision for credit losses of $1.6 million during the three months ended June 30, 2026. The decrease of $2.5 million in the provision for credit losses for the three months ended September 30, 2026 was determined by a number of factors, including a decrease in net charge-offs, paydowns in the loan portfolio, changes in the loan portfolio mix, and Management’s consideration of existing economic conditions, including a slight improvement in the quarterly economic outlook from the Federal Reserve Bank. During the three months ended June 30, 2026, the provision for credit losses included a partial charge-off of $1.8 million on a non-owner occupied commercial real estate participation loan relationship (“participation loan”) secured by an office building. In June 2026, the Company was notified by the lead bank of the participation loan that on June 4, 2026, the borrower filed for Chapter 11 Bankruptcy (“Bankruptcy Filing”). Immediately prior to notification of the Bankruptcy Filing, the Company’s 40% portion of the participation loan had a carrying value of $3.4 million and the borrower was then current with its scheduled payments. At September 30, 2026, the relationship was past due and is included in nonaccrual loans. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, increased energy costs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
3
During the three months ended September 30, 2026, the Company recorded net recoveries of $274,000, or 0.05% of average loans, on an annualized basis, compared to net charge-offs of $1.8 million, or 0.33% of average loans, on an annualized basis, for the three months ended June 30, 2026. The net charge-offs recorded during the three months ended June 30, 2026, were attributable to the $1.8 million charge-off of the participation loan discussed above.
Non-Interest Income
For the three months ended September 30, 2026, non-interest income was $3.9 million, an increase of $512,000, or 15.1%, from the three months ended June 30, 2026. During the three months ended September 30, 2026, the Company reported the sale of two buildings located at 219 and 229 Exchange Street, Chicopee, Massachusetts to the City of Chicopee. The transaction resulted in a total gross cash consideration of $2.4 million and a gain of $712,000 on the sale. Excluding the gain, non-interest income decreased $200,000, or 5.9%. Service charges and fees on deposits decreased $157,000, or 6.5%, from $2.4 million for the three months ended June 30, 2026, to $2.3 million for the three months ended September 30, 2026. During the three months ended June 30, 2026, service charges and fees on deposits included annual VISA incentives due to increased transaction volumes.
Income from bank-owned life insurance (“BOLI”) decreased $19,000, or 3.6%, from the three months ended June 30, 2026, to $516,000 for the three months ended September 30, 2026. During the three months ended September 30, 2026, the Company reported unrealized losses on marketable equity securities of $2,000, compared to unrealized gains of $47,000 during the three months ended June 30, 2026. For the three months ended September 30, 2026, and the three months ended June 30, 2026, wealth management income totaled $382,000 and $389,000, respectively. During the same period, assets under management increased from $256.6 million at June 30, 2026, to $261.4 million at September 30, 2026, reflecting net investment appreciation and assets acquired.
Non-Interest Expense
For the three months ended September 30, 2026, non-interest expense increased $158,000, or 1.0%, to $16.5 million from the three months ended June 30, 2026. During the three months ended September 30, 2026, salaries and employee benefits expense increased $128,000, or 1.4%, primarily due to one additional day of payroll expense. Debit card processing and ATM network costs increased $70,000, or 10.9%, furniture and equipment expense increased $29,000, or 7.2%, data processing expense increased $12,000, or 1.2%, FDIC insurance expense increased $4,000, or 1.1%, and other non-interest expense increased $43,000, or 3.1%. These increases were partially offset by a decrease in professional fees of $82,000, or 13.2%, a decrease in software-related expenses of $42,000, or 5.9%, and a decrease in advertising expense of $5,000, or 1.1%.
For the three months ended September 30, 2026, and the three months ended June 30, 2026, the efficiency ratio was 69.1% and 72.0%, respectively. The decrease in the efficiency ratio was driven by an increase in total revenues, defined as the sum of net interest income and non-interest income, of $1.2 million, or 5.2%, during the three months ended September 30, 2026, compared to the three months ended June 30, 2026.
Income Tax Provision
Income tax expense for the three months ended September 30, 2026 was $2.1 million, with an effective tax rate of 24.6%, compared to $1.2 million, with an effective tax rate of 25.1%, for the three months ended June 30, 2026. The increase is due to higher projected pre-tax income for the twelve months ended December 31, 2026.
4
Net Income for the Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025
The Company reported an increase in net income of $3.1 million, or 98.9%, from $3.2 million, or $0.16 per diluted share, for the three months ended September 30, 2025 to $6.3 million, or $0.32 per diluted share, for the three months ended September 30, 2026. Net interest income increased $1.9 million, or 10.5%, provision for credit losses decreased $2.3 million, non-interest income increased $733,000, or 23.1%, and non-interest expense increased $735,000, or 4.7%, during the same period. Return on average assets and return on average equity were 0.91% and 10.1%, respectively, for the three months ended September 30, 2026, compared to 0.46% and 5.20%, respectively, for the three months ended September 30, 2025.
Net Interest Income and Net Interest Margin
Net interest income increased $1.9 million, or 10.5%, to $20.0 million, for the three months ended September 30, 2026, from $18.1 million for the three months ended September 30, 2025. The increase in net interest income was due to an increase in interest and dividend income of $1.3 million, or 4.2%, and a decrease in interest expense of $632,000, or 5.3%.
The net interest margin increased 26 basis points from 2.81% for the three months ended September 30, 2025 to 3.07% for the three months ended September 30, 2026. The net interest margin, on a tax-equivalent basis (a non-GAAP financial measure), increased 26 basis points from 2.83%, for the three months ended September 30, 2025 to 3.09% for the three months ended September 30, 2026. The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 14 basis points from 4.67% for the three months ended September 30, 2025 to 4.81%, for the three months ended September 30, 2026. The average loan yield, without the impact of tax-equivalent adjustments, increased 15 basis points from 5.01% for the three months ended September 30, 2025 to 5.16% for the three months ended September 30, 2026. During the three months ended September 30, 2026, average interest-earning assets increased $27.8 million, or 1.1% to $2.6 billion, primarily due to an increase in average loans of $79.1 million, or 3.7%, partially offset by a decrease in average securities of $25.0 million, or 6.7%, and a decrease in average short-term investments, consisting of cash and cash equivalents, of $24.1 million, or 46.1%. See pages 20-22 for the related net interest margin calculations and a reconciliation of GAAP to non-GAAP financial measures.
The average cost of total funds, including non-interest-bearing accounts and borrowings, decreased 12 basis points from 1.94% for the three months ended September 30, 2025 to 1.82% for the three months ended September 30, 2026. The average cost of core deposits, which the Company defines as all deposits except time deposits, decreased three basis points from 1.04% for the three months ended September 30, 2025 to 1.01% for the three months ended September 30, 2026. The average cost of time deposits decreased 14 basis points from 3.51% for the three months ended September 30, 2025 to 3.37% for the three months ended September 30, 2026. The average cost of borrowings, including subordinated debt, increased 83 basis points from 5.03% for the three months ended September 30, 2025 to 5.86%, for the three months ended September 30, 2026. Average borrowings decreased $68.1 million, or 56.1%, from the three months ended September 30, 2025, to the three months ended September 30, 2026. Average demand deposits, an interest-free source of funds, increased $26.5 million, or 4.6%, from $581.8 million, or 25.0% of total average deposits, for the three months ended September 30, 2025, to $608.4 million, or 25.2% of total average deposits, for the three months ended September 30, 2026.
Provision for (Reversal of) Credit Losses
During the three months ended September 30, 2026, the Company recorded a reversal of credit losses of $971,000, compared to a provision for credit losses of $1.3 million, during the three months ended September 30, 2025. The decrease of $2.3 million in the provision for credit losses for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was determined by a number of factors, including paydowns in the loan portfolio, changes in the loan portfolio mix, a decrease in unfunded commitments, and Management’s consideration of existing economic conditions, including a slight improvement in the quarterly economic outlook from the Federal Reserve Bank. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, increased energy costs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
5
The Company recorded net recoveries of $274,000, or 0.05% of average loans, on an annualized basis, for the three months ended September 30, 2026, as compared to net charge-offs of $43,000, or 0.01% of average loans, on an annualized basis, for the three months ended September 30, 2025.
Non-Interest Income
Non-interest income increased $733,000, or 23.1%, to $3.9 million for the three months ended September 30, 2026, from $3.2 million for the three months ended September 30, 2025. During the three months ended September 30, 2026, the Company reported the sale of two buildings located at 219 and 229 Exchange Street, Chicopee, and recorded a gain of $712,000, as discussed above. During the three months ended September 30, 2026, service charges and fees on deposits increased $66,000, or 3.0%, income from BOLI increased $34,000, or 7.1%, from $482,000 for the three months ended September 30, 2025 to $516,000 for the three months ended September 30, 2026. During the three months ended September 30, 2025, the Company reported $117,000 in other income from loan-level swap fees on commercial loans and did not have comparable income during the three months ended September 30, 2026.
During the three months ended September 30, 2026, the Company reported an unrealized loss on marketable equity securities of $2,000, compared to an unrealized gain on marketable equity securities of $22,000, during the three months ended September 30, 2025. During the three months ended September 30, 2026, the Company reported a gain of $33,000 on non-marketable equity investments and did not have comparable income during the three months ended September 30, 2025. For the three months ended September 30, 2026, and the three months ended September 30, 2025, wealth management income totaled $382,000 and $353,000, respectively.
Non-Interest Expense
For the three months ended September 30, 2026, non-interest expense increased $735,000, or 4.7%, to $16.5 million from $15.8 million for the three months ended September 30, 2025. Salaries and employee benefits expense increased $395,000, or 4.3%, to $9.6 million, due to annual merit increases, an increase in deferred compensation expense to reflect updated performance award estimates and an increase in health insurance benefits. Occupancy expense increased $83,000, or 6.7%, debit card processing and ATM network costs increased $81,000, or 12.8%, professional fees increased $80,000, or 17.4%, data processing expense increased $57,000, or 6.2%, advertising expense increased $19,000, or 4.4%, software-related expenses increased $18,000, or 2.8%, FDIC insurance expense increased $5,000, or 1.3%, other non-interest expense increased $17,000, or 1.2%, and furniture and equipment expense decreased $20,000, or 4.4%.
For the three months ended September 30, 2026, the efficiency ratio was 69.1%, compared to 74.2% for the three months ended September 30, 2025. The decrease in the efficiency ratio was driven by an increase in total revenues, defined as the sum of net interest income and non-interest income, of $2.6 million, or 12.4%, during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.
Income Tax Provision
Income tax expense for the three months ended September 30, 2026 was $2.1 million, or an effective tax rate of 24.6%, compared to $1.0 million, or an effective tax rate of 24.5%, for the three months ended September 30, 2025. The increase is due to higher projected pre-tax income for the twelve months ended December 31, 2026.
Net Income for the Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
For the nine months ended September 30, 2026, the Company reported net income of $14.7 million, or $0.74 per diluted share, compared to $10.1 million, or $0.50 per diluted share, for the nine months ended September 30, 2025. Net interest income increased $6.9 million, or 13.4%, provision for credit losses decreased $159,000, non-interest income increased $1.4 million, or 14.9%, and non-interest expense increased $2.3 million, or 4.8%, during the same period. Return on average assets and return on average equity were 0.72% and 7.90% for the nine months ended September 30, 2026, respectively, compared to 0.50% and 5.64% for the nine months ended September 30, 2025, respectively.
6
Net Interest Income and Net Interest Margin
During the nine months ended September 30, 2026, net interest income increased $6.9 million, or 13.4%, to $58.1 million, compared to $51.3 million for the nine months ended September 30, 2025. The increase in net interest income was primarily due to an increase in interest and dividend income of $4.3 million, or 4.9%, and a decrease in interest expense of $2.6 million, or 7.0%.
For the nine months ended September 30, 2026, the net interest margin increased 31 basis points from 2.70% for the nine months ended September 30, 2025 to 3.01%. The net interest margin, on a tax-equivalent basis (a non-GAAP financial measure), was 2.72% for the nine months ended September 30, 2025, compared to 3.02% for the nine months ended September 30, 2026. During the nine months ended September 30, 2026, the Company recorded $98,000 in prepayment penalties related to payoffs in the commercial portfolio, compared to $459,000 during the nine months ended September 30, 2025. For the nine months ended September 30, 2026 and the nine months ended September 30, 2025, excluding the prepayment penalties, the net interest margin increased 32 basis points from 2.68%, to 3.00%, respectively. See pages 20-22 for the related net interest margin calculations and a reconciliation of GAAP to non-GAAP financial measures.
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.78% for the nine months ended September 30, 2026, compared to 4.64% for the nine months ended September 30, 2025. The average loan yield, without the impact of tax-equivalent adjustments, was 5.12% for the nine months ended September 30, 2026, compared to 4.98% for the nine months ended September 30, 2025. During the nine months ended September 30, 2026, average interest-earning assets increased $48.2 million, or 1.9%, to $2.6 billion, from the same period in 2025. The increase was primarily due to an increase in average loans of $100.1 million, or 4.8%, partially offset by a decrease in average short-term investments, consisting of cash and cash equivalents, of $35.9 million, or 57.6%, and a decrease in average securities of $15.3 million, or 4.1%.
The average cost of total funds, including non-interest-bearing accounts and borrowings, was 1.85% for the nine months ended September 30, 2026, compared to 2.02% for the nine months ended September 30, 2025. The average cost of core deposits, which the Company defines as all deposits except time deposits, decreased two basis points to 1.02% for the nine months ended September 30, 2026, from 1.04% for the nine months ended September 30, 2025. The average cost of time deposits decreased 38 basis points from 3.77% for the nine months ended September 30, 2025 to 3.39% for the nine months ended September 30, 2026. The average cost of borrowings, including subordinated debt, increased seven basis points from 5.04% for the nine months ended September 30, 2025 to 5.11% for the nine months ended September 30, 2026. Average demand deposits, an interest-free source of funds, increased $21.9 million, or 3.8%, from $574.8 million, or 24.9% of total average deposits, for the nine months ended September 30, 2025 to $596.7 million, or 25.0% of total average deposits, for the nine months ended September 30, 2026.
Provision for (Reversal of) Credit Losses
During the nine months ended September 30, 2026, the Company recorded a provision for credit losses of $661,000, compared to a provision for credit losses of $820,000, during the nine months ended September 30, 2025. The decrease of $159,000, or 19.4%, in the provision for credit losses was primarily due to an increase in total loans of $11.1 million, or 0.5%, during the nine months ended September 30, 2026, compared to an increase in total loans of $60.8 million, or 2.9%, during the nine months ended September 30, 2025. The provision for credit losses for the nine months ended September 30, 2026 was determined by a number of factors, including paydowns in the loan portfolio, changes in the loan portfolio mix, a decrease in unfunded commitments, and Management’s consideration of existing economic conditions, including a slight improvement in the quarterly economic outlook from the Federal Reserve Bank. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, increased energy costs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
Net charge-offs for the nine months ended September 30, 2026 were $1.6 million, or 0.10% of average loans, on an annualized basis, compared to net recoveries of $513,000, or 0.03% of average loans, on an annualized basis, for the nine months ended September 30, 2025. During the nine months ended September 30, 2026, the increase in net charge-offs was due to the partial charge-off of $1.8 million on the participation loan discussed above. During the nine months ended September 30, 2025, the Company recorded a recovery of $624,000 on a previously charged-off commercial relationship.
7
Non-Interest Income
For the nine months ended September 30, 2026, non-interest income increased $1.4 million, or 14.9%, from $9.3 million, during the nine months ended September 30, 2025 to $10.7 million. During the nine months ended September 30, 2026, the Company reported the sale of two buildings located at 219 and 229 Exchange Street, Chicopee, and recorded a gain of $712,000, as discussed above. During the nine months ended September 30, 2026, non-interest income also included the recognition of $450,000 in BOLI death benefits. Excluding the gain on the sale of premises and equipment and the BOLI death benefit, non-interest income increased $228,000, or 2.4%. For the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, service charges and fees on deposits increased $361,000, or 5.6%, due to increased transaction volumes, wealth management income increased $254,000, or 28.0%, and income from BOLI increased $56,000, or 3.8%. During the nine months ended September 30, 2026, the Company reported a gain of $33,000 on non-marketable equity investments, compared to a gain of $243,000 during the nine months ended September 30, 2025. During the nine months ended September 30, 2026, the Company reported unrealized gains on marketable equity securities of $32,000, compared to unrealized gains on marketable equity securities of $42,000 during the nine months ended September 30, 2025. Gains and losses from the investment portfolio vary from quarter to quarter based on market conditions, as well as the related yield curve and valuation changes. During the nine months ended September 30, 2025, the Company reported $212,000 in other income from loan-level swap fees on commercial loans and did not have comparable income during the nine months ended September 30, 2026.
Non-Interest Expense
For the nine months ended September 30, 2026, non-interest expense increased $2.3 million, or 4.8%, to $48.9 million, compared to $46.6 million for the nine months ended September 30, 2025. The increase in non-interest expense was primarily due to an increase in salaries and employee benefits expense of $1.9 million, or 7.0%, due to annual merit increases, an increase in deferred compensation expense to reflect updated performance award estimates, and an increase in health insurance benefits. Occupancy expense increased $287,000, or 7.3%, due to an increase in snow removal costs of $111,000, or 75.9%, debit card and ATM processing fees increased $137,000, or 7.3%, software-related expenses increased $115,000, or 5.9%, advertising expense increased $46,000, or 3.5%, professional fees increased $42,000, or 2.6%, and data processing expense increased $24,000, or 0.9%. These increases were partially offset by a decrease in furniture and equipment expense of $161,000, or 11.3%, a decrease in FDIC insurance expense of $56,000, or 4.6%, and a decrease in other non-interest expense of $32,000, or 0.8%.
For the nine months ended September 30, 2026, the efficiency ratio was 71.0%, compared to 76.9% for the nine months ended September 30, 2025. The decrease in the efficiency ratio was driven by an increase in total revenues, defined as the sum of net interest income and non-interest income, of $8.3 million, or 13.6%, during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.
Income Tax Provision
Income tax expense for the nine months ended September 30, 2026 was $4.7 million, representing an effective tax rate of 24.1%, compared to $3.1 million, representing an effective tax rate of 23.6%, for the nine months ended September 30, 2025. The increase is due to higher projected pre-tax income for the twelve months ended December 31, 2026.
Balance Sheet
At September 30, 2026, total assets were $2.7 billion, representing an increase of $9.7 million, or 0.4%, compared to December 31, 2025. The increase in total assets was primarily due to an increase in cash and cash equivalents of $22.4 million, or 55.4%, and an increase in total loans of $11.1 million, or 0.5%, partially offset by a decrease in investment securities of $25.8 million, or 7.1%.
8
Investments
At September 30, 2026, the investment securities portfolio totaled $339.4 million, or 12.4% of total assets, compared to $365.2 million, or 13.3% of total assets, at December 31, 2025. At September 30, 2026, the Company’s available-for-sale securities portfolio, recorded at fair market value, decreased $14.9 million, or 8.5%, from $175.8 million at December 31, 2025 to $160.9 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $10.9 million, or 5.8%, from $188.8 million at December 31, 2025, to $177.9 million at September 30, 2026.
At September 30, 2026, the Company reported net unrealized losses on the available-for-sale securities portfolio of $31.1 million, or 16.2% of the amortized cost basis of the available-for-sale securities portfolio, compared to unrealized losses of $22.4 million, or 11.3% of the amortized cost basis of the available-for-sale securities at December 31, 2025. At September 30, 2026, the Company reported net unrealized losses on the held-to-maturity securities portfolio of $39.6 million, or 22.3% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $30.3 million, or 16.1% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2025.
The securities in which the Company may invest are limited by regulation. Federally chartered savings banks have authority to invest in various types of assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises, mortgage-backed securities, certain certificates of deposit of insured financial institutions, repurchase agreements, overnight and short-term loans to other banks, corporate debt instruments and marketable equity securities. The securities, with the exception of $15.4 million in corporate bonds, are issued by the United States government or government-sponsored enterprises and are therefore either explicitly or implicitly guaranteed as to the timely payment of contractual principal and interest. These positions are deemed to have no credit impairment, therefore, the disclosed unrealized losses within the securities portfolio relate primarily to changes in prevailing interest rates. Absent credit deterioration or other adverse factors, unrealized losses attributable to interest-rate movements would generally be expected to diminish as the securities approach maturity.
Management regularly reviews the portfolio for securities in an unrealized loss position. At September 30, 2026, and December 31, 2025, the Company did not record any credit impairment charges on its securities portfolio and attributed the unrealized losses primarily due to fluctuations in general interest rates or changes in expected prepayments and not due to credit quality. The primary objective of the Company’s investment portfolio is to provide liquidity and to secure municipal deposit accounts while preserving the safety of principal. The available-for-sale and held-to-maturity portfolios are both eligible for pledging to the Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) as collateral for borrowings. The portfolios are comprised of high-credit quality investments and both portfolios generated cash flows monthly from interest, principal amortization and payoffs, which supports the Bank's objective to provide liquidity.
Total Loans
Total loans increased $11.1 million, or 0.5%, from $2.2 billion, or 79.7% of total assets, at December 31, 2025, to $2.2 billion, or 79.8% of total assets, at September 30, 2026. The increase in total loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $57.3 million, or 6.7%, partially offset by a decrease in commercial real estate loans of $40.6 million, or 3.7%, and a decrease in commercial and industrial loans of $4.9 million, or 2.2%. The decrease in commercial real estate loans was primarily driven by an increased level of prepayments in the commercial real estate loan portfolio and a broader slowdown in commercial real estate lending activity, as well as the partial charge-off of $1.8 million on the participation loan discussed above. Non-owner occupied commercial real estate loans decreased $31.1 million, or 3.4%, to $879.2 million, or 40.1% of total loans and owner-occupied commercial real estate loans decreased $9.5 million, or 5.0%, to $179.3 million, or 8.2% of total loans.
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The following table presents a summary of the loan portfolio by the major classification of loans at the periods indicated:
| September 30, 2026 | December 31, 2025 | |||||||
| (Dollars in thousands) | ||||||||
| Commercial real estate loans: | ||||||||
| Non-owner occupied | $ | 879,181 | $ | 910,239 | ||||
| Owner occupied | 179,309 | 188,824 | ||||||
| Total commercial real estate loans | 1,058,490 | 1,099,063 | ||||||
| Residential real estate loans: | ||||||||
| Residential one-to-four family | 768,537 | 719,070 | ||||||
| Home equity | 145,670 | 137,801 | ||||||
| Total residential real estate loans | 914,207 | 856,871 | ||||||
| Commercial and industrial loans | 216,889 | 221,790 | ||||||
| Consumer loans | 2,125 | 2,929 | ||||||
| Total loans | 2,191,711 | 2,180,653 | ||||||
| Unamortized premiums and net deferred loan fees and costs | 3,485 | 2,939 | ||||||
| Total loans, including unamortized premiums and net deferred loan fees and costs | $ | 2,195,196 | $ | 2,183,592 | ||||
Credit Quality
Total delinquency was $9.1 million, or 0.41% of total loans, at September 30, 2026, compared to $3.1 million, or 0.14% of total loans at December 31, 2025. Of the $9.1 million in past due loans, 74.1% are residential real estate loans, which include home equity loans. At September 30, 2026, nonaccrual loans totaled $7.9 million, or 0.36% of total loans, compared to $5.2 million, or 0.24% of total loans, at December 31, 2025. The increase in nonaccrual loans was primarily attributable to the participation loan discussed above, which was placed on nonaccrual status following the borrower’s Bankruptcy Filing. At September 30, 2026, and December 31, 2025, there were no loans 90 or more days past due and still accruing interest. Total nonperforming assets, defined as nonaccrual loans and other real estate owned, totaled $7.9 million, or 0.29% of total assets, at September 30, 2026, compared to $5.2 million, or 0.19% of total assets, at December 31, 2025. At September 30, 2026, and December 31, 2025, the Company did not have any other real estate owned.
At September 30, 2026, the allowance for credit losses was $19.6 million, or 0.89% of total loans and 248.4% of nonaccrual loans, compared to $20.3 million, or 0.93% of total loans and 393.2% of nonaccrual loans, at December 31, 2025. The decrease in the allowance for credit losses as a percentage of nonaccrual loans was due to an increase in nonaccrual loans from $5.2 million at December 31, 2025, to $7.9 million at September 30, 2026.
At September 30, 2026, total criticized loans, defined as special mention and substandard loans, totaled $57.7 million, or 2.6% of total loans, compared to $39.7 million, or 1.8% of total loans, at December 31, 2025. Loans designated special mention, which are not considered classified, increased $10.8 million, from $17.2 million, or 0.8% of total loans, at December 31, 2025, to $28.0 million, or 1.3% of total loans, at September 30, 2026. During the same period, substandard loans increased $7.2 million, or 32.0%, to $29.7 million, or 1.4% of total loans.
Of the $28.0 million in loans designated special mention at September 30, 2026, $15.6 million, or 55.7%, are commercial and industrial loans, and $12.4 million, or 44.3%, are commercial real estate loans. Of the $29.7 million in loans categorized substandard at September 30, 2026, $4.1 million, or 13.8%, are commercial and industrial loans, $20.2 million, or 68.0%, are commercial real estate loans, and $5.4 million, or 18.2%, are residential real estate loans. Of the total $57.7 million in criticized loans at September 30, 2026, 93.1% are current and paying as agreed.
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The increase in special mention loans from December 31, 2025 to September 30, 2026 resulted from the downgrade of two commercial relationships totaling $21.5 million, from a pass risk rating to special mention. The increase in substandard loans from December 31, 2025 to September 30, 2026 resulted from the downgrade of the participation loan with a carrying value of $1.6 million, net of the $1.8 million charge-off, discussed above. In the third quarter of 2026, an $11.5 million commercial loan relationship was downgraded from special mention to substandard and a $5.8 million commercial loan relationship was upgraded from substandard to special mention. Management continues to closely monitor the loan portfolio for any signs of weakness due to the speculation that commercial real estate values may deteriorate as the market continues to adjust to higher vacancies and higher interest rates as well as any signs of deterioration in the borrower’s financial condition. Management will continue to proactively take steps to mitigate risk in the loan portfolio.
Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At September 30, 2026, the commercial real estate portfolio totaled $1.1 billion and represented 48.3% of total loans. Of the $1.1 billion, $879.2 million, or 83.1% of the commercial real estate portfolio, was categorized as non-owner occupied commercial real estate and represented 314.1% of the Bank’s total risk-based capital. More details on the diversification of the loan portfolio are available in the supplementary earnings presentation.
Deposits
At September 30, 2026, total deposits were $2.4 billion and increased $67.2 million, or 2.8%, from December 31, 2025. Core deposits, which the Company defines as all deposits except time deposits, increased $25.0 million, or 1.5%, from $1.7 billion, or 70.8% of total deposits, at December 31, 2025, to $1.7 billion, or 69.8% of total deposits, at September 30, 2026. Non-interest-bearing deposits increased $20.7 million, or 3.5%, to $615.2 million, and represented 25.3% of total deposits, money market accounts increased $22.9 million, or 3.2%, to $738.5 million, and savings accounts increased $1.5 million, or 0.8%, to $188.1 million. These increases were partially offset by a decrease in interest-bearing checking accounts of $20.0 million, or 11.5%, to $154.2 million.
At September 30, 2026, time deposits increased $42.2 million, or 6.1%, from $689.9 million at December 31, 2025, to $732.1 million. The Company did not have brokered time deposits at September 30, 2026 and December 31, 2025. We continue our disciplined and focused approach to core relationship management and customer outreach to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term core customer relationship base by competing for and retaining deposits in our local market.
At September 30, 2026, the Bank’s uninsured deposits totaled $749.1 million, or 30.8% of total deposits, compared to $697.6 million, or 29.5% of total deposits, at December 31, 2025. Uninsured amounts were based on the portion of customer account balances that exceeded the FDIC limit of $250,000. At September 30, 2026, there was one consumer deposit relationship, which is our largest deposit relationship, with a household concentration comprising 6.1% of total deposits, compared to 5.0% of total deposits at December 31, 2025. The next largest deposit relationship is to a local municipality with a concentration of 1.2% of total deposits at September 30, 2026, and 1.9% at December 31, 2025.
The table below is a summary of our deposit balances for the periods noted:
| At September 30, 2026 | At December 31, 2025 | |||||||||||||||
| Balance | % of Total Deposits | Balance | % of Total Deposits | |||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Demand and interest-bearing checking: | ||||||||||||||||
| Demand deposit accounts | $ | 615,171 | 25.3 | % | $ | 594,516 | 25.2 | % | ||||||||
| Interest-bearing checking accounts | 154,243 | 6.4 | % | 174,227 | 7.4 | % | ||||||||||
| Savings: | ||||||||||||||||
| Regular savings accounts | 188,065 | 7.7 | % | 186,597 | 7.9 | % | ||||||||||
| Money market accounts | 738,523 | 30.4 | % | 715,620 | 30.3 | % | ||||||||||
| Total core deposits | 1,696,002 | 69.8 | % | 1,670,960 | 70.8 | % | ||||||||||
| Time deposits | 732,114 | 30.2 | % | 689,948 | 29.2 | % | ||||||||||
| Total deposits | $ | 2,428,116 | 100.0 | % | $ | 2,360,908 | 100.0 | % | ||||||||
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FHLB and Subordinated Debt
At September 30, 2026, total borrowings decreased $55.1 million, or 51.9%, from $106.1 million at December 31, 2025, to $51.0 million. At September 30, 2026, short-term borrowings decreased $7.1 million, or 53.7%, to $6.1 million, compared to $13.3 million at December 31, 2025. At September 30, 2026, long-term borrowings decreased $48.0 million, or 65.8%, to $25.0 million from $73.0 million at December 31, 2025.
At September 30, 2026, and December 31, 2025, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes (“Notes”). On April 20, 2021, the Company issued $20.0 million in aggregate principal amount of fixed-to-floating rate Notes due on May 1, 2031. On May 1, 2026, the Company’s Notes converted from an annual fixed rate of 4.875% to a floating rate equal to the 90-day average secured overnight financing rate (“SOFR”) plus 412 basis points. The Company has the ability to call the Notes, in whole or in part, on or after May 1, 2026, and at any time upon the occurrence of certain events, subject in each case to the approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Notes were designed to qualify as Tier 2 capital under the Federal Reserve’s capital adequacy regulations.
As of September 30, 2026, the Company had $615.6 million of additional borrowing capacity at the FHLB, $354.4 million of additional borrowing capacity under the FRB Discount Window and $25.0 million of other unsecured lines of credit with correspondent banks.
Capital
At September 30, 2026, shareholders’ equity was $244.7 million, or 8.9% of total assets, compared to $247.6 million, or 9.1% of total assets, at December 31, 2025. The change was primarily attributable to net income of $14.7 million, partially offset by an increase of $6.4 million in accumulated other comprehensive loss, cash dividends paid of $4.2 million and the repurchase of 596,000 shares of common stock at a cost of $8.2 million. At September 30, 2026, total shares outstanding were 19,830,872. The Company’s regulatory capital ratios continue to be strong and in excess of regulatory minimum requirements to be considered well-capitalized as defined by regulators and internal Company targets.
| September 30, 2026 | December 31, 2025 | |||||||||||||||
| Company | Bank | Company | Bank | |||||||||||||
| Total Capital (to Risk Weighted Assets) | 14.04% | 13.54% | 14.19% | 13.48% | ||||||||||||
| Tier 1 Capital (to Risk Weighted Assets) | 12.31% | 12.58% | 12.21% | 12.46% | ||||||||||||
| Common Equity Tier 1 Capital (to Risk Weighted Assets) | 12.31% | 12.58% | 12.21% | 12.46% | ||||||||||||
| Tier 1 Leverage Ratio (to Adjusted Average Assets) | 9.27% | 9.47% | 9.13% | 9.32% | ||||||||||||
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.
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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, and 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:
| • | unpredictable changes in general economic or political conditions, financial markets, fiscal, monetary and regulatory policies, including actual or potential stress in the banking industry; |
| • | the possibility that future credit losses, loan defaults and charge-off rates are higher than expected due to changes in economic assumptions or adverse economic developments; |
| • | general business and economic conditions on a national basis and in the local markets in which we operate, including those impacting credit quality; |
| • | unstable political and economic conditions, including changes in tariff policies, which could materially impact credit quality trends and the ability to generate loans and gather deposits; |
| • | inflation and governmental responses to inflation, including potential future increases in interest rates that reduce net interest 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 Wall Street Reform and Consumer Protection Act of 2010, Basel guidelines, capital requirements and other applicable laws and regulations; |
| • | changes in regulation, regulatory policy, legislation, accounting standards and practices, and fiscal monetary policy, particularly in light of the shift in presidential administrations and the potential for related shifts in agency policy and leadership; |
| • | operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity incidents, technological integration, including AI, vendor issues, business interruption, and fraud risks; |
| • | significant changes in accounting, tax or regulatory practices or requirements; |
| • | new legal obligations or liabilities or unfavorable resolutions or litigation; |
| • | disruptive technologies in payment systems and other services traditionally provided by financial institutions; |
| • | the risk that we may not be successful in the implementation of our business strategy; |
| • | severe weather, natural disasters, pandemics, acts of war, or terrorism and other external events which could significantly impact our business; |
| • | declines in real estate values in the Company’s market area, which may adversely affect our loan production; |
| • | decreases in the value of securities and other assets, or changes in the securities markets which affect investment management revenue; |
| • | decreases in deposit levels necessitating increased borrowing to fund loans, investments and other needs; |
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| • | competitive pressures from other financial institutions; |
| • | the soundness of other financial services institutions which may adversely affect our credit risk; |
| • | failure or circumvention of our internal controls or procedures; |
| • | the risk that goodwill and intangibles recorded in our financial statements will become impaired; |
| • | increases in Federal Deposit Insurance Corporation deposit insurance premiums and assessments; |
| • | introduction of 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; and |
| • | other risks and uncertainties detailed in Part 1A “Risk Factors” of the Company’s 2025 Annual Report on Form 10-K. |
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.
14
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 | Nine Months Ended | |||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | |||||||||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| INTEREST AND DIVIDEND INCOME: | ||||||||||||||||||||||||||||
| Loans | $ | 28,497 | $ | 27,960 | $ | 27,440 | $ | 27,491 | $ | 26,690 | $ | 83,897 | $ | 77,888 | ||||||||||||||
| Securities | 2,457 | 2,457 | 2,505 | 2,588 | 2,617 | 7,419 | 7,627 | |||||||||||||||||||||
| Other investments | 124 | 156 | 147 | 164 | 166 | 427 | 526 | |||||||||||||||||||||
| Short-term investments | 225 | 208 | 189 | 294 | 560 | 622 | 2,041 | |||||||||||||||||||||
| Total interest and dividend income | 31,303 | 30,781 | 30,281 | 30,537 | 30,033 | 92,365 | 88,082 | |||||||||||||||||||||
| INTEREST EXPENSE: | ||||||||||||||||||||||||||||
| Deposits | 10,522 | 10,358 | 9,978 | 10,296 | 10,403 | 30,858 | 32,216 | |||||||||||||||||||||
| Short-term borrowings | 81 | 236 | 322 | 85 | 39 | 639 | 140 | |||||||||||||||||||||
| Long-term debt | 308 | 515 | 902 | 1,073 | 1,245 | 1,725 | 3,696 | |||||||||||||||||||||
| Subordinated debt | 398 | 351 | 254 | 254 | 254 | 1,003 | 762 | |||||||||||||||||||||
| Total interest expense | 11,309 | 11,460 | 11,456 | 11,708 | 11,941 | 34,225 | 36,814 | |||||||||||||||||||||
| Net interest and dividend income | 19,994 | 19,321 | 18,825 | 18,829 | 18,092 | 58,140 | 51,268 | |||||||||||||||||||||
| (REVERSAL OF) PROVISION FOR CREDIT LOSSES | (971 | ) | 1,557 | 75 | (485 | ) | 1,293 | 661 | 820 | |||||||||||||||||||
| Net interest and dividend income after (reversal of) provision for credit losses | 20,965 | 17,764 | 18,750 | 19,314 | 16,799 | 57,479 | 50,448 | |||||||||||||||||||||
| NON-INTEREST INCOME: | ||||||||||||||||||||||||||||
| Service charges and fees on deposits | 2,265 | 2,422 | 2,131 | 2,234 | 2,199 | 6,818 | 6,457 | |||||||||||||||||||||
| Wealth management income | 382 | 389 | 390 | 319 | 353 | 1,161 | 907 | |||||||||||||||||||||
| Income from bank-owned life insurance | 516 | 535 | 476 | 492 | 482 | 1,527 | 1,471 | |||||||||||||||||||||
| Gain on sale of premises and equipment | 712 | – | – | – | – | 712 | – | |||||||||||||||||||||
| Gain on bank-owned life insurance death benefits | – | 1 | 449 | – | – | 450 | – | |||||||||||||||||||||
| Unrealized (loss) gain on marketable equity securities | (2 | ) | 47 | (13 | ) | (7 | ) | 22 | 32 | 42 | ||||||||||||||||||
| Gain on mortgage banking activity | – | – | – | – | – | – | 11 | |||||||||||||||||||||
| Gain on non-marketable equity investments | 33 | – | – | – | – | 33 | 243 | |||||||||||||||||||||
| Other income | – | – | – | 135 | 117 | – | 212 | |||||||||||||||||||||
| Total non-interest income | 3,906 | 3,394 | 3,433 | 3,173 | 3,173 | 10,733 | 9,343 | |||||||||||||||||||||
| NON-INTEREST EXPENSE: | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 9,604 | 9,476 | 9,229 | 9,373 | 9,209 | 28,309 | 26,453 | |||||||||||||||||||||
| Occupancy | 1,320 | 1,319 | 1,562 | 1,312 | 1,237 | 4,201 | 3,914 | |||||||||||||||||||||
| Furniture and equipment | 433 | 404 | 433 | 437 | 453 | 1,270 | 1,431 | |||||||||||||||||||||
| Data processing | 973 | 961 | 821 | 899 | 916 | 2,755 | 2,731 | |||||||||||||||||||||
| Software | 670 | 712 | 689 | 687 | 652 | 2,071 | 1,956 | |||||||||||||||||||||
| Debit/ATM card processing expense | 714 | 644 | 663 | 599 | 633 | 2,021 | 1,884 | |||||||||||||||||||||
| Professional fees | 540 | 622 | 509 | 388 | 460 | 1,671 | 1,629 | |||||||||||||||||||||
| FDIC insurance | 381 | 377 | 392 | 398 | 376 | 1,150 | 1,206 | |||||||||||||||||||||
| Advertising | 452 | 457 | 442 | 349 | 433 | 1,351 | 1,305 | |||||||||||||||||||||
| Other | 1,426 | 1,383 | 1,268 | 1,428 | 1,409 | 4,077 | 4,109 | |||||||||||||||||||||
| Total non-interest expense | 16,513 | 16,355 | 16,008 | 15,870 | 15,778 | 48,876 | 46,618 | |||||||||||||||||||||
| INCOME BEFORE INCOME TAXES | 8,358 | 4,803 | 6,175 | 6,617 | 4,194 | 19,336 | 13,173 | |||||||||||||||||||||
| INCOME TAX PROVISION | 2,059 | 1,205 | 1,398 | 1,408 | 1,027 | 4,662 | 3,113 | |||||||||||||||||||||
| NET INCOME | $ | 6,299 | $ | 3,598 | $ | 4,777 | $ | 5,209 | $ | 3,167 | $ | 14,674 | $ | 10,060 | ||||||||||||||
| Basic earnings per share | $ | 0.32 | $ | 0.18 | $ | 0.24 | $ | 0.26 | $ | 0.16 | $ | 0.74 | $ | 0.50 | ||||||||||||||
| Weighted average shares outstanding | 19,671,364 | 19,781,515 | 19,996,682 | 20,060,358 | 20,110,492 | 19,815,329 | 20,234,534 | |||||||||||||||||||||
| Diluted earnings per share | $ | 0.32 | $ | 0.18 | $ | 0.24 | $ | 0.26 | $ | 0.16 | $ | 0.74 | $ | 0.50 | ||||||||||||||
| Weighted average diluted shares outstanding | 19,791,391 | 19,894,399 | 20,065,067 | 20,206,539 | 20,240,975 | 19,915,761 | 20,354,977 | |||||||||||||||||||||
| Other Data: | ||||||||||||||||||||||||||||
| Return on average assets (1) | 0.91% | 0.53% | 0.71% | 0.75% | 0.46% | 0.72% | 0.50% | |||||||||||||||||||||
| Return on average equity (1) | 10.05% | 5.84% | 7.77% | 8.40% | 5.20% | 7.90% | 5.64% | |||||||||||||||||||||
| Efficiency ratio | 69.09% | 72.00% | 71.92% | 72.13% | 74.20% | 70.97% | 76.91% | |||||||||||||||||||||
| Adjusted efficiency ratio (2) | 71,31% | 72.15% | 73.36% | 72.11% | 74.27% | 72.25% | 77.28% | |||||||||||||||||||||
| Net interest margin | 3.07% | 3.00% | 2.95% | 2.89% | 2.81% | 3.01% | 2.70% | |||||||||||||||||||||
| Net interest margin, on a fully tax-equivalent basis | 3.09% | 3.02% | 2.97% | 2.91% | 2.83% | 3.02% | 2.72% | |||||||||||||||||||||
| (1) Annualized. | ||||||||||||||||||||||||||||
| (2) The adjusted efficiency ratio (non-GAAP) 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 non-marketable equity investments, gain on bank-owned life insurance death benefits, and gain on sale of premises and equipment. | ||||||||||||||||||||||||||||
15
WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2025 | ||||||||||||||||
| Cash and cash equivalents | $ | 62,768 | $ | 37,666 | $ | 56,137 | $ | 40,381 | $ | 82,942 | ||||||||||
| Securities available-for-sale, at fair value | 160,859 | 170,598 | 173,215 | 175,800 | 179,234 | |||||||||||||||
| Securities held to maturity, at amortized cost | 177,913 | 181,723 | 185,392 | 188,800 | 193,446 | |||||||||||||||
| Marketable equity securities, at fair value | 666 | 662 | 610 | 632 | 471 | |||||||||||||||
| Federal Home Loan Bank of Boston and other restricted stock - at cost | 2,985 | 3,790 | 5,736 | 5,359 | 5,818 | |||||||||||||||
| Loans | 2,195,196 | 2,193,832 | 2,200,956 | 2,183,592 | 2,131,308 | |||||||||||||||
| Allowance for credit losses | (19,634 | ) | (20,185 | ) | (20,451 | ) | (20,297 | ) | (20,542 | ) | ||||||||||
| Net loans | 2,175,562 | 2,173,647 | 2,180,505 | 2,163,295 | 2,110,766 | |||||||||||||||
| Bank-owned life insurance | 78,730 | 78,214 | 77,679 | 79,019 | 78,527 | |||||||||||||||
| Goodwill | 12,487 | 12,487 | 12,487 | 12,487 | 12,487 | |||||||||||||||
| Core deposit intangible | 781 | 875 | 969 | 1,063 | 1,156 | |||||||||||||||
| Other assets | 73,390 | 72,639 | 71,807 | 69,644 | 70,683 | |||||||||||||||
| TOTAL ASSETS | $ | 2,746,141 | $ | 2,732,301 | $ | 2,764,537 | $ | 2,736,480 | $ | 2,735,530 | ||||||||||
| Total deposits | $ | 2,428,116 | $ | 2,401,400 | $ | 2,381,792 | $ | 2,360,908 | $ | 2,349,875 | ||||||||||
| Short-term borrowings | 6,140 | 17,740 | 23,810 | 13,270 | 2,980 | |||||||||||||||
| Long-term debt | 25,000 | 25,000 | 73,000 | 73,000 | 98,000 | |||||||||||||||
| Subordinated debt | 19,820 | 19,810 | 19,800 | 19,790 | 19,781 | |||||||||||||||
| Securities pending settlement | 125 | – | – | 242 | – | |||||||||||||||
| Other liabilities | 22,246 | 20,072 | 18,039 | 21,633 | 21,254 | |||||||||||||||
| TOTAL LIABILITIES | 2,501,447 | 2,484,022 | 2,516,441 | 2,488,843 | 2,491,890 | |||||||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 244,694 | 248,279 | 248,096 | 247,637 | 243,640 | |||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,746,141 | $ | 2,732,301 | $ | 2,764,537 | $ | 2,736,480 | $ | 2,735,530 | ||||||||||
16
WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES
Other Data
(Dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2025 | ||||||||||||||||
| Shares outstanding at end of period | 19,830,872 | 20,045,872 | 20,240,872 | 20,372,786 | 20,491,966 | |||||||||||||||
| Operating results: | ||||||||||||||||||||
| Net interest income | $ | 19,994 | $ | 19,321 | $ | 18,825 | $ | 18,829 | $ | 18,092 | ||||||||||
| (Reversal of) provision for credit losses | (971 | ) | 1,557 | 75 | (485 | ) | 1,293 | |||||||||||||
| Non-interest income | 3,906 | 3,394 | 3,433 | 3,173 | 3,173 | |||||||||||||||
| Non-interest expense | 16,513 | 16,355 | 16,008 | 15,870 | 15,778 | |||||||||||||||
| Income before income provision for income taxes | 8,358 | 4,803 | 6,175 | 6,617 | 4,194 | |||||||||||||||
| Income tax provision | 2,059 | 1,205 | 1,398 | 1,408 | 1,027 | |||||||||||||||
| Net income | 6,299 | 3,598 | 4,777 | 5,209 | 3,167 | |||||||||||||||
| Performance Ratios: | ||||||||||||||||||||
| Net interest margin | 3.07% | 3.00% | 2.95% | 2.89% | 2.81% | |||||||||||||||
| Net interest margin, on a fully tax-equivalent basis | 3.09% | 3.02% | 2.97% | 2.91% | 2.83% | |||||||||||||||
| Interest rate spread | 2.40% | 2.33% | 2.28% | 2.21% | 2.13% | |||||||||||||||
| Interest rate spread, on a fully tax-equivalent basis | 2.41% | 2.34% | 2.30% | 2.23% | 2.14% | |||||||||||||||
| Return on average assets | 0.91% | 0.53% | 0.71% | 0.75% | 0.46% | |||||||||||||||
| Return on average equity | 10.05% | 5.84% | 7.77% | 8.40% | 5.20% | |||||||||||||||
| Efficiency ratio (GAAP) | 69.09% | 72.00% | 71.92% | 72.13% | 74.20% | |||||||||||||||
| Adjusted efficiency ratio (non-GAAP) (1) | 71.31% | 72.15% | 73.36% | 72.11% | 74.27% | |||||||||||||||
| Per Common Share Data: | ||||||||||||||||||||
| Basic earnings per share | $ | 0.32 | $ | 0.18 | $ | 0.24 | $ | 0.26 | $ | 0.16 | ||||||||||
| Earnings per diluted share | 0.32 | 0.18 | 0.24 | 0.26 | 0.16 | |||||||||||||||
| Cash dividend declared | 0.07 | 0.07 | 0.07 | 0.07 | 0.07 | |||||||||||||||
| Book value per share | 12.34 | 12.39 | 12.26 | 12.16 | 11.89 | |||||||||||||||
| Tangible book value per share (non-GAAP) (2) | 11.67 | 11.72 | 11.59 | 11.49 | 11.22 | |||||||||||||||
| Asset Quality: | ||||||||||||||||||||
| 30-89 day delinquent loans | $ | 7,688 | $ | 3,693 | $ | 2,317 | $ | 2,098 | $ | 3,123 | ||||||||||
| 90 days or more delinquent loans | 1,410 | 965 | 840 | 1,047 | 1,425 | |||||||||||||||
| Total delinquent loans | 9,098 | 4,658 | 3,157 | 3,145 | 4,548 | |||||||||||||||
| Total delinquent loans as a percentage of total loans | 0.41% | 0.21% | 0.14% | 0.14% | 0.21% | |||||||||||||||
| Nonaccrual loans | $ | 7,904 | $ | 7,759 | $ | 4,681 | $ | 5,162 | $ | 5,649 | ||||||||||
| Nonaccrual loans as a percentage of total loans | 0.36% | 0.35% | 0.21% | 0.24% | 0.27% | |||||||||||||||
| Nonaccrual assets as a percentage of total assets | 0.29% | 0.28% | 0.17% | 0.19% | 0.21% | |||||||||||||||
| Allowance for credit losses as a percentage of nonaccrual loans | 248.41% | 260.15% | 436.89% | 393.20% | 363.64% | |||||||||||||||
| Allowance for credit losses as a percentage of total loans | 0.89% | 0.92% | 0.93% | 0.93% | 0.96% | |||||||||||||||
| Net loan (recoveries) charge-offs | $ | (274 | ) | $ | 1,789 | $ | 55 | $ | 41 | $ | 43 | |||||||||
| Net loan (recoveries) charge-offs as a percentage of average loans, annualized | (0.05 | )% | 0.33% | 0.01% | 0.01% | 0.01% | ||||||||||||||
___________________________
| (1) | The adjusted efficiency ratio (non-GAAP) 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, gains on non-marketable equity investments, gain on bank-owned life insurance death benefits, and gain on sale of premises and equipment. |
| (2) | Tangible book value per share (non-GAAP) represents the value of the Company’s tangible assets divided by its current outstanding shares. |
17
The following table sets forth the information relating to our average balances and net interest income for the three months ended September 30, 2026, June 30, 2026 and September 30, 2025 and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated.
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||||
| Average | Average Yield/ | Average | Average Yield/ | Average | Average Yield/ | |||||||||||||||||||||||||||||||
| Balance | Interest | Cost(8) | Balance | Interest | Cost(8) | Balance | Interest | Cost(8) | ||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
| ASSETS: | ||||||||||||||||||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||||||||||||||
| Loans(1)(2) | $ | 2,191,532 | $ | 28,615 | 5.18 | % | $ | 2,189,867 | $ | 28,084 | 5.14 | % | $ | 2,112,394 | $ | 26,810 | 5.04 | % | ||||||||||||||||||
| Securities(2) | 349,128 | 2,457 | 2.79 | 355,904 | 2,457 | 2.77 | 374,082 | 2,617 | 2.78 | |||||||||||||||||||||||||||
| Other investments | 12,746 | 124 | 3.86 | 14,171 | 156 | 4.42 | 14,993 | 166 | 4.39 | |||||||||||||||||||||||||||
| Short-term investments(3) | 28,249 | 225 | 3.16 | 26,034 | 208 | 3.20 | 52,380 | 560 | 4.24 | |||||||||||||||||||||||||||
| Total interest-earning assets | 2,581,655 | 31,421 | 4.83 | 2,585,976 | 30,905 | 4.79 | 2,553,849 | 30,153 | 4.68 | |||||||||||||||||||||||||||
| Total non-interest-earning assets | 156,102 | 152,735 | 157,127 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 2,737,757 | $ | 2,738,711 | $ | 2,710,976 | ||||||||||||||||||||||||||||||
| LIABILITIES AND EQUITY: | ||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
| Interest-bearing checking accounts | $ | 142,809 | 259 | 0.72 | $ | 147,413 | 360 | 0.98 | $ | 161,171 | 453 | 1.12 | ||||||||||||||||||||||||
| Savings accounts | 189,139 | 46 | 0.10 | 193,850 | 58 | 0.12 | 187,279 | 42 | 0.09 | |||||||||||||||||||||||||||
| Money market accounts | 737,509 | 3,965 | 2.13 | 728,462 | 3,847 | 2.12 | 703,084 | 3,784 | 2.14 | |||||||||||||||||||||||||||
| Time deposit accounts | 735,029 | 6,252 | 3.37 | 722,603 | 6,093 | 3.38 | 692,742 | 6,124 | 3.51 | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 1,804,486 | 10,522 | 2.31 | 1,792,328 | 10,358 | 2.32 | 1,744,276 | 10,403 | 2.37 | |||||||||||||||||||||||||||
| Borrowings | 53,271 | 787 | 5.86 | 85,845 | 1,102 | 5.15 | 121,389 | 1,538 | 5.03 | |||||||||||||||||||||||||||
| Interest-bearing liabilities | 1,857,757 | 11,309 | 2.42 | 1,878,173 | 11,460 | 2.45 | 1,865,665 | 11,941 | 2.54 | |||||||||||||||||||||||||||
| Non-interest-bearing deposits | 608,384 | 593,110 | 581,835 | |||||||||||||||||||||||||||||||||
| Other non-interest-bearing liabilities | 22,905 | 20,392 | 22,014 | |||||||||||||||||||||||||||||||||
| Total non-interest-bearing liabilities | 631,289 | 613,502 | 603,849 | |||||||||||||||||||||||||||||||||
| Total liabilities | 2,489,046 | 2,491,675 | 2,469,514 | |||||||||||||||||||||||||||||||||
| Total equity | 248,711 | 247,036 | 241,462 | |||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 2,737,757 | $ | 2,738,711 | $ | 2,710,976 | ||||||||||||||||||||||||||||||
| Less: Tax-equivalent adjustment(2) | (118 | ) | (124 | ) | (120 | ) | ||||||||||||||||||||||||||||||
| Net interest and dividend income | $ | 19,994 | $ | 19,321 | $ | 18,092 | ||||||||||||||||||||||||||||||
| Net interest rate spread(4) | 2.40 | % | 2.33 | % | 2.13 | % | ||||||||||||||||||||||||||||||
| Net interest rate spread, on a tax-equivalent basis(5) | 2.41 | % | 2.34 | % | 2.14 | % | ||||||||||||||||||||||||||||||
| Net interest margin(6) | 3.07 | % | 3.00 | % | 2.81 | % | ||||||||||||||||||||||||||||||
| Net interest margin, on a tax-equivalent basis(7) | 3.09 | % | 3.02 | % | 2.83 | % | ||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 138.97 | % | 137.69 | % | 136.89 | % | ||||||||||||||||||||||||||||||
18
The following tables set forth the information relating to our average balances and net interest income for the nine months ended September 30, 2026 and 2025 and reflect the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated.
| Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||
| Average Balance | Interest | Average Yield Cost(8) | Average Balance | Interest | Average Yield Cost(8) | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| ASSETS: | ||||||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||
| Loans(1)(2) | $ | 2,189,328 | $ | 84,258 | 5.15 | % | $ | 2,089,208 | $ | 78,250 | 5.01 | % | ||||||||||||
| Securities(2) | 356,284 | 7,419 | 2.78 | 371,541 | 7,627 | 2.74 | ||||||||||||||||||
| Other investments | 14,156 | 427 | 4.03 | 14,959 | 526 | 4.70 | ||||||||||||||||||
| Short-term investments(3) | 26,384 | 622 | 3.15 | 62,260 | 2,041 | 4.38 | ||||||||||||||||||
| Total interest-earning assets | 2,586,152 | 92,726 | 4.79 | 2,537,968 | 88,444 | 4.66 | ||||||||||||||||||
| Total non-interest-earning assets | 154,215 | 156,704 | ||||||||||||||||||||||
| Total assets | $ | 2,740,367 | $ | 2,694,672 | ||||||||||||||||||||
| LIABILITIES AND EQUITY: | ||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||
| Interest-bearing checking accounts | $ | 146,342 | 919 | 0.84 | % | $ | 155,894 | 1,127 | 0.97 | % | ||||||||||||||
| Savings accounts | 191,019 | 147 | 0.10 | 186,561 | 137 | 0.10 | ||||||||||||||||||
| Money market accounts | 731,553 | 11,634 | 2.13 | 698,302 | 11,352 | 2.17 | ||||||||||||||||||
| Time deposit accounts | 716,574 | 18,158 | 3.39 | 695,312 | 19,600 | 3.77 | ||||||||||||||||||
| Total interest-bearing deposits | 1,785,488 | 30,858 | 2.31 | 1,736,069 | 32,216 | 2.48 | ||||||||||||||||||
| Short-term borrowings and long-term debt | 88,169 | 3,367 | 5.11 | 122,076 | 4,598 | 5.04 | ||||||||||||||||||
| Total interest-bearing liabilities | 1,873,657 | 34,225 | 2.44 | 1,858,145 | 36,814 | 2.65 | ||||||||||||||||||
| Non-interest-bearing deposits | 596,739 | 574,814 | ||||||||||||||||||||||
| Other non-interest-bearing liabilities | 21,575 | 23,216 | ||||||||||||||||||||||
| Total non-interest-bearing liabilities | 618,314 | 598,030 | ||||||||||||||||||||||
| Total liabilities | 2,491,971 | 2,456,175 | ||||||||||||||||||||||
| Total equity | 248,396 | 238,497 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 2,740,367 | $ | 2,694,672 | ||||||||||||||||||||
| Less: Tax-equivalent adjustment (2) | (361 | ) | (362 | ) | ||||||||||||||||||||
| Net interest and dividend income | $ | 58,140 | $ | 51,268 | ||||||||||||||||||||
| Net interest rate spread (4) | 2.33 | % | 1.99 | % | ||||||||||||||||||||
| Net interest rate spread, on a tax-equivalent basis (5) | 2.35 | % | 2.01 | % | ||||||||||||||||||||
| Net interest margin (6) | 3.01 | % | 2.70 | % | ||||||||||||||||||||
| Net interest margin, on a tax-equivalent basis (7) | 3.02 | % | 2.72 | % | ||||||||||||||||||||
| Ratio of average interest-earning | ||||||||||||||||||||||||
| assets to average interest-bearing liabilities | 138.03 | % | 136.59 | % | ||||||||||||||||||||
| (1) | Loans, including nonaccrual 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 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) | Annualized. |
19
Reconciliation of Non-GAAP to GAAP Financial Measures
The Company believes that certain non-GAAP financial measures provide information to investors that is useful in understanding its results of operations and financial condition. Because not all companies use the same calculation, this presentation may not be comparable to other similarly titled measures calculated by other companies. A reconciliation of these non-GAAP financial measures is provided below.
| For the quarter ended | ||||||||||||||||||||
| 9/30/2026 | 6/30/2026 | 3/31/2026 | 12/31/2025 | 9/30/2025 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Loan interest (no tax adjustment) | $ | 28,497 | $ | 27,960 | $ | 27,440 | $ | 27,491 | $ | 26,690 | ||||||||||
| Tax-equivalent adjustment | 118 | 124 | 119 | 125 | 120 | |||||||||||||||
| Loan interest (tax-equivalent basis) | $ | 28,615 | $ | 28,084 | $ | 27,559 | $ | 27,616 | $ | 26,810 | ||||||||||
| Loan interest (tax-equivalent basis) | $ | 28,615 | $ | 28,084 | $ | 27,559 | $ | 27,616 | $ | 26,810 | ||||||||||
| Less: | ||||||||||||||||||||
| Prepayment penalties | – | 82 | 16 | – | 34 | |||||||||||||||
| Adjusted loan income, excluding prepayment penalties (tax-equivalent basis) (non-GAAP) | $ | 28,615 | $ | 28,002 | $ | 27,543 | $ | 27,616 | $ | 26,776 | ||||||||||
| Average loans | $ | 2,191,532 | $ | 2,189,867 | $ | 2,186,529 | $ | 2,166,804 | $ | 2,112,394 | ||||||||||
| Average loan yield (no tax adjustment) | 5.16% | 5.12% | 5.09% | 5.03% | 5.01% | |||||||||||||||
| Average loan yield (no tax adjustment), excluding prepayment penalties (non-GAAP) | 5.16% | 5.11% | 5.09% | 5.03% | 5.01% | |||||||||||||||
| Average loan yield (tax-equivalent) | 5.18% | 5.14% | 5.11% | 5.06% | 5.04% | |||||||||||||||
| Average loan yield (tax-equivalent basis), excluding prepayment penalties (non-GAAP) | 5.18% | 5.13% | 5.11% | 5.06% | 5.03% | |||||||||||||||
| Net interest income (no tax adjustment) | $ | 19,994 | $ | 19,321 | $ | 18,825 | $ | 18,829 | $ | 18,092 | ||||||||||
| Tax equivalent adjustment | 118 | 124 | 119 | 125 | 120 | |||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 20,112 | $ | 19,445 | $ | 18,944 | $ | 18,954 | $ | 18,212 | ||||||||||
| Net interest income (no tax adjustment) | $ | 19,994 | $ | 19,321 | $ | 18,825 | $ | 18,829 | $ | 18,092 | ||||||||||
| Less: | ||||||||||||||||||||
| Prepayment penalties | – | 82 | 16 | – | 34 | |||||||||||||||
| Adjusted net interest income (non-GAAP) | $ | 19,994 | $ | 19,239 | $ | 18,809 | $ | 18,829 | $ | 18,058 | ||||||||||
| Average interest-earning assets | $ | 2,581,655 | $ | 2,585,976 | $ | 2,590,928 | $ | 2,584,310 | $ | 2,553,849 | ||||||||||
| Net interest margin (no tax adjustment) | 3.07% | 3.00% | 2.95% | 2.89% | 2.81% | |||||||||||||||
| Net interest margin (tax-equivalent basis) | 3.09% | 3.02% | 2.97% | 2.91% | 2.83% | |||||||||||||||
| Adjusted net interest margin, excluding prepayment penalties (no tax adjustment) (non-GAAP) | 3.07% | 2.98% | 2.94% | 2.89% | 2.81% | |||||||||||||||
20
| At or for the quarter ended | ||||||||||||||||||||
| 9/30/2026 | 6/30/2026 | 3/31/2026 | 12/31/2025 | 9/30/2025 | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Book Value per Share (GAAP) | $ | 12.34 | $ | 12.39 | $ | 12.26 | $ | 12.16 | $ | 11.89 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Goodwill | (0.63 | ) | (0.62 | ) | (0.62 | ) | (0.61 | ) | (0.61 | ) | ||||||||||
| Core deposit intangible | (0.04 | ) | (0.05 | ) | (0.05 | ) | (0.06 | ) | (0.06 | ) | ||||||||||
| Tangible Book Value per Share (non-GAAP) | $ | 11.67 | $ | 11.72 | $ | 11.59 | $ | 11.49 | $ | 11.22 | ||||||||||
| Efficiency Ratio: | ||||||||||||||||||||
| Non-interest Expense (GAAP) | $ | 16,513 | $ | 16,355 | $ | 16,008 | $ | 15,870 | $ | 15,778 | ||||||||||
| Net Interest Income (GAAP) | $ | 19,994 | $ | 19,321 | $ | 18,825 | $ | 18,829 | $ | 18,092 | ||||||||||
| Non-interest Income (GAAP) | $ | 3,906 | $ | 3,394 | $ | 3,433 | $ | 3,173 | $ | 3,173 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Unrealized loss (gain) on marketable equity securities | 2 | (47 | ) | 13 | 7 | (22 | ) | |||||||||||||
| Gain on non-marketable equity investments | (33 | ) | – | – | – | – | ||||||||||||||
| Gain on sale of premises and equipment | (712 | ) | – | – | – | – | ||||||||||||||
| Gain on bank-owned life insurance death benefits | – | (1 | ) | (449 | ) | – | – | |||||||||||||
| Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) | $ | 3,163 | $ | 3,346 | $ | 2,997 | $ | 3,180 | $ | 3,151 | ||||||||||
| Total Revenue for Adjusted Efficiency Ratio (non-GAAP) | $ | 23,157 | $ | 22,667 | $ | 21,822 | $ | 22,009 | $ | 21,243 | ||||||||||
| Efficiency Ratio (GAAP) | 69.09% | 72.00% | 71.92% | 72.13% | 74.20% | |||||||||||||||
| Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) | 71.31% | 72.15% | 73.36% | 72.11% | 74.27% | |||||||||||||||
21
| For the nine months ended | ||||||||
| 9/30/2026 | 9/30/2025 | |||||||
| (Dollars in thousands) | ||||||||
| Loan income (no tax adjustment) | $ | 83,897 | $ | 77,888 | ||||
| Tax-equivalent adjustment | 361 | 362 | ||||||
| Loan income (tax-equivalent basis) | $ | 84,258 | $ | 78,250 | ||||
| Net interest income (no tax adjustment) | $ | 58,140 | $ | 51,268 | ||||
| Tax equivalent adjustment | 361 | 362 | ||||||
| Net interest income (tax-equivalent basis) | $ | 58,501 | $ | 51,630 | ||||
| Net interest income (no tax adjustment) | $ | 58,140 | $ | 51,268 | ||||
| Less: | ||||||||
| Prepayment penalties | 98 | 459 | ||||||
| Adjusted net interest income (non-GAAP) | $ | 58,042 | $ | 50,809 | ||||
| Average interest-earning assets | $ | 2,586,152 | $ | 2,537,968 | ||||
| Net interest margin (no tax adjustment) | 3.01% | 2.70% | ||||||
| Net interest margin, tax-equivalent | 3.02% | 2.72% | ||||||
| Net interest margin, excluding prepayment penalties (no tax adjustment) (non-GAAP) | 3.00% | 2.68% | ||||||
| Adjusted Efficiency Ratio: | ||||||||
| Non-interest Expense (GAAP) | $ | 48,876 | $ | 46,618 | ||||
| Net Interest Income (GAAP) | $ | 58,140 | $ | 51,268 | ||||
| Non-interest Income (GAAP) | $ | 10,733 | $ | 9,343 | ||||
| Non-GAAP adjustments: | ||||||||
| Unrealized gains on marketable equity securities | (32 | ) | (42 | ) | ||||
| Gain on sale of premises and equipment | (712 | ) | – | |||||
| Gain on bank-owned life insurance death benefits | (450 | ) | – | |||||
| Gain on non-marketable equity investments | (33 | ) | (243 | ) | ||||
| Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) | $ | 9,506 | $ | 9,058 | ||||
| Total Revenue for Adjusted Efficiency Ratio (non-GAAP) | $ | 67,646 | $ | 60,326 | ||||
| Efficiency Ratio (GAAP) | 70.97% | 76.91% | ||||||
| Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) | 72.25% | 77.28% | ||||||
22
Western New England Bancorp, Inc.
Exhibit 99.2
Local banking is better than ever. INVESTOR PRESENTATION 3RD QUARTER 2026
FORWARD - LOOKING STATEMENTS 2 This Investor Presentation contains “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended, with respect to the Company’s financial condition, liquidity, results of operations, future performance, and 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 : unpredictable changes in general economic or political conditions, financial markets, fiscal, monetary and regulatory policies, including actual or potential stress in the banking industry ; the possibility that future credit losses, loan defaults and charge - off rates are higher than expected due to changes in economic assumptions or adverse economic developments ; general business and economic conditions on a national basis and in the local markets in which we operate, including those impacting credit quality ; unstable political and economic conditions, including changes in tariff policies, which could materially impact credit quality trends and the ability to generate loans and gather deposits ; inflation and governmental responses to inflation, including potential future increases in interest rates that reduce net interest 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 Wall Street Reform and Consumer Protection Act of 2010 , Basel guidelines, capital requirements and other applicable laws and regulations ; changes in regulation, regulatory policy, legislation, accounting standards and practices, and fiscal monetary policy, particularly in light of the shift in presidential administrations and the potential for related shifts in agency policy and leadership ; operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity incidents, technological integration, including AI, vendor issues, business interruption, and fraud risks ; significant changes in accounting, tax or regulatory practices or requirements ; new legal obligations or liabilities or unfavorable resolutions or litigation ; disruptive technologies in payment systems and other services traditionally provided by financial institutions ;
FORWARD - LOOKING STATEMENTS 3 the risk that we may not be successful in the implementation of our business strategy ; severe weather, natural disasters, pandemics, acts of war or terrorism and other external events which could significantly impact our business ; declines in real estate values in the Company’s market area, which may adversely affect our loan production ; decreases in the value of securities and other assets, or changes in the securities markets which affect investment management revenue ; decreases in deposit levels necessitating increased borrowing to fund loans, investments and other needs ; competitive pressures from other financial institutions ; the soundness of other financial services institutions which may adversely affect our credit risk ; failure or circumvention of our internal controls or procedures ; the risk that goodwill and intangibles recorded in our financial statements will become impaired ; increases in Federal Deposit Insurance Corporation deposit insurance premiums and assessments ; introduction of 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 ; and other risks and uncertainties detailed in Part 1 A “Risk Factors” of the Company’s 2025 Annual Report on Form 10 - K . 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 the se forward - looking statements, which speak only as of the date hereof. We do not undertake any obligation to republish revised for ward - 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.
WHO WE ARE Every day, we focus on showing Westfield Bank customers “ what better banking is all about . ” For us, the idea of better banking starts with putting customers first, while adhering to our core values . Our Core Values : • Integrity • Enhance Shareholder Value • Customer Focus • Community Focus Our Core Mission : Our core mission is to help customers succeed in our community, while creating and increasing shareholder value . The Company’s mission drives the outcome we envision for Western New England Bancorp . 4 70 Center Street, Chicopee, MA.
SENIOR MANAGEMENT TEAM James C . Hagan, President & Chief Executive Officer Guida R . Sajdak, Executive Vice President, Chief Financial Officer & Treasurer Allen J . Miles III, Executive Vice President & Chief Lending Officer Kevin C . O’Connor, Executive Vice President & Chief Operating Officer John E . Bonini , Senior Vice President & General Counsel Filipe Goncalves, Senior Vice President & Chief Credit Officer Darlene Libiszewski , Senior Vice President & Chief Information Officer Christine Phillips , Senior Vice President, Chief Human Resources Officer Leo R . Sagan, Jr . , Senior Vice President & Chief Risk Officer 5
3Q2026 QUARTERLY EARNINGS 6 3Q2025 4Q2025 1Q2026 (2) 2Q2026 3Q2026 (1) ($ in thousands, except EPS) $ 18,092 $ 18,829 $ 18,825 $ 19,321 $ 19,994 Net interest income 1,293 (485) 75 1,557 (971) (Reversal of) provision for credit losses 3,173 3,173 3,433 3,394 3,906 Non - interest income 15,778 15,870 16,008 16,355 16,513 Non - interest expense 4,194 6,617 6,175 4,803 8,358 Income before taxes 1,027 1,408 1,398 1,205 2,059 Income tax expense $ 3,167 $ 5,209 $ 4,777 $ 3,598 $ 6,299 Net income $ 0.16 $ 0.26 $ 0.24 $ 0.18 $ 0.32 Diluted earnings per share (EPS) 0.46% 0.75% 0.71% 0.53% 0.91% Return on average assets (ROA) 5.20% 8.40% 7.77% 5.84% 10.05% Return on average equity (ROE) 2.81% 2.89% 2.95% 3.00% 3.07% Net interest margin 2.83% 2.91% 2.97% 3.02% 3.09% Net interest margin, tax - equivalent basis (3) (1) Non - interest income includes $712,000 in gains on the sale of two buildings located at 219 and 229 Exchange Street, Chicopee, MA . (2) Non - interest income includes $449,000 in gains on bank - owned life insurance death benefits. (3) See slides 36 - 38 for the related net interest margin calculations and a reconciliation of GAAP to non - GAAP financial measures.
NET INTEREST INCOME AND NET INTEREST MARGIN 7 $18.1 $18.8 $18.8 $19.3 $20.0 2.81% 2.89% 2.95% 3.00% 3.07% 2.75% 2.80% 2.85% 2.90% 2.95% 3.00% 3.05% 3.10% $14.0 $16.0 $18.0 $20.0 $22.0 $24.0 Net interest income ($) Net interest margin (%) ($ in millions) (1) See slides 36 - 38 for the related net interest margin calculation and a reconciliation of GAAP to non - GAAP financial measures . HIGHLIGHTS Net interest income, our primary driver of revenues, increased $ 1 . 9 million, or 10 . 5 % , from $ 18 . 1 million for the three months ended September 30 , 2025 to $ 20 . 0 million for the three months ended September 30 , 2026 and increased $ 673 , 000 , or 3 . 5 % , from the three months ended June 30 , 2026 . For the three months ended September 30 , 2026 , the net interest margin increased 26 basis points, from 2 . 81 % for the three months ended September 30 , 2025 to 3 . 07 % , and increased seven basis points, from 3 . 00 % for the three months ended June 30 , 2026 .
TOTAL LOANS 8 Residential Real Estate 35% Home Equity Lines and Loans 7% CRE - Owner Occupied 40% CRE - Non - Owner Occupied 8% C&I 10% Consumer 0% Total Loans $2.2 Billion HIGHLIGHTS • Total loans increased $ 11 . 1 million, or 0 . 5 % , from $ 2 . 2 billion, or 79 . 7 % of total assets, at December 31 , 2025 to $ 2 . 2 billion, or 79 . 8 % of total assets, at September 30 , 2026 . • Commercial and industrial loans (“C&I”) decreased $ 4 . 9 million, or 2 . 2 % , to $ 216 . 9 million and represented 9 . 9 % of total loans . • Commercial real estate loans (“CRE”) decreased $ 40 . 6 million, or 3 . 7 % , to $ 1 . 1 billion, and represented 48 . 3 % of total loans . • Residential real estate loans, including home equity loans, increased $ 57 . 3 million, or 6 . 7 % , to $ 914 . 2 million, and represented 41 . 7 % of total loans . • Loan Mix : 58 . 2 % Commercial and 41 . 8 % Retail/Consumer . • Non - owner occupied CRE as a percentage of Total Bank Risk - Based Capital (“RBC”) ( 3 ) was 314 . 1 % at September 30 , 2026 . • Fixed rate ( 55 % ) ; Adjustable ( 28 % ) ; and Floating ( 17 % ) . Weighted Average Rate on New Originations (2) Weighted Average Portfolio Rate as of September 30, 2026 Line of Business 6.51% 5.10% Commercial Real Estate 6.98% 6.34% Commercial and Industrial 6.30% 5.03% Residential Real Estate (1) Total loans as of September 30, 2026. (2) Yield on new originations for the 3rd quarter of 2026 (3) The total RBC ratio is based on Westfield Bank’s capital. Due to loan classifications, the percentage of total RBC may differ fr om the Call Report. (1)
TOTAL LOANS 9 $2,112 $2,167 $2,187 $2,190 $2,192 5.04% 5.06% 5.11% 5.14% 5.18% 4.90% 4.95% 5.00% 5.05% 5.10% 5.15% 5.20% 5.25% 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $2,075 $2,100 $2,125 $2,150 $2,175 $2,200 AVERAGE LOANS OUTSTANDING ($ in millions) Average Loans Outstanding Average Loan Yield, Tax-Equivalent Basis (1) See slides 36 - 38 for the related average loan yield on a tax - equivalent basis calculation and a reconciliation of GAAP to non - GA AP financial measures. $2,128 $2,181 $2,198 $2,191 $2,192 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $2,000 $2,025 $2,050 $2,075 $2,100 $2,125 $2,150 $2,175 $2,200 $2,225 PERIOD - END LOANS OUTSTANDING ($ in millions) The average loan yield, on a tax - equivalent basis, a non - GAAP financial measure (1) , increased 14 basis points from 5.04% for the three months ended September 30, 2025 to 5.18% for the three months ended September 30, 2026, while average loans increased $79.1 million, or 3.7%, during the same period.
COMMERCIAL AND INDUSTRIAL LOANS 10 $219 $222 $228 $234 $217 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $205 $210 $215 $220 $225 $230 $235 $240 Total C&I loans decreased $ 4 . 9 million, or 2 . 2 % , from $ 221 . 8 million, or 10 . 2 % of total loans, at December 31 , 2025 to $ 216 . 9 million, or 9 . 9 % of total loans, at September 30 , 2026 . During the three months ended September 20 , 2026 , C&I loans decreased $ 17 . 4 million, or 7 . 4 % , primarily due to a decrease in line of credit usage during the period . ($ in millions)
COMMERCIAL & INDUSTRIAL PORTFOLIO (1) 11 (1) % of total loans as of September 30, 2026. Other , 2.3% Manufacturing , 2.4% Merchant Wholesalers , 1.8% Educational Services , 0.9% Construction, Sand and Gravel Mining , 0.7% Specialty Trade Contractors , 0.5% Healthcare , 0.5% Auto Sales/Service , 0.3% Heavy and Civil Engineering Construction , 0.4% HOTELS , 0.1%
COMMERCIAL REAL ESTATE LOANS 12 $194 $189 $183 $182 $179 $884 $910 $918 $883 $879 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $- $200 $400 $600 $800 $1,000 $1,200 Owner Non-Owner At September 30 , 2026 , total CRE loans decreased $ 40 . 6 million, or 3 . 7 % , to $ 1 . 1 billion from December 31 , 2025 . Non - owner occupied CRE loans decreased $ 31 . 1 million, or 3 . 4 % , and owner - occupied CRE loans decreased $ 9 . 5 million, or 5 . 0 % . The decrease in CRE loans was primarily driven by an increased level of CRE loan prepayments and a broader slowdown in CRE lending activity during the nine months ended September 30 , 2026 . Non - owner occupied CRE loans as a percentage of total RBC ( 1 ) decreased from 328 . 6 % at December 31 , 2025 to 314 . 1 % at September 30 , 2026 . ($ in millions) (1) The total RBC ratio is based on Westfield Bank’s capital. Due to loan classifications, the percentage of total RBC may d iff er from the Call Report.
COMMERCIAL REAL ESTATE LOANS (CRE) – SEPTEMBER 30, 2026 13 (1) The total RBC ratio is based on Westfield Bank’s capital. Due to loan classifications, the percentage of total RBC may d iff er from the Call Report. At September 30 , 2026 , the commercial real estate portfolio totaled $ 1 . 1 billion and represented 48 . 3 % of total loans . Of the $ 1 . 1 billion, $ 879 . 2 million, or 83 . 1 % of the CRE portfolio, was categorized as non - owner occupied and $ 179 . 3 million, or 16 . 9 % , was categorized as owner occupied . % of Total Bank RBC (1) % of CRE Portfolio Total Owner Occupied Non - Owner Occupied Property Type ($ in thousands) 67.6% 17.9% $ 189,346 $ 21,115 $ 168,231 Office 61.8% 16.3% 172,955 - 172,955 Apartment 52.4% 13.8% 146,505 38,270 108,235 Industrial 41.2% 10.9% 115,198 4,907 110,291 Retail 29.1% 7.7% 81,365 5,306 76,059 Mixed Use 24.0% 6.4% 67,296 23,299 43,997 Other 21.9% 5.8% 61,478 53,831 7,647 Automotive Sales and Service 16.9% 4.5% 47,190 63 47,127 Self Storage 12.9% 3.4% 36,180 - 36,180 Hotel/Hospitality 12.6% 3.3% 35,389 6,501 28,888 Shopping Center 11.8% 3.1% 33,068 10,727 22,341 Warehouse 10.7% 2.8% 29,801 - 29,801 Adult Care/Assisted Living 9.0% 2.4% 25,021 15,290 9,731 School/Higher Education 6.3% 1.7% 17,698 - 17,698 Student Housing 378.2% 100.0% $ 1,058,490 $ 179,309 $ 879,181 Total commercial real estate loans 64.1% 314.1% % of Total RBC 16.9% 83.1% % of Total CRE Loans
CRE CONCENTRATION 14 (1) The total RBC ratio is based on Westfield Bank’s capital. Due to loan classifications, the percentage of total RBC may differ fr om the Call Report. $884 $910 $918 $883 $879 322% 329% 330% 318% 314% 290% 300% 310% 320% 330% 340% 350% $850 $860 $870 $880 $890 $900 $910 $920 $930 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 Non - Owner Occupied Commercial Real Estate as a Percent of Total RBC (1) ($ in millions) CRE Non-Owner Occupied CRE Non-Owner Occupied as a percentage of Risk-Based Capital
COMMERCIAL REAL ESTATE – NON - OWNER OCCUPIED – SEPTEMBER 30, 2026 15 At September 30 , 2026 , the non - owner occupied CRE portfolio totaled $ 879 . 2 million, or 314 . 1 % of total RBC . Of the $ 879 . 2 million, $ 473 . 4 million, or 53 . 8 % of non - owner occupied CRE, was concentrated in Massachusetts and $ 252 . 9 million, or 28 . 8 % of non - owner occupied CRE, was concentrated in Connecticut . At September 30 , 2026 , the non - owner occupied office portfolio totaled $ 168 . 2 million, or 60 . 1 % of total RBC with a weighted average LTV of 61 . 1 % . The non - owner occupied apartment portfolio totaled $ 173 . 0 million, or 61 . 8 % of total RBC with a weighted average LTV of 50 . 6 % . (1) The total RBC ratio is based on Westfield Bank’s capital and due to loan classifications, the percentage of total RBC may dif fer from the Call Report. (2) Weighted average LTV is based on the original appraisal and the current loan balance. Weighted Average Loan to Value % of Total Total Other ME RI NH CT MA Property Type (LTV) (2) RBC (1) ($ in thousands) 61.1% 60.1% $ 168,231 - $ 11,029 $ - $ 37,724 $ 57,281 $ 62,197 Office 50.6% 61.8% 172,955 - - 20,084 - 42,874 109,997 Apartment 49.0% 39.4% 110,291 - 13,286 5,955 13,538 25,154 52,358 Retail 52.8% 38.7% 108,235 4,397 - 11,196 - 34,203 58,439 Industrial 55.1% 27.2% 76,059 4,583 12,611 - 22,118 36,747 Mixed Use 53.9% 16.8% 47,127 - - - 760 9,171 37,196 Self Storage 50.5% 15.7% 43,997 - 113 653 3,617 39,614 Other 51.8% 12.9% 36,180 - - - - 16,677 19,503 Hotel/Hospitality 48.2% 10.3% 28,888 - - - - 19,033 9,855 Shopping Center 57.5% 10.7% 29,801 - - - 13,094 8,396 8,311 Adult Care/Assisted Living 41.1% 8.0% 22,341 836 - - - 4,808 16,697 Warehouse 54.5% 6.3% 17,698 337 - 2,655 7,499 7,207 Student Housing 41.9% 3.5% 9,731 - - - - - 9,731 School/Higher Education 64.4% 2.7% 7,647 - - - - 2,076 5,571 Automotive Sales and Service 53.3% 314.1% $ 879,181 $ 10,153 $ 24,428 $ 49,846 $ 68,424 $ 252,907 $ 473,423 Total non - owner occupied CRE
COMMERCIAL REAL ESTATE – OFFICE BUILDINGS – SEPTEMBER 30, 2026 16 (1) The total RBC ratio is based on Westfield Bank’s capital and due to loan classifications, the percentage of total RBC may dif fer from the Call Report. % of Total RBC (1) % of Office Portfolio Total Owner Occupied Non - Owner Occupied ($ in thousands) By Collateral Type 41.6% 61.5% $ 116,477 $ 10,693 $ 105,784 Office/Medical 3.9% 5.8% 10,967 7,479 3,488 Office/Professional Metro 13.0% 19.2% 36,408 2,738 33,670 Office/Professional Suburban 9.1% 13.5% 25,494 205 25,289 Office/Professional Urban 67.6% 100.0% $ 189,346 $ 21,115 $ 168,231 Total Office Portfolio 67.6% 7.5% 60.1% Percent of RBC % of Total RBC (1) % of Office Portfolio Total Owner Occupied Non - Owner Occupied ($ in thousands) By State 28.6% 42.3% $ 80,085 $ 17,888 $ 62,197 Massachusetts 21.6% 32.0% 60,508 3,227 57,281 Connecticut 13.5% 19.9% 37,724 - 37,724 New Hampshire 3.9% 5.8% 11,029 - 11,029 Other 67.6% 100.0% $ 189,346 $ 21,115 $ 168,231 Total Office Portfolio % of Total RBC (1) % of Office Portfolio Total Owner Occupied Non - Owner Occupied ($ in thousands) By Risk Rating 64.1% 94.9% $ 179,565 $ 20,855 $ 158,710 Pass - % - 66 - 66 Special Mention 3.5% 5.1% 9,715 260 9,455 Substandard 67.6% 100.0% $ 189,346 $ 21,115 $ 168,231 Total Office Portfolio As of September 30 , 2026 , the office portfolio totaled $ 189 . 3 million, or 67 . 6 % of total RBC . Non - owner occupied office totaled $ 168 . 2 million, or 60 . 1 % of total RBC, and owner - occupied office totaled $ 21 . 1 million, or 7 . 5 % of total RBC . Office exposure is concentrated in medical - office, totaling $ 116 . 5 million, or 61 . 5 % of the total office portfolio . Of the $ 189 . 3 million in total office, 42 . 3 % is concentrated in Massachusetts and 32 . 0 % is concentrated in Connecticut . The Company does not have any exposure in Greater Boston or New York . Of the $ 189 . 3 million in total office, 94 . 9 % of the office portfolio is in the pass - rated category and 5 . 1 % is in the substandard category .
RESIDENTIAL REAL ESTATE LOANS 17 $828 $857 $866 $889 $914 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $780 $800 $820 $840 $860 $880 $900 $920 $940 At September 30 , 2026 , residential real estate loans, including home equity loans, increased $ 57 . 3 million, or 6 . 7 % , from $ 856 . 9 million, or 39 . 3 % of total loans, at December 31 , 2025 to $ 914 . 2 million, or 41 . 7 % of total loans . At September 30 , 2026 , the Company serviced $ 71 . 9 million in loans sold to the secondary market, with servicing retained, which are not included on the Company’s balance sheet under residential real estate loans . Residential Real Estate 84% Home Equity 16% Residential Real Estate Loans As of September 30, 2026 ($ in millions)
INVESTMENT PORTFOLIO 18 The held - to - maturity (“HTM”) and available - for - sale (“AFS”) securities portfolio totaled $ 338 . 8 million and represented 12 . 4 % of total assets at September 30 , 2026 and $ 364 . 6 million, or 13 . 3 % of total assets, at December 31 , 2025 . The HTM unrealized losses, net of tax, were approximately $ 28 . 8 million, or 16 . 2 % , of the total HTM amortized cost basis . If the HTM losses, net of tax, were included in capital, the losses would represent 11 . 1 % of Tier 1 capital and negatively impact tangible common equity (“TCE”), a non - GAAP financial measure, by 1 . 1 % . ( 2 ) The AFS unrealized losses, net of tax, were approximately $ 23 . 1 million, or 12 . 1 % of the total AFS amortized cost basis . As a percentage of Tier 1 capital, the AFS unrealized losses, net of tax, represented 8 . 9 % of Tier 1 capital and negatively impacted TCE, a non - GAAP financial measure, by 0 . 8 % . ( 2 ) (1) Tier 1 Capital represents Westfield Bank’s Tier 1 Capital as of September 30, 2026. (2) Impact to TCE is net of tax. TCE is a non - GAAP measure. See slides 36 - 38 for the related TCE calculation and a reconciliation o f GAAP to non - GAAP financial measures . The table below displays the investment portfolio as of September 30 , 2026 . Duration in Years Net of Tax Loss as a % of Tier 1 Capital (1) Net of Tax Loss as a % of Amortized Cost Basis Unrealized Loss (Net of Tax) % of Investment Portfolio (Amortized Cost Basis) Fair Value Amortized Cost Basis ( $ in millions) 6.8 11.1% (16.2%) ($28.8) 48.1% $138.3 $177.9 HTM 5.4 8.9% (12.1%) ($23.1) 51.9% $160.9 $191.9 AFS 6.1 20.0% (14.0%) ($51.9) 100.0% $299.2 $369.8 Total Investments
TOTAL DEPOSITS - SEPTEMBER 30, 2026 19 Time Deposits 30% Money Market 31% Demand (Non - interest - bearing) 25% Savings 8% Interest - bearing checking 6% Total Deposits $2.4 Billion HIGHLIGHTS • Average cost of total deposits decreased one basis point from 1 . 74 % for the three months ended June 30 , 2026 to 1 . 73 % for the three months ended September 30 , 2026 . • At September 30 , 2026 , period - end deposits increased $ 67 . 2 million, or 2 . 8 % , from December 31 , 2025 , primarily driven by an increase in time deposits of $ 42 . 2 million, or 6 . 1 % , and an increase in non - interest - bearing deposits of $ 20 . 7 million, or 3 . 5 % . There were no brokered deposits at September 30 , 2026 or December 31 , 2025 . • At September 30 , 2026 , core deposits and non - interest - bearing deposits represented 69 . 8 % and 25 . 3 % of total deposits, respectively . The loan to deposit ratio was 90 . 4 % at September 30 , 2026 . • At September 30 , 2026 , uninsured deposits represented 30 . 8 % of total deposits . Uninsured amounts were based on the portion of customer account balances that exceeded the FDIC limit of $ 250 , 000 . At September 30 , 2026 , there was one consumer deposit relationship, which is our largest deposit relationship, with a household concentration comprising 6 . 1 % of total deposits, compared to 5 . 0 % of total deposits at December 31 , 2025 . The next largest deposit relationship is to a local municipality with a concentration of 1 . 2 % of total deposits at September 30 , 2026 and 1 . 9 % at December 31 , 2025 . Average Cost of Interest - Bearing Deposits Average Cost of Deposits for the Quarter - ended September 30, 2026 2.13% Money market 0.10% Savings 0.72% Interest - bearing checking 3.37% Time deposits 1.73% Total average cost of deposits
TOTAL DEPOSITS 20 $1,657 $1,671 $1,672 $1,666 $1,696 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $1,630 $1,640 $1,650 $1,660 $1,670 $1,680 $1,690 $1,700 PERIOD - END CORE DEPOSITS Total deposits of $ 2 . 4 billion increased $ 67 . 2 million, or 2 . 8 % , from December 31 , 2025 to $ 2 . 4 billion at September 30 , 2026 . Core deposits, which the Company defines as all deposits except time deposits, increased $ 25 . 0 million, or 1 . 5 % , from $ 1 . 7 billion, or 70 . 8 % of total deposits, at December 31 , 2025 , to $ 1 . 7 billion, or 69 . 8 % of total deposits, at September 30 , 2026 . During the same period, time deposits increased $ 42 . 2 million, or 6 . 1 % , from $ 689 . 9 million at December 31 , 2025 to $ 732 . 1 million at September 30 , 2026 . $693 $690 $710 $736 $732 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $660 $670 $680 $690 $700 $710 $720 $730 $740 PERIOD - END TIME DEPOSITS ($ in millions)
AVERAGE TOTAL DEPOSITS 21 $1,744 $1,761 $1,759 $1,792 $1,804 $582 $596 $589 $593 $608 1.77% 1.73% 1.72% 1.74% 1.73% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 $2,100 $2,300 $2,500 AVERAGE DEPOSITS AND RATES ($ in millions) Interest-bearing deposits Non-interest-bearing deposits Average deposit cost Total average deposits, consisting of interest - bearing and non - interest - bearing deposits, increased $ 27 . 4 million, or 1 . 1 % , from the three months ended June 30 , 2026 , to $ 2 . 4 billion for the three months ended September 30 , 2026 , and increased $ 86 . 8 million, or 3 . 7 % , from the three months ended September 30 , 2025 . The average cost of deposits decreased one basis point, from 1 . 74 % for the three months ended June 30 , 2026 , to 1 . 73 % for the three months ended September 30 , 2026 and decreased four basis points from the three months ended September 30 , 2025 .
AVERAGE CORE AND TIME DEPOSITS 22 $1,633 $1,671 $1,656 $1,663 $1,678 1.04% 1.02% 1.02% 1.03% 1.01% 1.00% 1.00% 1.01% 1.01% 1.02% 1.02% 1.03% 1.03% 1.04% 1.04% 1.05% $1,500 $1,520 $1,540 $1,560 $1,580 $1,600 $1,620 $1,640 $1,660 $1,680 $1,700 AVERAGE CORE DEPOSITS AND RATES ($ in millions) During the three months ended September 30 , 2026 , average core deposits of $ 1 . 7 billion, including non - interest - bearing deposits, increased $ 15 . 0 million, or 0 . 9 % , from the three months ended June 30 , 2026 and increased $ 44 . 5 million, or 2 . 7 % , from the three months ended September 30 , 2025 . During the three months ended September 30 , 2026 , average time deposits of $ 735 . 0 million increased $ 12 . 4 million, or 1 . 7 % , from the three months ended June 30 , 2026 . During the same period, the average cost of time deposits decreased one basis point to 3 . 37 % . As of September 30 , 2026 , there was $ 174 . 6 million, or 23 . 8 % , in time deposits scheduled to mature by December 31 , 2026 , with a weighted average rate of 3 . 41 % . $693 $687 $692 $723 $735 3.51% 3.46% 3.41% 3.38% 3.37% 0.25% 0.75% 1.25% 1.75% 2.25% 2.75% 3.25% 3.75% $500 $600 $700 $800 AVERAGE TIME DEPOSITS AND RATES ($ in millions)
LOAN - TO - DEPOSIT RATIO 23 90.7% 92.5% 92.4% 91.4% 90.4% 89% 90% 90% 91% 91% 92% 92% 93% 93% Loan to Deposit Ratio 71% 71% 70% 69% 70% 30% 29% 30% 31% 30% 25% 25% 25% 25% 25% 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 0% 20% 40% 60% 80% Deposits as a Percent of Total Deposits Demand deposits as a percent of total deposits Time deposits as a percent of total deposits Core deposits as a percent of total deposits (1) Demand deposits are a subset of core deposits . (2) Core deposits are defined as all deposits except time deposits . (1) (2)
WHOLESALE FUNDING 24 $121 $106 $117 $63 $51 5.03% 4.96% 4.75% 5.15% 5.86% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 3Q2025 4Q2025 1Q2026 2Q2026 3Q2026 $25 $45 $65 $85 $105 $125 $145 $165 WHOLESALE FUNDING ( Includes $20 million in Subordinated Debt) ($ in millions) Wholesale Funding Average Cost of Funds At September 30 , 2026 , total borrowings decreased $ 55 . 1 million, or 51 . 9 % , from $ 106 . 1 million at December 31 , 2025 to $ 51 . 0 million . At September 30 , 2026 , short - term borrowings decreased $ 7 . 1 million, or 53 . 7 % , to $ 6 . 1 million, compared to $ 13 . 3 million at December 31 , 2025 . At September 30 , 2026 , long - term borrowings decreased $ 48 . 0 million, or 65 . 8 % , from $ 73 . 0 million at December 31 , 2025 , to $ 25 . 0 million . At September 30 , 2026 and December 31 , 2025 , borrowings also consisted of $ 19 . 8 million in fixed - to - floating rate subordinated debt .
25 The Company’s liquidity position remains strong with solid core deposit relationships, cash, unencumbered securities and access to diversified borrowing sources . At September 30 , 2026 , the Company had available borrowing capacity with the FHLB of $ 615 . 6 million, including its overnight Ideal Way Line of Credit . At September 30 , 2026 , the Company had available borrowing capacity of $ 354 . 4 million from the Federal Reserve Discount Window, with no outstanding borrowings . At September 30 , 2026 , the Company also had available borrowing capacity of $ 25 . 0 million from two unsecured credit lines with correspondent banks, with no outstanding borrowings . At September 30 , 2026 , the Company had $ 1 . 2 billion in immediately available liquidity, and $ 749 . 1 million in uninsured deposits, or 30 . 8 % of total deposits, representing a coverage ratio of 162 % . Uninsured amounts were based on the portion of customer account balances that exceeded the FDIC limit of $ 250 , 000 . The Company also had access to the brokered deposit market with approval from the Board of Directors to purchase brokered deposits in an amount not to exceed 10 % of total assets . At September 30 , 2026 , the Company did not have any brokered deposits . LIQUIDITY Net Available Amount in Use at September 30, 2026 Total Available ($ in millions) Internal Sources: $62.8 - $62.8 Cash and cash equivalents $155.7 - $155.7 Unpledged securities $0.4 - $0.4 Excess pledged securities External Sources: $615.6 $72.4 $688.0 FHLB (1) $354.4 - $354.4 FRB Discount Window Other Unsecured: $25.0 - $25.0 Correspondent banks $1,213.9 $72.4 $1,286.3 Total Liquidity $749.1 Uninsured deposits 162% Liquidity/Total (1) At September 30 , 2026 , there were $ 25 . 0 million in outstanding FHLB advances and $ 47 . 3 million in letters of credit to secure municipal deposits .
________ Source: SNL Financial as of June 30, 2026. Note: Total number of Westfield Bank branches shown includes the Big E seasonal branch and online deposit channel. Three Westfield branches are located in Hampshire County, MA and four Westfield branches are located in Hartford County, CT outside of Springfield MSA. DEPOSIT MARKET SHARE IN HAMPDEN COUNTY, MA 26 Total Deposit Rank 2026 Parent Company Name Deposits in Market ($000) Market Share # of Branches 1 PeoplesBank 2,402,081 17.1% 11 1,762,519 13.1% 20 3 Westfield Bank 1,957,945 13.9% 20 2 TD Bank 2,232,072 15.9% 13 4 Bank of America 1,530,368 10.9% 8 5 M&T Bank 994,596 7.1% 13 6 Beacon Bank 990,283 7.0% 11 7 KeyBank 897,608 6.4% 7 8 Country Bank 735,193 5.2% 6 9 Monson Savings Bank 647,383 4.6% 4 10 Citizens Bank 641,218 4.6% 9 11 New Valley Bank & Trust 321,386 2.3% 3
ASSET QUALITY INDICATORS 27 3Q2026 2Q2026 1Q2026 4Q2025 3Q2025 ($ in thousands) $9,098 $4,658 $3,157 $3,145 $4,548 Total delinquent loans 0.41% 0.21% 0.14% 0.14% 0.21% Delinquent loans as a % of total loans $7,904 $7,759 $4,681 $5,162 $5,649 Nonaccrual loans 0.36% 0.35% 0.21% 0.24% 0.27% Nonaccrual loans as a % of total loans 0.29% 0.28% 0.17% 0.19% 0.21% Nonaccrual loans as a % of total assets At September 30 , 2026 , delinquent loans totaled $ 9 . 1 million, or 0 . 41 % of total loans, compared to $ 3 . 1 million, or 0 . 14 % of total loans, at December 31 , 2025 . Of the $ 9 . 1 million in delinquent loans, $ 6 . 7 million, or 74 . 1 % , were residential real estate loans, which includes home equity loans . Of the $ 6 . 7 million in delinquent residential real estate loans, $ 1 . 4 million, or 20 . 9 % , are 90 days or more past due . At September 30 , 2026 and December 31 , 2025 , the Company did not have any other real estate owned . At September 30 , 2026 , nonaccrual loans totaled $ 7 . 9 million, or 0 . 36 % of total loans, compared to $ 5 . 2 million, or 0 . 24 % of total loans, at December 31 , 2025 . The increase in nonaccrual loans was primarily attributable to a non - owner occupied commercial real estate participation loan relationship (“participation loan”) secured by an office building . In June 2026 , the Company was notified by the lead bank that the borrower filed for Chapter 11 Bankruptcy (“Bankruptcy Filing”) on June 4 , 2026 . Immediately prior to notification of the Bankruptcy Filing, the Company’s 40 % portion of the participation loan had a carrying value of $ 3 . 4 million and the borrower was then current with its scheduled payments . During the three months ended June 30, 2026, due to the Bankruptcy Filing, the Company downgraded the participation loan to substandard, placed the loan on nonaccrual status and recognized a partial charge - off of $1.8 million. At September 30, 2026, the Company’s portion of the remaining carrying value of the participation loan was $1.6 million. At September 30, 2026, the relationship is past due and on nonaccrual.
ASSET QUALITY INDICATORS 28 % of Loan Segment Total Past Due Greater Than 90 Days Past Due 60 – 89 Days Past Due 30 – 59 Days Past Due September 30, 2026 ($ in thousands) Commercial Real Estate Loans: 0.20% $ 1,720 $ - $ 505 $ 1,215 Non - Owner 0.20% 360 - 261 99 Owner 0.20% 2,080 - 766 1,314 Total Residential Real Estate: 0.62% 4,779 383 807 3,589 One - to - four family 1.35% 1,964 1,027 105 832 Home Equity 0.74% 6,743 1,410 912 4,421 Total 0.12% 270 - 256 14 Commercial and Industrial 0.24% 5 - - 5 Consumer 0.41% $ 9,098 $ 1,410 $ 1,934 $ 5,754 Total 100.0% 15.5% 21.3% 63.2% Percentage of past due total % of Loan Segment Total Past Due Greater Than 90 Days Past Due 60 – 89 Days Past Due 30 – 59 Days Past Due December 31, 2025 ($ in thousands) Commercial Real Estate Loans: $ - $ - $ - $ - $ - Non - Owner 0.16% 304 - - 304 Owner 0.03% 304 - - 304 Total Residential Real Estate: 0.30% 2,176 546 503 1,127 One - to - four family 0.44% 613 500 - 113 Home Equity 0.33% 2,789 1,046 503 1,240 Total 0.02% 49 1 - 48 Commercial and Industrial 0.10% 3 - - 3 Consumer 0.14% $ 3,145 $ 1,047 $ 503 $ 1,595 Total 100.0% 33.3% 16.0% 50.7% Percentage of past due total
ASSET QUALITY INDICATORS 29 3Q2026 2Q2026 1Q2026 4Q2025 3Q2025 ($ in thousands) 0.89% 0.92% 0.93% 0.93% 0.96% Allowance for credit losses % of total loans 248.4% 260.2% 437% 393% 364% Allowance for credit losses % of nonaccrual loans ($274) $1,789 $55 $41 $43 Net charge - offs/(recoveries) (0.05%) 0.33% 0.01% 0.01% 0.01% Net charge - offs/(recoveries) as a % average loans, annualized At September 30 , 2026 , the allowance for credit losses was $ 19 . 6 million, or 0 . 89 % of total loans, compared to $ 20 . 3 million, or 0 . 93 % of total loans, at December 31 , 2025 . The allowance for credit losses, as a percentage of nonaccrual loans, was 248 . 4 % and 393 . 2 % at September 30 , 2026 and December 31 , 2025 , respectively . During the nine months ended September 30 , 2026 , the Company reported net charge - offs of $ 1 . 6 million, representing an annualized net charge - off of 0 . 10 % of average loans . The increase in net charge - offs for the nine months ended September 30 , 2026 was due to the $ 1 . 8 million charge - off on the participation loan discussed on slide 27 .
ALLOWANCE FOR CREDIT LOSSES (“ACL”) 30 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 . The allowance for credit losses as a percentage of total loans was 0 . 89 % at September 30 , 2026 and 0 . 93 % at December 31 , 2025 . At September 30 , 2026 , the allowance for credit losses as a percentage of nonaccrual loans was 248 % , compared to 393 % at December 31 , 2025 . December 31, 2025 September 30, 2026 ACL/ Loan Segment Total Loans ACL ACL/ Loan Segment Total Loans ACL 1.01% $ 221,790 $ 2,245 0.95% $ 216,889 $ 2,066 C&I 1.25% 1,099,063 13,718 1.13% 1,058,490 11,986 CRE 0.49% 856,871 4,186 0.60% 914,207 5,472 Residential (1) 5.05% 2,929 148 5.18% 2,125 110 Consumer - - - - - - Unallocated 0.93% $ 2,180,653 $ 20,297 0.89% $ 2,191,711 $ 19,634 Total Loans $ in thousands for each period noted . (1) Includes home equity loans and home equity lines of credit .
ASSET QUALITY 31 3Q2026 2Q2026 1Q2026 4Q2025 3Q2025 $28.0 $40.3 $37.6 $17.2 $13.0 Special Mention 1.3% 1.8% 1.7% 0.8% 0.6% % of Total Loans $29.7 $23.6 $21.1 $22.5 $27.0 Substandard 1.4% 1.1% 1.0% 1.0% 1.3% % of Total Loans $57.7 $63.9 $58.7 $39.7 $40.0 Total Criticized Loans 2.6% 2.9% 2.7% 1.8% 1.9% % of Total Loans Total criticized loans, defined as special mention and substandard loans, totaled $ 57 . 7 million at September 30 , 2026 , or 2 . 6 % of total loans, compared to $ 39 . 7 million, or 1 . 8 % of total loans, at December 31 , 2025 . Loans designated special mention, which are not considered classified, increased $ 10 . 8 million, from $ 17 . 2 million, or 0 . 8 % of total loans, at December 31 , 2025 to $ 28 . 0 million, or 1 . 3 % of total loans, at September 30 , 2026 . During the same period, substandard loans increased $ 7 . 2 million to $ 29 . 7 million, or 1 . 4 % of total loans . The increase in substandard loans from December 31 , 2025 , to September 30 , 2026 , resulted from the downgrade of an $ 11 . 5 million commercial relationship from special mention to substandard . This was partially offset by the upgrade of a $ 5 . 8 million commercial relationship from substandard to special mention during the same period . At September 30 , 2026 , total criticized loans represent 20 . 6 % of Total RBC, compared to 14 . 3 % at December 31 , 2025 . ($ in millions)
ASSET QUALITY 32 At September 30 , 2026 , special mention loans totaled $ 28 . 0 million, or 1 . 3 % of total loans . Of the loans designated special mention, $ 15 . 6 million, or 55 . 7 % are commercial and industrial loans and $ 12 . 4 million, or 44 . 3 % are commercial real estate loans . At September 30 , 2026 , substandard loans totaled $ 29 . 7 million, or 1 . 4 % of total loans . Of the loans categorized as substandard, $ 4 . 1 million, or 13 . 8 % , are commercial and industrial, $ 20 . 2 million, or 68 . 0 % , are commercial real estate loans and $ 5 . 4 million, or 18 . 2 % , are residential loans . Of the $ 57 . 7 million in criticized loans, 93 . 1 % are current and paying as agreed . The increase in criticized from December 31 , 2025 to September 30 , 2026 resulted from the downgrade of two commercial relationships totaling $ 21 . 5 million, from “pass” risk rating to “special mention” . The increase in substandard loans from June 30 , 2026 to September 30 , 2026 was attributable to an $ 11 . 5 million commercial loan relationship that was downgraded from special mention to substandard . This was partially offset by the upgrade of a $ 5 . 8 million commercial relationship from substandard to special mention during the same period . $15,597 $4,085 $12,369 $20,205 $5,448 $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Special Mention Substandard Total Criticized Loans ($ in thousands) Residential Commercial Real Estate Loans Commercial and Industrial Loans
CAPITAL MANAGEMENT 33 We are well - capitalized with excess capital. December 31, 2025 September 30, 2026 Consolidated 9.13% 9.27% Tier 1 Leverage Ratio (to Adjusted Average Assets) 12.21% 12.31% Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.21% 12.31% Tier 1 Capital (to Risk Weighted Assets) 14.19% 14.04% Total Capital (to Risk Weighted Assets) At September 30 , 2026 , the Bank’s Tier 1 Leverage Ratio was 9 . 47 % . The Bank’s TCE ratio ( 1 ) , a non - GAAP financial measure, was 8 . 62 % at September 30 , 2026 . At September 30 , 2026 , available - for - sale unrealized losses of $ 23 . 1 million, net of tax, negatively impacted the TCE ratio by 0 . 8 % . If the held - to - maturity unrealized losses of $ 28 . 8 million, net of tax, were factored in, the TCE ratio would decrease to 7 . 58 % . Well Capitalized December 31, 2025 September 30, 2026 Westfield Bank 5.0% 9.32% 9.47% Tier 1 Leverage Ratio (to Adjusted Average Assets) 6.5% 12.46% 12.58% Common Equity Tier 1 Capital (to Risk Weighted Assets) 8.0% 12.46% 12.58% Tier 1 Capital (to Risk Weighted Assets) 10.0% 13.48% 13.54% Total Capital (to Risk Weighted Assets) (1) TCE is a non - GAAP measure. See slides 36 - 38 for the related TCE calculation and a reconciliation of GAAP to non - GAAP financial measures. x From a regulatory standpoint, we are well - capitalized with excess capital . x We take a prudent approach to capital management .
CAPITAL RETURN TO SHAREHOLDERS 34 # of Shares Year 720,975 2022 649,744 2023 934,282 2024 599,853 2025 186,000 1Q - 2026 195,000 2Q - 2026 215,000 3Q - 2026 Annual Dividends per Share Year $0.24 2022 $0.28 2023 $0.28 2024 $0.28 2025 $0.07 1Q - 2026 $0.07 2Q - 2026 $0.07 3Q - 2026 SHARE REPURCHASES DIVIDENDS PAID ON COMMON STOCK On April 22 , 2025 , the Board of Directors authorized the 2025 Repurchase Plan (“ 2025 Plan”), pursuant to which the Company may repurchase up to 1 . 0 million shares of its common stock, or approximately 4 . 8 % , of the Company’s then - outstanding shares of common stock . During the three months ended September 30 , 2026 , the Company repurchased 215 , 000 shares of its common stock at an average price per share of $ 13 . 85 . For the nine months ended September 30 , 2026 , the Company repurchased 596 , 000 shares of its common stock at an average price per share of $ 13 . 72 . As of September 30 , 2026 , there were 276 , 465 shares of common stock available for repurchase under the 2025 Plan . On October 27 , 2026 , the Company announced that its Board of Directors authorized a new stock repurchase plan (the “ 2026 Plan”), pursuant to which the Company may repurchase up to 1 . 0 million shares of the Company’s common stock, or approximately 5 . 0 % of the Company’s outstanding common stock as of the date the 2026 Plan was authorized . The 2026 Plan will commence upon the completion of the 2025 Plan . On October 27 , 2026 , the Company also announced that its Board of Directors declared a quarterly cash dividend of $ 0 . 07 per share on the Company’s common stock . The dividend will be payable on or about November 25 , 2026 to shareholders of record on November 11 , 2026 .
CAPITAL MANAGEMENT 35 $11.89 $12.16 $12.26 $12.39 $12.34 $11.22 $11.49 $11.59 $11.72 $11.67 BOOK VALUE PER SHARE TANGIBLE BOOK VALUE PER SHARE (non - GAAP) (1) Book Value Tangible Book Value (non-GAAP) The Company’s book value per share was $12.34 at September 30, 2026, compared to $12.16 at December 31, 2025, while tangible book value per share, a non - GAAP financial measure, increased $0.18, or 1.6%, from $11.49 at December 31, 2025 to $11.67 at September 30, 2026. (1) Tangible book value is a non - GAAP measure. See slides 36 - 38 for the related tangible book value calculation and a reconciliatio n of GAAP to non - GAAP financial measures .
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 36 Reconciliation of Non - GAAP to GAAP Financial Measures The Company believes that certain non - GAAP financial measures provide information to investors that is useful in understanding i ts results of operations and financial condition. Because not all companies use the same calculation, this presentation may not be comparable to other simil arly titled measures calculated by other companies. A reconciliation of these non - GAAP financial measures is provided below. 9/30/2026 6/30/2026 3/31/2026 12/31/2025 9/30/2025 Loan interest (no tax adjustment) 28,497$ 27,960$ 27,440$ 27,491$ 26,690$ Tax-equivalent adjustment 118 124 119 125 120 Loan interest (tax-equivalent basis) 28,615$ 28,084$ 27,559$ 27,616$ 26,810$ Loan interest (tax-equivalent basis) 28,615$ 28,084$ 27,559$ 27,616$ 26,810$ Less: Prepayment penalties - 82 16 - 34 Adjusted loan income, excluding prepayment penalties (tax-equivalent basis) (non-GAAP) 28,615$ 28,002$ 27,543$ 27,616$ 26,776$ Average loans 2,191,532$ 2,189,867$ 2,186,529$ 2,166,804$ 2,112,394$ Average loan yield (no tax adjustment) 5.16% 5.12% 5.09% 5.03% 5.01% Average loan yield (no tax adjustment), excluding prepayment penalties (non-GAAP) 5.16% 5.11% 5.09% 5.03% 5.01% Average loan yield (tax-equivalent basis) 5.18% 5.14% 5.11% 5.06% 5.04% Average loan yield (tax equivalent basis), excluding prepayment penalties (non-GAAP) 5.18% 5.13% 5.11% 5.06% 5.03% For the quarter ended (Dollars in thousands)
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 37 9/30/2026 6/30/2026 3/31/2026 12/31/2025 9/30/2025 Net interest income (no tax adjustment) 19,994$ 19,321$ 18,825$ 18,829$ 18,092$ Tax equivalent adjustment 118 124 119 125 120 Net interest income (tax-equivalent basis) 20,112$ 19,445$ 18,944$ 18,954$ 18,212$ Net interest income (no tax adjustment) 19,994$ 19,321$ 18,825$ 18,829$ 18,092$ Less: Prepayment penalties - 82 16 - 34 Adjusted net interest income (non-GAAP) 19,994$ 19,239$ 18,809$ 18,829$ 18,058$ Average interest-earning assets 2,581,655$ 2,585,976$ 2,590,928$ 2,584,310$ 2,553,849$ Net interest margin (no tax adjustment) 3.07% 3.00% 2.95% 2.89% 2.81% Net interest margin (tax-equivalent) 3.09% 3.02% 2.97% 2.91% 2.83% Adjusted net interest margin, excluding prepayment penalties (no tax adjustment) (non-GAAP) 3.07% 2.98% 2.94% 2.89% 2.81% Book Value per Share (GAAP) 12.34$ 12.39$ 12.26$ 12.16$ 11.89$ Non-GAAP adjustments: Goodwill (0.63) (0.62) (0.62) (0.61) (0.61) Core deposit intangible (0.04) (0.05) (0.05) (0.06) (0.06) Tangible Book Value per Share (non-GAAP) 11.67$ 11.72$ 11.59$ 11.49$ 11.22$ For the quarter ended (Dollars in thousands)
APPENDIX: NON - GAAP TO GAAP RECONCILIATION 38 9/30/2026 6/30/2026 3/31/2026 12/31/2025 9/30/2025 Total Bank Equity (GAAP) 249,918$ 253,495$ 253,406$ 252,553$ 248,575$ Non-GAAP adjustments: Goodwill (12,487) (12,487) (12,487) (12,487) (12,487) Core deposit intangible, net of associated (562) (629) (696) (764) (831) Tangible Capital (non-GAAP) 236,869$ 240,379$ 240,223$ 239,302$ 235,257$ Tangible Capital (non-GAAP) 236,869$ 240,379$ 240,223$ 239,302$ 235,257$ Unrealized losses on HTM securities, net of tax (28,816) (22,193) (22,223) (22,019) (23,154) Adjusted Tangible Capital For Impact of Unrealized Losses on HTM Securities Net of Tax (non-GAAP) 208,053$ 218,186$ 218,000$ 217,283$ 212,103$ Common Equity Tier (CET) 1 Capital 260,010$ 257,436$ 257,398$ 256,019$ 253,044$ Total Assets for Leverage Ratio (non-GAAP) 2,746,319$ 2,746,042$ 2,751,073$ 2,746,949$ 2,721,892$ Tier 1 Leverage Ratio 9.47% 9.37% 9.36% 9.32% 9.30% Tangible Common Equity (non-GAAP) =Tangible Capital (non-GAAP)/Total Assets for Leverage Ratio (non-GAAP) 8.62% 8.75% 8.73% 8.71% 8.64% Adjusted Tangible Common Equity for HTM Impact (non-GAAP) = Adjusted Tangible Capital For Impact of Unrealized Losses on HTM Securities Net of Tax (non- GAAP)/Total Assets for Leverage Ratio (non-GAAP) 7.58% 7.95% 7.92% 7.91% 7.79% For the quarter ended (Dollars in thousands)
WESTFIELD BANK “WHAT BETTER BANKING’S ALL ABOUT” James C. Hagan , President and Chief Executive Officer Guida R. Sajdak , Executive Vice President and Chief Financial Officer Meghan Hibner , First Vice President and Investor Relations Officer 39 141 Elm Street, Westfield, MA