Western New England Bancorp (WNEB) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $3.5 million ($0.17 per share), up from $2.8 million ($0.13) in Q2 2023 and $2.5 million in 4Q2023; six-month net income was $6.5 million ($0.31 per share), down from $8.1 million ($0.37) year-over-year.

• Net interest income declined 14.1% year-over-year to $14.5 million, down 5.7% sequentially, due to higher deposit costs and a shift to time deposits.

• Non-interest income rose 140.8% to $3.8 million, including a $987,000 gain on non-marketable equity investments.

• Non-interest expense decreased 1.6% to $14.3 million, with lower professional fees and salaries offsetting higher processing and insurance costs.

• Quarterly dividend of $0.07 per share declared; new 2024 share repurchase plan authorized for up to 1.0 million shares, with 470,000 shares repurchased YTD at an average price of $7.32.

Financial highlights

• Net interest margin fell to 2.42% in Q2 2024 from 2.81% in Q2 2023 and 2.57% in Q1 2024.

• Return on average assets was 0.55% and return on average equity was 6.03% for Q2 2024, up from 0.43% and 4.72% in Q2 2023.

• Book value per share was $11.07; tangible book value per share was $10.41 at June 30, 2024.

• Total loans at June 30, 2024 were $2.0 billion, down $1.1 million from year-end; commercial real estate loans fell $23.2 million, while residential real estate loans rose $23.8 million.

• Total deposits increased $28.1 million (1.3%) from year-end to $2.2 billion; core deposits declined $32.3 million, while time deposits rose $60.3 million.

Outlook and guidance

• Management expects continued net interest margin compression and funding challenges due to the prolonged inverted yield curve and high interest rate environment.

• Focus remains on expense management, customer retention, and core deposit growth.

• Management continues to monitor macroeconomic variables, including interest rates and inflation, and believes reserves are appropriate for the current environment.

• No material changes to risk factors or critical accounting policies were noted for the quarter.

• The company continues to monitor economic and regulatory risks, including interest rate trends and competitive deposit pricing.