Executive Summary

Q2 2025 delivered a clean beat: diluted EPS $0.23 versus S&P Global consensus ~$0.14; total revenues rose sharply on net interest margin expansion to 2.80% and lower funding costs, aided by $425k in prepayment penalties and a $615k credit loss reversal . EPS estimate from S&P Global: 0.14333*.
Sequential acceleration: net interest income +13.6% to $17.6M; efficiency ratio improved to 74.4% from 83.0% in Q1; ROA/ROE stepped up to 0.69% and 7.76% .
Core deposits up $81.4M since year-end (+5.2%), time deposits down $13.9M; loan-to-deposit fell to 89.8%, supporting funding stability and NIM expansion .
Capital return remains a catalyst: 497,318 shares repurchased YTD at $9.31; new 1.0M-share 2025 program authorized; dividend of $0.07 declared (payable ~Aug 20, 2025) .
Asset quality stayed strong: NPAs 0.21% of assets; ACL 0.94% of loans; total criticized loans fell $12.3M since year-end .

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded 31 bps sequentially to 2.80% (2.82% tax-equivalent) on rising asset yields and declining deposit costs; excluding prepayment penalties, NIM still improved 24 bps to 2.73% .
Core deposit growth and mix improved: +$81.4M since year-end, core now 70.4% of total deposits; average cost of core deposits fell 7 bps QoQ to 1.01% .
Management quote underscores strategy: “Core deposits increased $81.4 million... allowing us to expand our net interest margin as we continue to decrease the cost of interest-bearing liabilities and our reliance on time deposits” — James C. Hagan, CEO .

What Went Wrong

Non-interest expense rose YoY: +9.4% to $15.7M, driven by salaries/benefits (+11.8%), advertising (+30.7%), data processing (+10.3%), FDIC (+23.5%) .
Non-interest income YoY declined by $423k to $3.4M, primarily on lower gains from non-marketable equity investments versus last year .
CRE contraction and office concentration: CRE loans fell $29.5M YTD; non-owner occupied office exposure totals $174.7M (316.9% of RBC for total CRE), warranting ongoing monitoring amid sector headwinds .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenues ($USD Millions) = Net Interest Income + Non-Interest Income	$18.30 = $14.47 + $3.83	$18.29 = $15.53 + $2.76	$21.05 = $17.64 + $3.41
Diluted EPS ($)	$0.17	$0.11	$0.23
Net Interest Income ($USD Millions)	$14.47	$15.53	$17.64
Non-Interest Income ($USD Millions)	$3.83	$2.76	$3.41
Net Interest Margin (%)	2.42%	2.49%	2.80%
Efficiency Ratio (%)	78.20%	83.00%	74.36%
ROA (%)	0.55%	0.35%	0.69%
ROE (%)	6.03%	3.94%	7.76%

Segment/Portfolio Breakdown (Loans)

Loan Category ($USD Thousands)	Dec 31, 2024	Jun 30, 2025
Commercial Real Estate – Non-owner occupied	$880,828	$859,162
Commercial Real Estate – Owner occupied	$194,904	$187,043
Total Commercial Real Estate	$1,075,732	$1,046,205
Residential Real Estate	$653,802	$677,356
Home Equity	$121,857	$128,003
Total Residential Real Estate	$775,659	$805,359
Commercial & Industrial	$211,656	$234,505
Consumer	$4,391	$3,512
Total Gross Loans	$2,067,438	$2,089,581

Key KPIs and Balance Sheet

KPI	Dec 31, 2024	Jun 30, 2025
Total Deposits ($USD Thousands)	$2,262,647	$2,330,113
Core Deposits ($USD Thousands)	$1,559,064	$1,640,432
Time Deposits ($USD Thousands)	$703,583	$689,681
Loan-to-Deposit Ratio (%)	91.5%	89.8%
Nonperforming Loans (% of total loans)	0.26%	0.27%
ACL (% of total loans)	0.94%	0.94%
ACL (% of nonaccrual loans)	362.93%	343.06%
NPAs (% of total assets)	0.20%	0.21%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q3 2025	$0.07	$0.07 (payable ~Aug 20, 2025; record Aug 6, 2025)	Maintained
Share Repurchase Authorization	2025 Plan	2024 Plan: 1.0M authorized, completed May 30, 2025	New 2025 Plan: up to 1.0M shares; 975k remaining at 6/30/25	Raised (new plan)
Specific financial guidance (revenue, margins, opex, tax)	N/A	Not provided	Not provided	N/A

Note: Company did not issue quantitative guidance for revenue/NIM/OpEx; capital return policies (dividends, buybacks) reiterated .

Earnings Call Themes & Trends

No public Q2 2025 earnings call transcript was available; themes below reflect prepared remarks and investor presentation.

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Net interest margin drivers	Fair value hedge benefit ended; deposit cost management; NIM 2.41–2.49%	NIM 2.80%; asset yields +13 bps QoQ; deposit costs −18 bps; prepayment penalties $425k	Improving
Deposit mix/core growth	Core deposits ~70.0% at Q1; average deposit cost ~2.00%	Core deposits 70.4%; time deposits down; average core deposit cost 1.01%	Positive mix shift
Liquidity & funding	Immediately available liquidity ~$1.1B; L/D down	Liquidity coverage 164% vs uninsured deposits; FHLB/FRB lines ample	Stable/strong
CRE/office exposure	Office portfolio $200.1M; largely pass-rated; no Boston/NY exposure	Office $196.5M; 95.9% pass-rated; concentration in MA/CT; LTVs moderate	Managed cautiously
Asset quality	Delinquencies/NPAs low; ACL robust	NPAs 0.21%; delinquency 0.18%; net recoveries $585k; ACL 0.94%	Stable/benign
Capital return	2024 Plan ongoing; dividends $0.07	2024 Plan completed; new 2025 Plan; 497k shares repurchased YTD; dividend maintained	Accretive buybacks ongoing

Management Commentary

“We are pleased to report solid earnings for the second quarter of 2025, along with strong overall loan growth and core deposit growth... Net interest income increased $2.1 million... while the net interest margin increased 31 basis points from 2.49% to 2.80%...” — James C. Hagan, President & CEO .
“Our capital position continues to remain strong... we repurchased 497,318 shares... We continue to believe that buying back shares, at current prices, represents a prudent use of the Company’s capital.” — James C. Hagan .
CFO/management detail: average cost of time deposits decreased 42 bps QoQ to 3.69%; average demand deposits rose modestly QoQ, supporting NIM .

Q&A Highlights

No Q2 2025 earnings call transcript or Q&A was available in the document set; no additional clarifications beyond the press release and investor presentation .

Estimates Context

Results versus S&P Global consensus and prior periods:

Q2 2025 EPS: Actual $0.23 vs Consensus ~$0.14*; revenue: Company total revenues ~$21.05M vs Consensus ~$16.35M*. Strong beat, driven by NIM expansion and lower deposit costs, plus $425k prepayment penalties and $615k provision reversal . Values retrieved from S&P Global*.
Q1 2025 EPS: Actual $0.11 vs Consensus ~$0.12*; revenue actual ~$18.29M vs Consensus ~$15.58M*. Mixed: slight EPS miss with revenue beat as NIM rose but provision/fee income softer . Values retrieved from S&P Global*.
Q2 2024 EPS: Actual $0.17 vs Consensus ~$0.11*; revenue actual ~$18.30M vs Consensus ~$15.50M*. Beat on both metrics . Values retrieved from S&P Global*.

Forward consensus (next two quarters):

Metric	Q3 2025	Q4 2025
Primary EPS Consensus Mean	0.185*	0.21*
Revenue Consensus Mean ($USD)	17.89M*	18.62M*
Primary EPS – # of Estimates	2*	2*
Revenue – # of Estimates	2*	2*
Target Price Consensus Mean ($)	12.75*	12.75*

Values retrieved from S&P Global*.

Note: S&P “Revenue” definitions for banks may differ from the Company’s “total revenues” (net interest income + non-interest income). Company revenue figures above are calculated per WNEB’s disclosure .

Key Takeaways for Investors

Earnings power inflecting: NIM expansion (+31 bps QoQ) and lower deposit costs should continue to support net interest income into H2, barring rate shocks .
Funding mix improving: Core deposits rising and time deposits shrinking lowers funding cost and reliance on time deposits; L/D ratio sub-90% adds flexibility .
Asset quality benign with reserve coverage strong; Q2 net recoveries and reversal of credit losses are positive indicators amid monitored CRE/office exposures .
Capital return is a visible driver: ongoing buybacks (975k shares remaining in 2025 plan) and steady dividends can be accretive to EPS and TBV per share .
Watch non-interest expenses: elevated salaries/benefits, FDIC, and technology costs are headwinds; operating leverage improved this quarter via stronger revenues .
Liquidity ample: immediate liquidity ~$1.28B vs uninsured deposits ~$688M (coverage 164%) reduces event risk and supports balance sheet optimization .
Near-term trading: EPS/revenue beats and NIM expansion are positive catalysts; monitor subsequent quarters for sustainability excluding one-offs (prepayment penalties) and for deposit cost trajectory .

Values retrieved from S&P Global* where noted.

Western New England Bancorp, Inc. (WNEB)·Q2 2025 Earnings Summary