Western New England Reverses Credit Losses After CRE Charge-Off

The Tip Desk · October 27, 2026 · 3 min read

Net income was $6.3 million, or $0.32 a share, as the bank booked a $971,000 credit-loss reversal after a $1.8 million June CRE participation charge-off.

Western New England Bancorp (WNEB), the holding company for Westfield Bank, reported net income of $6.3 million, or $0.32 a share, for the three months ended September 30, 2026, compared with $3.6 million, or $0.18 a share, in the prior quarter.

The swing followed a $971,000 reversal of credit losses, versus a $1.6 million provision in the second quarter. In June the company recorded an $1.8 million partial charge-off on a non-owner-occupied commercial real estate participation loan secured by an office building after the borrower filed for Chapter 11. The relationship was past due at September 30 and included in nonaccrual loans.

Management said the provision decline reflected lower net charge-offs, paydowns, mix changes and a slight improvement in the Federal Reserve Bank’s quarterly economic outlook. Net recoveries were $274,000, or 0.05% of average loans annualized, versus net charge-offs of $1.8 million, or 0.33%, in the prior quarter.

Net interest income rose $673,000, or 3.5%, to $20.0 million from $19.3 million. The net interest margin expanded 7 basis points to 3.07% (3.09% tax-equivalent), after a 5 basis point expansion to 3.00% in the second quarter. Average loan yield rose 4 basis points to 5.16% and the average cost of total funds fell 4 basis points to 1.82%. Average demand deposits increased $15.3 million, or 2.6%, to $608.4 million, or 25.2% of total average deposits. Average borrowings fell $32.6 million, or 37.9%.

Non-interest income was $3.9 million, up $512,000, or 15.1%, including a $712,000 gain on the sale of two Chicopee buildings. Excluding the gain, non-interest income decreased $200,000, or 5.9%. Service charges and fees on deposits fell $157,000, or 6.5%, to $2.3 million after VISA incentives in the prior quarter. Non-interest expense increased $158,000, or 1.0%, to $16.5 million. The efficiency ratio improved to 69.1% from 72.0%. Return on average assets and return on average equity were 0.91% and 10.1%, versus 0.53% and 5.84%.

At September 30, 2026, total loans were $2.2 billion, up $11.1 million, or 0.5%, from December 31, 2025. Residential real estate including home equity rose $57.3 million, or 6.7%, while commercial real estate fell $40.6 million, or 3.7%, and commercial and industrial loans fell $4.9 million, or 2.2%. Total deposits were $2.4 billion, up $67.2 million, or 2.8%, led by time deposits up $42.2 million, or 6.1%.

Nonaccrual loans were $7.9 million, or 0.36% of total loans, versus $5.2 million, or 0.24%, at year-end 2025. Total delinquency rose to 0.41% of loans from 0.14%. The allowance for credit losses was $19.6 million, or 0.89% of loans, versus $20.3 million, or 0.93%, at year-end 2025. Of $9.1 million in past-due loans, 74.1% were residential real estate.

The board declared a quarterly cash dividend of $0.07 a share, payable on or about November 25, 2026. It also authorized a 2026 repurchase plan of up to 1.0 million shares, or about 5.0% of outstanding common stock, to commence after the 2025 plan. During the quarter the company repurchased 215,000 shares at an average $13.85, leaving 276,465 shares available under the 2025 plan. Book value per share was $12.34.