Regulation FD Presentation, Business/Financial Results (Form 8-K)

Western New England Bancorp, Inc.

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."

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.

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.

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.

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.

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.

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.

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%.

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.

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.

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	%

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.

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.