Western New England Bancorp Q2 profit falls on higher credit loss provision

Overview

• US regional bank's Q2 net income and EPS declined yr/yr

• Q2 net interest income rose 9.5% yr/yr, net interest margin improved to 3.00%

• Company repurchased 195,000 shares in Q2 and maintained quarterly dividend

Outlook

• Company says it continues to monitor interest rates, tariffs, inflation and economic uncertainty

• Western New England Bancorp says it remains disciplined in capital management strategies

• Company says it is proactively identifying and managing credit risk within its loan portfolio

Result Drivers

• CREDIT LOSS PROVISION - Q2 provision for credit losses rose sharply due to a $1.8 mln charge-off on a commercial real estate participation loan after a bankruptcy filing

• NET INTEREST INCOME - Net interest income rose 9.5% yr/yr, driven by higher loan interest and lower interest expense

• NON-INTEREST EXPENSES - Higher salaries, benefits, software and occupancy costs contributed to a 4.5% yr/yr rise in non-interest expense

Company press release: ID:nGNX7gvhwR

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Western New England Bancorp Inc is $15.00, about 4.2% above its July 27 closing price of $14.40

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 13 three months ago

Reuters Recommended Reads

• July 27 - Citizens Community Bancorp Q2 profit drops on higher credit losses

• July 28 - Summit State Bank posts Q2 loss on higher credit provisions

• July 27 - FirstSun Capital Q2 adjusted EPS misses estimates as charge-offs weigh

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)