Western New England Bancorp, Inc. 10-K

ITEM 3. LEGAL PROCEEDINGS. During the fiscal year ended December 31, 2024, except as set forth below, the Company was not involved in any material pending legal proceedings as a plaintiff or as a defendant, other than routine legal proceedings occurring in the ordinary course of business. Management believes that those routine legal proceedings involve, in the aggregate, amounts that are immaterial to the Company’s financial condition and results of operations financial condition or results of operations. In the fourth quarter of 2023, the Company reached an agreement to settle two (2) purported class action lawsuits concerning the Company’s deposit products and related disclosures, specifically involving overdraft fees and insufficient funds fees. The matters, which asserted claims for breach of contract including the covenant of good faith and fair dealing against the Company, were filed in the Massachusetts Superior Court, County of Suffolk, on June 10, 2022 and July 29, 2022, respectively. Also in March 2022, the Company received from the named plaintiff in one of the putative class action lawsuits a demand letter pursuant to the Massachusetts Consumer Protection Act, M.G.L Ch. 93A (“Chapter 93A”). The demand letter sought restitution and debt forgiveness for the named plaintiff and the putative class, plus double or treble damages and reasonable attorneys’ fees, as may be allowed under Chapter 93A. The Bank retained outside litigation counsel in these matters, and discussions to find a mutually acceptable resolution, including an arms-length mediation before a neutral mediator, proceeded between the parties. On December 29, 2023, the parties entered into an agreement to settle both actions on a class basis. Pursuant to the settlement agreement and for purposes of effectuating the settlement, on January 5, 2024, the cases were refiled as a single action in federal court in Massachusetts. Under the terms of the settlement agreement, the Bank agreed to pay approximately $510,000 in exchange for the dismissal with prejudice and release of all claims that were or could have been asserted in the putative class action lawsuits on behalf of the plaintiffs and all putative settlement class members. On January 23, 2025 the Court granted final approval of the settlement. During the year ended December 31, 2023, the $510,000 in settlement expense was included in non-interest expense in the Company’s Consolidated Statements of Net Income. ITEM 4. MINE SAFETY DISCLOSURES. n ot Applicable. 54 PART II