United Financial Bancorp, Inc. Announces Fourth Quarter Earnings, Portfolio Purchases, New Share Repurchase Authorization, And Quarterly Dividend

26 Jan, 2016, 16:25 ET from United Financial Bancorp, Inc.

GLASTONBURY, Conn., Jan. 26, 2016 /PRNewswire/ -- United Financial Bancorp, Inc. ("United Financial" or the "Company") (NASDAQ Global Select Stock Market: "UBNK"), the holding company for United Bank (the "Bank"), today announced results for the quarter ended December 31, 2015.

The Company had net income of $9.9 million, or $0.20 per diluted share, for the quarter ended December 31, 2015, compared to net income for the linked quarter of $13.4 million, or $0.27 per diluted share. Operating net income for the fourth quarter of 2015 was $11.3 million (Non-GAAP), or $0.23 per diluted share, compared to $10.9 million, or $0.22 per diluted share for the linked quarter. Operating net income for the fourth quarter was adjusted for purchase accounting benefits, bank owned life insurance proceeds, net gain on sale of securities, separation expenses related to the previously announced departure of our Chief Operating Officer ("COO"), and fees associated with the acquisition of loan portfolios during the quarter. The Company reported net income of $1.4 million, or $0.03 per diluted share, for the quarter ended December 31, 2014.

Late in the fourth quarter of 2015, the Company completed the acquisition of a specialty marine finance portfolio and a 13 person team supporting the origination and underwriting of floor plan loans on select premium global marine manufacturers and resulting retail end loans. The specialty marine portfolio totaled $171.8 million at December 31, 2015. Also late in the quarter, the Company completed two additional consumer portfolio purchases totaling $158.7 million which supports the Company's efforts to geographically diversify credit exposure and shift the composition of the loan portfolio into favorable consumer products with more favorable risk adjusted returns.

Net income for the year ended December 31, 2015 was $49.6 million, or $1.00 per diluted share, and increased from $6.8 million or $0.16 per diluted share for the year ended December 31, 2014. Operating net income of $44.2 million (Non-GAAP), or $0.90 per diluted share for the year ended December 31, 2015 increased from $26.7 million, or $0.62 per diluted share for the year ended December 31, 2014.  Adjustments to operating net income from GAAP net income for 2014 are largely related to the merger costs and are itemized in the reconciliation of non-GAAP measures.

"I am pleased to announce the establishment of LH-Finance, a division of United Bank, a specialty marine finance business unit based in Baltimore, Maryland, which will originate and underwrite floor plan loans on premium global marine manufacturers and resulting retail loans," stated William H. W. Crawford, IV, Chief Executive Officer of the Company and the Bank. "In addition to the specialty marine portfolio and team lift out, the Company closed on two consumer portfolios with attractive risk adjusted yields.  Our fourth quarter results were impacted by non-recurring expenses associated with the three portfolio purchases and the previously disclosed elimination of the COO position and related severance."

"For 2015, the Company's return on average assets ("ROA") was 0.87%, and return on average equity ("ROE") was 8.08%, resulting from strong commercial loan growth, and consistent mortgage banking activity. Looking forward to 2016, we expect to continue to show improvement of operating pre-tax, pre-provision revenue as it relates to average assets through organic growth and expense management, as well as continuing to shift the overall consumer portfolio composition to more favorable risk adjusted returns," added Mr. Crawford. "At United, people are our competitive advantage and I want to personally thank each one of them for their hard work in making 2015 a great year for the Bank and for their continued support in the communities we serve."

Financial Highlights

  • Achieved record operating net income of $11.3 million for quarter ended December 31, 2015
  • Commercial loan growth $87 million or 13% annualized; commercial business loan growth $26 million or 18% annualized
  • DDA growth 32% annualized
  • $326 million of loan portfolio purchases
  • Specialty marine team lift out completed
  • Operating Non-Interest Expense/Average Assets (NIE/AA) of 2.13% for the quarter (annualized) and 2.17% for full year 2015

 

Earnings Results

The Company reported quarterly net income of $9.9 million, or $0.20 per diluted share, and ROA of 0.66% in the fourth quarter of 2015. Interest income totaled $49.7 million in the fourth quarter of 2015 and increased by $89,000, or 0.2%, in comparison to the linked quarter. Earning assets grew by $375.5 million, or 7%, during the quarter driven by the aforementioned portfolio purchases late in the quarter, while average interest-earning assets increased by $242.5 million, or 4%, from the linked quarter due primarily to three consecutive quarters of strong commercial loan growth. Compared to the linked quarter, interest expense increased by $1.0 million, or 13%, to $9.0 million for the fourth quarter of 2015. This interest expense increase was driven by the $119.3 million increase in average Federal Home Loan Bank advances and other borrowings, coupled with a 5 basis point increase in the cost of interest-bearing deposits. Interest expense on deposits increased by $480,000, while average interest-bearing deposit balances increased by $50.6 million and average non-interest bearing deposit balances increased by $27.2 million from the linked quarter.

The GAAP tax equivalent net interest margin for the fourth quarter of 2015 decreased by 18 basis points to 3.02% compared to 3.20% for the linked quarter. The yields on interest-earning assets decreased by 13 basis points in the fourth quarter of 2015 to 3.66% as compared to the linked quarter, largely reflective of the reduced benefit of purchase accounting loan accretion. Additionally, the Company continues to experience strong execution of interest rate swaps. The result of these loan-level hedges is that the Company originates more variable rate loans with lower yields; however, greater fee income is recognized at the time of the swap origination. The increase in the interest-bearing cost of funds of six basis points, to 0.77%, was attributable to an increase of 17 basis points in the cost of Federal Home Loan Bank advances driven by the duration extension of wholesale funding, coupled with an increase of five basis points in the cost of interest bearing liabilities. The increase in the cost of interest bearing liabilities was driven by an increase of 12 basis points in the cost of certificates of deposit relating to a reduced purchase accounting benefit, while the cost of NOW and money market balances decreased by three basis points and the cost of savings balances decreased by one basis point. The operating net interest margin, which excludes the impact of purchase accounting adjustments, increased by 1 basis point to 2.90% in the fourth quarter of 2015 from 2.89% in the linked quarter.

The net benefit to interest income in the fourth quarter of 2015 from accretion of purchase accounting adjustments totaled $718,000, a 74% decrease from $2.8 million recognized in the linked quarter. The decline between the two quarters reflects the decreased impact of loan purchase accounting marks. Interest expense benefited from net accretion of discounts totaling $899,000 in the fourth quarter of 2015, a 31% decrease from $1.3 million recognized in the linked quarter. The decrease in the interest expense benefit was due to a notably lower level of maturities related to time deposits in the fourth quarter of 2015 as compared to the linked quarter.

The provision for loan losses increased by 16%, or $528,000, to $3.8 million for the quarter ended December 31, 2015 compared to $3.3 million for the linked quarter due to growth of the covered portfolio for the current period as compared to the linked quarter, primarily from commercial loans. The level of non-covered portfolio expansion results from an increase in the purchased loan portfolios that were recorded at fair market value. Net charge-offs for the fourth quarter of 2015 decreased by $551,000 to $724,000, or 0.06% annualized as a percentage of average loans outstanding, from $1.3 million, or 0.12% annualized as a percentage of average loans outstanding, in the linked quarter. Factors considered in the provision for loan losses include, but are not limited to, historical charge-offs, the composition of the portfolio, the current level of non-performing loans and charge-offs, local economic and credit conditions, the direction of real estate values and delinquency trends.

Total non-interest income increased by $645,000, or 8%, to $8.5 million for the quarter ended December 31, 2015 from $7.8 million in the linked quarter. The most significant factors attributing to the increase in the fourth quarter's non-interest income were the $359,000 increase in gain on sale of securities, and the $605,000 increase in other income driven by a positive adjustment to loan level hedge valuations due to higher long term interest rates, offset by a $323,000 decline in mortgage banking activities income due to expected seasonality of mortgage production in the fourth quarter. The mortgage servicing rights valuation increased by $1.1 million as compared to the linked quarter.

Non-interest income in the fourth quarter of 2015 includes the recognition of a $799,000 loss related to limited partnership investments, and is consistent with the linked quarter. The loss correlates with the utilization of tax benefits and is more than offset in the tax provision for both the fourth quarter of 2015 and the linked quarter.

Non-Interest Expense

Non-interest expense for the quarter ended December 31, 2015 totaled $35.3 million and increased by $3.4 million, or 11%, from the linked quarter. The increase was the result of several non-recurring items including expenses associated with the previously disclosed executive departure, and investment banking fees recognized in the quarter associated with the portfolio purchases. Cumulatively, this added $3.4 million of pre-tax expense in the quarter that the Company considers non-recurring. The Company's cost structure continues to be favorable with non-interest expense as a percentage of average assets reported at 2.25% and operating non-interest expense as a percentage of average assets reported at 2.17% for the full year ended December 31, 2015. Salaries and benefits increased by $314,000 from the linked quarter due to staffing related to the on-boarding of the specialty marine finance unit, investments made in our payment operations area to support cash management and debit card fraud prevention monitoring, investments made in our information security unit and compliance, and producers in our wealth management division. Service bureau fees declined $214,000 due to a decrease in expenses related to issuing EMV chip cards in the linked quarter that were not recurring in the current period. Occupancy and equipment expenses increased $499,000 due in part to lease negotiation termination benefits realized in the linked quarter. Professional fees increased $1.5 million from the linked quarter which includes the aforementioned investment banking fees paid in connection to the loan portfolio purchases. Other expenses declined $393,000 from the linked quarter due to lower debit card fraud losses and lower expenses associated with loan level hedge activity. Excluding the noted expenses pertaining to the executive separation and loan portfolio acquisition totaling $3.4 million, non-interest expense was flat in comparison to the linked quarter. 

Business Line Discussions

Commercial Banking

Total commercial loans increased by $84 million, or 13% annualized, during the fourth quarter of 2015. For the quarter ended December 31, 2015, commercial loan activity was comprised of an increase in the commercial real estate portfolio of $74 million, or 4%, and an increase in the commercial business portfolio of $26 million, or 5%, offset by a decrease in the commercial construction portfolio of $17 million, or 12%. Commercial banking profitability was augmented by continued loan level hedging fee income which was $2.3 million and $2.4 million for the quarters ended December 31, 2015 and September 30, 2015, respectively. The Company has been able to successfully meet the customer preference for fixed rate loans in this low interest rate environment while prudently managing interest rate risk and increasing fee income.

In the quarter ending December 31, 2015, total commercial deposits declined $41 million, or 5%, due to expected seasonality in our municipal businesses; however, total transaction accounts, which include demand deposits and NOW accounts, increased $17 million, or 6%. In the year ending December 31, 2015, total commercial deposits grew $94 million, or 14%, of which transaction accounts increased $53 million, or 22%.

Consumer Lending

In the fourth quarter of 2015, the Company produced residential mortgage originations of $146 million, reflecting expected seasonality in the final quarter of the year. In 2015, residential mortgage originations totaled $706 million, an increase of $327 million, or 87%, from $378 million in the prior year. Purchase mortgage activity represented 66% of the production during the fourth quarter of 2015, and 37% of the quarter's production was comprised of adjustable rate mortgages. For the full year of 2015, 58% of the production represented purchase activity and 35% of production was comprised of adjustable rate mortgages. The Company sold residential mortgage loans totaling $119 million during the fourth quarter of 2015, and $404 million during the full year of 2015.

Funding & Deposits

Deposits totaled $4.44 billion at December 31, 2015 and increased by $174 million, or 4%, from $4.26 billion at September 30, 2015, reflecting a $49 million, or 8%, increase in non-interest bearing deposits and a $125 million, or 3% increase in interest bearing deposits. The cost of total interest bearing deposits increased by five basis points to 0.63% in the quarter ending December 31, 2015 from 0.58% in the linked quarter, primarily due to the increased cost of time deposits. Money market account specials expiring and seasonal increases in lower cost municipal money market deposits both drove down the cost of money market accounts during the fourth quarter of 2015, while maturities of acquired time deposits decreased the benefit of purchase accounting in the fourth quarter of 2015 relative to the linked period as well as selected promotional pricing to extend the duration of the time deposit portfolio.

Asset Quality

Non-performing assets increased by $1.5 million to $38.6 million at December 31, 2015 from $37.1 million at September 30, 2015. The ratio of non-performing assets to total assets as compared to the linked quarter remained largely unchanged at 0.62% at December 31, 2015. The allowance for loan losses as a percentage of total covered loans outstanding increased to 1.07% at December 31, 2015 from 1.04% at September 30, 2015.  The Company maintains a disciplined approach to asset quality and will not match extremely favorable pricing or underwriting and structure pressures from competitor banks if those considerations do not meet the Company's asset quality and return standards.

Dividend

The Board of Directors declared a cash dividend on the Company's common stock of $0.12 per share to shareholders of record at the close of business on February 5, 2016 and payable on February 18, 2016. This dividend equates to a 3.59% annualized yield based on the $13.38 average closing price of the Company's common stock in the fourth quarter of 2015. The Company has paid dividends for 39 consecutive quarters.

Tangible Book Value

Tangible book value per share increased to $10.07 at December 31, 2015 from $10.06 at September 30, 2015, primarily due to the impact of the Company's net income of $9.9 million and awards granted under the 2015 Omnibus Stock Incentive Plan in the fourth quarter. These increases were partially offset by the cash dividend payment to shareholders of $0.12 per share. Book value per share at December 31, 2015 was $12.53.

Capital Management

The Company reported Tangible Common Equity ("TCE") of $503 million, or 8.43% of average assets, at December 31, 2015. The Company obtained approval for and initiated a third buyback plan on October 15, 2014. Under this plan, the Company was authorized to repurchase up to 2,566,283 shares, or 5% of the outstanding shares at the time the plan was approved and had a remaining authorization to purchase an additional 254,394 shares.  On January 26, 2016, the Company's Board of Directors approved a fourth share repurchase plan authorizing the Company to repurchase up to 2.5% of outstanding shares, or 1,248,536 shares. In connection with this authorization, the third share repurchase program was suspended and the remaining shares are no longer available for repurchase. The Company did not repurchase any shares during the quarter ended December 31, 2015.  The Company anticipates leveraging its capital through organic loan growth.

Investor Conference Call

United Financial Bancorp, Inc. will host a conference call on Wednesday, January 27, 2016 at 10:00 a.m. Eastern Time (ET) to discuss the Company's fourth quarter results. Those wishing to participate in the call may dial toll-free 1-888-339-0797. A telephone replay of the call will be available through February 11, 2016 by calling 1-877-344-7529 and entering conference number 10078748. A podcast will be available on the Company's website for an extended period of time, as well as on the Company's investor relations app.

Investor Presentation

United Financial Bancorp, Inc. has prepared and furnished a visual slide presentation to accompany the earnings press release and investor conference call. The presentation has been furnished as an exhibit to the SEC Form 8-K, but is not included in this press release. Copies of the presentation may be accessed on the Company's investor relations website (www.unitedfinancialinc.com) by selecting "News & Market Data," then "Presentations;" or via the IRapp and selecting "Presentations;" or directly from SEC EDGAR.

About United Financial Bancorp, Inc.

United Financial Bancorp, Inc. is the holding company for United Bank, a full service financial services firm offering a complete line of commercial, business, and consumer banking products and services to customers throughout Connecticut and Massachusetts. On April 30, 2014, United Bank and Rockville Bank completed a transformational merger of equals bringing together two financially strong, well-respected institutions and creating a leading New England bank with more than 50 branches in two states. Through the merger, Rockville Financial, Inc. completed the acquisition of United Financial Bancorp, Inc. The combined Company, known as United Financial Bancorp, Inc. trades on the NASDAQ Global Select Stock Exchange under the ticker symbol "UBNK". At December 31, 2015, the Company had $6.2 billion in assets.

For more information about United Bank's services and products call (866) 959-BANK or visit www.bankatunited.com. For more information about United Financial Bancorp, Inc., visit www.unitedfinancialinc.com or download the Company's free Investor Relations app on your Apple or Android device.

To download United Financial Bancorp, Inc.'s investor relations app on your iPhone or on your iPad, which offers access to SEC documents, press releases, videos, audiocasts and more, please visit: https://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=725271098&mt=8 or https://play.google.com/store/apps/details?id=com.theirapp.ubnk for your Android mobile device.

Forward Looking Statements

This press release may contain certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged.

 

 


United Financial Bancorp, Inc. and Subsidiaries

Consolidated Statements of Net Income

(In Thousands, Except Share Data)

(Unaudited)




For the Three Months Ended
December 31,


For the Year Ended
December 31,



2015


2014


2015


2014

Interest and dividend income:









Loans


$

41,751



$

40,682



$

165,409



$

133,011


Securities-taxable interest


5,092



5,303



20,039



16,367


Securities-non-taxable interest


2,001



1,794



8,354



5,113


Securities-dividends


809



409



2,363



1,302


Interest-bearing deposits


61



21



180



86


Total interest and dividend income


49,714



48,209



196,345



155,879


Interest expense:









Deposits


5,799



4,265



21,442



13,559


Borrowed funds


3,222



2,052



10,321



4,448


Total interest expense


9,021



6,317



31,763



18,007


Net interest income


40,693



41,892



164,582



137,872


Provision for loan losses


3,780



4,333



13,005



9,496


Net interest income after provision for loan losses


36,913



37,559



151,577



128,376


Non-interest income:









Service charges and fees


5,606



4,330



21,040



13,509


Net gain (loss) from sales of securities


300



(59)



939



1,228


Income from mortgage banking activities


1,934



434



9,552



3,203


Bank-owned life insurance


1,059



897



3,616



3,042


Net loss on limited partnership investments


(799)



(2,048)



(3,136)



(4,224)


Other income (loss)


363



(553)



476



(153)


Total non-interest income


8,463



3,001



32,487



16,605


Non-interest expense:









Salaries and employee benefits


17,308



16,758



67,469



59,332


Service bureau fees


1,614



2,304



6,728



8,179


Occupancy and equipment


3,842



5,653



15,442



13,239


Professional fees


3,037



1,297



6,317



3,662


Marketing and promotions


478



1,420



2,321



2,296


FDIC insurance assessments


1,041



818



3,692



2,553


Other real estate owned


35



223



237



792


Core deposit intangible amortization


433



481



1,796



1,283


Merger related expense


1,575



10,136



1,575



36,918


Other


5,942



5,986



22,618



16,178


Total non-interest expense


35,305



45,076



128,195



144,432


Income (loss) before income taxes


10,071



(4,516)



55,869



549


Provision (benefit) for income taxes


169



(5,937)



6,229



(6,233)


Net income


$

9,902



$

1,421



$

49,640



$

6,782











Net income per share:









Basic


$

0.20



$

0.03



$

1.01



$

0.16


Diluted


$

0.20



$

0.03



$

1.00



$

0.16


Weighted-average shares outstanding:









Basic


49,160,925



50,329,002



48,912,807



42,829,094


Diluted


49,621,935



51,086,811



49,385,566



43,269,517


 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Consolidated Statements of Net Income

(In Thousands)

(Unaudited)




For the Three Months Ended



December 31,
2015


September 30,
2015


June 30,
2015


March 31,
2015


December 31,
2014

Interest and dividend income:











Loans


$

41,751



$

41,878



$

41,253



$

40,527



$

40,682


Securities-taxable interest


5,092



4,907



4,771



5,269



5,303


Securities-non-taxable interest


2,001



2,080



2,181



2,092



1,794


Securities-dividends


809



708



472



374



409


Interest-bearing deposits


61



52



34



33



21


Total interest and dividend income


49,714



49,625



48,711



48,295



48,209


Interest expense:











Deposits


5,799



5,319



5,584



4,740



4,265


Borrowed funds


3,222



2,663



2,224



2,212



2,052


Total interest expense


9,021



7,982



7,808



6,952



6,317


Net interest income


40,693



41,643



40,903



41,343



41,892


Provision for loan losses


3,780



3,252



4,462



1,511



4,333


Net interest income after provision for loan losses


36,913



38,391



36,441



39,832



37,559


Non-interest income:











Service charges and fees


5,606



5,960



5,643



3,831



4,330


Net gain (loss) from sales of securities


300



(59)



360



338



(59)


Income from mortgage banking activities


1,934



2,257



2,990



2,371



434


Bank-owned life insurance


1,059



893



830



834



897


Net loss on limited partnership investments


(799)



(991)



(916)



(430)



(2,048)


Other income (loss)


363



(242)



464



(109)



(553)


Total non-interest income


8,463



7,818



9,371



6,835



3,001


Non-interest expense:











Salaries and employee benefits


17,308



16,994



16,595



16,572



16,758


Service bureau fees


1,614



1,828



1,466



1,820



2,304


Occupancy and equipment


3,842



3,343



3,799



4,458



5,653


Professional fees


3,037



1,581



782



917



1,297


Marketing and promotions


478



587



620



636



1,420


FDIC insurance assessments


1,041



750



823



1,078



818


Other real estate owned


35



25



62



115



223


Core deposit intangible amortization


433



433



449



481



481


Merger related expense


1,575









10,136


Other


5,942



6,335



5,761



4,580



5,986


Total non-interest expense


35,305



31,876



30,357



30,657



45,076


Income (loss) before income taxes


10,071



14,333



15,455



16,010



(4,516)


Provision (benefit) for income taxes


169



952



2,123



2,985



(5,937)


Net income


$

9,902



$

13,381



$

13,332



$

13,025



$

1,421


 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Consolidated Statements of Condition

(In Thousands)

(Unaudited)




December 31,
2015


September 30,
2015


June 30,
2015


March 31,
2015


December 31,
2014

ASSETS











Cash and cash equivalents:











Cash and due from banks


$

47,602



$

38,534



$

44,482



$

43,348



$

43,416


Short-term investments


47,574



59,776



40,043



46,013



43,536


Total cash and cash equivalents


95,176



98,310



84,525



89,361



86,952


Available for sale securities – At fair value


1,059,169



1,080,393



1,061,927



1,094,229



1,053,011


Held to maturity securities – At amortized cost


14,565



14,715



14,992



15,204



15,368


Loans held for sale


10,136



13,511



28,017



13,002



8,220


Loans receivable, net of allowance for loan losses


4,587,062



4,185,032



4,048,770



3,884,067



3,877,063


Federal Home Loan Bank of Boston stock, at cost


51,196



40,814



37,061



34,006



31,950


Accrued interest receivable


15,740



15,477



14,777



14,958



14,212


Deferred tax asset, net


33,094



31,554



31,822



29,956



33,833


Premises and equipment, net


54,779



55,919



57,131



57,718



57,665


Goodwill


115,281



115,281



115,265



115,232



115,240


Core deposit intangible asset


7,506



7,939



8,372



8,821



9,302


Cash surrender value of bank-owned life insurance


125,101



125,186



124,287



123,456



122,622


Other real estate owned


755



258



227



1,711



2,239


Other assets


58,981



58,633



53,517



49,429



49,132


Total assets


$

6,228,541



$

5,843,022



$

5,680,690



$

5,531,150



$

5,476,809













LIABILITIES AND STOCKHOLDERS' EQUITY











Liabilities:











Deposits:











Non-interest-bearing


$

672,008



$

622,535



$

610,279



$

598,157



$

602,359


Interest-bearing


3,765,063



3,640,436



3,571,972



3,558,958



3,432,952


Total deposits


4,437,071



4,262,971



4,182,251



4,157,115



4,035,311


Mortgagors' and investor escrow accounts


13,526



8,108



15,168



8,815



13,004


Federal Home Loan Bank advances and other borrowings


1,099,020



893,865



825,963



707,318



777,314


Accrued expenses and other liabilities


53,403



56,626



45,313



47,779



48,772


Total liabilities


5,603,020



5,221,570



5,068,695



4,921,027



4,874,401


Total stockholders' equity


625,521



621,452



611,995



610,123



602,408


Total liabilities and stockholders' equity


$

6,228,541



$

5,843,022



$

5,680,690



$

5,531,150



$

5,476,809


 

 

 


United Financial Bancorp, Inc. and Subsidiaries

Selected Financial Highlights

(Dollars In Thousands, Except Share Data)

(Unaudited)




At or For the Three Months Ended



December 31,
 2015


September 30,
 2015


June 30,
 2015


March 31,
2015


December 31,
2014

Share Data:











Basic net income per share


$

0.20



$

0.27



$

0.27



$

0.27



$

0.03


Diluted net income per share


0.20



0.27



0.27



0.26



0.03


Dividends declared per share


0.12



0.12



0.12



0.10



0.10


Key Statistics:











Total revenue


$

49,156



$

49,461



$

50,274



$

48,178



$

44,893


Total non-interest expense


35,305



31,876



30,357



30,657



45,076


Average earning assets


5,575,297



5,332,758



5,112,581



5,084,717



4,969,225


Key Ratios:











Return on average assets (annualized)


0.66

%


0.93

%


0.96

%


0.95

%


0.11

%

Return on average equity (annualized)


6.35

%


8.68

%


8.69

%


8.63

%


0.90

%

Tax-equivalent net interest margin (annualized)


3.02

%


3.20

%


3.30

%


3.37

%


3.44

%

Residential Mortgage Production:











Dollar volume (total)


$

146,271



$

187,926



$

203,433



$

168,023



$

121,886


Mortgages originated for purchases


95,927



131,609



115,286



64,108



74,171


Loans sold


119,289



123,316



93,972



67,377



39,489


Income from mortgage banking activities


1,934



2,257



2,990



2,371



434


Non-performing Assets:











Residential real estate


$

13,979



$

14,577



$

12,377



$

12,527



$

12,387


Commercial real estate


11,504



11,581



10,989



12,056



10,663


Construction


2,808



1,604



1,334



1,686



611


Commercial business


3,898



4,475



5,315



4,349



4,872


Installment and collateral


2



3



13



13



25


Non-accrual loans


32,191



32,240



30,028



30,631



28,558


Troubled debt restructured – non-accruing


5,611



4,605



5,346



5,034



3,800


Total non-performing loans


37,802



36,845



35,374



35,665



32,358


Other real estate owned


755



258



227



1,711



2,239


Total non-performing assets


$

38,557



$

37,103



$

35,601



$

37,376



$

34,597


Non-performing loans to total loans


0.82

%


0.88

%


0.87

%


0.91

%


0.83

%

Non-performing assets to total assets


0.62

%


0.63

%


0.63

%


0.68

%


0.63

%

Allowance for loan losses to non-performing loans


89.64

%


83.68

%


81.57

%


70.93

%


76.67

%

Allowance for loan losses to total loans


0.73

%


0.73

%


0.71

%


0.65

%


0.64

%

Non-GAAP Ratios: (1)











Non-interest expense to average assets (annualized)


2.37

%


2.22

%


2.19

%


2.23

%


3.35

%

Efficiency ratio (2)


62.20

%


61.20

%


57.36

%


60.82

%


66.48

%

Cost of funds (annualized) (3)


0.68

%


0.63

%


0.64

%


0.57

%


0.54

%

Total revenue growth rate


(0.62)

%


(1.62)

%


4.35

%


7.32

%


(2.97)

%

Total revenue growth rate (annualized)

(2.47)

%


(6.47)

%


17.40

%


29.27

%


(11.90)

%

Average earning asset growth rate


4.55

%


4.31

%


0.55

%


2.32

%


3.14

%

Average earning asset growth rate (annualized)

18.19

%


17.23

%


2.19

%


9.30

%


12.56

%

Return on average tangible common equity (annualized)


8.14

%


11.08

%


11.12

%


11.13

%


1.37

%

Pre-provision net revenue to average assets (4)


0.96

%


1.38

%


1.56

%


1.36

%


1.16

%

Operating pre-provision net revenue to average assets


1.03

%


0.96

%


1.19

%


1.03

%


0.72

%



(1)

Non-GAAP Ratios are not financial measurements required by generally accepted accounting principles; however, management believes such information is useful to investors in evaluating Company performance.

(2)

 The efficiency ratio represents the ratio of non-interest expense before other real estate owned expense, amortization of intangibles, and goodwill impairment as a percent of net interest income (fully taxable equivalent) and non-interest income, excluding gains from securities transactions, losses on partnerships and nonrecurring items.

(3)

The cost of funds ratio represents interest incurred on liabilities as a percentage of average non-interest bearing deposits and interest-bearing liabilities.

(4)

The pre-provision net revenue to average assets ratio represents the ratio of net interest income, on a fully tax-equivalent basis, fees and other non-interest income, as a percent of average assets.

 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Average Balance Sheets, Interest and Yields/Costs

(Dollars In Thousands)

(Unaudited)




For the Three Months Ended



December 31, 2015


December 31, 2014



Average
Balance


Interest
and
Dividends


Yield/Cost


Average
Balance


Interest
and
Dividends


Yield/Cost

Interest-earning assets:













Residential real estate


$

1,555,950



$

12,912



3.32

%


$

1,403,045



$

12,296



3.51

%

Commercial real estate


1,950,133



20,228



4.12



1,665,230



19,538



4.65


Construction


179,684



1,760



3.89



162,823



2,406



5.86


Commercial business


604,976



6,288



4.12



618,429



6,380



4.09


Installment and collateral


74,131



968



5.22



8,483



62



2.94


Investment securities


1,129,522



9,007



3.19



1,078,162



8,498



3.15


Other earning assets


80,901



61



0.30



33,053



21



0.25


Total interest-earning assets


5,575,297



51,224



3.66



4,969,225



49,201



3.94


Allowance for loan losses


(31,968)







(23,353)






Non-interest-earning assets


422,145







434,559






Total assets


$

5,965,474







$

5,380,431






Interest-bearing liabilities:













NOW and money market


$

1,533,823



$

1,826



0.47

%


$

1,309,691



$

1,024



0.31

%

Savings


517,219



71



0.05



549,209



100



0.07


Certificates of deposit


1,619,038



3,902



0.96



1,545,452



3,141



0.81


Total interest-bearing deposits


3,670,080



5,799



0.63



3,404,352



4,265



0.50


Federal Home Loan Bank advances


797,484



1,805



0.90



469,194



589



0.50


Other borrowings


163,974



1,417



3.43



205,057



1,463



2.85


Total interest-bearing liabilities


4,631,538



9,021



0.77



4,078,603



6,317



0.62


Non-interest-bearing deposits


637,481







616,618






Other liabilities


72,902







53,786






Total liabilities


5,341,921







4,749,007






Stockholders' equity


623,553







631,424






Total liabilities and stockholders' equity


$

5,965,474







$

5,380,431






Net interest-earning assets


$

943,759







$

890,622






Tax-equivalent net interest income




42,203







42,884




Tax-equivalent net interest rate spread






2.89

%






3.32

%

Tax-equivalent net interest margin






3.02

%






3.44

%

Average interest-earning assets to average interest-bearing liabilities






120.38

%






121.84

%

Less tax-equivalent adjustment




1,510







992




Net interest income




$

40,693







$

41,892




 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Average Balance Sheets, Interest and Yields/Costs

(Dollars In Thousands)

(Unaudited)




For the Three Months Ended



December 31, 2015


September 30, 2015



Average
Balance


Interest
and
Dividends


Yield/Cost


Average
Balance


Interest
and
Dividends


Yield/Cost

Interest-earning assets:













Residential real estate


$

1,555,950



$

12,912



3.32

%


$

1,539,362



$

12,931



3.36

%

Commercial real estate


1,950,133



20,228



4.12



1,816,122



18,901



4.13


Construction


179,684



1,760



3.89



173,355



1,952



4.47


Commercial business


604,976



6,288



4.12



612,909



8,044



5.21


Installment and collateral


74,131



968



5.22



4,265



50



4.67


Investment securities


1,129,522



9,007



3.19



1,123,005



8,843



3.15


Other earning assets


80,901



61



0.30



63,740



52



0.33


Total interest-earning assets


5,575,297



51,224



3.66



5,332,758



50,773



3.79


Allowance for loan losses


(31,968)







(29,901)






Non-interest-earning assets


422,145







449,311






Total assets


$

5,965,474







$

5,752,168






Interest-bearing liabilities:













NOW and money market


$

1,533,823



$

1,826



0.47

%


$

1,500,449



$

1,874



0.50

%

Savings


517,219



71



0.05



527,430



82



0.06


Certificates of deposit


1,619,038



3,902



0.96



1,591,618



3,363



0.84


Total interest-bearing deposits


3,670,080



5,799



0.63



3,619,497



5,319



0.58


Federal Home Loan Bank advances


797,484



1,805



0.90



695,208



1,276



0.73


Other borrowings


163,974



1,417



3.43



146,936



1,387



3.75


Total interest-bearing liabilities


4,631,538



9,021



0.77



4,461,641



7,982



0.71


Non-interest-bearing deposits


637,481







610,253






Other liabilities


72,902







63,620






Total liabilities


5,341,921







5,135,514






Stockholders' equity


623,553







616,654






Total liabilities and stockholders' equity


$

5,965,474







$

5,752,168






Net interest-earning assets


$

943,759







$

871,117






Tax-equivalent net interest income




42,203







42,791




Tax-equivalent net interest rate spread






2.89

%






3.08

%

Tax-equivalent net interest margin






3.02

%






3.20

%

Average interest-earning assets to average interest-bearing liabilities






120.38

%






119.52

%

Less tax-equivalent adjustment




1,510







1,148




Net interest income




$

40,693







$

41,643




 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Average Balance Sheets, Interest and Yields/Costs

(Dollars In Thousands)

(Unaudited)




For the Year Ended



December 31, 2015


December 31, 2014



Average

Balance


Interest

and

Dividends


Yield/Cost


Average

Balance


Interest

and

Dividends


Yield/Cost

Interest-earning assets:













Residential real estate


$

1,508,370



$

50,859



3.37

%


$

1,134,890



$

39,537



3.48

%

Commercial real estate


1,776,407



77,710



4.37



1,365,059



65,044



4.76


Construction


172,257



7,942



4.61



106,291



7,469



7.03


Commercial business


610,424



29,093



4.77



492,035



20,549



4.18


Installment and collateral


22,599



1,107



4.90



10,147



412



4.06


Investment securities


1,127,144



35,370



3.14



833,402



25,607



3.07


Other earning assets


60,956



181



0.30



35,842



86



0.24


Total interest-earning assets


5,278,157



202,262



3.83



3,977,666



158,704



3.99


Allowance for loan losses


(28,483)







(21,192)






Non-interest-earning assets


444,518







329,652






Total assets


$

5,694,192







$

4,286,126






Interest-bearing liabilities:













NOW and money market


$

1,470,459



$

7,183



0.49

%


$

1,109,625



$

3,293



0.30

%

Savings


529,659



319



0.06



418,091



437



0.10


Certificates of deposit


1,577,739



13,940



0.88



1,218,782



9,829



0.81


Total interest-bearing deposits


3,577,857



21,442



0.60



2,746,498



13,559



0.49


Federal Home Loan Bank advances


664,665



4,749



0.71



344,218



2,326



0.68


Other borrowings


162,419



5,572



3.43



127,381



2,122



1.67


Total interest-bearing liabilities


4,404,941



31,763



0.72



3,218,097



18,007



0.56


Non-interest-bearing deposits


605,112







503,398






Other liabilities


69,646







34,482






Total liabilities


5,079,699







3,755,977






Stockholders' equity


614,493







530,149






Total liabilities and stockholders' equity


$

5,694,192







$

4,286,126






Net interest-earning assets


$

873,216







$

759,569






Tax-equivalent net interest income




170,499







140,697




Tax-equivalent net interest rate spread






3.11

%






3.43

%

Tax-equivalent net interest margin






3.23

%






3.54

%

Average interest-earning assets to average interest-bearing liabilities






119.82

%






123.60

%

Less tax-equivalent adjustment




5,917







2,825




Net interest income




$

164,582







$

137,872




 

 

 


United Financial Bancorp, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

(Dollars In Thousands)

(Unaudited)




Three Months Ended


Years Ended



December 31,
 2015


September 30,
 2015


June 30,
 2015


March 31,
2015


December 31,
2014


December 31,
2015


December 31,
2014

Net income


$

9,902



$

13,381



$

13,332



$

13,025



$

1,421



$

49,640



$

6,782


Adjustments:















Net interest income


(1,617)



(4,092)



(3,512)



(3,432)



(3,421)



(12,653)



(12,197)


Non-interest income


(519)



59



(360)



(338)



729



(1,158)



(558)


Non-interest expense


3,586



244



454



486



12,513



4,770



40,105


Income tax (benefit)expense


(65)



1,326



1,196



1,152



(2,926)



3,609



(7,403)


Net adjustment


1,385



(2,463)



(2,222)



(2,132)



6,895



(5,432)



19,947


Total operating net income


$

11,287



$

10,918



$

11,110



$

10,893



$

8,316



$

44,208



$

26,729


Total net interest income


$

40,693



$

41,643



$

40,903



$

41,343



$

41,892



$

164,582



$

137,872


Adjustments:















Impact from purchase accounting fair value marks:











Accretion of loan mark


(718)



(2,787)



(2,194)



(1,871)



(1,543)



(7,570)



(6,665)


Accretion of deposit mark


444



841



845



1,079



1,276



3,209



3,908


Accretion of borrowings mark


455



464



473



482



602



1,874



1,624


Net adjustment


(1,617)



(4,092)



(3,512)



(3,432)



(3,421)



(12,653)



(12,197)


Total operating net interest
income


$

39,076



$

37,551



$

37,391



$

37,911



$

38,471



$

151,929



$

125,675


Total non-interest income


$

8,464



$

7,818



$

9,371



$

6,835



$

3,001



$

32,488



$

16,605


Adjustments:















Net (gain) loss on sales of securities


(300)



59



(360)



(338)



59



(939)



(1,228)


Loss on fixed assets - branch optimization










670





670


BOLI claim benefit


(219)











(219)




Net adjustment


(519)



59



(360)



(338)



729



(1,158)



(558)


Total operating non-interest income


7,945



7,877



9,011



6,497



3,730



31,330



16,047


Total operating net interest income


39,076



37,551



37,391



37,911



38,471



151,929



125,675


Total operating revenue


$

47,021



$

45,428



$

46,402



$

44,408



$

42,201



$

183,259



$

141,722


Total non-interest expense


$

35,306



$

31,876



$

30,357



$

30,657



$

45,076



$

128,196



$

144,432


Adjustments:















Merger related expense


(1,575)









(10,136)



(1,575)



(36,918)


Core deposit intangible amortization expense


(433)



(433)



(449)



(481)



(481)



(1,796)



(1,283)


Loan portfolio acquisition fees


(1,572)











(1,572)




Effect of branch lease termination agreement




195







(1,888)



195



(1,888)


Amortization of fixed asset fair value mark


(6)



(6)



(5)



(5)



(8)



(22)



(16)


Net adjustment


(3,586)



(244)



(454)



(486)



(12,513)



(4,770)



(40,105)


Total operating expense


$

31,720



$

31,632



$

29,903



$

30,171



$

32,563



$

123,426



$

104,327

















Total loans


$

4,613,931



$

4,209,618



$

4,072,067



$

3,904,733



$

3,897,866



$

4,613,931



$

3,897,866


Non-covered loans (1)


(1,448,435)



(1,255,618)



(1,356,259)



(1,510,264)



(1,658,594)



(1,448,435)



(1,658,594)


Total covered loans


$

3,165,496



$

2,954,000



$2,715,808


$

2,394,469



$

2,239,272



$

3,165,496



$

2,239,272


Allowance for loan losses


$

33,887



$

30,832



$

28,856



$

25,297



$

24,809



$

33,887



$

24,809


Allowance for loan losses to total loans


0.73

%


0.73

%


0.71

%


0.65

%


0.64

%


0.73

%


0.64

%

Allowance for loan losses to total covered loans


1.07

%


1.04

%


1.06

%


1.06

%


1.11

%


1.07

%


1.11

%



(1)

 As required by GAAP, the Company recorded at fair value the loans acquired in the legacy United transaction. These loans carry no allowance for loan losses for the periods reflected above.

 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Selected Interest Income/Expense and Yields/Costs

Reconciliation of Non-GAAP Financial Measures

(Dollars In Thousands)

(Unaudited)




Three Months Ended December 31, 2015



GAAP


Mark to Market


Operating



Interest

and

Dividends


Yield/Cost


Interest

and

Dividends


Yield/Cost


Interest

and

Dividends


Yield/Cost

Residential real estate


$

12,912



3.32

%


$

(784)



(0.23)%



$

13,696



3.55

%

Commercial real estate


20,228



4.12



867



0.20



19,361



3.92


Construction


1,760



3.89



130



0.34



1,630



3.55


Commercial business


6,288



4.12



591



0.42



5,697



3.70


Installment and collateral


968



5.22



(86)



(0.49)



1,054



5.71


Certificates of deposit


3,902



0.96



(444)



(0.11)



4,346



1.07


Federal Home Loan Bank advances


1,805



0.90



(467)



(0.24)



2,272



1.14


Other borrowings


1,417



3.43



12



0.08



1,405



3.35


Tax-equivalent net interest margin


42,203



3.02



1,617





40,586



2.90






























Three Months Ended September 30, 2015



GAAP


Mark to Market


Operating



Interest
and
Dividends


Yield/Cost


Interest
and
Dividends


Yield/Cost


Interest
and
Dividends


Yield/Cost

Residential real estate


$

12,931



3.36

%


$

(729)



(0.22)%



$

13,660



3.58

%

Commercial real estate


18,901



4.13



543



0.14



18,358



3.99


Construction


1,952



4.47



371



0.92



1,581



3.55


Commercial business


8,044



5.21



2,606



1.73



5,438



3.48


Installment and collateral


50



4.67



(4)



(0.35)



54



5.02


Certificates of deposit


3,363



0.84



(841)



(0.21)



4,204



1.05


Federal Home Loan Bank advances


1,276



0.73



(475)



(0.28)



1,751



1.01


Other borrowings


1,387



3.75



11



0.09



1,376



3.66


Tax-equivalent net interest margin


42,791



3.20



4,092





38,699



2.89


 

Logo - http://photos.prnewswire.com/prnh/20141027/154555LOGO

 

 

SOURCE United Financial Bancorp, Inc.



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