United Financial Bancorp Reports Fourth Quarter 2011 Earnings of $3.0 Million, or $0.20 Per Diluted Share; Announces Quarterly Dividend of $0.09 Per Share

 

 

WEST SPRINGFIELD, Mass., Jan. 23, 2012 /PRNewswire/ -- United Financial Bancorp, Inc. (the "Company") (NASDAQ Global Select Market: UBNK), the holding company for United Bank (the "Bank"), reported net income of $3.0 million, or $0.20 per diluted share, for the fourth quarter of 2011 compared to net income of $2.7 million, or $0.18 per diluted share, for the corresponding period in 2010.  For the year ended December 31, 2011, net income was $11.2 million, or $0.74 per diluted share, compared to net income of $10.0 million or $0.65 per diluted share, for the same period in 2010. Excluding acquisition-related expenses of $1.1 million ($819,000 net of tax benefit), net income would have been $10.9 million, or $0.70 per diluted share, in 2010.  The Company also announced a quarterly cash dividend of $0.09 per share, payable on March 2, 2012 to shareholders of record as of February 9, 2012.

Financial Highlights:

  • Diluted earnings per share increased 11% from the fourth quarter of 2010.
  • Return on average assets increased 5 basis points to 0.74% in the fourth quarter of 2011 from the fourth quarter of 2010.
  • Return on average equity increased 44 basis points to 5.24% in the fourth quarter of 2011 from the fourth quarter of 2010.
  • Total loans increased 4% to $1.122 billion at year end 2011 reflecting solid growth in the residential mortgages (6%), commercial mortgages (5%) and commercial (7%) portfolios.
  • Total deposits increased 8% to $1.230 billion at December 31, 2011 as a result of 19% growth in core account balances, partially offset by a decrease of 9% in certificates of deposits. 
  • The non-performing loans to total loans ratio improved to 0.75% at December 31, 2011 from 0.88% from prior year end.
  • Tangible book value per share increased 5% during the year to $13.90 at December 31, 2011.
  • The Company repurchased 103,503 shares at an average price of $15.17 per share during the fourth quarter of 2011 and 426,299 shares at an average cost of $14.96 for 2011.  At December 31, 2011 the Company has approximately 330,000 shares remaining to be purchased under its current plan approved in October 2010.

"We are pleased to report our fourth consecutive year of growth in operating earnings, a trend that has continued despite the challenging economic environment.  Our success has been driven by our focus on profitably expanding our franchise through organic loan and deposit growth and the acquisition of CNB, maintaining excellent asset quality and effectively managing our interest rate, capital and liquidity positions," commented Richard B. Collins, President and Chief Executive Officer.  Mr. Collins further remarked "we believe we are well positioned to continue to deliver improving financial results and reward our shareholders."

Earnings Summary (Q4 2011 compared to Q4 2010)

Net income grew $309,000, or 12%, to $3.0 million in the fourth quarter of 2011 compared to the same period last year largely due to an increase in net interest income, driven by growth in average earning assets, growth in non-interest income and a lower effective tax rate, offset in part by a higher provision for loan losses.

  • Net interest income increased $280,000, or 2%, to $13.2 million for the fourth quarter of 2011 as a result of an increase in average interest earning assets, partially offset by net interest margin compression.  Total average earning assets increased $39 million, or 3%, to $1.509 billion for the fourth quarter of 2011 mainly due to growth in loans and investment securities. The net interest margin declined 2 basis points to 3.51% for the three months ended December 31, 2011.
  • The provision for loan losses expanded by $659,000 to $1.0 million for the three months ended December 31, 2011 driven by an increase in net charge-offs, classified loan reserves and loan growth.
  • Non-interest income increased by $213,000, or 9%, to $2.6 million for the three months ended December 31, 2011. The growth in non-interest income was primarily due to an increase of $148,000, or 11%, in fee income on depositor's accounts driven by higher ATM and debit card income and an increase of $86,000, or 24%, in bank owned life insurance income reflecting a $10 million BOLI investment in May 2011.
  • Non-interest expense decreased $18,000, or 0.2%, to $10.7 million for the fourth quarter of 2011 reflecting lower FDIC assessment and marketing expenses, offset by increases in other expenses, salaries and benefits and professional services.
  • Income taxes decreased $457,000, or 29%, to $1.1 million for the three months ended December 31, 2011, primarily due to a lower effective tax rate, partially offset by lower pretax income.  The Company's effective tax rate decreased to 27% for the fourth quarter of 2011 from 37% in the fourth quarter of 2010 largely as a result of tax credits from an investment in a low income housing fund and an increase in tax exempt municipal investment income in 2011.

 

Balance Sheet Activity:

 

  • Total assets increased $38.9 million, or 2%, during the year to $1.624 billion at December 31, 2011, reflecting an increase in loans and bank owned life insurance partially offset by a lower cash position.
  • Cash and cash equivalents decreased $21.6 million, or 26%, to $61.5 million at December 31, 2011 reflecting the use of excess cash to fund loan originations and the purchase of additional bank owned life insurance.
  • Total loans increased $47.8 million, or 4%, to $1.122 billion at December 31, 2011 reflecting growth in the residential and commercial mortgages, commercial and construction portfolios. The increase in residential loans was due to originations of 10- and 15-year loans as a result of promotional efforts and continued lower market interest rates, partially offset by payments and sales of 30-year fixed rate loan originations.  Commercial mortgage and commercial loan growth was primarily attributable to business development efforts, competitive products and pricing and the establishment of a loan production office in Beverly, Massachusetts during the second quarter of 2011.  These positive variances were offset in part by declines in consumer and home equity loans.
  • Total deposits increased $86.7 million, or 8%, to $1.230 billion at December 31, 2011 reflecting growth of $127.6 million, or 19%, in core account balances, partially offset by a decrease of $40.9 million, or 9%, in certificates of deposit.  The strong growth in core account balances was driven by the success of sales and marketing initiatives, competitive products and pricing and excellent customer service. Core deposit balances were $808.2 million, or 66% of total deposits at December 31, 2011 compared to $680.7 million, or 60% at December 31, 2010.
  • Long-term debt decreased $46.5 million, or 27%, mainly due to the use of positive cash flows to retire maturing debt.

Credit Quality:

 

  • Non-performing assets totaled $10.5 million, or 0.65% of total assets, at December 31, 2011 compared to $11.0 million, or 0.69% of total assets, at December 31, 2010.  The $462,000 improvement in the non-performing assets reflects a $1.0 million reduction in non-performing loans partially offset by an increase of $518,000 in other real estate owned.
  • At December 31, 2011, the ratio of the allowance for loan losses to total loans was 0.99% compared to 0.93% at December 31, 2010.  Excluding the impact of loans acquired from CNB and other financial institutions totaling $165.1 million at December 31, 2011 and $231.2 million at December 31, 2010, the ratio of the allowance for loan losses to total loans would have been 1.16% at December 31, 2011 and 1.18% at December 31, 2010.  Net charge-offs totaled $2.1 million, or 0.19% of average loans outstanding for the year ended December 31, 2011 as compared to net charge-offs of $1.5 million, or 0.13% of average loans outstanding for 2010.  The increase in net charge-offs was primarily due to the resolution of several problem credits within the commercial portfolio.  

Capital and Liquidity:

  • The Company remains well capitalized with a tangible equity-to-tangible assets ratio of 13.53% at December 31, 2011. During 2011, the Company repurchased 426,299 shares at an average cost of $14.96 under the current plan approved in October 2010.
  • At December 31, 2011, the Company continued to have considerable liquidity consisting of significant balances at the Federal Reserve, a large amount of marketable loans and investment securities, substantial unused borrowing capacity at the Federal Home Loan Bank and the Federal Reserve Bank and access to funding through the repurchase agreement and brokered deposit markets.

United Financial Bancorp, Inc. is a publicly owned corporation and the holding company for United Bank, a federally chartered bank headquartered at 95 Elm Street, West Springfield, MA, 01090.  The Company's common stock is traded on the NASDAQ Global Select Market under the symbol UBNK.   United Bank provides an array of financial products and services through its 16 branch offices and two express drive-up branches in the Springfield region of Western Massachusetts and six branches in the Worcester region of Central Massachusetts.  The bank also operates a loan production office located in Beverly, Massachusetts.  Through its Wealth Management Group, the Bank offers access to a wide range of investment and insurance products and services, as well as financial, estate and retirement strategies and products.  For more information regarding the Bank's products and services and for United Financial Bancorp, Inc. investor relations information please visit www.bankatunited.com or on Facebook at facebook.com/bankatunited.

Except for the historical information contained in this press release, the matters discussed may be deemed to be forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties, including changes in economic conditions in the Company's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company's market area, competition, and other risks detailed from time to time in the Company's SEC reports.  Actual strategies and results in future periods may differ materially from those currently expected.   These forward-looking statements represent the Company's judgment as of the date of this release.  The Company disclaims, however, any intent or obligation to update these forward-looking statements.

 

UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in thousands, except per share amounts)

 

 

 

December 31,

 

December 31,

Assets

 

2011

 

2010

 

 

(unaudited)

 

(audited)

 

 

 

 

 

Cash and cash equivalents

 

$61,518

 

$83,069

Investment securities  

 

337,710

 

338,327

Loans held for sale

 

53

 

-

 

 

 

 

 

Loans:

 

 

 

 

Residential mortgages

 

314,839

 

295,721

Commercial mortgages

 

450,180

 

427,994

Construction loans

 

30,271

 

27,553

Commercial loans

 

176,086

 

165,335

Home equity loans

 

135,518

 

138,290

Consumer loans

 

14,985

 

19,218

Total loans

 

1,121,879

 

1,074,111

 

 

 

 

 

Net deferred loan costs and fees

 

2,194

 

2,073

Allowance for loan losses

 

(11,132)

 

(9,987)

Loans, net

 

1,112,941

 

1,066,197

 

 

 

 

 

Federal Home Loan Bank of Boston stock, at cost 

 

15,365

 

15,365

Other real estate owned

 

2,054

 

1,536

Deferred tax asset, net

 

14,006

 

11,029

Premises and equipment, net 

 

16,438

 

15,565

Bank-owned life insurance

 

40,688

 

29,180

Goodwill

 

8,192

 

8,192

Other intangible assets

 

752

 

975

Other assets 

 

14,035

 

15,442

 

 

 

 

 

Total assets

 

$1,623,752

 

$1,584,877

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Deposits: 

 

 

 

 

Demand

 

$205,902

 

$175,996

NOW

 

52,899

 

40,922

Savings

 

247,664

 

203,165

Money market

 

301,770

 

260,573

Certificates of deposit

 

421,740

 

462,645

Total deposits

 

1,229,975

 

1,143,301

 

 

 

 

 

Short-term borrowings 

 

17,260

 

21,029

Long-term debt

 

126,857

 

173,307

Subordinated debentures

 

5,539

 

5,448

Escrow funds held for borrowers

 

2,103

 

1,899

Due to broker

 

-

 

3,002

Capitalized lease obligations

 

4,874

 

5,011

Accrued expenses and other liabilities 

 

9,783

 

9,304

Total liabilities

 

1,396,391

 

1,362,301

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

Preferred stock, par value $0.01 per share, authorized 50,000,000 shares; 

 

 

 

 

none issued

 

-

 

-

Common stock, par value $0.01 per share; authorized 100,000,000 shares;  

 

 

 

 

shares issued: 18,706,933 at December 31, 2011 and December 31, 2010      

187

 

187

Additional paid-in capital

 

182,475

 

180,322

Retained earnings

 

88,977

 

82,899

Unearned compensation

 

(10,047)

 

(10,750)

Accumulated other comprehensive income, net of taxes

 

6,752

 

4,858

Treasury stock, at cost (2,994,036 shares at December 31, 2011 and   

 

 

 

 

2,597,827 shares at December 31, 2010)  

 

(40,983)

 

(34,940)

Total stockholders' equity

 

227,361

 

222,576

 

 

 

 

 

Total liabilities and stockholders' equity

 

$1,623,752

 

$1,584,877

 

 

UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY

 

CONSOLIDATED INCOME STATEMENTS

 

(Amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended  

 

Years Ended

 

  December 31, 

 

  December 31, 

 

 

2011

 

2010

 

2011

 

2010

 

 

(unaudited)

 

(unaudited)

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Loans

$ 14,501

 

$15,287

 

$ 58,220

 

$  61,554

 

Investments

2,901

 

2,852

 

12,728

 

12,238

 

Other interest-earning assets 

26

 

31

 

126

 

66

 

Total interest and dividend income 

17,428

 

18,170

 

71,074

 

73,858

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

Deposits

2,944

 

3,464

 

12,449

 

13,847

 

Borrowings

1,243

 

1,745

 

5,812

 

7,100

 

Total interest expense

4,187

 

5,209

 

18,261

 

20,947

 

 

 

 

 

 

 

 

 

 

Net interest income before provision for loan losses

13,241

 

12,961

 

52,813

 

52,911

 

 

 

 

 

 

 

 

 

 

Provision for loan losses 

1,011

 

352

 

3,242

 

2,285

 

 

 

 

 

 

 

 

 

 

Net interest income after provision for loan losses

12,230

 

12,609

 

49,571

 

50,626

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

Fee income on depositors' accounts

1,469

 

1,321

 

5,554

 

5,327

 

Wealth management income

217

 

251

 

919

 

754

 

Income from bank-owned life insurance

450

 

364

 

1,642

 

1,390

 

Net gain on sales of loans

150

 

164

 

274

 

573

 

Net gain (loss) on sales of securities

-

 

4

 

1

 

(185)

 

Impairment charges on securities

(7)

 

-

 

(99)

 

(145)

 

Other income

291

 

253

 

1,062

 

1,002

 

Total non-interest income

2,570

 

2,357

 

9,353

 

8,716

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

Salaries and benefits

5,957

 

5,889

 

24,818

 

24,056

 

Occupancy expenses

845

 

840

 

3,317

 

3,397

 

Marketing expenses 

376

 

510

 

1,797

 

2,091

 

Data processing expenses

1,037

 

1,050

 

3,970

 

4,099

 

Professional fees

533

 

482

 

2,174

 

1,812

 

Acquisition related expenses

-

 

-

 

-

 

1,148

 

FDIC insurance assessments

218

 

365

 

1,029

 

1,470

 

Low income housing tax credit fund

210

 

181

 

837

 

181

 

Other expenses

1,542

 

1,419

 

6,120

 

5,587

 

Total non-interest expense 

10,718

 

10,736

 

44,062

 

43,841

 

 

 

 

 

 

 

 

 

 

Income before income taxes

4,082

 

4,230

 

14,862

 

15,501

 

 

 

 

 

 

 

 

 

 

Income tax expense

1,102

 

1,559

 

3,678

 

5,469

 

 

 

 

 

 

 

 

 

 

Net income

$   2,980

 

$  2,671

 

$ 11,184

 

$ 10,032

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

Basic

$   0.20

 

$    0.18

 

$     0.75

 

$      0.66

 

Diluted

$   0.20

 

$    0.18

 

$     0.74

 

$      0.65

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

14,726

 

15,028

 

14,930

 

15,303

 

Diluted

15,022

 

15,180

 

15,199

 

15,395

 

 

 

 

 

 

 

 

 

 

 

 

UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY

SELECTED DATA AND RATIOS (unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At or For The Quarters Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dec. 31

 

Sep. 30

 

Jun. 30

 

Mar. 31

 

Dec. 31

 

 

 

2011

 

2011

 

2011

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Results:

 

 

 

 

 

 

 

 

 

 

Net interest income

$      13,241

 

$      13,399

 

$      13,382

 

$      12,791

 

$      12,961

 

Loan loss provision

1,011

 

750

 

673

 

808

 

352

 

Non-interest income

2,570

 

2,423

 

2,211

 

2,149

 

2,357

 

Non-interest expense

10,718

 

11,001

 

11,403

 

10,940

 

10,736

 

Net income

2,980

 

3,085

 

2,690

 

2,429

 

2,671

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios (annualized):

 

 

 

 

 

 

 

 

 

 

Return on average assets 

0.74%

 

0.77%

 

0.67%

 

0.62%

 

0.69%

 

Return on average equity

5.24%

 

5.41%

 

4.76%

 

4.36%

 

4.80%

 

Net interest margin

3.51%

 

3.56%

 

3.55%

 

3.42%

 

3.53%

 

Non-interest income to average total assets

0.64%

 

0.60%

 

0.55%

 

0.54%

 

0.61%

 

Non-interest expense to average total assets

2.66%

 

2.74%

 

2.85%

 

2.77%

 

2.76%

 

Efficiency ratio 

68.41%

(1)

69.61%

(1)

73.09%

(1)

73.34%

(1)

70.86%

(1)

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$         0.20

 

$         0.20

 

$         0.18

 

$         0.16

 

$         0.18

 

Book value per share

$       14.47

 

$       14.36

 

$       14.15

 

$       13.92

 

$       13.82

 

Tangible book value per share

$       13.90

(2)

$       13.79

(2)

$       13.58

(2)

$       13.35

(2)

$       13.25

(2)

Market price at period end

$       16.09

 

$       13.69

 

$       15.43

 

$       16.51

 

$       15.27

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Profile

 

 

 

 

 

 

 

 

 

 

Equity as a percentage of assets

14.00%

 

14.11%

 

14.15%

 

14.01%

 

14.04%

 

Tangible equity as a percentage of tangible assets

13.53%

(2)

13.63%

(2)

13.66%

(2)

13.51%

(2)

13.54%

(2)

Net charge-offs to average loans outstanding (annualized)

0.22%

 

0.23%

 

0.18%

 

0.12%

 

0.11%

 

Non-performing assets as a percent of total assets

0.65%

 

0.85%

 

0.77%

 

0.62%

 

0.69%

 

Non-performing loans as a percent of total loans, gross

0.75%

 

1.00%

 

0.86%

 

0.76%

 

0.88%

 

Allowance for loan losses as a percent of total loans, gross

0.99%

(3)

0.96%

(3)

0.96%

(3)

0.95%

(3)

0.93%

(3)

Allowance for loan losses as a percent of non-performing loans

131.68%

 

96.22%

 

112.01%

 

125.20%

 

105.86%

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances

 

 

 

 

 

 

 

 

 

 

Loans

$ 1,119,511

 

$ 1,113,672

 

$ 1,103,305

 

$ 1,090,796

 

$ 1,091,756

 

Securities

346,939

 

358,929

 

356,479

 

341,804

 

310,024

 

Total interest-earning assets

1,509,079

 

1,503,940

 

1,509,438

 

1,493,946

 

1,470,127

 

Total assets

1,611,447

 

1,605,844

 

1,602,767

 

1,579,048

 

1,555,266

 

Deposits

1,211,957

 

1,186,530

 

1,179,166

 

1,145,296

 

1,115,775

 

FHLBB advances

111,762

 

132,544

 

138,215

 

147,880

 

153,965

 

Stockholders' Equity

227,678

 

228,278

 

226,279

 

223,067

 

222,749

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Yields/Rates (annualized)

 

 

 

 

 

 

 

 

 

 

Loans

5.18%

 

5.22%

 

5.33%

 

5.31%

 

5.60%

 

Securities

3.34%

 

3.62%

 

3.80%

 

3.73%

 

3.68%

 

Total interest-earning assets

4.62%

 

4.73%

 

4.80%

 

4.74%

 

4.94%

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings accounts

0.69%

 

0.71%

 

0.76%

 

0.77%

 

0.87%

 

Money market/NOW accounts

0.62%

 

0.64%

 

0.70%

 

0.71%

 

0.84%

 

Certificates of deposit 

1.88%

 

1.91%

 

1.99%

 

2.06%

 

2.16%

 

FHLBB advances

3.17%

 

3.26%

 

3.60%

 

3.52%

 

3.62%

 

Total interest-bearing liabilities

1.43%

 

1.50%

 

1.61%

 

1.68%

 

1.83%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Excludes gains/losses on sales of securities and loans and impairment charges on securities.

 

 

 

(2)  Excludes the impact of goodwill and other intangible assets of $8.9 million at December 31, 2011, $9.0 million at September 30, 2011 and $9.2 million at June 30, 2011, March 31, 2011 and December 31, 2010.

 

 

(3)  Excluding acquired loans of $146.0 million, $156.2 million, $168.6 million, $178.7 million and $209.8 million and loans purchased from other financial  institutions of $19.1 million, $19.3 million, $20.8 million, $21.1 million and $21.4 million at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010,  respectively, allowance for loan losses as a percent of total loans, gross would have been 1.16%, 1.14%, 1.16%, 1.17%, and 1.18% for the quarters ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For More Information Contact:
Mark A. Roberts
Executive Vice President & CFO
(413) 787-1700

 

 

 

 

SOURCE United Financial Bancorp, Inc.



RELATED LINKS
https://www.bankatunited.com

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