United Financial Bancorp, Inc. Announces Record Revenue, Record Earnings, 19% Annualized Commercial Loan Growth And Quarterly Dividend

Jul 21, 2015, 16:17 ET from United Financial Bancorp, Inc.

GLASTONBURY, Conn., July 21, 2015 /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 June 30, 2015. These results represent the fourth full fiscal quarter as the combined United Financial [merger of Rockville Financial, Inc. ("Rockville") and legacy United Financial Bancorp, Inc. ("legacy United")]. Rockville was the legal acquirer in the merger of equals with legacy United, in a transaction that closed on April 30, 2014, and Rockville changed its name to United Financial Bancorp, Inc. at that time.

The Company had net income of $13.3 million, or $0.27 per diluted share, for the quarter ended June 30, 2015, compared to net income for the linked quarter of $13.0 million, or $0.26 per diluted share. The Company reported a net loss of $5.6 million, or $(0.13) per diluted share, for the quarter ended June 30, 2014. The results for the quarter ended June 30, 2014 included one month of the pre-merger Rockville net income and net income of the combined entity beginning on May 1, 2014.

"I am pleased to report that during the second quarter of 2015, United Financial Bancorp, Inc. delivered record results for earnings, revenue, fee income, commercial loan growth and residential mortgage production. We continue to make substantial progress toward our merger goals announced in November 2013. The quarter's results included a 0.96% return on average assets ("ROA"), an 8.69% return on average equity ("ROE"), an 11.12% return on average tangible common equity ("ROTCE"), a 57% efficiency ratio, 17%  annualized total loan growth and $0.27 earnings per diluted share for the quarter ended June 30, 2015," stated William H. W. Crawford, IV, Chief Executive Officer of United Financial Bancorp, Inc. and United Bank. "These results were driven by 4% linked quarter revenue growth combined with a 1% decrease in non-interest expense compared to the linked quarter."

"The quarter ended June 30, 2015 represents United Financial's second consecutive quarter of record revenue and record earnings. Non-interest expense exceeded our earlier forecast due to higher costs related to record mortgage production, significantly increased consumer loan originations and greater loan level hedge expense, all of which are variable expenses that increased commensurate with higher than projected revenue," further stated Chief Executive Officer Crawford. "Commercial and residential mortgage loan pipelines remain robust, continuing the expectation that the Company will achieve high single digit total loan growth for 2015. The Company's capital and infrastructure investments will support continued commercial loan growth."

Financial Highlights

  • Second quarter net income of $13.3 million, or $0.27 per diluted share
  • ROA of 0.96% for the second quarter
  • ROE of 8.69% for the second quarter
  • ROTCE of 11.12% for the second quarter
  • 4% increase in total revenue, compared to the linked quarter
  • 1% decrease in operating expense compared to the linked quarter
  • Second consecutive quarter of positive operating leverage resulting from increase in revenue and decrease in operating expense
  • Non-Interest Expense/Average Assets (NIE/AA) decreased to 2.19%
  • Efficiency ratio decreased to 57%

Loan Production Highlights

  • 17% record annualized total loan growth
  • 19% annualized commercial loan growth compared to the linked quarter
  • Four consecutive quarters of record residential mortgage production
  • 73% increase in non-mortgage consumer loan production compared to the linked quarter

Earnings Results

The Company reported record quarterly net income of $13.3 million, or $0.27 per diluted share, and ROA of 0.96% in the second quarter of 2015. These results reflect the Company's second consecutive quarter of reporting earnings as a combined entity without items prevalent in the prior year related to merger and acquisition expenses and redundant back office expenses before the data conversion was completed. Operating leverage was improved as a result of total operating revenues increasing by 4%, and reaching a record $50.3 million for the quarter ended June 30, 2015 while total operating expenses decreased by 1% during the same period. The Company's cost structure continues to improve and non-interest expense as a percentage of average assets declined to 2.19% in the second quarter of 2015 from 2.23% in the linked quarter. The efficiency ratio declined to 57% in the second quarter of 2015 from 61% in the linked quarter.

Interest income totaled $48.7 million in the second quarter of 2015 and increased by $416,000, or 1%, in comparison to the linked quarter. Earning assets grew organically by $144 million, or 3%, during the quarter, while average interest-earning assets increased less significantly, by $28 million, from the linked quarter due to the introduction of commercial loan growth toward the end of the quarter. Increased yields on  commercial real estate and commercial business loans include the positive impact of prepayment penalty income totaling $848,000 during the second quarter of 2015 compared to $339,000 in the linked quarter. Interest expense increased by $856,000, or 12%, to $7.8 million for the second quarter of 2015.  The increase was primarily driven by the impact of growth in money market deposits utilized in target market areas at special rates during the second quarter of 2015. Average interest bearing liabilities increased slightly by $5 million from the linked quarter as increases in average interest bearing deposit balances were offset by declines in average borrowings.

The GAAP tax equivalent net interest margin for the second quarter of 2015 decreased by 7 basis points to 3.30% compared to 3.37% for the linked quarter, primarily as a result of the increased interest expense associated with growth of money market deposits and certificates of deposit which was partially offset by the positive yield impact of loan prepayment fees. Commercial loan yields are further impacted by the commercial team becoming more effective in executing interest rate swaps. The result is that the Company originates more variable rate loans with lower loan yields, however greater fee income is recognized up front. On a GAAP basis, the yield on interest-earning assets decreased by 1 basis point in the second quarter of 2015 to 3.91%, while the cost of interest-bearing liabilities increased by 7 basis points during the quarter to 0.73%.

The provision for loan losses increased by $3.0 million to $4.5 million for the quarter ended June 30, 2015 compared to $1.5 million for the linked quarter due to expansion of the covered loan portfolio, including strong organic commercial loan growth during the quarter. This increase in provision expense impacted earnings in the second quarter to some degree as the full provision recognition was incurred as the loans were originated, however the growth was largely late in the quarter and therefore the offsetting positive impact on interest income was inconsequential to the quarter's results. Net charge-offs for the second quarter of 2015 decreased by $119,000 to $904,000, or 0.09% annualized as a percentage of average loans outstanding, from $1.0 million, or 0.10% 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, the composition of the portfolio, the 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 $2.5 million, or 37%, to $9.4 million for the quarter ended June 30, 2015 from $6.8 million recognized in the linked quarter. The most significant factor attributing to the growth in the second quarter's non-interest income was the $1.8 million, or 47%, increase in service charges and fees during the quarter to $5.6 million from $3.8 million reported in the linked quarter. Of this $1.8 million increase, $1.5 million is due to the growth in gross loan level hedge income for the quarter ended June 30, 2015. Secondarily, the Company reported a $619,000 increase in mortgage banking activity income during the quarter ended June 30, 2015 to $3.0 million, compared to $2.4 million in the linked quarter.

Non-interest income in the second quarter of 2015 includes the recognition of a $916,000 loss related to limited partnership investments, while in the linked quarter the Company reported a $430,000 loss related to limited partnership investments. The most recent limited partnership investments are primarily related to solar tax credits which provide an attractive risk adjusted return on capital ("RAROC"); noting that RAROC is an on-going focus for all activities the Company pursues. The loss correlates with the utilization of tax benefits and is more than offset in the tax provision for both the second quarter of 2015 and the linked quarter.

Non-Interest Expense

Non-interest expense for the quarter ended June 30, 2015 totaled $30.4 million and decreased by $300,000, or 1%, from the linked quarter. The Company reported a decrease in each of its non-interest expense categories, with the exceptions of salaries and benefits expense and other expense, both of which reported increases related to significant revenue enhancements. Salaries and benefits expense increased slightly by $23,000. Other expense increased during the second quarter of 2015 by $1.2 million, or 26%, the majority of which was related to growth in variable costs required to generate additional loan level hedge and consumer lending revenue.

Business Line Discussions

Commercial Banking

Total commercial loans increased by $114 million, or 19% annualized, during the second quarter of 2015 while average commercial loans decreased during the quarter by $40 million. The decrease in average commercial loans reflects that a majority of the production was introduced late in the second quarter when commercial loan originations benefited from the production ramp up of new teams introduced in late 2014 and early 2015, as well as the typical seasonal rebound experienced in the second quarter in general. For the quarter ended June 30, 2015, commercial loan activity was comprised of a $72 million, or 4%, increase in the commercial real estate portfolio, a $31 million, or 5%, increase in the commercial business portfolio and an $11 million, or 8%, increase in the commercial construction portfolio. The Company is leveraging the investment made in commercial banking, in new teams combined with the existing teams, and as a result is experiencing strong momentum in this line of business, including a robust commercial loan pipeline and a continued expectation for strong growth in the third quarter.

Commercial banking profitability was augmented further by significant increases in loan level hedging fee income which increased by $1.5 million to $2.3 million for the quarter ended June 30, 2015 from $752,000  in the linked quarter. Customers have expressed a preference for fixed rate loans in this low interest rate environment and the Company has been able to successfully meet the customer needs, while prudently managing interest rate risk and increasing fee income.

Consumer Lending

In the second quarter of 2015, the Company reported its fourth consecutive quarter of record origination volume for residential mortgage loans due to the investments made in this line of business in prior years. On a linked quarter basis, residential mortgage originations increased by $35 million, or 21%, to $203 million from $168 million in the first quarter of 2015. During the second quarter, mortgage originations increased by $121 million from $82 million in the same period of the prior year and purchase mortgage activity increased year-over-year to $115 million from $64 million in the prior year period. The Company sold residential mortgage loans totaling $257 million during the past four quarters. Our non-mortgage consumer lending production increased by 73% over the linked quarter, indicative of the Company's strategy to drive higher origination volumes through this delivery channel.  

Funding & Deposits

Deposits totaled $4.18 billion at June 30, 2015 and increased by $25 million, or 1%, from $4.16 billion at March 31, 2015, reflecting a $12 million, or 2%, increase in non-interest bearing deposits and a $13 million, increase in interest bearing deposits. For the year-to-date, total deposits increased by $147 million, or 4%, funding 73% of the $202 million increase in earning assets over that same time period. The cost of total interest bearing deposits increased by 8 basis points to 0.63% in the quarter ending June 30, 2015 from 0.55% in the linked quarter, driven primarily by the impact of money market specials utilized in target market areas during the second quarter of 2015.

Asset Quality

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. Non-performing assets decreased $1.8 million to $35.6 million at June 30, 2015 from $37.4 million at March 31, 2015. The ratio of non-performing assets to total assets decreased 5 basis points to 0.63% at June 30, 2015 from 0.68% at March 31, 2015. The allowance for loan losses as a percentage of total covered loans outstanding remained flat at 1.06% for June 30, 2015 and March 31, 2015.

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 July 31, 2015 and payable on August 12, 2015. This dividend equates to a 3.72% annualized yield based on the $12.91 average closing price of the Company's common stock in the second quarter of 2015. In April 2015, the Board increased the dividend by $0.02, or 20%, from the $0.10 quarterly amount which was in effect throughout 2014. The Company has paid dividends for 37 consecutive quarters.

Tangible Book Value

Tangible book value per share increased to $9.87 at June 30, 2015 from $9.86 at March 31, 2015; primarily due to the impact of the Company's net income of $13.3 million, offset in part by the cash dividend payment to shareholders of $0.12 per share. Additionally, during the second quarter of 2015 the investment portfolio negatively impacted tangible book value by $0.15, net of the balance sheet hedge valuation. The market value of the available for sale portfolio was impacted in part by the increase in the ten year treasury yield during the quarter, as well as the widening of credit spreads within the municipal sleeve of the portfolio. At June 30, 2015, the investment portfolio had a duration of 3.45 years, which is prudently positioned at this time.

Capital Management

The Company reported Tangible Common Equity ("TCE") of $488 million, or 8.79%, at June 30, 2015. The Company obtained approval for and initiated a third buyback plan on October 15, 2014. Under this plan, the Company is authorized to repurchase up to 2,566,283 shares, or 5% of the outstanding shares at the time the plan was approved. The Company did not repurchase any shares during the quarter ended June 30, 2015, and has remaining authorization to purchase an additional 254,394 shares. The Company anticipates leveraging its capital through organic loan growth.

Management Comments

"I want to thank my United Bank teammates and Directors for their relentless focus on the pursuit of excellence for our customers, employees, communities and shareholders," stated William H. W. Crawford, IV, Chief Executive Officer of United Financial Bancorp, Inc. and United Bank. "For the remainder of 2015, we will be focused on driving continued strong operating leverage to maximize the benefits of our merger which positions us as a revenue growth company with an attractive cost structure and conservative risk profile all fueled by our ability to attract and retain top talent throughout our Company."

Investor Conference Call

United Financial Bancorp, Inc. will host a conference call on Wednesday, July 22, 2015 at 10:00 a.m. Eastern Time (ET) to discuss the Company's second 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 August 5, 2015 by calling 1-877-344-7529 and entering conference number 10068673. 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 filed a visual slide presentation to accompany the earnings press release and investor conference call. The presentation has been filed 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 and over $5.6 billion in assets. 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".

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 Operations

(In Thousands, Except Share Data)

(Unaudited)




For the Three Months Ended

June 30,


For the Six Months Ended

June 30,



2015


2014


2015


2014

Interest and dividend income:









Loans


$

41,253



$

35,237



$

81,780



$

52,081


Securities-taxable interest


4,771



3,981



10,040



5,884


Securities-non-taxable interest


2,181



1,053



4,273



1,824


Securities-dividends


472



468



846



641


Interest-bearing deposits


34



28



67



39


Total interest and dividend income


48,711



40,767



97,006



60,469


Interest expense:









Deposits


5,584



3,146



10,324



5,304


Borrowed funds


2,224



742



4,436



1,378


Total interest expense


7,808



3,888



14,760



6,682


Net interest income


40,903



36,879



82,246



53,787


Provision for loan losses


4,462



2,080



5,973



2,530


Net interest income after provision for loan losses


36,441



34,799



76,273



51,257


Non-interest income:









Service charges and fees


5,643



3,636



9,474



5,522


Net gain from sales of securities


360



589



698



857


Income from mortgage banking activities


2,990



1,236



5,361



1,791


Bank-owned life insurance


830



750



1,664



1,272


Net loss on limited partnership investments


(916)





(1,346)




Other income


464



108



355



86


Total non-interest income


9,371



6,319



16,206



9,528


Non-interest expense:









Salaries and employee benefits


16,595



14,541



33,167



24,783


Service bureau fees


1,466



1,768



3,286



2,859


Occupancy and equipment


3,799



2,610



8,257



4,308


Professional fees


782



856



1,699



1,284


Marketing and promotions


620



280



1,256



509


FDIC insurance assessments


823



632



1,901



950


Other real estate owned


62



125



177



433


Core deposit intangible amortization


449



321



930



321


Merger and acquisition expense




20,945





22,774


Other


5,761



4,099



10,341



6,213


Total non-interest expense


30,357



46,177



61,014



64,434


Income before income taxes


15,455



(5,059)



31,465



(3,649)


Provision for income taxes


2,123



512



5,108



975


Net income (loss)


$

13,332



$

(5,571)



$

26,357



$

(4,624)











Net income (loss) per share:









Basic


$

0.27



$

(0.13)



$

0.54



$

(0.14)


Diluted


$

0.27



$

(0.13)



$

0.53



$

(0.14)


Weighted-average shares outstanding:









Basic


48,837,512



43,178,460



48,777,096



34,191,095


Diluted


49,309,189



43,178,460



49,292,910



34,191,095


 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Consolidated Statements of Operations

(In Thousands)

(Unaudited)




For the Three Months Ended



June 30,
2015


March 31, 2015


December 31,
2014


September 30,
2014


June 30,
2014

Interest and dividend income:











Loans


$

41,253



$

40,527



$

40,682



$

40,119



$

35,237


Securities-taxable interest


4,771



5,269



5,303



5,180



3,981


Securities-non-taxable interest


2,181



2,092



1,794



1,495



1,053


Securities-dividends


472



374



409



381



468


Interest-bearing deposits


34



33



21



26



28


Total interest and dividend income


48,711



48,295



48,209



47,201



40,767


Interest expense:











Deposits


5,584



4,740



4,265



3,990



3,146


Borrowed funds


2,224



2,212



2,052



1,018



742


Total interest expense


7,808



6,952



6,317



5,008



3,888


Net interest income


40,903



41,343



41,892



42,193



36,879


Provision for loan losses


4,462



1,511



4,333



2,633



2,080


Net interest income after provision for loan

losses


36,441



39,832



37,559



39,560



34,799


Non-interest income:











Service charges and fees


5,643



3,831



4,330



3,657



3,636


Net gain (loss) from sales of securities


360



338



(59)



430



589


Income from mortgage banking activities


2,990



2,371



434



978



1,236


Bank-owned life insurance


830



834



897



873



750


Net loss on limited partnership investments


(916)



(430)



(2,048)



(2,176)




Other income (loss)


464



(109)



(553)



314



108


Total non-interest income


9,371



6,835



3,001



4,076



6,319


Non-interest expense:











Salaries and employee benefits


16,595



16,572



16,758



17,791



14,541


Service bureau fees


1,466



1,820



2,304



3,016



1,768


Occupancy and equipment


3,799



4,458



5,653



3,278



2,610


Professional fees


782



917



1,297



1,081



856


Marketing and promotions


620



636



1,420



367



280


FDIC insurance assessments


823



1,078



818



785



632


Other real estate owned


62



115



223



136



125


Core deposit intangible amortization


449



481



481



481



321


Merger related expense






10,136



4,008



20,945


Other


5,761



4,580



5,986



3,979



4,099


Total non-interest expense


30,357



30,657



45,076



34,922



46,177


Income (loss) before income taxes


15,455



16,010



(4,516)



8,714



(5,059)


Provision (benefit) for income taxes


2,123



2,985



(5,937)



(1,271)



512


Net income (loss)


$

13,332



$

13,025



$

1,421



$

9,985



$

(5,571)


 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Consolidated Statements of Condition

(In Thousands)

(Unaudited)




June 30,
2015


March 31,

2015


December 31,
2014


September 30,
2014


June 30,
2014

ASSETS











Cash and cash equivalents:











Cash and due from banks


$

44,482



$

43,348



$

43,416



$

58,109



$

66,269


Short-term investments


40,043



46,013



43,536



26,876



23,157


Total cash and cash equivalents


84,525



89,361



86,952



84,985



89,426


Available for sale securities – At fair value


1,061,927



1,094,229



1,053,011



1,012,780



952,033


Held to maturity securities – At amortized cost


14,992



15,204



15,368



15,556



15,761


Loans held for sale


28,017



13,002



8,220



6,332



19,656


Loans receivable, net of allowance for loan losses


4,048,770



3,884,067



3,877,063



3,772,522



3,674,936


Federal Home Loan Bank of Boston stock,

at cost


37,061



34,006



31,950



30,090



30,419


Accrued interest receivable


14,777



14,958



14,212



14,712



13,728


Deferred tax asset, net


31,822



29,956



33,833



25,974



22,656


Premises and equipment, net


57,131



57,718



57,665



57,595



52,149


Goodwill


115,265



115,232



115,240



114,160



114,936


Core deposit intangible asset


8,372



8,821



9,302



9,783



10,264


Cash surrender value of bank-owned life insurance


124,287



123,456



122,622



121,724



120,851


Other real estate owned


227



1,711



2,239



2,647



3,213


Other assets


53,517



49,429



49,132



44,946



39,450


Total assets


$

5,680,690



$

5,531,150



$

5,476,809



$

5,313,806



$

5,159,478













LIABILITIES AND STOCKHOLDERS'

EQUITY











Liabilities:











Deposits:











Non-interest-bearing


$

610,279



$

598,157



$

602,359



$

659,859



$

649,929


Interest-bearing


3,571,972



3,558,958



3,432,952



3,369,143



3,290,261


Total deposits


4,182,251



4,157,115



4,035,311



4,029,002



3,940,190


Mortgagors' and investor escrow accounts


15,168



8,815



13,004



6,649



11,983


Federal Home Loan Bank advances and other borrowings


825,963



707,318



777,314



594,873



526,375


Accrued expenses and other liabilities


45,313



47,779



48,772



31,916



28,287


Total liabilities


5,068,695



4,921,027



4,874,401



4,662,440



4,506,835


Total stockholders' equity


611,995



610,123



602,408



651,366



652,643


Total liabilities and stockholders' equity


$

5,680,690



$

5,531,150



$

5,476,809



$

5,313,806



$

5,159,478


 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Selected Financial Highlights

(Dollars In Thousands, Except Share Data)

(Unaudited)




At or For the Three Months Ended



June 30,
 2015


March 31,

2015


December 31,
2014


September 30,
2014


June 30,
2014

Share Data:











Basic net income (loss) per share


$

0.27



$

0.27



$

0.03



$

0.19



$

(0.13)


Diluted net income (loss) per share


0.27



0.26



0.03



0.19



(0.13)


Dividends declared per share


0.12



0.10



0.10



0.10



0.10


Key Statistics:











Total revenue


$

50,274



$

48,178



$

44,893



$

46,269



$

43,198


Total expense


30,357



30,657



45,076



34,922



46,177


Average earning assets


5,112,581



5,084,717



4,969,225



4,817,907



3,892,382


Key Ratios:











Return (loss) on average assets (annualized)


0.96

%


0.95

%


0.11

%


0.76

%


(0.53)

%

Return (loss) on average equity (annualized)


8.69

%


8.63

%


0.90

%


6.12

%


(4.19)

%

Tax-equivalent net interest margin (annualized)


3.30

%


3.37

%


3.44

%


3.56

%


3.86

%

Residential Mortgage Production:











Dollar volume (total)


$

203,433



$

168,023



$

121,886



$

115,787



$

82,434


Mortgages originated for home purchases


115,286



64,108



74,171



80,709



64,273


Loans sold


93,972



67,377



39,489



55,806



23,485


Income from mortgage banking activities


2,990



2,371



434



978



1,236


Non-performing Assets:











Residential real estate


$

12,377



$

12,527



$

12,387



$

11,468



$

8,366


Commercial real estate


10,989



12,056



10,663



5,914



168


Construction


1,334



1,686



611



638



665


Commercial business


5,315



4,349



4,872



5,703



5,516


Installment and collateral


13



13



25



386



18


Non-accrual loans


30,028



30,631



28,558



24,109



14,733


Troubled debt restructured – non-accruing


5,346



5,034



3,800



5,180



4,380


Total non-performing loans


35,374



35,665



32,358



29,289



19,113


Other real estate owned


227



1,711



2,239



2,647



3,213


Total non-performing assets


$

35,601



$

37,376



$

34,597



$

31,936



$

22,326


Non-performing loans to total loans


0.87

%


0.91

%


0.83

%


0.77

%


0.52

%

Non-performing assets to total assets


0.63

%


0.68

%


0.63

%


0.60

%


0.43

%

Allowance for loan losses to non-performing loans


81.57

%


70.93

%


76.67

%


76.15

%


111.67

%

Allowance for loan losses to total loans


0.71

%


0.65

%


0.64

%


0.59

%


0.58

%

Non-GAAP Ratios: (1)











Non-interest expense to average assets


2.19

%


2.23

%


3.35

%


2.66

%


4.41

%

Efficiency ratio (2)


57.36

%


60.82

%


66.48

%


61.98

%


57.31

%

Cost of interest-bearing deposits (annualized)


0.66

%


0.55

%


0.50

%


0.46

%


0.46

%

Total revenue growth rate


4.35

%


7.32

%


(2.97)%



7.11

%


114.73

%

Total revenue growth rate (annualized) (3)


17.40

%


29.27

%


(11.90)

%


28.44

%


n/m


Average earning asset growth rate


0.55

%


2.32

%


3.14

%


23.78

%


77.70

%

Average earning asset growth rate (annualized) (3)


2.19

%


9.30

%


12.56

%


95.11

%


n/m


Return on average tangible common equity (annualized)


11.12

%


11.13

%


1.37

%


7.80

%


(4.58)%


Pre-Provision net revenue to average assets (4)


1.56

%


1.36

%


1.16

%


1.37

%


1.72

%

Pre-Provision net revenue to average equity (5)


14.13

%


12.43

%


9.89

%


11.01

%


13.55

%





































(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.(1)

(2) The efficiency ratio represents the ratio of non-interest expense before foreclosed property expense, amortization of intangibles, and goodwill impairments as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding only gains from securities transactions and nonrecurring items.

(3) The annualized growth rate for revenue and earning assets based on second quarter 2014 results is not meaningful due to the acquisition of United Financial Bancorp, Inc. on April 30, 2014.

(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, net of non-credit-related expenses as a percent of average assets.

(5) The Pre-Provision net revenue to average equity ratio represents the ratio of net interest income, on a fully tax-equivalent basis, fees and other non-interest income, net of non-credit-related expenses as a percent of average equity.

 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Average Balance Sheets, Interest and Yields/Costs

(Dollars In Thousands)

(Unaudited)




For the Three Months Ended



June 30, 2015


June 30, 2014



Average

Balance


Interest

and

Dividends


Yield/Cost


Average

Balance


Interest

and

Dividends


Yield/Cost

Interest-earning assets:













Residential real estate


$

1,501,850



$

12,702



3.38

%


$

1,109,696



$

9,716



3.50

%

Commercial real estate


1,658,734



19,614



4.74



1,365,361



18,291



5.37


Construction


156,114



1,841



4.73



89,948



1,804



8.05


Commercial business


613,220



7,050



4.61



465,780



5,253



4.52


Installment and collateral


4,843



44



3.63



12,642



173



5.48


Investment securities


1,130,543



8,632



3.05



790,846



6,140



3.11


Other earning assets


47,277



34



0.29



40,602



27



0.27


Total interest-earning assets


5,112,581



49,917



3.91



3,874,875



41,404



4.28


Allowance for loan losses


(26,552)







(19,951)






Non-interest-earning assets


458,462







329,452






Total assets


$

5,544,491







$

4,184,376






Interest-bearing liabilities:













NOW and money market


$

1,434,648



1,952



0.55



$

1,090,279



772



0.28


Savings


540,162



84



0.06



457,373



134



0.12


Certificates of deposit


1,555,593



3,548



0.91



1,197,717



2,240



0.75


Total interest-bearing deposits


3,530,403



5,584



0.63



2,745,369



3,146



0.46


Federal Home Loan Bank advances


572,948



845



0.59



310,946



569



0.73


Other borrowings


160,015



1,379



3.46



64,740



173



1.07


Total interest-bearing liabilities


4,263,366



7,808



0.73



3,121,055



3,888



0.50


Non-interest-bearing deposits


593,117







499,415






Other liabilities


74,305







32,307






Total liabilities


4,930,788







3,652,777






Stockholders' equity


613,703







531,599






Total liabilities and stockholders' equity


$

5,544,491







$

4,184,376






Net interest-earning assets


$

849,215







$

753,820






Tax-equivalent net interest income




42,109







37,516




Tax-equivalent net interest rate spread






3.18

%






3.78

%

Tax-equivalent net interest margin






3.30

%






3.88

%

Average interest-earning assets to average

interest-bearing liabilities






119.92

%






124.15

%

Less tax-equivalent adjustment




1,206







637




Net interest income




$

40,903







$

36,879




 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Average Balance Sheets, Interest and Yields/Costs

(Dollars In Thousands)

(Unaudited)




For the Three Months Ended



June 30, 2015


March 31, 2015



Average

Balance


Interest

and

Dividends


Yield/Cost


Average

Balance


Interest

and

Dividends


Yield/Cost

Interest-earning assets:













Residential real estate


$

1,501,850



$

12,702



3.38

%


$

1,434,644



$

12,319



3.43

%

Commercial real estate


1,658,734



19,614



4.74



1,677,202



18,954



4.58


Construction


156,114



1,841



4.73



179,866



2,357



5.31


Commercial business


613,220



7,050



4.61



610,569



6,858



4.56


Installment and collateral


4,843



44



3.63



5,374



39



2.89


Investment securities


1,130,543



8,632



3.05



1,125,510



8,890



3.16


Other earning assets


47,277



34



0.29



51,552



33



0.26


Total interest-earning assets


5,112,581



49,917



3.91



5,084,717



49,450



3.92


Allowance for loan losses


(26,552)







(25,421)






Non-interest-earning assets


458,462







449,687






Total assets


$

5,544,491







$

5,508,983






Interest-bearing liabilities:













NOW and money market


$

1,434,648



1,952



0.55



$

1,411,240



1,531



0.44


Savings


540,162



84



0.06



534,033



82



0.06


Certificates of deposit


1,555,593



3,548



0.91



1,543,727



3,127



0.82


Total interest-bearing deposits


3,530,403



5,584



0.63



3,489,000



4,740



0.55


Federal Home Loan Bank advances


572,948



845



0.59



590,409



822



0.56


Other borrowings


160,015



1,379



3.46



179,087



1,390



3.15


Total interest-bearing liabilities


4,263,366



7,808



0.73



4,258,496



6,952



0.66


Non-interest-bearing deposits


593,117







578,897






Other liabilities


74,305







67,771






Total liabilities


4,930,788







4,905,164






Stockholders' equity


613,703







603,819






Total liabilities and stockholders' equity


$

5,544,491







$

5,508,983






Net interest-earning assets


$

849,215







$

826,221






Tax-equivalent net interest income




42,109







42,498




Tax-equivalent net interest rate spread






3.18

%






3.26

%

Tax-equivalent net interest margin






3.30

%






3.37

%

Average interest-earning assets to average

interest-bearing liabilities






119.92

%






119.40

%

Less tax-equivalent adjustment




1,206







1,155




Net interest income




$

40,903







$

41,343




 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Average Balance Sheets, Interest and Yields/Costs

(Dollars In Thousands)

(Unaudited)




For the Six Months Ended



June 30, 2015


June 30, 2014



Average

Balance


Interest

and

Dividends


Yield/Cost


Average

Balance


Interest

and

Dividends


Yield/Cost

Interest-earning assets:













Residential real estate


$

1,468,433



$

25,022



3.41

%


$

881,638



$

15,607



3.54

%

Commercial real estate


1,667,917



38,569



4.66



1,076,686



26,773



5.01


Construction


167,924



4,199



5.04



68,632



2,223



6.53


Commercial business


611,902



13,908



4.58



358,736



7,283



4.09


Installment and collateral


5,309



82



3.08



7,435



195



5.24


Investment securities


1,128,040



17,520



3.11



615,389



9,314



3.03


Other earning assets


49,403



67



0.27



29,268



39



0.27


Total interest-earning assets


5,098,928



99,367



3.92



3,037,784



61,434



4.06


Allowance for loan losses


(25,989)







(19,605)






Non-interest-earning assets


453,896







236,297






Total assets


$

5,526,835







$

3,254,476






Interest-bearing liabilities:













NOW and money market


$

1,423,008



3,483



0.49



$

890,384



1,324



0.30


Savings


537,115



166



0.06



341,017



169



0.10


Certificates of deposit


1,549,693



6,675



0.87



893,096



3,811



0.86


Total interest-bearing deposits


3,509,816



10,324



0.59



2,124,497



5,304



0.50


Federal Home Loan Bank advances


581,630



1,667



0.58



252,228



1,153



0.92


Other borrowings


169,498



2,769



3.29



55,330



225



0.82


Total interest-bearing liabilities


4,260,944



14,760



0.70



2,432,055



6,682



0.55


Non-interest-bearing deposits


586,047







380,267






Other liabilities


71,055







25,876






Total liabilities


4,918,046







2,838,198






Stockholders' equity


608,789







416,278






Total liabilities and stockholders' equity


$

5,526,835







$

3,254,476






Net interest-earning assets


$

837,984







$

605,729






Tax-equivalent net interest income




84,607







54,752




Tax-equivalent net interest rate spread






3.22

%






3.51

%

Tax-equivalent net interest margin






3.33

%






3.62

%

Average interest-earning assets to average

interest-bearing liabilities






119.67

%






124.91

%

Less tax-equivalent adjustment




2,361







965




Net interest income




$

82,246







$

53,787




 

 

 

United Financial Bancorp, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

(Dollars In Thousands)

(Unaudited)




Three Months Ended



June 30,

2015


March 31,

2015


December 31,
2014


September 30, 2014


June 30,

2014

Net income (loss)


$

13,332



$

13,025



$

1,421



$

9,985



$

(5,571)


Adjustments:











Net interest income


(3,512)



(3,432)



(3,421)



(3,828)



(4,948)


Non-interest income


(360)



(338)



729



(430)



(589)


Non-interest expense


454



486



12,513



4,497



21,266


Income tax expense (benefit)


1,196



1,152



(2,926)



226



(4,346)


Net adjustment


(2,222)



(2,132)



6,895



465



11,383


Total operating net income


$

11,110



$

10,893



$

8,316



$

10,450



$

5,812


Total net interest income


$

40,903



$

41,343



$

41,892



$

42,193



$

36,879


Adjustments:











Impact from purchase accounting fair value marks:







(Accretion) / Amortization of loan mark


(2,194)



(1,871)



(1,543)



(1,734)



(3,388)


Accretion / (Amortization) of deposit mark


845



1,079



1,276



1,482



1,150


Accretion / (Amortization) of borrowings mark


473



482



602



612



410


Net adjustment


(3,512)



(3,432)



(3,421)



(3,828)



(4,948)


Total operating net interest income


$

37,391



$

37,911



$

38,471



$

38,365



$

31,931


Total non-interest income


$

9,371



$

6,835



$

3,001



$

4,076



$

6,319


Adjustments:











Net gain on sales of securities


(360)



(338)



59



(430)



(589)


Loss on fixed assets - branch optimization






670






Net adjustment


(360)



(338)



729



(430)



(589)


Total operating non-interest income


9,011



6,497



3,730



3,646



5,730


Total operating net interest income


37,391



37,911



38,471



38,365



31,931


Total operating revenue


$

46,402



$

44,408



$

42,201



$

42,011



$

37,661


Total non-interest expense


$

30,357



$

30,657



$

45,076



$

34,922



$

46,177


Adjustments:











Merger and acquisition expense






(10,136)



(4,008)



(20,945)


Core deposit intangible amortization expense


(449)



(481)



(481)



(481)



(321)


Effect of branch lease termination agreement






(1,888)






Amortization of fixed asset fair value mark


(5)



(5)



(8)



(8)




Net adjustment


(454)



(486)



(12,513)



(4,497)



(21,266)


Total operating expense


$

29,903



$

30,171



$

32,563



$

30,425



$

24,911


Total loans


$

4,072,067



$

3,904,733



$

3,897,866



$

3,791,491



$

3,693,115


Non-covered loans (1)


(1,356,259)



(1,510,264)



(1,658,594)



(1,693,669)



(1,820,526)


Total covered loans


$

2,715,808



$

2,394,469



$

2,239,272



$

2,097,822



$

1,872,589


Allowance for loan losses


$

28,856



$

25,297



$

24,809



$

22,304



$

21,343


Allowance for loan losses to total loans


0.71

%


0.65

%


0.64

%


0.59

%


0.58

%

Allowance for loan losses to total covered

loans


1.06

%


1.06

%


1.11

%


1.06

%


1.14

%


(1) As required by GAAP, the Company recorded at fair value the loans acquired in the legacy United transactions. 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 June 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


$

12,702



3.38

%


$

(848)



(0.26)%



$

13,550



3.64

%

Commercial real estate


19,614



4.74



1,137



0.30



18,477



4.44


Construction


1,841



4.73



360



1.02



1,481



3.71


Commercial business


7,050



4.61



1,554



1.08



5,496



3.53


Installment and collateral


44



3.63



(8)



(0.68)



52



4.31


Certificates of deposit


3,548



0.91



(845)



(0.23)



4,393



1.14


Federal Home Loan Bank advances


845



0.59



(482)



(0.33)



1,327



0.92


Other borrowings


1,379



3.46



9



0.26



1,370



3.20


Tax-equivalent net interest margin


42,109



3.30



3,513





38,596



3.02






























Three Months Ended March 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


$

12,319



3.43

%


$

(735)



(0.24)

%


$

13,054



3.67

%

Commercial real estate


18,954



4.58



698



0.20



18,256



4.38


Construction


2,357



5.31



542



1.33



1,815



3.98


Commercial business


6,858



4.56



1,384



1.00



5,474



3.56


Installment and collateral


39



2.89



(18)



(1.39)



57



4.28


Certificates of deposit


3,127



0.82



(1,079)



(0.29)



4,206



1.11


Federal Home Loan Bank advances


822



0.56



(490)



(0.35)



1,312



0.91


Other borrowings


1,390



3.15



8



0.06



1,382



3.09


Tax-equivalent net interest margin


42,498



3.37



3,432





39,066



3.08


 

 

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SOURCE United Financial Bancorp, Inc.



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