United Financial Bancorp Reports Solid First Quarter 2013 Earnings; Announces 10% Increase In Quarterly Dividend To $0.11 Per Share
WEST SPRINGFIELD, Mass., April 18, 2013 /PRNewswire/ -- United Financial Bancorp, Inc. (the "Company") (NASDAQ Global Select Market: UBNK), the holding company for United Bank (the "Bank"), reported net income of $4.7 million, or $0.23 per diluted share, for the first quarter of 2013 compared to net income of $2.8 million, or $0.19 per diluted share, for the corresponding period in 2012. Excluding branch closing costs totaling $510,000 ($302,000 net of tax benefit) and acquisition related expenses of $158,000 ($152,000 net of tax benefit) resulting from the Company's acquisition of New England Bancshares, Inc. in November 2012, net income would have been $5.2 million, or $0.25 per diluted share, for the first quarter of 2013.
The Company also announced that its Board of Directors approved a 10% increase in its quarterly cash dividend to $0.11 per share, payable on May 31, 2013 to shareholders of record as of May 9, 2013. Based upon the closing share price of $14.55 as of April 17, 2013 and the new annualized dividend of $0.44, the dividend yield on the Company's common stock is 3.02%.
Financial Highlights:
- Excluding the impact of branch closing costs totaling $510,000 ($302,000 net of tax benefit) and acquisition related expenses of $158,000 ($152,000 net of tax benefit), diluted earnings per share would have increased 32% compared to the first quarter of 2012.
- Total loans increased $23.3 million, or 1.3%, to $1.84 billion at March 31, 2013.
- Total core deposits increased $21.7 million, or 1.9%, during the first quarter of 2013 to $1.16 billion.
- Credit quality remained very strong, as demonstrated by a non-performing loans to total loans ratio of 77 basis points at March 31, 2013 and an annualized net charge-offs to average loans ratio of 7 basis points in the first quarter of 2013.
- Tangible book value per share was $13.16 at March 31, 2013. During the first quarter of 2013, the Company repurchased 204,400 shares at an average price of $14.91 per share. At March 31, 2013, the Company had approximately 537,288 shares remaining to be purchased under its current plan approved in October 2012.
"We are pleased to report solid first quarter earnings, which reflect the positive impact of the New England Bancshares acquisition, organic growth in loans and core deposits, excellent asset quality and a strong balance sheet. As a result of our improved results and confidence in our future performance, we are excited to reward our shareholders with a 10% increase in the quarterly dividend payment," commented Richard B. Collins, President and Chief Executive Officer. "Since our successful systems integration last fall, we have focused our efforts in Connecticut on further developing relationships with existing customers and driving new customer traffic into the former New England Bank branches. At the same time, we continue to be aggressive in our account acquisition efforts in the Worcester and Springfield regions."
Earnings Summary
- Net interest income increased $7.4 million, or 56%, to $20.5 million for the first quarter of 2013 as a result of an increase in average interest-earning assets and net interest margin expansion. Total average interest-earning assets increased $691.8 million, or 45%, to $2.22 billion for the first quarter of 2013 driven by the acquisition of New England Bank and organic loan growth. The net interest margin increased by 27 basis points to 3.70% for the three months ended March 31, 2013 due in large part to a $1.4 million increase in the net accretion of acquisition accounting adjustments.
- Provision for loan losses increased $300,000, or 46%, to $950,000 for the three months ended March 31, 2013 reflecting a higher level of impaired loan reserves as well as an increase in commercial loan originations.
- Non-interest income increased $225,000, or 9%, to $2.8 million for the three months ended March 31, 2013 due to growth in deposit services charges, bank-owned life insurance income and other income in connection with the New England Bank acquisition.
- Non-interest expense totaled $15.9 million in first quarter of 2013 compared to $11.3 million for the corresponding period last year. Excluding branch closing costs of $510,000 and acquisition-related expenses totaling $158,000, non-interest expenses would have increased $3.9 million, or 35%, to $15.2 million mainly due to additional costs incurred to operate our new Connecticut franchise.
- Income tax expense was $1.8 million for the first quarter of 2013, $891,000 higher than the same period last year, driven by an increase in pre-tax income, and to a lesser extent, a higher effective tax rate.
Balance Sheet Activity:
- Total assets increased $26.9 million, or 1%, to $2.43 billion at March 31, 2013 from $2.40 billion at December 31, 2012 primarily reflecting growth in loans and cash balances, offset in part by a decrease in the investment securities porfolio.
- Total loans increased $23.3 million, or 1%, to $1.84 billion at March 31, 2013 due to growth in construction loans ($11.0 million), commercial mortgages ($10.0 million) and commercial and industrial loans ($7.3 million) as a result of successful business development efforts as well as competitive products and pricing. These items were partially reduced by runoff in the consumer segments.
- Total investment securities decreased $18.3 million, or 5%, to $359.0 million at March 31, 2013 as cash flows from existing bonds were used to fund loan originations.
- Total deposits increased $46.4 million, or 3%, to $1.89 billion at March 31, 2013 reflecting growth of $21.7 million, or 2%, in core account balances and an increase of $24.7 million, or 3%, in certificates of deposit. Core deposit balances were $1.16 billion, or 61% of total deposits, at March 31, 2013 compared to $1.14 billion, or 62% of total deposits, at December 31, 2012.
- Total subordinated debentures decreased $4.0 million, or 41%, to $5.7 million at March 31, 2013 as a result of the full redemption of callable debt instruments previously issued by New England Bancshares, Inc.
Credit Quality:
- Non-performing assets totaled $15.7 million, or 0.64% of total assets, at March 31, 2013 compared to $17.3 million, or 0.72% of total assets, at December 31, 2012. The $1.6 million decrease was due to sales of several OREO properties totaling $1.2 million and successful loan workout activities.
- The ratio of the allowance for loan losses to total loans was 0.69% at March 31, 2013. Excluding the aggregate impact of loans acquired from Commonwealth National Bank in 2009 and New England Bank in 2012 totaling $616.2 million at March 31, 2013 and $664.6 million at December 31, 2012, the ratio of the allowance for loan losses to total loans would have been 1.04% at March 31, 2013 and 1.05% at December 31, 2012. Net charge-offs totaled $343,000, or 0.07% of average loans outstanding (annualized) for the quarter ended March 31, 2013 as compared to net charge-offs of $457,000, or 0.16% of average loans outstanding (annualized) for the quarter ended March 31, 2012.
Capital and Liquidity:
- At March 31, 2013, the Company was well capitalized with a tangible equity-to-tangible assets ratio of 11.00% and an equity-to-assets ratio of 12.61%.
- At March 31, 2013, the Company continued to have considerable liquidity consisting of significant balances at the Federal Reserve Bank of Boston, a large amount of marketable loans and investment securities, substantial unused borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank of Boston 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. The Company had total consolidated assets of approximately $2.4 billion as of March 31, 2013. 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; seven branches in the Worcester region of Central Massachusetts; and 15 branches in Connecticut's Hartford, Tolland, New Haven and Litchfield counties. The Bank also operates loan production offices located in Beverly, Massachusetts and Glastonbury, Connecticut. 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.
CONFERENCE CALL:
United Financial Bancorp, Inc. will host a conference call at 10:00 a.m. Eastern time on Friday, April 19, 2013 to discuss the results for the quarter. Participants should dial-in to the call a few minutes before it begins.
Audio:
Dial in number: 1-888-317-6016
Replay:
Dial in number: 1-877-344-7529
Conference number: 10027468
A telephone replay of the call will be available one hour after the end of the conference call through May 20, 2013 at 9:00 a.m. EDT.
For More Information Contact:
Mark A. Roberts
Executive Vice President & CFO
(413) 787-1700
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY |
||||||
CONSOLIDATED STATEMENTS OF CONDITION |
||||||
(Dollars in thousands, except per share amounts) |
||||||
March 31, |
December 31, |
March 31, |
||||
Assets |
2013 |
2012 |
2012 |
|||
(unaudited) |
(audited) |
(unaudited) |
||||
Cash and cash equivalents |
$ 56,312 |
$ 30,679 |
$ 75,548 |
|||
Investment securities |
359,004 |
377,308 |
340,712 |
|||
Loans held for sale |
953 |
632 |
685 |
|||
Loans: |
||||||
Residential mortgages |
440,638 |
441,874 |
312,065 |
|||
Commercial mortgages |
824,701 |
814,692 |
467,022 |
|||
Construction loans |
63,797 |
52,778 |
30,191 |
|||
Commercial loans |
313,478 |
306,192 |
181,512 |
|||
Home equity loans |
176,124 |
179,039 |
134,368 |
|||
Consumer loans |
20,593 |
21,501 |
14,186 |
|||
Total loans |
1,839,331 |
1,816,076 |
1,139,344 |
|||
Net deferred loan costs and fees |
3,520 |
3,414 |
2,255 |
|||
Allowance for loan losses |
(12,696) |
(12,089) |
(11,325) |
|||
Loans, net |
1,830,155 |
1,807,401 |
1,130,274 |
|||
Federal Home Loan Bank of Boston stock, at cost |
17,334 |
18,554 |
14,454 |
|||
Other real estate owned |
1,411 |
2,578 |
2,442 |
|||
Deferred tax asset, net |
19,726 |
20,178 |
14,368 |
|||
Premises and equipment, net |
25,058 |
25,064 |
17,333 |
|||
Bank-owned life insurance |
53,305 |
52,876 |
41,084 |
|||
Goodwill |
39,585 |
39,852 |
8,192 |
|||
Other intangible assets |
4,387 |
4,514 |
712 |
|||
Other assets |
21,971 |
22,667 |
14,394 |
|||
Total assets |
$ 2,429,201 |
$ 2,402,303 |
$ 1,660,198 |
|||
Liabilities and Stockholders' Equity |
||||||
Deposits: |
||||||
Demand |
$ 313,755 |
$ 307,302 |
$ 208,553 |
|||
NOW |
82,338 |
87,983 |
58,078 |
|||
Savings |
351,935 |
350,188 |
263,076 |
|||
Money market |
414,452 |
395,293 |
311,684 |
|||
Certificates of deposit |
732,138 |
707,409 |
417,238 |
|||
Total deposits |
1,894,618 |
1,848,175 |
1,258,629 |
|||
Short-term borrowings |
66,663 |
79,229 |
23,561 |
|||
Long-term debt |
134,697 |
133,969 |
126,704 |
|||
Subordinated debentures |
5,653 |
9,630 |
5,562 |
|||
Escrow funds held for borrowers |
3,327 |
4,315 |
2,250 |
|||
Capitalized lease obligations |
4,669 |
4,711 |
4,837 |
|||
Accrued expenses and other liabilities |
13,219 |
15,085 |
11,407 |
|||
Total liabilities |
2,122,846 |
2,095,114 |
1,432,950 |
|||
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: 24,266,428 at March 31, 2013 and December 31, 2012 and |
||||||
18,706,933 at March 31, 2012 |
243 |
243 |
187 |
|||
Additional paid-in capital |
273,278 |
272,822 |
182,671 |
|||
Retained earnings |
89,845 |
87,153 |
90,553 |
|||
Unearned compensation |
- |
- |
(9,874) |
|||
Accumulated other comprehensive income, net of taxes |
4,549 |
5,401 |
6,549 |
|||
Treasury stock, at cost (4,324,279 shares at March 31, 2013, 4,114,310 shares |
||||||
at December 31, 2012 and 3,108,811 shares at March 31, 2012) |
(61,560) |
(58,430) |
(42,838) |
|||
Total stockholders' equity |
306,355 |
307,189 |
227,248 |
|||
Total liabilities and stockholders' equity |
$ 2,429,201 |
$ 2,402,303 |
$ 1,660,198 |
|||
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY |
|||
CONSOLIDATED INCOME STATEMENTS |
|||
(Dollars in thousands, except per share amounts) |
|||
Three Months Ended |
|||
March 31, |
|||
2013 |
2012 |
||
(unaudited) |
|||
Interest and dividend income: |
|||
Loans |
$ 22,056 |
$ 14,075 |
|
Investments |
2,313 |
2,855 |
|
Other interest-earning assets |
18 |
41 |
|
Total interest and dividend income |
24,387 |
16,971 |
|
Interest expense: |
|||
Deposits |
2,803 |
2,753 |
|
Borrowings |
1,091 |
1,118 |
|
Total interest expense |
3,894 |
3,871 |
|
Net interest income before provision for loan losses |
20,493 |
13,100 |
|
Provision for loan losses |
950 |
650 |
|
Net interest income after provision for loan losses |
19,543 |
12,450 |
|
Non-interest income: |
|||
Fee income on depositors' accounts |
1,499 |
1,408 |
|
Wealth management income |
211 |
227 |
|
Income from bank-owned life insurance |
513 |
440 |
|
Net gain on sales of loans |
106 |
108 |
|
Net loss on sales of securities |
(50) |
- |
|
Other income |
519 |
390 |
|
Total non-interest income |
2,798 |
2,573 |
|
Non-interest expense: |
|||
Salaries and benefits |
8,479 |
6,442 |
|
Occupancy expenses |
1,628 |
874 |
|
Marketing expenses |
538 |
440 |
|
Data processing expenses |
1,207 |
1,020 |
|
Professional fees |
678 |
506 |
|
Acquisition related expenses |
158 |
- |
|
Branch closing expenses |
510 |
- |
|
FDIC insurance assessments |
298 |
269 |
|
Low income housing tax credit fund |
175 |
243 |
|
Other expenses |
2,179 |
1,481 |
|
Total non-interest expense |
15,850 |
11,275 |
|
Income before income taxes |
6,491 |
3,748 |
|
Income tax expense |
1,790 |
899 |
|
Net income |
$ 4,701 |
$ 2,849 |
|
Earnings per share: |
|||
Basic |
$ 0.23 |
$ 0.19 |
|
Diluted |
$ 0.23 |
$ 0.19 |
|
Weighted average shares outstanding: |
|||
Basic |
20,036 |
14,671 |
|
Diluted |
20,289 |
14,987 |
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY |
||||||||||
SELECTED DATA AND RATIOS (unaudited) |
||||||||||
(Dollars in thousands, except per share amounts) |
||||||||||
At or For The Quarters Ended |
||||||||||
Mar. 31 |
Dec. 31 |
Sep. 30 |
Jun. 30 |
Mar. 31 |
||||||
2013 |
2012 |
2012 |
2012 |
2012 |
||||||
Operating Results: |
||||||||||
Net interest income (1) |
$ 20,493 |
$ 16,235 |
$ 13,550 |
$ 13,294 |
$ 13,100 |
|||||
Loan loss provision |
950 |
689 |
1,050 |
750 |
650 |
|||||
Non-interest income |
2,798 |
2,969 |
2,511 |
(2) |
2,570 |
2,573 |
||||
Non-interest expense |
15,850 |
(3) |
22,305 |
(3) |
11,192 |
(3) |
11,468 |
(3) |
11,275 |
|
Net income (loss) |
4,701 |
(4,732) |
2,929 |
2,582 |
2,849 |
|||||
Performance Ratios (annualized): |
||||||||||
Return (loss) on average assets |
0.78% |
(4) |
(0.93)% |
0.71% |
(4) |
0.62% |
(4) |
0.70% |
||
Return (loss) on average equity |
6.13% |
(4) |
(7.00)% |
5.10% |
(4) |
4.53% |
(4) |
5.00% |
||
Net interest margin (1) |
3.70% |
3.43% |
3.51% |
3.44% |
3.43% |
|||||
Non-interest income to average total assets |
0.47% |
0.58% |
0.61% |
(5) |
0.62% |
0.63% |
||||
Non-interest expense to average total assets |
2.64% |
(6) |
4.37% |
(6) |
2.71% |
(6) |
2.78% |
(6) |
2.77% |
|
Efficiency ratio (7) |
68.22% |
(6) |
118.71% |
(6) |
69.74% |
(6) |
73.04% |
(6) |
72.44% |
|
Per Share Data: |
||||||||||
Diluted earnings (loss) per share |
$ 0.23 |
$ (0.28) |
$ 0.20 |
$ 0.17 |
$ 0.19 |
|||||
Book value per share |
$ 15.36 |
$ 15.24 |
$ 14.88 |
$ 14.70 |
$ 14.57 |
|||||
Tangible book value per share (8) |
$ 13.16 |
$ 13.04 |
$ 14.31 |
$ 14.12 |
$ 14.00 |
|||||
Market price at period end |
$ 15.20 |
$ 15.72 |
$ 14.47 |
$ 14.38 |
$ 15.82 |
|||||
Risk Profile |
||||||||||
Equity as a percentage of assets |
12.61% |
12.79% |
13.67% |
13.80% |
13.69% |
|||||
Tangible equity as a percentage of tangible assets (8) |
11.00% |
11.15% |
13.21% |
13.33% |
13.22% |
|||||
Net charge-offs to average loans outstanding (annualized) |
0.07% |
0.30% |
0.09% |
0.11% |
0.16% |
|||||
Non-performing assets as a percent of total assets |
0.64% |
0.72% |
0.61% |
0.68% |
0.70% |
|||||
Non-performing loans as a percent of total loans |
0.77% |
0.81% |
0.73% |
0.74% |
0.79% |
|||||
Allowance for loan losses as a percent of total loans (9) |
0.69% |
0.67% |
1.03% |
1.01% |
0.99% |
|||||
Allowance for loan losses as a percent of non-performing loans |
89.41% |
(10) |
82.20% |
(10) |
140.49% |
136.43% |
125.65% |
|||
Average Balances |
||||||||||
Loans |
$ 1,830,620 |
$ 1,519,877 |
$ 1,178,802 |
$ 1,151,141 |
$ 1,133,543 |
|||||
Securities |
365,237 |
350,572 |
338,352 |
340,086 |
338,405 |
|||||
Total interest-earning assets |
2,217,842 |
1,893,447 |
1,543,779 |
1,547,132 |
1,526,015 |
|||||
Total assets |
2,397,027 |
2,043,983 |
1,650,148 |
1,652,997 |
1,628,071 |
|||||
Deposits |
1,854,974 |
1,571,613 |
1,254,148 |
1,256,780 |
1,231,285 |
|||||
FHLBB advances |
136,627 |
122,331 |
103,915 |
103,632 |
105,302 |
|||||
Stockholders' equity |
306,553 |
270,564 |
229,614 |
227,855 |
227,854 |
|||||
Average Yields/Rates (annualized) |
||||||||||
Loans |
4.82% |
4.65% |
4.92% |
4.93% |
4.97% |
|||||
Securities |
2.53% |
2.71% |
3.01% |
3.25% |
3.37% |
|||||
Total interest-earning assets |
4.40% |
4.25% |
4.42% |
4.39% |
4.45% |
|||||
Savings accounts |
0.38% |
0.44% |
0.45% |
0.51% |
0.58% |
|||||
Money market/NOW accounts |
0.40% |
0.42% |
0.41% |
0.45% |
0.55% |
|||||
Certificates of deposit |
1.11% |
1.35% |
1.74% |
1.78% |
1.82% |
|||||
FHLBB advances |
2.32% |
3.03% |
3.04% |
3.16% |
3.12% |
|||||
Total interest-bearing liabilities |
0.88% |
1.05% |
1.20% |
1.24% |
1.31% |
|||||
(1) |
Includes amortization of acquisition accounting adjustments totaling $1.8 million, $633,000, $715,000, $319,000 and $371,000 for the quarters ending March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, respectively. |
|||||||||
(2) |
Includes a $202,000 other-than-temporary impairment ("OTTI") charge on securities for the quarter ended September 30, 2012. |
|||||||||
(3) |
Includes branch closing costs totaling $510,000 for the quarter ended March 31, 2013, an ESOP plan termination expense of $4.5 million for the quarter ended December 31, 2012 and acquisition-related expenses totaling $158,000, $4.0 million, $366,000 and $592,000 for the quarters ended March 31, 2013, December 31, 2012, September 30, 2012 and June 30, 2012, respectively. |
|||||||||
(4) |
Exclusive of branch closing costs totaling $302,000 (after tax) for the quarter ended March 31, 2013, acquisition-related expenses totaling $254,000 (after tax) and $592,000 for the quarters ended September 30, 2012 and June 30, 2012, respectively, and a $119,000 (after tax) other-than-temporary impairment charge for the quarter ended September 30, 2012, the return on average assets would have been 0.86%, 0.80% and 0.77% and the return on average equity would have been 6.73%, 5.75% and 5.57%, respectively. |
|||||||||
(5) |
Exclusive of the $202,000 other-than-temporary impairment charge, non-interest income to average total assets would have been 0.66% for the quarter ended September 30, 2012. |
|||||||||
(6) |
Excluding the branch closing costs totaling $510,000 for the quarter ended March 31, 2013, ESOP plan termination expense of $4.5 million and FHLBB prepayment penalties of $207,000 for the quarter ended December 31, 2012 and acquisition-related expenses totaling $158,000, $4.0 million, $366,000 and $592,000 for the quarters ended March 31, 2013, December 31, 2012, September 30, 2012 and June 30, 2012, non-interest expense to average total assets would have been 2.53%, 2.67%, 2.62% and 2.63% and the efficiency ratio would have been 65.34%, 72.50%, 67.46% and 69.27%, respectively. |
|||||||||
(7) |
Excludes gains/losses on sales of securities and loans and impairment charges on securities. |
|||||||||
(8) |
Excludes the impact of goodwill and other intangible assets of $44.0 million at March 31, 2013, $44.4 million at December 31, 2012 and $8.9 million at September 30, 2012, June 30, 2012 and March 31, 2012. |
|||||||||
(9) |
Excluding acquired loans of $611.3 million, $659.6 million, $118.6 million, $126.4 million and $136.4 million, and loans purchased from other financial institutions of $4.9 million, $5.0 million, $6.3 million, $6.4 million and $18.3 million at March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, respectively, allowance for loan losses as a percent of total loans, gross would have been 1.04%, 1.05%, 1.15%, 1.14% and 1.15% for the quarters ended March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, respectively. |
|||||||||
(10) |
Excluding acquired non-performing loans of $4.4 million and $7.0 million at March 31, 2013 and December 31, 2012, allowance for loan losses as a percent of total non-performing loans would have been 129.78% and 157.72%, respectively. |
|||||||||
SOURCE United Financial Bancorp, Inc.
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