Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - United Financial Bancorp, Inc. | d8k.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE | For More Information Contact: | |||
| Mark A. Roberts | ||||
| Executive Vice President & CFO | ||||
| (413) 787-1700 |
UNITED FINANCIAL BANCORP REPORTS SECOND QUARTER 2011
EARNINGS OF $2.7 MILLION, OR $0.18 PER DILUTED SHARE
ANNOUNCES 13% INCREASE IN QUARTERLY DIVIDEND PAYMENT TO $0.09 PER SHARE
WEST SPRINGFIELD, MA— July 22, 2011—United Financial Bancorp, Inc. (the “Company”) (NASDAQ Global Select Market: UBNK), the holding company for United Bank (the “Bank”), reported net income of $2.7 million, or $0.18 per diluted share, for the second quarter of 2011 compared to net income of $2.9 million, or $0.19 per diluted share, for the corresponding period in 2010. For the six months ended June 30, 2011, net income was $5.1 million, or $0.33 per diluted share, compared to net income of $4.7 million or $0.30 per diluted share, for the same period in 2010. The Company also announced a 13% increase in its quarterly cash dividend to $0.09 per share, payable on September 2, 2011 to shareholders of record as of August 12, 2011.
“We are pleased with our ability to profitably grow our franchise while maintaining excellent asset quality and a strong capital position,” commented Richard B. Collins, President and Chief Executive Officer. “While our performance continues to be affected by a challenging economic environment and a very competitive local market, we remain committed to improving our financial performance and enhancing shareholder value. As a result of our consistent, stable financial results we are pleased to reward our shareholders with a 13% increase in our quarterly dividend payment.”
Earnings Summary
| • | Net interest income increased $95,000, or 1%, to $13.4 million for the second quarter of 2011 driven by higher average interest-earning assets partially reduced by net interest margin compression. Total average interest-earning assets increased $69.5 million, or 5%, to $1.509 billion as compared to the second quarter of 2010 driven by growth in investment securities and loan balances. Net interest margin declined 14 basis points to 3.55% for the three months ended June 30, 2011 due to lower amortization of acquisition accounting adjustments ($528,000 in the second quarter of 2011 compared to $706,000 in the second quarter of 2010), the downward re-pricing of certain fixed rate loans and investments as a result of the lower interest rate environment and an increase in funds held in lower-yielding cash equivalents. These items were partially offset by lower funding costs. |
| • | Provision for loan losses increased by $223,000, or 50%, to $673,000 for the three months ended June 30, 2011 primarily as a result of an increase in reserves for classified and impaired loans and growth in net loan originations. |
| • | Non-interest income remained flat at $2.2 million for the three months ended June 30, 2011. Excluding a security impairment charge of $59,000, non-interest income increased $51,000, or 2%, from the same period one year ago mainly driven by an increase of $53,000, or 16%, in bank owned life insurance income and an increase of $47,000, or 28%, in wealth management income as a result of growth in assets under management and annuity sales. The results were also impacted by lower gains from sales of loans. |
| • | Non-interest expense increased $772,000, or 7%, to $11.4 million for the three months ended June 30, 2011 from $10.6 million in the same period last year. Excluding acquisition related expenses totaling $169,000 incurred in the second quarter of 2010 in connection with the company’s acquisition of CNB Financial Corp. (“CNB”), non-interest expense would have increased $941,000 or 9%. Salaries and benefits increased $446,000, or 7%, mainly driven by annual wage increases, staffing costs for the new loan production office opened in 2011 and a larger incentive plan accrual due to improved operating performance. Other expenses increased $484,000, or 34%, primarily as a result of a $198,000 operating loss from an investment in a low income housing tax credit fund, an increase in other real estate owned costs as the 2010 results included a gain from the sale of a property and increases in furniture and equipment depreciation and the writedown of mortgage servicing rights. These increases were partially offset by an $81,000, or 25%, decrease in FDIC premium expense, which reflects the positive impact of the new assessment calculation that became effective on April 1, 2011. |
| • | Income taxes decreased $665,000, or 45%, to $827,000 for the three months ended June 30, 2011 from $1.5 million in the same period last year primarily due to a lower effective tax rate. The effective tax rate decreased from 34% in the second quarter of 2010 to 24% for the second quarter of 2011 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 $24.8 million, or 2%, to $1.610 billion at June 30, 2011 from year-end reflecting growth in investment securities and loan balances, offset in part by declining cash balances. |
| • | Investment securities grew $23.4 million, or 7%, to $361.8 million at June 30, 2011 from year-end reflecting the use of excess cash to fund additional purchases of agency mortgage-backed securities. |
| • | Total loans increased by $29.2 million, or 3%, to $1.103 billion at June 30, 2011 from year-end reflecting an increase in net origination activity in the residential real estate, commercial real estate, commercial and construction portfolios as a result of business development efforts and competitive products and pricing. |
| • | Cash and cash equivalents decreased $43.6 million, or 53%, to $39.5 million at June 30, 2011 from year-end as excess cash was used to fund investment security purchases and paydown maturing FHLB advances. |
| • | Total deposits increased $46.0 million, or 4%, to $1.189 billion at June 30, 2011 from year-end reflecting growth of $69.1 million, or 10%, in core account balances, partially offset by a decrease of $23.1 million, or 5%, in certificates of deposit. The growth in core account balances was driven by strong demand in all categories, particularly demand and savings accounts. Core deposit balances were $749.8 million, or 63% of total deposits, at June 30, 2011 compared to $680.7 million, or 60% of total deposits, at December 31, 2010. |
| • | Short-term borrowings and long-term debt decreased $4.3 million and $18.5 million, respectively, during the six months ended June 30, 2011 mainly due to the use of excess cash balances to pay down FHLB advances. |
Credit Quality & Reserve Coverage
| • | Non-performing assets totaled $12.4 million, or 0.77% of total assets, at June 30, 2011 compared to $11.0 million, or 0.69% of total assets, at December 31, 2010. The growth of $1.4 million in non-performing assets during the first six months of 2011 was primarily due to an increase in other real estate owned. |
| • | At June 30, 2011, the ratio of the allowance for loan losses to total loans was 0.96% compared to 0.93% at December 31, 2010. Excluding the impact of loans acquired from CNB and other financial institutions totaling $189.3 million at June 30, 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 June 30, 2011 and 1.18% at December 31, 2010. Net charge-offs totaled $828,000, or 0.15% of average loans outstanding (annualized), for the six months ended June 30, 2011 as compared to net charge-offs of $641,000, or 0.12% of average loans outstanding (annualized), for the same period in 2010. |
Capital and Liquidity
The Company remains well capitalized with a tangible equity-to-tangible assets ratio of 13.66% at June 30, 2011. At June 30, 2011 the Company continued to have considerable liquidity including significant unused borrowing capacity at the Federal Home Loan Bank and the Federal Reserve Bank as well as 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. As of June 30, 2011, the Company had total consolidated assets of $1.6 billion. 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 par value amounts)
| June 30, 2011 |
December 31, 2010 |
June 30, 2010 |
||||||||||
| (unaudited) | (audited) | (unaudited) | ||||||||||
| Assets |
||||||||||||
| Cash and cash equivalents |
$ | 39,452 | $ | 83,069 | $ | 57,878 | ||||||
| Investment securities |
361,750 | 338,327 | 300,347 | |||||||||
| Loans held for sale |
342 | — | 725 | |||||||||
| Loans: |
||||||||||||
| Residential mortgages |
314,255 | 295,721 | 317,346 | |||||||||
| Commercial mortgages |
437,378 | 427,994 | 425,091 | |||||||||
| Construction loans |
28,903 | 27,553 | 38,978 | |||||||||
| Commercial loans |
167,884 | 165,335 | 152,972 | |||||||||
| Home equity loans |
138,023 | 138,290 | 138,268 | |||||||||
| Consumer loans |
16,864 | 19,218 | 21,586 | |||||||||
| Total loans |
1,103,307 | 1,074,111 | 1,094,241 | |||||||||
| Net deferred loan costs and fees |
2,051 | 2,073 | 2,333 | |||||||||
| Allowance for loan losses |
(10,640 | ) | (9,987 | ) | (9,722 | ) | ||||||
| Loans, net |
1,094,718 | 1,066,197 | 1,086,852 | |||||||||
| Federal Home Loan Bank of Boston stock, at cost |
15,365 | 15,365 | 15,365 | |||||||||
| Other real estate owned |
2,858 | 1,536 | 2,007 | |||||||||
| Deferred tax asset, net |
11,675 | 11,029 | 12,181 | |||||||||
| Premises and equipment, net |
16,257 | 15,565 | 15,647 | |||||||||
| Bank-owned life insurance |
39,832 | 29,180 | 28,526 | |||||||||
| Goodwill |
8,192 | 8,192 | 7,731 | |||||||||
| Other intangible assets |
987 | 975 | 1,059 | |||||||||
| Other assets |
18,225 | 15,442 | 16,597 | |||||||||
| Total assets |
$ | 1,609,653 | $ | 1,584,877 | $ | 1,544,915 | ||||||
| Liabilities and Stockholders’ Equity |
||||||||||||
| Deposits: |
||||||||||||
| Demand |
$ | 195,925 | $ | 175,996 | $ | 166,999 | ||||||
| NOW |
42,390 | 40,922 | 41,149 | |||||||||
| Savings |
238,335 | 203,165 | 191,386 | |||||||||
| Money market |
273,115 | 260,573 | 249,289 | |||||||||
| Certificates of deposit |
439,505 | 462,645 | 458,873 | |||||||||
| Total deposits |
1,189,270 | 1,143,301 | 1,107,696 | |||||||||
| Short-term borrowings |
16,702 | 21,029 | 15,644 | |||||||||
| Long-term debt |
154,773 | 173,307 | 177,397 | |||||||||
| Subordinated debentures |
5,494 | 5,448 | 5,402 | |||||||||
| Escrow funds held for borrowers |
1,893 | 1,899 | 1,687 | |||||||||
| Due to broker |
— | 3,002 | — | |||||||||
| Capitalized lease obligations |
4,943 | 5,011 | 5,077 | |||||||||
| Accrued expenses and other liabilities |
8,813 | 9,304 | 8,910 | |||||||||
| Total liabilities |
1,381,888 | 1,362,301 | 1,321,813 | |||||||||
| 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 June 30, 2011, December 31, 2010 and June 30, 2010 |
187 | 187 | 187 | |||||||||
| Additional paid-in capital |
181,654 | 180,322 | 179,065 | |||||||||
| Retained earnings |
85,618 | 82,899 | 79,962 | |||||||||
| Unearned compensation |
(10,405 | ) | (10,750 | ) | (11,096 | ) | ||||||
| Accumulated other comprehensive income, net of taxes |
5,839 | 4,858 | 6,496 | |||||||||
| Treasury stock, at cost (2,607,458 shares at June 30, 2011, 2,597,827 shares at December 31, 2010 and 2,348,307 shares at June 30, 2010) |
(35,128 | ) | (34,940 | ) | (31,512 | ) | ||||||
| Total stockholders’ equity |
227,765 | 222,576 | 223,102 | |||||||||
| Total liabilities and stockholders’ equity |
$ | 1,609,653 | $ | 1,584,877 | $ | 1,544,915 | ||||||
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
(Amounts in thousands, except per share amounts)
| Three Months
Ended June 30, |
Six Months
Ended June 30, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Interest and dividend income: |
||||||||||||||||
| Loans |
$ | 14,703 | $ | 15,404 | $ | 29,190 | $ | 30,861 | ||||||||
| Investments |
3,387 | 3,122 | 6,578 | 6,414 | ||||||||||||
| Other interest-earning assets |
38 | 10 | 78 | 18 | ||||||||||||
| Total interest and dividend income |
18,128 | 18,536 | 35,846 | 37,293 | ||||||||||||
| Interest expense: |
||||||||||||||||
| Deposits |
3,194 | 3,507 | 6,491 | 6,882 | ||||||||||||
| Borrowings |
1,552 | 1,742 | 3,182 | 3,628 | ||||||||||||
| Total interest expense |
4,746 | 5,249 | 9,673 | 10,510 | ||||||||||||
| Net interest income before provision for loan losses |
13,382 | 13,287 | 26,173 | 26,783 | ||||||||||||
| Provision for loan losses |
673 | 450 | 1,481 | 1,183 | ||||||||||||
| Net interest income after provision for loan losses |
12,709 | 12,837 | 24,692 | 25,600 | ||||||||||||
| Non-interest income: |
||||||||||||||||
| Net gain on sales of loans |
50 | 109 | 73 | 197 | ||||||||||||
| Net gains on sales of securities |
— | — | 1 | — | ||||||||||||
| Impairment charges on securities |
(59 | ) | — | (59 | ) | (145 | ) | |||||||||
| Fee income on depositors’ accounts |
1,373 | 1,340 | 2,665 | 2,711 | ||||||||||||
| Wealth management income |
214 | 167 | 454 | 305 | ||||||||||||
| Income from bank-owned life insurance |
393 | 340 | 724 | 686 | ||||||||||||
| Other income |
240 | 263 | 502 | 502 | ||||||||||||
| Total non-interest income |
2,211 | 2,219 | 4,360 | 4,256 | ||||||||||||
| Non-interest expense: |
||||||||||||||||
| Salaries and benefits |
6,414 | 5,968 | 12,683 | 12,046 | ||||||||||||
| Occupancy expenses |
805 | 800 | 1,649 | 1,727 | ||||||||||||
| Marketing expenses |
635 | 622 | 1,082 | 1,182 | ||||||||||||
| Data processing expenses |
984 | 959 | 1,972 | 2,026 | ||||||||||||
| Professional fees |
407 | 358 | 1,068 | 899 | ||||||||||||
| Acquisition related expenses |
— | 169 | — | 1,148 | ||||||||||||
| FDIC insurance assessments |
244 | 325 | 574 | 740 | ||||||||||||
| Other expenses |
1,914 | 1,430 | 3,315 | 2,881 | ||||||||||||
| Total non-interest expense |
11,403 | 10,631 | 22,343 | 22,649 | ||||||||||||
| Income before income taxes |
3,517 | 4,425 | 6,709 | 7,207 | ||||||||||||
| Income tax expense |
827 | 1,492 | 1,590 | 2,523 | ||||||||||||
| Net income |
$ | 2,690 | $ | 2,933 | $ | 5,119 | $ | 4,684 | ||||||||
| Earnings per share: |
||||||||||||||||
| Basic |
$ | 0.18 | $ | 0.19 | $ | 0.34 | $ | 0.30 | ||||||||
| Diluted |
$ | 0.18 | $ | 0.19 | $ | 0.33 | $ | 0.30 | ||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
15,028 | 15,440 | 15,022 | 15,529 | ||||||||||||
| Diluted |
15,309 | 15,518 | 15,285 | 15,590 | ||||||||||||
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY
SELECTED DATA AND RATIOS (unaudited)
(Dollars in thousands, except per share amounts)
| At or For The Quarters Ended | ||||||||||||||||||||
| Jun. 30 2011 |
Mar. 31 2011 |
Dec. 31 2010 |
Sep. 30 2010 |
Jun. 30 2010 |
||||||||||||||||
| Operating Results: |
||||||||||||||||||||
| Net interest income |
$ | 13,382 | $ | 12,791 | $ | 12,961 | $ | 13,167 | $ | 13,287 | ||||||||||
| Loan loss provision |
673 | 808 | 352 | 750 | 450 | |||||||||||||||
| Non-interest income |
2,211 | 2,149 | 2,357 | 2,103 | 2,219 | |||||||||||||||
| Non-interest expense |
11,403 | 10,940 | 10,736 | 10,456 | 10,631 | |||||||||||||||
| Net income |
2,690 | 2,429 | 2,671 | 2,677 | 2,933 | |||||||||||||||
| Performance Ratios (annualized): |
||||||||||||||||||||
| Return on average assets |
0.67 | % | 0.62 | % | 0.69 | % | 0.70 | % | 0.77 | % | ||||||||||
| Return on average equity |
4.76 | % | 4.36 | % | 4.80 | % | 4.80 | % | 5.24 | % | ||||||||||
| Net interest margin |
3.55 | % | 3.42 | % | 3.53 | % | 3.64 | % | 3.69 | % | ||||||||||
| Non-interest income to average total assets |
0.55 | % | 0.54 | % | 0.61 | % | 0.55 | % | 0.58 | % | ||||||||||
| Non-interest expense to average total assets |
2.85 | % | 2.77 | % | 2.76 | % | 2.73 | % | 2.79 | % | ||||||||||
| Efficiency ratio (1) |
73.09 | % | 73.34 | % | 70.86 | % | 68.58 | % | 69.05 | % | ||||||||||
| Per Share Data: |
||||||||||||||||||||
| Diluted earnings per share |
$ | 0.18 | $ | 0.16 | $ | 0.18 | $ | 0.18 | $ | 0.19 | ||||||||||
| Book Value Per Share |
$ | 14.15 | $ | 13.92 | $ | 13.82 | $ | 13.73 | $ | 13.64 | ||||||||||
| Tangible book value per share |
$ | 13.58 | (2) | $ | 13.35 | (2) | $ | 13.25 | (2) | $ | 13.18 | (2) | $ | 13.10 | (2) | |||||
| Market price at period end |
$ | 15.43 | $ | 16.51 | $ | 15.27 | $ | 13.51 | $ | 13.65 | ||||||||||
| Risk Profile |
||||||||||||||||||||
| Equity as a percentage of assets |
14.15 | % | 14.01 | % | 14.04 | % | 14.37 | % | 14.44 | % | ||||||||||
| Tangible equity as a percentage of tangible assets |
13.66 | %(2) | 13.51 | %(2) | 13.54 | %(2) | 13.87 | %(2) | 13.95 | %(2) | ||||||||||
| Net charge-offs to average loans outstanding (annualized) |
0.18 | % | 0.12 | % | 0.11 | % | 0.19 | % | 0.12 | % | ||||||||||
| Non-performing assets as a percent of total assets |
0.77 | % | 0.62 | % | 0.69 | % | 0.83 | % | 1.20 | % | ||||||||||
| Non-performing loans as a percent of total loans, gross |
0.86 | % | 0.76 | % | 0.88 | % | 1.06 | % | 1.19 | % | ||||||||||
| Allowance for loan losses as a percent of total loans, gross |
0.96 | %(3) | 0.95 | %(3) | 0.93 | %(3) | 0.90 | %(3) | 0.89 | %(3) | ||||||||||
| Allowance for loan losses as a percent of non-performing loans |
112.01 | % | 125.20 | % | 105.86 | % | 85.30 | % | 74.58 | % | ||||||||||
| Average Balances |
||||||||||||||||||||
| Loans |
$ | 1,103,305 | $ | 1,090,796 | $ | 1,091,756 | $ | 1,091,859 | $ | 1,100,409 | ||||||||||
| Securities |
356,479 | 341,804 | 310,024 | 298,335 | 294,849 | |||||||||||||||
| Total interest-earning assets |
1,509,438 | 1,493,946 | 1,470,127 | 1,447,147 | 1,439,953 | |||||||||||||||
| Total assets |
1,602,767 | 1,579,048 | 1,555,266 | 1,533,489 | 1,526,154 | |||||||||||||||
| Deposits |
1,179,166 | 1,145,296 | 1,115,775 | 1,095,764 | 1,084,885 | |||||||||||||||
| FHLBB advances |
138,215 | 147,880 | 153,965 | 155,987 | 158,333 | |||||||||||||||
| Stockholders’ Equity |
226,279 | 223,067 | 222,749 | 222,995 | 223,928 | |||||||||||||||
| Average Yields/Rates (annualized) |
||||||||||||||||||||
| Loans |
5.33 | % | 5.31 | % | 5.60 | % | 5.64 | % | 5.60 | % | ||||||||||
| Securities |
3.80 | % | 3.73 | % | 3.68 | % | 3.98 | % | 4.24 | % | ||||||||||
| Total interest-earning assets |
4.80 | % | 4.74 | % | 4.94 | % | 5.08 | % | 5.15 | % | ||||||||||
| Savings accounts |
0.76 | % | 0.77 | % | 0.87 | % | 0.86 | % | 0.96 | % | ||||||||||
| Money market/NOW accounts |
0.70 | % | 0.71 | % | 0.84 | % | 0.86 | % | 0.87 | % | ||||||||||
| Certificates of deposit |
1.99 | % | 2.06 | % | 2.16 | % | 2.21 | % | 2.14 | % | ||||||||||
| FHLBB advances |
3.60 | % | 3.52 | % | 3.62 | % | 3.61 | % | 3.57 | % | ||||||||||
| Total interest-bearing liabilities |
1.61 | % | 1.68 | % | 1.83 | % | 1.85 | % | 1.86 | % | ||||||||||
| (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 $9.2 million at June 30, 2011, March 31, 2011 and December 31, 2010, $9.0 million at September 30, 2010 and $8.8 million at June 30, 2010. |
| (3) | Excluding acquired loans of $168.6 million, $178.7 million, $209.8 million, $219.9 million and $228.8 million and loans purchased from other financial institutions of $20.8 million, $21.1 million, $21.4 million, $21.8 million and $22.1 million at June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively, allowance for loan losses as a percent of total loans, gross would have been 1.16%, 1.17%, 1.18%, 1.16% and 1.15% for the quarters ended June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively. |