Attached files
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EX-23.1 - EX-23.1 - United Financial Bancorp, Inc. | d781323dex231.htm |
EX-99.2 - EX-99.2 - United Financial Bancorp, Inc. | d781323dex992.htm |
EX-99.1 - EX-99.1 - United Financial Bancorp, Inc. | d781323dex991.htm |
8-K - FORM 8-K - United Financial Bancorp, Inc. | d781323d8k.htm |
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined statement of income and explanatory notes combines data from the historical consolidated statements of income of United Financial Bancorp, Inc., a Connecticut corporation formerly known as Rockville Financial, Inc. (United Financial Bancorp, Inc.), and United Financial Bancorp, Inc., a Maryland corporation (Legacy United Bancorp), giving effect to the merger of United Financial Bancorp, Inc. and Legacy United Bancorp under the acquisition method of accounting with United Financial Bancorp, Inc. treated as the acquirer.
The unaudited pro forma condensed combined statement of income for the three months ended March 31, 2014 combines data from the historical consolidated statement of net income of United Financial Bancorp, Inc. for the three months ended March 31, 2014 and the historical statement of net income of Legacy United Bancorp for the three months ended March 31, 2014, giving effect to the merger as if it had occurred on January 1, 2014.
The unaudited pro forma condensed combined statement of income is presented for illustrative purposes only and does not necessarily indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented, nor are they necessarily indicative of future results of the combined company following the consummation of the merger. The unaudited pro forma condensed combined statement of income also does not consider any potential impacts of potential revenue enhancements, anticipated cost savings and expense efficiencies, or asset dispositions, among other factors.
The preparation of the unaudited pro forma condensed combined financial information and related adjustments required management to make certain assumptions and estimates. The unaudited pro forma condensed combined statement of income should be read together with:
| The accompanying notes to the unaudited pro forma condensed combined statement of income; |
| United Financial Bancorp, Inc.s separate unaudited historical consolidated financial statements and accompanying notes as of and for the three months ended March 31, 2014 included in United Financial Bancorp, Inc.s Quarterly Report on Form 10-Q for the three months ended March 31, 2014; |
| United Financial Bancorp, Inc.s separate audited historical consolidated financial statements and accompanying notes as of and for the fiscal year ended December 31, 2013 included in United Financial Bancorp, Inc.s Annual Report on Form 10-K for the fiscal year ended December 31, 2013; |
| Legacy United Bancorps separate unaudited historical consolidated financial statements and accompanying notes as of and for the three months ended March 31, 2014 included as Exhibit 99.2 to this Current Report on Form 8-K; and |
| Legacy United Bancorps separate audited historical consolidated financial statements and accompanying notes as of and for the fiscal year ended December 31, 2013 included as Exhibit 99.1 to this Current Report on Form 8-K. |
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Unaudited Pro Forma Condensed Combined Statement of Income
for the Three Months Ended March 31, 2014
(Dollars in thousands, except share data) | United Financial Bancorp, Inc. |
Legacy United Bancorp |
Pro Forma Merger Adjustments |
Pro Forma Combined |
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INTEREST AND DIVIDEND INCOME: |
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Total interest and dividend income |
$ | 19,702 | $ | 22,842 | $ | 3,795 | (A) | $ | 46,339 | |||||||
INTEREST EXPENSE: |
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Total interest expense |
2,794 | 3,490 | (2,247 | )(B) | 4,037 | |||||||||||
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Net interest income |
16,908 | 19,352 | 6,042 | 42,302 | ||||||||||||
PROVISION FOR LOAN LOSSES |
450 | 600 | | 1,050 | ||||||||||||
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Net interest income after provision for loan losses |
16,458 | 18,752 | 6,042 | 41,252 | ||||||||||||
NON-INTEREST INCOME: |
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Total non-interest income |
3,209 | 2,777 | | 5,986 | ||||||||||||
NON-INTEREST EXPENSE: |
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Total non-interest expense |
18,257 | 15,514 | 489 | (C ) | 34,260 | |||||||||||
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INCOME BEFORE INCOME TAXES |
1,410 | 6,015 | 5,553 | 12,978 | ||||||||||||
PROVISION FOR INCOME TAXES |
463 | 1,813 | 1,944 | (D) | 4,220 | |||||||||||
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NET INCOME |
$ | 947 | $ | 4,202 | $ | 3,609 | $ | 8,758 | ||||||||
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Per common share |
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Earningsbasic |
$ | 0.04 | $ | 0.21 | $ | 0.17 | ||||||||||
Earningsdiluted |
$ | 0.04 | $ | 0.21 | $ | 0.17 | ||||||||||
Dividends declared |
$ | 0.10 | $ | 0.11 | ||||||||||||
Weighted-average common shares |
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Basic |
25,265,190 | 19,797,596 | 51,971,591 | |||||||||||||
Diluted |
25,681,048 | 20,099,803 | 52,387,449 |
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Notes to Unaudited Pro Forma Condensed Combined Statement of Income
Note 1Basis of Presentation
The unaudited pro forma condensed combined statement of income has been prepared using the acquisition method of accounting giving effect to the merger involving United Financial Bancorp, Inc. and Legacy United Bancorp, with United Financial Bancorp, Inc. as the acquirer. The unaudited pro forma condensed combined statement of income is presented for illustrative purposes only and is not necessarily indicative of the financial position had the merger been consummated at January 1, 2014, nor is it necessarily indicative of the results of operations in future periods or the future financial position of the combined entities. The merger was completed on April 30, 2014. The merger consideration included the issuance of 26.7 million common shares, or $356.4 million in equity consideration.
Note 2Estimated Merger and Integration Costs
In connection with the merger, the plan to integrate United Financial Bancorp, Inc.s and Legacy United Bancorps operations is on-going and the specific details of these plans continue to be refined. United Financial Bancorp, Inc. and Legacy United Bancorp assessed the two companies personnel, benefit plans, premises, equipment, computer systems, and service contracts to determine where they could take advantage of redundancies or where it was beneficial or necessary to convert to one system. Certain decisions arising from these assessments have and still may involve involuntary termination of employees, vacating leased premises, changing information systems, canceling contracts between United Financial Bancorp, Inc. or Legacy United Bancorp and certain service providers and selling or otherwise disposing of certain premises, furniture and equipment. United Financial Bancorp, Inc. expects to incur merger-related expenses, including system conversion costs, employee retention and severance agreements, communications to customers, and certain other expenses. To the extent there are costs associated with these actions, the costs will be recorded based on the nature and timing of these integration actions. Most acquisition and restructuring costs are recognized separately from a business combination and generally will be expensed as incurred. We estimate the merger-related costs to be approximately $39.8 million and expect they will be incurred primarily in fiscal year 2014, of which $1.8 million was incurred during the three months ended March 31, 2014 and are reflected in the accompanying pro forma financial information.
Note 3Estimated Annual Cost Savings
United Financial Bancorp, Inc. expects to realize approximately $17.6 million in annual pre-tax cost savings following the merger, which management expects to be phased-in over a two-year period, but there is no assurance that the anticipated cost savings will be realized on the anticipated time schedule or at all. These cost savings are not reflected in the accompanying pro forma financial information.
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Note 4Pro Forma Merger Adjustments
The following pro forma adjustments have been reflected in the unaudited pro forma condensed combined financial information. The statutory tax rate of 35% was used to arrive at the income tax provision adjustment.
Statement of Income
(In thousands)
Three Months Ended March 31, 2014 |
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(A) |
Adjustment to loan interest income |
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To reflect the amortization of loan discount from interest rate fair value mark adjustment and the credit mark adjustment. Amortization based on estimated weighted average life of 5.1 years. |
$ | 3,795 | ||||
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(B) |
Adjustment to deposit and borrowings interest expense |
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To reflect amortization of deposit premium resulting from the time deposit fair value adjustment. Amortization based on deposit maturity dates, which mature at different times over 4.7 years. |
$ | (1,647 | ) | |||
To reflect amortization of borrowing premium resulting from borrowing fair value adjustment for Federal Home Loan Bank advances, subordinated debentures and capital lease obligations. Amortization based on maturity dates, which mature at different times over a period of 9.4 years. |
(600 | ) | ||||
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Total adjustment to deposit and borrowings interest expense |
$ | (2,247 | ) | |||
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(C) |
Adjustment to premises and equipment and other non-interest expense |
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To reflect an increase in depreciation expense resulting from fair value adjustments to premises and equipment and capital leases. Amortization based on an estimated average life of 20 years. |
$ | 8 | ||||
To reflect the amortization of acquired identifiable intangible assets using a 10-year amortization period and using the sum-of-the-years-digits method of amortization. |
481 | |||||
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Total adjustment to premises and equipment and other non-interest expense |
$ | 489 | ||||
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(D) |
Adjustment to income tax provision |
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To reflect the income tax effect of pro forma adjustments at statutory rate of 35%. |
$ | 1,944 | ||||
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