Attached files
| file | filename |
|---|---|
| 8-K - 8-K - United Financial Bancorp, Inc. | a8-k20160331.htm |
| EX-99.2 - EXHIBIT 99.2 - United Financial Bancorp, Inc. | exhibit992earningsdec8e7.htm |
Exhibit 99.1
For Immediate Release: | April 19, 2016 | |
Investor Relations Contact: Marliese L. Shaw Executive Vice President, Investor Relations Officer United Bank 860-291-3622 MShaw@bankatunited.com | Media Relations Contact: Adam J. Jeamel Regional President, Corporate Communications United Bank 860-291-3765 AJeamel@bankatunited.com | |
UNITED FINANCIAL BANCORP, INC.
ANNOUNCES FIRST QUARTER EARNINGS
AND QUARTERLY DIVIDEND
GLASTONBURY, Conn., April 19, 2016 – United Financial Bancorp, Inc. (“United Financial” or "The Company”) (NASDAQ Global Select Stock Market: “UBNK”), the holding company for United Bank ("The Bank”), announced results for the quarter ended March 31, 2016.
The Company had net income of $11.9 million, or $0.24 per diluted share, for the quarter ended March 31, 2016, compared to net income for the linked quarter of $9.9 million, or $0.20 per diluted share. Operating net income (Non-GAAP) for the first quarter of 2016 was $10.9 million, or $0.22 per diluted share, compared to $11.3 million, or $0.23 per diluted share for the linked quarter. Operating net income is adjusted for purchase accounting impacts and net gain on sale of securities. Additionally, in the first quarter of 2016, operating income was also adjusted for Federal Home Loan Bank of Boston ("FHLBB") prepayment penalties. The Company reported net income of $13.0 million, or $0.26 per diluted share, for the quarter ended March 31, 2015.
"In the first quarter of 2016, linked quarter annualized growth included a 13% increase in demand deposits, 9% growth in total deposits, and a seven basis point expansion in the net interest margin. Non-interest expense to average assets declined to 2.03% on an operating basis and asset quality remained excellent. Tangible book value increased by 5% compared to the linked quarter (annualized) as we announced our 40th consecutive dividend payment," stated William H. W. Crawford, IV, Chief Executive Officer of the Company and the Bank. "Given the interest rate environment, we believe execution on the aforementioned key variables give us the best opportunity to continue building long term shareholder value."
"While volatile interest rates reduced mortgage banking income and headline Company profitability in the first quarter of 2016, management is focused on growing revenue centered in net interest income and core fee income. I remain bullish on United Financial Bancorp, Inc.'s outlook for 2016 earnings and tangible book value growth," remarked Mr. Crawford. "I want to thank my fellow executives, teammates, and directors for their continued commitment to serving our customers and communities."
UBNK - United Financial Bancorp, Inc. | Page 1 | www.unitedfinancialinc.com |
Financial Highlights
• | Return on average assets (ROA) of 0.76% |
• | Return on average equity (ROE) of 7.59% |
• | Net Interest Margin (NIM) increased to 3.09% from 3.02% in the linked quarter |
• | Operating Non-Interest Expense/Average Assets (NIE/AA) of 2.03% for the quarter (annualized) |
Balance Sheet
Total assets at March 31, 2016 increased by $90.7 million to $6.3 billion from $6.2 billion at December 31, 2015. At March 31, 2016, total loans were $4.6 billion, representing an increase of $34.9 million from the linked quarter. Despite the typical softness experienced in the first quarter in general, total commercial loans increased by $38.5 million, or 6% annualized. Residential mortgages declined during the first quarter of 2016 by $3.6 million, reflecting the Company's strategy to reduce on-balance sheet exposure to residential mortgage loans.
During the first quarter of 2016, in response to a flatter yield curve, lower rates, and in an effort to improve the earnings profile of the investment portfolio for the remainder of 2016, the Company took actions to restructure certain FHLBB borrowings and securities resulting in a gain on sale of securities and an offsetting debt extinguishment expense.
Deposits totaled $4.5 billion at March 31, 2016 and increased by $97.0 million, or 2%, from $4.4 billion at December 31, 2015, reflecting a $21.1 million, or 3%, increase in non-interest bearing deposits and a $75.8 million, or 2% increase in interest-bearing deposits.
Net Interest Income
Net interest income increased by $2.7 million to $43.4 million during the first quarter of 2016 from the linked quarter. Interest income totaled $53.6 million in the first quarter of 2016 and increased by $3.9 million, or 7.8%, in comparison to the linked quarter. This increase largely contributed to the growth in interest-earning assets of $61.4 million, or 1%, during the quarter. Of note, average interest-earning assets increased by $274.2 million, or 5%, from the linked quarter reflective of late fourth quarter 2015 loan portfolio purchases. Interest expense increased by $1.2 million to $10.2 million during the first quarter of 2016 from $9.0 million in the linked quarter. On an operating basis, net interest income increased by $2.4 million to $41.5 million during the first quarter of 2016 from the linked quarter.
The GAAP tax equivalent net interest margin for the first quarter of 2016 increased by seven basis points to 3.09% compared to 3.02% for the linked quarter. The yield on interest-earning assets increased by 13 basis points in the first quarter of 2016 to 3.79% as compared to the linked quarter, and the cost of total interest bearing liabilities increased by six basis points to 0.83% in the quarter ending March 31, 2016 from 0.77% in the linked quarter, in significant part due to the increase in short-term borrowing rates during the first quarter of 2016. The operating net interest margin, which excludes the impact of purchase accounting adjustments, increased by five basis points to 2.95% in the first quarter of 2016 from 2.90% in the linked quarter.
Provision for Loan Losses
The provision for loan losses decreased by 29%, or $1.1 million, to $2.7 million for the quarter ended March 31, 2016 compared to $3.8 million for the linked quarter due to a slowing of the migration of purchased loans to the covered portfolio for the current period as compared to the linked quarter. Net charge-offs for the first quarter of 2016 increased by $351,000 to $1.1 million, or 0.09% annualized as a percentage of average loans
UBNK - United Financial Bancorp, Inc. | Page 2 | www.unitedfinancialinc.com |
outstanding, from $724,000, or 0.06% 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, historical charge-offs, the composition of the portfolio, the current level of non-performing loans and charge-offs, local economic and credit conditions, the direction of real estate values and delinquency trends.
Non-Interest Income
Total non-interest income decreased by $1.7 million, or 21%, to $6.7 million for the quarter ended March 31, 2016 from $8.5 million in the linked quarter. Operating non-interest income, which excludes the impact of gains on the sales of securities, decreased by $2.7 million to $5.3 million for the first quarter of 2016. The decrease in the first quarter's operating non-interest income was driven primarily from a $1.4 million decline in loan level hedge income associated with the lower commercial loan originations during the quarter, as well as the $1.6 million decline in the mortgage servicing rights valuation as compared to the linked quarter as a result of the decline in long-term interest rates.
Non-Interest Expense
Non-interest expense for the quarter ended March 31, 2016 totaled $33.8 million and decreased by $1.5 million, or 4%, from the linked quarter, while operating non-interest expense has been flat for the last three consecutive quarters. Operating non-interest expense excluded the impact of one-time expenses recognized in the quarter ended December 31, 2015 that did not repeat in the current period and the one-time prepayment penalty to the FHLBB during the quarter ended March 31, 2016. The only significant variance in operating non-interest expense during the quarter was the $2.2 million decline in professional fees as compared to the linked quarter due to a normalization after recognizing expenses associated with the prior period loan purchases. The Company's cost structure continues to be favorable with non-interest expense as a percentage of average assets reported at 2.15% and operating non-interest expense as a percentage of average assets reported at 2.03% for the quarter ended March 31, 2016. On April 18, 2016, the Company executed a reorganization plan designed to centralize operational responsibilities into the back office, thereby allowing our sales staff to better serve our customers. As a result, the reorganization is expected to save the Company approximately $3.0 million (pre-tax) annually and approximately $1.5 million (pre-tax) of expenses are anticipated to be incurred in the second quarter.
Asset Quality
Non-performing assets decreased by $1.5 million to $37.1 million at March 31, 2016 from $38.6 million at December 31, 2015. The ratio of non-performing assets to total assets as compared to the linked quarter decreased to 0.59% at March 31, 2016. The allowance for loan losses as a percentage of total covered loans outstanding remained flat at 1.07% at March 31, 2016 and December 31, 2015. 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.
Capital
The Company reported Tangible Common Equity ("TCE") of $510.9 million, or 8.13% of average assets, at March 31, 2016. Tangible book value per share increased to $10.20 at March 31, 2016 from $10.07 at December 31, 2015, primarily due to the impact of the Company’s net income of $11.9 million, partially offset by the cash dividend payment to shareholders of $0.12 per share, which reduced shareholders' equity by $6.0 million. Book value per share at March 31, 2016 was $12.64.
UBNK - United Financial Bancorp, Inc. | Page 3 | www.unitedfinancialinc.com |
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 April 29, 2016 and payable on May 11, 2016. This dividend equates to a 4.06% annualized yield based on the $11.81 average closing price of the Company’s common stock in the first quarter of 2016. The Company has paid dividends for 40 consecutive quarters.
Investor Conference Call
United Financial Bancorp, Inc. will host a conference call on Wednesday, April 20, 2016 at 10:00 a.m. Eastern Time (ET) to discuss the Company’s first 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 May 4, 2016 by calling 1-877-344-7529 and entering conference number 10083787. 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 furnished a visual slide presentation to accompany the earnings press release and investor conference call. The presentation has been furnished 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. United Bank is a financially strong, leading New England bank with more than 50 branches in two states and several commercial and residential loan production offices. United Financial Bancorp, Inc. trades on the NASDAQ Global Select Stock Exchange under the ticker symbol “UBNK”. At March 31, 2016, the Company had $6.3 billion in assets.
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.
UBNK - United Financial Bancorp, Inc. | Page 4 | www.unitedfinancialinc.com |
United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(In Thousands, Except Share Data)
(Unaudited)
For the Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Interest and dividend income: | ||||||||
Loans | $ | 45,472 | $ | 40,527 | ||||
Securities-taxable interest | 5,096 | 5,269 | ||||||
Securities-non-taxable interest | 2,010 | 2,092 | ||||||
Securities-dividends | 923 | 374 | ||||||
Interest-bearing deposits | 73 | 33 | ||||||
Total interest and dividend income | 53,574 | 48,295 | ||||||
Interest expense: | ||||||||
Deposits | 6,266 | 4,740 | ||||||
Borrowed funds | 3,906 | 2,212 | ||||||
Total interest expense | 10,172 | 6,952 | ||||||
Net interest income | 43,402 | 41,343 | ||||||
Provision for loan losses | 2,688 | 1,511 | ||||||
Net interest income after provision for loan losses | 40,714 | 39,832 | ||||||
Non-interest income: | ||||||||
Service charges and fees | 4,594 | 3,831 | ||||||
Net gain from sales of securities | 1,452 | 338 | ||||||
Income from mortgage banking activities | 860 | 2,371 | ||||||
Bank-owned life insurance income | 818 | 834 | ||||||
Net loss on limited partnership investments | (936 | ) | (430 | ) | ||||
Other income (loss) | (61 | ) | (109 | ) | ||||
Total non-interest income | 6,727 | 6,835 | ||||||
Non-interest expense: | ||||||||
Salaries and employee benefits | 17,791 | 16,572 | ||||||
Service bureau fees | 2,029 | 1,820 | ||||||
Occupancy and equipment | 3,900 | 4,458 | ||||||
Professional fees | 881 | 917 | ||||||
Marketing and promotions | 592 | 636 | ||||||
FDIC insurance assessments | 939 | 1,078 | ||||||
Core deposit intangible amortization | 433 | 481 | ||||||
FHLBB prepayment penalties | 1,454 | — | ||||||
Other | 5,744 | 4,695 | ||||||
Total non-interest expense | 33,763 | 30,657 | ||||||
Income before income taxes | 13,678 | 16,010 | ||||||
Provision for income taxes | 1,784 | 2,985 | ||||||
Net income | $ | 11,894 | $ | 13,025 | ||||
Net income per share: | ||||||||
Basic | $ | 0.24 | $ | 0.27 | ||||
Diluted | $ | 0.24 | $ | 0.26 | ||||
Weighted-average shares outstanding: | ||||||||
Basic | 49,423,218 | 48,715,992 | ||||||
Diluted | 49,652,632 | 49,275,942 | ||||||
F - 1 | ||
United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(In Thousands)
(Unaudited)
For the Three Months Ended | ||||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Interest and dividend income: | ||||||||||||||||||||
Loans | $ | 45,472 | $ | 41,751 | $ | 41,878 | $ | 41,253 | $ | 40,527 | ||||||||||
Securities-taxable interest | 5,096 | 5,092 | 4,907 | 4,771 | 5,269 | |||||||||||||||
Securities-non-taxable interest | 2,010 | 2,001 | 2,080 | 2,181 | 2,092 | |||||||||||||||
Securities-dividends | 923 | 809 | 708 | 472 | 374 | |||||||||||||||
Interest-bearing deposits | 73 | 61 | 52 | 34 | 33 | |||||||||||||||
Total interest and dividend income | 53,574 | 49,714 | 49,625 | 48,711 | 48,295 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 6,266 | 5,799 | 5,319 | 5,584 | 4,740 | |||||||||||||||
Borrowed funds | 3,906 | 3,222 | 2,663 | 2,224 | 2,212 | |||||||||||||||
Total interest expense | 10,172 | 9,021 | 7,982 | 7,808 | 6,952 | |||||||||||||||
Net interest income | 43,402 | 40,693 | 41,643 | 40,903 | 41,343 | |||||||||||||||
Provision for loan losses | 2,688 | 3,780 | 3,252 | 4,462 | 1,511 | |||||||||||||||
Net interest income after provision for loan losses | 40,714 | 36,913 | 38,391 | 36,441 | 39,832 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||
Service charges and fees | 4,594 | 5,606 | 5,960 | 5,643 | 3,831 | |||||||||||||||
Net gain from sales of securities | 1,452 | 300 | (59 | ) | 360 | 338 | ||||||||||||||
Income from mortgage banking activities | 860 | 1,934 | 2,257 | 2,990 | 2,371 | |||||||||||||||
Bank-owned life insurance income | 818 | 1,059 | 893 | 830 | 834 | |||||||||||||||
Net loss on limited partnership investments | (936 | ) | (799 | ) | (991 | ) | (916 | ) | (430 | ) | ||||||||||
Other income (loss) | (61 | ) | 363 | (242 | ) | 464 | (109 | ) | ||||||||||||
Total non-interest income | 6,727 | 8,463 | 7,818 | 9,371 | 6,835 | |||||||||||||||
Non-interest expense: | ||||||||||||||||||||
Salaries and employee benefits | 17,791 | 17,308 | 16,994 | 16,595 | 16,572 | |||||||||||||||
Service bureau fees | 2,029 | 1,614 | 1,828 | 1,466 | 1,820 | |||||||||||||||
Occupancy and equipment | 3,900 | 3,842 | 3,343 | 3,799 | 4,458 | |||||||||||||||
Professional fees | 881 | 3,037 | 1,581 | 782 | 917 | |||||||||||||||
Marketing and promotions | 592 | 478 | 587 | 620 | 636 | |||||||||||||||
FDIC insurance assessments | 939 | 1,041 | 750 | 823 | 1,078 | |||||||||||||||
Core deposit intangible amortization | 433 | 433 | 433 | 449 | 481 | |||||||||||||||
Merger related expense | — | 1,575 | — | — | — | |||||||||||||||
FHLBB prepayment penalties | 1,454 | — | — | — | — | |||||||||||||||
Other | 5,744 | 5,977 | 6,360 | 5,823 | 4,695 | |||||||||||||||
Total non-interest expense | 33,763 | 35,305 | 31,876 | 30,357 | 30,657 | |||||||||||||||
Income before income taxes | 13,678 | 10,071 | 14,333 | 15,455 | 16,010 | |||||||||||||||
Provision for income taxes | 1,784 | 169 | 952 | 2,123 | 2,985 | |||||||||||||||
Net income | $ | 11,894 | $ | 9,902 | $ | 13,381 | $ | 13,332 | $ | 13,025 | ||||||||||
F - 2 | ||
United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Condition
(In Thousands)
(Unaudited)
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
Cash and due from banks | $ | 46,618 | $ | 47,602 | $ | 38,534 | $ | 44,482 | $ | 43,348 | ||||||||||
Short-term investments | 40,616 | 47,574 | 59,776 | 40,043 | 46,013 | |||||||||||||||
Total cash and cash equivalents | 87,234 | 95,176 | 98,310 | 84,525 | 89,361 | |||||||||||||||
Available for sale securities – At fair value | 1,090,498 | 1,059,169 | 1,080,393 | 1,061,927 | 1,094,229 | |||||||||||||||
Held to maturity securities – At amortized cost | 14,434 | 14,565 | 14,715 | 14,992 | 15,204 | |||||||||||||||
Loans held for sale | 7,560 | 10,136 | 13,511 | 28,017 | 13,002 | |||||||||||||||
Loans: | ||||||||||||||||||||
Commercial real estate loans: | ||||||||||||||||||||
Owner-occupied | 376,511 | 322,084 | 340,047 | 305,522 | 301,176 | |||||||||||||||
Investor non-owner occupied | 1,648,321 | 1,673,248 | 1,580,848 | 1,458,229 | 1,390,701 | |||||||||||||||
Construction | 128,007 | 129,922 | 146,975 | 142,462 | 131,539 | |||||||||||||||
Commercial real estate loans | 2,152,839 | 2,125,254 | 2,067,870 | 1,906,213 | 1,823,416 | |||||||||||||||
Commercial business loans | 614,235 | 603,332 | 576,899 | 634,529 | 603,761 | |||||||||||||||
Consumer loans: | ||||||||||||||||||||
Residential real estate | 1,176,357 | 1,179,915 | 1,190,745 | 1,167,830 | 1,123,355 | |||||||||||||||
Home equity | 446,515 | 431,282 | 335,220 | 333,983 | 331,206 | |||||||||||||||
Residential construction | 42,205 | 41,084 | 33,648 | 24,306 | 17,840 | |||||||||||||||
Other consumer | 217,725 | 233,064 | 5,236 | 5,206 | 5,155 | |||||||||||||||
Consumer loans | 1,882,802 | 1,885,345 | 1,564,849 | 1,531,325 | 1,477,556 | |||||||||||||||
Total loans | 4,649,876 | 4,613,931 | 4,209,618 | 4,072,067 | 3,904,733 | |||||||||||||||
Net deferred loan costs and premiums | 7,612 | 7,018 | 6,246 | 5,559 | 4,631 | |||||||||||||||
Allowance for loan losses | (35,500 | ) | (33,887 | ) | (30,832 | ) | (28,856 | ) | (25,297 | ) | ||||||||||
Loans receivable - net | 4,621,988 | 4,587,062 | 4,185,032 | 4,048,770 | 3,884,067 | |||||||||||||||
Federal Home Loan Bank of Boston stock, at cost | 55,989 | 51,196 | 40,814 | 37,061 | 34,006 | |||||||||||||||
Accrued interest receivable | 16,922 | 15,740 | 15,477 | 14,777 | 14,958 | |||||||||||||||
Deferred tax asset, net | 32,222 | 33,094 | 31,554 | 31,822 | 29,956 | |||||||||||||||
Premises and equipment, net | 53,685 | 54,779 | 55,919 | 57,131 | 57,718 | |||||||||||||||
Goodwill | 115,281 | 115,281 | 115,281 | 115,265 | 115,232 | |||||||||||||||
Core deposit intangible asset | 7,073 | 7,506 | 7,939 | 8,372 | 8,821 | |||||||||||||||
Cash surrender value of bank-owned life insurance | 125,920 | 125,101 | 125,186 | 124,287 | 123,456 | |||||||||||||||
Other assets | 90,438 | 59,736 | 58,891 | 53,744 | 51,140 | |||||||||||||||
Total assets | $ | 6,319,244 | $ | 6,228,541 | $ | 5,843,022 | $ | 5,680,690 | $ | 5,531,150 | ||||||||||
F - 3 | ||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Non-interest-bearing | $ | 693,144 | $ | 672,008 | $ | 622,535 | $ | 610,279 | $ | 598,157 | ||||||||||
Interest-bearing | 3,840,901 | 3,765,063 | 3,640,436 | 3,571,972 | 3,558,958 | |||||||||||||||
Total deposits | 4,534,045 | 4,437,071 | 4,262,971 | 4,182,251 | 4,157,115 | |||||||||||||||
Mortgagors’ and investor escrow accounts | 9,696 | 13,526 | 8,108 | 15,168 | 8,815 | |||||||||||||||
Federal Home Loan Bank advances and other borrowings | 1,073,034 | 1,099,020 | 893,865 | 825,963 | 707,318 | |||||||||||||||
Accrued expenses and other liabilities | 69,191 | 53,403 | 56,626 | 45,313 | 47,779 | |||||||||||||||
Total liabilities | 5,685,966 | 5,603,020 | 5,221,570 | 5,068,695 | 4,921,027 | |||||||||||||||
Total stockholders’ equity | 633,278 | 625,521 | 621,452 | 611,995 | 610,123 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 6,319,244 | $ | 6,228,541 | $ | 5,843,022 | $ | 5,680,690 | $ | 5,531,150 | ||||||||||
F - 4 | ||
United Financial Bancorp, Inc. and Subsidiaries
Selected Financial Highlights
(Dollars In Thousands, Except Share Data)
(Unaudited)
At or For the Three Months Ended | ||||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Share Data: | ||||||||||||||||||||
Basic net income per share | $ | 0.24 | $ | 0.20 | $ | 0.27 | $ | 0.27 | $ | 0.27 | ||||||||||
Diluted net income per share | 0.24 | 0.20 | 0.27 | 0.27 | 0.26 | |||||||||||||||
Dividends declared per share | 0.12 | 0.12 | 0.12 | 0.12 | 0.10 | |||||||||||||||
Key Statistics: | ||||||||||||||||||||
Total revenue | $ | 50,129 | $ | 49,156 | $ | 49,461 | $ | 50,274 | $ | 48,178 | ||||||||||
Total non-interest expense | 33,763 | 35,305 | 31,876 | 30,357 | 30,657 | |||||||||||||||
Average earning assets | 5,849,517 | 5,575,297 | 5,332,758 | 5,112,581 | 5,084,717 | |||||||||||||||
Key Ratios: | ||||||||||||||||||||
Return on average assets (annualized) | 0.76 | % | 0.66 | % | 0.93 | % | 0.96 | % | 0.95 | % | ||||||||||
Return on average equity (annualized) | 7.59 | % | 6.35 | % | 8.68 | % | 8.69 | % | 8.63 | % | ||||||||||
Tax-equivalent net interest margin (annualized) | 3.09 | % | 3.02 | % | 3.20 | % | 3.30 | % | 3.37 | % | ||||||||||
Residential Mortgage Production: | ||||||||||||||||||||
Dollar volume (total) | $ | 124,058 | $ | 146,271 | $ | 187,926 | $ | 203,433 | $ | 168,023 | ||||||||||
Mortgages originated for purchases | 66,696 | 95,927 | 131,609 | 115,286 | 64,108 | |||||||||||||||
Loans sold | 89,758 | 119,289 | 123,316 | 93,972 | 67,377 | |||||||||||||||
Income from mortgage banking activities | 860 | 1,934 | 2,257 | 2,990 | 2,371 | |||||||||||||||
Non-performing Assets: | ||||||||||||||||||||
Residential real estate | $ | 11,725 | $ | 11,193 | $ | 10,975 | $ | 9,421 | $ | 10,492 | ||||||||||
Home equity | 3,036 | 2,786 | 3,602 | 2,956 | 2,035 | |||||||||||||||
Investor-owned commercial real estate | 5,297 | 8,565 | 6,505 | 7,685 | 8,657 | |||||||||||||||
Owner-occupied commercial real estate | 3,115 | 2,939 | 5,076 | 3,304 | 3,399 | |||||||||||||||
Construction | 2,114 | 2,808 | 1,604 | 1,334 | 1,686 | |||||||||||||||
Commercial business | 3,979 | 3,898 | 4,475 | 5,315 | 4,349 | |||||||||||||||
Other consumer | 19 | 2 | 3 | 13 | 13 | |||||||||||||||
Non-accrual loans | 29,285 | 32,191 | 32,240 | 30,028 | 30,631 | |||||||||||||||
Troubled debt restructured – non-accruing | 7,143 | 5,611 | 4,605 | 5,346 | 5,034 | |||||||||||||||
Total non-performing loans | 36,428 | 37,802 | 36,845 | 35,374 | 35,665 | |||||||||||||||
Other real estate owned | 659 | 755 | 258 | 227 | 1,711 | |||||||||||||||
Total non-performing assets | $ | 37,087 | $ | 38,557 | $ | 37,103 | $ | 35,601 | $ | 37,376 | ||||||||||
Non-performing loans to total loans | 0.78 | % | 0.82 | % | 0.88 | % | 0.87 | % | 0.91 | % | ||||||||||
Non-performing assets to total assets | 0.59 | % | 0.62 | % | 0.63 | % | 0.63 | % | 0.68 | % | ||||||||||
Allowance for loan losses to non-performing loans | 97.45 | % | 89.64 | % | 83.68 | % | 81.57 | % | 70.93 | % | ||||||||||
Allowance for loan losses to total loans | 0.76 | % | 0.73 | % | 0.73 | % | 0.71 | % | 0.65 | % | ||||||||||
Non-GAAP Ratios: (1) | ||||||||||||||||||||
Non-interest expense to average assets (annualized) | 2.15 | % | 2.37 | % | 2.22 | % | 2.19 | % | 2.23 | % | ||||||||||
Efficiency ratio (2) | 61.98 | % | 62.20 | % | 61.20 | % | 57.36 | % | 60.82 | % | ||||||||||
Cost of funds (annualized) (3) | 0.73 | % | 0.68 | % | 0.63 | % | 0.64 | % | 0.57 | % | ||||||||||
Total revenue growth rate | 1.98 | % | (0.62 | )% | (1.62 | )% | 4.35 | % | 7.32 | % | ||||||||||
Total revenue growth rate (annualized) | 7.92 | % | (2.47 | )% | (6.47 | )% | 17.40 | % | 29.27 | % | ||||||||||
Average earning asset growth rate | 4.92 | % | 4.55 | % | 4.31 | % | 0.55 | % | 2.32 | % | ||||||||||
Average earning asset growth rate (annualized) | 19.67 | % | 18.19 | % | 17.23 | % | 2.19 | % | 9.30 | % | ||||||||||
Return on average tangible common equity (annualized) | 9.65 | % | 8.14 | % | 11.08 | % | 11.12 | % | 11.13 | % | ||||||||||
Pre-provision net revenue to average assets (4) | 1.21 | % | 1.17 | % | 1.38 | % | 1.56 | % | 1.36 | % | ||||||||||
Operating pre-provision net revenue to average assets (5) | 0.95 | % | 1.03 | % | 0.96 | % | 1.19 | % | 1.03 | % | ||||||||||
(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. |
(2) | The efficiency ratio represents the ratio of non-interest expense before other real estate owned expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest income, excluding gains from securities transactions, losses on partnerships and other nonrecurring items. |
(3) | The cost of funds ratio represents interest incurred on liabilities as a percentage of average non-interest bearing deposits and interest-bearing liabilities. |
F - 5 | ||
(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, as a percent of average assets. |
(5) | The operating pre-provision net revenue to average assets ratio represents the ratio of operating net interest income, on a fully tax-equivalent basis, fees and other operating non-interest income, as a percent of average assets. |
F - 6 | ||
United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
For the Three Months Ended | |||||||||||||||||||||
March 31, 2016 | March 31, 2015 | ||||||||||||||||||||
Average Balance | Interest and Dividends | Yield/Cost | Average Balance | Interest and Dividends | Yield/Cost | ||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Residential real estate | $ | 1,207,005 | $ | 10,200 | 3.38 | % | $ | 1,099,437 | $ | 9,696 | 3.53 | % | |||||||||
Commercial real estate | 2,010,589 | 20,501 | 4.10 | 1,677,202 | 18,954 | 4.58 | |||||||||||||||
Construction | 171,268 | 1,876 | 4.41 | 179,866 | 2,357 | 5.31 | |||||||||||||||
Commercial business | 607,331 | 6,732 | 4.46 | 610,569 | 6,858 | 4.56 | |||||||||||||||
Home equity | 432,208 | 3,712 | 3.44 | 335,207 | 2,623 | 3.13 | |||||||||||||||
Other consumer | 228,657 | 2,957 | 5.17 | 5,374 | 39 | 2.89 | |||||||||||||||
Investment securities | 1,134,723 | 9,139 | 3.22 | 1,125,510 | 8,890 | 3.16 | |||||||||||||||
Other earning assets | 57,736 | 73 | 0.51 | 51,552 | 33 | 0.26 | |||||||||||||||
Total interest-earning assets | 5,849,517 | 55,190 | 3.79 | 5,084,717 | 49,450 | 3.92 | |||||||||||||||
Allowance for loan losses | (35,134 | ) | (25,421 | ) | |||||||||||||||||
Non-interest-earning assets | 472,379 | 449,687 | |||||||||||||||||||
Total assets | $ | 6,286,762 | $ | 5,508,983 | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
NOW and money market | $ | 1,553,093 | $ | 1,783 | 0.46 | % | $ | 1,411,240 | $ | 1,531 | 0.44 | % | |||||||||
Savings | 519,264 | 74 | 0.06 | 534,033 | 82 | 0.06 | |||||||||||||||
Certificates of deposit | 1,747,654 | 4,409 | 1.01 | 1,543,727 | 3,127 | 0.82 | |||||||||||||||
Total interest-bearing deposits | 3,820,011 | 6,266 | 0.66 | 3,489,000 | 4,740 | 0.55 | |||||||||||||||
Federal Home Loan Bank advances | 956,819 | 2,481 | 1.04 | 590,409 | 822 | 0.56 | |||||||||||||||
Other borrowings | 150,387 | 1,425 | 3.81 | 179,087 | 1,390 | 3.15 | |||||||||||||||
Total interest-bearing liabilities | 4,927,217 | 10,172 | 0.83 | 4,258,496 | 6,952 | 0.66 | |||||||||||||||
Non-interest-bearing deposits | 656,013 | 578,897 | |||||||||||||||||||
Other liabilities | 76,472 | 67,771 | |||||||||||||||||||
Total liabilities | 5,659,702 | 4,905,164 | |||||||||||||||||||
Stockholders’ equity | 627,060 | 603,819 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 6,286,762 | $ | 5,508,983 | |||||||||||||||||
Net interest-earning assets | $ | 922,300 | $ | 826,221 | |||||||||||||||||
Tax-equivalent net interest income | 45,018 | 42,498 | |||||||||||||||||||
Tax-equivalent net interest rate spread | 2.96 | % | 3.26 | % | |||||||||||||||||
Tax-equivalent net interest margin | 3.09 | % | 3.37 | % | |||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 118.72 | % | 119.40 | % | |||||||||||||||||
Less tax-equivalent adjustment | 1,616 | 1,155 | |||||||||||||||||||
Net interest income | $ | 43,402 | $ | 41,343 | |||||||||||||||||
F - 7 | ||
United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
For the Three Months Ended | ||||||||||||||||||||||
March 31, 2016 | December 31, 2015 | |||||||||||||||||||||
Average Balance | Interest and Dividends | Yield/Cost | Average Balance | Interest and Dividends | Yield/Cost | |||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Residential real estate | $ | 1,207,005 | $ | 10,200 | 3.38 | % | $ | 1,200,471 | $ | 9,935 | 3.31 | % | ||||||||||
Commercial real estate | 2,010,589 | 20,501 | 4.10 | 1,950,133 | 20,228 | 4.12 | ||||||||||||||||
Construction | 171,268 | 1,876 | 4.41 | 179,684 | 1,760 | 3.89 | ||||||||||||||||
Commercial business | 607,331 | 6,732 | 4.46 | 604,976 | 6,288 | 4.12 | ||||||||||||||||
Home equity | 432,208 | 3,712 | 3.44 | 355,479 | 2,977 | 3.35 | ||||||||||||||||
Other consumer | 228,657 | 2,957 | 5.17 | 74,131 | 968 | 5.22 | ||||||||||||||||
Investment securities | 1,134,723 | 9,139 | 3.22 | 1,129,522 | 9,007 | 3.19 | ||||||||||||||||
Other earning assets | 57,736 | 73 | 0.51 | 80,901 | 61 | 0.30 | ||||||||||||||||
Total interest-earning assets | 5,849,517 | 55,190 | 3.79 | 5,575,297 | 51,224 | 3.66 | ||||||||||||||||
Allowance for loan losses | (35,134 | ) | (31,968 | ) | ||||||||||||||||||
Non-interest-earning assets | 472,379 | 422,145 | ||||||||||||||||||||
Total assets | $ | 6,286,762 | $ | 5,965,474 | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
NOW and money market | $ | 1,553,093 | $ | 1,783 | 0.46 | % | $ | 1,533,823 | $ | 1,826 | 0.47 | % | ||||||||||
Savings | 519,264 | 74 | 0.06 | 517,219 | 71 | 0.05 | ||||||||||||||||
Certificates of deposit | 1,747,654 | 4,409 | 1.01 | 1,619,038 | 3,902 | 0.96 | ||||||||||||||||
Total interest-bearing deposits | 3,820,011 | 6,266 | 0.66 | 3,670,080 | 5,799 | 0.63 | ||||||||||||||||
Federal Home Loan Bank advances | 956,819 | 2,481 | 1.04 | 797,484 | 1,805 | 0.90 | ||||||||||||||||
Other borrowings | 150,387 | 1,425 | 3.81 | 163,974 | 1,417 | 3.43 | ||||||||||||||||
Total interest-bearing liabilities | 4,927,217 | 10,172 | 0.83 | 4,631,538 | 9,021 | 0.77 | ||||||||||||||||
Non-interest-bearing deposits | 656,013 | 637,481 | ||||||||||||||||||||
Other liabilities | 76,472 | 72,902 | ||||||||||||||||||||
Total liabilities | 5,659,702 | 5,341,921 | ||||||||||||||||||||
Stockholders’ equity | 627,060 | 623,553 | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 6,286,762 | $ | 5,965,474 | ||||||||||||||||||
Net interest-earning assets | $ | 922,300 | $ | 943,759 | ||||||||||||||||||
Tax-equivalent net interest income | 45,018 | 42,203 | ||||||||||||||||||||
Tax-equivalent net interest rate spread | 2.96 | % | 2.89 | % | ||||||||||||||||||
Tax-equivalent net interest margin | 3.09 | % | 3.02 | % | ||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 118.72 | % | 120.38 | % | ||||||||||||||||||
Less tax-equivalent adjustment | 1,616 | 1,510 | ||||||||||||||||||||
Net interest income | $ | 43,402 | $ | 40,693 | ||||||||||||||||||
F - 8 | ||
United Financial Bancorp, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Dollars In Thousands)
(Unaudited)
Three Months Ended | ||||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Net income | $ | 11,894 | $ | 9,902 | $ | 13,381 | $ | 13,332 | $ | 13,025 | ||||||||||
Adjustments: | ||||||||||||||||||||
Net interest income | (1,900 | ) | (1,617 | ) | (4,092 | ) | (3,512 | ) | (3,432 | ) | ||||||||||
Non-interest income | (1,452 | ) | (519 | ) | 59 | (360 | ) | (338 | ) | |||||||||||
Non-interest expense | 1,893 | 3,586 | 244 | 454 | 486 | |||||||||||||||
Income tax (benefit) expense | 511 | (65 | ) | 1,326 | 1,196 | 1,152 | ||||||||||||||
Net adjustment | (948 | ) | 1,385 | (2,463 | ) | (2,222 | ) | (2,132 | ) | |||||||||||
Total operating net income | $ | 10,946 | $ | 11,287 | $ | 10,918 | $ | 11,110 | $ | 10,893 | ||||||||||
Total net interest income | $ | 43,402 | $ | 40,693 | $ | 41,643 | $ | 40,903 | $ | 41,343 | ||||||||||
Adjustments: | ||||||||||||||||||||
Impact from purchase accounting fair value marks: | ||||||||||||||||||||
Accretion of loan mark | (1,094 | ) | (718 | ) | (2,787 | ) | (2,194 | ) | (1,871 | ) | ||||||||||
Accretion of deposit mark | 359 | 444 | 841 | 845 | 1,079 | |||||||||||||||
Accretion of borrowings mark | 447 | 455 | 464 | 473 | 482 | |||||||||||||||
Net adjustment | (1,900 | ) | (1,617 | ) | (4,092 | ) | (3,512 | ) | (3,432 | ) | ||||||||||
Total operating net interest income | $ | 41,502 | $ | 39,076 | $ | 37,551 | $ | 37,391 | $ | 37,911 | ||||||||||
Total non-interest income | $ | 6,727 | $ | 8,463 | $ | 7,818 | $ | 9,371 | $ | 6,835 | ||||||||||
Adjustments: | ||||||||||||||||||||
Net (gain) loss on sales of securities | (1,452 | ) | (300 | ) | 59 | (360 | ) | (338 | ) | |||||||||||
BOLI claim benefit | — | (219 | ) | — | — | — | ||||||||||||||
Net adjustment | (1,452 | ) | (519 | ) | 59 | (360 | ) | (338 | ) | |||||||||||
Total operating non-interest income | 5,275 | 7,944 | 7,877 | 9,011 | 6,497 | |||||||||||||||
Total operating net interest income | 41,502 | 39,076 | 37,551 | 37,391 | 37,911 | |||||||||||||||
Total operating revenue | $ | 46,777 | $ | 47,020 | $ | 45,428 | $ | 46,402 | $ | 44,408 | ||||||||||
Total non-interest expense | $ | 33,763 | $ | 35,305 | $ | 31,876 | $ | 30,357 | $ | 30,657 | ||||||||||
Adjustments: | ||||||||||||||||||||
Merger related expense | — | (1,575 | ) | — | — | — | ||||||||||||||
Core deposit intangible amortization expense | (433 | ) | (433 | ) | (433 | ) | (449 | ) | (481 | ) | ||||||||||
Loan portfolio acquisition fees | — | (1,572 | ) | — | — | — | ||||||||||||||
Effect of branch lease termination agreement | — | — | 195 | — | — | |||||||||||||||
Amortization of fixed asset fair value mark | (6 | ) | (6 | ) | (6 | ) | (5 | ) | (5 | ) | ||||||||||
FHLBB prepayment penalties | (1,454 | ) | — | — | — | — | ||||||||||||||
Net adjustment | (1,893 | ) | (3,586 | ) | (244 | ) | (454 | ) | (486 | ) | ||||||||||
Total operating expense | $ | 31,870 | $ | 31,719 | $ | 31,632 | $ | 29,903 | $ | 30,171 | ||||||||||
Total loans | $ | 4,649,876 | $ | 4,613,931 | $ | 4,209,618 | $ | 4,072,067 | $ | 3,904,733 | ||||||||||
Non-covered loans (1) | (1,334,303 | ) | (1,448,435 | ) | (1,255,618 | ) | (1,356,259 | ) | (1,510,264 | ) | ||||||||||
Total covered loans | $ | 3,315,573 | $ | 3,165,496 | $ | 2,954,000 | $ | 2,715,808 | $ | 2,394,469 | ||||||||||
Allowance for loan losses | $ | 35,500 | $ | 33,887 | $ | 30,832 | $ | 28,856 | $ | 25,297 | ||||||||||
Allowance for loan losses to total loans | 0.76 | % | 0.73 | % | 0.73 | % | 0.71 | % | 0.65 | % | ||||||||||
Allowance for loan losses to total covered loans | 1.07 | % | 1.07 | % | 1.04 | % | 1.06 | % | 1.06 | % | ||||||||||
(1) As required by GAAP, the Company recorded at fair value acquired loans. These loans carry no allowance for loan losses for the periods reflected above.
F - 9 | ||
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 March 31, 2016 | |||||||||||||||||||||
GAAP | Mark to Market | Operating | |||||||||||||||||||
Interest and Dividends | Yield/Cost | Interest and Dividends | Yield/Cost | Interest and Dividends | Yield/Cost | ||||||||||||||||
Residential real estate | $ | 10,200 | 3.38 | % | $ | (390 | ) | (0.15) % | $ | 10,590 | 3.53 | % | |||||||||
Commercial real estate | 20,501 | 4.10 | 1,303 | 0.28 | 19,198 | 3.82 | |||||||||||||||
Construction | 1,876 | 4.41 | 255 | 0.66 | 1,621 | 3.75 | |||||||||||||||
Commercial business | 6,732 | 4.46 | 924 | 0.64 | 5,808 | 3.82 | |||||||||||||||
Home equity | 3,712 | 3.44 | (520 | ) | (0.52 | ) | 4,232 | 3.96 | |||||||||||||
Other consumer | 2,957 | 5.17 | (478 | ) | (0.91 | ) | 3,435 | 6.08 | |||||||||||||
Certificates of deposit | 4,409 | 1.01 | (359 | ) | (0.09 | ) | 4,768 | 1.10 | |||||||||||||
Federal Home Loan Bank advances | 2,481 | 1.04 | (462 | ) | (0.20 | ) | 2,943 | 1.24 | |||||||||||||
Other borrowings | 1,425 | 3.81 | 15 | 0.08 | 1,410 | 3.73 | |||||||||||||||
Tax-equivalent net interest margin | 45,018 | 3.09 | 1,900 | 43,118 | 2.95 | ||||||||||||||||
Three Months Ended December 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 | $ | 9,935 | 3.31 | % | $ | (582 | ) | (0.22 | ) % | $ | 10,517 | 3.53 | % | ||||||||
Commercial real estate | 20,228 | 4.12 | 867 | 0.20 | 19,361 | 3.92 | |||||||||||||||
Construction | 1,760 | 3.89 | 130 | 0.34 | 1,630 | 3.55 | |||||||||||||||
Commercial business | 6,288 | 4.12 | 591 | 0.42 | 5,697 | 3.70 | |||||||||||||||
Home equity | 2,977 | 3.35 | (202 | ) | (0.25 | ) | 3,179 | 3.60 | |||||||||||||
Other consumer | 968 | 5.22 | (86 | ) | (0.49 | ) | 1,054 | 5.71 | |||||||||||||
Certificates of deposit | 3,902 | 0.96 | (444 | ) | (0.11 | ) | 4,346 | 1.07 | |||||||||||||
Federal Home Loan Bank advances | 1,805 | 0.90 | (467 | ) | (0.24 | ) | 2,272 | 1.14 | |||||||||||||
Other borrowings | 1,417 | 3.43 | 12 | 0.08 | 1,405 | 3.35 | |||||||||||||||
Tax-equivalent net interest margin | 42,203 | 3.02 | 1,617 | 40,586 | 2.90 | ||||||||||||||||
F - 10 | ||