Attached files
| file | filename |
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| EX-99.1 - EXHIBIT 99.120170331 - United Financial Bancorp, Inc. | ex-99120170331.htm |
| 8-K - 8-K20170331 - United Financial Bancorp, Inc. | a8-k20170331.htm |
First Quarter 2017 EarningsNASDAQ Global Select Market: UBNK
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2NASDAQ: UBNK
This Presentation contains forward-looking statements that are within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are
based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. These risks and uncertainties could
cause our results to differ materially from those set forth in such forward-looking statements. Forward-looking statements can be identified by the fact that they
do not relate strictly to historical or current facts. Words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “estimates,” “targeted” and similar
expressions, and future or conditional verbs, such as “will,” “would,” “should,” “could” or “may” are intended to identify forward-looking statements but are not
the only means to identify these statements. Forward-looking statements involve risks and uncertainties. Actual conditions, events or results may differ materially
from those contemplated by a forward-looking statement. Factors that could cause this difference — many of which are beyond our control — include without
limitation the following: Any forward-looking statements made by or on behalf of us in this Presentation speak only as of the date of this Presentation. We do
not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statement
was made. The reader should; however, consult any further disclosures of a forward-looking nature we may make in future filings.
NON-GAAP FINANCIAL MEASURES
This Presentation contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles
(“GAAP”). These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition. They are not a
substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. These non-GAAP financial measures
provide information for investors to effectively analyze financial trends of our business activities, and to enhance comparability with peers across the financial
services sector.
Forward Looking Statements
3NASDAQ: UBNK
Corporate Contacts
William H. W. Crawford, IV
Chief Executive Officer
Eric R. Newell, CFA
Executive Vice President, Chief Financial Officer
860-291-3722 or ENewell@bankatunited.com
Investor Information:
Marliese L. Shaw
Executive Vice President, Corporate Secretary/Investor Relations Officer
860-291-3622 or MShaw@bankatunited.com
4NASDAQ: UBNK
Table of Contents
Page
Branch Network 5
Market Opportunities 6
Management Team and Ownership 7
Four Key Objectives 8
Consumer Banking 9
Wholesale Banking 10
Wholesale Banking Overview 11
Shared Services 12
Financial Highlights 13
5NASDAQ: UBNK
Branch Network
3rd largest public bank
headquartered in CT
with $6.70 billion in
assets
53 Branches located
in Central CT and
Western MA
#4 market share in
combined Hartford /
Springfield MSA
$85 million in average
deposits per branch
(6/30/16 Branch level reporting;
Source: FDIC Summary of Deposits
Report)
6NASDAQ: UBNK
Market Opportunities
• United Bank operates in attractive markets with significant wealth and customer base
• New Haven and Fairfield County provide growth opportunities
• The Bank’s main operational markets have significant wealth
Markets Population Population35-54 Average HHI Median Age
Hartford MSA 1,209,666 314,305 99,183 41
Springfield MSA 634,548 150,871 74,794 38
Worcester MSA 941,096 252,449 90,066 40
New Haven County 857,654 222,167 88,804 40
Fairfield County 954,291 261,415 140,792 40
Total 4,597,255 1,201,207 100,236 40
*Total Average Household Income (HHI) weighted by households and Age weighted by population
Main Operational
Markets
Opportunity Markets
NOTE: All financial data as of June 30, 2016
7NASDAQ: UBNK
Management Team and Ownership
• William H.W. Crawford, IV owns 538,087 shares of stock and options*
• UBNK management owns 1,310,398 shares of stock and options*
• UBNK and United Bank Directors own 1,072,652 shares of stock and options*
*Note: 401k/ESOP share ownership is as of 12/31/16.
Name Title/Function Years in Industry/Years at United Prior Experience
William H.W. Crawford, IV Chief Executive Officer 28/6 Wells Fargo Bank, Wachovia Bank,SouthTrust Bank
Eric R. Newell Chief Financial Officer 13/6 FDIC, Fitch Ratings, Alliance Berstein
Dena M. Hall Chief Marketing Officer 20/12 Woronoco Savings Bank
Craig W. Hurty Chief Human Resources Officer 33/3 Aetna, PacifiCare Health Systems
Mark A. Kucia Chief Credit Officer 29/11 National Westminster Bank, Liberty Bank,Mechanics Bank, BayBank
Brandon C. Lorey Head of Consumer Banking 26/4 H&R Block Bank, Chevy Chase FederalSavings Bank
David C. Paulson Head of Wholesale Banking 31/3 Santander, Wells Fargo, Wachovia
John J. Smith Chief Information &Administrative Officer 31/1
CIT Group, NYCE Corporation, Summit
Bank
Elizabeth Wynnick Chief Risk Officer 25/5 NewAlliance Bank, Webster Bank
8NASDAQ: UBNK
Four Key Objectives
Objective Progress
1.
Align earning asset growth with organic capital and low
cost core deposit generation to maintain strong capital
and liquidity
(a) YoY loans and deposits increased similarly at 6.3%
and 5.7%; (b) YoY DDA growth of 5.1%; (c) YoY capital
growth of 5.2%
2.
Re-Mix cash flows into higher yielding risk adjusted
return on assets with lower funding costs relative to
peers.
(a) NIM increased 7bps QoQ; (b) growth focused on C&I,
consumer, and OOCRE, with less emphasis on Investor
CRE & residential real estate
3.
Invest in people, systems, and technology to grow
revenue and improve customer experience while
maintaining attractive cost structure.
(a) Non-Interest Expense/Average Assets (NIE/AA) at
2.11% annualized in 1Q17 while making strategic
investments in Information Technology & Project
Management
4.
Grow operating revenue, maximize operating earnings,
grow tangible book value, pay dividend. Achieve more
revenue into NII and core fee income.
(a) Q1 2017 record revenue while improving EPS vs. Q1
2016; (b) TBV/share increased 2.1% QoQ; (c) Increased
core banking fees vs. the linked quarter; (d) 1Q17
annualized dividend yield of 2.73%
9NASDAQ: UBNK
Consumer Banking
Consumer Loan Detail as of 03/31/2017
Construction 3%
Home equity 26%
Other
consumer
11%
Residential 60%
Diverse products designed to meet the needs of our
consumer customers.
Retail and Small Business Banking team focused on
gaining new customer relationships and deposit growth
• Mortgage Sales team originated $134.0 million of
residential mortgage loans in Q1 2017. Participate in
secondary market sales.
• Consumer Lending team who utilize the branch
network to acquire profitable customer relationships
with growth in Home Equity and lines of credit.
• United Northeast Financial Advisors serving over 50
banking offices with investment services offerings.
Demonstrating strong growth each quarter.
• Internationally experienced LH-finance Marine
division.
($1.96 Bn, or 40% of loans)
10NASDAQ: UBNK
Wholesale Banking
Commercial Loan Detail as of 03/31/2017
Construction 3%
Owner-Occupied CRE
14%
C&I 26%
Investor CRE 57%
Robust offering of products to support commercial
customer needs and provide competitive advantage.
• Diverse and experienced Commercial Banking team:
Commercial Lending team provides geographic
diversity and multiple areas of C&I industry expertise.
• Cash Management and Municipal Banking team
focused on deposit gathering and growing strategically
important relationships.
• Commercial Real Estate activities largely focused on
growing Owner-Occupied CRE portfolio, while Investor
CRE has remained essentially flat for four quarters.
Regional CRE program provides geographic diversity in
strong markets throughout the Northeast and Mid
Atlantic.
• Business Banking team focused on growing C&I loans
and core deposits.
($2.99 Bn, or 60% of loans)
11NASDAQ: UBNK
Wholesale Banking Overview
• Asset quality remains exceptional through diversification, granularity,
that is accretive to risk adjusted capital
Investor CRE & ADC by Property Type
$1,783 Million
C&I & Owner Occupied CRE by Industry
$1,203 Million
12NASDAQ: UBNK
Shared Services
In addition to a strong and seasoned leadership team, the Company has recruited, retained
and developed deeply talented teams across the organization
Significant investment in Information Technology resources to provide leadership
for effective strategic and tactical planning in the use of technology. Implementing
the use of leading edge development methodologies and feedback loops.
Experienced Enterprise Risk and Credit Risk areas that maintain a strong, consistent
culture of risk discipline. Support profitable business results using vigilance, agility,
and expertise.
Strong recruiting, retention and talent development via Human Capital division.
Focus on defining, attracting, and developing the right mix of critical talent to
support and grow the businesses.
Deep Finance group with talent recruited from a large and diversified set of
institutions. Provide decision support for strategic and operational goals using key
business drivers and parameters that impact future profit and revenue growth.
Experienced and talented Tax team driving profitable tax planning.
13NASDAQ: UBNK
Financial Highlights
14NASDAQ: UBNK
First Quarter Walk
(Dollars in thousands) GAAP Net Income
Actual Fourth Quarter 2016 $ 14,550
Loan Interest Income 810
Fee Income 223
Investment Income 512
Interest Expense (420)
Net Interest Income 1,125
Provision 1,071
Net Interest Income after Provision 2,196
Service Charges and Fees (162)
Security Gains/Losses 363
Mortgage Banking (1,517)
Gains/Losses on Limited Partnerships 625
Other 260
Non-Interest Income (431)
Salaries and Benefits (451)
Service Bureau Fees (336)
Occupancy Expense (813)
Professional Fees (285)
Marketing 66
FDIC 94
Other 323
Total Operating Expense (1,402)
Taxes (1,187)
Total Change (824)
Actual First Quarter 2017 $ 13,726
15NASDAQ: UBNK
Tangible Book Value per Share Walk
16NASDAQ: UBNK
Forecast
Actual
FY 2016
Actual
Q1 2017 FY2017
Tax Equivalent Net Interest Margin 2.99% 3.03% 3.05% ^
Loan Growth* 6.2% 3.4%* high single digit
Provision / Average Gross Loans* 0.29% 0.19%* 0.30%
Non-Interest Income Run Rate* $30.1 million $34.0 million* $32 - 34 million
Non-Interest Expense Run Rate* $134.0 million $138.8 million* $138-140 million
Effective Tax Rate (YTD) 7.6% 13.2% 13%
*Note: Loan Growth, Provision/Average Gross Loans, Fee Income and
NIE calculations are annualized.
^ Tax Equivalent NIM forecast assumes no changes to interest rates in forecast period
17NASDAQ: UBNK
NIE/Average Assets/FTE Employees
NIE/AA Employees
3.5%
2.5%
1.5%
0.5%
800
700
600
500
400
300
200
100
0
2011Y 2012Y 2013Y 2014Y 2015Y 2016Y 2017 Q1*
Period Ending
2.11%
281
331 342
683 697
718 710
*NIE/Average Assets calculation is annualized
18NASDAQ: UBNK
Balance Sheet Trends
QoQ YoY
1Q17 vs 4Q16 1Q17 vs 1Q16
Balance Sheet ($ in thousands) 1Q2017 4Q2016 3Q2016 2Q2016 1Q2016 $ Change % Change $ Change % Change
ASSETS
Cash and cash equivalents $ 84,660 $ 90,944 $ 214,246 $ 97,441 $ 87,234 $ (6,284) (6.9)% $ (2,574) (3.0)%
Securities 1,089,666 1,057,449 1,066,601 1,087,748 1,104,932 32,217 3.0 (15,266) (1.4)
Loans held for sale 87,031 62,517 83,321 30,558 7,560 24,514 39.2 79,471 1,051.2
Residential real estate 1,167,428 1,156,227 1,129,079 1,171,300 1,176,357 11,201 1.0 (8,929) (0.8)
Home equity 516,325 536,772 479,390 460,058 446,515 (20,447) (3.8) 69,810 15.6
Other consumer 225,317 209,393 213,830 211,065 217,725 15,924 7.6 7,592 3.5
Residential construction 49,456 53,934 52,476 49,338 42,205 (4,478) (8.3) 7,251 17.2
Investor non-occupied CRE 1,697,414 1,705,319 1,702,701 1,675,821 1,648,321 (7,905) (0.5) 49,093 3.0
Owner occupied CRE 433,358 416,718 392,168 384,324 376,511 16,640 4.0 56,847 15.1
Commercial business 769,153 724,557 660,676 671,687 614,235 44,596 6.2 154,918 25.2
Commercial construction (ADC) 85,533 98,794 90,380 107,302 128,007 (13,261) (13.4) (42,474) (33.2)
Loans - net 4,913,953 4,870,552 4,689,834 4,702,337 4,621,988 43,401 0.9 291,965 6.3
Deferred tax asset, net 37,040 39,962 32,529 31,395 32,222 (2,922) (7.3) 4,818 15.0
Premises and equipment, net 51,299 51,757 52,520 53,021 53,685 (458) (0.9) (2,386) (4.4)
Intangible Assets 120,798 121,183 121,568 121,953 122,354 (385) (0.3) (1,556) (1.3)
Cash surrender value of BOLI 169,007 167,823 126,948 126,734 125,920 1,184 0.7 43,087 34.2
Other Assets* 143,166 137,333 157,288 163,897 163,349 5,833 4.2 (20,183) (12.4)
Total Assets $ 6,696,620 $6,599,520 $6,544,855 $6,415,084 $6,319,244 $ 97,100 1.5 % $ 377,376 6.0 %
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities: QoQ YoY
Deposits: 1Q17 vs 4Q16 1Q17 vs 1Q16
Non-interest-bearing $ 690,516 $ 708,050 $ 687,865 $ 673,624 $ 657,144 $ (17,534) (2.5)% $ 33,372 5.1 %
Interest-bearing 4,099,843 4,003,122 4,007,606 3,781,717 3,876,901 96,721 2.4 222,942 5.8
Total Deposits 4,790,359 4,711,172 4,695,471 4,455,341 4,534,045 79,187 1.7 256,314 5.7
Mortgagors' and investor escrow accounts 10,925 13,354 9,045 14,040 9,696 (2,429) (18.2) 1,229 12.7
FHLB advances and other borrowings 1,180,053 1,169,619 1,102,882 1,222,160 1,073,034 10,434 0.9 107,019 10.0
Accrued expenses and other liabilities 49,300 49,509 81,217 79,350 69,191 (209) (0.4) (19,891) (28.7)
Total liabilities 6,030,637 5,943,654 5,888,615 5,770,891 5,685,966 86,983 1.5 344,671 6.1
Total stockholders' equity 665,983 655,866 656,240 644,193 633,278 10,117 1.5 32,705 5.2
Total liabilities and stockholders' equity $ 6,696,620 $6,599,520 $6,544,855 $6,415,084 $6,319,244 $ 97,100 1.5 % $ 377,376 6.0 %
*Other assets include FHLBB stock (at cost), accrued interest receivable, in addition to other assets
19NASDAQ: UBNK
Investment Portfolio
Portfolio Stats ($ in millions) 2017Q1 2016Q4
Average balance $ 1,123 $ 1,100
Yield 3.45% 3.36%
Average Rating AA AA
Actual MBS Portfolio $ 578 $ 554
Total Portfolio Duration (years) 3.7 3.6
Summary of Quarterly Securities
Purchases
2017Q1 2016Q4
Average Yield 3.18% 3.30%
Average Rating AA- AA-
Total Securities/Assets (%)
25.0
20.0
15.0
10.0
5.0
201
4Q
1
201
4Q
2
201
4Q
3
201
4Q
4
201
5Q
1
201
5Q
2
201
5Q
3
201
5Q
4
201
6Q
1
201
6Q
2
201
6Q
3
201
6Q
4
201
7Q
1
19.3 18.8 19.4 19.5 20.1 19.0 18.7 17.2 17.5 17.0 16.3 16.0 16.3
Investment Portfolio Summary (Total)
March 31, 2017
Corp Debt: 8%
Agency CMO: 19%
Agency CCMO: 13%
Agency CMBS: 2%
CLO: 14%
Muni: 23%
Agency MBS: 20%
Preferred: 1%
(Excludes FHLBB stock)
20NASDAQ: UBNK
Asset Quality
($ in thousands, except percentage data) 2017Q1 2016Q4 2016Q3 2016Q2 2016Q1
Non-accrual loans $ 26,376 $ 26,759 $ 25,983 $ 32,310 $ 29,285
TDR - non-accruing 8,252 7,304 7,345 6,713 7,143
Total non-performing loans 34,628 34,063 33,328 39,023 36,428
OREO 1,786 1,890 2,792 702 659
Total non-performing assets $ 36,414 $ 35,953 $ 36,120 $ 39,725 $ 37,087
NPLs to total loans 0.70% 0.69% 0.71% 0.82% 0.78%
NPAs to total assets 0.54% 0.54% 0.55% 0.62% 0.59%
Net charge offs $ 1,783 $ 1,641 $ 647 $ 1,163 $ 1,075
Annualized NCOs to average loans 0.14% 0.14% 0.05% 0.10% 0.09%
Allowance for loan losses to non-performing loans 125.05% 125.64% 123.26% 97.28% 97.45%
Allowance for loan losses to total loans 0.88% 0.87% 0.87% 0.80% 0.76%
Provision for loan losses (annualized)/Average Loans 0.19% 0.28% 0.31% 0.31% 0.23%
21NASDAQ: UBNK
Commercial Real Estate
Institution Name City State Ticker CRE / Risk-Based Capital
3-Year Ratio
Delta
Construction /
Risk-Based
Capital
3-Year Ratio
Delta
United Financial Bancorp, Inc. Glastonbury CT UBNK 288% 19% 26% 1%
People's United Financial, Inc. Bridgeport CT PBCT 259% (31)% 21% 1%
Webster Financial Corporation Waterbury CT WBS 163% 34% 22% 7%
Berkshire Hills Bancorp, Inc. Pittsfield MA BHLB 258% 71% 46% 13%
Independent Bank Corp. Rockland MA INDB 307% (11)% 49% (1)%
Brookline Bancorp, Inc. Boston MA BRKL 367% 13% 22% (1)%
Century Bancorp, Inc. Medford MA CNBKA 35% (7)% 4% (2)%
Washington Trust Bancorp, Inc. Westerly RI WASH 315% 47% 39% 20%
Meridian Bancorp, Inc. Peabody MA EBSB 516% (31)% 107% 22%
Camden National Corporation Camden ME CAC 199% 45% 31% 11%
First Connecticut Bancorp, Inc. Farmington CT FBNK 315% 46% 20% (18)%
Enterprise Bancorp, Inc. Lowell MA EBTC 245% 14% 82% 1%
Community Bank System, Inc. De Witt NY CBU 80% (2)% 15% (3)%
NBT Bancorp Inc. Norwich NY NBTB 167% (4)% 33% 12%
Sterling Bancorp Montebello NY STL 265% 51% 16% 1%
High 516% 71% 107% 22%
Low 35% (31)% 4% (18)%
Mean 249% 17% 36% 4%
Median 259% 14% 26% 1%
UBNK Ranking out of 15 (ascending): 10 9 8 7
NOTE: All financial data as of December 31, 2016
CRE includes 1.a.1, 1.a.2, 1.b, 1.d, and 1.e.2 from RC-C Part 1 FFIEC 041
Data is Bank-level; BRKL subsidiaries aggregated
Ratio deltas represent change in ratio over 3-year period
All data sourced from S & P Global Market Intelligence
22NASDAQ: UBNK
Deposit Composition
Demand & NOW:
23%
Regular Savings:
12%
Money Market: 26%
Time Deposits:
39%
Demand & NOW:
26%
Regular Savings:
11%
Money Market: 29%
Time Deposits:
34%
Deposit Composition at March 31, 2016Deposit Composition at March 31, 2017
Total Deposits at 3/31/16: $4.53 billionTotal Deposits at 3/31/17: $4.79 billion
23NASDAQ: UBNK
Non-GAAP Reconciliation
Three Months Ended
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
Net Income (GAAP) $ 13,726 $ 14,550 $ 14,159 $ 9,058 $ 11,894
Non-GAAP adjustments:
Non-interest income (465) (94) (118) (367) (1,452)
Non-interest expense — 107 55 1,403 1,454
Related income tax (benefit) expense 163 (5) 22 (363) 47
Net adjustment (302) 8 (41) 673 49
Total non-GAAP net income $ 13,424 $ 14,558 $ 14,118 $ 9,731 $ 11,943
Net interest income (GAAP) $ 44,297 $ 43,172 $ 43,029 $ 41,496 $ 43,402
Non-interest income (GAAP) $ 8,505 $ 8,936 $ 7,889 $ 6,532 $ 6,727
Non-GAAP adjustments:
Net gain on sales of securities (457) (94) (48) (367) (1,452)
BOLI claim benefit (8) — (70) — —
Net adjustment (465) (94) (118) (367) (1,452)
Total non-GAAP non-interest income 8,040 8,842 7,771 6,165 5,275
Total non-GAAP net interest income 44,297 43,172 43,029 41,496 43,402
Total non-GAAP revenue $ 52,337 $ 52,014 $ 50,800 $ 47,661 $ 48,677
24NASDAQ: UBNK
Non-GAAP Reconciliation (cont.)
Three Months Ended
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
Non-interest expense (GAAP) $ 34,695 $ 33,293 $ 32,236 $ 34,681 $ 33,763
Non-GAAP adjustments:
Effect of position eliminations — (107) (55) (1,403) —
FHLBB prepayment penalties — — — — (1,454)
Net adjustment — (107) (55) (1,403) (1,454)
Total non-GAAP non-interest expense $ 34,695 $ 33,186 $ 32,181 $ 33,278 $ 32,309
Total loans $ 4,943,984 $ 4,901,714 $ 4,720,700 $ 4,730,895 $ 4,649,876
Non-covered loans (1) (691,054) (744,763) (721,763) (1,259,285) (1,334,303)
Total covered loans $ 4,252,930 $ 4,156,951 $ 3,998,937 $ 3,471,610 $ 3,315,573
Allowance for loan losses $ 43,304 $ 42,798 $ 41,080 $ 37,961 $ 35,500
Allowance for loan losses to total loans 0.88% 0.87% 0.87% 0.80% 0.76%
Allowance for loan losses to total covered loans 1.02% 1.03% 1.03% 1.09% 1.07%
(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.