United Financial Bancorp, Inc. ("United Financial" or the "Company") (NASDAQ:UBNK), the holding company for United Bank (the "Bank"), announced results for the quarter ended September 30, 2017.

The Company reported net income of $15.2 million, or $0.30 per diluted share, for the quarter ended September 30, 2017, compared to net income for the linked quarter of $16.2 million, or $0.32 per diluted share. The Company reported net income of $14.2 million, or $0.28 per diluted share, for the quarter ended September 30, 2016.

"Management remains focused on our Four Key Objectives outlined in April 2016. In the third quarter of 2017, we delivered 7% year-over-year diluted earnings per share ("EPS") growth, 8% annualized linked quarter tangible book value growth, and delivered 40% of net earnings to our shareholders via a cash dividend, all while maintaining strong capital, liquidity, and asset quality. Annualized loan and deposit growth was 12% and 13%, respectively, for the quarter," stated William H.W. Crawford, IV, Chief Executive Officer of the Company and the Bank. "As always, I want to thank our United Bank teammates for their relentless focus on serving our customers and communities."

Balance Sheet

Assets totaled $6.98 billion at September 30, 2017 and increased $100.3 million, or 1.5%, from $6.88 billion at June 30, 2017. At September 30, 2017, total loans were $5.21 billion, representing an increase of $151.6 million, or 3.0%, from the linked quarter. Changes to loan balances during the third quarter of 2017 were highlighted by a $28.5 million, or 3.6%, increase in commercial business loans, a $23.7 million, or 4.4%, increase in home equity loans, and a $13.1 million, or 3.1%, increase in owner-occupied commercial real estate loans. Total residential mortgages increased during the third quarter of 2017 by $39.2 million, or 3.3%. Loans held for sale decreased $68.1 million, or 43.2%, from the linked quarter, as the Company delivered a large portion of the held for sale portfolio to third party investors at the end of the quarter. Total cash and cash equivalents increased $23.7 million, or 31.6%, from the linked quarter, while the available-for-sale securities portfolio remained relatively flat, with a slight decrease of $5.3 million, or 0.5%.

Deposits totaled $5.15 billion at September 30, 2017 and increased by $159.5 million, or 3.2%, from $4.99 billion at June 30, 2017. In the third quarter of 2017, NOW checking deposits increased by $47.2 million, or 7.5%, from the linked quarter, while non-interest bearing checking deposits increased by $3.2 million, or 0.4%.   Money market deposits increased by $160.1 million, or 11.8%, from the linked quarter. The increases in NOW and money market deposits are reflective of continued success in sourcing new commercial deposit relationships, coupled with the seasonal return of municipal deposits. These increases were slightly offset by a $34.7 million, or 2.0%, decrease in certificates of deposit.

Total Federal Home Loan Bank advances decreased by $39.7 million, or 4.0%, over the linked quarter, while other borrowings decreased by $30.4 million, or 20.4%, due to a decrease in the use of reverse repurchase borrowings.

Net Interest Income

Income growth in the third quarter of 2017, as compared to the linked quarter, was highlighted by an increase in net interest income of $440,000, or 0.9%, to $46.8 million, primarily attributable to an increase in interest income of $2.2 million, or 3.8%, to $60.8 million.  Average interest-earning assets increased by $118.9 million, or 1.9%, primarily due to growth in average loan balances, which increased by $105.7 million, or 2.1%.  Average loan balance growth was driven by a $57.7 million, or 2.7%, increase in average commercial real estate loans, a $25.7 million, or 2.0%, increase in average residential real estate loans, inclusive of loans held for sale, and a $11.0 million, or 1.4%, increase in average commercial business loans.

Interest expense increased by $1.8 million to $14.0 million during the third quarter of 2017, from $12.2 million in the linked quarter. Average balance shifts in the third quarter of 2017 included a $175.9 million, or 9.1%, increase in average NOW and money market deposits, and a $16.2 million, or 1.0%, increase in average certificates of deposit. The growth observed in average deposit balances was largely driven by continued success in new account acquisition strategies.

The non-GAAP tax equivalent net interest margin decreased by four basis points to 3.00% in the third quarter from the linked period. The decline was largely driven by duration extension decisions made in the period, resulting in an increase in the cost of interest-bearing liabilities. The interest-earning asset yield improvement was largely driven by a seven basis point increase in the yield on commercial real estate loans, which represents 34.4% of the Company's interest-earning assets, a 13 basis point increase in the average home equity loan yield, and a 17 basis point increase in the average commercial business loan yield. The increase in the loan portfolio yield was further driven by increases in the 1-month LIBOR and Prime rate indices. The total funding cost increased by ten basis points to 0.91% in the third quarter driven by a ten basis point increase in the cost of interest-bearing deposits, which represents 80.1% of costing liabilities, while the cost of Federal Home Loan Bank advances increased 19 basis points.

Provision for Loan Losses

The provision for loan losses remained relatively flat, totaling $2.6 million at September 30, 2017 as compared to $2.3 million for the linked quarter. Net charge-offs for the quarter ended September 30, 2017 totaled $1.3 million, or 0.10%, as a percentage of average loans outstanding, as compared to $534,000, or 0.04% as a percentage of average loans for the quarter ended June 30, 2017. 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 $1.4 million, or 14.8%, to $8.1 million for the quarter ended September 30, 2017 from $9.5 million in the linked quarter. The decrease in the third quarter's non-interest income was driven primarily by a decrease in service charges and fees and mortgage banking activities as compared to the linked quarter. Additionally, there were higher losses on limited partnership investments as compared to the linked quarter.

Non-Interest Expense

Non-interest expense for the quarter ended September 30, 2017 totaled $34.9 million and decreased by $70,000, or 0.2%, from the linked quarter. The decrease in non-interest expense during the quarter was primarily due to a decrease in marketing and promotions and other expenses, partially offset by an increase in salaries and employee benefits, professional fees, and occupancy and equipment expenses as compared to the linked quarter.

Asset Quality

Asset quality remained strong and stable for the period, with non-performing assets decreasing by $432,000 to $33.9 million at September 30, 2017 from $34.3 million at June 30, 2017. The ratio of non-performing assets to total assets for the quarter ended September 30, 2017 was 0.49%, as compared to 0.50% in the linked quarter.

Capital

The Company reported Tangible Common Equity ("TCE") of $570.5 million, or 8.3% of average assets, at September 30, 2017. Tangible book value per share increased to $11.23 at September 30, 2017 from $11.01 at June 30, 2017. The increase was primarily driven by the impact of the Company's net income of $15.2 million, partially offset by the cash dividend payment to shareholders of $0.12 per share, which reduced stockholders' equity by $6.1 million. Book value per share at September 30, 2017 was $13.59.

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 October 27, 2017 and payable on November 8, 2017. This dividend equates to a 2.76% annualized yield based on the $17.38 average closing price of the Company’s common stock in the third quarter of 2017. The Company has paid dividends for 46 consecutive quarters.

Investor Conference Call

United Financial Bancorp, Inc. will host a conference call on Wednesday, October 18, 2017 at 10:00 a.m. Eastern Time (ET) to discuss the Company’s third quarter results. Those wishing to participate in the call may dial toll-free 1-800-544-8281. A telephone replay of the call will be available through November 1, 2017 by calling 1-877-344-7529 and entering conference number 10112041. 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 September 30, 2017, the Company had $6.98 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.

Non-GAAP Financial Measures

This document 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. A reconciliation of non-GAAP financial measures to GAAP measures is included on pages F-10 through F-12 in the accompanying financial tables. 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

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.

United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(Unaudited)
 
    For the Three Months Ended September 30,   For the Nine Months Ended September 30,
    2017   2016   2017   2016
Interest and dividend income:   (In thousands, except share data)
Loans   $ 51,809     $ 45,331     $ 147,976     $ 134,359  
Securities-taxable interest   5,604     4,808     16,907     14,830  
Securities-non-taxable interest   2,499     2,140     7,108     6,201  
Securities-dividends   736     990     2,233     2,934  
Interest-bearing deposits   151     67     303     207  
Total interest and dividend income   60,799     53,336     174,527     158,531  
Interest expense:                
Deposits   9,185     6,279     23,607     18,927  
Borrowed funds   4,846     4,028     13,527     11,677  
Total interest expense   14,031     10,307     37,134     30,604  
Net interest income   46,768     43,029     137,393     127,927  
Provision for loan losses   2,566     3,766     7,146     10,078  
Net interest income after provision for loan losses   44,202     39,263     130,247     117,849  
Non-interest income:                
Service charges and fees   6,161     5,726     18,413     14,679  
Net gain from sales of securities   158     48     710     1,867  
Income from mortgage banking activities   1,204     2,198     4,355     5,389  
Bank-owned life insurance income   1,167     899     3,523     2,531  
Net loss on limited partnership investments   (864 )   (850 )   (1,582 )   (3,290 )
Other income (loss)   247     (132 )   635     (28 )
Total non-interest income   8,073     7,889     26,054     21,148  
Non-interest expense:                
Salaries and employee benefits   20,005     18,301     59,309     56,105  
Service bureau fees   1,983     1,960     6,029     6,219  
Occupancy and equipment   3,740     3,580     11,866     11,330  
Professional fees   1,048     1,125     3,309     2,893  
Marketing and promotions   1,087     656     3,036     2,271  
FDIC insurance assessments   780     819     2,255     2,800  
Core deposit intangible amortization   337     385     1,075     1,219  
FHLBB prepayment penalties               1,454  
Other   5,929     5,410     17,704     16,389  
Total non-interest expense   34,909     32,236     104,583     100,680  
Income before income taxes   17,366     14,916     51,718     38,317  
Provision for income taxes   2,175     757     6,601     3,206  
Net income   $ 15,191     $ 14,159     $ 45,117     $ 35,111  
                 
Net income per share:                
Basic   $ 0.30     $ 0.28     $ 0.90     $ 0.71  
Diluted   $ 0.30     $ 0.28     $ 0.89     $ 0.70  
Weighted-average shares outstanding:                
Basic   50,263,602     49,800,105     50,246,234     49,617,136  
Diluted   50,889,987     50,141,175     50,888,175     49,917,049  

 

United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(Unaudited)
 
    For the Three Months Ended
    September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016
Interest and dividend income:   (In thousands, except share data)
Loans   $ 51,809     $ 49,674     $ 46,493     $ 45,460     $ 45,331  
Securities-taxable interest   5,604     5,793     5,510     4,848     4,808  
Securities-non-taxable interest   2,499     2,355     2,254     2,191     2,140  
Securities-dividends   736     689     808     986     990  
Interest-bearing deposits   151     51     101     136     67  
Total interest and dividend income   60,799     58,562     55,166     53,621     53,336  
Interest expense:                    
Deposits   9,185     7,603     6,819     6,649     6,279  
Borrowed funds   4,846     4,631     4,050     3,800     4,028  
Total interest expense   14,031     12,234     10,869     10,449     10,307  
Net interest income   46,768     46,328     44,297     43,172     43,029  
Provision for loan losses   2,566     2,292     2,288     3,359     3,766  
Net interest income after provision for loan losses   44,202     44,036     42,009     39,813     39,263  
Non-interest income:                    
Service charges and fees   6,161     6,834     5,418     5,580     5,726  
Net gain from sales of securities   158     95     457     94     48  
Income from mortgage banking activities   1,204     1,830     1,321     2,838     2,198  
Bank-owned life insurance income   1,167     1,149     1,207     863     899  
Net loss on limited partnership investments   (864 )   (638 )   (80 )   (705 )   (850 )
Other income (loss)   247     206     182     266     (132 )
Total non-interest income   8,073     9,476     8,505     8,936     7,889  
Non-interest expense:                    
Salaries and employee benefits   20,005     19,574     19,730     19,279     18,301  
Service bureau fees   1,983     1,943     2,103     1,767     1,960  
Occupancy and equipment   3,740     3,657     4,469     3,656     3,580  
Professional fees   1,048     952     1,309     1,024     1,125  
Marketing and promotions   1,087     1,237     712     778     656  
FDIC insurance assessments   780     796     679     773     819  
Core deposit intangible amortization   337     353     385     385     385  
Other   5,929     6,467     5,308     5,631     5,410  
Total non-interest expense   34,909     34,979     34,695     33,293     32,236  
Income before income taxes   17,366     18,533     15,819     15,456     14,916  
Provision for income taxes   2,175     2,333     2,093     906     757  
Net income   $ 15,191     $ 16,200     $ 13,726     $ 14,550     $ 14,159  
                     
Net income per share:                    
Basic   $ 0.30     $ 0.32     $ 0.27     $ 0.29     $ 0.28  
Diluted   $ 0.30     $ 0.32     $ 0.27     $ 0.29     $ 0.28  
Weighted-average shares outstanding:                    
Basic   50,263,602     50,217,212     50,257,825     50,070,710     49,800,105  
Diluted   50,889,987     50,839,091     50,935,382     50,602,494     50,141,175  

 

United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
 
    September 30, 2017   June 30, 2017   March 31,  2017   December 31, 2016   September 30, 2016
ASSETS   (In thousands)
Cash and cash equivalents:                    
Cash and due from banks   $ 59,456     $ 57,137     $ 45,279     $ 47,248     $ 51,951  
Short-term investments   39,061     17,714     39,381     43,696     162,295  
Total cash and cash equivalents   98,517     74,851     84,660     90,944     214,246  
Available for sale securities – At fair value   1,068,055     1,073,384     1,075,729     1,043,411     1,052,439  
Held to maturity securities – At amortized cost   13,693     13,792     13,937     14,038     14,162  
Loans held for sale   89,419     157,487     87,031     62,517     83,321  
Loans:                    
Commercial real estate loans:                    
Owner-occupied   442,989     429,848     433,358     416,718     392,168  
Investor non-owner occupied   1,777,716     1,761,940     1,697,414     1,705,319     1,702,701  
Construction   82,688     74,980     85,533     98,794     90,380  
Total commercial real estate loans   2,303,393     2,266,768     2,216,305     2,220,831     2,185,249  
Commercial business loans   821,372     792,918     769,153     724,557     660,676  
Consumer loans:                    
Residential real estate   1,211,783     1,172,540     1,167,428     1,156,227     1,129,079  
Home equity   561,814     538,130     516,325     536,772     479,390  
Residential construction   39,460     46,117     49,456     53,934     52,476  
Other consumer   267,921     237,708     225,317     209,393     213,830  
Total consumer loans   2,080,978     1,994,495     1,958,526     1,956,326     1,874,775  
Total loans   5,205,743     5,054,181     4,943,984     4,901,714     4,720,700  
Net deferred loan costs and premiums   15,297     15,413     13,273     11,636     10,214  
Allowance for loan losses   (46,368 )   (45,062 )   (43,304 )   (42,798 )   (41,080 )
Loans receivable - net   5,174,672     5,024,532     4,913,953     4,870,552     4,689,834  
Federal Home Loan Bank of Boston stock, at cost   46,758     54,760     52,707     53,476     52,847  
Accrued interest receivable   20,893     19,751     19,126     18,771     17,888  
Deferred tax asset, net   30,999     27,034     37,040     39,962     32,529  
Premises and equipment, net   61,063     54,480     51,299     51,757     52,520  
Goodwill   115,281     115,281     115,281     115,281     115,281  
Core deposit intangible asset   4,827     5,164     5,517     5,902     6,287  
Cash surrender value of bank-owned life insurance   171,300     170,144     169,007     167,823     126,948  
Other assets   81,019     85,503     71,333     65,086     86,553  
Total assets   $ 6,976,496     $ 6,876,163     $ 6,696,620     $ 6,599,520     $ 6,544,855  
                     
                     
LIABILITIES AND STOCKHOLDERS’ EQUITY                    
Liabilities:                    
Deposits:                    
Non-interest-bearing   $ 725,130     $ 721,917     $ 690,516     $ 708,050     $ 687,865  
Interest-bearing   4,427,892     4,271,562     4,099,843     4,003,122     4,007,606  
Total deposits   5,153,022     4,993,479     4,790,359     4,711,172     4,695,471  
Mortgagors’ and investor escrow accounts   9,641     15,045     10,925     13,354     9,045  
Federal Home Loan Bank advances and other borrowings   1,068,814     1,138,817     1,180,053     1,169,619     1,102,882  
Accrued expenses and other liabilities   54,366     49,358     49,300     49,509     81,217  
Total liabilities   6,285,843     6,196,699     6,030,637     5,943,654     5,888,615  
Total stockholders’ equity   690,653     679,464     665,983     655,866     656,240  
Total liabilities and stockholders’ equity   $ 6,976,496     $ 6,876,163     $ 6,696,620     $ 6,599,520     $ 6,544,855  

 

United Financial Bancorp, Inc. and Subsidiaries
Selected Financial Highlights
(Dollars In Thousands, Except Share Data)
(Unaudited)
 
  At or For the Three Months Ended
  September 30,  2017   June 30,  2017   March 31, 2017   December 31, 2016   September 30, 2016
Share Data:                  
Basic net income per share $ 0.30     $ 0.32     $ 0.27     $ 0.29     $ 0.28  
Diluted net income per share 0.30     0.32     0.27     0.29     0.28  
Dividends declared per share 0.12     0.12     0.12     0.12     0.12  
Tangible book value per share $ 11.23     $ 11.01     $ 10.75     $ 10.53     $ 10.60  
Key Statistics:                  
Total revenue $ 54,841     $ 55,804     $ 52,802     $ 52,108     $ 50,918  
Total non-interest expense 34,909     34,979     34,695     33,293     32,236  
Average earning assets 6,423,741     6,304,849     6,113,363     6,054,347     5,984,951  
Key Ratios:                  
Return on average assets (annualized) 0.88 %   0.96 %   0.83 %   0.90 %   0.88 %
Return on average equity (annualized) 8.92 %   9.66 %   8.35 %   8.95 %   8.80 %
Tax-equivalent net interest margin (annualized) 3.00 %   3.04 %   3.01 %   2.93 %   2.95 %
Residential Mortgage Production:                  
Dollar volume (total) $ 133,462     $ 186,220     $ 134,022     $ 160,512     $ 173,473  
Mortgages originated for purchases 97,132     129,165     77,613     77,549     113,019  
Loans sold 152,551     61,363     51,826     87,626     99,051  
Income from mortgage banking activities 1,204     1,830     1,321     2,838     2,198  
Non-performing Assets:                  
Residential real estate $ 11,330     $ 11,190     $ 12,185     $ 11,357     $ 11,526  
Home equity 4,206     5,211     4,307     4,043     3,650  
Investor-owned commercial real estate 2,957     3,512     3,809     4,016     3,746  
Owner-occupied commercial real estate 2,084     2,184     2,314     2,642     2,838  
Construction 1,748     287     1,355     1,701     1,879  
Commercial business 2,427     2,624     2,369     2,000     2,016  
Other consumer 37     40     37     1,000     328  
Non-accrual loans 24,789     25,048     26,376     26,759     25,983  
Troubled debt restructured – non-accruing 6,628     7,475     8,252     7,304     7,345  
Total non-performing loans 31,417     32,523     34,628     34,063     33,328  
Other real estate owned 2,444     1,770     1,786     1,890     2,792  
Total non-performing assets $ 33,861     $ 34,293     $ 36,414     $ 35,953     $ 36,120  
Non-performing loans to total loans 0.60 %   0.64 %   0.70 %   0.69 %   0.71 %
Non-performing assets to total assets 0.49 %   0.50 %   0.54 %   0.54 %   0.55 %
Allowance for loan losses to non-performing loans 147.59 %   138.55 %   125.05 %   125.64 %   123.26 %
Allowance for loan losses to total loans 0.89 %   0.89 %   0.88 %   0.87 %   0.87 %
Non-GAAP Ratios: (1)                  
Non-interest expense to average assets (annualized) 2.02 %   2.06 %   2.11 %   2.05 %   2.00 %
Efficiency ratio (2) 60.22 %   59.49 %   63.95 %   60.79 %   60.31 %
Cost of funds (annualized) (3) 0.91 %   0.81 %   0.74 %   0.73 %   0.72 %
Total revenue growth rate (1.73 )%   5.69 %   1.33 %   2.34 %   6.02 %
Total revenue growth rate (annualized) (6.90 )%   22.74 %   5.33 %   9.35 %   24.07 %
Average earning asset growth rate 1.89 %   3.13 %   0.97 %   1.16 %   1.65 %
Average earning asset growth rate (annualized) 7.54 %   12.53 %   3.90 %   4.64 %   6.60 %
Return on average tangible common equity (annualized) (2) 10.99 %   11.95 %   10.42 %   11.19 %   11.05 %
Pre-provision net revenue to average assets (2) 1.31 %   1.38 %   1.18 %   1.31 %   1.31 %
 
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.  Calculations of these non-GAAP metrics are provided after the reconciliations of non-GAAP financial measures and appear on page F-10 through page F-12.
3.  The cost of funds ratio represents interest incurred on liabilities as a percentage of average non-interest bearing deposits and interest-bearing liabilities.

 

United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
 
  For the Three Months Ended
  September 30, 2017   September 30, 2016
  Average Balance   Interest and Dividends   Yield/Cost   Average Balance   Interest and Dividends   Yield/Cost
Interest-earning assets:                      
Residential real estate $ 1,323,262     $ 11,017     3.33 %   $ 1,229,384     $ 10,033     3.26 %
Commercial real estate 2,211,601     23,063     4.08     2,077,585     19,525     3.68  
Construction 122,511     1,301     4.16     156,217     1,565     3.92  
Commercial business 791,547     8,163     4.04     669,595     6,103     3.57  
Home equity 536,509     5,917     4.38     467,552     6,046     5.15  
Other consumer 252,532     3,063     4.81     209,255     2,554     4.85  
Investment securities 1,090,559     9,621     3.52     1,073,007     8,576     3.19  
Federal Home Loan Bank stock 51,722     572     4.43     56,126     508     3.62  
Other earning assets 43,498     151     1.38     46,230     67     0.57  
Total interest-earning assets 6,423,741     62,868     3.86     5,984,951     54,977     3.63  
Allowance for loan losses (46,479 )           (38,916 )        
Non-interest-earning assets 529,937             491,160          
Total assets $ 6,907,199             $ 6,437,195          
Interest-bearing liabilities:                      
NOW and money market $ 2,105,796     $ 3,992     0.75 %   $ 1,485,177     $ 1,501     0.40 %
Savings 527,641     77     0.06     527,225     77     0.06  
Certificates of deposit 1,731,658     5,116     1.17     1,821,061     4,701     1.03  
Total interest-bearing deposits 4,365,095     9,185     0.83     3,833,463     6,279     0.65  
Federal Home Loan Bank advances 951,760     3,404     1.40     1,085,932     2,657     0.96  
Other borrowings 135,173     1,442     4.18     119,902     1,371     4.47  
Total interest-bearing liabilities 5,452,028     14,031     1.02     5,039,297     10,307     0.81  
Non-interest-bearing deposits 702,916             662,437          
Other liabilities 70,853             92,195          
Total liabilities 6,225,797             5,793,929          
Stockholders’ equity 681,402             643,266          
Total liabilities and stockholders’ equity $ 6,907,199             $ 6,437,195          
Net interest-earning assets $ 971,713             $ 945,654          
Tax-equivalent net interest income     48,837             44,670      
Tax-equivalent net interest rate spread         2.84 %           2.82 %
Tax-equivalent net interest margin         3.00 %           2.95 %
Average interest-earning assets to average interest-bearing liabilities          117.82 %           118.77 %
Less tax-equivalent adjustment     2,069             1,641      
Net interest income     $ 46,768             $ 43,029      

 

United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
 
  For the Three Months Ended
  September 30, 2017   June 30, 2017
  Average Balance   Interest and Dividends   Yield/Cost   Average Balance   Interest and Dividends   Yield/Cost
Interest-earning assets:                      
Residential real estate $ 1,323,262     $ 11,017     3.33 %   $ 1,297,558     $ 10,839     3.34 %
Commercial real estate 2,211,601     23,063     4.08     2,153,938     21,837     4.01  
Construction 122,511     1,301     4.16     128,730     1,396     4.29  
Commercial business 791,547     8,163     4.04     780,553     7,628     3.87  
Home equity 536,509     5,917     4.38     541,017     5,737     4.25  
Other consumer 252,532     3,063     4.81     230,419     2,907     5.06  
Investment securities 1,090,559     9,621     3.52     1,099,011     9,577     3.48  
Federal Home Loan Bank stock 51,722     572     4.43     54,151     534     3.95  
Other earning assets 43,498     151     1.38     19,472     50     1.03  
Total interest-earning assets 6,423,741     62,868     3.86     6,304,849     60,505     3.82  
Allowance for loan losses (46,479 )           (44,888 )        
Non-interest-earning assets 529,937             520,375          
Total assets $ 6,907,199             $ 6,780,336          
Interest-bearing liabilities:                      
NOW and money market $ 2,105,796     $ 3,992     0.75 %   $ 1,929,917     $ 2,808     0.58 %
Savings 527,641     77     0.06     541,867     80     0.06  
Certificates of deposit 1,731,658     5,116     1.17     1,715,436     4,715     1.10  
Total interest-bearing deposits 4,365,095     9,185     0.83     4,187,220     7,603     0.73  
Federal Home Loan Bank advances 951,760     3,404     1.40     1,028,835     3,152     1.21  
Other borrowings 135,173     1,442     4.18     154,780     1,479     3.78  
Total interest-bearing liabilities 5,452,028     14,031     1.02     5,370,835     12,234     0.91  
Non-interest-bearing deposits 702,916             670,244          
Other liabilities 70,853             68,731          
Total liabilities 6,225,797             6,109,810          
Stockholders’ equity 681,402             670,526          
Total liabilities and stockholders’ equity $ 6,907,199             $ 6,780,336          
Net interest-earning assets $ 971,713             $ 934,014          
Tax-equivalent net interest income     48,837             48,271      
Tax-equivalent net interest rate spread         2.84 %           2.91 %
Tax-equivalent net interest margin         3.00 %           3.04 %
Average interest-earning assets to average interest-bearing liabilities          117.82 %           117.39 %
Less tax-equivalent adjustment     2,069             1,943      
Net interest income     $ 46,768             $ 46,328      

 

United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
 
  For the Nine Months Ended
  September 30, 2017   September 30, 2016
  AverageBalance   InterestandDividends   Yield/Cost   AverageBalance   InterestandDividends   Yield/Cost
Interest-earning assets:                      
Residential real estate $ 1,285,618     $ 32,079     3.33 %   $ 1,211,995     $ 29,814     3.28 %
Commercial real estate 2,155,085     65,626     4.02     2,039,087     61,477     3.96  
Construction 132,158     4,261     4.25     164,039     5,234     4.19  
Commercial business 767,738     22,510     3.87     638,086     17,766     3.66  
Home equity 533,669     16,876     4.23     448,371     13,346     3.98  
Other consumer 231,892     8,581     4.95     218,801     8,201     5.00  
Investment securities 1,086,574     28,366     3.48     1,083,717     25,942     3.18  
Federal Home Loan Bank stock 53,005     1,630     4.10     54,842     1,366     3.32  
Other earning assets 36,049     303     1.12     48,755     207     0.57  
Total interest-earning assets 6,281,788     180,232     3.80     5,907,693     163,353     3.66  
Allowance for loan losses (45,008 )           (36,775 )        
Non-interest-earning assets 521,629             479,513          
Total assets $ 6,758,409             $ 6,350,431          
Interest-bearing liabilities:                      
NOW and money market $ 1,960,685     $ 8,996     0.61 %   $ 1,533,096     $ 4,950     0.43 %
Savings 532,718     235     0.06     527,919     229     0.06  
Certificates of deposit 1,720,120     14,376     1.12     1,784,269     13,748     1.03  
Total interest-bearing deposits 4,213,523     23,607     0.75     3,845,284     18,927     0.66  
Federal Home Loan Bank advances 986,935     9,225     1.23     1,009,671     7,507     0.98  
Other borrowings 138,685     4,302     4.09     130,586     4,170     4.20  
Total interest-bearing liabilities 5,339,143     37,134     0.93     4,985,541     30,604     0.81  
Non-interest-bearing deposits 680,786             646,416          
Other liabilities 68,499             83,543          
Total liabilities 6,088,428             5,715,500          
Stockholders’ equity 669,981             634,931          
Total liabilities and stockholders’ equity $ 6,758,409             $ 6,350,431          
Net interest-earning assets $ 942,645             $ 922,152          
Tax-equivalent net interest income     143,098             132,749      
Tax-equivalent net interest rate spread         2.87 %           2.85 %
Tax-equivalent net interest margin         3.02 %           2.97 %
Average interest-earning assets to average interest-bearing liabilities         117.66 %           118.50 %
Less tax-equivalent adjustment     5,705             4,822      
Net interest income     $ 137,393             $ 127,927      

 

United Financial Bancorp, Inc. and SubsidiariesReconciliation of Non-GAAP Financial Measures(Dollars In Thousands)(Unaudited)

In addition to evaluating the Company’s results of operations in accordance with GAAP, management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures. These non-GAAP measures are intended to provide the reader with additional perspectives on operating results, financial condition, and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.  

The efficiency ratio is used as a common measure by banks as a comparable metric to understand the Company’s expense structure relative to its total revenue; in other words, for every dollar of total revenue we recognize, how much of that dollar is expended. In order to improve the comparability of the ratio to our peers, we remove non-core items. To improve transparency, and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure.

Pre-provision net revenue is a measure that the Company uses to understand fundamental operating performance before credit related expenses and tax expense. It is often expressed as a ratio relative to average assets which demonstrates the “core” performance and can be viewed as an alternative measure of how efficiently the Company services its asset base.

Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors.

The Company believes that disclosing these non-GAAP metrics is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included on pages F-10 through F-12 in the following press release tables:

    Three Months Ended
    September 30,  2017   June 30,  2017   March 31, 2017   December 31,  2016   September 30,  2016
    (Dollars in thousands)
Net Income (GAAP)   $ 15,191     $ 16,200     $ 13,726     $ 14,550     $ 14,159  
Non-GAAP adjustments:                    
Non-interest income   (158 )   (95 )   (465 )   (94 )   (118 )
Non-interest expense               107     55  
Related income tax (benefit) expense   55     33     163     (5 )   22  
Net adjustment   (103 )   (62 )   (302 )   8     (41 )
Total net income (non-GAAP)   $ 15,088     $ 16,138     $ 13,424     $ 14,558     $ 14,118  
                     
Non-interest income (GAAP)   $ 8,073     $ 9,476     $ 8,505     $ 8,936     $ 7,889  
Non-GAAP adjustments:                    
Net gain on sales of securities   (158 )   (95 )   (457 )   (94 )   (48 )
BOLI claim benefit           (8 )       (70 )
Net adjustment   (158 )   (95 )   (465 )   (94 )   (118 )
Total non-interest income (non-GAAP)   7,915     9,381     8,040     8,842     7,771  
Total net interest income   46,768     46,328     44,297     43,172     43,029  
Total revenue (non-GAAP)   $ 54,683     $ 55,709     $ 52,337     $ 52,014     $ 50,800  
                     
Non-interest expense (GAAP)   $ 34,909     $ 34,979     $ 34,695     $ 33,293     $ 32,236  
Non-GAAP adjustments:                    
Effect of position eliminations               (107 )   (55 )
Net adjustment               (107 )   (55 )
Total non-interest expense (non-GAAP)   $ 34,909     $ 34,979     $ 34,695     $ 33,186     $ 32,181  
                     
Total loans   $ 5,205,743     $ 5,054,181     $ 4,943,984     $ 4,901,714     $ 4,720,700  
Non-covered loans (1)   (739,376 )   (699,938 )   (691,054 )   (744,763 )   (721,763 )
Total covered loans   $ 4,466,367     $ 4,354,243     $ 4,252,930     $ 4,156,951     $ 3,998,937  
Allowance for loan losses   $ 46,368     $ 45,062     $ 43,304     $ 42,798     $ 41,080  
Allowance for loan losses to total loans   0.89 %   0.89 %   0.88 %   0.87 %   0.87 %
Allowance for loan losses to total covered loans   1.04 %   1.03 %   1.02 %   1.03 %   1.03 %
 
(1) As required by GAAP, the Company recorded acquired loans at fair value. These loans carry no allowance for loan losses for the periods reflected above. 

 

                     
    Three Months Ended
    September 30,  2017   June 30,  2017   March 31, 2017   December 31,  2016   September 30,  2016
    (Dollars in thousands)
Efficiency Ratio:                    
Non-Interest Expense (GAAP)   $ 34,909     $ 34,979     $ 34,695     $ 33,293     $ 32,236  
Non-GAAP adjustments:                    
Other real estate owned expense   (211 )   (305 )   (91 )   (100 )   (40 )
Effect of position eliminations               (107 )   (55 )
Non-Interest Expense for Efficiency Ratio (non-GAAP)   $ 34,698     $ 34,674     $ 34,604     $ 33,086     $ 32,141  
                     
Net Interest Income (GAAP)   $ 46,768     $ 46,328     $ 44,297     $ 43,172     $ 43,029  
Non-GAAP adjustments:                    
Tax equivalent adjustment for tax-exempt loans and investment securities   2,069     1,943     1,693     1,712     1,641  
                     
Non-Interest Income (GAAP)   8,073     9,476     8,505     8,936     7,889  
Non-GAAP adjustments:                    
Net gain on sales of securities   (158 )   (95 )   (457 )   (94 )   (48 )
Net loss on limited partnership investments   864     638     80     705     850  
BOLI claim benefit           (8 )       (70 )
Total Revenue for Efficiency Ratio (non-GAAP)   $ 57,616     $ 58,290     $ 54,110     $ 54,431     $ 53,291  
                     
Efficiency Ratio (Non-Interest Expense for Efficiency Ratio (non-GAAP)/Total Revenue for Efficiency Ratio (non-GAAP))   60.22 %   59.49 %   63.95 %   60.79 %   60.31 %
                     
Pre-Provision Net Revenue ("PPNR") to Average Assets (Annualized):                
Net Interest income (GAAP)   $ 46,768     $ 46,328     $ 44,297     $ 43,172     $ 43,029  
Non-GAAP adjustments:                    
Tax equivalent adjustment for tax-exempt loans and investment securities   2,069     1,943     1,693     1,712     1,641  
Total tax equivalent net interest income (A)   $ 48,837     $ 48,271     $ 45,990     $ 44,884     $ 44,670  
                     
Non Interest Income (GAAP)   8,073     9,476     8,505     8,936     7,889  
Non-GAAP adjustments:                    
Net gain on sales of securities   (158 )   (95 )   (457 )   (94 )   (48 )
Net loss on limited partnership investments   864     638     80     705     850  
BOLI claim benefit           (8 )       (70 )
Non-Interest Income for PPNR (non-GAAP) (B)   $ 8,779     $ 10,019     $ 8,120     $ 9,547     $ 8,621  
                     
Non-Interest Expense (GAAP)   $ 34,909     $ 34,979     $ 34,695     $ 33,293     $ 32,236  
Non-GAAP adjustments:                    
Effect of position eliminations               (107 )   (55 )
Non-Interest Expense for PPNR (non-GAAP) (C)   $ 34,909     $ 34,979     $ 34,695     $ 33,186     $ 32,181  
                     
Total PPNR (non-GAAP)  (A + B - C) :   $ 22,707     $ 23,311     $ 19,415     $ 21,245     $ 21,110  
Average Assets   6,907,199     6,780,336     6,584,138     6,490,971     6,437,195  
PPNR to Average Assets (Annualized)   1.31 %   1.38 %   1.18 %   1.31 %   1.31 %
                     
                     
                     
    Three Months Ended
    September 30,  2017   June 30,  2017   March 31, 2017   December 31,  2016   September 30,  2016
    (Dollars in thousands)
Return on Average Tangible Common Equity (Annualized):              
Net Income (GAAP)   $ 15,191     $ 16,200     $ 13,726     $ 14,550     $ 14,159  
Non-GAAP adjustments:                    
Intangible Assets amortization, tax effected at 35%   219     229     250     250     250  
Net Income excluding intangible assets amortization, tax effected at 35%   $ 15,410     $ 16,429     $ 13,976     $ 14,800     $ 14,409  
Average stockholders' equity (non-GAAP)   $ 681,402     $ 670,526     $ 657,755     $ 650,590     $ 643,266  
Average goodwill & other intangible assets (non-GAAP)   120,275     120,631     121,004     121,383     121,767  
Average tangible common stockholders' equity (non-GAAP)   $ 561,127     $ 549,895     $ 536,751     $ 529,207     $ 521,499  
Return on Average Tangible Common Equity (non-GAAP)   10.99 %   11.95 %   10.42 %   11.19 %   11.05 %

   

   
Investor Relations Contact:Marliese L. ShawExecutive Vice President, Investor Relations Officer     United Bank860-291-3622MShaw@bankatunited.com   Media Relations Contact:Adam J. JeamelRegional President, Corporate CommunicationsUnited Bank860-291-3765AJeamel@bankatunited.com
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