UNITED FINANCIAL BANCORP, INC. GLASTONBURY, Conn., Jan. 24, 2017 /PRNewswire/ -- 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 December 31, 2016.
The Company reported net income of $14.6 million, or $0.29 per diluted share, for the quarter ended December 31, 2016, compared to net income for the linked quarter of $14.2 million, or $0.28 per diluted share. The Company reported net income of $9.9 million, or $0.20 per diluted share, for the quarter ended December 31, 2015.
"In the fourth quarter of 2016 the United Financial Bancorp, Inc. team delivered record revenue, record earnings per share, and strong loan growth all supported by an attractive cost structure and excellent asset quality," stated William H. W. Crawford, IV, Chief Executive Officer of the Company and the Bank. "I want to thank our employees for their relentless focus on serving the financial needs of our customers."
GAAP net income for the year ended December 31, 2016 was $49.7 million, or $0.99 per diluted share, compared to GAAP net income for the year ended December 31, 2015 of $49.6 million, or $1.00 per diluted share. Non-GAAP net income for the year ended December 31, 2016 was $49.6 million compared to $44.2 million for the year ended December 31, 2015. Non-GAAP net income for the year ended December 31, 2016 was adjusted for purchase accounting impacts, the net gain from sales of securities, bank-owned life insurance ("BOLI") claim benefit and the effect of position eliminations as part of the Company's 2016 reorganization plan. For the year ended December 31, 2015, non-GAAP net income was adjusted for purchase accounting impacts, the net gain from sales of securities, BOLI claim benefit, merger related expenses and fees associated with loan portfolio acquisitions.
Balance Sheet
Total assets at December 31, 2016 increased by $54.7 million to $6.60 billion from $6.54 billion at September 30, 2016. At December 31, 2016, total loans were $4.90 billion, representing an increase of $181.0 million, or 3.8%, from the linked quarter. Changes to loan balances during the fourth quarter of 2016 were highlighted by a $63.9 million, or 9.7%, increase in commercial business loans and a $24.6 million, or 6.3%, increase in owner-occupied commercial real estate loans. Total residential mortgages increased during the fourth quarter of 2016 by $27.1 million and total held for sale loans decreased $20.8 million. Total cash and cash equivalents decreased $123.3 million, or 57.6%, during the linked quarter partially due to the Company funding loan originations.
Deposits totaled $4.71 billion at December 31, 2016 and increased by $15.7 million, or 0.3%, from $4.70 billion at September 30, 2016. Reflective of growth in newly acquired deposit relationships, increases in the fourth quarter of 2016 included a $20.2 million, or 2.9%, increase in non-interest bearing deposits and a $65.6 million, or 15.2%, increase in NOW checking deposits. These increases were offset by a $115.4 million, or 6.2%, decrease in certificates of deposit, some of which migrated to money market deposit accounts that reflected growth of $40.5 million, or 3.4%, during the quarter ended December 31, 2016.
Total Federal Home Loan Bank advances and other borrowings increased by $66.7 million, or 6.1%, at December 31, 2016 from the linked quarter.
Net Interest Income
Net interest income increased by $143,000, or 0.3%, to $43.2 million during the fourth quarter of 2016 from $43.0 million during the linked quarter. Interest income totaled $53.6 million in the fourth quarter of 2016 and increased by $285,000, or 0.5%, in comparison to $53.3 million in the linked quarter. As communicated in the second quarter of 2016, the Company planned to grow assets at a slower pace and as a result, average interest-earning assets increased slightly by $69.4 million, or 1.2%, from the linked quarter. Average loan balances increased by $41.6 million, or 0.9%, from the linked quarter, highlighted by a $26.6 million, or 1.3%, increase in commercial real estate loans and a $1.2 million, or 0.2%, increase in commercial business loans. Average residential mortgage balances decreased by $6.7 million, or 0.6%, during the fourth quarter of 2016. On a non-GAAP basis, net interest income increased by $119,000 to $42.8 million during the fourth quarter of 2016 as compared to the linked quarter.
Interest expense increased by $142,000 to $10.4 million during the fourth quarter of 2016 from $10.3 million in the linked quarter. Average balance increases in the fourth quarter of 2016 included a $135.5 million, or 9.1%, increase in NOW and money market deposits and a $48.2 million, or 2.6%, increase in certificates of deposit. The growth observed in the money market and NOW checking deposits was largely driven by newly acquired deposit relationships.
The GAAP tax equivalent net interest margin for the fourth quarter of 2016 decreased by two basis points to 2.96% compared to 2.98% for the linked quarter. The yield on interest-earning assets decreased by two basis points in the fourth quarter of 2016 to 3.65% as compared to the linked quarter, and the total funding cost increased one basis point to 0.73% in the quarter ending December 31, 2016. The non-GAAP net interest margin, which excludes the impact of purchase accounting adjustments, decreased by two basis points to 2.94% in the fourth quarter of 2016 from 2.96% in the linked quarter.
Provision for Loan Losses
The provision for loan losses decreased by $407,000, or 10.8% to $3.4 million for the quarter ended December 31, 2016 compared to $3.8 million for the linked quarter. The decrease in the provision for the quarter is the result of slowed growth in the covered portfolio. Net charge-offs for the year ending December 31, 2016 totaled $4.5 million, or 0.10% as a percentage of average loans outstanding, as compared to $3.9 million, or 0.10% as a percentage of average loans outstanding, as of the year ending December 31, 2015. 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 increased by $1.0 million, or 13.3%, to $8.9 million for the quarter ended December 31, 2016 from $7.9 million in the linked quarter. The increase in the fourth quarter's non-interest income was driven primarily by a $640,000 increase in mortgage banking activities as compared to the linked quarter. Total non-interest income increased by $473,000 from the comparable quarter in 2015.
Non-Interest Expense
GAAP non-interest expense for the quarter ended December 31, 2016 totaled $33.3 million and increased by $1.1 million, or 3.3%, from the linked quarter, while non-GAAP non-interest expense increased by $1.0 million, or 3.2%. The increase in GAAP non-interest expense during the quarter was mostly due to the $978,000, or 5.3%, increase in salaries and employee benefits expense as compared to the linked quarter. The increase in salaries and employee benefits expense was due to the Company continuing to make investments in hiring experienced information technology personnel, as well as increases in commissions and health insurance expense as compared to the linked quarter. The Company's cost structure continues to be favorable with non-interest expense to average assets reported at 2.05% for the quarter ended December 31, 2016, on an annualized basis. Total non-GAAP non-interest expense increased by $1.1 million from the comparable quarter in 2015.
Asset Quality
Asset quality remained strong and stable. Non-performing assets decreased by $167,000 to $36.0 million at December 31, 2016 from $36.1 million at September 30, 2016. The ratio of non-performing assets to total assets as compared to the linked quarter decreased to 0.54% at December 31, 2016 from 0.55% at September 30, 2016.
Capital
The Company reported Tangible Common Equity ("TCE") of $534.7 million, or 8.24% of average assets, at December 31, 2016. Tangible book value per share decreased to $10.53 at December 31, 2016 from $10.60 at September 30, 2016. The decrease was primarily due to a net contraction in accumulated other comprehensive income as a result of the increase in interest rates during the fourth quarter of 2016 as well as the cash dividend payment to shareholders of $0.12 per share, which reduced shareholders' equity by $6.0 million. These decreases were partially offset by the impact of the Company's net income of $14.6 million, and the change in the value of the Company's derivative strategy. Book value per share at December 31, 2016 was $12.91.
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 February 3, 2017 and payable on February 15, 2017. This dividend equates to a 3.00% annualized yield based on the $16.01 average closing price of the Company's common stock in the fourth quarter of 2016. The Company has paid dividends for 43 consecutive quarters.
Investor Conference Call
United Financial Bancorp, Inc. will host a conference call on Wednesday, January 25, 2017 at 10:00 a.m. Eastern Time (ET) to discuss the Company's fourth 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 February 8, 2017 by calling 1-877-344-7529 and entering conference number 10098766. 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.
Annual Meeting
The Board of Directors approved May 24, 2017 as the date of the Company's 2017 Annual Meeting of Shareholders (the "Annual Meeting") and set the record date on which the Company's shareholders who will be eligible to vote at the Annual Meeting as the close of business on March 15, 2017.
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 December 31, 2016, the Company had $6.6 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 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 For the Year Ended
Ended December 31, December 31,
2016 2015 2016 2015
---- ---- ---- ----
Interest and dividend income: (In thousands, except share data)
Loans $45,460 $41,751 $179,819 $165,409
Securities-taxable interest 4,848 5,092 19,678 20,039
Securities-non-taxable
interest 2,191 2,001 8,392 8,354
Securities-dividends 986 809 3,920 2,363
Interest-bearing deposits 136 61 343 180
--- --- --- ---
Total interest and dividend
income 53,621 49,714 212,152 196,345
------ ------ ------- -------
Interest expense:
Deposits 6,649 5,799 25,576 21,442
Borrowed funds 3,800 3,222 15,477 10,321
----- ----- ------ ------
Total interest expense 10,449 9,021 41,053 31,763
------ ----- ------ ------
Net interest income 43,172 40,693 171,099 164,582
Provision for loan losses 3,359 3,780 13,437 13,005
----- ----- ------ ------
Net interest income after
provision for loan losses 39,813 36,913 157,662 151,577
------ ------ ------- -------
Non-interest income:
Service charges and fees 5,580 5,606 20,259 21,040
Net gain from sales of
securities 94 300 1,961 939
Income from mortgage banking
activities 2,838 1,934 8,227 9,552
Bank-owned life insurance
income 863 1,059 3,394 3,616
Net loss on limited
partnership investments (705) (799) (3,995) (3,136)
Other income (loss) 266 363 238 476
--- --- --- ---
Total non-interest income 8,936 8,463 30,084 32,487
----- ----- ------ ------
Non-interest expense:
Salaries and employee
benefits 19,279 17,308 75,384 67,469
Service bureau fees 1,767 1,614 7,986 6,728
Occupancy and equipment 3,656 3,842 14,986 15,442
Professional fees 1,024 3,037 3,917 6,317
Marketing and promotions 778 478 3,049 2,321
FDIC insurance assessments 773 1,041 3,573 3,692
Core deposit intangible
amortization 385 433 1,604 1,796
Merger related expense - 1,575 - 1,575
FHLBB prepayment penalties - - 1,454 -
Other 5,631 5,977 22,020 22,855
----- ----- ------ ------
Total non-interest expense 33,293 35,305 133,973 128,195
------ ------ ------- -------
Income before income taxes 15,456 10,071 53,773 55,869
Provision for income taxes 906 169 4,112 6,229
--- --- ----- -----
Net income $14,550 $9,902 $49,661 $49,640
======= ====== ======= =======
Net income per share:
Basic $0.29 $0.20 $1.00 $1.01
Diluted $0.29 $0.20 $0.99 $1.00
Weighted-average shares
outstanding:
Basic 50,070,710 49,160,925 49,731,149 48,912,807
Diluted 50,602,494 49,621,935 50,089,030 49,385,566
United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(Unaudited)
For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Interest and dividend income: (In thousands)
Loans $45,460 $45,331 $43,556 $45,472 $41,751
Securities-taxable interest 4,848 4,808 4,926 5,096 5,092
Securities-non-taxable
interest 2,191 2,140 2,051 2,010 2,001
Securities-dividends 986 990 1,021 923 809
Interest-bearing deposits 136 67 67 73 61
--- --- --- --- ---
Total interest and dividend
income 53,621 53,336 51,621 53,574 49,714
------ ------ ------ ------ ------
Interest expense:
Deposits 6,649 6,279 6,382 6,266 5,799
Borrowed funds 3,800 4,028 3,743 3,906 3,222
----- ----- ----- ----- -----
Total interest expense 10,449 10,307 10,125 10,172 9,021
------ ------ ------ ------ -----
Net interest income 43,172 43,029 41,496 43,402 40,693
Provision for loan losses 3,359 3,766 3,624 2,688 3,780
----- ----- ----- ----- -----
Net interest income after
provision for loan losses 39,813 39,263 37,872 40,714 36,913
------ ------ ------ ------ ------
Non-interest income:
Service charges and fees 5,580 5,726 4,359 4,594 5,606
Net gain from sales of
securities 94 48 367 1,452 300
Income from mortgage banking
activities 2,838 2,198 2,331 860 1,934
Bank-owned life insurance
income 863 899 814 818 1,059
Net loss on limited
partnership investments (705) (850) (1,504) (936) (799)
Other income (loss) 266 (132) 165 (61) 363
--- ---- --- --- ---
Total non-interest income 8,936 7,889 6,532 6,727 8,463
----- ----- ----- ----- -----
Non-interest expense:
Salaries and employee
benefits 19,279 18,301 20,013 17,791 17,308
Service bureau fees 1,767 1,960 2,230 2,029 1,614
Occupancy and equipment 3,656 3,580 3,850 3,900 3,842
Professional fees 1,024 1,125 887 881 3,037
Marketing and promotions 778 656 1,023 592 478
FDIC insurance assessments 773 819 1,042 939 1,041
Core deposit intangible
amortization 385 385 401 433 433
Merger related expense - - - - 1,575
FHLBB prepayment penalties - - - 1,454 -
Other 5,631 5,410 5,235 5,744 5,977
----- ----- ----- ----- -----
Total non-interest expense 33,293 32,236 34,681 33,763 35,305
------ ------ ------ ------ ------
Income before income taxes 15,456 14,916 9,723 13,678 10,071
Provision for income taxes 906 757 665 1,784 169
Net income $14,550 $14,159 $9,058 $11,894 $9,902
======= ======= ====== ======= ======
Net income per share:
Basic $0.29 $0.28 $0.18 $0.24 $0.20
Diluted $0.29 $0.28 $0.18 $0.24 $0.20
Weighted-average shares
outstanding:
Basic 50,070,710 49,800,105 49,623,472 49,423,218 49,160,925
Diluted 50,602,494 50,091,202 49,946,639 49,652,632 49,621,935
United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
ASSETS (In thousands)
Cash and cash equivalents:
Cash and due from banks $47,248 $51,951 $54,792 $46,618 $47,602
Short-term investments 43,696 162,295 42,649 40,616 47,574
------ ------- ------ ------ ------
Total cash and cash equivalents 90,944 214,246 97,441 87,234 95,176
Available for sale securities - At fair
value 1,043,411 1,052,439 1,073,459 1,090,498 1,059,169
Held to maturity securities - At amortized
cost 14,038 14,162 14,289 14,434 14,565
Loans held for sale 62,517 83,321 30,558 7,560 10,136
Loans:
Commercial real estate loans:
Owner-occupied 416,718 392,168 384,324 376,511 322,084
Investor non-owner occupied 1,705,319 1,702,701 1,675,821 1,648,321 1,673,248
Construction 98,794 90,380 107,302 128,007 129,922
Total commercial real estate loans 2,220,831 2,185,249 2,167,447 2,152,839 2,125,254
Commercial business loans 724,557 660,676 671,687 614,235 603,332
Consumer loans:
Residential real estate 1,156,227 1,129,079 1,171,300 1,176,357 1,179,915
Home equity 536,772 479,390 460,058 446,515 431,282
Residential construction 53,934 52,476 49,338 42,205 41,084
Other consumer 209,393 213,830 211,065 217,725 233,064
Total consumer loans 1,956,326 1,874,775 1,891,761 1,882,802 1,885,345
Total loans 4,901,714 4,720,700 4,730,895 4,649,876 4,613,931
Net deferred loan costs and premiums 11,636 10,214 9,403 7,612 7,018
Allowance for loan losses (42,798) (41,080) (37,961) (35,500) (33,887)
Loans receivable - net 4,870,552 4,689,834 4,702,337 4,621,988 4,587,062
Federal Home Loan Bank of Boston stock, at
cost 53,476 52,847 55,989 55,989 51,196
Accrued interest receivable 18,771 17,888 16,635 16,922 15,740
Deferred tax asset, net 39,962 32,529 31,395 32,222 33,094
Premises and equipment, net 51,757 52,520 53,021 53,685 54,779
Goodwill 115,281 115,281 115,281 115,281 115,281
Core deposit intangible asset 5,902 6,287 6,672 7,073 7,506
Cash surrender value of bank-owned life
insurance 167,823 126,948 126,734 125,920 125,101
Other assets 65,086 86,553 91,273 90,438 59,736
------ ------ ------ ------ ------
Total assets $6,599,520 $6,544,855 $6,415,084 $6,319,244 $6,228,541
========== ========== ========== ========== ==========
December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest-bearing $708,050 $687,865 $673,624 $657,144 $657,718
Interest-bearing 4,003,122 4,007,606 3,781,717 3,876,901 3,779,353
--------- --------- --------- --------- ---------
Total deposits 4,711,172 4,695,471 4,455,341 4,534,045 4,437,071
Mortgagors' and investor escrow accounts 13,354 9,045 14,040 9,696 13,526
Federal Home Loan Bank advances and other
borrowings 1,169,619 1,102,882 1,222,160 1,073,034 1,099,020
Accrued expenses and other liabilities 49,509 81,217 79,350 69,191 53,403
------ ------ ------ ------ ------
Total liabilities 5,943,654 5,888,615 5,770,891 5,685,966 5,603,020
Total stockholders' equity 655,866 656,240 644,193 633,278 625,521
------- ------- ------- ------- -------
Total liabilities and stockholders' equity $6,599,520 $6,544,855 $6,415,084 $6,319,244 $6,228,541
========== ========== ========== ========== ==========
United Financial Bancorp, Inc. and Subsidiaries
Selected Financial Highlights
(Dollars In Thousands, Except Share Data)
(Unaudited)
At or For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Share Data:
Basic net income
per share $0.29 $0.28 $0.18 $0.24 $0.20
Diluted net
income per share 0.29 0.28 0.18 0.24 0.20
Dividends
declared per
share 0.12 0.12 0.12 0.12 0.12
Key Statistics:
Total revenue $52,108 $50,918 $48,028 $50,129 $49,156
Total non-
interest expense 33,293 32,236 34,681 33,763 35,305
Average earning
assets 6,054,346 5,984,951 5,887,738 5,849,517 5,575,297
Key Ratios:
Return on average
assets
(annualized) 0.90% 0.88% 0.57% 0.76% 0.66%
Return on average
equity
(annualized) 8.95% 8.80% 5.71% 7.59% 6.35%
Tax-equivalent
net interest
margin
(annualized) 2.96% 2.98% 2.94% 3.09% 3.02%
Residential Mortgage Production:
Dollar volume
(total) $160,512 $173,473 $173,507 $124,058 $146,271
Mortgages
originated for
purchases 77,549 113,019 100,871 66,696 95,927
Loans sold 87,626 99,051 93,681 89,758 119,289
Income from
mortgage banking
activities 2,838 2,198 2,331 860 1,934
Non-performing Assets:
Residential real
estate $11,357 $11,526 $11,729 $11,725 $11,193
Home equity 4,043 3,650 3,176 3,036 2,786
Investor-owned
commercial real
estate 4,016 3,746 5,618 5,297 8,565
Owner-occupied
commercial real
estate 2,642 2,838 3,815 3,115 2,939
Construction 1,701 1,879 2,103 2,114 2,808
Commercial
business 2,000 2,016 4,364 3,979 3,898
Other consumer 1,000 328 1,505 19 2
----- --- ----- --- ---
Non-accrual loans 26,759 25,983 32,310 29,285 32,191
Troubled debt
restructured -
non-accruing 7,304 7,345 6,713 7,143 5,611
----- ----- ----- ----- -----
Total non-
performing loans 34,063 33,328 39,023 36,428 37,802
Other real estate
owned 1,890 2,792 702 659 755
----- ----- --- --- ---
Total non-
performing
assets $35,953 $36,120 $39,725 $37,087 $38,557
======= ======= ======= ======= =======
Non-performing
loans to total
loans 0.69% 0.71% 0.82% 0.78% 0.82%
Non-performing
assets to total
assets 0.54% 0.55% 0.62% 0.59% 0.62%
Allowance for
loan losses to
non-performing
loans 125.64% 123.26% 97.28% 97.45% 89.64%
Allowance for
loan losses to
total loans 0.87% 0.87% 0.80% 0.76% 0.73%
Non-GAAP Ratios: (1)
Non-interest
expense to
average assets
(annualized) 2.05% 2.00% 2.19% 2.15% 2.37%
Efficiency ratio
(2) 60.00% 59.50% 64.54% 61.98% 62.20%
Cost of funds
(annualized) (3) 0.73% 0.72% 0.72% 0.73% 0.68%
Total revenue
growth rate 2.34% 6.02% (4.19)% 1.98% (0.62)%
Total revenue
growth rate
(annualized) 9.35% 24.07% (16.77)% 7.92% (2.47)%
Average earning
asset growth
rate 1.16% 1.65% 0.65% 4.92% 4.55%
Average earning
asset growth
rate
(annualized) 4.64% 6.60% 2.61% 19.67% 18.19%
Return on average
tangible common
equity
(annualized) (2) 11.19% 11.05% 7.28% 9.65% 8.14%
Pre-provision
net revenue to
average assets
(2) 1.31% 1.32% 1.11% 1.21% 1.17%
(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.
(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
December 31, 2016 December 31, 2015
Average Interest Yield/Cost Average Interest Yield/Cost
Balance and Balance and
Dividends Dividends
---
Interest-earning assets:
Residential real estate $1,222,680 $9,907 3.24% $1,200,471 $9,812 3.27%
Commercial real estate 2,104,146 20,950 3.96 1,950,133 20,501 4.17
Construction 146,688 1,612 4.37 179,684 1,851 4.09
Commercial business 670,795 6,171 3.66 604,976 6,025 3.95
Home equity 496,379 4,846 3.91 355,479 2,990 3.36
Other consumer 210,473 2,551 4.85 74,131 977 5.27
Investment securities 1,100,280 9,234 3.36 1,129,522 9,007 3.19
Other earning assets 102,905 136 0.53 80,901 61 0.30
------- --- ---- ------ --- ----
Total interest-earning assets 6,054,346 55,407 3.65 5,575,297 51,224 3.66
Allowance for loan losses (42,176) (31,968)
Non-interest-earning assets 478,997 422,145
------- -------
Total assets $6,491,167 $5,965,474
========== ==========
Interest-bearing liabilities:
NOW and money market $1,620,899 $1,597 0.39% $1,533,823 $1,826 0.47%
Savings 526,426 80 0.06 517,219 71 0.05
Certificates of deposit 1,869,223 4,972 1.06 1,619,038 3,902 0.96
--------- ----- ---- --------- ----- ----
Total interest-bearing
deposits 4,016,548 6,649 0.66 3,670,080 5,799 0.63
Federal Home Loan Bank
advances 926,827 2,425 1.04 797,484 1,805 0.90
Other borrowings 122,752 1,375 4.46 163,974 1,417 3.43
------- ----- ---- ------- ----- ----
Total interest-bearing
liabilities 5,066,127 10,449 0.82 4,631,538 9,021 0.77
Non-interest-bearing deposits 691,932 637,481
Other liabilities 82,518 72,902
------ ------
Total liabilities 5,840,577 5,341,921
Stockholders' equity 650,590 623,553
------- -------
Total liabilities and
stockholders' equity $6,491,167 $5,965,474
========== ==========
Net interest-earning assets $988,219 $943,759
======== ========
Tax-equivalent net interest income 44,958 42,203
Tax-equivalent net interest rate spread 2.83% 2.89%
Tax-equivalent net interest margin 2.96% 3.02%
Average interest-earning assets to average
interest-bearing liabilities 119.51% 120.38%
Less tax-equivalent adjustment 1,786 1,510
----- -----
Net interest income $43,172 $40,693
======= =======
United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
For the Three Months Ended
December 31, 2016 September 30, 2016
Average Interest Yield/Cost Average Interest Yield/Cost
Balance and Balance and
Dividends Dividends
--------- ---------
Interest-earning assets:
Residential real estate $1,222,680 $9,907 3.24% $1,229,384 $10,026 3.26%
Commercial real estate 2,104,146 20,950 3.96 2,077,585 21,255 4.07
Construction 146,688 1,612 4.37 156,217 1,563 3.98
Commercial business 670,795 6,171 3.66 669,595 6,054 3.60
Home equity 496,379 4,846 3.91 467,552 4,407 3.77
Other consumer 210,473 2,551 4.85 209,255 2,562 4.90
Investment securities 1,100,280 9,234 3.36 1,129,133 9,123 3.23
Other earning assets 102,905 136 0.53 46,230 67 0.58
------- --- ---- ------ --- ----
Total interest-earning
assets 6,054,346 55,407 3.65 5,984,951 55,057 3.67
Allowance for loan losses (42,176) (38,916)
Non-interest-earning assets 478,997 491,061
------- -------
Total assets $6,491,167 $6,437,096
========== ==========
Interest-bearing
liabilities:
NOW and money market $1,620,899 $1,597 0.39% $1,485,372 $1,501 0.40%
Savings 526,426 80 0.06 527,225 77 0.06
Certificates of deposit 1,869,223 4,972 1.06 1,821,061 4,701 1.03
--------- ----- ---- --------- ----- ----
Total interest-bearing
deposits 4,016,548 6,649 0.66 3,833,658 6,279 0.65
Federal Home Loan Bank
advances 926,827 2,425 1.04 1,085,932 2,657 0.97
Other borrowings 122,752 1,375 4.46 119,902 1,371 4.55
------- ----- ---- ------- ----- ----
Total interest-bearing
liabilities 5,066,127 10,449 0.82 5,039,492 10,307 0.81
------ ---- ------ ----
Non-interest-bearing
deposits 691,932 662,243
Other liabilities 82,518 92,095
------ ------
Total liabilities 5,840,577 5,793,830
Stockholders' equity 650,590 643,266
------- -------
Total liabilities and
stockholders' equity $6,491,167 $6,437,096
========== ==========
Net interest-earning assets $988,219 $945,459
======== ========
Tax-equivalent net
interest income 44,958 44,750
Tax-equivalent net
interest rate spread 2.83% 2.86%
Tax-equivalent net
interest margin 2.96% 2.98%
Average interest-earning
assets to average
interest-bearing
liabilities 119.51% 118.76%
Less tax-equivalent
adjustment 1,786 1,721
----- -----
Net interest income $43,172 $43,029
======= =======
United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
For the Year Ended December 31,
2016 2015
----
Average Interest Yield/Cost Average Interest Yield/Cost
Balance and Balance and
Dividends Dividends
--------- ---------
Interest-earning assets:
Residential real estate $1,214,681 $39,658 3.26% $1,169,083 $39,384 3.37%
Commercial real estate 2,055,441 84,290 4.10 1,776,407 78,709 4.43
Construction 159,677 6,854 4.29 172,257 8,264 4.80
Commercial business 646,308 23,814 3.68 610,424 28,275 4.63
Home equity 460,439 16,584 3.60 339,287 10,961 3.23
Other consumer 216,708 10,779 4.97 22,599 1,118 4.95
Investment securities 1,128,937 36,626 3.24 1,127,144 35,370 3.14
Other earning assets 62,367 343 0.55 60,956 181 0.3
------ --- ---- ------ ---
Total interest-earning
assets 5,944,558 218,948 3.68 5,278,157 202,262 3.83
Allowance for loan losses (38,529) (28,483)
Non-interest-earning assets 479,768 444,518
------- -------
Total assets $6,385,797 $5,694,192
========== ==========
Interest-bearing
liabilities:
NOW and money market $1,555,194 $6,547 0.42% $1,470,459 $7,183 0.49%
Savings 527,544 309 0.06 529,659 319 0.06
Certificates of deposit 1,805,624 18,720 1.04 1,577,739 13,940 0.88
--------- ------ ---- --------- ------ ----
Total interest-bearing
deposits 3,888,362 25,576 0.66 3,577,857 21,442 0.60
Federal Home Loan Bank
advances 988,847 9,932 1.00 664,665 4,749 0.71
Other borrowings 128,617 5,545 4.31 162,419 5,572 3.43
------- ----- ---- ------- ----- ----
Total interest-bearing
liabilities 5,005,826 41,053 0.82 4,404,941 31,763 0.72
------ ---- ------ ----
Non-interest-bearing
deposits 657,829 605,112
Other liabilities 83,275 69,646
------ ------
Total liabilities 5,746,930 5,079,699
Stockholders' equity 638,867 614,493
------- -------
Total liabilities and
stockholders' equity $6,385,797 $5,694,192
========== ==========
Net interest-earning assets $938,732 $873,216
======== ========
Tax-equivalent net
interest income 177,895 170,499
Tax-equivalent net
interest rate spread 2.86% 3.11%
Tax-equivalent net
interest margin 2.99% 3.23%
Average interest-earning
assets to average
interest-bearing
liabilities 118.75% 119.82%
Less tax-equivalent
adjustment 6,796 5,917
----- -----
Net interest income $171,099 $164,582
======== ========
United Financial Bancorp, Inc. and Subsidiaries
Reconciliation 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 the 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 below in the following press release tables.
Three Months Ended Years Ended
December 31, September 30, June 30, March 31, December 31, December 31, 2016 December 31, 2015
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
(Dollars in thousands)
Net Income (GAAP) $14,550 $14,159 $9,058 $11,894 $9,902 $49,661 $49,640
----------------
Non-GAAP adjustments:
Net interest income (407) (383) 35 (1,900) (1,617) (2,655) (12,653)
Non-interest income (94) (118) (367) (1,452) (519) (2,031) (1,158)
Non-interest expense 501 447 1,814 1,893 3,586 4,655 4,770
Related income tax (benefit)
expense - 19 (518) 511 (65) 12 3,609
--- --- ---- --- --- --- -----
Net adjustment - (35) 964 (948) 1,385 (19) (5,432)
--- --- --- ---- ----- --- ------
Total net income (non-GAAP) $14,550 $14,124 $10,022 $10,946 $11,287 $49,642 $44,208
======= ======= ======= ======= ======= ======= =======
Net interest income (GAAP) $43,172 $43,029 $41,496 $43,402 $40,693 $171,099 $164,582
-------------------------
Non-GAAP Adjustments:
Impact from purchase accounting fair value marks:
Accretion of loan mark 228 403 835 (1,094) (718) 372 (7,570)
Accretion of deposit mark (259) (359) (359) (359) (444) (1,336) (3,209)
Accretion of borrowings mark (376) (427) (441) (447) (455) (1,691) (1,874)
---- ---- ---- ---- ---- ------ ------
Net adjustment (407) (383) 35 (1,900) (1,617) (2,655) (12,653)
---- ---- --- ------ ------ ------ -------
Total net interest income (non-
GAAP) $42,765 $42,646 $41,531 $41,502 $39,076 $168,444 $151,929
======= ======= ======= ======= ======= ======== ========
Three Months Ended Years Ended
December 31, September 30, June 30, March 31, December 31, December 31, 2016 December 31, 2015
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
(Dollars in thousands)
Non-interest income (GAAP) $8,936 $7,889 $6,532 $6,727 $8,463 $30,084 $32,487
-------------------------
Non-GAAP adjustments:
Net gain on sales of securities (94) (48) (367) (1,452) (300) (1,961) (939)
BOLI claim benefit - (70) - - (219) (70) (219)
---
Net adjustment (94) (118) (367) (1,452) (519) (2,031) (1,158)
--- ---- ---- ------ ---- ------ ------
Total non-interest income (non-
GAAP) 8,842 7,771 6,165 5,275 7,944 28,053 31,329
Total net interest income (non-
GAAP) 42,765 42,646 41,531 41,502 39,076 168,444 151,929
------ ------ ------ ------ ------ ------- -------
Total revenue (non-GAAP) $51,607 $50,417 $47,696 $46,777 $47,020 $196,497 $183,258
======= ======= ======= ======= ======= ======== ========
Non-interest expense (GAAP) $33,293 $32,236 $34,681 $33,763 $35,305 $133,973 $128,195
--------------------------
Non-GAAP adjustments:
Merger related expense - - - - (1,575) - (1,575)
Core deposit intangible
amortization expense (385) (385) (401) (433) (433) (1,604) (1,796)
Loan portfolio acquisition fees - - - - (1,572) - (1,572)
Effect of position eliminations (107) (55) (1,403) - - (1,565) -
Effect of branch lease termination
agreement - - - - - - 195
Amortization of fixed asset fair
value mark (9) (7) (10) (6) (6) (32) (22)
FHLBB prepayment penalties - - - (1,454) - (1,454) -
--- --- --- ------ --- ------ ---
Net adjustment (501) (447) (1,814) (1,893) (3,586) (4,655) (4,770)
---- ---- ------ ------ ------ ------ ------
Total non-interest expense (non-
GAAP) $32,792 $31,789 $32,867 $31,870 $31,719 $129,318 $123,425
======= ======= ======= ======= ======= ======== ========
Total loans $4,901,714 $4,720,700 $4,730,895 $4,649,876 $4,613,931 $4,901,714 $4,613,931
Non-covered loans (1) (744,763) (721,763) (1,259,285) (1,334,303) (1,448,435) (744,763) (1,448,435)
-------- -------- ---------- ---------- ---------- -------- ----------
Total covered loans $4,156,951 $3,998,937 $3,471,610 $3,315,573 $3,165,496 $4,156,951 $3,165,496
========== ========== ========== ========== ========== ========== ==========
Allowance for loan losses $42,798 $41,080 $37,961 $35,500 $33,887 $42,798 $33,887
Allowance for loan losses to total
loans 0.87% 0.87% 0.80% 0.76% 0.73% 0.87% 0.73%
Allowance for loan losses to total
covered loans 1.03% 1.03% 1.09% 1.07% 1.07% 1.03% 1.07%
Efficiency Ratio:
Non-Interest Expense (GAAP) $33,293 $32,236 $34,681 $33,763 $35,305 $133,973 $128,195
--------------------------
Non-GAAP adjustments:
Other real estate owned expense (100) (40) (63) (35) (35) (238) (237)
Intangible assets amortization (385) (385) (401) (433) (433) (1,604) (1,796)
Three Months Ended Years Ended
December 31, September 30, June 30, March 31, December 31, December 31, 2016 December 31, 2015
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
(Dollars in thousands)
Merger related expense - - - - (1,575) - (1,575)
Loan portfolio acquisition fees - - - - (1,572) - (1,572)
Effect of position eliminations (107) (55) (1,403) - - (1,565) -
Effect of branch lease
termination agreement - - - - - - 195
FHLBB prepayment penalties - - - (1,454) - (1,454) -
Non-Interest Expense for
Efficiency Ratio (non-GAAP) $32,701 $31,756 $32,814 $31,841 $31,690 $129,112 $123,210
======= ======= ======= ======= ======= ======== ========
Net Interest Income (GAAP) $43,172 $43,029 $41,496 $43,402 $40,693 $171,099 $164,582
-------------------------
Non-GAAP adjustments:
Tax equivalent adjustment for
tax-exempt loans and
investment securities 1,786 1,721 1,675 1,616 1,510 6,796 5,917
Non-Interest Income (GAAP) 8,936 7,889 6,532 6,727 8,463 30,084 32,487
-------------------------
Non-GAAP adjustments:
Net gain on sales of securities 94 48 367 1,452 300 1,961 939
Net loss on limited partnership
investments (705) (850) (1,504) (936) (799) (3,995) (3,136)
BOLI claim benefit - 70 - - 219 70 219
Total Revenue for Efficiency
Ratio (non-GAAP) $54,505 $53,371 $50,840 $51,229 $50,946 $209,943 $204,964
======= ======= ======= ======= ======= ======== ========
Efficiency Ratio (Non-Interest
Expense for Efficiency Ratio
(non-GAAP)/Total Revenue for
Efficiency Ratio (non-GAAP)) 60.00% 59.50% 64.54% 62.15% 62.20% 61.50% 60.11%
Pre-Provision Net Revenue ("PPNR") to Average Assets (Annualized):
Net Interest income (GAAP) $43,172 $43,029 $41,496 $43,402 $40,693 $171,099 $164,582
-------------------------
Non-GAAP adjustments:
Tax equivalent adjustment for
tax-exempt loans and
investment securities 1,786 1,721 1,675 1,616 1,510 6,796 5,917
Total net interest income
before provision (A) $44,958 $44,750 $43,171 $45,018 $42,203 $177,895 $170,499
======= ======= ======= ======= ======= ======== ========
Three Months Ended Years Ended
December 31, September 30, June 30, March 31, December 31, December 31, 2016 December 31, 2015
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
(Dollars in thousands)
Non Interest Income (GAAP) 8,936 7,889 6,532 6,727 8,463 30,084 32,487
-------------------------
Non-GAAP adjustments:
Net gain on sales of securities (94) (48) (367) (1,452) (300) (1,961) (939)
Net loss on limited partnership
investments 705 850 1,504 936 799 3,995 3,136
Loss on fixed assets -branch
optimization - - - - - - -
BOLI claim benefit - (70) - - (219) (70) (219)
Non-Interest Income for PPNR
(non-GAAP) (B) $9,547 $8,621 $7,669 $6,211 $8,743 $32,048 $34,465
====== ====== ====== ====== ====== ======= =======
Non-Interest Expense (GAAP) $33,293 $32,236 $34,681 $33,763 $35,305 $133,973 $128,195
--------------------------
Non-GAAP adjustments:
Merger related expense - - - - (1,575) - (1,575)
Loan portfolio acquisition fees - - - - (1,572) - (1,572)
Effect of position eliminations (107) (55) (1,403) - - (1,565) -
Effect of branch lease
termination agreement - - - - - - 195
FHLBB prepayment penalties - - - (1,454) - (1,454) -
Non-Interest Expense for PPNR
(non-GAAP) (C) $33,186 $32,181 $33,278 $32,309 $32,158 $130,954 $125,243
======= ======= ======= ======= ======= ======== ========
Total PPNR (non-GAAP) (A + B
- C) : $21,319 $21,190 $17,562 $18,920 $18,788 $78,989 $79,721
Average Assets 6,491,167 6,437,096 6,326,441 6,286,762 5,965,474 6,385,797 5,694,192
PPNR to Average Assets
(Annualized) 1.31% 1.32% 1.11% 1.20% 1.26% 1.24% 1.40%
Three Months Ended Years Ended
December 31, September 30, June 30, March 31, December 31, December 31, 2016 December 31, 2015
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
(Dollars in thousands)
Return on Average Tangible Common Equity (Annualized) :
Net Income (GAAP) $14,550 $14,159 $9,058 $11,894 $9,902 $49,661 $49,640
----------------
Non-GAAP adjustments:
Intangible Assets amortization,
tax effected at 35% 250 250 261 281 281 1,043 1,167
Net Income excluding intangible
assets amortization, tax
effected at 35% $14,800 $14,409 $9,319 $12,175 $10,183 $50,704 $50,807
======= ======= ====== ======= ======= ======= =======
Average shareholders' equity
(non-GAAP) $650,590 $643,266 $634,375 $627,060 $623,553 $638,867 $614,493
Average goodwill & other
intangible assets (non-GAAP) 121,383 121,767 122,171 122,590 123,022 121,976 123,694
Average tangible common
shareholders' equity (non-
GAAP) $529,207 $521,499 $512,204 $504,470 $500,531 $516,891 $490,799
======== ======== ======== ======== ======== ======== ========
Return on Average Tangible
Common Equity (non-GAAP) 11.19% 11.05% 7.28% 9.65% 8.14% 9.81% 10.35%
(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.
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 December 31, 2016
Non-GAAP (Including Tax Equivalent Mark to Market Non-GAAP (Excluding Mark to Market
Adjustment) and Tax Equivalents Adjustments)
Interest Yield/Cost Interest Yield/Cost Interest Yield/Cost
and and and
Dividends Dividends Dividends
--------- --------- ---------
Residential real estate $9,907 3.24% $(232) (0.09)% $10,139 3.33%
Commercial real estate 20,950 3.96 335 0.07 20,615 3.89
Construction 1,612 4.37 58 0.17 1,554 4.20
Commercial business 6,171 3.66 363 0.24 5,808 3.42
Home equity 4,846 3.91 (249) (0.25) 5,095 4.16
Other consumer 2,551 4.85 (503) (1.05) 3,054 5.90
Certificates of deposit 4,972 1.06 (259) (0.05) 5,231 1.11
Federal Home Loan Bank
advances 2,425 1.04 (395) (0.17) 2,820 1.21
Other borrowings 1,375 4.46 19 0.13 1,356 4.33
Tax-equivalent net interest
margin 44,958 2.96 407 44,551 2.94
Three Months Ended September 30, 2016
Non-GAAP (Including Tax Mark to Market Non-GAAP (Excluding Mark to Market
and Tax Equivalents Adjustments)
Equivalent Adjustment)
Interest Yield/Cost Interest Yield/Cost Interest Yield/Cost
and and and
Dividends Dividends Dividends
--------- --------- ---------
Residential real estate $10,026 3.26% $(483) (0.18)% $10,509 3.44%
Commercial real estate 21,255 4.07 545 0.12 20,710 3.95
Construction 1,563 3.98 39 0.11 1,524 3.87
Commercial business 6,054 3.60 329 0.22 5,725 3.38
Home equity 4,407 3.77 (293) (0.30) 4,700 4.07
Other consumer 2,562 4.90 (540) (1.14) 3,102 6.04
Certificates of deposit 4,701 1.03 (359) (0.08) 5,060 1.11
Federal Home Loan Bank
advances 2,657 0.97 (445) (0.17) 3,102 1.14
Other borrowings 1,371 4.55 18 0.12 1,353 4.43
Tax-equivalent net interest
margin 44,750 2.98 383 44,367 2.96
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/united-financial-bancorp-inc-announces-record-earnings-for-fourth-quarter-quarterly-dividend-and-annual-meeting-date-300396056.html
SOURCE United Financial Bancorp, Inc.
