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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
_________________________ 
FORM 8-K 
__________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 17, 2018  
__________________________ 
United Financial Bancorp, Inc.
__________________________ 
 
 
 
 
 
Connecticut
 
001-35028
 
27-3577029
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
225 Asylum Street
Hartford, CT
 
06103
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (860) 291-3600

Not Applicable
(Former name or former address, if changed since last report)
__________________________ 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨





Item 2.02.
Results of Operations and Financial Condition
On April 17, 2018, United Financial Bancorp, Inc. issued a press release describing its results of operation for the quarter ended March 31, 2018. The press release announcing financial results is included as Exhibit 99.1 to this report and incorporated herein by reference.
Item 7.01.
Regulation FD Disclosure
On April 17, 2018, United Financial Bancorp, Inc. made available its presentation slides to accompany the earnings press release. The presentation includes among other things, a review of the financial results and trends through the period ending March 31, 2018. Copies of these materials are attached as Exhibit 99.2 to this filing.
Item 9.01.
Financial Statements and Exhibits
 
(a)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Exhibits.
 
 
 
 
Number
  
Description
 
  
Press Release Dated April 17, 2018.
 
 
Investor Presentation Dated First Quarter 2018.
 
 
 
 
 






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
Dated: April 17, 2018
 
 
 
UNITED FINANCIAL BANCORP, INC.
Registrant
 
 
 
 
 
 
 
 
By: 
 
/s/ Eric R. Newell
 
 
 
 
 
 
Eric R. Newell
Executive Vice President/
Chief Financial Officer





Exhibit Index
 
 
 
 
 
Number
  
Description
 
  
Press Release Dated April 17, 2018.
 
 
Investor Presentation Dated First Quarter 2018.
 
 
 
 
 


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit



Exhibit 99.1
 393059602_a8kgraphica01a01a13.jpg
 
 
 
For Immediate Release:
 
April 17, 2018
 
 
Investor Relations Contact:
Marliese L. Shaw
Executive Vice President, Investor Relations Officer
United Bank
860-291-3622
MShaw@bankatunited.com
 
Media Relations Contact:
Adam J. Jeamel
Regional President, Corporate Communications
United Bank
860-291-3765
AJeamel@bankatunited.com

UNITED FINANCIAL BANCORP, INC.
ANNOUNCES FIRST QUARTER EARNINGS AND QUARTERLY DIVIDEND

HARTFORD, Conn., April 17, 2018United Financial Bancorp, Inc. ("United Financial" or the "Company") (NASDAQ Global Select Stock Market: “UBNK”), the holding company for United Bank (the "Bank"), announced results for the quarter ended March 31, 2018.

The Company reported net income of $15.8 million, or $0.31 per diluted share, for the quarter ended March 31, 2018, compared to net income for the linked quarter of $9.5 million, or $0.19 per diluted share. The Company reported net income of $13.7 million, or $0.27 per diluted share, for the quarter ended March 31, 2017.

"I am pleased to report 15% year-over-year earnings per diluted share ("EPS") growth, along with 10% growth in total deposits, and 9% growth in non-interest bearing deposits, total tangible book value plus dividend returns, and loans year-over-year. Asset quality, capital, and liquidity remain strong and stable," stated William H.W. Crawford, IV, Chief Executive Officer and President of the Company and the Bank. "I would like to thank our United Bank teammates and directors for their continued steadfast focus on servicing our customers and communities."

Balance Sheet

Assets totaled $7.07 billion at March 31, 2018 and decreased $45.5 million, or 0.6%, from $7.11 billion at December 31, 2017. At March 31, 2018, total loans were $5.38 billion, representing an increase of $42.3 million, or 0.8%, from the linked quarter. Changes to loan balances during the first quarter of 2018 were highlighted by a $30.8 million, or 2.6%, increase in residential real estate loans, a $17.7 million, or 6.0%, increase in other consumer loans, a $6.6 million, or 8.5%, increase in commercial construction loans, and a $5.9 million, or 0.7%, increase in commercial business loans. The Company observed an $11.6 million, or 0.6%, decrease in investor non-owner occupied commercial real estate loans, and a $2.9 million, or 0.6%, decrease in owner-occupied commercial real estate loans, which were attributable to higher payoffs in the existing loan portfolio. Loans held for sale decreased $50.7 million, or 44.4%, from the linked quarter, as the Company delivered a significant level of loans held for sale to third party investors during the first quarter of 2018. Total cash and cash equivalents decreased $19.4 million, or 21.9%, from the linked quarter.


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Deposits totaled $5.28 billion at March 31, 2018 and increased by $84.3 million, or 1.6%, from $5.20 billion at December 31, 2017. Increases in deposit balances during the first quarter of 2018 were highlighted by a $72.1 million, or 5.4%, increase in money market account balances, a $23.9 million, or 3.0%, increase in NOW checking balances, and a $9.5 million, or 1.9%, increase in savings account balances. Offsetting these increases was a $25.0 million, or 3.2%, decline in non-interest bearing checking deposits, largely due to seasonal outflows that are typical of commercial DDA accounts in the first quarter.

Total Federal Home Loan Bank advances declined by $132.5 million, or 12.7%, over the linked quarter as advance maturities were primarily repaid with deposit growth.

Net Interest Income

Net interest income decreased slightly by $306,000, or 0.7%, on a linked quarter basis, to $46.5 million, primarily attributable to an increase in interest expense of $2.1 million, or 13.9%, to $17.0 million, which was partially offset by an increase in interest income of $1.8 million, or 2.9%, to $63.5 million. Average interest-earning assets increased by $87.2 million, or 1.3%, primarily due to growth in average loan balances, which increased by $108.6 million, or 2.0%. Average loan balance growth was driven by a $47.0 million, or 2.1%, increase in average commercial real estate loans, a $29.4 million, or 3.6%, increase in average commercial business loans, a $21.4 million, or 7.7%, increase in average other consumer loans, and a $9.8 million, or 1.7%, increase in average home equity loans. Average residential real estate loan balances increased slightly by $3.9 million, or 0.3%, as the Company continues to actively sell loan originations in the secondary market.

Interest expense increased by $2.1 million, or 13.9%, to $17.0 million during the first quarter of 2018, from $14.9 million in the linked quarter. Average interest-bearing deposit balances increased by $46.3 million, or 1.1%, primarily driven by a $21.8 million, or 1.0%, increase in average NOW and money market deposit balances, and a $31.7 million, or 1.8%, increase in average certificates of deposit balances. Slightly offsetting the aforementioned increases was a $7.1 million, or 1.4%, decrease in average savings account balances. The overall growth observed in average deposit balances was largely driven by continued success in new account acquisition strategies.

The tax equivalent net interest margin decreased by eight basis points to 2.90% in the first quarter from the linked period. Due to tax reform in late December 2017, the tax equivalency impact was unfavorable by six basis points as compared to the linked period. Also contributing to the decline was an increase of 15 basis points in the cost of interest-bearing liabilities to 1.22%, partially offset by a five basis point increase in the yield on interest-earning assets to 3.94%. The interest-earning asset yield improvement was largely driven by an 11 basis point increase in the yield on commercial real estate loans, a 13 basis point increase in the yield on commercial business loans, an 18 basis point increase in the yield on home equity loans, and a 43 basis point increase in the other consumer loan yield. Offsetting the improvement in the loan yield was a 29 basis point decline in the yield of the investment portfolio, which was largely driven by the negative impact that tax reform has on the yield on tax-exempt municipal bonds, and, to a lesser extent, increased amortization in collateralized loan obligations. The total cost of funds increased by 11 basis points to 1.07% in the first quarter driven by a ten basis point increase in the cost of interest-bearing deposits and a 31 basis point increase in the cost of Federal Home Loan Bank of Boston advances.


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Provision for Loan Losses

The provision for loan losses totaled $1.9 million for the quarter ended March 31, 2018 as compared to $2.3 million for the linked quarter. Net charge-offs for the quarter ended March 31, 2018 totaled $1.1 million, or 0.08%, as a percentage of average loans outstanding, as compared to $1.5 million, or 0.11% as a percentage of average loans for the quarter ended December 31, 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 and national economic and credit conditions, the direction of real estate values and delinquency trends.

Non-Interest Income

Total non-interest income increased by $1.7 million, or 22.5%, to $9.3 million for the quarter ended March 31, 2018 from $7.6 million in the linked quarter. The increase in the first quarter's non-interest income was driven primarily by increases in income from mortgage banking activities, other income, and service charges and fees. These increases were offset by a decrease in bank-owned life insurance income, due to lower death benefits received relative to the prior quarter. Additionally, there were lower losses on limited partnership investments as compared to the linked quarter, which contributed to the overall increase in non-interest income.

Non-Interest Expense

Non-interest expense for the quarter ended March 31, 2018 totaled $36.7 million and decreased by $501,000, or 1.3%, from the linked quarter. The decrease in non-interest expense during the quarter was primarily due to decreases in marketing and promotions, other non-interest expenses, and occupancy and equipment. These decreases were partially offset by increases in salaries and employee benefits, and to a lesser extent, professional fees, as compared to the linked quarter.

Asset Quality

Asset quality remained strong and stable for the period, with non-performing assets decreasing slightly by $137,000 to $33.7 million at March 31, 2018 from $33.8 million at December 31, 2017. The ratio of non-performing assets to total assets for the quarters ended March 31, 2018 and December 31, 2017 remained unchanged at 0.48%.

Capital

The Company reported Tangible Common Equity ("TCE") of $573.6 million, or 8.1% of average assets, for the quarter ended March 31, 2018. Tangible book value per share increased to $11.25 at March 31, 2018 from $11.24 at December 31, 2017. The increase was primarily driven by the impact of the Company's net income of $15.8 million, partially offset by the cash dividend payment to shareholders of $0.12 per share, as well as a decrease in accumulated other comprehensive income as a result of a decrease in the market value of the Company's investment portfolio, as compared to the previous quarter. Book value per share at March 31, 2018 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 April 27, 2018 and payable on May 9, 2018. This dividend equates to a 2.90% annualized yield based on the $16.58 average closing price of the Company’s common stock in the first quarter of 2018. The Company has paid dividends for 48 consecutive quarters.

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Investor Conference Call

United Financial Bancorp, Inc. will host a conference call on Wednesday, April 18, 2018 at 10:00 a.m. Eastern Time (ET) to discuss the Company’s first quarter results. Those wishing to participate in the call may dial toll-free 1-800-544-8281. A telephone replay of the call will be available through May 2, 2018 by calling 1-877-344-7529 and entering conference number 10118840. A podcast will be available on the Company’s website for an extended period of time, as well as on the Company’s investor relations app.

Investor Presentation

United Financial Bancorp, Inc. has prepared and furnished a visual slide presentation to accompany the earnings press release and investor conference call. The presentation has been furnished as an exhibit to the SEC Form 8-K, but is not included in this press release. Copies of the presentation may be accessed on the Company’s investor relations website (www.unitedfinancialinc.com) by selecting “News & Market Data,” then “Presentations;” or via the IRapp and selecting “Presentations;” or directly from SEC EDGAR.

About United Financial Bancorp, Inc.

United Financial Bancorp, Inc. is the holding company for United Bank, a full service financial services firm offering a complete line of commercial, business, and consumer banking products and services to customers throughout Connecticut and Massachusetts. United Bank is a financially strong, leading New England bank with more than 50 branches in two states and several commercial and residential loan production offices. United Financial Bancorp, Inc. trades on the NASDAQ Global Select Stock Exchange under the ticker symbol “UBNK.” At March 31, 2018, the Company had $7.07 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-9 through F-11 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.


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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.

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United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(Unaudited)
 
 
For the Three Months Ended March 31,
 
 
2018
 
2017
Interest and dividend income:
(In thousands, except share data)
Loans
 
$
54,780

 
$
46,493

Securities-taxable interest
 
5,498

 
5,510

Securities-non-taxable interest
 
2,429

 
2,254

Securities-dividends
 
637

 
808

Interest-bearing deposits
 
150

 
101

Total interest and dividend income
 
63,494

 
55,166

Interest expense:
 
 
 
 
Deposits
 
11,027

 
6,819

Borrowed funds
 
5,924

 
4,050

Total interest expense
 
16,951

 
10,869

Net interest income
 
46,543

 
44,297

Provision for loan losses
 
1,939

 
2,288

Net interest income after provision for loan losses
 
44,604

 
42,009

Non-interest income:
 
 
 
 
Service charges and fees
 
6,159

 
5,645

Net gain from sales of securities
 
116

 
457

Income from mortgage banking activities
 
1,729

 
1,321

Bank-owned life insurance income
 
1,646

 
1,207

Net loss on limited partnership investments
 
(590
)
 
(80
)
Other income
 
229

 
182

Total non-interest income
 
9,289

 
8,732

Non-interest expense:
 
 
 
 
Salaries and employee benefits
 
21,198

 
19,730

Service bureau fees
 
2,218

 
2,330

Occupancy and equipment
 
4,949

 
4,469

Professional fees
 
1,164

 
1,309

Marketing and promotions
 
685

 
712

FDIC insurance assessments
 
739

 
679

Core deposit intangible amortization
 
337

 
385

Other
 
5,446

 
5,308

Total non-interest expense
 
36,736

 
34,922

Income before income taxes
 
17,157

 
15,819

Provision for income taxes
 
1,370

 
2,093

Net income
 
$
15,787

 
$
13,726

 
 
 
 
 
Net income per share:
 
 
 
 
Basic
 
$
0.31

 
$
0.27

Diluted
 
$
0.31

 
$
0.27

Weighted-average shares outstanding:
 
 
 
 
Basic
 
50,474,942

 
50,257,825

Diluted
 
50,996,596

 
50,935,382


 
F - 1
 




United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(Unaudited)
 
For the Three Months Ended
 
March 31, 2018
 
December 31, 2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
Interest and dividend income:
(In thousands, except share data)
Loans
$
54,780

 
$
52,758

 
$
51,809

 
$
49,674

 
$
46,493

Securities-taxable interest
5,498

 
5,643

 
5,604

 
5,793

 
5,510

Securities-non-taxable interest
2,429

 
2,571

 
2,499

 
2,355

 
2,254

Securities-dividends
637

 
669

 
736

 
689

 
808

Interest-bearing deposits
150

 
86

 
151

 
51

 
101

Total interest and dividend income
63,494

 
61,727

 
60,799

 
58,562

 
55,166

Interest expense:
 
 
 
 
 
 
 
 
 
Deposits
11,027

 
9,958

 
9,185

 
7,603

 
6,819

Borrowed funds
5,924

 
4,920

 
4,846

 
4,631

 
4,050

Total interest expense
16,951

 
14,878

 
14,031

 
12,234

 
10,869

Net interest income
46,543

 
46,849

 
46,768

 
46,328

 
44,297

Provision for loan losses
1,939

 
2,250

 
2,566

 
2,292

 
2,288

Net interest income after provision for loan losses
44,604

 
44,599

 
44,202

 
44,036

 
42,009

Non-interest income:
 
 
 
 
 
 
 
 
 
Service charges and fees
6,159

 
6,031

 
6,514

 
7,184

 
5,645

Net gain from sales of securities
116

 
72

 
158

 
95

 
457

Income from mortgage banking activities
1,729

 
1,184

 
1,204

 
1,830

 
1,321

Bank-owned life insurance income
1,646

 
1,939

 
1,167

 
1,149

 
1,207

Net loss on limited partnership investments
(590
)
 
(1,441
)
 
(864
)
 
(638
)
 
(80
)
Other income (loss)
229

 
(204
)
 
247

 
206

 
182

Total non-interest income
9,289

 
7,581

 
8,426

 
9,826

 
8,732

Non-interest expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
21,198

 
20,752

 
20,005

 
19,574

 
19,730

Service bureau fees
2,218

 
2,304

 
2,336

 
2,293

 
2,330

Occupancy and equipment
4,949

 
5,036

 
3,740

 
3,657

 
4,469

Professional fees
1,164

 
996

 
1,048

 
952

 
1,309

Marketing and promotions
685

 
1,011

 
1,087

 
1,237

 
712

FDIC insurance assessments
739

 
821

 
780

 
796

 
679

Core deposit intangible amortization
337

 
336

 
337

 
353

 
385

Other
5,446

 
5,981

 
5,929

 
6,467

 
5,308

Total non-interest expense
36,736

 
37,237

 
35,262

 
35,329

 
34,922

Income before income taxes
17,157

 
14,943

 
17,366

 
18,533

 
15,819

Provision for income taxes
1,370

 
5,442

 
2,175

 
2,333

 
2,093

Net income
$
15,787

 
$
9,501

 
$
15,191

 
$
16,200

 
$
13,726

 
 
 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.31

 
$
0.19

 
$
0.30

 
$
0.32

 
$
0.27

Diluted
$
0.31

 
$
0.19

 
$
0.30

 
$
0.32

 
$
0.27

Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
50,474,942

 
50,392,382

 
50,263,602

 
50,217,212

 
50,257,825

Diluted
50,996,596

 
51,024,881

 
50,889,987

 
50,839,091

 
50,935,382


 
F - 2
 




United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
 
 
 
March 31,
2018
 
December 31, 2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
ASSETS
 
(In thousands)
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
45,332

 
$
56,661

 
$
59,456

 
$
57,137

 
$
45,279

Short-term investments
 
23,910

 
32,007

 
39,061

 
17,714

 
39,381

Total cash and cash equivalents
 
69,242

 
88,668

 
98,517

 
74,851

 
84,660

Available for sale securities – At fair value
 
1,031,277

 
1,050,787

 
1,068,055

 
1,073,384

 
1,075,729

Held to maturity securities – At amortized cost
 

 
13,598

 
13,693

 
13,792

 
13,937

Loans held for sale
 
63,394

 
114,073

 
89,419

 
157,487

 
87,031

Loans:
 
 
 
 
 
 
 
 
 
 
Commercial real estate loans:
 
 
 
 
 
 
 
 
 
 
Owner-occupied
 
442,938

 
445,820

 
442,989

 
429,848

 
433,358

Investor non-owner occupied
 
1,842,898

 
1,854,459

 
1,777,716

 
1,761,940

 
1,697,414

Construction
 
84,717

 
78,083

 
82,688

 
74,980

 
85,533

Total commercial real estate loans
 
2,370,553

 
2,378,362

 
2,303,393

 
2,266,768

 
2,216,305

Commercial business loans
 
846,182

 
840,312

 
821,372

 
792,918

 
769,153

Consumer loans:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
1,235,197

 
1,204,401

 
1,211,783

 
1,172,540

 
1,167,428

Home equity
 
582,285

 
583,180

 
561,814

 
538,130

 
516,325

Residential construction
 
37,579

 
40,947

 
39,460

 
46,117

 
49,456

Other consumer
 
310,439

 
292,781

 
267,921

 
237,708

 
225,317

Total consumer loans
 
2,165,500

 
2,121,309

 
2,080,978

 
1,994,495

 
1,958,526

Total loans
 
5,382,235

 
5,339,983

 
5,205,743

 
5,054,181

 
4,943,984

Net deferred loan costs and premiums
 
14,724

 
14,794

 
15,297

 
15,413

 
13,273

Allowance for loan losses
 
(47,915
)
 
(47,099
)
 
(46,368
)
 
(45,062
)
 
(43,304
)
Loans receivable - net
 
5,349,044

 
5,307,678

 
5,174,672

 
5,024,532

 
4,913,953

Federal Home Loan Bank of Boston stock, at cost
 
49,895

 
50,194

 
46,758

 
54,760

 
52,707

Accrued interest receivable
 
22,333

 
22,332

 
20,893

 
19,751

 
19,126

Deferred tax asset, net
 
28,710

 
25,656

 
30,999

 
27,034

 
37,040

Premises and equipment, net
 
67,619

 
67,508

 
61,063

 
54,480

 
51,299

Goodwill
 
115,281

 
115,281

 
115,281

 
115,281

 
115,281

Core deposit intangible asset
 
4,154

 
4,491

 
4,827

 
5,164

 
5,517

Cash surrender value of bank-owned life insurance
 
179,556

 
148,300

 
171,300

 
170,144

 
169,007

Other assets
 
88,169

 
105,593

 
81,019

 
85,503

 
71,333

Total assets
 
$
7,068,674

 
$
7,114,159

 
$
6,976,496

 
$
6,876,163

 
$
6,696,620

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
F - 3
 




 
 
March 31,
2018
 
December 31, 2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing
 
$
753,575

 
$
778,576

 
$
725,130

 
$
721,917

 
$
690,516

Interest-bearing
 
4,528,935

 
4,419,645

 
4,427,892

 
4,271,562

 
4,099,843

Total deposits
 
5,282,510

 
5,198,221

 
5,153,022

 
4,993,479

 
4,790,359

Mortgagors’ and investor escrow accounts
 
11,096

 
7,545

 
9,641

 
15,045

 
10,925

Federal Home Loan Bank advances and other borrowings
 
1,030,735

 
1,165,054

 
1,068,814

 
1,138,817

 
1,180,053

Accrued expenses and other liabilities
 
51,333

 
50,011

 
54,366

 
49,358

 
49,300

Total liabilities
 
6,375,674

 
6,420,831

 
6,285,843

 
6,196,699

 
6,030,637

Total stockholders’ equity
 
693,000

 
693,328

 
690,653

 
679,464

 
665,983

Total liabilities and stockholders’ equity
 
$
7,068,674

 
$
7,114,159

 
$
6,976,496

 
$
6,876,163

 
$
6,696,620




 
F - 4
 




United Financial Bancorp, Inc. and Subsidiaries
Selected Financial Highlights
(Dollars In Thousands, Except Share Data)
(Unaudited)
 
At or For the Three Months Ended
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
Share Data:
 
 
 
 
 
 
 
 
 
Basic net income per share
$
0.31

 
$
0.19

 
$
0.30

 
$
0.32

 
$
0.27

Diluted net income per share
0.31

 
0.19

 
0.30

 
0.32

 
0.27

Dividends declared per share
0.12

 
0.12

 
0.12

 
0.12

 
0.12

Tangible book value per share
$
11.25

 
$
11.24

 
$
11.23

 
$
11.01

 
$
10.75

Key Statistics:
 
 
 
 
 
 
 
 
 
Total revenue
$
55,832

 
$
54,430

 
$
55,194

 
$
56,154

 
$
53,029

Total non-interest expense
36,736

 
37,237

 
35,262

 
35,329

 
34,922

Average earning assets
6,568,168

 
6,480,966

 
6,423,741

 
6,304,849

 
6,113,363

Key Ratios:
 
 
 
 
 
 
 
 
 
Return on average assets (annualized)
0.89
%
 
0.54
%
 
0.88
%
 
0.96
%
 
0.83
%
Return on average equity (annualized)
9.15
%
 
5.50
%
 
8.92
%
 
9.66
%
 
8.35
%
Tax-equivalent net interest margin (annualized)
2.90
%
 
2.98
%
 
3.00
%
 
3.04
%
 
3.01
%
Residential Mortgage Production:
 
 
 
 
 
 
 
 
 
Dollar volume (total)
$
94,433

 
$
135,522

 
$
133,462

 
$
186,220

 
$
134,022

Mortgages originated for purchases
63,193

 
83,181

 
97,132

 
129,165

 
77,613

Loans sold
99,899

 
94,738

 
152,551

 
61,363

 
51,826

Income from mortgage banking activities
1,729

 
1,184

 
1,204

 
1,830

 
1,321

Non-performing Assets:
 
 
 
 
 
 
 
 
 
Residential real estate
$
11,663

 
$
11,824

 
$
11,330

 
$
11,190

 
$
12,185

Home equity
4,698

 
4,968

 
4,206

 
5,211

 
4,307

Investor-owned commercial real estate
2,863

 
1,821

 
2,957

 
3,512

 
3,809

Owner-occupied commercial real estate
2,326

 
1,664

 
2,084

 
2,184

 
2,314

Construction
273

 
1,398

 
1,748

 
287

 
1,355

Commercial business
1,579

 
1,477

 
2,427

 
2,624

 
2,369

Other consumer
34

 
35

 
37

 
40

 
37

Non-accrual loans
23,436

 
23,187

 
24,789

 
25,048

 
26,376

Troubled debt restructured – non-accruing
8,308

 
8,475

 
6,628

 
7,475

 
8,252

Total non-performing loans
31,744

 
31,662

 
31,417

 
32,523

 
34,628

Other real estate owned
1,935

 
2,154

 
2,444

 
1,770

 
1,786

Total non-performing assets
$
33,679

 
$
33,816

 
$
33,861

 
$
34,293

 
$
36,414

Non-performing loans to total loans
0.59
%
 
0.59
%
 
0.60
%
 
0.64
%
 
0.70
%
Non-performing assets to total assets
0.48
%
 
0.48
%
 
0.49
%
 
0.50
%
 
0.54
%
Allowance for loan losses to non-performing loans
150.94
%
 
148.76
%
 
147.59
%
 
138.55
%
 
125.05
%
Allowance for loan losses to total loans
0.89
%
 
0.88
%
 
0.89
%
 
0.89
%
 
0.88
%
Non-GAAP Ratios: (1)
 
 
 
 
 
 
 
 
 
Non-interest expense to average assets (annualized)
2.08
%
 
2.13
%
 
2.04
%
 
2.08
%
 
2.12
%
Efficiency ratio (2)
63.97
%
 
63.53
%
 
60.47
%
 
59.75
%
 
64.08
%
Cost of funds (annualized) (3)
1.07
%
 
0.96
%
 
0.91
%
 
0.81
%
 
0.74
%
Total revenue growth rate
2.58
%
 
(1.38
)%
 
(1.71
)%
 
5.89
%
 
1.34
%
Total revenue growth rate (annualized)
10.30
%
 
(5.54
)%
 
(6.84
)%
 
23.57
%
 
5.37
%
Average earning asset growth rate
1.35
%
 
0.89
%
 
1.89
%
 
3.13
%
 
0.97
%
Average earning asset growth rate (annualized)
5.38
%
 
3.56
%
 
7.54
%
 
12.53
%
 
3.90
%
Return on average tangible common equity (annualized) (2)
11.25
%
 
6.81
%
 
10.99
%
 
11.95
%
 
10.42
%
Pre-provision net revenue to average assets (annualized)(2)
1.15
%
 
1.19
%
 
1.31
%
 
1.38
%
 
1.18
%
(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-11.
(3)
The cost of funds ratio represents interest incurred on liabilities as a percentage of average non-interest bearing deposits and interest-bearing liabilities.

 
F - 5
 




United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
 
 
For the Three Months Ended
 
March 31, 2018
 
March 31, 2017
 
Average
Balance
 
Interest
and
Dividends
 
Yield/Cost
 
Average
Balance
 
Interest
and
Dividends
 
Yield/Cost
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
$
1,314,219

 
$
11,506

 
3.51
%
 
$
1,235,065

 
$
10,223

 
3.31
%
Commercial real estate
2,281,868

 
23,656

 
4.15

 
2,098,472

 
20,727

 
3.95

Construction
119,435

 
1,325

 
4.44

 
145,486

 
1,563

 
4.30

Commercial business
842,809

 
8,382

 
3.98

 
730,443

 
6,720

 
3.68

Home equity
578,776

 
6,528

 
4.57

 
523,335

 
5,221

 
4.04

Other consumer
299,839

 
3,800

 
5.14

 
212,283

 
2,612

 
4.99

Investment securities
1,041,849

 
8,624

 
3.31

 
1,069,924

 
9,168

 
3.43

Federal Home Loan Bank stock
51,458

 
606

 
4.71

 
53,159

 
524

 
3.94

Other earning assets
37,915

 
150

 
1.61

 
45,196

 
101

 
0.91

Total interest-earning assets
6,568,168

 
64,577

 
3.94

 
6,113,363

 
56,859

 
3.73

Allowance for loan losses
(47,780
)
 
 
 
 
 
(43,625
)
 
 
 
 
Non-interest-earning assets
554,333

 
 
 
 
 
514,400

 
 
 
 
Total assets
$
7,074,721

 
 
 
 
 
$
6,584,138

 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
NOW and money market
$
2,146,945

 
$
4,892

 
0.92
%
 
$
1,843,458

 
$
2,196

 
0.48
%
Savings
510,904

 
73

 
0.06

 
528,657

 
77

 
0.06

Certificates of deposit
1,796,675

 
6,062

 
1.37

 
1,713,062

 
4,546

 
1.08

Total interest-bearing deposits
4,454,524

 
11,027

 
1.00

 
4,085,177

 
6,819

 
0.68

Federal Home Loan Bank advances
1,033,884

 
4,545

 
1.76

 
980,524

 
2,670

 
1.09

Other borrowings
118,008

 
1,379

 
4.67

 
126,001

 
1,380

 
4.38

Total interest-bearing liabilities
5,606,416

 
16,951

 
1.22

 
5,191,702

 
10,869

 
0.84

Non-interest-bearing deposits
713,364

 
 
 
 
 
668,823

 
 
 
 
Other liabilities
64,596

 
 
 
 
 
65,858

 
 
 
 
Total liabilities
6,384,376

 
 
 
 
 
5,926,383

 
 
 
 
Stockholders’ equity
690,345

 
 
 
 
 
657,755

 
 
 
 
Total liabilities and stockholders’ equity
$
7,074,721

 
 
 
 
 
$
6,584,138

 
 
 
 
Net interest-earning assets
$
961,752

 
 
 
 
 
$
921,661

 
 
 
 
Tax-equivalent net interest income
 
 
47,626

 
 
 
 
 
45,990

 
 
Tax-equivalent net interest rate spread (1)
 
 
 
 
2.72
%
 
 
 
 
 
2.89
%
Tax-equivalent net interest margin (2)
 
 
 
 
2.90
%
 
 
 
 
 
3.01
%
Average interest-earning assets to average interest-bearing liabilities
 
 
 
 
117.15
%
 
 
 
 
 
117.75
%
Less tax-equivalent adjustment
 
 
1,083

 
 
 
 
 
1,693

 
 
Net interest income
 
 
$
46,543

 
 
 
 
 
$
44,297

 
 

(1) Tax-equivalent net interest rate spread represents the difference between yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2) Tax-equivalent net interest rate margin represents tax-equivalent net interest income divided by average interest-earning assets.

 
F - 6
 




United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)
 
 
 
For the Three Months Ended
 
 
March 31, 2018
 
December 31, 2017
 
 
Average
Balance
 
Interest
and
Dividends
 
Yield/Cost
 
Average
Balance
 
Interest
and
Dividends
 
Yield/Cost
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,314,219

 
$
11,506

 
3.51
%
 
$
1,310,352

 
$
11,343

 
3.47
%
Commercial real estate
 
2,281,868

 
23,656

 
4.15

 
2,234,878

 
23,089

 
4.04

Construction
 
119,435

 
1,325

 
4.44

 
122,151

 
1,453

 
4.66

Commercial business
 
842,809

 
8,382

 
3.98

 
813,457

 
7,994

 
3.85

Home equity
 
578,776

 
6,528

 
4.57

 
569,021

 
6,293

 
4.39

Other consumer
 
299,839

 
3,800

 
5.14

 
278,465

 
3,309

 
4.71

Investment securities
 
1,041,849

 
8,624

 
3.31

 
1,074,840

 
9,713

 
3.60

Federal Home Loan Bank stock
 
51,458

 
606

 
4.71

 
47,964

 
564

 
4.71

Other earning assets
 
37,915

 
150

 
1.61

 
29,838

 
86

 
1.15

Total interest-earning assets
 
6,568,168

 
64,577

 
3.94

 
6,480,966

 
63,844

 
3.89

Allowance for loan losses
 
(47,780
)
 
 
 
 
 
(46,880
)
 
 
 
 
Non-interest-earning assets
 
554,333

 
 
 
 
 
542,596

 
 
 
 
Total assets
 
$
7,074,721

 
 
 
 
 
$
6,976,682

 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
NOW and money market
 
$
2,146,945

 
$
4,892

 
0.92
%
 
$
2,125,177

 
$
4,286

 
0.80
%
Savings
 
510,904

 
73

 
0.06

 
517,993

 
77

 
0.06

Certificates of deposit
 
1,796,675

 
6,062

 
1.37

 
1,765,007

 
5,595

 
1.26

Total interest-bearing deposits
 
4,454,524

 
11,027

 
1.00

 
4,408,177

 
9,958

 
0.90

Federal Home Loan Bank advances
 
1,033,884

 
4,545

 
1.76

 
954,159

 
3,538

 
1.45

Other borrowings
 
118,008

 
1,379

 
4.67

 
117,578

 
1,382

 
4.60

Total interest-bearing liabilities
 
5,606,416

 
16,951

 
1.22

 
5,479,914

 
14,878

 
1.07

Non-interest-bearing deposits
 
713,364

 
 
 
 
 
740,007

 
 
 
 
Other liabilities
 
64,596

 
 
 
 
 
65,757

 
 
 
 
Total liabilities
 
6,384,376

 
 
 
 
 
6,285,678

 
 
 
 
Stockholders’ equity
 
690,345

 
 
 
 
 
691,004

 
 
 
 
Total liabilities and stockholders’ equity
 
$
7,074,721

 
 
 
 
 
$
6,976,682

 
 
 
 
Net interest-earning assets
 
$
961,752

 
 
 
 
 
$
1,001,052

 
 
 
 
Tax-equivalent net interest income
 
 
 
47,626

 
 
 
 
 
48,966

 
 
Tax-equivalent net interest rate spread (1)
 
 
 
 
 
2.72
%
 
 
 
 
 
2.82
%
Tax-equivalent net interest margin (2)
 
 
 
 
 
2.90
%
 
 
 
 
 
2.98
%
Average interest-earning assets to average interest-bearing liabilities
 
 
 
 
 
117.15
%
 
 
 
 
 
118.27
%
Less tax-equivalent adjustment
 
 
 
1,083

 
 
 
 
 
2,117

 
 
Net interest income
 
 
 
$
46,543

 
 
 
 
 
$
46,849

 
 

(1) Tax-equivalent net interest rate spread represents the difference between yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2) Tax-equivalent net interest rate margin represents tax-equivalent net interest income divided by average interest-earning assets.



 
F - 7
 




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 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-9 through F-11 in the following press release tables:

 
F - 8
 




 
Three Months Ended
 
March 31, 2018
 
December 31, 2017
 
September 30,
2017
 
June 30,
2017
 
March 31,
2017
 
(Dollars in thousands)
Net Income (GAAP)
$
15,787

 
$
9,501

 
$
15,191

 
$
16,200

 
$
13,726

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Non-interest income
(342
)
 
745

 
(158
)
 
(95
)
 
(465
)
Non-interest expense

 
536

 

 

 

Income tax expense related to tax reform

 
1,609

 

 

 

Related income tax expense
72

 
2,074

 
55

 
33

 
163

Net adjustment
(270
)
 
4,964

 
(103
)
 
(62
)
 
(302
)
Total net income (non-GAAP)
$
15,517

 
$
14,465

 
$
15,088

 
$
16,138

 
$
13,424

 
 
 
 
 
 
 
 
 
 
Non-Interest Income (GAAP)
$
9,289

 
$
7,581

 
$
8,426

 
$
9,826

 
$
8,732

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Net gain on sales of securities
(116
)
 
(72
)
 
(158
)
 
(95
)
 
(457
)
Limited partnership writedown

 
1,214

 

 

 

Loss on sale of premises and equipment

 
401

 

 

 

BOLI claim benefit
(226
)
 
(798
)
 

 

 
(8
)
Net adjustment
(342
)
 
745

 
(158
)
 
(95
)
 
(465
)
Total non-interest income (non-GAAP)
8,947

 
8,326

 
8,268

 
9,731

 
8,267

Total net interest income
46,543

 
46,849

 
46,768

 
46,328

 
44,297

Total revenue (non-GAAP)
$
55,490

 
$
55,175

 
$
55,036

 
$
56,059

 
$
52,564

 
 
 
 
 
 
 
 
 
 
Non-Interest Expense (GAAP)
$
36,736

 
$
37,237

 
$
35,262

 
$
35,329

 
$
34,922

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Lease exit/disposal cost obligation

 
(536
)
 

 

 

Net adjustment

 
(536
)
 

 

 

Total non-interest expense (non-GAAP)
$
36,736

 
$
36,701

 
$
35,262

 
$
35,329

 
$
34,922

 
 
 
 
 
 
 
 
 
 
Total loans
$
5,382,235

 
$
5,339,983

 
$
5,205,743

 
$
5,054,181

 
$
4,943,984

Non-covered loans (1)
(771,802
)
 
(780,776
)
 
(739,376
)
 
(699,938
)
 
(691,054
)
Total covered loans
$
4,610,433

 
$
4,559,207

 
$
4,466,367

 
$
4,354,243

 
$
4,252,930

Allowance for loan losses
$
47,915

 
$
47,099

 
$
46,368

 
$
45,062

 
$