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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 16, 2019  
__________________________ 
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 16, 2019, United Financial Bancorp, Inc. issued a press release describing its results of operation for the quarter ended March 31, 2019. 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 16, 2019, 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, 2019. 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 16, 2019.
 
 
Investor Presentation Dated First Quarter 2019.
 
 
 
 
 






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 16, 2019
 
 
 
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 16, 2019.
 
 
Investor Presentation Dated First Quarter 2019.
 
 
 
 
 


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit



Exhibit 99.1
 397544896_a8kgraphica01a01a17.jpg
 
 
 
For Immediate Release:
 
April 16, 2019
 
 
Investor Relations Contact:
Marliese L. Shaw
Executive Vice President, Investor Relations Officer
United Bank
860-291-3622
 
Media Relations Contact:
Adam J. Jeamel
Regional President, Corporate Communications
United Bank
860-291-3765

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

HARTFORD, Conn., April 16, 2019United 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, 2019.

The Company reported net income of $12.7 million, or $0.25 per diluted share, for the quarter ended March 31, 2019, compared to net income for the quarter ended December 31, 2018 ("linked quarter") of $12.2 million, or $0.24 per diluted share. The Company reported net income of $15.8 million, or $0.31 per diluted share, for the quarter ended March 31, 2018.

"Despite the challenging operating environment, the United Financial Bancorp, Inc. team is focused on expanding and winning new client relationships, maintaining strong asset quality and ample capital, and providing superior customer service," stated William H.W. Crawford, IV, Chief Executive Officer and President of the Company and the Bank. "Having a talented and dedicated team of employees to serve the needs of our customers and communities continues to be a strong value proposition of the Company and will protect and enhance franchise value.”

Balance Sheet

Assets totaled $7.34 billion at March 31, 2019, decreasing $16.9 million from $7.36 billion at December 31, 2018. At March 31, 2019, total available for sale securities were $848.5 million, representing a decrease of $124.8 million, or 12.8%, from the linked quarter. The overall decrease was primarily due to sales of lower yielding collateralized mortgage obligations and municipal securities at a gain during the quarter, and a portion of the proceeds were utilized to pay off maturing Federal Home Loan Bank advances. At March 31, 2019, total loans were $5.73 billion, representing an increase of $75.1 million, or 1.3%, from the linked quarter. Changes to loan balances during the first quarter of 2019 were highlighted by a $33.4 million, or 3.8%, increase in commercial business loans, a $21.1 million, or 1.1%, increase in investor non-owner occupied commercial real estate loans, a $15.6 million, or 3.8%, increase in other consumer loans, a $9.1 million, or 0.7%, increase in residential real estate loans and a $7.2 million, or 8.2%, increase in commercial construction loans. Slightly offsetting the increased loan balances above were a $7.0 million, or 34.0%, decrease in residential construction loans and a $4.0 million, or 0.9%, decrease in owner-occupied commercial real estate loans from the linked quarter. Loans held for sale also decreased $62.6 million, or 79.5%, from the linked quarter. Total cash and

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cash equivalents increased $57.2 million, or 58.4%, from the linked quarter as a result of the aforementioned sale of investment securities.

During the quarter ended March 31, 2019, the Company adopted Accounting Standards Update ("ASU") No. 2016-02 - Leases, requiring on-balance sheet reporting for all operating and financing leases, which resulted in the recording of $46.5 million in operating and financing lease right-of-use assets and a corresponding $46.5 million in operating and financing lease liabilities associated with the implementation of the standard.
 
Deposits totaled $5.66 billion at March 31, 2019 and decreased by $6.3 million, or 0.1%, from $5.67 billion at December 31, 2018. Decreases in deposit balances during the first quarter of 2019 were primarily due to a $97.4 million, or 5.6%, decrease in money market account balances and a $21.8 million, or 2.7%, decrease in non-interest bearing checking deposits, largely due to seasonal outflows that are typical of commercial DDA accounts in the first quarter. Offsetting these decreases was a $61.0 million, or 7.1%, increase in NOW checking account balances and a $51.8 million, or 2.9%, increase in certificates of deposit balances.

Total Federal Home Loan Bank advances decreased by $60.2 million, or 7.6%, over the linked quarter as the Company utilized proceeds from sales of investment securities to pay off maturing advances as noted above.

Investment in D.C. Solar Tax-Advantaged Funds

The Company continues to monitor developments in its investments in Solar Eclipse Investment Fund X, LLC, Solar Eclipse Investment Fund XV, LLC, and Solar Eclipse Investment Fund XXII, LLC ("LLC investments"), all of which are borrowers of and lessees to D.C Solar Solutions, Inc., D.C Solar Distribution, Inc., respectively. In late January and early February, 2019, D.C Solar Solutions, Inc., D.C. Solar Distribution, Inc. and several affiliated companies filed for Chapter 11 bankruptcy. On March 22, 2019, all cases were converted to cases under Chapter 7 of the Bankruptcy Code. At this time, no measurable loss has been identified, but the Company believes a loss is more likely than not. The Company has provided disclosure in its press release deck as it pertains to the impact on capital if the Company were to recognize a complete loss ($41.7 million) on the LLC investments. Given the facts and circumstances that we are aware of at the time of the filing of this release, the Company does not believe a full loss or total tax benefit recapture to be likely.

Net Interest Income

Net interest income decreased by $1.4 million, or 2.9%, on a linked quarter basis, to $46.9 million, primarily attributable to an increase in interest expense of $2.4 million, or 10.1%, to $26.3 million, offset by an increase in loan interest income of $1.5 million, or 2.4%, to $64.8 million. Average interest-earning assets increased by $74.9 million, or 1.1%, on a linked quarter basis, primarily due to growth in average loan balances, which increased by $88.9 million, or 1.6%. Average loan balance growth was driven by a $56.2 million, or 2.4%, increase in average commercial real estate loans, a $27.8 million, or 7.1%, increase in average other consumer loans and a $27.1 million, or 3.2%, increase in average commercial business loans. Slightly offsetting the increases was a $16.8 million, or 1.2%, decrease in average residential real estate loans, a $3.0 million, or 0.5%, decrease in average home equity loans and a $2.4 million, or 2.1%, decrease in average construction loans.

Interest expense increased by $2.4 million, or 10.1%, to $26.3 million during the first quarter of 2019, from $23.9 million in the linked quarter. Average interest-bearing deposit balances increased by $41.4 million, or 0.9%, on a linked quarter basis, primarily driven by a $64.5 million, or 3.7%, increase in average certificates of deposit, which was slightly offset by a $16.3 million, or 0.6%, decrease in average NOW and money market account balances and a $6.7 million, or 1.3%, decrease in average savings account balances. Average non-

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interest bearing deposits decreased by $23.7 million, or 3.1%, as compared to the linked quarter. Average Federal Home Loan Bank advances increased by $67.9 million, or 9.3%.

The tax-equivalent net interest margin decreased by nine basis points to 2.81% in the first quarter of 2019, from 2.90% in the linked period. The decline in the tax-equivalent net interest margin was driven by an 18 basis point increase in the cost of interest-bearing liabilities, which was partially offset by a six basis point increase in the yield of interest-earning assets. The interest-earning asset yield improvement was largely driven by a 29 basis point increase in the yield on construction loans, a 20 basis point increase in the yield on commercial real estate loans, a 16 basis point increase in the yield on home equity loans, a three basis point increase in the yield on residential real estate loans, a two basis point increase in the yield on commercial business loans and a one basis point increase in the yield on other consumer loans. Slightly offsetting the increase in loan yields was a 30 basis point decline in the yield of the investment portfolio, largely resulting from the implementation of ASU No. 2017-08 - Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which caused lower yields on the Company's tax-exempt municipal bonds. The total cost of funds increased by 13 basis points to 1.61% in the first quarter of 2019 driven by a 16 basis point increase in the cost of interest-bearing deposits and a 22 basis point increase in the cost of Federal Home Loan Bank advances.

Provision for Loan Losses

The provision for loan losses totaled $2.0 million for the quarter ended March 31, 2019 as compared to $2.6 million for the linked quarter. Net charge-offs for the quarter ended March 31, 2019 totaled $1.6 million, or 0.11%, as a percentage of average loans outstanding, as compared to $891,000, or 0.06%, as a percentage of average loans for the quarter ended December 31, 2018. 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 decreased by $513,000, or 5.4%, to $9.0 million for the quarter ended March 31, 2019 from $9.5 million in the linked quarter. The decrease in the first quarter's non-interest income was driven primarily by a $1.3 million, or 17.0%, decrease in service charges and fee income resulting from lower swap fee income and non-sufficient fund fees as compared to the linked quarter, offset by an increase of $712,000 in net gain from sales of securities and an increase of $429,000, or 28.3%, in bank-owned life insurance income as compared to the linked quarter.

Non-Interest Expense

Non-interest expense for the quarter ended March 31, 2019 totaled $39.2 million and decreased by $4.5 million, or 10.4%, from the linked quarter. The decrease in non-interest expense during the quarter was primarily due to decreases in salaries and employee benefits, occupancy and equipment, and service bureau fees. These decreases were slightly offset by an increase in professional fees as compared to the linked quarter.

The primary driver of the decrease in non-interest expense was a $3.1 million, or 12.4%, decrease in salaries and employee benefits expense as compared to the linked quarter. This decrease was largely due to a $2.2 million severance expense (pre-tax) that was recorded in the quarter ended December 31, 2018 as a result of the Company's shift in its mortgage banking strategy, which reduced staffing in our mortgage division, as well as decreases in commissions and incentives and other benefits as compared to the linked quarter. Other notable

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decreases include an $844,000, or 13.2%, decrease in occupancy and equipment and a $272,000, or 11.8%, decrease in service bureau fees during the quarter ended March 31, 2019.

Asset Quality

Asset quality remained strong and stable for the period, with non-performing assets decreasing by $1.4 million to $30.6 million at March 31, 2019 from $32.1 million at December 31, 2018. The ratio of non-performing assets to total assets for the quarter ended March 31, 2019 was 0.42%, as compared to 0.44% in the linked quarter.

Capital

The Company reported Tangible Common Equity ("TCE") of $601.8 million, or 8.2% of average assets, for the quarter ended March 31, 2019. Tangible book value per share increased to $11.78 at March 31, 2019 from $11.54 at December 31, 2018. The increase was primarily driven by an increase in accumulated other comprehensive income as a result of an increase in the market value of the Company’s investment portfolio as compared to the previous quarter as well as the impact of the Company's net income of $12.7 million, offset by the cash dividend payment to shareholders of $0.12 per share and the impact of the adoption of ASU No. 2017-08 during the quarter, which resulted in a $10.2 million cumulative effect adjustment to beginning retained earnings. Book value per share at March 31, 2019 was $14.17, as compared to $13.94 in the linked quarter.

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 26, 2019 and payable on May 8, 2019. This dividend equates to a 3.17% annualized yield based on the $15.12 average closing price of the Company’s common stock in the first quarter of 2019. The Company has paid dividends for 52 consecutive quarters.

Investor Conference Call

United Financial Bancorp, Inc. will host a conference call on Wednesday, April 17, 2019 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 1, 2019 by calling 1-877-344-7529 and entering conference number 10130129. 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.

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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, small business, wealth management and consumer banking products and services to customers throughout Connecticut, Massachusetts and Rhode Island. United Bank is a financially strong, leading New England bank headquartered in Hartford, Connecticut with more than 50 branches in three states. United Financial Bancorp, Inc. trades on the NASDAQ Global Select Stock Exchange under the ticker symbol “UBNK.” At March 31, 2019, the Company had $7.34 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.

Forward Looking Statements

This press release contains certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events, such as the anticipated effect of the Company's LLC investments, 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 the outcome of the D.C. Solar bankruptcy, 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,
 
 
2019
 
2018
Interest and dividend income:
 
(In thousands, except share data)
Loans
 
$
64,764

 
$
54,780

Securities-taxable interest
 
6,475

 
5,498

Securities-non-taxable interest
 
1,094

 
2,429

Securities-dividends
 
656

 
637

Interest-bearing deposits
 
225

 
150

Total interest and dividend income
 
73,214

 
63,494

Interest expense:
 
 
 
 
Deposits
 
19,931

 
11,027

Borrowed funds
 
6,346

 
5,924

Total interest expense
 
26,277

 
16,951

Net interest income
 
46,937

 
46,543

Provision for loan losses
 
2,043

 
1,939

Net interest income after provision for loan losses
 
44,894

 
44,604

Non-interest income:
 
 
 
 
Service charges and fees
 
6,185

 
6,159

Net gain from sales of securities
 
737

 
116

Income from mortgage banking activities
 
591

 
1,729

Bank-owned life insurance income
 
1,946

 
1,646

Net loss on limited partnership investments
 
(603
)
 
(590
)
Other income
 
124

 
229

Total non-interest income
 
8,980

 
9,289

Non-interest expense:
 
 
 
 
Salaries and employee benefits
 
22,202

 
21,198

Service bureau fees
 
2,037

 
2,218

Occupancy and equipment
 
5,540

 
4,949

Professional fees
 
1,293

 
1,164

Marketing and promotions
 
858

 
685

FDIC insurance assessments
 
659

 
739

Core deposit intangible amortization
 
420

 
337

Other
 
6,178

 
5,446

Total non-interest expense
 
39,187

 
36,736

Income before income taxes
 
14,687

 
17,157

Provision for income taxes
 
2,030

 
1,370

Net income
 
$
12,657

 
$
15,787

 
 
 
 
 
Net income per share:
 
 
 
 
Basic
 
$
0.25

 
$
0.31

Diluted
 
$
0.25

 
$
0.31

Weighted-average shares outstanding:
 
 
 
 
Basic
 
50,615,059

 
50,474,942

Diluted
 
50,907,092

 
50,996,596


 
F - 1
 




United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(Unaudited)
 
 
For the Three Months Ended
 
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Interest and dividend income:
 
(In thousands, except share data)
Loans
 
$
64,764

 
$
63,227

 
$
61,061

 
$
57,958

 
$
54,780

Securities-taxable interest
 
6,475

 
5,705

 
5,822

 
5,969

 
5,498

Securities-non-taxable interest
 
1,094

 
2,339

 
2,347

 
2,354

 
2,429

Securities-dividends
 
656

 
702

 
748

 
736

 
637

Interest-bearing deposits
 
225

 
250

 
213

 
113

 
150

Total interest and dividend income
 
73,214

 
72,223

 
70,191

 
67,130

 
63,494

Interest expense:
 
 
 
 
 
 
 
 
 
 
Deposits
 
19,931

 
18,183

 
15,767

 
12,864

 
11,027

Borrowed funds
 
6,346

 
5,678

 
5,995

 
6,085

 
5,924

Total interest expense
 
26,277

 
23,861

 
21,762

 
18,949

 
16,951

Net interest income
 
46,937

 
48,362

 
48,429

 
48,181

 
46,543

Provision for loan losses
 
2,043

 
2,618

 
2,007

 
2,350

 
1,939

Net interest income after provision for loan losses
 
44,894

 
45,744

 
46,422

 
45,831

 
44,604

Non-interest income:
 
 
 
 
 
 
 
 
 
 
Service charges and fees
 
6,185

 
7,447

 
6,623

 
6,542

 
6,159

Net gain (loss) from sales of securities
 
737

 
25

 
(58
)
 
62

 
116

Income from mortgage banking activities
 
591

 
698

 
1,486

 
846

 
1,729

Bank-owned life insurance income
 
1,946

 
1,517

 
1,460

 
1,671

 
1,646

Net loss on limited partnership investments
 
(603
)
 
(405
)
 
(221
)
 
(960
)
 
(590
)
Other income
 
124

 
211

 
265

 
199

 
229

Total non-interest income
 
8,980

 
9,493

 
9,555

 
8,360

 
9,289

Non-interest expense:
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
22,202

 
25,341

 
22,643

 
22,113

 
21,198

Service bureau fees
 
2,037

 
2,309

 
2,209

 
2,165

 
2,218

Occupancy and equipment
 
5,540

 
6,384

 
4,487

 
4,668

 
4,949

Professional fees
 
1,293

 
1,136

 
1,013

 
1,105

 
1,164

Marketing and promotions
 
858

 
1,108

 
1,119

 
1,189

 
685

FDIC insurance assessments
 
659

 
611

 
655

 
735

 
739

Core deposit intangible amortization
 
420

 
420

 
288

 
305

 
337

Other
 
6,178

 
6,409

 
6,529

 
6,090

 
5,446

Total non-interest expense
 
39,187

 
43,718

 
38,943

 
38,370

 
36,736

Income before income taxes
 
14,687

 
11,519

 
17,034

 
15,821

 
17,157

Provision (benefit) for income taxes
 
2,030

 
(646
)
 
726

 
175

 
1,370

Net income
 
$
12,657

 
$
12,165

 
$
16,308

 
$
15,646

 
$
15,787

 
 
 
 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.25

 
$
0.24

 
$
0.32

 
$
0.31

 
$
0.31

Diluted
 
$
0.25

 
$
0.24

 
$
0.32

 
$
0.31

 
$
0.31

Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
 
Basic
 
50,615,059

 
50,613,498

 
50,624,832

 
50,504,273

 
50,474,942

Diluted
 
50,907,092

 
50,970,000

 
51,104,776

 
50,974,283

 
50,996,596


 
F - 2
 




United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
 
 
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
ASSETS
 
(In thousands)
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
50,823

 
$
36,434

 
$
48,786

 
$
62,188

 
$
45,332

Short-term investments
 
104,350

 
61,530

 
29,809

 
46,987

 
23,910

Total cash and cash equivalents
 
155,173

 
97,964

 
78,595

 
109,175

 
69,242

Available for sale securities – At fair value
 
848,541

 
973,347

 
972,035

 
1,006,135

 
1,031,277

Loans held for sale
 
16,172

 
78,788

 
86,948

 
85,458

 
63,394

Loans:
 
 
 
 
 
 
 
 
 
 
Commercial real estate loans:
 
 
 
 
 
 
 
 
 
 
Owner-occupied
 
439,366

 
443,398

 
434,906

 
418,338

 
442,938

Investor non-owner occupied
 
1,932,137

 
1,911,070

 
1,888,848

 
1,927,960

 
1,842,898

Construction
 
94,649

 
87,493

 
78,235

 
82,883

 
84,717

Total commercial real estate loans
 
2,466,152

 
2,441,961

 
2,401,989

 
2,429,181

 
2,370,553

Commercial business loans
 
920,165

 
886,770

 
861,030

 
841,142

 
846,182

Consumer loans:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
1,322,423

 
1,313,373

 
1,283,126

 
1,252,001

 
1,235,197

Home equity
 
583,368

 
583,454

 
579,907

 
588,638

 
582,285

Residential construction
 
13,620

 
20,632

 
32,750

 
32,063

 
37,579

Other consumer
 
425,854

 
410,249

 
369,781

 
332,402

 
310,439

Total consumer loans
 
2,345,265

 
2,327,708

 
2,265,564

 
2,205,104

 
2,165,500

Total loans
 
5,731,582

 
5,656,439

 
5,528,583

 
5,475,427

 
5,382,235

Net deferred loan costs and premiums
 
17,901

 
17,786

 
16,603

 
15,502

 
14,724

Allowance for loan losses
 
(52,041
)
 
(51,636
)
 
(49,909
)
 
(49,163
)
 
(47,915
)
Loans receivable - net
 
5,697,442

 
5,622,589

 
5,495,277

 
5,441,766

 
5,349,044

Federal Home Loan Bank of Boston stock, at cost
 
37,702

 
41,407

 
42,032

 
46,734

 
49,895

Accrued interest receivable
 
25,061

 
24,823

 
25,485

 
23,209

 
22,333

Deferred tax asset, net
 
27,600

 
32,706

 
31,473

 
30,190

 
28,710

Premises and equipment, net
 
63,863

 
68,657

 
67,612

 
67,614

 
67,619

Operating lease right-of-use assets
 
44,377

 

 

 

 

Financing lease right-of-use assets
 
4,356

 

 

 

 

Goodwill
 
116,727

 
116,769

 
115,281

 
115,281

 
115,281

Core deposit intangible asset
 
5,607

 
6,027

 
3,561

 
3,849

 
4,154

Cash surrender value of bank-owned life insurance
 
194,496

 
193,429

 
181,928

 
180,490

 
179,556

Other assets
 
102,823

 
100,368

 
107,271

 
98,695

 
88,169

Total assets
 
$
7,339,940

 
$
7,356,874

 
$
7,207,498

 
$
7,208,596

 
$
7,068,674

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
F - 3
 




 
 
 
 
 
 
 
 
 
 
 
 
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing
 
$
777,969

 
$
799,785

 
$
759,210

 
$
770,982

 
$
753,575

Interest-bearing
 
4,886,283

 
4,870,814

 
4,741,153

 
4,622,394

 
4,528,935

Total deposits
 
5,664,252

 
5,670,599

 
5,500,363

 
5,393,376

 
5,282,510

Mortgagors’ and investor escrow accounts
 
11,510

 
4,685

 
9,597

 
14,526

 
11,096

Federal Home Loan Bank advances and other borrowings
 
826,668

 
899,626

 
926,592

 
1,041,896

 
1,030,735

Operating lease liabilities
 
56,265

 

 

 

 

Financing lease liabilities
 
4,585

 

 

 

 

Accrued expenses and other liabilities
 
52,562

 
69,446

 
61,128

 
56,921

 
51,333

Total liabilities
 
6,615,842

 
6,644,356

 
6,497,680

 
6,506,719

 
6,375,674

Total stockholders’ equity
 
724,098

 
712,518

 
709,818

 
701,877

 
693,000

Total liabilities and stockholders’ equity
 
$
7,339,940

 
$
7,356,874

 
$
7,207,498

 
$
7,208,596

 
$
7,068,674




 
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,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
Share Data:
 
 
 
 
 
 
 
 
 
Basic net income per share
$
0.25

 
$
0.24

 
$
0.32

 
$
0.31

 
$
0.31

Diluted net income per share
0.25

 
0.24

 
0.32

 
0.31

 
0.31

Dividends declared per share
0.12

 
0.12

 
0.12

 
0.12

 
0.12

Tangible book value per share
$
11.78

 
$
11.54

 
$
11.55

 
$
11.40

 
$
11.25

Key Statistics:
 
 
 
 
 
 
 
 
 
Total revenue
$
55,917

 
$
57,855

 
$
57,984

 
$
56,541

 
$
55,832

Total non-interest expense
39,187

 
43,718

 
38,943

 
38,370

 
36,736

Average earning assets
6,783,604

 
6,708,701

 
6,671,424

 
6,584,938

 
6,568,168

Key Ratios:
 
 
 
 
 
 
 
 
 
Return on average assets (annualized)
0.69
%
 
0.67
%
 
0.91
%
 
0.88
%
 
0.89
%
Return on average equity (annualized)
7.13
%
 
6.89
%
 
9.26
%
 
9.00
%
 
9.15
%
Tax-equivalent net interest margin (annualized)
2.81
%
 
2.90
%
 
2.92
%
 
2.97
%
 
2.90
%
Non-interest expense to average assets (annualized)
2.13
%
 
2.41
%
 
2.17
%
 
2.16
%
 
2.08
%
Cost of funds (annualized) (1)
1.61
%
 
1.48
%
 
1.36
%
 
1.20
%
 
1.07
%
Total revenue growth rate
(3.35
)%
 
(0.22
)%
 
2.55
%
 
1.27
%
 
2.58
%
Total revenue growth rate (annualized)
(13.40
)%
 
(0.89
)%
 
10.21
%
 
5.08
%
 
10.30
%
Average earning asset growth rate
1.12
%
 
0.56
%
 
1.31
%
 
0.26
%
 
1.35
%
Average earning asset growth rate (annualized)
4.47
%
 
2.24
%
 
5.25
%
 
1.02
%
 
5.38
%
Residential Mortgage Production:
 
 
 
 
 
 
 
 
 
Dollar volume (total)
$
31,882

 
$
128,209

 
$
143,673

 
$
140,409

 
$
94,433

Mortgages originated for purchases
21,434

 
101,266

 
111,555

 
110,351

 
63,193

Loans sold
89,980

 
108,663

 
99,372

 
99,637

 
99,899

Income from mortgage banking activities
591

 
698

 
1,486

 
846

 
1,729

Non-performing Assets:
 
 
 
 
 
 
 
 
 
Residential real estate
$
13,742

 
$
13,217

 
$
11,949

 
$
11,221

 
$
11,663

Home equity
4,577

 
4,735

 
4,005

 
4,607

 
4,698

Investor-owned commercial real estate
739

 
1,131

 
1,525

 
2,400

 
2,863

Owner-occupied commercial real estate
1,830

 
2,450

 
1,202

 
2,176

 
2,326

Construction
171

 
199

 
243

 
250

 
273

Commercial business
1,627

 
944

 
985

 
1,196

 
1,579

Other consumer
1,034

 
1,030

 
597

 
237

 
34

Non-accrual loans
23,720

 
23,706

 
20,506

 
22,087

 
23,436

Troubled debt restructured – non-accruing
5,479

 
6,971

 
6,706

 
7,330

 
8,308

Total non-performing loans
29,199

 
30,677

 
27,212

 
29,417

 
31,744

Other real estate owned
1,429

 
1,389

 
1,808

 
1,855

 
1,935

Total non-performing assets
$
30,628

 
$
32,066

 
$
29,020

 
$
31,272

 
$
33,679

Non-performing loans to total loans
0.51
%
 
0.54
%
 
0.49
%
 
0.54
%
 
0.59
%
Non-performing assets to total assets
0.42
%
 
0.44
%
 
0.40
%
 
0.43
%
 
0.48
%
Allowance for loan losses to non-performing loans
178.23
%
 
168.32
%
 
183.41
%
 
167.12
%
 
150.94
%
Allowance for loan losses to total loans
0.91
%
 
0.91
%
 
0.90
%
 
0.90
%
 
0.89
%
Non-GAAP Ratios: (2)
 
 
 
 
 
 
 
 
 
Efficiency ratio 
69.67
%
 
69.18
%
 
65.61
%
 
65.18
%
 
63.97
%
Return on average tangible common equity (annualized)
8.85
%
 
8.55
%
 
11.30
%
 
11.03
%
 
11.25
%
Pre-provision net revenue to average assets
0.92
%
 
1.00
%
 
1.12
%
 
1.14
%
 
1.15
%
(1)
The cost of funds ratio represents interest incurred on liabilities as a percentage of average non-interest bearing deposits and interest-bearing liabilities.
(2)
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. Calculations of these non-GAAP metrics are provided after the reconciliations of non-GAAP financial measures and appear on page F-9 through page F-11.


 
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, 2019
 
March 31, 2018
 
Average
Balance
 
Interest
and
Dividends
 
Yield/Cost
 
Average
Balance
 
Interest
and
Dividends
 
Yield/Cost
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
$
1,380,829

 
$
12,886

 
3.73
%
 
$
1,314,219

 
$
11,506

 
3.51
%
Commercial real estate
2,358,955

 
27,302

 
4.63

 
2,281,868

 
23,656

 
4.15

Construction
111,198

 
1,426

 
5.13

 
119,435

 
1,325

 
4.44

Commercial business
888,436

 
10,612

 
4.78

 
842,809

 
8,382

 
3.98

Home equity
582,180

 
7,874

 
5.48

 
578,776

 
6,528

 
4.57

Other consumer
418,053

 
5,174

 
5.02

 
299,839

 
3,800

 
5.14

Investment securities
966,841

 
7,819

 
3.23

 
1,041,849

 
8,624

 
3.31

Federal Home Loan Bank stock
40,475

 
628

 
6.21

 
51,458

 
606

 
4.71

Other earning assets
36,637

 
229

 
2.53

 
37,915

 
150

 
1.61

Total interest-earning assets
6,783,604

 
73,950

 
4.37

 
6,568,168

 
64,577

 
3.94

Allowance for loan losses
(52,089
)
 
 
 
 
 
(47,780
)
 
 
 
 
Non-interest-earning assets
639,923

 
 
 
 
 
554,333

 
 
 
 
Total assets
$
7,371,438

 
 
 
 
 
$
7,074,721

 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
NOW and money market
$
2,567,634

 
$
10,309

 
1.63
%
 
$
2,146,945

 
$
4,892

 
0.92
%
Savings
500,167

 
75

 
0.06

 
510,904

 
73

 
0.06

Certificates of deposit
1,823,867

 
9,547

 
2.12

 
1,796,675

 
6,062

 
1.37

Total interest-bearing deposits
4,891,668

 
19,931

 
1.65

 
4,454,524

 
11,027

 
1.00

Federal Home Loan Bank advances
800,862

 
5,045

 
2.52

 
1,033,884

 
4,545

 
1.76

Other borrowings
88,757

 
1,301

 
5.86

 
118,008

 
1,379

 
4.67

Total interest-bearing liabilities
5,781,287

 
26,277

 
1.84

 
5,606,416

 
16,951

 
1.22

Non-interest-bearing deposits
745,259

 
 
 
 
 
713,364

 
 
 
 
Other liabilities
134,987

 
 
 
 
 
64,596

 
 
 
 
Total liabilities
6,661,533

 
 
 
 
 
6,384,376

 
 
 
 
Stockholders’ equity
709,905

 
 
 
 
 
690,345

 
 
 
 
Total liabilities and stockholders’ equity
$
7,371,438

 
 
 
 
 
$
7,074,721

 
 
 
 
Net interest-earning assets
$
1,002,317

 
 
 
 
 
$
961,752

 
 
 
 
Tax-equivalent net interest income
 
 
47,673

 
 
 
 
 
47,626

 
 
Tax-equivalent net interest rate spread (1)
 
 
 
 
2.53
%
 
 
 
 
 
2.72
%
Tax-equivalent net interest margin (2)
 
 
 
 
2.81
%
 
 
 
 
 
2.90
%
Average interest-earning assets to average interest-bearing liabilities
 
 
 
 
117.34
%
 
 
 
 
 
117.15
%
Less tax-equivalent adjustment
 
 
736

 
 
 
 
 
1,083

 
 
Net interest income
 
 
$
46,937

 
 
 
 
 
$
46,543

 
 

(1) Tax-equivalent net interest rate spread represents the difference between the 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, 2019
 
December 31, 2018
 
Average
Balance
 
Interest
and
Dividends
 
Yield/Cost
 
Average
Balance
 
Interest
and
Dividends
 
Yield/Cost
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
$
1,380,829

 
$
12,886

 
3.73
%
 
$
1,397,669

 
$
12,929

 
3.70
%
Commercial real estate
2,358,955

 
27,302

 
4.63

 
2,302,741

 
26,085

 
4.43

Construction
111,198

 
1,426

 
5.13

 
113,617

 
1,405

 
4.84

Commercial business
888,436

 
10,612

 
4.78

 
861,311

 
10,481

 
4.76

Home equity
582,180

 
7,874

 
5.48

 
585,178

 
7,848

 
5.32

Other consumer
418,053

 
5,174

 
5.02

 
390,237

 
4,931

 
5.01

Investment securities
966,841

 
7,819

 
3.23

 
967,881

 
8,564

 
3.53

Federal Home Loan Bank stock
40,475

 
628

 
6.21

 
40,428

 
665

 
6.58

Other earning assets
36,637

 
229

 
2.53

 
49,639

 
253

 
2.02

Total interest-earning assets
6,783,604

 
73,950

 
4.37

 
6,708,701

 
73,161

 
4.31

Allowance for loan losses
(52,089
)
 
 
 
 
 
(50,754
)
 
 
 
 
Non-interest-earning assets
639,923

 
 
 
 
 
586,449

 
 
 
 
Total assets
$
7,371,438

 
 
 
 
 
$
7,244,396

 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
NOW and money market
$
2,567,634

 
$
10,309

 
1.63
%
 
$
2,583,982

 
$
9,641

 
1.48
%
Savings
500,167

 
75

 
0.06

 
506,880

 
76

 
0.06

Certificates of deposit
1,823,867

 
9,547

 
2.12

 
1,759,382

 
8,466

 
1.91

Total interest-bearing deposits
4,891,668

 
19,931

 
1.65

 
4,850,244

 
18,183

 
1.49

Federal Home Loan Bank advances
800,862

 
5,045

 
2.52

 
732,995

 
4,307

 
2.30

Other borrowings
88,757

 
1,301

 
5.86

 
107,365

 
1,371

 
5.00

Total interest-bearing liabilities
5,781,287

 
26,277

 
1.84

 
5,690,604

 
23,861

 
1.66

Non-interest-bearing deposits
745,259

 
 
 
 
 
768,916

 
 
 
 
Other liabilities
134,987

 
 
 
 
 
78,752

 
 
 
 
Total liabilities
6,661,533

 
 
 
 
 
6,538,272

 
 
 
 
Stockholders’ equity
709,905

 
 
 
 
 
706,124

 
 
 
 
Total liabilities and stockholders’ equity
$
7,371,438

 
 
 
 
 
$
7,244,396

 
 
 
 
Net interest-earning assets
$
1,002,317

 
 
 
 
 
$
1,018,097

 
 
 
 
Tax-equivalent net interest income
 
 
47,673

 
 
 
 
 
49,300

 
 
Tax-equivalent net interest rate spread (1)
 
 
 
 
2.53
%
 
 
 
 
 
2.65
%
Tax-equivalent net interest margin (2)
 
 
 
 
2.81
%
 
 
 
 
 
2.90
%
Average interest-earning assets to average interest-bearing liabilities
 
 
 
 
117.34
%
 
 
 
 
 
117.89
%
Less tax-equivalent adjustment
 
 
736

 
 
 
 
 
938

 
 
Net interest income
 
 
$
46,937

 
 
 
 
 
$
48,362

 
 

(1) Tax-equivalent net interest rate spread represents the difference between the 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,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
(Dollars in thousands)
Net Income (GAAP)
$
12,657

 
$
12,165

 
$
16,308

 
$
15,646

 
$
15,787

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Non-interest income
(1,158
)
 
(25
)
 
58

 
(271
)
 
(342
)
Non-interest expense

 
2,677

 
(129
)
 
215

 

Income tax benefit related to tax reform

 
(1,717
)
 

 

 

Related income tax (benefit) expense
155

 
(557
)
 
15

 
(93
)
 
72

Net adjustment
(1,003
)
 
378

 
(56
)
 
(149
)
 
(270
)
Total net income (non-GAAP)
$
11,654

 
$
12,543

 
$
16,252

 
$
15,497

 
$
15,517

 
 
 
 
 
 
 
 
 
 
Non-interest income (GAAP)
$
8,980

 
$
9,493

 
$
9,555

 
$
8,360

 
$
9,289

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Net loss (gain) on sales of securities
(737
)
 
(25
)
 
58

 
(62
)
 
(116
)
BOLI claim benefit
(421
)
 

 

 
(209
)
 
(226
)
Net adjustment
(1,158
)
 
(25
)
 
58

 
(271
)
 
(342
)
Total non-interest income (non-GAAP)
7,822

 
9,468

 
9,613

 
8,089

 
8,947

Total net interest income
46,937

 
48,362

 
48,429

 
48,181

 
46,543

Total revenue (non-GAAP)
$
54,759

 
$
57,830

 
$
58,042

 
$
56,270

 
$
55,490

 
 
 
 
 
 
 
 
 
 
Non-interest expense (GAAP)
$
39,187

 
$
43,718

 
$
38,943

 
$
38,370

 
$
36,736

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
Lease exit/disposal cost obligation

 
(466
)
 
129

 
(215
)
 

Effect of position eliminations

 
(2,211
)
 

 

 

Net adjustment

 
(2,677
)
 
129

 
(215
)
 

Total non-interest expense (non-GAAP)
$
39,187

 
$
41,041

 
$
39,072

 
$
38,155

 
$
36,736