United Financial Bancorp Reports Fourth Quarter and Full Year 2012 Results; Announces Quarterly Dividend of $0.10 Per Share
WEST SPRINGFIELD, Mass., Jan. 24, 2013 /PRNewswire/ -- United Financial Bancorp, Inc. (the "Company") (NASDAQ Global Select Market: UBNK), the holding company for United Bank (the "Bank"), reported a net loss of $4.7 million, or $0.28 per diluted share, for the fourth quarter of 2012 compared to net income of $3.0 million, or $0.20 per diluted share, for the corresponding period in 2011. The fourth quarter 2012 results included an ESOP plan termination expense of $4.5 million and acquisition-related expenses of $4.0 million.
For the year ended December 31, 2012, the Company's net income was $3.6 million, or $0.24 per diluted share, compared to net income of $11.2 million, or $0.74 per diluted share, for 2011. The results for the year ended December 31, 2012 included acquisition-related expenses of $5.0 million and the ESOP plan termination expense of $4.5 million.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.10 per share, payable on March 5, 2013 to shareholders of record as of February 11, 2013. Based upon the closing share price of $15.09 as of January 22, 2013, the dividend yield on the Company's common stock was 2.65%.
"We are pleased to report that the acquisition of New England Bancshares, Inc. was completed in the fourth quarter. Immediately following the legal closing on November 16, 2012, all New England Bank operating systems were successfully and seamlessly converted to United Bank's operating platform. With the systems integration and merger behind us, we are now focused on getting to know the customers and communities we are now serving in our Connecticut region and we look forward to making United Bank a household name in the markets we serve," commented Richard B. Collins, President and Chief Executive Officer.
Earnings Summary (Q4 2012 compared to Q4 2011)
- Net interest income increased $3.0 million, or 23%, to $16.2 million for the fourth quarter of 2012 mainly as a result of an increase in average interest-earning assets, partially offset by a contraction in the net interest margin. Total average interest-earning assets increased $384.4 million, or 25%, to $1.89 billion for the fourth quarter of 2012 driven by the acquisition of New England Bank ("NEB") and strong organic loan growth, offset in part by a decrease in interest-earning cash balances. The net interest margin decreased by 8 basis points to 3.43% for the three months ended December 31, 2012 reflecting lower yields on loans and investments as a result of the lower interest rate environment, partially offset by reduced funding costs.
- Provision for loan losses decreased $322,000, or 32%, to $689,000 for the three months ended December 31, 2012 primarily reflecting a decrease in required reserves for performing and impaired loans, partially reduced by increased net charge-offs.
- Non-interest income increased $399,000, or 16%, to $3.0 million for the three months ended December 31, 2012. Fee income on deposit accounts grew $64,000, or 4%, driven by growth in core accounts. BOLI income increased $51,000, or 11%, due to the addition of the $10 million NEB portfolio. Net gains from sales of loans increased $37,000, or 25%, due to improved pricing on sales of 30-year fixed rate loans, and to a lesser extent, increased sales volume. The results also included $227,000 in gains from sales of $4.6 million in municipal securities.
- Non-interest expense increased $11.6 million, or 108%, to $22.3 million in the fourth quarter of 2012. Excluding the ESOP plan termination expense of $4.5 million, acquisition-related costs totaling $4.0 million and FHLBB prepayment penalties of $207,000, non-interest expense would have increased $2.9 million, or 27%, to $13.6 million mainly due to additional costs incurred to operate our new Connecticut franchise.
- Income tax expense was $942,000 for the fourth quarter of 2012 compared to $1.1 million in 2011. The 2012 total does not include a tax benefit for the $4.5 million ESOP termination expense and $2.1 million of acquisition-related costs because both items are not tax deductible. In addition, the 2012 amount was impacted by the reversal of an ESOP temporary difference ($532,000 expense) and a one-time adjustment to the tax basis of an investment in a low income housing tax credit fund ($350,000 expense).
Balance Sheet Activity:
- Total assets increased $778.9 million, or 48%, to $2.40 billion at December 31, 2012 from $1.62 billion at December 31, 2011 reflecting the acquisition of NEB ($745 million) and strong organic loan growth, offset in part by a $30.8 million decrease in cash and cash equivalents.
- Total loans increased $694.2 million, or 62%, to $1.82 billion at December 31, 2012 due in large part to the NEB acquisition ($553 million) and strong growth in the commercial loan portfolio.
- Investment securities increased $39.6 million, or 12%, to $377.3 million at December 31, 2012 as a result of the addition of NEB's $53.4 million portfolio partially offset by the sale of $13.8 million of securities.
- Cash and cash equivalents decreased $30.8 million, or 50%, to $30.7 million at December 31, 2012 mainly driven by the use of excess cash to fund new loans and to pay-off longer-term FHLB advances.
- Total deposits increased $618.2 million, or 50%, to $1.85 billion at December 31, 2012 reflecting growth of $332.5 million, or 41%, in core account balances and an increase of $285.7 million, or 68%, in certificates of deposit. These increases were in large part due to the acquisition of NEB's $597 million deposit base and organic growth. Core deposit balances were $1.14 billion, or 62% of total deposits at December 31, 2012 compared to $808 million, or 66% at December 31, 2011.
Credit Quality:
- Non-performing assets totaled $17.3 million, or 0.72% of total assets, at December 31, 2012 compared to $10.6 million, or 0.65% of total assets, at December 31, 2011. The $6.7 million increase was attributable to the addition of $7.1 million in NEB non-performing loans.
- The ratio of the allowance for loan losses to total loans was 0.67% at December 31, 2012. Excluding the impact of loans acquired from Commonwealth National Bank in 2009 and NEB totaling $664.6 million at December 31, 2012 and $165.1 million at December 31, 2011, the ratio of the allowance for loan losses to total loans would have been 1.05% at December 31, 2012 and 1.16% at December 31, 2011. Net charge-offs totaled $2.2 million, or 0.18% of average loans outstanding for the year ended December 31, 2012 as compared to net charge-offs of $ 2.1 million, or 0.19% of average loans outstanding for 2011.
Capital and Liquidity:
- At December 31, 2012, the Company was well capitalized with a tangible equity-to-tangible assets ratio of 11.11% and an equity-to-assets ratio of 12.79%.
- Tangible book value per share was $12.99 at December 31, 2012.
- In 2012, the Company repurchased 357,415 shares at an average price of $15.26 under publicly announced plans. During the fourth quarter of 2012, the Company completed its October 2010 repurchase program of 807,803 shares and commenced a new program to repurchase 769,000 shares. As of December 31, 2012, the Company has repurchased 27,312 shares under this new repurchase plan.
- At December 31, 2012, the Company continued to have considerable liquidity consisting of significant balances at the Federal Reserve Bank of Boston, a large amount of marketable loans and investment securities, substantial unused borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank of Boston and access to funding through the repurchase agreement and brokered deposit markets.
United Financial Bancorp, Inc. is a publicly owned corporation and the holding company for United Bank, a federally chartered bank headquartered at 95 Elm Street, West Springfield, MA, 01090. The Company's common stock is traded on the NASDAQ Global Select Market under the symbol UBNK. The Company had total consolidated assets of approximately $2.4 billion as of December 31, 2012. United Bank provides an array of financial products and services through its 16 branch offices and two express drive-up branches in the Springfield region of Western Massachusetts; seven branches in the Worcester region of Central Massachusetts; and 15 branches in Connecticut's Hartford, Tolland, New Haven and Litchfield counties. The Bank also operates loan production offices located in Beverly, Massachusetts and Glastonbury, Connecticut. Through its Wealth Management Group, the Bank offers access to a wide range of investment and insurance products and services, as well as financial, estate and retirement strategies and products. For more information regarding the Bank's products and services and for United Financial Bancorp, Inc. investor relations information please visit www.bankatunited.com or on Facebook at facebook.com/bankatunited.
Except for the historical information contained in this press release, the matters discussed may be deemed to be forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties, including changes in economic conditions in the Company's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company's market area, competition, and other risks detailed from time to time in the Company's SEC reports. Actual strategies and results in future periods may differ materially from those currently expected. These forward-looking statements represent the Company's judgment as of the date of this release. The Company disclaims, however, any intent or obligation to update these forward-looking statements.
For More Information Contact:
Mark A. Roberts
Executive Vice President & CFO
(413) 787-1700
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY |
|||||
CONSOLIDATED STATEMENTS OF CONDITION |
|||||
(Dollars in thousands, except per share amounts) |
|||||
December 31, |
December 31, |
||||
Assets |
2012 |
2011 |
|||
(unaudited) |
(audited) |
||||
Cash and cash equivalents |
$ 30,679 |
$ 61,518 |
|||
Investment securities |
377,308 |
337,710 |
|||
Loans held for sale |
632 |
53 |
|||
Loans: |
|||||
Residential mortgages |
441,874 |
314,839 |
|||
Commercial mortgages |
814,692 |
450,180 |
|||
Construction loans |
52,778 |
30,271 |
|||
Commercial loans |
306,192 |
176,086 |
|||
Home equity loans |
179,039 |
135,518 |
|||
Consumer loans |
21,501 |
14,985 |
|||
Total loans |
1,816,076 |
1,121,879 |
|||
Net deferred loan costs and fees |
2,603 |
2,194 |
|||
Allowance for loan losses |
(12,089) |
(11,132) |
|||
Loans, net |
1,806,590 |
1,112,941 |
|||
Federal Home Loan Bank of Boston stock, at cost |
18,554 |
15,365 |
|||
Other real estate owned |
2,578 |
2,054 |
|||
Deferred tax asset, net |
20,705 |
14,006 |
|||
Premises and equipment, net |
25,064 |
16,438 |
|||
Bank-owned life insurance |
52,876 |
40,688 |
|||
Goodwill |
40,995 |
8,192 |
|||
Other intangible assets |
4,514 |
752 |
|||
Other assets |
22,137 |
14,035 |
|||
Total assets |
$ 2,402,632 |
$ 1,623,752 |
|||
Liabilities and Stockholders' Equity |
|||||
Deposits: |
|||||
Demand |
$ 307,302 |
$ 205,902 |
|||
NOW |
87,983 |
52,899 |
|||
Savings |
350,188 |
247,664 |
|||
Money market |
395,293 |
301,770 |
|||
Certificates of deposit |
707,409 |
421,740 |
|||
Total deposits |
1,848,175 |
1,229,975 |
|||
Short-term borrowings |
79,229 |
17,260 |
|||
Long-term debt |
133,969 |
126,857 |
|||
Subordinated debentures |
9,630 |
5,539 |
|||
Escrow funds held for borrowers |
4,315 |
2,103 |
|||
Capitalized lease obligations |
4,711 |
4,874 |
|||
Accrued expenses and other liabilities |
15,246 |
9,783 |
|||
Total liabilities |
2,095,275 |
1,396,391 |
|||
Stockholders' Equity: |
|||||
Preferred stock, par value $0.01 per share, authorized 50,000,000 shares; none issued |
- |
- |
|||
Common stock, par value $0.01 per share; authorized 100,000,000 shares; shares issued: 24,266,428 at December 31, 2012 and 18,706,933 at December 31, 2011 |
243 |
187 |
|||
Additional paid-in capital |
272,990 |
182,433 |
|||
Retained earnings |
87,153 |
89,019 |
|||
Unearned compensation |
- |
(10,047) |
|||
Accumulated other comprehensive income, net of taxes |
5,401 |
6,752 |
|||
Treasury stock, at cost (4,114,310 shares at December 31, 2012 and 2,994,036 shares at December 31, 2011) |
(58,430) |
(40,983) |
|||
Total stockholders' equity |
307,357 |
227,361 |
|||
Total liabilities and stockholders' equity |
$ 2,402,632 |
$ 1,623,752 |
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY |
|||||||
CONSOLIDATED INCOME STATEMENTS |
|||||||
(Dollars in thousands, except per share amounts) |
|||||||
Three Months Ended |
Years Ended |
||||||
December 31, |
December 31, |
||||||
2012 |
2011 |
2012 |
2011 |
||||
(unaudited) |
(unaudited) |
||||||
Interest and dividend income: |
|||||||
Loans |
$ 17,651 |
$ 14,501 |
$ 60,401 |
$ 58,220 |
|||
Investments |
2,373 |
2,901 |
10,544 |
12,728 |
|||
Other interest-earning assets |
107 |
26 |
226 |
126 |
|||
Total interest and dividend income |
20,131 |
17,428 |
71,171 |
71,074 |
|||
Interest expense: |
|||||||
Deposits |
2,671 |
2,944 |
10,466 |
12,449 |
|||
Borrowings |
1,225 |
1,243 |
4,526 |
5,812 |
|||
Total interest expense |
3,896 |
4,187 |
14,992 |
18,261 |
|||
Net interest income before provision for loan losses |
16,235 |
13,241 |
56,179 |
52,813 |
|||
Provision for loan losses |
689 |
1,011 |
3,139 |
3,242 |
|||
Net interest income after provision for loan losses |
15,546 |
12,230 |
53,040 |
49,571 |
|||
Non-interest income: |
|||||||
Fee income on depositors' accounts |
1,533 |
1,469 |
5,922 |
5,554 |
|||
Wealth management income |
231 |
217 |
1,026 |
919 |
|||
Income from bank-owned life insurance |
501 |
450 |
1,825 |
1,642 |
|||
Net gain on sales of loans |
187 |
150 |
645 |
274 |
|||
Net gain on sales of securities |
227 |
- |
254 |
1 |
|||
Impairment charges on securities |
- |
(7) |
(202) |
(99) |
|||
Other income |
290 |
291 |
1,153 |
1,062 |
|||
Total non-interest income |
2,969 |
2,570 |
10,623 |
9,353 |
|||
Non-interest expense: |
|||||||
Salaries and benefits |
7,430 |
5,957 |
26,533 |
24,818 |
|||
Occupancy expenses |
1,204 |
845 |
3,771 |
3,317 |
|||
Marketing expenses |
397 |
376 |
1,654 |
1,797 |
|||
Data processing expenses |
1,460 |
1,037 |
4,600 |
3,970 |
|||
Professional fees |
604 |
533 |
1,886 |
2,174 |
|||
ESOP plan termination expense |
4,482 |
- |
4,482 |
- |
|||
Acquisition related expenses |
3,994 |
- |
4,952 |
- |
|||
FDIC insurance assessments |
335 |
218 |
1,135 |
1,029 |
|||
Low income housing tax credit fund |
- |
210 |
243 |
837 |
|||
Other expenses |
2,399 |
1,542 |
6,984 |
6,120 |
|||
Total non-interest expense |
22,305 |
10,718 |
56,240 |
44,062 |
|||
Income before income taxes |
(3,790) |
4,082 |
7,423 |
14,862 |
|||
Income tax expense |
942 |
1,102 |
3,795 |
3,678 |
|||
Net income |
$ (4,732) |
$ 2,980 |
$ 3,628 |
$ 11,184 |
|||
Earnings per share: |
|||||||
Basic |
$ (0.28) |
$ 0.20 |
$ 0.24 |
$ 0.75 |
|||
Diluted |
$ (0.28) |
$ 0.20 |
$ 0.24 |
$ 0.74 |
|||
Weighted average shares outstanding: |
|||||||
Basic |
17,191 |
14,726 |
15,235 |
14,930 |
|||
Diluted |
17,191 |
15,022 |
15,422 |
15,199 |
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY |
|||||||||||
SELECTED DATA AND RATIOS (unaudited) |
|||||||||||
(Dollars in thousands, except per share amounts) |
|||||||||||
At or For The Quarters Ended |
|||||||||||
Dec. 31 |
Sep. 30 |
Jun. 30 |
Mar. 31 |
Dec. 31 |
|||||||
2012 |
2012 |
2012 |
2012 |
2011 |
|||||||
Operating Results: |
|||||||||||
Net interest income |
$ 16,235 |
$ 13,550 |
$ 13,294 |
$ 13,100 |
$ 13,241 |
||||||
Loan loss provision |
689 |
1,050 |
750 |
650 |
1,011 |
||||||
Non-interest income |
2,969 |
2,511 |
(1) |
2,570 |
2,573 |
2,570 |
|||||
Non-interest expense |
22,305 |
(2) |
11,192 |
(2) |
11,468 |
(2) |
11,275 |
10,718 |
|||
Net (loss) income |
(4,732) |
2,929 |
2,582 |
2,849 |
2,980 |
||||||
Performance Ratios (annualized): |
|||||||||||
(Loss) return on average assets |
(0.93)% |
0.71% |
(3) |
0.62% |
(3) |
0.70% |
0.74% |
||||
(Loss) return on average equity |
(7.00)% |
5.10% |
(3) |
4.53% |
(3) |
5.00% |
5.24% |
||||
Net interest margin |
3.43% |
3.51% |
3.44% |
3.43% |
3.51% |
||||||
Non-interest income to average total assets |
0.58% |
0.61% |
(4) |
0.62% |
0.63% |
0.64% |
|||||
Non-interest expense to average total assets |
4.37% |
(5) |
2.71% |
(5) |
2.78% |
(5) |
2.77% |
2.66% |
|||
Efficiency ratio (6) |
118.71% |
(5) |
69.74% |
(5) |
73.04% |
(5) |
72.44% |
68.41% |
|||
Per Share Data: |
|||||||||||
Diluted (loss) earnings per share |
$ (0.28) |
$ 0.20 |
$ 0.17 |
$ 0.19 |
$ 0.20 |
||||||
Book value per share |
$ 15.25 |
$ 14.88 |
$ 14.70 |
$ 14.57 |
$ 14.47 |
||||||
Tangible book value per share |
$ 12.99 |
(7) |
$ 14.31 |
(7) |
$ 14.12 |
(7) |
$ 14.00 |
(7) |
$ 13.90 |
(7) |
|
Market price at period end |
$ 15.72 |
$ 14.47 |
$ 14.38 |
$ 15.82 |
$ 16.09 |
||||||
Risk Profile |
|||||||||||
Equity as a percentage of assets |
12.79% |
13.67% |
13.80% |
13.69% |
14.00% |
||||||
Tangible equity as a percentage of tangible assets |
11.11% |
(7) |
13.21% |
(7) |
13.33% |
(7) |
13.22% |
(7) |
13.53% |
(7) |
|
Net charge-offs to average loans outstanding (annualized) |
0.30% |
0.09% |
0.11% |
0.16% |
0.22% |
||||||
Non-performing assets as a percent of total assets |
0.72% |
0.61% |
0.68% |
0.70% |
0.65% |
||||||
Non-performing loans as a percent of total loans |
0.81% |
0.73% |
0.74% |
0.79% |
0.75% |
||||||
Allowance for loan losses as a percent of total loans |
0.67% |
(8) |
1.03% |
(8) |
1.01% |
(8) |
0.99% |
(8) |
0.99% |
(8) |
|
Allowance for loan losses as a percent of non-performing loans |
82.20% |
(9) |
140.49% |
136.43% |
125.65% |
131.68% |
|||||
Average Balances |
|||||||||||
Loans |
$ 1,519,877 |
$ 1,178,802 |
$ 1,151,141 |
$ 1,133,543 |
$ 1,119,511 |
||||||
Securities |
350,572 |
338,352 |
340,086 |
338,405 |
346,939 |
||||||
Total interest-earning assets |
1,893,447 |
1,543,779 |
1,547,132 |
1,526,015 |
1,509,079 |
||||||
Total assets |
2,043,983 |
1,650,148 |
1,652,997 |
1,628,071 |
1,611,447 |
||||||
Deposits |
1,571,613 |
1,254,148 |
1,256,780 |
1,231,285 |
1,211,957 |
||||||
FHLBB advances |
122,331 |
103,915 |
103,632 |
105,302 |
111,762 |
||||||
Stockholders' Equity |
270,564 |
229,614 |
227,855 |
227,854 |
227,678 |
||||||
Average Yields/Rates (annualized) |
|||||||||||
Loans |
4.65% |
4.92% |
4.93% |
4.97% |
5.18% |
||||||
Securities |
2.71% |
3.01% |
3.25% |
3.37% |
3.34% |
||||||
Total interest-earning assets |
4.25% |
4.42% |
4.39% |
4.45% |
4.62% |
||||||
Savings accounts |
0.44% |
0.45% |
0.51% |
0.58% |
0.69% |
||||||
Money market/NOW accounts |
0.42% |
0.41% |
0.45% |
0.55% |
0.62% |
||||||
Certificates of deposit |
1.35% |
1.74% |
1.78% |
1.82% |
1.88% |
||||||
FHLBB advances |
3.03% |
3.04% |
3.16% |
3.12% |
3.17% |
||||||
Total interest-bearing liabilities |
1.05% |
1.20% |
1.24% |
1.31% |
1.43% |
||||||
(1) |
Includes a $202,000 other-than-temporary impairment ("OTTI") charge on securities for the quarter ended September 30, 2012. |
||||||||||
(2) |
Includes an ESOP plan termination expense of $4.5 million and FHLBB prepayment penalties of $207,000 for the quarter ended December 31, 2012 and acquisition-related expenses totaling $4.0 million, $366,000 and $592,000 for the quarters ended December 31, 2012, September 30, 2012 and June 30, 2012, respectively. |
||||||||||
(3) |
Exclusive of acquisition-related expenses totaling $254,000 (after tax) and $592,000 for the quarters ended September 30, 2012 and June 30, 2012, respectively, and a $119,000 (after tax) other-than-temporary impairment charge for the quarter ended September 30, 2012, the return on average assets would have been 0.80% and 0.77% and the return on average equity would have been 5.75% and 5.57%, respectively. |
||||||||||
(4) |
Exclusive of the $202,000 other-than-temporary impairment charge, non-interest income to average total assets would have been 0.66% for the quarter ended September 30, 2012. |
||||||||||
(5) |
Excluding the ESOP plan termination expense of $4.5 million and FHLBB prepayment penalties of $207,000 for the quarter ended December 31, 2012 and acquisition-related expenses totaling $4.0 million, $366,000 and $592,000 for the quarters ended December 31, 2012, September 30, 2012 and June 30, 2012, non-interest expense to average total assets would have been 2.67%, 2.62% and 2.63% and the efficiency ratio would have been 72.50%, 67.46% and 69.27%, respectively. |
||||||||||
(6) |
Excludes gains/losses on sales of securities and loans and impairment charges on securities. |
||||||||||
(7) |
Excludes the impact of goodwill and other intangible assets of $45.5 million at December 31, 2012 and $8.9 million at September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011. |
||||||||||
(8) |
Excluding acquired loans of $659.6 million, $118.6 million, $126.4 million, $136.4 million and $146.0 million, and loans purchased from other financial institutions of $5.0 million, $6.3 million, $6.4 million, $18.3 million and $19.1 million at December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011, respectively, allowance for loan losses as a percent of total loans, gross would have been 1.05%, 1.15%, 1.14%, 1.15% and 1.16% for the quarters ended December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011, respectively. |
||||||||||
(9) |
Excluding acquired non-performing loans of $7.0 million at December 31, 2012, allowance for loan losses as a percent of total non-performing loans would have been 157.72%. |
||||||||||
SOURCE United Financial Bancorp, Inc.
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