EX-99.1 2 form8k_ex991-080305.txt Exhibit 99.1 ------------ FOR IMMEDIATE RELEASE For More Information Contact: Dena M. Hall Assistant Vice President (413) 787-1700 UNITED FINANCIAL BANCORP, INC. ANNOUNCES SECOND QUARTER EARNINGS ---------------------------------------------------------------- WEST SPRINGFIELD, MA--July 28, 2005--United Financial Bancorp, Inc. (the "Company") (NASDAQ:UBNK), the holding company for United Bank (the "Bank"), reported that net income grew to $1.6 million, an increase of 19.2%, for the three months ended June 30, 2005 compared to net income of $1.3 million for the same quarter last year. The increase primarily resulted from growth in net interest income and non-interest income, partially offset by a higher provision for loan losses and higher non-interest expense. Total assets increased $180.7 million, or 23.4%, to $952.7 million at June 30, 2005 from $772.0 million at December 31, 2004. The increase reflected growth of $58.5 million in securities available for sale and $96.4 million in cash received for stock subscriptions in the Company's recent initial public offering which was invested in short term deposits. Total net loans increased to $588.1 million from $569.2 million at December 31, 2004, fueled largely by increases in residential mortgage loans, reflecting continued demand for these products and solid loan origination activity. The growth in assets was funded by $116.5 million in subscriptions for the initial public offering, a $41.3 million increase in deposits and a $16.9 million increase in Federal Home Loan Bank advances. "United Financial Bancorp, Inc. had an exciting second quarter as we completed our initial public offering and prepared for shares of UBNK stock to begin trading on the NASDAQ National Market," said Richard B. Collins, President and Chief Executive Officer. "We are pleased to announce solid second quarter results fueled by strong loan and deposit growth as well as a modest increase in fee income. With the stock offering behind us, we can now focus all of our efforts on growing our franchise. We remain committed to serving the needs of our customers and enhancing shareholder value." he said. Financial Highlights Include: o Net loan growth was driven primarily by one-to-four family residential mortgage loans which increased $22.3 million, or 6.7%, to $353.1 million at June 30, 2005 compared to $330.8 million at December 31, 2004. o Asset quality remained strong with delinquencies at .87% of total loans and non-performing loans at .30% of total assets at June 30, 2005 compared to .98% and .32% respectively at June 30, 2004. o At June 30, 2005 the allowance for loan losses to total loans was 1.05% and the allowance for loan losses to non-performing loans was 216%. The provision for loan losses increased $879,000, or 16.5%, from the quarter ended June 30, 2004 due to an increase in the portfolio of commercial real estate loans and commercial and industrial loans, and higher adversely classified loans and non-performing loans at June 30, 2005 as compared to June 30, 2004. o Deposits increased to $655.0 million. Core deposit growth was approximately 5.9% for the six months ended June 30, 2005, due to our continued emphasis on lower-cost core deposit balances. o Net interest income before provision for loan losses increased $599,000, or 10.0%, to $6.6 million for the three months ended June 30, 2005 compared to the three months ended June 30, 2004. The increase reflected a $76.0 million, or 10.5%, increase in the average balance of total interest earning assets to $802.9 million for the three months ended June 30, 2005, which more than offset a 13 basis point decrease in our interest rate spread to 2.87% from 3.00%. For the six months ended June 30, 2005, our interest rate spread decreased to 2.95% from 3.05% for the comparable period of 2004. o Non-interest income increased $88,000, or 7.5%, to $1.3 million for the three months ended June 30, 2005 compared to the same period last year reflecting modest growth in fee income. o Non-interest expense increased 2.0% to $4.9 million for the three months ended June 30, 2005 from $4.8 million for the prior year period. The increase reflected salary and employee benefits increases as well as increased staffing. Non-interest expense in 2004 included expenses related to the conversion of United Bank to a federal charter. 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 National Market under the symbol UBNK. United Bank provides an array of financial products and services through its 11 branch offices located throughout Western Massachusetts. Through its Financial Services Group, the Bank offers access to a wide range of investment and insurance products and services, as well as financial, estate and retirement planning. For more information regarding the Bank's products and services and for United Financial Bancorp, Inc. investor relations information please visit www.bankatunited.com. 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. Attached are consolidated balance sheets and consolidated statements of operations. UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CONDITION (unaudited) (Dollars in Thousands) --------------------------------------------------------------------------------

June 30, December 31, 2005 2004 -------------- -------------- ASSETS Cash and due from banks.................................................... $ 15,687 $ 15,772 Interest bearing deposits.................................................. 103,625 7,180 Liquidity and cash funds................................................... 4,223 281 -------------- -------------- Total cash and cash equivalents...................................... 123,535 23,233 Securities available for sale, at market value............................. 210,859 152,329 Securities to be held to maturity, at amortized cost (fair value $3,379 in 2005 and $2,498 in 2004)............................................. 3,380 2,498 Loans, net of allowance for loan losses of $6,214 in 2005 and $5,750 in 2004................................................................. 588,104 569,243 Banking premises and equipment, net........................................ 7,710 7,671 Accrued interest receivable................................................ 3,455 2,862 Deferred tax asset......................................................... 1,587 1,551 Stock in the Federal Home Loan Bank of Boston.............................. 6,175 6,021 Bank-owned life insurance.................................................. 5,867 5,705 Other assets............................................................... 2,015 895 -------------- -------------- TOTAL ASSETS......................................................... $ 952,687 $ 772,008 ============== ============== LIABILITIES AND STOCKHOLDER'S EQUITY Liabilities: Deposits: Interest bearing......................................................... $ 565,818 $ 527,426 Non-interest bearing..................................................... 89,167 86,246 -------------- -------------- Total deposits....................................................... 654,985 613,672 Federal Home Loan Bank of Boston advances................................ 103,630 86,694 Subscriptions payable.................................................... 116,547 -- Repurchase agreements.................................................... 7,970 4,317 Escrow funds held for borrowers.......................................... 924 954 Accrued expenses and other liabilities................................... 3,748 4,116 -------------- -------------- Total liabilities.................................................... 887,804 709,753 Commitments and contingencies............................................ Stockholder's equity: Preferred stock, par value $0.01 per share, authorized 5,000,000 shares; none issued............................................................ -- -- Common stock, par value $0.01 per share, authorized 60,000,000 shares; 100 shares issued in 2004 and 2005..................................... -- -- Paid-in capital.......................................................... -- -- Retained earnings........................................................ 65,632 62,667 Accumulated other comprehensive loss..................................... (749) (412) -------------- -------------- Total stockholder's equity........................................... 64,883 62,255 -------------- -------------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY........................... $ 952,687 $ 772,008 ============== ==============

UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (Dollars in Thousands) --------------------------------------------------------------------------------

Three Months Ended Six Months Ended June 30, June 30, 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Interest and dividend income: Loans...................................................... $ 8,418 $ 7,197 $ 16,525 $ 14,273 Investment interest and dividends.......................... 1,859 1,473 3,387 3,314 Other interest-earning assets.............................. 115 239 256 280 ------------ ------------ ------------ ------------ Total interest and dividend income...................... 10,392 8,909 20,168 17,867 Interest expense: Interest on deposits....................................... 2,901 2,194 5,481 4,430 Interest on short-term borrowings.......................... 228 75 322 154 Interest on long-term debt................................. 690 666 1,385 1,285 ------------ ------------ ------------ ------------ Total interest expense.................................. 3,819 2,935 7,188 5,869 ------------ ------------ ------------ ------------ Net interest income before provision for loan losses.... 6,573 5,974 12,980 11,998 Provision for loan losses.................................... 275 113 550 225 ------------ ------------ ------------ ------------ Net interest income after provision for loan losses..... 6,298 5,861 12,430 11,773 Non-interest income: Fee income on depositors' accounts......................... 1,005 889 1,908 1,677 Gain on sale of loans...................................... -- 1 -- 10 Net gain on sale of securities............................. -- 2 -- 112 Income from bank-owned life insurance...................... 81 75 162 150 Other income .............................................. 175 206 357 372 ------------ ------------ ------------ ------------ Total non-interest income............................... 1,261 1,173 2,427 2,321 ------------ ------------ ------------ ------------ Non-interest expense: Salaries and employee benefits............................. 2,346 1,991 5,101 4,536 Occupancy expense.......................................... 399 437 739 848 Advertising expenses....................................... 335 394 680 618 Data processing expenses................................... 645 645 1,391 1,262 Professional fees.......................................... 108 50 219 143 Other expenses............................................. 1,064 1,282 1,796 2,361 ------------ ------------ ------------ ------------ Total non-interest expense.............................. 4,897 4,799 9,926 9,768 ------------ ------------ ------------ ------------ Income before income taxes.............................. 2,662 2,235 4,931 4,326 Income tax expense........................................... 1,063 893 1,966 1,723 ------------ ------------ ------------ ------------ NET INCOME.............................................. $ 1,599 $ 1,342 $ 2,965 $ 2,603 ============ ============ ============ ============