EX-99.1 2 ex99-1.htm EX-99.1 EX-99.1

FOR IMMEDIATE RELEASE
For More Information Contact:
 
Mark A. Roberts
 
Executive Vice President & CFO
 
(413) 787-1700
   
 
UNITED FINANCIAL BANCORP, INC. SURPASSES $1 BILLION IN TOTAL ASSETS;
ANNOUNCES INCREASE OF 20% IN QUARTERLY CASH DIVIDEND TO $0.06 PER SHARE
 

WEST SPRINGFIELD, MA—January 30, 2007—United Financial Bancorp, Inc. (the “Company”) (NASDAQ:UBNK), the holding company for United Bank (the “Bank”), reported net income of $766,000, or $0.05 per diluted share, for the fourth quarter of 2006 compared to net income of $1.6 million, or $0.10 per diluted share, for the same period in 2005. The 2006 results were mainly impacted by net interest margin contraction, an increase in non-interest expenses and growth in average earning assets. For the year ended December 31, 2006, the Company earned $4.9 million, or $0.30 per diluted share, compared to $4.4 million for the 2005 period. Earnings-per-share data were not applicable to the year ended December 31, 2005 since the Company’s initial public offering was consummated in July 2005. The Company also announced a quarterly cash dividend of $0.06 per share payable on February 26, 2007 to shareholders of record as of February 12, 2007.

The Company’s total assets increased $102.4 million, or 11.3%, to $1.0 billion at December 31, 2006 compared to $906.5 million at December 31, 2005, reflecting strong loan growth. The balance sheet expansion was funded by cash flows from the investment securities portfolio, an increase in total deposits and the use of additional advances from the Federal Home Loan Bank.

"We are pleased with the results of our efforts to grow our franchise while maintaining excellent asset quality and a strong capital position,” commented Richard B. Collins, President and Chief Executive Officer. “During 2006, we achieved an important milestone as total assets reached $1 billion, we opened two new branches in Northampton and Westfield Massachusetts and we acquired a financial services business.” Mr. Collins also remarked that “while our performance continues to be affected by a challenging interest rate environment and a very competitive local market, we remain committed to improving our financial performance and enhancing shareholder value.”



 
Financial Highlights Include:
 
 
·
Gross loans increased $126.3 million, or 19.9%, to $762.1 million at December 31, 2006 compared to $635.8 million at December 31, 2005. Loan growth was solid in all categories, reflecting a sound local economy, a stable real estate market, a relatively low interest rate environment and successful business development efforts.

 
·
Asset quality remained strong, with the ratio of non-performing loans to total loans improving to 0.17% at December 31, 2006 compared to 0.27% at December 31, 2005.

 
·
At December 31, 2006, the allowance for loan losses to total loans was 0.95% and the allowance for loan losses to non-performing loans was 560%.

 
·
Total deposits increased $32.1 million, or 4.9%, to $685.7 million at December 31, 2006 compared to $653.6 million at December 31, 2005. Deposit growth was concentrated in transaction accounts (+1.1%), money market accounts (+7.7%) and certificates of deposit (+14.5%).

 
·
Net interest income declined $26,000 to $6.9 million for the three months ended December 31, 2006 compared to $7.0 million for the same period last year. Net interest margin contracted 30 basis points to 2.89% for the fourth quarter of 2006 in large part due to the flat to inverted yield curve, increasingly competitive pricing conditions for loans and deposits, a shift in deposit demand towards higher-yielding money market and time deposit accounts and the impact of increased short-term market interest rates on the cost to fund earning assets. The impact of net interest margin compression was lessened by an increase of $85.6 million, or 9.8%, in average earning assets mainly due to strong loan growth.

 
·
Non-interest income expanded $93,000, or 7.1%, to $1.4 million for the fourth quarter of 2006 from $1.3 million for the same period last year reflecting strong growth in fee income.

 
·
Non-interest expenses increased $1.1 million, or 19.5%, to $6.8 million for the three months ended December 31, 2006 from $5.7 million for the comparable period in 2005. The growth in non-interest expenses was primarily attributable to costs associated with Sarbanes Oxley Section 404 compliance, the Company’s Stock Based Incentive Plans,



two new branches opened in 2006, a larger loan and deposit account base, new employees hired to support and facilitate the growth of the Company and annual wage increases.
 
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. United Bank provides an array of financial products and services through its 13 branch offices located throughout Western Massachusetts. Through its Financial Services Group and its partnership with NFP Securities, Inc., the Bank is able to offer 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.

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.


 
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION (unaudited)
(Dollars in thousands, except per share amounts)
           
   
December 31,
 
Assets
 
2006
 
2005
 
           
Cash and cash equivalents
 
$
25,419
 
$
15,843
 
Securities available for sale, at fair value
   
190,237
   
226,465
 
Securities to be held to maturity, at amortized cost (fair value:
             
$3,227 at December 31, 2006 and $3,298 at December 31, 2005
   
3,241
   
3,325
 
Federal Home Loan Bank of Boston stock, at cost
   
9,274
   
6,588
 
               
Loans:
             
Residential mortgages
   
319,107
   
285,236
 
Commercial mortgages
   
175,564
   
150,099
 
Construction loans
   
54,759
   
28,872
 
Commercial loans
   
69,762
   
59,591
 
Home equity loans
   
112,739
   
86,045
 
Consumer loans
   
30,181
   
25,949
 
Total loans
   
762,112
   
635,792
 
               
Net deferred loan costs and fees
   
1,286
   
1,148
 
Allowance for loan losses
   
(7,218
)
 
(6,382
)
Loans, net
   
756,180
   
630,558
 
               
Other real estate owned
   
562
   
1,602
 
Premises and equipment, net
   
8,821
   
8,236
 
Bank-owned life insurance
   
6,304
   
6,031
 
Other assets
   
8,885
   
7,865
 
               
Total assets
 
$
1,008,923
 
$
906,513
 
               
Liabilities and Stockholders' Equity
             
               
Deposits:
             
Demand
 
$
97,190
 
$
93,301
 
NOW
   
37,523
   
39,922
 
Savings
   
65,475
   
87,253
 
Money market
   
165,984
   
154,177
 
Certificates of deposit
   
319,514
   
278,958
 
Total deposits
   
685,686
   
653,611
 
               
Federal Home Loan Bank of Boston advances
   
169,806
   
101,880
 
Repurchase agreements
   
10,425
   
8,434
 
Escrow funds held for borrowers
   
1,121
   
1,129
 
Accrued expenses and other liabilities
   
4,174
   
4,454
 
Total liabilities
   
871,212
   
769,508
 
               
Stockholders' Equity:
             
Preferred stock ($0.01 par value; 5,000,000 shares
             
authorized; no shares issued and outstanding)
   
-
   
-
 
Common stock ($0.01 par value; 60,000,000 shares authorized; 17,205,995
             
shares issued at December 31, 2006 and December 31, 2005)
   
172
   
172
 
Additional paid-in capital
   
75,506
   
78,446
 
Retained earnings
   
70,420
   
66,944
 
Unearned compensation
   
(5,772
)
 
(6,092
)
Accumulated other comprehensive loss
   
(1,951
)
 
(2,465
)
Treasury stock, at cost (51,445 shares at December 31, 2006)
   
(664
)
 
-
 
Total stockholders' equity
   
137,711
   
137,005
 
               
Total liabilities and stockholders' equity
 
$
1,008,923
 
$
906,513
 
 

 
UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS (unaudited)
(Amounts in thousands, except per share amounts)
                   
                   
   
Three Months Ended
 
Years Ended
 
   
December 31,
 
December 31,
 
   
2006
 
2005
 
2006
 
2005
 
Interest and dividend income:
                         
Loans
 
$
11,619
 
$
9,272
 
$
42,338
 
$
34,540
 
Investments
   
2,082
   
2,317
   
8,843
   
7,970
 
Other interest-earning assets
   
235
   
144
   
1,021
   
723
 
Total interest and dividend income
   
13,936
   
11,733
   
52,202
   
43,233
 
                           
Interest expense:
                         
Deposits
   
5,106
   
3,647
   
18,696
   
12,300
 
Borrowings
   
1,892
   
1,122
   
5,951
   
3,906
 
Total interest expense
   
6,998
   
4,769
   
24,647
   
16,206
 
                           
Net interest income before provision for loan losses
   
6,938
   
6,964
   
27,555
   
27,027
 
                           
Provision for loan losses
   
342
   
92
   
969
   
917
 
                           
Net interest income after provision for loan losses
   
6,596
   
6,872
   
26,586
   
26,110
 
                           
Non-interest income:
                         
(Loss) gain on sales of available for sale securities
   
(4
)
 
2
   
(222
)
 
3
 
Fee income on depositors’ accounts
   
1,062
   
993
   
4,190
   
3,744
 
Income from bank-owned life insurance
   
46
   
83
   
273
   
326
 
Other income
   
295
   
228
   
1,151
   
947
 
Total non-interest income
   
1,399
   
1,306
   
5,392
   
5,020
 
                           
Non-interest expense:
                         
Salaries and benefits
   
3,715
   
3,037
   
12,888
   
11,167
 
Occupancy expenses
   
524
   
406
   
1,792
   
1,494
 
Marketing expenses
   
343
   
466
   
1,436
   
1,386
 
Data processing expenses
   
661
   
571
   
2,474
   
2,371
 
Contributions and sponsorships
   
41
   
45
   
174
   
3,791
 
Professional fees
   
446
   
325
   
1,148
   
732
 
Other expenses
   
1,114
   
875
   
4,124
   
3,171
 
Total non-interest expense
   
6,844
   
5,725
   
24,036
   
24,112
 
                           
Income before income taxes
   
1,151
   
2,453
   
7,942
   
7,018
 
                           
Income tax expense
   
385
   
877
   
3,018
   
2,649
 
                           
Net income
 
$
766
 
$
1,576
 
$
4,924
 
$
4,369
 
                           
Earnings per share:
                         
Basic
 
$
0.05
 
$
0.10
 
$
0.30
   
NA
 
Diluted
 
$
0.05
 
$
0.10
 
$
0.30
   
NA
 
                           
Weighted average shares outstanding:
                         
Basic
   
16,285
   
16,589
   
16,468
   
NA
 
Diluted
   
16,314
   
16,589
   
16,476
   
NA
 
 
                         
NA - Not applicable
                         
 
 

 

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
 
   
2006
 
2006
 
2006
 
2006
 
2005
 
                       
Operating Results:
                               
Net interest income
 
$
6,938
 
$
6,944
 
$
6,765
 
$
6,908
 
$
6,964
 
Loan loss provision
   
342
   
165
   
300
   
162
   
92
 
Non-interest income
   
1,399
   
1,294
   
1,441
   
1,258
   
1,306
 
Non-interest expenses
   
6,844
   
5,580
   
5,836
   
5,776
   
5,725
 
Net income
   
766
   
1,513
   
1,290
   
1,355
   
1,576
 
                                 
Performance Ratios (annualized):
                               
Return on average assets
   
0.31
%
 
0.62
%
 
0.55
%
 
0.59
%
 
0.70
%
Return on average equity
   
2.23
%
 
4.44
%
 
3.75
%
 
3.93
%
 
4.62
%
Net interest margin
   
2.89
%
 
2.96
%
 
2.96
%
 
3.10
%
 
3.19
%
Non-interest income to average total assets
   
0.57
%
 
0.53
%
 
0.61
%
 
0.55
%
 
0.58
%
Non-interest expense to average total assets
   
2.77
%
 
2.30
%
 
2.47
%
 
2.51
%
 
2.53
%
Efficiency ratio
   
82.09
%
 
65.99
%
 
71.12
%
 
70.73
%
 
69.23
%
                                 
Per Share Data:
                               
Diluted earnings per share
 
$
0.05
 
$
0.09
 
$
0.08
 
$
0.08
 
$
0.10
 
Book value per share
 
$
8.03
 
$
7.95
 
$
8.00
 
$
7.98
 
$
7.96
 
Market price at period end
 
$
13.80
 
$
12.93
 
$
13.31
 
$
12.03
 
$
11.53
 
                                 
Risk Profile
                               
Non-performing assets as a percent of total assets
   
0.18
%
 
0.26
%
 
0.28
%
 
0.18
%
 
0.37
%
Non-performing loans as a percent of total loans, gross
   
0.17
%
 
0.27
%
 
0.33
%
 
0.26
%
 
0.27
%
Allowance for loan losses as a percent of total loans, gross
   
0.95
%
 
0.94
%
 
0.98
%
 
1.02
%
 
1.00
%
Allowance for loan losses as a percent of non-performing loans
   
560.40
%
 
341.78
%
 
294.82
%
 
390.18
%
 
371.91
%
Equity as a percentage of assets
   
13.65
%
 
13.90
%
 
14.31
%
 
14.49
%
 
15.11
%
                                 
Average Balances
                               
Loans
 
$
746,256
 
$
714,918
 
$
669,409
 
$
640,832
 
$
626,556
 
Securities
   
194,786
   
211,101
   
220,845
   
227,373
   
232,469
 
Total assets
   
988,939
   
969,962
   
945,262
   
921,155
   
903,971
 
Deposits
   
688,104
   
687,397
   
686,630
   
658,530
   
653,493
 
FHLB advances
   
150,301
   
134,833
   
111,316
   
112,641
   
102,010
 
Capital
   
137,219
   
136,279
   
137,639
   
137,768
   
136,415
 
                                 
Average Yields/Rates (annualized)
                               
Loans
   
6.23
%
 
6.18
%
 
6.02
%
 
5.99
%
 
5.92
%
Securities
   
4.28
%
 
4.16
%
 
4.10
%
 
4.06
%
 
3.99
%
Total interest earning assets
   
5.81
%
 
5.74
%
 
5.52
%
 
5.46
%
 
5.37
%
                                 
Savings accounts
   
0.84
%
 
0.84
%
 
0.83
%
 
0.82
%
 
0.60
%
Money market/NOW accounts
   
2.69
%
 
2.64
%
 
2.61
%
 
2.45
%
 
2.31
%
Certificates of deposit
   
4.48
%
 
4.27
%
 
4.07
%
 
3.71
%
 
3.43
%
FHLB advances
   
4.79
%
 
4.69
%
 
4.03
%
 
3.97
%
 
4.15
%
Total interest-bearing liabilities
   
3.73
%
 
3.57
%
 
3.30
%
 
3.05
%
 
2.84
%