SOURCE: United Financial Bancorp, Inc.

July 28, 2005 16:54 ET

United Financial Bancorp, Inc. Announces Second Quarter Earnings

WEST SPRINGFIELD, MA -- (MARKET WIRE) -- 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:

--  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.
    
--  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.
    
--  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.
    
--  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.
    
--  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.
    
--  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.
    
--  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
                                  =======   =======     =======    =======

Contact Information

  • For More Information Contact:
    Dena M. Hall
    Assistant Vice President
    (413) 787-1700