United Financial Bancorp Announces Second-quarter Earnings
GLASTONBURY, Conn. — United Financial Bancorp Inc., the holding company for United Bank, announced results for the quarter ended June 30, 2016.
The company had net income of $9.1 million, or $0.18 per diluted share, for the quarter ended June 30, 2016, compared to net income for the linked quarter of $11.9 million, or $0.24 per diluted share. Operating net income (non-GAAP) for the second quarter of 2016 was $10.0 million, or $0.20 per diluted share, compared to $10.9 million, or $0.22 per diluted share, for the linked quarter.
Operating net income for the second quarter of 2016 is adjusted for purchase accounting impacts, net gain from sales of securities, and the effect of position eliminations as a result of the company’s previously disclosed reorganization plan. Additionally, in the first quarter of 2016, operating income was also adjusted for Federal Home Loan Bank of Boston pre-payment penalties. The company reported net income of $13.3 million, or $0.27 per diluted share, for the quarter ended June 30, 2015.
“In the second quarter of 2016, operating revenue increased 2%, but operating net income declined to $0.20 per diluted share from $0.22 per diluted share for the linked quarter. Despite record-low interest rates, our operating net interest margin declined only one basis point, and we maintained strong expense discipline, evidenced in our ratio of operating non-interest expense to average assets at 2.08%. Management remains focused on its previously disclosed four key objectives to enhance shareholder value in this difficult operating environment for banks. Tangible book value per share increased to $10.39 from $10.20 after paying a dividend of $0.12 per share. Asset quality remains strong and non-interest bearing deposits increased by 10% year over year,” said William Crawford IV, CEO of the bank and the holding company. “In addition, I want to thank our talented employees for their continued steadfast focus on serving our customers and communities.”
Total assets at June 30, 2016 increased by $95.8 million to $6.42 billion from $6.32 billion at March 31, 2016. At June 30, 2016, total loans were $4.73 billion, representing an increase of $81 million, or 2%, from the linked quarter. Loan growth during the second quarter of 2016 was highlighted by a $58 million, or 9%, increase in commercial business loans; a $14 million, or 3%, increase in home-equity loans; and an $8 million, or 2%, increase in owner-occupied commercial real-estate loans. Residential mortgages declined during the second quarter of 2016 by $5 million, reflecting the company’s continued strategy to reduce on-balance sheet exposure to residential mortgage loans.
Deposits totaled $4.46 billion at June 30, 2016 and decreased by $79 million, or 2%, from $4.53 billion at March 31, 2016. While deposits declined during the second quarter of 2016, the shift in the deposit mix is reflective of the company’s strategy to focus on low-cost core deposit growth. Noteworthy increases include a $16 million, or 3%, increase in non-interest bearing deposits and a $32 million, or 8%, increase in NOW checking deposits. Deposit balances were substantially impacted during the second quarter of 2016 by the seasonal outflows of municipal deposits, and, to a lesser extent, retail money-market account outflows were experienced due to the expiration of promotional pricing.