HARTFORD, Conn., July 16, 2019 (GLOBE NEWSWIRE) -- United Financial Bancorp, Inc. ("United Financial" or the "Company") (NASDAQ Global Select Stock Market: “UBNK”), the holding company for United Bank (the "Bank"), announced results for the quarter ended June 30, 2019.
The Company reported a net loss of $3.2 million, or $0.06 per diluted share, for the quarter ended June 30, 2019, compared to net income for the quarter ended March 31, 2019 ("linked quarter") of $12.7 million, or $0.25 per diluted share. The net loss for the current quarter was primarily due to an impairment charge recorded on the Company's investments in D.C. Solar LLCs of $6.3 million (after tax) and the related establishment of an additional tax reserve of $8.7 million during the three months ended June 30, 2019. The Company reported net income of $15.6 million, or $0.31 per diluted share, for the quarter ended June 30, 2018.
On July 15, 2019, United Financial and People's United Financial, Inc. announced the signing of a definitive agreement and plan of merger pursuant to which United Financial will merge with and into People's United Financial, Inc., with People's United Financial, Inc. surviving the merger, in an all stock transaction valued at approximately $759.0 million as of July 15, 2019. Subject to the satisfaction or waiver of customary closing conditions, including the approval of the merger agreement by United Financial shareholders and the receipt of required regulatory approvals, United Financial and People's United Financial, Inc. expect that the merger will be completed during the fourth quarter of 2019.
Balance Sheet
Assets totaled $7.34 billion at both June 30, 2019 and March 31, 2019. At June 30, 2019, total available for sale securities were $840.5 million, representing a decrease of $8.0 million, or 0.9%, from the linked quarter. The overall decrease was primarily due to sales of lower yielding, higher risk weighted securities, offset by purchases of various mortgage-backed securities and corporate bonds. At June 30, 2019, total loans were $5.76 billion, representing an increase of $23.6 million, or 0.4%, from the linked quarter. Changes to loan balances during the second quarter of 2019 were highlighted by a $39.0 million, or 2.0%, increase in investor non-owner occupied commercial real estate loans, a $20.3 million, or 4.6%, increase in owner-occupied commercial real estate loans and a $13.6 million, or 3.2%, increase in other consumer loans. Slightly offsetting the increased loan balances above were a $16.2 million, or 1.2%, decrease in residential real estate loans, a $14.6 million, or 15.4%, decrease in commercial construction loans, a $9.7 million, or 1.1%, decrease in commercial business loans, a $7.7 million, or 1.3%, decrease in home equity loans and a $1.1 million, or 7.9%, decrease in residential construction loans from the linked quarter. Loans held for sale increased $22.6 million, or 140.0%, from the linked quarter due to a change in pipeline delivery terms. Total cash and cash equivalents decreased $40.4 million, or 26.1%, from the linked quarter as the Company utilized excess cash to pay off maturing Federal Home Loan Bank advances.
Deposits totaled $5.73 billion at June 30, 2019 and increased by $62.3 million, or 1.1%, from $5.66 billion at March 31, 2019. Increases in deposit balances during the second quarter of 2019 were primarily due to a $66.0 million, or 8.5%, increase in non-interest bearing checking deposits and a $40.6 million, or 2.5%, increase in money market account balances, largely due to seasonal inflows that are typical of commercial DDA accounts in the second quarter. Offsetting these increases was a $22.9 million, or 2.5%, decrease in NOW checking account balances, a $12.4 million, or 2.5%, decrease in regular savings accounts and a $9.3 million, or 0.5%, decrease in certificates of deposit balances.
Total Federal Home Loan Bank advances decreased by $85.2 million, or 11.6%, over the linked quarter as the Company utilized excess cash generated from proceeds from sales of investment securities to pay off maturing advances as noted above.
Investment in D.C. Solar Tax-Advantaged Funds
The Company continues to monitor developments in its investments in Solar Eclipse Investment Fund X, LLC, Solar Eclipse Investment Fund XV, LLC, and Solar Eclipse Investment Fund XXII, LLC ("LLC investments"), all of which are borrowers of and lessees to D.C. Solar Solutions, Inc. and D.C. Solar Distribution, Inc., respectively. In late January and early February, 2019, D.C Solar Solutions, Inc., D.C. Solar Distribution, Inc. and several affiliated companies filed for Chapter 11 bankruptcy. On March 22, 2019, all cases were converted to cases under Chapter 7 of the Bankruptcy Code.
During the three months ended June 30, 2019, the Company recorded an impairment charge to the investment in the LLCs of $6.3 million (after tax) and an additional tax reserve of $8.7 million to reflect the loss and the associated uncertain tax positions. The net impact to net income for the three months ended June 30, 2019 was $15.0 million. At this time, no additional measurable loss has been identified, but the Company believes an additional loss is more likely than not. Given the facts and circumstances that we are aware of at the time of the filing of this release, the Company does not believe a full loss or total tax benefit reversal to be likely.
Net Interest Income
Net interest income increased by $73,000, or 0.2%, on a linked quarter basis, to $47.0 million, primarily attributable to an increase in interest and dividend income of $191,000, or 0.3%, to $73.4 million being partially offset by an increase in interest expense of $118,000, or 0.4%, to $26.4 million. Average interest-earning assets decreased by $77.4 million, or 1.1%, on a linked quarter basis, primarily due to a decrease in average investment balances, which decreased by $120.1 million, or 12.4%, as the result of a deleveraging strategy executed at the end of March. This decrease was offset by average loan balance growth, which was driven by a $28.5 million, or 3.2%, increase in average commercial business loans, a $20.4 million, or 0.9%, increase in average commercial real estate loans and a $15.9 million, or 3.8%, increase in average other consumer loans. Slightly offsetting the increases was a $29.3 million, or 2.1%, decrease in average residential real estate loans, a $6.1 million, or 1.1%, decrease in average home equity loans and a $5.4 million, or 4.9%, decrease in average construction loans.
Interest expense increased by $118,000, or 0.4%, to $26.4 million during the second quarter of 2019, from $26.3 million in the linked quarter. Average interest-bearing deposit balances decreased by $39.5 million, or 0.8%, on a linked quarter basis, primarily driven by a $50.4 million, or 2.0%, decrease in average NOW and money market account balances, slightly offset by a $6.9 million, or 0.4%, increase in average certificates of deposit and a $4.0 million, or 0.8%, increase in average savings account balances. Average non-interest bearing deposits increased by $51.2 million, or 6.9%, as compared to the linked quarter. Average Federal Home Loan Bank advances decreased by $106.8 million, or 13.3%.
The tax-equivalent net interest margin increased by 1 basis point to 2.82% in the second quarter of 2019, from 2.81% in the linked period. The increase in the tax-equivalent net interest margin was driven by a 2 basis point increase in the yield of interest-earning assets slightly offset by a 3 basis point increase in the cost of interest-bearing liabilities. The interest-earning asset yield improvement was largely driven by an 18 basis point increase in the yield on commercial business loans, a 6 basis point increase in the yield on construction loans and a 6 basis point increase in the yield on other consumer loans. These increases were offset by a 7 basis point decrease in the yield on home equity loans, a 6 basis point decrease in the yield on commercial real estate loans and a 2 basis point decrease in the yield on residential real estate loans. In addition, there was a 3 basis point increase in the yield of the investment portfolio. The total cost of funds increased by 3 basis points to 1.64% in the second quarter of 2019 driven by a 5 basis point increase in the cost of interest-bearing deposits and a 7 basis point increase in the cost of Federal Home Loan Bank advances.
Provision for Loan Losses
The provision for loan losses totaled $2.5 million for the quarter ended June 30, 2019 as compared to $2.0 million for the linked quarter. Net charge-offs for the quarter ended June 30, 2019 totaled $1.3 million, or 0.09%, as a percentage of average loans outstanding, as compared to $1.6 million, or 0.11%, as a percentage of average loans for the quarter ended March 31, 2019. Factors considered in the provision for loan losses include, but are not limited to, historical charge-offs, the composition of the portfolio, the current level of non-performing loans and charge-offs, local and national economic and credit conditions, the direction of real estate values and delinquency trends.
Non-Interest Income
Total non-interest income decreased by $8.1 million, or 90.6%, to $840,000 for the quarter ended June 30, 2019 from $9.0 million in the linked quarter. The decrease in the second quarter's non-interest income was driven primarily by a change of $7.3 million in net loss on limited partnership investments as compared to the linked quarter, due mainly to the $7.8 million impairment charge on the D.C. Solar LLC investments discussed above, a $1.0 million, or 169.4%, decrease in income from mortgage banking activities, a decrease of $600,000, or 81.4%, in net gain from sales of securities and a decrease of $425,000, or 21.8%, in bank-owned life insurance income as compared to the linked quarter. These decreases were slightly offset by an increase of $1.4 million, or 21.9%, in service charges and fee income primarily resulting from higher swap fee income as compared to the linked quarter.
Non-Interest Expense
Non-interest expense for the quarter ended June 30, 2019 totaled $39.5 million and increased by $270,000, or 0.7%, from the linked quarter. The increase in non-interest expense during the quarter was driven by a $1.1 million, or 86.70%, increase in professional fees largely due to legal expenses pertaining to the proposed acquisition by People's United Financial, Inc. and D.C. Solar, offset by a $279,000, or 1.3%, decrease in salaries and employee benefits expense and a $429,000, or 7.7%, decrease in occupancy and equipment expense as compared to the linked quarter.
Provision for Income Taxes
The provision for income taxes was $9.2 million for the quarter ended June 30, 2019 as compared to $2 million in the linked quarter. The effective tax rate was 154.9% at June 30, 2019 as compared to 13.8% at March 31, 2019. The effective tax rate is higher compared to the linked quarter due to the recognition of uncertain tax positions of $8.7 million associated with D.C. Solar as discussed above.
Asset Quality
Asset quality remained strong and stable for the period, with non-performing assets increasing by $1.4 million to $32.0 million at June 30, 2019 from $30.6 million at March 31, 2019. The ratio of non-performing assets to total assets for the quarter ended June 30, 2019 was 0.44%, as compared to 0.42% in the linked quarter.
Capital
The Company reported Tangible Common Equity ("TCE") of $598.1 million, or 8.2% of average assets, for the quarter ended June 30, 2019. Tangible book value per share decreased to $11.71 at June 30, 2019 from $11.78 at March 31, 2019. The decrease was primarily driven by the impact of the Company's net loss of $3.2 million and the cash dividend payment to shareholders of $0.12 per share during the quarter, offset by an increase in accumulated other comprehensive income as a result of an increase in the market value of the Company’s investment portfolio as compared to the previous quarter. Book value per share at June 30, 2019 was $14.09, as compared to $14.17 in the linked quarter.
Dividend
The Board of Directors declared a cash dividend on the Company’s common stock of $0.12 per share to shareholders of record at the close of business on July 26, 2019 and payable on August 7, 2019. This dividend equates to a 3.51% annualized yield based on the $13.68 average closing price of the Company’s common stock in the second quarter of 2019. The Company has paid dividends for 53 consecutive quarters.
About United Financial Bancorp, Inc.
United Financial Bancorp, Inc. is the holding company for United Bank, a full service financial services firm offering a complete line of commercial, small business, wealth management and consumer banking products and services to customers throughout Connecticut, Massachusetts and Rhode Island. United Bank is a financially strong, leading New England bank headquartered in Hartford, Connecticut with more than 50 branches in three states. United Financial Bancorp, Inc. trades on the NASDAQ Global Select Stock Exchange under the ticker symbol “UBNK.” At June 30, 2019, the Company had $7.34 billion in assets.
For more information about United Bank’s services and products call (866) 959-BANK or visit www.bankatunited.com. For more information about United Financial Bancorp, Inc., visit www.unitedfinancialinc.com or download the Company’s free Investor Relations app on your Apple or Android device. To download United Financial Bancorp, Inc.'s investor relations app on your iPhone or on your iPad, which offers access to SEC documents, press releases, videos, audiocasts and more, please visit:
https://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=725271098&mt=8
or https://play.google.com/store/apps/details?id=com.theirapp.ubnk for your Android mobile device.
Non-GAAP Financial Measures
This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included on pages F-10 through F-12 in the accompanying financial tables. These non-GAAP financial measures provide information for investors to effectively analyze financial trends of our business activities, and to enhance comparability with peers across the financial services sector.
Forward Looking Statements
This press release contains certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events, such as the anticipated effect of the Company's LLC investments, and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include the outcome of the D.C. Solar bankruptcy, increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged.
| Investor Relations Contact: Marliese L. Shaw Executive Vice President, Investor Relations Officer United Bank 860-291-3622 MShaw@bankatunited.com | Media Relations Contact: Adam J. Jeamel Regional President, Corporate Communications United Bank 860-291-3765 AJeamel@bankatunited.com |
| United Financial Bancorp, Inc. and Subsidiaries | ||||||||||||||||
| Consolidated Statements of Net Income | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Interest and dividend income: | (In thousands, except share data) | |||||||||||||||
| Loans | $ | 65,650 | $ | 57,958 | $ | 130,414 | $ | 112,738 | ||||||||
| Securities-taxable interest | 6,117 | 5,969 | 12,592 | 11,467 | ||||||||||||
| Securities-non-taxable interest | 644 | 2,354 | 1,738 | 4,783 | ||||||||||||
| Securities-dividends | 653 | 736 | 1,309 | 1,373 | ||||||||||||
| Interest-bearing deposits | 341 | 113 | 566 | 263 | ||||||||||||
| Total interest and dividend income | 73,405 | 67,130 | 146,619 | 130,624 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 20,564 | 12,864 | 40,495 | 23,891 | ||||||||||||
| Borrowed funds | 5,831 | 6,085 | 12,177 | 12,009 | ||||||||||||
| Total interest expense | 26,395 | 18,949 | 52,672 | 35,900 | ||||||||||||
| Net interest income | 47,010 | 48,181 | 93,947 | 94,724 | ||||||||||||
| Provision for loan losses | 2,472 | 2,350 | 4,515 | 4,289 | ||||||||||||
| Net interest income after provision for loan losses | 44,538 | 45,831 | 89,432 | 90,435 | ||||||||||||
| Non-interest income: | ||||||||||||||||
| Service charges and fees | 7,538 | 6,542 | 13,723 | 12,701 | ||||||||||||
| Net gain from sales of securities | 137 | 62 | 874 | 178 | ||||||||||||
| (Loss) income from mortgage banking activities | (410 | ) | 846 | 181 | 2,575 | |||||||||||
| Bank-owned life insurance income | 1,521 | 1,671 | 3,467 | 3,317 | ||||||||||||
| Net loss on limited partnership investments | (7,898 | ) | (960 | ) | (8,501 | ) | (1,550 | ) | ||||||||
| Other (loss) income | (48 | ) | 199 | 76 | 428 | |||||||||||
| Total non-interest income | 840 | 8,360 | 9,820 | 17,649 | ||||||||||||
| Non-interest expense: | ||||||||||||||||
| Salaries and employee benefits | 21,923 | 22,113 | 44,125 | 43,311 | ||||||||||||
| Service bureau fees | 2,198 | 2,165 | 4,235 | 4,383 | ||||||||||||
| Occupancy and equipment | 5,111 | 4,668 | 10,651 | 9,617 | ||||||||||||
| Professional fees | 2,414 | 1,105 | 3,707 | 2,269 | ||||||||||||
| Marketing and promotions | 782 | 1,189 | 1,640 | 1,874 | ||||||||||||
| FDIC insurance assessments | 769 | 735 | 1,428 | 1,474 | ||||||||||||
| Core deposit intangible amortization | 388 | 305 | 808 | 642 | ||||||||||||
| Other | 5,872 | 6,090 | 12,050 | 11,536 | ||||||||||||
| Total non-interest expense | 39,457 | 38,370 | 78,644 | 75,106 | ||||||||||||
| Income before income taxes | 5,921 | 15,821 | 20,608 | 32,978 | ||||||||||||
| Provision for income taxes | 9,169 | 175 | 11,199 | 1,545 | ||||||||||||
| Net (loss) income | $ | (3,248 | ) | $ | 15,646 | $ | 9,409 | $ | 31,433 | |||||||
| Net (loss) income per share: | ||||||||||||||||
| Basic | $ | (0.06 | ) | $ | 0.31 | $ | 0.19 | $ | 0.62 | |||||||
| Diluted | $ | (0.06 | ) | $ | 0.31 | $ | 0.19 | $ | 0.62 | |||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 50,620,236 | 50,504,273 | 50,617,661 | 50,489,689 | ||||||||||||
| Diluted | 50,620,236 | 50,974,283 | 50,763,678 | 50,985,520 | ||||||||||||
| United Financial Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||
| Consolidated Statements of Net Income | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||||||||||||
| Interest and dividend income: | (In thousands, except share data) | |||||||||||||||||||
| Loans | $ | 65,650 | $ | 64,764 | $ | 63,227 | $ | 61,061 | $ | 57,958 | ||||||||||
| Securities-taxable interest | 6,117 | 6,475 | 5,705 | 5,822 | 5,969 | |||||||||||||||
| Securities-non-taxable interest | 644 | 1,094 | 2,339 | 2,347 | 2,354 | |||||||||||||||
| Securities-dividends | 653 | 656 | 702 | 748 | 736 | |||||||||||||||
| Interest-bearing deposits | 341 | 225 | 250 | 213 | 113 | |||||||||||||||
| Total interest and dividend income | 73,405 | 73,214 | 72,223 | 70,191 | 67,130 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 20,564 | 19,931 | 18,183 | 15,767 | 12,864 | |||||||||||||||
| Borrowed funds | 5,831 | 6,346 | 5,678 | 5,995 | 6,085 | |||||||||||||||
| Total interest expense | 26,395 | 26,277 | 23,861 | 21,762 | 18,949 | |||||||||||||||
| Net interest income | 47,010 | 46,937 | 48,362 | 48,429 | 48,181 | |||||||||||||||
| Provision for loan losses | 2,472 | 2,043 | 2,618 | 2,007 | 2,350 | |||||||||||||||
| Net interest income after provision for loan losses | 44,538 | 44,894 | 45,744 | 46,422 | 45,831 | |||||||||||||||
| Non-interest income: | ||||||||||||||||||||
| Service charges and fees | 7,538 | 6,185 | 7,447 | 6,623 | 6,542 | |||||||||||||||
| Net gain (loss) from sales of securities | 137 | 737 | 25 | (58 | ) | 62 | ||||||||||||||
| (Loss) income from mortgage banking activities | (410 | ) | 591 | 698 | 1,486 | 846 | ||||||||||||||
| Bank-owned life insurance income | 1,521 | 1,946 | 1,517 | 1,460 | 1,671 | |||||||||||||||
| Net loss on limited partnership investments | (7,898 | ) | (603 | ) | (405 | ) | (221 | ) | (960 | ) | ||||||||||
| Other (loss) income | (48 | ) | 124 | 211 | 265 | 199 | ||||||||||||||
| Total non-interest income | 840 | 8,980 | 9,493 | 9,555 | 8,360 | |||||||||||||||
| Non-interest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 21,923 | 22,202 | 25,341 | 22,643 | 22,113 | |||||||||||||||
| Service bureau fees | 2,198 | 2,037 | 2,309 | 2,209 | 2,165 | |||||||||||||||
| Occupancy and equipment | 5,111 | 5,540 | 6,384 | 4,487 | 4,668 | |||||||||||||||
| Professional fees | 2,414 | 1,293 | 1,136 | 1,013 | 1,105 | |||||||||||||||
| Marketing and promotions | 782 | 858 | 1,108 | 1,119 | 1,189 | |||||||||||||||
| FDIC insurance assessments | 769 | 659 | 611 | 655 | 735 | |||||||||||||||
| Core deposit intangible amortization | 388 | 420 | 420 | 288 | 305 | |||||||||||||||
| Other | 5,872 | 6,178 | 6,409 | 6,529 | 6,090 | |||||||||||||||
| Total non-interest expense | 39,457 | 39,187 | 43,718 | 38,943 | 38,370 | |||||||||||||||
| Income before income taxes | 5,921 | 14,687 | 11,519 | 17,034 | 15,821 | |||||||||||||||
| Provision (benefit) for income taxes | 9,169 | 2,030 | (646 | ) | 726 | 175 | ||||||||||||||
| Net (loss) income | $ | (3,248 | ) | $ | 12,657 | $ | 12,165 | $ | 16,308 | $ | 15,646 | |||||||||
| Net (loss) income per share: | ||||||||||||||||||||
| Basic | $ | (0.06 | ) | $ | 0.25 | $ | 0.24 | $ | 0.32 | $ | 0.31 | |||||||||
| Diluted | $ | (0.06 | ) | $ | 0.25 | $ | 0.24 | $ | 0.32 | $ | 0.31 | |||||||||
| Weighted-average shares outstanding: | ||||||||||||||||||||
| Basic | 50,620,236 | 50,615,059 | 50,613,498 | 50,624,832 | 50,504,273 | |||||||||||||||
| Diluted | 50,620,236 | 50,907,092 | 50,970,000 | 51,104,776 | 50,974,283 | |||||||||||||||
| United Financial Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||
| Consolidated Statements of Condition | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||||||||||||
| ASSETS | (In thousands) | |||||||||||||||||||
| Cash and cash equivalents: | ||||||||||||||||||||
| Cash and due from banks | $ | 67,939 | $ | 50,823 | $ | 36,434 | $ | 48,786 | $ | 62,188 | ||||||||||
| Short-term investments | 46,807 | 104,350 | 61,530 | 29,809 | 46,987 | |||||||||||||||
| Total cash and cash equivalents | 114,746 | 155,173 | 97,964 | 78,595 | 109,175 | |||||||||||||||
| Available for sale securities – At fair value | 840,500 | 848,541 | 973,347 | 972,035 | 1,006,135 | |||||||||||||||
| Loans held for sale | 38,809 | 16,172 | 78,788 | 86,948 | 85,458 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| Commercial real estate loans: | ||||||||||||||||||||
| Owner-occupied | 459,648 | 439,366 | 443,398 | 434,906 | 418,338 | |||||||||||||||
| Investor non-owner occupied | 1,971,103 | 1,932,137 | 1,911,070 | 1,888,848 | 1,927,960 | |||||||||||||||
| Construction | 80,063 | 94,649 | 87,493 | 78,235 | 82,883 | |||||||||||||||
| Total commercial real estate loans | 2,510,814 | 2,466,152 | 2,441,961 | 2,401,989 | 2,429,181 | |||||||||||||||
| Commercial business loans | 910,473 | 920,165 | 886,770 | 861,030 | 841,142 | |||||||||||||||
| Consumer loans: | ||||||||||||||||||||
| Residential real estate | 1,306,208 | 1,322,423 | 1,313,373 | 1,283,126 | 1,252,001 | |||||||||||||||
| Home equity | 575,683 | 583,368 | 583,454 | 579,907 | 588,638 | |||||||||||||||
| Residential construction | 12,542 | 13,620 | 20,632 | 32,750 | 32,063 | |||||||||||||||
| Other consumer | 439,413 | 425,854 | 410,249 | 369,781 | 332,402 | |||||||||||||||
| Total consumer loans | 2,333,846 | 2,345,265 | 2,327,708 | 2,265,564 | 2,205,104 | |||||||||||||||
| Total loans | 5,755,133 | 5,731,582 | 5,656,439 | 5,528,583 | 5,475,427 | |||||||||||||||
| Net deferred loan costs and premiums | 17,965 | 17,901 | 17,786 | 16,603 | 15,502 | |||||||||||||||
| Allowance for loan losses | (53,206 | ) | (52,041 | ) | (51,636 | ) | (49,909 | ) | (49,163 | ) | ||||||||||
| Loans receivable - net | 5,719,892 | 5,697,442 | 5,622,589 | 5,495,277 | 5,441,766 | |||||||||||||||
| Federal Home Loan Bank of Boston stock, at cost | 34,335 | 37,702 | 41,407 | 42,032 | 46,734 | |||||||||||||||
| Accrued interest receivable | 24,938 | 25,061 | 24,823 | 25,485 | 23,209 | |||||||||||||||
| Deferred tax asset, net | 27,366 | 27,600 | 32,706 | 31,473 | 30,190 | |||||||||||||||
| Premises and equipment, net | 62,304 | 63,863 | 68,657 | 67,612 | 67,614 | |||||||||||||||
| Operating lease right-of-use assets | 43,171 | 44,377 | — | — | — | |||||||||||||||
| Financing lease right-of-use assets | 4,266 | 4,356 | — | — | — | |||||||||||||||
| Goodwill | 116,709 | 116,727 | 116,769 | 115,281 | 115,281 | |||||||||||||||
| Core deposit intangible asset | 5,219 | 5,607 | 6,027 | 3,561 | 3,849 | |||||||||||||||
| Cash surrender value of bank-owned life insurance | 195,993 | 194,496 | 193,429 | 181,928 | 180,490 | |||||||||||||||
| Other assets | 107,707 | 102,823 | 100,368 | 107,271 | 98,695 | |||||||||||||||
| Total assets | $ | 7,335,955 | $ | 7,339,940 | $ | 7,356,874 | $ | 7,207,498 | $ | 7,208,596 | ||||||||||
| June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Non-interest-bearing | $ | 843,926 | $ | 777,969 | $ | 799,785 | $ | 759,210 | $ | 770,982 | ||||||||||
| Interest-bearing | 4,882,622 | 4,886,283 | 4,870,814 | 4,741,153 | 4,622,394 | |||||||||||||||
| Total deposits | 5,726,548 | 5,664,252 | 5,670,599 | 5,500,363 | 5,393,376 | |||||||||||||||
| Mortgagors’ and investor escrow accounts | 14,541 | 11,510 | 4,685 | 9,597 | 14,526 | |||||||||||||||
| Federal Home Loan Bank advances and other borrowings | 741,989 | 826,668 | 899,626 | 926,592 | 1,041,896 | |||||||||||||||
| Operating lease liabilities | 55,197 | 56,265 | — | — | — | |||||||||||||||
| Financing lease liabilities | 4,518 | 4,585 | — | — | — | |||||||||||||||
| Accrued expenses and other liabilities | 73,140 | 52,562 | 69,446 | 61,128 | 56,921 | |||||||||||||||
| Total liabilities | 6,615,933 | 6,615,842 | 6,644,356 | 6,497,680 | 6,506,719 | |||||||||||||||
| Total stockholders’ equity | 720,022 | 724,098 | 712,518 | 709,818 | 701,877 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 7,335,955 | $ | 7,339,940 | $ | 7,356,874 | $ | 7,207,498 | $ | 7,208,596 | ||||||||||
| United Financial Bancorp, Inc. and Subsidiaries | |||||||||||||||||||
| Selected Financial Highlights | |||||||||||||||||||
| (Dollars In Thousands, Except Share Data) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| At or For the Three Months Ended | |||||||||||||||||||
| June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||
| Share Data: | |||||||||||||||||||
| Basic net (loss) income per share | $ | (0.06 | ) | $ | 0.25 | $ | 0.24 | $ | 0.32 | $ | 0.31 | ||||||||
| Diluted net (loss) income per share | (0.06 | ) | 0.25 | 0.24 | 0.32 | 0.31 | |||||||||||||
| Dividends declared per share | 0.12 | 0.12 | 0.12 | 0.12 | 0.12 | ||||||||||||||
| Tangible book value per share | $ | 11.71 | $ | 11.78 | $ | 11.54 | $ | 11.55 | $ | 11.40 | |||||||||
| Key Statistics: | |||||||||||||||||||
| Total revenue | $ | 47,850 | $ | 55,917 | $ | 57,855 | $ | 57,984 | $ | 56,541 | |||||||||
| Total non-interest expense | 39,457 | 39,187 | 43,718 | 38,943 | 38,370 | ||||||||||||||
| Average earning assets | 6,706,237 | 6,783,604 | 6,708,701 | 6,671,424 | 6,584,938 | ||||||||||||||
| Key Ratios: | |||||||||||||||||||
| (Loss) return on average assets (annualized) | (0.18 | %) | 0.69 | % | 0.67 | % | 0.91 | % | 0.88 | % | |||||||||
| (Loss) return on average equity (annualized) | (1.79 | %) | 7.13 | % | 6.89 | % | 9.26 | % | 9.00 | % | |||||||||
| Tax-equivalent net interest margin (annualized) | 2.82 | % | 2.81 | % | 2.90 | % | 2.92 | % | 2.97 | % | |||||||||
| Non-interest expense to average assets (annualized) | 2.16 | % | 2.13 | % | 2.41 | % | 2.17 | % | 2.16 | % | |||||||||
| Cost of funds (annualized) (1) | 1.64 | % | 1.61 | % | 1.48 | % | 1.36 | % | 1.20 | % | |||||||||
| Total revenue growth rate | (14.43 | %) | (3.35 | %) | (0.22 | %) | 2.55 | % | 1.27 | % | |||||||||
| Total revenue growth rate (annualized) | (57.71 | %) | (13.40 | %) | (0.89 | %) | 10.21 | % | 5.08 | % | |||||||||
| Average earning asset growth rate | (1.14 | %) | 1.12 | % | 0.56 | % | 1.31 | % | 0.26 | % | |||||||||
| Average earning asset growth rate (annualized) | (4.56 | %) | 4.47 | % | 2.24 | % | 5.25 | % | 1.02 | % | |||||||||
| Residential Mortgage Production: | |||||||||||||||||||
| Dollar volume (total) | $ | 46,549 | $ | 31,882 | $ | 128,209 | $ | 143,673 | $ | 140,409 | |||||||||
| Mortgages originated for purchases | 24,409 | 21,434 | 101,266 | 111,555 | 110,351 | ||||||||||||||
| Loans sold | 22,352 | 89,980 | 108,663 | 99,372 | 99,637 | ||||||||||||||
| (Loss) income from mortgage banking activities | (410 | ) | 591 | 698 | 1,486 | 846 | |||||||||||||
| Non-performing Assets: | |||||||||||||||||||
| Residential real estate | $ | 12,893 | $ | 13,742 | $ | 13,217 | $ | 11,949 | $ | 11,221 | |||||||||
| Home equity | 5,051 | 4,577 | 4,735 | 4,005 | 4,607 | ||||||||||||||
| Investor-owned commercial real estate | 2,357 | 739 | 1,131 | 1,525 | 2,400 | ||||||||||||||
| Owner-occupied commercial real estate | 1,989 | 1,830 | 2,450 | 1,202 | 2,176 | ||||||||||||||
| Construction | 137 | 171 | 199 | 243 | 250 | ||||||||||||||
| Commercial business | 1,666 | 1,627 | 944 | 985 | 1,196 | ||||||||||||||
| Other consumer | 657 | 1,034 | 1,030 | 597 | 237 | ||||||||||||||
| Non-accrual loans | 24,750 | 23,720 | 23,706 | 20,506 | 22,087 | ||||||||||||||
| Troubled debt restructured – non-accruing | 5,820 | 5,479 | 6,971 | 6,706 | 7,330 | ||||||||||||||
| Total non-performing loans | 30,570 | 29,199 | 30,677 | 27,212 | 29,417 | ||||||||||||||
| Other real estate owned | 1,455 | 1,429 | 1,389 | 1,808 | 1,855 | ||||||||||||||
| Total non-performing assets | $ | 32,025 | $ | 30,628 | $ | 32,066 | $ | 29,020 | $ | 31,272 | |||||||||
| Non-performing loans to total loans | 0.53 | % | 0.51 | % | 0.54 | % | 0.49 | % | 0.54 | % | |||||||||
| Non-performing assets to total assets | 0.44 | % | 0.42 | % | 0.44 | % | 0.40 | % | 0.43 | % | |||||||||
| Allowance for loan losses to non-performing loans | 174.05 | % | 178.23 | % | 168.32 | % | 183.41 | % | 167.12 | % | |||||||||
| Allowance for loan losses to total loans | 0.92 | % | 0.91 | % | 0.91 | % | 0.90 | % | 0.90 | % | |||||||||
| Non-GAAP Ratios: (2) | |||||||||||||||||||
| Efficiency ratio | 69.99 | % | 69.67 | % | 69.18 | % | 65.61 | % | 65.18 | % | |||||||||
| (Loss) return on average tangible common equity (annualized) | (1.94 | %) | 8.85 | % | 8.55 | % | 11.30 | % | 11.03 | % | |||||||||
| Pre-provision net revenue to average assets | 0.92 | % | 0.92 | % | 1.00 | % | 1.12 | % | 1.14 | % | |||||||||
(1) The cost of funds ratio represents interest incurred on liabilities as a percentage of average non-interest-bearing deposits and interest-bearing liabilities.
(2) Non-GAAP ratios are not financial measurements required by generally accepted accounting principles; however, management believes such information is useful to investors in evaluating Company performance. Calculations of these non-GAAP metrics are provided after the reconciliations of non-GAAP financial measures and appear on pages F-11 and F-12.
| United Financial Bancorp, Inc. and Subsidiaries | |||||||||||||||||||||
| Average Balance Sheets, Interest and Yields/Costs | |||||||||||||||||||||
| (Dollars In Thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||
| June 30, 2019 | June 30, 2018 | ||||||||||||||||||||
| Average Balance | Interest and Dividends | Yield/Cost | Average Balance | Interest and Dividends | Yield/Cost | ||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Residential real estate | $ | 1,351,571 | $ | 12,520 | 3.71 | % | $ | 1,338,021 | $ | 12,020 | 3.60 | % | |||||||||
| Commercial real estate | 2,379,330 | 27,503 | 4.57 | 2,306,896 | 24,762 | 4.25 | |||||||||||||||
| Construction | 105,801 | 1,387 | 5.19 | 114,987 | 1,331 | 4.58 | |||||||||||||||
| Commercial business | 916,928 | 11,487 | 4.96 | 816,102 | 9,139 | 4.43 | |||||||||||||||
| Home equity | 576,046 | 7,771 | 5.41 | 588,080 | 7,058 | 4.81 | |||||||||||||||
| Other consumer | 433,971 | 5,496 | 5.08 | 322,103 | 4,062 | 5.06 | |||||||||||||||
| Investment securities | 846,711 | 6,921 | 3.26 | 1,019,491 | 8,998 | 3.53 | |||||||||||||||
| Federal Home Loan Bank stock | 35,513 | 620 | 6.98 | 49,136 | 703 | 5.72 | |||||||||||||||
| Other earning assets | 60,366 | 344 | 2.29 | 30,122 | 116 | 1.55 | |||||||||||||||
| Total interest-earning assets | 6,706,237 | 74,049 | 4.39 | 6,584,938 | 68,189 | 4.12 | |||||||||||||||
| Allowance for loan losses | (52,680 | ) | (48,624 | ) | |||||||||||||||||
| Non-interest-earning assets | 636,544 | 555,407 | |||||||||||||||||||
| Total assets | $ | 7,290,101 | $ | 7,091,721 | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| NOW and money market | $ | 2,517,212 | $ | 10,267 | 1.64 | % | $ | 2,256,323 | $ | 6,163 | 1.10 | % | |||||||||
| Savings | 504,186 | 81 | 0.06 | 517,910 | 77 | 0.06 | |||||||||||||||
| Certificates of deposit | 1,830,763 | 10,215 | 2.24 | 1,749,097 | 6,624 | 1.52 | |||||||||||||||
| Total interest-bearing deposits | 4,852,161 | 20,563 | 1.70 | 4,523,330 | 12,864 | 1.14 | |||||||||||||||
| Federal Home Loan Bank advances | 694,082 | 4,542 | 2.59 | 959,248 | 4,692 | 1.94 | |||||||||||||||
| Other borrowings | 87,875 | 1,290 | 5.81 | 112,112 | 1,393 | 4.91 | |||||||||||||||
| Total interest-bearing liabilities | 5,634,118 | 26,395 | 1.87 | 5,594,690 | 18,949 | 1.35 | |||||||||||||||
| Non-interest-bearing deposits | 796,504 | 738,484 | |||||||||||||||||||
| Other liabilities | 134,924 | 63,246 | |||||||||||||||||||
| Total liabilities | 6,565,546 | 6,396,420 | |||||||||||||||||||
| Stockholders’ equity | 724,555 | 695,301 | |||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 7,290,101 | $ | 7,091,721 | |||||||||||||||||
| Net interest-earning assets | $ | 1,072,119 | $ | 990,248 | |||||||||||||||||
| Tax-equivalent net interest income | 47,654 | 49,240 | |||||||||||||||||||
| Tax-equivalent net interest rate spread (1) | 2.52 | % | 2.77 | % | |||||||||||||||||
| Tax-equivalent net interest margin (2) | 2.82 | % | 2.97 | % | |||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 119.03 | % | 117.70 | % | |||||||||||||||||
| Less tax-equivalent adjustment | 644 | 1,059 | |||||||||||||||||||
| Net interest income | $ | 47,010 | $ | 48,181 | |||||||||||||||||
(1) Tax-equivalent net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2) Tax-equivalent net interest rate margin represents tax-equivalent net interest income divided by average interest-earning assets.
| United Financial Bancorp, Inc. and Subsidiaries | |||||||||||||||||||||
| Average Balance Sheets, Interest and Yields/Costs | |||||||||||||||||||||
| (Dollars In Thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||
| June 30, 2019 | March 31, 2019 | ||||||||||||||||||||
| Average Balance | Interest and Dividends | Yield/Cost | Average Balance | Interest and Dividends | Yield/Cost | ||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Residential real estate | $ | 1,351,571 | $ | 12,520 | 3.71 | % | $ | 1,380,829 | $ | 12,886 | 3.73 | % | |||||||||
| Commercial real estate | 2,379,330 | 27,503 | 4.57 | 2,358,955 | 27,302 | 4.63 | |||||||||||||||
| Construction | 105,801 | 1,387 | 5.19 | 111,198 | 1,426 | 5.13 | |||||||||||||||
| Commercial business | 916,928 | 11,487 | 4.96 | 888,436 | 10,612 | 4.78 | |||||||||||||||
| Home equity | 576,046 | 7,771 | 5.41 | 582,180 | 7,874 | 5.48 | |||||||||||||||
| Other consumer | 433,971 | 5,496 | 5.08 | 418,053 | 5,174 | 5.02 | |||||||||||||||
| Investment securities | 846,711 | 6,921 | 3.26 | 966,841 | 7,819 | 3.23 | |||||||||||||||
| Federal Home Loan Bank stock | 35,513 | 620 | 6.98 | 40,475 | 628 | 6.21 | |||||||||||||||
| Other earning assets | 60,366 | 344 | 2.29 | 36,637 | 229 | 2.53 | |||||||||||||||
| Total interest-earning assets | 6,706,237 | 74,049 | 4.39 | 6,783,604 | 73,950 | 4.37 | |||||||||||||||
| Allowance for loan losses | (52,680 | ) | (52,089 | ) | |||||||||||||||||
| Non-interest-earning assets | 636,544 | 639,923 | |||||||||||||||||||
| Total assets | $ | 7,290,101 | $ | 7,371,438 | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| NOW and money market | $ | 2,517,212 | $ | 10,267 | 1.64 | % | $ | 2,567,634 | $ | 10,309 | 1.63 | % | |||||||||
| Savings | 504,186 | 81 | 0.06 | 500,167 | 75 | 0.06 | |||||||||||||||
| Certificates of deposit | 1,830,763 | 10,215 | 2.24 | 1,823,867 | 9,547 | 2.12 | |||||||||||||||
| Total interest-bearing deposits | 4,852,161 | 20,563 | 1.70 | 4,891,668 | 19,931 | 1.65 | |||||||||||||||
| Federal Home Loan Bank advances | 694,082 | 4,542 | 2.59 | 800,862 | 5,045 | 2.52 | |||||||||||||||
| Other borrowings | 87,875 | 1,290 | 5.81 | 88,757 | 1,301 | 5.86 | |||||||||||||||
| Total interest-bearing liabilities | 5,634,118 | 26,395 | 1.87 | 5,781,287 | 26,277 | 1.84 | |||||||||||||||
| Non-interest-bearing deposits | 796,504 | 745,259 | |||||||||||||||||||
| Other liabilities | 134,924 | 134,987 | |||||||||||||||||||
| Total liabilities | 6,565,546 | 6,661,533 | |||||||||||||||||||
| Stockholders’ equity | 724,555 | 709,905 | |||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 7,290,101 | $ | 7,371,438 | |||||||||||||||||
| Net interest-earning assets | $ | 1,072,119 | $ | 1,002,317 | |||||||||||||||||
| Tax-equivalent net interest income | 47,654 | 47,673 | |||||||||||||||||||
| Tax-equivalent net interest rate spread (1) | 2.52 | % | 2.53 | % | |||||||||||||||||
| Tax-equivalent net interest margin (2) | 2.82 | % | 2.81 | % | |||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 119.03 | % | 117.34 | % | |||||||||||||||||
| Less tax-equivalent adjustment | 644 | 736 | |||||||||||||||||||
| Net interest income | $ | 47,010 | $ | 46,937 | |||||||||||||||||
(1) Tax-equivalent net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2) Tax-equivalent net interest rate margin represents tax-equivalent net interest income divided by average interest-earning assets.
| United Financial Bancorp, Inc. and Subsidiaries | |||||||||||||||||||||
| Average Balance Sheets, Interest and Yields/Costs | |||||||||||||||||||||
| (Dollars In Thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| For the Six Months Ended | |||||||||||||||||||||
| June 30, 2019 | June 30, 2018 | ||||||||||||||||||||
| Average Balance | Interest and Dividends | Yield/Cost | Average Balance | Interest and Dividends | Yield/Cost | ||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Residential real estate | $ | 1,366,119 | $ | 25,406 | 3.72 | % | $ | 1,326,185 | $ | 23,526 | 3.56 | % | |||||||||
| Commercial real estate | 2,369,199 | 54,804 | 4.60 | 2,294,451 | 48,419 | 4.20 | |||||||||||||||
| Construction | 108,484 | 2,813 | 5.16 | 117,199 | 2,656 | 4.51 | |||||||||||||||
| Commercial business | 902,761 | 22,099 | 4.87 | 829,382 | 17,521 | 4.20 | |||||||||||||||
| Home equity | 579,096 | 15,645 | 5.45 | 583,454 | 13,585 | 4.69 | |||||||||||||||
| Other consumer | 426,056 | 10,670 | 5.05 | 311,032 | 7,862 | 5.10 | |||||||||||||||
| Investment securities | 906,444 | 14,740 | 3.25 | 1,030,404 | 17,618 | 3.42 | |||||||||||||||
| Federal Home Loan Bank stock | 37,980 | 1,248 | 6.57 | 50,291 | 1,309 | 5.21 | |||||||||||||||
| Other earning assets | 48,567 | 573 | 2.38 | 34,202 | 270 | 1.59 | |||||||||||||||
| Total interest-earning assets | 6,744,706 | 147,998 | 4.38 | 6,576,600 | 132,766 | 4.03 | |||||||||||||||
| Allowance for loan losses | (52,386 | ) | (48,205 | ) | |||||||||||||||||
| Non-interest-earning assets | 638,225 | 554,873 | |||||||||||||||||||
| Total assets | $ | 7,330,545 | $ | 7,083,268 | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| NOW and money market | $ | 2,542,284 | $ | 20,577 | 1.63 | % | $ | 2,201,937 | $ | 11,055 | 1.01 | % | |||||||||
| Savings | 502,187 | 156 | 0.06 | 514,426 | 150 | 0.06 | |||||||||||||||
| Certificates of deposit | 1,827,334 | 19,762 | 2.18 | 1,772,754 | 12,686 | 1.44 | |||||||||||||||
| Total interest-bearing deposits | 4,871,805 | 40,495 | 1.68 | 4,489,117 | 23,891 | 1.07 | |||||||||||||||
| Federal Home Loan Bank advances | 747,177 | 9,586 | 2.55 | 996,360 | 9,238 | 1.84 | |||||||||||||||
| Other borrowings | 88,314 | 2,591 | 5.84 | 115,043 | 2,771 | 4.79 | |||||||||||||||
| Total interest-bearing liabilities | 5,707,296 | 52,672 | 1.86 | 5,600,520 | 35,900 | 1.29 | |||||||||||||||
| Non-interest-bearing deposits | 771,023 | 725,993 | |||||||||||||||||||
| Other liabilities | 134,955 | 63,919 | |||||||||||||||||||
| Total liabilities | 6,613,274 | 6,390,432 | |||||||||||||||||||
| Stockholders’ equity | 717,271 | 692,836 | |||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 7,330,545 | $ | 7,083,268 | |||||||||||||||||
| Net interest-earning assets | $ | 1,037,410 | $ | 976,080 | |||||||||||||||||
| Tax-equivalent net interest income | 95,326 | 96,866 | |||||||||||||||||||
| Tax-equivalent net interest rate spread (1) | 2.52 | % | 2.74 | % | |||||||||||||||||
| Tax-equivalent net interest margin (2) | 2.81 | % | 2.94 | % | |||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 118.18 | % | 117.43 | % | |||||||||||||||||
| Less tax-equivalent adjustment | 1,379 | 2,142 | |||||||||||||||||||
| Net interest income | $ | 93,947 | $ | 94,724 | |||||||||||||||||
(1) Tax-equivalent net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2) Tax-equivalent net interest rate margin represents tax-equivalent net interest income divided by average interest-earning assets.
| United Financial Bancorp, Inc. and Subsidiaries |
| Reconciliation of Non-GAAP Financial Measures |
| (Dollars In Thousands) |
| (Unaudited) |
In addition to evaluating the Company’s results of operations in accordance with GAAP, management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures. These non-GAAP measures are intended to provide the reader with additional perspectives on operating results, financial condition, and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.
The efficiency ratio is used as a common measure by banks as a comparable metric to understand the Company’s expense structure relative to its total revenue; in other words, for every dollar of total revenue we recognize, how much of that dollar is expended. In order to improve the comparability of the ratio to our peers, we remove non-core items. To improve transparency, and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure.
Pre-provision net revenue is a measure that the Company uses to understand fundamental operating performance before credit related expenses and tax expense. It is often expressed as a ratio relative to average assets which demonstrates the “core” performance and can be viewed as an alternative measure of how efficiently the Company services its asset base.
Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors.
The Company believes that disclosing these non-GAAP metrics is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included on pages F-10 through F-12 in the following press release tables:
| Three Months Ended | |||||||||||||||||||
| June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Net (Loss) Income (GAAP) | $ | (3,248 | ) | $ | 12,657 | $ | 12,165 | $ | 16,308 | $ | 15,646 | ||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Non-interest income | (137 | ) | (1,158 | ) | (25 | ) | 58 | (271 | ) | ||||||||||
| Non-interest expense | — | — | 2,677 | (129 | ) | 215 | |||||||||||||
| Income tax benefit related to tax reform | — | — | (1,717 | ) | — | — | |||||||||||||
| Related income tax expense (benefit) | 29 | 155 | (557 | ) | 15 | (93 | ) | ||||||||||||
| Net adjustment | (108 | ) | (1,003 | ) | 378 | (56 | ) | (149 | ) | ||||||||||
| Total net (loss) income (non-GAAP) | $ | (3,356 | ) | $ | 11,654 | $ | 12,543 | $ | 16,252 | $ | 15,497 | ||||||||
| Non-interest income (GAAP) | $ | 840 | $ | 8,980 | $ | 9,493 | $ | 9,555 | $ | 8,360 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Net (gain) loss on sales of securities | (137 | ) | (737 | ) | (25 | ) | 58 | (62 | ) | ||||||||||
| BOLI claim benefit | — | (421 | ) | — | — | (209 | ) | ||||||||||||
| Net adjustment | (137 | ) | (1,158 | ) | (25 | ) | 58 | (271 | ) | ||||||||||
| Total non-interest income (non-GAAP) | 703 | 7,822 | 9,468 | 9,613 | 8,089 | ||||||||||||||
| Total net interest income | 47,010 | 46,937 | 48,362 | 48,429 | 48,181 | ||||||||||||||
| Total revenue (non-GAAP) | $ | 47,713 | $ | 54,759 | $ | 57,830 | $ | 58,042 | $ | 56,270 | |||||||||
| Non-interest expense (GAAP) | $ | 39,457 | $ | 39,187 | $ | 43,718 | $ | 38,943 | $ | 38,370 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Lease exit/disposal cost obligation | — | — | (466 | ) | 129 | (215 | ) | ||||||||||||
| Effect of position eliminations | — | — | (2,211 | ) | — | — | |||||||||||||
| Net adjustment | — | — | (2,677 | ) | 129 | (215 | ) | ||||||||||||
| Total non-interest expense (non-GAAP) | $ | 39,457 | $ | 39,187 | $ | 41,041 | $ | 39,072 | $ | 38,155 | |||||||||
| Total loans | $ | 5,755,133 | $ | 5,731,582 | $ | 5,656,439 | $ | 5,528,583 | $ | 5,475,427 | |||||||||
| Non-covered loans (1) | (618,176 | ) | (658,455 | ) | (675,112 | ) | (708,621 | ) | (729,947 | ) | |||||||||
| Total covered loans | $ | 5,136,957 | $ | 5,073,127 | $ | 4,981,327 | $ | 4,819,962 | $ | 4,745,480 | |||||||||
| Allowance for loan losses | $ | 53,206 | $ | 52,041 | $ | 51,636 | $ | 49,909 | $ | 49,163 | |||||||||
| Allowance for loan losses to total loans | 0.92 | % | 0.91 | % | 0.91 | % | 0.90 | % | 0.90 | % | |||||||||
| Allowance for loan losses to total covered loans | 1.04 | % | 1.03 | % | 1.04 | % | 1.04 | % | 1.04 | % | |||||||||
(1) Represents acquired loans that were recorded at fair value. These loans carry no allowance for loan losses for the periods reflected above.
| Three Months Ended | |||||||||||||||||||
| June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||
| Efficiency Ratio: | |||||||||||||||||||
| Non-Interest Expense (GAAP) | $ | 39,457 | $ | 39,187 | $ | 43,718 | $ | 38,943 | $ | 38,370 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Other real estate owned expense | (83 | ) | (105 | ) | (108 | ) | (256 | ) | (163 | ) | |||||||||
| Lease exit/disposal cost obligation | — | — | (466 | ) | 129 | (215 | ) | ||||||||||||
| Effect of position eliminations | — | — | (2,211 | ) | — | — | |||||||||||||
| Non-Interest Expense for Efficiency Ratio (non-GAAP) | $ | 39,374 | $ | 39,082 | $ | 40,933 | $ | 38,816 | $ | 37,992 | |||||||||
| Net Interest Income (GAAP) | $ | 47,010 | $ | 46,937 | $ | 48,362 | $ | 48,429 | $ | 48,181 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Tax-equivalent adjustment for tax-exempt loans and investment securities | 644 | 736 | 938 | 895 | 1,059 | ||||||||||||||
| Non-Interest Income (GAAP) | 840 | 8,980 | 9,493 | 9,555 | 8,360 | ||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Net (gain) loss on sales of securities | (137 | ) | (737 | ) | (25 | ) | 58 | (62 | ) | ||||||||||
| Net loss on limited partnership investments | 7,898 | 603 | 405 | 221 | 960 | ||||||||||||||
| BOLI claim benefit | — | (421 | ) | — | — | (209 | ) | ||||||||||||
| Total Revenue for Efficiency Ratio (non-GAAP) | $ | 56,255 | $ | 56,098 | $ | 59,173 | $ | 59,158 | $ | 58,289 | |||||||||
| Efficiency Ratio (Non-Interest Expense for Efficiency Ratio (non-GAAP)/Total Revenue for Efficiency Ratio (non-GAAP)) | 69.99 | % | 69.67 | % | 69.18 | % | 65.61 | % | 65.18 | % | |||||||||
| Three Months Ended | |||||||||||||||||||
| June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | |||||||||||||||
| Pre-Provision Net Revenue ("PPNR") to Average Assets (Annualized): | |||||||||||||||||||
| Net Interest Income (GAAP) | $ | 47,010 | $ | 46,937 | $ | 48,362 | $ | 48,429 | $ | 48,181 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Tax-equivalent adjustment for tax-exempt loans and investment securities | 644 | 736 | 938 | 895 | 1,059 | ||||||||||||||
| Total tax-equivalent net interest income (A) | $ | 47,654 | $ | 47,673 | $ | 49,300 | $ | 49,324 | $ | 49,240 | |||||||||
| Non-Interest Income (GAAP) | 840 | 8,980 | 9,493 | 9,555 | 8,360 | ||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Net (gain) loss on sales of securities | (137 | ) | (737 | ) | (25 | ) | 58 | (62 | ) | ||||||||||
| Net loss on limited partnership investments | 7,898 | 603 | 405 | 221 | 960 | ||||||||||||||
| BOLI claim benefit | — | (421 | ) | — | — | (209 | ) | ||||||||||||
| Non-Interest Income for PPNR (non-GAAP) (B) | $ | 8,601 | $ | 8,425 | $ | 9,873 | $ | 9,834 | $ | 9,049 | |||||||||
| Non-Interest Expense (GAAP) | $ | 39,457 | $ | 39,187 | $ | 43,718 | $ | 38,943 | $ | 38,370 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Lease exit/disposal cost obligation | — | — | (466 | ) | 129 | (215 | ) | ||||||||||||
| Effect of position eliminations | — | — | (2,211 | ) | — | — | |||||||||||||
| Non-Interest Expense for PPNR (non-GAAP) (C) | $ | 39,457 | $ | 39,187 | $ | 41,041 | $ | 39,072 | $ | 38,155 | |||||||||
| Total PPNR (non-GAAP) (A + B - C) : | $ | 16,798 | $ | 16,911 | $ | 18,132 | $ | 20,086 | $ | 20,134 | |||||||||
| Average Assets | 7,290,101 | 7,371,438 | 7,244,396 | 7,191,072 | 7,091,721 | ||||||||||||||
| PPNR to Average Assets (Annualized) | 0.92 | % | 0.92 | % | 1.00 | % | 1.12 | % | 1.14 | % | |||||||||
| Return on Average Tangible Common Equity (Annualized): | |||||||||||||||||||
| Net (Loss) Income (GAAP) | $ | (3,248 | ) | $ | 12,657 | $ | 12,165 | $ | 16,308 | $ | 15,646 | ||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Intangible assets amortization, tax effected at 21% | 307 | 332 | 332 | 228 | 241 | ||||||||||||||
| Net (Loss) Income excluding intangible assets amortization, tax effected at 21% | $ | (2,941 | ) | $ | 12,989 | $ | 12,497 | $ | 16,536 | $ | 15,887 | ||||||||
| Average stockholders' equity (non-GAAP) | $ | 724,555 | $ | 709,905 | $ | 706,124 | $ | 704,306 | $ | 695,301 | |||||||||
| Average goodwill & other intangible assets (non-GAAP) | 119,287 | 122,597 | 121,614 | 119,009 | 119,288 | ||||||||||||||
| Average tangible common stockholders' equity (non-GAAP) | $ | 605,268 | $ | 587,308 | $ | 584,510 | $ | 585,297 | $ | 576,013 | |||||||||
| (Loss) Return on Average Tangible Common Equity (non-GAAP) | (1.94 | )% | 8.85 | % | 8.55 | % | 11.30 | % | 11.03 | % | |||||||||