Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - United Financial Bancorp, Inc. | ex-99120161231.htm |
| 8-K - 8-K - United Financial Bancorp, Inc. | a8-k20161231.htm |
Fourth Quarter 2016 EarningsNASDAQ Global Select Market: UBNK
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2NASDAQ: UBNK
This Presentation contains forward-looking statements that are within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are
based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. These risks and uncertainties could
cause our results to differ materially from those set forth in such forward-looking statements. Forward-looking statements can be identified by the fact that they
do not relate strictly to historical or current facts. Words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “estimates,” “targeted” and similar
expressions, and future or conditional verbs, such as “will,” “would,” “should,” “could” or “may” are intended to identify forward-looking statements but are not
the only means to identify these statements. Forward-looking statements involve risks and uncertainties. Actual conditions, events or results may differ materially
from those contemplated by a forward-looking statement. Factors that could cause this difference — many of which are beyond our control — include without
limitation the following: Any forward-looking statements made by or on behalf of us in this Presentation speak only as of the date of this Presentation. We do
not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statement
was made. The reader should; however, consult any further disclosures of a forward-looking nature we may make in future filings.
NON-GAAP FINANCIAL MEASURES
This Presentation 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. 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
3NASDAQ: UBNK
Corporate Contacts
William H. W. Crawford, IV
Chief Executive Officer
Eric R. Newell, CFA
Executive Vice President, Chief Financial Officer
860-291-3722 or ENewell@bankatunited.com
Investor Information:
Marliese L. Shaw
Executive Vice President, Corporate Secretary/Investor Relations Officer
860-291-3622 or MShaw@bankatunited.com
4NASDAQ: UBNK
Table of Contents
Page
Branch Network 5
Market Opportunities 6
Management Team and Ownership 7
Four Key Objectives 8
Consumer Banking 9
Wholesale Banking 10
Commercial Banking Overview 11
Shared Services 12
Financial Highlights 13
5NASDAQ: UBNK
Branch Network
3rd largest public bank
headquartered in CT
with $6.6 billion in
assets
53 Branches located
in Central CT and
Western MA
#4 market share in
combined Hartford /
Springfield MSA
$85 million in average
deposits per branch
(6/30/16 Branch level
reporting)
6NASDAQ: UBNK
Market Opportunities
• United Bank operates in attractive markets with significant wealth and customer base
• New Haven and Fairfield County provide growth opportunities
• The Bank’s main operational markets have significant wealth
Markets Population Population35-54 Average HHI Median Age
Hartford MSA 1,209,666 314,305 99,183 41
Springfield MSA 634,548 150,871 74,794 38
Worcester MSA 941,096 252,449 90,066 40
New Haven County 857,654 222,167 88,804 40
Fairfield County 954,291 261,415 140,792 40
Total 4,597,255 1,201,207 100,236 40
*Total Average Household Income (HHI) weighted by households and Age weighted by population
Main Operational
Markets
Opportunity Markets
7NASDAQ: UBNK
Management Team and Ownership
• William H.W. Crawford, IV owns 537,076 shares of stock and options*
• UBNK management owns 1,291,501 shares of stock and options*
• UBNK and United Bank Directors own 1,072,005 shares of stock and options*
*Note: 401k/ESOP share ownership is as of 12/31/15.
Name Title/Function Years in Industry/Years at United Prior Experience
William H.W. Crawford, IV Chief Executive Officer 28/6 Wells Fargo Bank, Wachovia Bank,SouthTrust Bank
Eric R. Newell Chief Financial Officer 13/6 FDIC, Fitch Ratings, Alliance Berstein
Dena M. Hall Chief Marketing Officer 20/12 Woronoco Savings Bank
Craig W. Hurty Chief Human Resources Officer 33/3 Aetna, PacifiCare Health Systems
Mark A. Kucia Chief Credit Officer 29/11 National Westminster Bank, Liberty Bank,Mechanics Bank, BayBank
Brandon C. Lorey Head of Consumer Banking 26/4 H&R Block Bank, Chevy Chase FederalSavings Bank
David C. Paulson Head of Wholesale Banking 31/3 Santander, Wells Fargo, Wachovia
John J. Smith Chief Information &Administrative Officer 31/1
CIT Group, NYCE Corporation, Summit
Bank
Elizabeth Wynnick Chief Risk Officer 25/5 NewAlliance Bank, Webster Bank
8NASDAQ: UBNK
Four Key Objectives
Objective Progress
1.
Align earning asset growth with organic capital and low
cost core deposit generation to maintain strong capital
and liquidity
(a) FY 2016 loans and deposits increased similarly at
6.0%; (b) FY 2016 DDA growth 8.0%; (c) FY 2016 capital
growth 5%
2.
Re-Mix cash flows into higher yielding risk adjusted
return on assets with lower funding costs relative to
peers.
(a) FY2016, improved NIM stability compared to FY 2015;
(b) growth focused on OOCRE, C&I, and consumer, less
emphasis on Investor CRE & residential real estate
3.
Invest in people, systems, and technology to grow
revenue and improve customer experience while
maintaining attractive cost structure.
(a) Non-Interest Expense/ Average Assets (NIE/AA) at
2.05% in 4Q16; while making strategic stair step
investment in Information Technology & Project
Management
4.
Grow operating revenue, maximize operating earnings,
grow tangible book value, pay dividend. Achieve more
revenue into NII and core fee income.
(a) Q4 2016 record revenue, record EPS; (b) TBV/share
declined 0.7% due to higher rates; (b) increased core
banking fees in 2016 versus 2015
9NASDAQ: UBNK
Consumer Banking
Consumer Loan Detail as of 12/31/2016
Construction 3%
Home equity 27%
Other
consumer
11%
Residential 59%
Diverse products designed to meet the needs of our
consumer customers.
Retail and Small Business Banking team focused on
gaining new customer relationships and deposit growth
• Mortgage Sales team originated $631.5 million of
residential mortgage loans in 2016. Participate in
secondary market sales.
• Consumer Lending team who utilize the branch
network to acquire profitable customer relationships
with growth in Home Equity and lines of credit.
• United Northeast Financial Advisors serving over 50
banking offices with investment services offerings.
Demonstrating strong growth each quarter.
• Internationally experienced LH-finance Marine
division.
($1.96 Bn, or 40% of loans)
10NASDAQ: UBNK
Wholesale Banking
Commercial Loan Detail as of 12/31/2016
Construction 3%
Owner-Occupied CRE
14%
C&I 25%
Investor CRE 58%
Robust offering of products to support commercial
customer needs and provide competitive advantage.
• Diverse and experienced Commercial Banking group:
Commercial Lending team across various divisions and
areas of expertise.
• Cash Management and Municipal Banking team
focused on deposit gathering and growing strategically
important relationships.
• Commercial Real Estate team focused on growing
Owner-Occupied CRE portfolio, includes Regional CRE
program which expands throughout the Northeast and
Mid Atlantic.
• Business Banking group focused on growing C&I loans
and core deposits.
($2.95 Bn, or 60% of loans)
11NASDAQ: UBNK
Commercial Banking Overview
• Asset quality remains exceptional through diversification, granularity,
that is accretive to risk adjusted capital
Investor CRE & ADC by Property Type
$1,804 Million
C&I & Owner Occupied CRE by Industry
$1,141 Million
12NASDAQ: UBNK
Shared Services
In addition to a strong and seasoned leadership team, the Company has recruited, retained
and developed deeply talented teams across the organization
Significant investment in Information Technology resources to provide leadership
for effective strategic and tactical planning in the use of technology. Implementing
the use of leading edge development methodologies and feedback loops.
Experienced Enterprise Risk and Credit Risk areas that maintain a strong, consistent
culture of risk discipline. Support profitable business results using vigilance, agility,
and expertise.
Strong recruiting, retention and talent development via Human Capital division.
Focus on defining, attracting, and developing the right mix of critical talent to
support and grow the businesses.
Deep Finance group with talent recruited from a large and diversified set of
institutions. Provide decision support for strategic and operational goals using key
business drivers and parameters that impact future profit and revenue growth.
Experienced and talented Tax team driving profitable tax credit investments.
13NASDAQ: UBNK
Financial Highlights
14NASDAQ: UBNK
Fourth Quarter Walk
(Dollars in thousands) GAAP Net Income Non-GAAP Net Income
Actual Third Quarter 2016 $ 14,159 $ 14,124
Loan Interest Income 501 326
Fee Income (370) (370)
Investment Income 154 154
Interest Expense (142) 9
Net Interest Income 143 119
Provision 407 407
Net Interest Income after Provision 550 526
Service Charges and Fees (146) (146)
Security Gains/Losses 46 —
Gains/Losses on Limited Partnerships 145 145
Other 1,002 1,072
Non-Interest Income 1,047 1,071
Salaries and Benefits (978) (910)
Service Bureau Fees 193 193
Occupancy Expense (76) (74)
Professional Fees 101 101
Marketing (122) (122)
FDIC 46 46
Other (221) (237)
Total Operating Expense (1,057) (1,003)
Taxes (149) (168)
Total Change 391 426
Actual Fourth Quarter 2016 $ 14,550 $ 14,550
15NASDAQ: UBNK
Tangible Book Value per Share Walk
16NASDAQ: UBNK
Forecast
Actual
Q3 2016
Actual
Q4 2016
Actual
FY 2016 FY 2017
Tax Equivalent Net Interest Margin 2.98% 2.96% 2.99% 3.00%
Loan Growth (1.0%)* 15.3% 6.2% high single digit
Provision / Average Gross Loans 0.31%* 0.28%* 0.29% 0.30%
Non-Interest Income Run Rate $31.6 million* $35.7 million* $30.1 million $32 - 34 million
Non-Interest Expense Run Rate $128.9 million* $133.2 million* $134.0 million $138 - 140 million
Effective Tax Rate (YTD) 8.4% 7.6% 7.6% 13%
*Note: Loan Growth, Provision/Average Gross Loans, Fee Income and
NIE calculations are annualized.
17NASDAQ: UBNK
NIE/Average Assets/FTE Employees
18NASDAQ: UBNK
Balance Sheet Trends
QoQ YoY
4Q16 vs 3Q16 4Q16 vs 4Q15
Balance Sheet ($ in thousands) 4Q2016 3Q2016 2Q2016 1Q2016 4Q2015 $ Change % Change $ Change % Change
ASSETS
Cash and cash equivalents $ 90,944 $ 214,246 $ 97,441 $ 87,234 $ 95,176 $ (123,302) (57.6)% $ (4,232) (4.4)%
Securities 1,057,449 1,066,601 1,087,748 1,104,932 1,073,734 (9,152) (0.9) (16,285) (1.5)
Loans held for sale 62,517 83,321 30,558 7,560 10,136 (20,804) (25.0) 52,381 516.8
Residential real estate 1,156,227 1,129,079 1,171,300 1,176,357 1,179,915 27,148 2.4 (23,688) (2.0)
Home equity 536,772 479,390 460,058 446,515 431,282 57,382 12.0 105,490 24.5
Other consumer 209,393 213,830 211,065 217,725 233,064 (4,437) (2.1) (23,671) (10.2)
Residential construction 53,934 52,476 49,338 42,205 41,084 1,458 2.8 12,850 31.3
Investor non-occupied CRE 1,705,319 1,702,701 1,675,821 1,648,321 1,673,248 2,618 0.2 32,071 1.9
Owner occupied CRE 416,718 392,168 384,324 376,511 322,084 24,550 6.3 94,634 29.4
Commercial business 724,557 660,676 671,687 614,235 603,332 63,881 9.7 121,225 20.1
Commercial construction (ADC) 98,794 90,380 107,302 128,007 129,922 8,414 9.3 (31,128) (24.0)
Loans - net 4,870,552 4,689,834 4,702,337 4,621,988 4,587,062 180,718 3.9 283,490 6.2
Deferred tax asset, net 39,962 32,529 31,395 32,222 33,094 7,433 22.9 6,868 20.8
Premises and equipment, net 51,757 52,520 53,021 53,685 54,779 (763) (1.5) (3,022) (5.5)
Intangible Assets 121,183 121,568 121,953 122,354 122,787 (385) (0.3) (1,604) (1.3)
Cash surrender value of BOLI 167,823 126,948 126,734 125,920 125,101 40,875 32.2 42,722 34.2
Other Assets* 137,333 157,288 163,897 163,349 126,672 (19,955) (12.7) 10,661 8.4
Total Assets $ 6,599,520 $6,544,855 $6,415,084 $6,319,244 $6,228,541 $ 54,665 0.8 % $ 370,979 6.0 %
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities: QoQ YoY
Deposits: 4Q16 vs 3Q16 4Q16 vs 4Q15
Non-interest-bearing $ 708,050 $ 687,865 $ 673,624 $ 657,144 $ 657,718 $ 20,185 2.9 % $ 50,332 7.7 %
Interest-bearing 4,003,122 4,007,606 3,781,717 3,876,901 3,779,353 (4,484) (0.1) 223,769 5.9
Total Deposits 4,711,172 4,695,471 4,455,341 4,534,045 4,437,071 15,701 0.3 274,101 6.2
Mortgagors' and investor escrow accounts 13,354 9,045 14,040 9,696 13,526 4,309 47.6 (172) (1.3)
FHLB advances and other borrowings 1,169,619 1,102,882 1,222,160 1,073,034 1,099,020 66,737 6.1 70,599 6.4
Accrued expenses and other liabilities 49,509 81,217 79,350 69,191 53,403 (31,708) (39.0) (3,894) (7.3)
Total liabilities 5,943,654 5,888,615 5,770,891 5,685,966 5,603,020 55,039 0.9 340,634 6.1
Total stockholders' equity 655,866 656,240 644,193 633,278 625,521 (374) (0.1) 30,345 4.9
Total liabilities and stockholders' equity $ 6,599,520 $6,544,855 $6,415,084 $6,319,244 $6,228,541 $ 54,665 0.8 % $ 370,979 6.0 %
*Other assets include FHLBB stock (at cost), accrued interest receivable, in addition to other assets
19NASDAQ: UBNK
Investment Portfolio
Portfolio Stats ($ in millions) 2016Q4 2016Q3
Market Value $ 1,057 $ 1,067
Yield 3.18% 2.99%
Average Rating AA AA
MBS Portfolio $ 554 $ 572
Total Portfolio Duration (years) 3.6 3.0
Summary of Quarterly Securities
Purchases
2016Q4 2016Q3
Average Yield 3.3% 3.68%
Average Rating AA- AA
Total Securities/Assets (%)
25.0
20.0
15.0
10.0
5.0
201
3Q
4
201
4Q
1
201
4Q
2
201
4Q
3
201
4Q
4
201
5Q
1
201
5Q
2
201
5Q
3
201
5Q
4
201
6Q
1
201
6Q
2
201
6Q
3
201
6Q
4
18.2 19.3 18.8 19.4 19.5
20.1 19.0 18.7 17.2 17.5 17.0 16.3 16.0
Investment Portfolio Summary (Total)
December 31, 2016
Corp Debt: 7%
Agency CMO: 17%
Agency CCMO: 16%
Agency CMBS: 3%
CLO: 14%
Muni: 22%
FFELP: 1%
Agency MBS: 17%
Preferred: 3%
20NASDAQ: UBNK
Asset Quality
($ in thousands, except percentage data) 2016Q4 2016Q3 2016Q2 2016Q1 2015Q4
Non-accrual loans $ 26,759 $ 25,983 $ 32,310 $ 29,285 $ 32,191
TDR - non-accruing 7,304 7,345 6,713 7,143 5,611
Total non-performing loans 34,063 33,328 39,023 36,428 37,802
OREO 1,890 2,792 702 659 755
Total non-performing assets $ 35,953 $ 36,120 $ 39,725 $ 37,087 $ 38,557
NPLs to total loans 0.69% 0.71% 0.82% 0.78% 0.82%
NPAs to total assets 0.54% 0.55% 0.62% 0.59% 0.62%
Net charge offs $ 1,641 $ 647 $ 1,163 $ 1,075 $ 724
Annualized NCOs to average loans 0.14% 0.05% 0.10% 0.09% 0.07%
Allowance for loan losses to non-performing loans 125.64% 123.26% 97.28% 97.45% 89.64%
Allowance for loan losses to total loans 0.87% 0.87% 0.80% 0.76% 0.73%
Provision for loan losses (annualized)/Average Loans 0.28% 0.31% 0.31% 0.23% 0.35%
21NASDAQ: UBNK
Commercial Real Estate
Institution Name City State Ticker CRE / Risk-Based Capital
3-Year Ratio
Delta
Construction /
Risk-Based
Capital
3-Year Ratio
Delta
United Financial Bancorp, Inc. Glastonbury CT UBNK 294% 37% 26% (3)%
People's United Financial, Inc. Bridgeport CT PBCT 264% (10)% 26% 7%
Webster Financial Corporation Waterbury CT WBS 158% 31% 20% 7%
Berkshire Hills Bancorp, Inc. Pittsfield MA BHLB 263% 78% 46% 19%
Independent Bank Corp. Rockland MA INDB 307% (21)% 59% 4%
Brookline Bancorp, Inc. Boston MA BRKL 362% 26% 21% (3)%
Century Bancorp, Inc. Medford MA CNBKA 34% (11)% 6% —%
Washington Trust Bancorp, Inc. Westerly RI WASH 318% 67% 34% 10%
Meridian Bancorp, Inc. Peabody MA EBSB 490% (46)% 104% 22%
Camden National Corporation Camden ME CAC 204% 50% 30% 16%
First Connecticut Bancorp, Inc. Farmington CT FBNK 305% 47% 20% (24)%
Enterprise Bancorp, Inc. Lowell MA EBTC 248% 25% 85% 13%
Community Bank System, Inc. De Witt NY CBU 78% (2)% 18% 1%
NBT Bancorp Inc. Norwich NY NBTB 168% (12)% 34% 10%
Sterling Bancorp Montebello NY STL 266% (1)% 16% (10)%
High 490% 78% 104% 22%
Low 34% (46)% 6% (24)%
Mean 247% 16% 37% 5%
Median 263% 12% 28% 7%
UBNK Ranking out of 15 (ascending): 10 11 8 3
NOTE: All financial data as of September 30, 2016
CRE includes 1.a.1, 1.a.2, 1.b, 1.d, and 1.e.2 from RC-C Part 1 FFIEC 041
Data is Bank-level; BRKL subsidiaries aggregated
Ratio deltas represent change in ratio over 3-year period
All data sourced from S & P Global Market Intelligence
22NASDAQ: UBNK
Deposit Composition
Demand & NOW:
26%
Regular Savings:
11%
Money Market: 26%
Time Deposits:
37%
Demand & NOW:
23%
Regular Savings:
11%
Money Market: 27%
Time Deposits:
39%
Deposit Composition at December 31, 2016Deposit Composition at December 31, 2015
Total Deposits at 12/31/16: $4.71 billionTotal Deposits at 12/31/15: $4.44 billion
23NASDAQ: UBNK
Non-GAAP Reconciliation
Three Months Ended
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Net Income (GAAP) $ 14,550 $ 14,159 $ 9,058 $ 11,894 $ 9,902
Non-GAAP adjustments:
Net interest income (407) (383) 35 (1,900) (1,617)
Non-interest income (94) (118) (367) (1,452) (519)
Non-interest expense 501 447 1,814 1,893 3,586
Related income tax (benefit) expense — 19 (518) 511 (65)
Net adjustment — (35) 964 (948) 1,385
Total non-GAAP net income $ 14,550 $ 14,124 $ 10,022 $ 10,946 $ 11,287
Net interest income (GAAP) $ 43,172 $ 43,029 $ 41,496 $ 43,402 $ 40,693
Non-GAAP Adjustments:
Impact from purchase accounting fair value marks:
Accretion of loan mark 228 403 835 (1,094) (718)
Accretion of deposit mark (259) (359) (359) (359) (444)
Accretion of borrowings mark (376) (427) (441) (447) (455)
Net adjustment (407) (383) 35 (1,900) (1,617)
Total non-GAAP net interest income $ 42,765 $ 42,646 $ 41,531 $ 41,502 $ 39,076
Non-interest income (GAAP) $ 8,936 $ 7,889 $ 6,532 $ 6,727 $ 8,463
Non-GAAP adjustments:
Net gain on sales of securities (94) (48) (367) (1,452) (300)
BOLI claim benefit — (70) — — (219)
Net adjustment (94) (118) (367) (1,452) (519)
Total non-GAAP non-interest income 8,842 7,771 6,165 5,275 7,944
Total non-GAAP net interest income 42,765 42,646 41,531 41,502 39,076
Total non-GAAP revenue $ 51,607 $ 50,417 $ 47,696 $ 46,777 $ 47,020
24NASDAQ: UBNK
Non-GAAP Reconciliation (cont.)
Three Months Ended
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Non-interest expense (GAAP) $ 33,293 $ 32,236 $ 34,681 $ 33,763 $ 35,305
Non-GAAP adjustments:
Merger related expense — — — — (1,575)
Core deposit intangible amortization expense (385) (385) (401) (433) (433)
Loan portfolio acquisition fees — — — — (1,572)
Effect of position eliminations (107) (55) (1,403) — —
Effect of branch lease termination agreement — — — — —
Amortization of fixed asset fair value mark (9) (7) (10) (6) (6)
FHLBB prepayment penalties — — — (1,454) —
Net adjustment (501) (447) (1,814) (1,893) (3,586)
Total non-GAAP non-interest expense $ 32,792 $ 31,789 $ 32,867 $ 31,870 $ 31,719
Total loans $ 4,901,714 $ 4,720,700 $ 4,730,895 $ 4,649,876 $ 4,613,931
Non-covered loans (1) (744,763) (721,763) (1,259,285) (1,334,303) (1,448,435)
Total covered loans $ 4,156,951 $ 3,998,937 $ 3,471,610 $ 3,315,573 $ 3,165,496
Allowance for loan losses $ 42,798 $ 41,080 $ 37,961 $ 35,500 $ 33,887
Allowance for loan losses to total loans 0.87% 0.87% 0.80% 0.76% 0.73%
Allowance for loan losses to total covered loans 1.03% 1.03% 1.09% 1.07% 1.07%
(1) As required by GAAP, the Company recorded at fair value acquired loans. These loans carry no
allowance for loan losses for the periods reflected above.