United Financial Bancorp, Inc. Announces Record Annual Earnings of $59.9 Million; $1.17 Earnings Per Share

January 22, 2019

HARTFORD, Conn., Jan. 22, 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 December 31, 2018.

The Company reported net income of $12.2 million, or $0.24 per diluted share, for the quarter ended December 31, 2018, compared to net income for the linked quarter of $16.3 million, or $0.32 per diluted share. The Company reported net income of $9.5 million, or $0.19 per diluted share, for the quarter ended December 31, 2017. Net income for the year ended December 31, 2018 was $59.9 million, or $1.17 per diluted share, compared to net income of $54.6 million, or $1.07 per diluted share, for the year ended December 31, 2017.

“In the fourth quarter of 2018, United Financial Bancorp, Inc. delivered annualized linked quarter loan growth of 9% and deposit growth of 12%, while maintaining pristine asset quality and a strong balance sheet,” stated William H.W. Crawford, IV, Chief Executive Officer and President of the Company and the Bank. “I would like to thank our United employees for their continued steadfast focus on serving the needs of our customers and communities.”

Balance Sheet

Assets totaled $7.36 billion at December 31, 2018, increasing $149.4 million from $7.21 billion at September 30, 2018. At December 31, 2018, total loans were $5.66 billion, representing an increase of $127.9 million, or 2.3%, from the linked quarter. Changes to loan balances during the fourth quarter of 2018 were highlighted by a $40.5 million, or 10.9%, increase in other consumer loans, a $30.2 million, or 2.4%, increase in residential real estate loans, a $25.7 million, or 3.0%, increase in commercial business loans, a $22.2 million, or 1.2%, increase in investor non-owner occupied commercial real estate loans, a $9.3 million, or 11.8%, increase in commercial construction loans, and an $8.5 million, or 2.0%, increase in owner-occupied commercial real estate loans. Slightly offsetting the increased loan balances above was a $12.1 million, or 37.0%, decrease in residential construction loans from the linked quarter. Loans held for sale also decreased $8.2 million, or 9.4%, from the linked quarter. Total cash and cash equivalents increased $19.4 million, or 24.6%, from the linked quarter.

Deposits totaled $5.67 billion at December 31, 2018 and increased by $170.2 million, or 3.1%, from $5.50 billion at September 30, 2018. The increase in deposits was positively impacted by the Webster Bank deposit acquisition of $109.4 million that occurred in the beginning of October 2018. Increases in deposit balances during the fourth quarter of 2018 were highlighted by a $121.2 million, or 7.3%, increase in certificates of deposit balances, a $40.6 million, or 5.3%, increase in demand deposit balances, a $17.1 million, or 3.6%, increase in savings deposit balances, and an $11.8 million, or 1.4%, increase in NOW checking account balances. Slightly offsetting these increases was a $20.5 million, or 1.2%, decrease in money market account balances. The growth in the certificate of deposit account balances was attributable to the success of two retail pricing campaigns executed during the fourth quarter.

Total Federal Home Loan Bank advances decreased by $15.7 million, or 1.9%, over the linked quarter as the Company utilized excess cash from deposit growth to pay off maturing advances.

Net Interest Income

Net interest income decreased by $67,000, or 0.1%, on a linked quarter basis, to $48.4 million, primarily attributable to an increase in loan interest income of $2.2 million, or 3.5%, to $63.2 million, offset by an increase in interest expense of $2.1 million, or 9.6%, to $23.9 million. Average interest-earning assets increased by $37.3 million, or 0.6%, on a linked quarter basis, primarily due to growth in average loan balances, which increased by $61.8 million, or 1.1%. Average loan balance growth was driven by a $38.3 million, or 10.9%, increase in average other consumer loans, a $21.7 million, or 1.6%, increase in average residential real estate loans, and a $19.4 million, or 2.3%, increase in average commercial business loans. Slightly offsetting the increases was a $17.6 million, or 0.8%, decrease in average commercial real estate loans.

Interest expense increased by $2.1 million, or 9.6%, to $23.9 million during the fourth quarter of 2018, from $21.8 million in the linked quarter. Average interest-bearing deposit balances increased by $141.5 million, or 3.0%, on a linked quarter basis, primarily driven by a $68.3 million, or 2.7%, increase in average NOW and money market account balances, a $68.0 million, or 4.0%, increase in average certificates of deposits, and a $5.2 million, or 1.0%, increase in average savings account balances. Average non-interest bearing deposits increased by $18.4 million, or 2.5%, as compared to the linked quarter. Average Federal Home Loan Bank of Boston advances decreased by $111.2 million, or 13.2%, as the Company used funds obtained through deposit growth to pay down the maturing advances. The overall growth observed in average account balances is attributable to the continued success of the Company’s retail deposit acquisition strategies.

The tax-equivalent net interest margin decreased by two basis points to 2.90% in the fourth quarter of 2018, from 2.92% in the linked period. The decline in the net interest margin was driven by a 14 basis point increase in the cost of interest-bearing liabilities, which was partially offset by a ten basis point increase in the yield of interest-earning assets. The interest-earning asset yield improvement was largely driven by a 33 basis point increase in the yield on commercial business loans, a 25 basis point increase in the yield on home equity loans, an eight basis point increase in the yield on residential real estate loans, and a three basis point increase in the yield on commercial real estate loans. The total cost of funds increased by 12 basis points to 1.48% in the fourth quarter of 2018 driven by a 16 basis point increase in the cost of interest-bearing deposits and a 17 basis point increase in the cost of Federal Home Loan Bank of Boston advances.

Provision for Loan Losses

The provision for loan losses totaled $2.6 million for the quarter ended December 31, 2018 as compared to $2.0 million for the linked quarter. Net charge-offs for the quarter ended December 31, 2018 totaled $891,000, or 0.06%, as a percentage of average loans outstanding, as compared to $1.3 million, or 0.09%, as a percentage of average loans for the quarter ended September 30, 2018. 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 slightly by $62,000, or 0.6%, to $9.5 million for the quarter ended December 31, 2018 from $9.6 million in the linked quarter. The decrease in the fourth quarter’s non-interest income was driven primarily by decreases in income from mortgage banking activities and other income. Additionally, there were higher losses on limited partnership investments as compared to the linked quarter, which contributed to the overall decrease in non-interest income. These decreases were offset primarily by an increase in service charges and fees, as well as bank-owned life insurance income.

Non-Interest Expense

Non-interest expense for the quarter ended December 31, 2018 totaled $43.7 million and increased by $4.8 million, or 12.3%, from the linked quarter. The increase in non-interest expense during the quarter was primarily due to increases in salaries and employee benefits, occupancy and equipment, and the core deposit intangible amortization. These increases were primarily offset by decreases in other expenses and FDIC insurance assessment expenses as compared to the linked quarter.

The primary driver of the increase in non-interest expense occurred late in the quarter as the Company shifted its mortgage banking strategy to reflect our customers’ preference to conduct business with us over the internet and through our direct sales channel. Consequently, we reduced staffing in our mortgage division, resulting in a $2.2 million severance expense (pre-tax) in the quarter ending December 31, 2018. Other notable increases in the quarter included a change in Company policy related to the carryover of unused vacation days by employees year-over-year, resulting in the Company recording $439,000 of additional expense. The Company also recorded lease impairment expense of $466,000 as a result of branch consolidation. Additionally, the Webster Bank branch acquisition also closed in the fourth quarter, resulting in $371,000 of other expenses related to this transaction.

Asset Quality

Asset quality remained strong and stable for the period, with non-performing assets increasing by $3.0 million to $32.1 million at December 31, 2018 from $29.0 million at September 30, 2018. The ratio of non-performing assets to total assets for the quarter ended December 31, 2018 was 0.44%, as compared to 0.40% in the linked quarter.

Capital

The Company reported Tangible Common Equity (“TCE”) of $589.7 million, or 8.1% of average assets, for the quarter ended December 31, 2018. Tangible book value per share decreased slightly to $11.54 at December 31, 2018 from $11.55 at September 30, 2018. The decrease was primarily driven by the cash dividend payment to shareholders of $0.12 per share, an increase in intangibles associated with the Webster Bank branch acquisition, and the continued repurchase of Company stock during the quarter, which was slightly offset by the Company’s net income of $12.2 million. Book value per share at December 31, 2018 was $13.94, as compared to $13.88 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 February 1, 2019 and payable on February 13, 2019. This dividend equates to a 3.04% annualized yield based on the $15.78 average closing price of the Company’s common stock in the fourth quarter of 2018. The Company has paid dividends for 51 consecutive quarters.

Investor Conference Call

United Financial Bancorp, Inc. will host a conference call on Wednesday, January 23, 2019 at 10:00 a.m. Eastern Time (ET) to discuss the Company’s fourth quarter results. Those wishing to participate in the call may dial toll-free 1-800-544-8281. A telephone replay of the call will be available through February 6, 2019 by calling 1-877-344-7529 and entering conference number 10127439. A podcast will be available on the Company’s website for an extended period of time, as well as on the Company’s investor relations app.

Investor Presentation

United Financial Bancorp, Inc. has prepared and furnished a visual slide presentation to accompany the earnings press release and investor conference call. The presentation has been furnished as an exhibit to the SEC Form 8-K, but is not included in this press release. Copies of the presentation may be accessed on the Company’s investor relations website (www.unitedfinancialinc.com) by selecting “News & Market Data,” then “Presentations;” or via the IRapp and selecting “Presentations;” or directly from SEC EDGAR.

Annual Meeting

The Board of Directors approved May 13, 2019 as the date of the Company’s 2019 Annual Meeting of Shareholders (the “Annual Meeting”) and set the record date on which the Company’s shareholders who will be eligible to vote at the Annual Meeting as the close of business on March 4, 2019.

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 December 31, 2018, the Company had $7.36 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 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 may contain certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events 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 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.

United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(Unaudited)

	For the Three Months Ended December 31,						For the Year Ended December 31,
	2018			2017			2018			2017
Interest and dividend income:	(In thousands, except share data)
Loans	$	63,227		$	52,758		$	237,026		$	200,734
Securities-taxable interest	5,705			5,643			22,994			22,550
Securities-non-taxable interest	2,339			2,571			9,469			9,679
Securities-dividends	702			669			2,823			2,902
Interest-bearing deposits	250			86			726			389
Total interest and dividend income	72,223			61,727			273,038			236,254
Interest expense:
Deposits	18,183			9,958			57,841			33,565
Borrowed funds	5,678			4,920			23,682			18,447
Total interest expense	23,861			14,878			81,523			52,012
Net interest income	48,362			46,849			191,515			184,242
Provision for loan losses	2,618			2,250			8,914			9,396
Net interest income after provision for loan losses	45,744			44,599			182,601			174,846
Non-interest income:
Service charges and fees	7,447			6,031			26,771			25,374
Net gain from sales of securities	25			72			145			782
Income from mortgage banking activities	698			1,184			4,759			5,539
Bank-owned life insurance income	1,517			1,939			6,294			5,462
Net loss on limited partnership investments	(405		)	(1,441		)	(2,176		)	(3,023		)
Other income (loss)	211			(204		)	904			431
Total non-interest income	9,493			7,581			36,697			34,565
Non-interest expense:
Salaries and employee benefits	25,341			20,752			91,295			80,061
Service bureau fees	2,309			2,304			8,901			9,263
Occupancy and equipment	6,384			5,036			20,488			16,902
Professional fees	1,136			996			4,418			4,305
Marketing and promotions	1,108			1,011			4,101			4,047
FDIC insurance assessments	611			821			2,740			3,076
Core deposit intangible amortization	420			336			1,350			1,411
Other	6,409			5,981			24,474			23,685
Total non-interest expense	43,718			37,237			157,767			142,750
Income before income taxes	11,519			14,943			61,531			66,661
Provision (benefit) for income taxes	(646		)	5,442			1,625			12,043
Net income	$	12,165		$	9,501		$	59,906		$	54,618

Net income per share:
Basic	$	0.24		$	0.19		$	1.18		$	1.09
Diluted	$	0.24		$	0.19		$	1.17		$	1.07
Weighted-average shares outstanding:
Basic	50,613,498			50,392,382			50,555,212			50,283,071
Diluted	50,970,000			51,024,881			51,012,239			50,922,652

United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Net Income
(Unaudited)

	For the Three Months Ended
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Interest and dividend income:	(In thousands, except share data)
Loans	$	63,227		$	61,061		$	57,958		$	54,780		$	52,758
Securities-taxable interest	5,705			5,822			5,969			5,498			5,643
Securities-non-taxable interest	2,339			2,347			2,354			2,429			2,571
Securities-dividends	702			748			736			637			669
Interest-bearing deposits	250			213			113			150			86
Total interest and dividend income	72,223			70,191			67,130			63,494			61,727
Interest expense:
Deposits	18,183			15,767			12,864			11,027			9,958
Borrowed funds	5,678			5,995			6,085			5,924			4,920
Total interest expense	23,861			21,762			18,949			16,951			14,878
Net interest income	48,362			48,429			48,181			46,543			46,849
Provision for loan losses	2,618			2,007			2,350			1,939			2,250
Net interest income after provision for loan losses	45,744			46,422			45,831			44,604			44,599
Non-interest income:
Service charges and fees	7,447			6,623			6,542			6,159			6,031
Net gain (loss) from sales of securities	25			(58		)	62			116			72
Income from mortgage banking activities	698			1,486			846			1,729			1,184
Bank-owned life insurance income	1,517			1,460			1,671			1,646			1,939
Net loss on limited partnership investments	(405		)	(221		)	(960		)	(590		)	(1,441		)
Other income (loss)	211			265			199			229			(204		)
Total non-interest income	9,493			9,555			8,360			9,289			7,581
Non-interest expense:
Salaries and employee benefits	25,341			22,643			22,113			21,198			20,752
Service bureau fees	2,309			2,209			2,165			2,218			2,304
Occupancy and equipment	6,384			4,487			4,668			4,949			5,036
Professional fees	1,136			1,013			1,105			1,164			996
Marketing and promotions	1,108			1,119			1,189			685			1,011
FDIC insurance assessments	611			655			735			739			821
Core deposit intangible amortization	420			288			305			337			336
Other	6,409			6,529			6,090			5,446			5,981
Total non-interest expense	43,718			38,943			38,370			36,736			37,237
Income before income taxes	11,519			17,034			15,821			17,157			14,943
Provision (benefit) for income taxes	(646		)	726			175			1,370			5,442
Net income	$	12,165		$	16,308		$	15,646		$	15,787		$	9,501

Net income per share:
Basic	$	0.24		$	0.32		$	0.31		$	0.31		$	0.19
Diluted	$	0.24		$	0.32		$	0.31		$	0.31		$	0.19
Weighted-average shares outstanding:
Basic	50,613,498			50,624,832			50,504,273			50,474,942			50,392,382
Diluted	50,970,000			51,104,776			50,974,283			50,996,596			51,024,881

United Financial Bancorp, Inc. and Subsidiaries
Consolidated Statements of Condition
(Unaudited)

	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
ASSETS	(In thousands)
Cash and cash equivalents:
Cash and due from banks	$	36,434		$	48,786		$	62,188		$	45,332		$	56,661
Short-term investments	61,530			29,809			46,987			23,910			32,007
Total cash and cash equivalents	97,964			78,595			109,175			69,242			88,668
Available for sale securities – At fair value	973,347			972,035			1,006,135			1,031,277			1,050,787
Held to maturity securities – At amortized cost	—			—			—			—			13,598
Loans held for sale	78,788			86,948			85,458			63,394			114,073
Loans:
Commercial real estate loans:
Owner-occupied	443,398			434,906			418,338			442,938			445,820
Investor non-owner occupied	1,911,070			1,888,848			1,927,960			1,842,898			1,854,459
Construction	87,493			78,235			82,883			84,717			78,083
Total commercial real estate loans	2,441,961			2,401,989			2,429,181			2,370,553			2,378,362
Commercial business loans	886,770			861,030			841,142			846,182			840,312
Consumer loans:
Residential real estate	1,313,373			1,283,126			1,252,001			1,235,197			1,204,401
Home equity	583,454			579,907			588,638			582,285			583,180
Residential construction	20,632			32,750			32,063			37,579			40,947
Other consumer	410,249			369,781			332,402			310,439			292,781
Total consumer loans	2,327,708			2,265,564			2,205,104			2,165,500			2,121,309
Total loans	5,656,439			5,528,583			5,475,427			5,382,235			5,339,983
Net deferred loan costs and premiums	17,786			16,603			15,502			14,724			14,794
Allowance for loan losses	(51,636		)	(49,909		)	(49,163		)	(47,915		)	(47,099		)
Loans receivable – net	5,622,589			5,495,277			5,441,766			5,349,044			5,307,678
Federal Home Loan Bank of Boston stock, at cost	41,407			42,032			46,734			49,895			50,194
Accrued interest receivable	24,823			25,485			23,209			22,333			22,332
Deferred tax asset, net	32,706			31,473			30,190			28,710			25,656
Premises and equipment, net	68,657			67,612			67,614			67,619			67,508
Goodwill	116,769			115,281			115,281			115,281			115,281
Core deposit intangible asset	6,027			3,561			3,849			4,154			4,491
Cash surrender value of bank-owned life insurance	193,429			181,928			180,490			179,556			148,300
Other assets	100,368			107,271			98,695			88,169			105,593
Total assets	$	7,356,874		$	7,207,498		$	7,208,596		$	7,068,674		$	7,114,159

	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest-bearing	$	799,785		$	759,210		$	770,982		$	753,575		$	778,576
Interest-bearing	4,870,814			4,741,153			4,622,394			4,528,935			4,419,645
Total deposits	5,670,599			5,500,363			5,393,376			5,282,510			5,198,221
Mortgagors’ and investor escrow accounts	4,685			9,597			14,526			11,096			7,545
Federal Home Loan Bank advances and other borrowings	899,626			926,592			1,041,896			1,030,735			1,165,054
Accrued expenses and other liabilities	69,446			61,128			56,921			51,333			50,011
Total liabilities	6,644,356			6,497,680			6,506,719			6,375,674			6,420,831
Total stockholders’ equity	712,518			709,818			701,877			693,000			693,328
Total liabilities and stockholders’ equity	$	7,356,874		$	7,207,498		$	7,208,596		$	7,068,674		$	7,114,159

United Financial Bancorp, Inc. and Subsidiaries
Selected Financial Highlights
(Dollars In Thousands, Except Share Data)
(Unaudited)

	At or For the Three Months Ended
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Share Data:
Basic net income per share	$	0.24		$	0.32		$	0.31		$	0.31		$	0.19
Diluted net income per share	0.24			0.32			0.31			0.31			0.19
Dividends declared per share	0.12			0.12			0.12			0.12			0.12
Tangible book value per share	$	11.54		$	11.55		$	11.40		$	11.25		$	11.24
Key Statistics:
Total revenue	$	57,855		$	57,984		$	56,541		$	55,832		$	54,430
Total non-interest expense	43,718			38,943			38,370			36,736			37,327
Average earning assets	6,708,701			6,671,424			6,584,938			6,568,168			6,480,966
Key Ratios:
Return on average assets (annualized)	0.67		%	0.91		%	0.88		%	0.89		%	0.54		%
Return on average equity (annualized)	6.89		%	9.26		%	9.00		%	9.15		%	5.50		%
Tax-equivalent net interest margin (annualized)	2.90		%	2.92		%	2.97		%	2.90		%	2.98		%
Residential Mortgage Production:
Dollar volume (total)	$	128,209		$	143,673		$	140,409		$	94,433		$	135,522
Mortgages originated for purchases	101,266			111,555			110,351			63,193			83,181
Loans sold	108,663			99,372			99,637			99,899			94,738
Income from mortgage banking activities	698			1,486			846			1,729			1,184
Non-performing Assets:
Residential real estate	$	13,217		$	11,949		$	11,221		$	11,663		$	11,824
Home equity	4,735			4,005			4,607			4,698			4,968
Investor-owned commercial real estate	1,131			1,525			2,400			2,863			1,821
Owner-occupied commercial real estate	2,450			1,202			2,176			2,326			1,664
Construction	199			243			250			273			1,398
Commercial business	944			985			1,196			1,579			1,477
Other consumer	1,030			597			237			34			35
Non-accrual loans	23,706			20,506			22,087			23,436			23,187
Troubled debt restructured – non-accruing	6,971			6,706			7,330			8,308			8,475
Total non-performing loans	30,677			27,212			29,417			31,744			31,662
Other real estate owned	1,389			1,808			1,855			1,935			2,154
Total non-performing assets	$	32,066		$	29,020		$	31,272		$	33,679		$	33,816
Non-performing loans to total loans	0.54		%	0.49		%	0.54		%	0.59		%	0.59		%
Non-performing assets to total assets	0.44		%	0.40		%	0.43		%	0.48		%	0.48		%
Allowance for loan losses to non-performing loans	168.32		%	183.41		%	167.12		%	150.94		%	148.76		%
Allowance for loan losses to total loans	0.91		%	0.90		%	0.90		%	0.89		%	0.88		%
Non-GAAP Ratios: (1)
Non-interest expense to average assets (annualized)	2.41		%	2.17		%	2.16		%	2.08		%	2.13		%
Efficiency ratio (2)	69.18		%	65.61		%	65.18		%	63.97		%	63.53		%
Cost of funds (annualized) (3)	1.48		%	1.36		%	1.20		%	1.07		%	0.96		%
Total revenue growth rate	(0.22		)%	2.55		%	1.27		%	2.58		%	(1.38		)%
Total revenue growth rate (annualized)	(0.89		)%	10.21		%	5.08		%	10.30		%	(5.54		)%
Average earning asset growth rate	0.56		%	1.31		%	0.26		%	1.35		%	0.89		%
Average earning asset growth rate (annualized)	2.24		%	5.25		%	1.02		%	5.38		%	3.56		%
Return on average tangible common equity (annualized) (2)	8.55		%	11.30		%	11.03		%	11.25		%	6.81		%
Pre-provision net revenue to average assets (2)	1.00		%	1.12		%	1.14		%	1.15		%	1.19		%

⁽¹⁾			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.
⁽²⁾			Calculations of these non-GAAP metrics are provided after the reconciliations of non-GAAP financial measures and appear on page F-10 through page F-12.
⁽³⁾			The cost of funds ratio represents interest incurred on liabilities as a percentage of average non-interest bearing deposits and interest-bearing liabilities.

United Financial Bancorp, Inc. and Subsidiaries
Average Balance Sheets, Interest and Yields/Costs
(Dollars In Thousands)
(Unaudited)

	For the Three Months Ended
	December 31, 2018							December 31, 2017
	Average Balance			Interest and Dividends		Yield/Cost		Average Balance			Interest and Dividends		Yield/Cost
Interest-earning assets:
Residential real estate	$	1,397,669		$	12,929	3.70	%	$	1,310,352		$	11,343	3.47	%
Commercial real estate	2,302,741			26,085		4.43		2,234,878			23,089		4.04
Construction	113,617			1,405		4.84		122,151			1,453		4.66
Commercial business	861,311			10,481		4.76		813,457			7,994		3.85
Home equity	585,178			7,848		5.32		569,021			6,293		4.39
Other consumer	390,237			4,931		5.01		278,465			3,309		4.71
Investment securities	967,881			8,564		3.53		1,074,840			9,713		3.60
Federal Home Loan Bank stock	40,428			665		6.58		47,964			564		4.71
Other earning assets	49,639			253		2.02		29,838			86		1.15
Total interest-earning assets	6,708,701			73,161		4.31		6,480,966			63,844		3.89
Allowance for loan losses	(50,754		)					(46,880		)
Non-interest-earning assets	586,449							542,596
Total assets	$	7,244,396						$	6,976,682
Interest-bearing liabilities:
NOW and money market	$	2,583,982		$	9,641	1.48	%	$	2,125,177		$	4,286	0.80	%
Savings	506,880			76		0.06		517,993			77		0.06
Certificates of deposit	1,759,382			8,466		1.91		1,765,007			5,595		1.26
Total interest-bearing deposits	4,850,244			18,183		1.49		4,408,177			9,958		0.90
Federal Home Loan Bank advances	732,995			4,307		2.30		954,159			3,538		1.45
Other borrowings	107,365			1,371		5.00		117,578			1,382		4.60
Total interest-bearing liabilities	5,690,604			23,861		1.66		5,479,914			14,878		1.07
Non-interest-bearing deposits	768,916							740,007
Other liabilities	78,752							65,757
Total liabilities	6,538,272							6,285,678
Stockholders’ equity	706,124							691,004
Total liabilities and stockholders’ equity	$	7,244,396						$	6,976,682
Net interest-earning assets	$	1,018,097						$	1,001,052
Tax-equivalent net interest income				49,300							48,966
Tax-equivalent net interest rate spread ⁽¹⁾						2.65	%						2.82	%
Tax-equivalent net interest margin⁽²⁾						2.90	%						2.98	%
Average interest-earning assets to average interest-bearing liabilities						117.89	%						118.27	%
Less tax-equivalent adjustment				938							2,117
Net interest income				$	48,362						$	46,849

⁽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
	December 31, 2018							September 30, 2018
	Average Balance			Interest and Dividends		Yield/Cost		Average Balance			Interest and Dividends		Yield/Cost
Interest-earning assets:
Residential real estate	$	1,397,669		$	12,929	3.70	%	$	1,375,948		$	12,451	3.62	%
Commercial real estate	2,302,741			26,085		4.43		2,320,375			26,105		4.40
Construction	113,617			1,405		4.84		114,068			1,379		4.73
Commercial business	861,311			10,481		4.76		841,936			9,531		4.43
Home equity	585,178			7,848		5.32		584,706			7,471		5.07
Other consumer	390,237			4,931		5.01		351,892			4,532		5.11
Investment securities	967,881			8,564		3.53		995,405			8,686		3.48
Federal Home Loan Bank stock	40,428			665		6.58		45,016			715		6.35
Other earning assets	49,639			253		2.02		42,078			216		2.04
Total interest-earning assets	6,708,701			73,161		4.31		6,671,424			71,086		4.21
Allowance for loan losses	(50,754		)					(49,823		)
Non-interest-earning assets	586,449							569,471
Total assets	$	7,244,396						$	7,191,072
Interest-bearing liabilities:
NOW and money market	$	2,583,982		$	9,641	1.48	%	$	2,515,660		$	8,461	1.33	%
Savings	506,880			76		0.06		501,700			75		0.06
Certificates of deposit	1,759,382			8,466		1.91		1,691,382			7,231		1.70
Total interest-bearing deposits	4,850,244			18,183		1.49		4,708,742			15,767		1.33
Federal Home Loan Bank advances	732,995			4,307		2.30		844,207			4,591		2.13
Other borrowings	107,365			1,371		5.00		111,760			1,404		4.92
Total interest-bearing liabilities	5,690,604			23,861		1.66		5,664,709			21,762		1.52
Non-interest-bearing deposits	768,916							750,503
Other liabilities	78,752							71,554
Total liabilities	6,538,272							6,486,766
Stockholders’ equity	706,124							704,306
Total liabilities and stockholders’ equity	$	7,244,396						$	7,191,072
Net interest-earning assets	$	1,018,097						$	1,006,715
Tax-equivalent net interest income				49,300							49,324
Tax-equivalent net interest rate spread ⁽¹⁾						2.65	%						2.69	%
Tax-equivalent net interest margin⁽²⁾						2.90	%						2.92	%
Average interest-earning assets to average interest-bearing liabilities						117.89	%						117.77	%
Less tax-equivalent adjustment				938							895
Net interest income				$	48,362						$	48,429

⁽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 Years Ended
	December 31, 2018							December 31, 2017
	Average Balance			Interest and Dividends		Yield/Cost		Average Balance			Interest and Dividends		Yield/Cost
Interest-earning assets:
Residential real estate	$	1,356,746		$	48,905	3.60	%	$	1,291,852		$	43,422	3.36	%
Commercial real estate	2,303,075			100,608		4.31		2,175,197			88,716		4.02
Construction	115,507			5,440		4.65		129,636			5,714		4.35
Commercial business	840,594			37,533		4.40		779,262			30,504		3.86
Home equity	584,204			28,903		4.95		542,579			23,168		4.27
Other consumer	341,295			17,326		5.08		243,631			11,890		4.88
Investment securities	1,005,823			34,869		3.46		1,083,616			38,078		3.51
Federal Home Loan Bank stock	46,475			2,689		5.78		51,735			2,195		4.24
Other earning assets	40,078			740		1.85		34,484			389		1.13
Total interest-earning assets	6,633,797			277,013		4.15		6,331,992			244,076		3.83
Allowance for loan losses	(49,255		)					(45,480		)
Non-interest-earning assets	566,511							526,914
Total assets	$	7,151,053						$	6,813,426
Interest-bearing liabilities:
NOW and money market	$	2,377,309		$	29,157	1.23	%	$	2,002,146		$	13,282	0.66	%
Savings	509,316			301		0.06		529,006			312		0.06
Certificates of deposit	1,748,873			28,383		1.62		1,731,434			19,971		1.15
Total interest-bearing deposits	4,635,498			57,841		1.25		4,262,586			33,565		0.79
Federal Home Loan Bank advances	891,626			18,135		2.01		978,673			12,763		1.29
Other borrowings	112,280			5,547		4.87		133,364			5,684		4.20
Total interest-bearing liabilities	5,639,404			81,523		1.44		5,374,623			52,012		0.96
Non-interest-bearing deposits	742,990							695,713
Other liabilities	69,582							67,810
Total liabilities	6,451,976							6,138,146
Stockholders’ equity	699,077							675,280
Total liabilities and stockholders’ equity	$	7,151,053						$	6,813,426
Net interest-earning assets	$	994,393						$	957,369
Tax-equivalent net interest income				195,490							192,064
Tax-equivalent net interest rate spread ⁽¹⁾						2.71	%						2.87	%
Tax-equivalent net interest margin⁽²⁾						2.92	%						3.01	%
Average interest-earning assets to average interest-bearing liabilities						117.63	%						117.81	%
Less tax-equivalent adjustment				3,975							7,822
Net interest income				$	191,515						$	184,242

⁽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															Years Ended
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			December 31, 2018			December 31, 2017
	(Dollars in thousands)
Net Income (GAAP)	$	12,165		$	16,308		$	15,646		$	15,787		$	9,501		$	59,906		$	54,618
Non-GAAP adjustments:
Non-interest income	(25		)	58			(271		)	(342		)	745			(580		)	27
Non-interest expense	2,677			(129		)	215			—			536			2,763			536
Income tax (benefit) expense related to tax reform	(1,717		)	—			—			—			1,609			(1,717		)	1,609
Related income tax (benefit) expense	(557		)	15			(93		)	72			2,074			(563		)	2,325
Net adjustment	378			(56		)	(149		)	(270		)	4,964			(97		)	4,497
Total net income (non-GAAP)	$	12,543		$	16,252		$	15,497		$	15,517		$	14,465		$	59,809		$	59,115

Non-interest income (GAAP)	$	9,493		$	9,555		$	8,360		$	9,289		$	7,581		$	36,697		$	34,565
Non-GAAP adjustments:
Net loss (gain) on sales of securities	(25		)	58			(62		)	(116		)	(72		)	(145		)	(782		)
Limited partnership writedown⁽¹⁾	—			—			—			—			1,214			—			1,214
Loss on sale of premises and equipment	—			—			—			—			401			—			401
BOLI claim benefit	—			—			(209		)	(226		)	(798		)	(435		)	(806		)
Net adjustment	(25		)	58			(271		)	(342		)	745			(580		)	27
Total non-interest income (non-GAAP)	9,468			9,613			8,089			8,947			8,326			36,117			34,592
Total net interest income	48,362			48,429			48,181			46,543			46,849			191,515			184,242
Total revenue (non-GAAP)	$	57,830		$	58,042		$	56,270		$	55,490		$	55,175		$	227,632		$	218,834

Non-interest expense (GAAP)	$	43,718		$	38,943		$	38,370		$	36,736		$	37,237		$	157,767		$	142,750
Non-GAAP adjustments:
Lease exit/disposal cost obligation	(466		)	129			(215		)	—			(536		)	(552		)	(536		)
Effect of position eliminations	(2,211		)	—			—			—			—			(2,211		)	—
Net adjustment	(2,677		)	129			(215		)	—			(536		)	(2,763		)	(536		)
Total non-interest expense (non-GAAP)	$	41,041		$	39,072		$	38,155		$	36,736		$	36,701		$	155,004		$	142,214

Total loans	$	5,656,439		$	5,528,583		$	5,475,427		$	5,382,235		$	5,339,983		$	5,656,439		$	5,339,983
Non-covered loans⁽²⁾	(675,112		)	(708,621		)	(729,947		)	(771,802		)	(780,776		)	(675,112		)	(780,776		)
Total covered loans	$	4,981,327		$	4,819,962		$	4,745,480		$	4,610,433		$	4,559,207		$	4,981,327		$	4,559,207
Allowance for loan losses	$	51,636		$	49,909		$	49,163		$	47,915		$	47,099		$	51,636		$	47,099
Allowance for loan losses to total loans	0.91		%	0.90		%	0.90		%	0.89		%	0.88		%	0.91		%	0.88		%
Allowance for loan losses to total covered loans	1.04		%	1.04		%	1.04		%	1.04		%	1.03		%	1.04		%	1.03		%

⁽¹⁾			Represents limited partnership writedowns related to the reduction of the Company’s tax rate in December 2017.
⁽²⁾			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															Years Ended
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			December 31, 2018			December 31, 2017

Efficiency Ratio:
Non-Interest Expense (GAAP)	$	43,718		$	38,943		$	38,370		$	36,736		$	37,237		$	157,767		$	142,750
Non-GAAP adjustments:
Other real estate owned expense	(108		)	(256		)	(163		)	(167		)	(157		)	(694		)	(764		)
Lease exit/disposal cost obligation	(466		)	129			(215		)	—			(536		)	(552		)	(536		)
Effect of position eliminations	(2,211		)	—			—			—			—			(2,211		)	—
Non-Interest Expense for Efficiency Ratio (non-GAAP)	$	40,933		$	38,816		$	37,992		$	36,569		$	36,544		$	154,310		$	141,450

Net Interest Income (GAAP)	$	48,362		$	48,429		$	48,181		$	46,543		$	46,849		$	191,515		$	184,242
Non-GAAP adjustments:
Tax-equivalent adjustment for tax-exempt loans and investment securities	938			895			1,059			1,083			2,117			3,975			7,822

Non-Interest Income (GAAP)	9,493			9,555			8,360			9,289			7,581			36,697			34,565
Non-GAAP adjustments:
Net (gain) loss on sales of securities	(25		)	58			(62		)	(116		)	(72		)	(145		)	(782		)
Net loss on limited partnership investments	405			221			960			590			1,441			2,176			3,023
Loss on sale of premises and equipment	—			—			—			—			401			—			401
BOLI claim benefit	—			—			(209		)	(226		)	(798		)	(435		)	(806		)
Total Revenue for Efficiency Ratio (non-GAAP)	$	59,173		$	59,158		$	58,289		$	57,163		$	57,519		$	233,783		$	228,465

Efficiency Ratio (Non-Interest Expense for Efficiency Ratio (non-GAAP)/Total Revenue for Efficiency Ratio (non-GAAP))	69.18		%	65.61		%	65.18		%	63.97		%	63.53		%	66.01		%	61.91		%

	Three Months Ended															Years Ended
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			December 31, 2018			December 31, 2017

Pre-Provision Net Revenue (“PPNR”) to Average Assets (Annualized):
Net Interest income (GAAP)	$	48,362		$	48,429		$	48,181		$	46,543		$	46,849		$	191,515		$	184,242
Non-GAAP adjustments:
Tax-equivalent adjustment for tax-exempt loans and investment securities	938			895			1,059			1,083			2,117			3,975			7,822
Total tax-equivalent net interest income (A)	$	49,300		$	49,324		$	49,240		$	47,626		$	48,966		$	195,490		$	192,064

Non Interest Income (GAAP)	9,493			9,555			8,360			9,289			7,581			36,697			34,565
Non-GAAP adjustments:
Net (gain) loss on sales of securities	(25		)	58			(62		)	(116		)	(72		)	(145		)	(782		)
Net loss on limited partnership investments	405			221			960			590			1,441			2,176			3,023
Loss on sale of premises and equipment	—			—			—			—			401			—			401
BOLI claim benefit	—			—			(209		)	(226		)	(798		)	(435		)	(806		)
Non-Interest Income for PPNR (non-GAAP) (B)	$	9,873		$	9,834		$	9,049		$	9,537		$	8,553		$	38,293		$	36,401

Non-Interest Expense (GAAP)	$	43,718		$	38,943		$	38,370		$	36,736		$	37,237		$	157,767		$	142,750
Non-GAAP adjustments:
Lease exit/disposal cost obligation	(466		)	129			(215		)	—			(536		)	(552		)	(536		)
Effect of position eliminations	(2,211		)	—			—			—			—			(2,211		)	—
Non-Interest Expense for PPNR (non-GAAP) (C)	$	41,041		$	39,072		$	38,155		$	36,736		$	36,701		$	155,004		$	142,214

Total PPNR (non-GAAP) (A + B – C) :	$	18,132		$	20,086		$	20,134		$	20,427		$	20,818		$	78,779		$	86,251
Average Assets	7,244,396			7,191,072			7,091,721			7,074,721			6,976,682			7,151,053			6,813,426
PPNR to Average Assets (Annualized)	1.00		%	1.12		%	1.14		%	1.15		%	1.19		%	1.10		%	1.27		%

Return on Average Tangible Common Equity (Annualized):
Net Income (GAAP)	$	12,165		$	16,308		$	15,646		$	15,787		$	9,501		$	59,906		$	54,618
Non-GAAP adjustments:
Intangible assets amortization, tax effected ⁽¹⁾	332			228			241			266			219			1,067			917
Net Income excluding intangible assets amortization, tax effected ⁽¹⁾	$	12,497		$	16,536		$	15,887		$	16,053		$	9,720		$	60,973		$	55,535
Average stockholders’ equity (non-GAAP)	$	706,124		$	704,306		$	695,301		$	690,345		$	691,004		$	699,077		$	675,280
Average goodwill & other intangible assets (non-GAAP)	121,614			119,009			119,288			119,611			119,962			119,883			120,465
Average tangible common stockholders’ equity (non-GAAP)	$	584,510		$	585,297		$	576,013		$	570,734		$	571,042		$	579,194		$	554,815
Return on Average Tangible Common Equity (non-GAAP)	8.55		%	11.30		%	11.03		%	11.25		%	6.81		%	10.53		%	10.01		%

⁽¹⁾

Intangible assets amortization is tax effected at 21% for quarters and year ended 2018, and at 35% for all prior periods due to the Tax Cuts and Jobs Act of 2017 that was signed into law in December 2017, lowering the corporate federal tax rate from 35% to 21%.


Investor Relations Contact:							Media Relations Contact:
Marliese L. Shaw							Adam J. Jeamel
Executive Vice President, Investor Relations Officer							Regional President, Corporate Communications
United Bank							United Bank
860-291-3622							860-291-3765
[email protected]							[email protected]

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