UBNK United Financial Bancorp Inc

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 March 31, 2019.

The Company reported net income of $12.7 million, or $0.25 per diluted share, for the quarter ended March 31, 2019, compared to net income for the quarter ended December 31, 2018 ("linked quarter") of $12.2 million, or $0.24 per diluted share. The Company reported net income of $15.8 million, or $0.31 per diluted share, for the quarter ended March 31, 2018.

"Despite the challenging operating environment, the United Financial Bancorp, Inc. team is focused on expanding and winning new client relationships, maintaining strong asset quality and ample capital, and providing superior customer service," stated William H.W. Crawford, IV, Chief Executive Officer and President of the Company and the Bank. "Having a talented and dedicated team of employees to serve the needs of our customers and communities continues to be a strong value proposition of the Company and will protect and enhance franchise value.”

Balance Sheet

Assets totaled $7.34 billion at March 31, 2019, decreasing $16.9 million from $7.36 billion at December 31, 2018. At March 31, 2019, total available for sale securities were $848.5 million, representing a decrease of $124.8 million, or 12.8%, from the linked quarter. The overall decrease was primarily due to sales of lower yielding collateralized mortgage obligations and municipal securities at a gain during the quarter, and a portion of the proceeds were utilized to pay off maturing Federal Home Loan Bank advances. At March 31, 2019, total loans were $5.73 billion, representing an increase of $75.1 million, or 1.3%, from the linked quarter. Changes to loan balances during the first quarter of 2019 were highlighted by a $33.4 million, or 3.8%, increase in commercial business loans, a $21.1 million, or 1.1%, increase in investor non-owner occupied commercial real estate loans, a $15.6 million, or 3.8%, increase in other consumer loans, a $9.1 million, or 0.7%, increase in residential real estate loans and a $7.2 million, or 8.2%, increase in commercial construction loans.  Slightly offsetting the increased loan balances above were a $7.0 million, or 34.0%, decrease in residential construction loans and a $4.0 million, or 0.9%, decrease in owner-occupied commercial real estate loans from the linked quarter. Loans held for sale also decreased $62.6 million, or 79.5%, from the linked quarter. Total cash and cash equivalents increased $57.2 million, or 58.4%, from the linked quarter as a result of the aforementioned sale of investment securities.

During the quarter ended March 31, 2019, the Company adopted Accounting Standards Update ("ASU") No. 2016-02 - Leases, requiring on-balance sheet reporting for all operating and financing leases, which resulted in the recording of $46.5 million in operating and financing lease right-of-use assets and a corresponding $46.5 million in operating and financing lease liabilities associated with the implementation of the standard.

Deposits totaled $5.66 billion at March 31, 2019 and decreased by $6.3 million, or 0.1%, from $5.67 billion at December 31, 2018. Decreases in deposit balances during the first quarter of 2019 were primarily due to a $97.4 million, or 5.6%, decrease in money market account balances and a $21.8 million, or 2.7%, decrease in non-interest bearing checking deposits, largely due to seasonal outflows that are typical of commercial DDA accounts in the first quarter. Offsetting these decreases was a $61.0 million, or 7.1%, increase in NOW checking account balances and a $51.8 million, or 2.9%, increase in certificates of deposit balances.

Total Federal Home Loan Bank advances decreased by $60.2 million, or 7.6%, over the linked quarter as the Company utilized 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., 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. At this time, no measurable loss has been identified, but the Company believes a loss is more likely than not. The Company has provided disclosure in its press release deck as it pertains to the impact on capital if the Company were to recognize a complete loss ($41.7 million) on the LLC investments. 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 recapture to be likely.

Net Interest Income

Net interest income decreased by $1.4 million, or 2.9%, on a linked quarter basis, to $46.9 million, primarily attributable to an increase in interest expense of $2.4 million, or 10.1%, to $26.3 million, offset by an increase in loan interest income of $1.5 million, or 2.4%, to $64.8 million. Average interest-earning assets increased by $74.9 million, or 1.1%, on a linked quarter basis, primarily due to growth in average loan balances, which increased by $88.9 million, or 1.6%. Average loan balance growth was driven by a $56.2 million, or 2.4%, increase in average commercial real estate loans, a $27.8 million, or 7.1%, increase in average other consumer loans and a $27.1 million, or 3.2%, increase in average commercial business loans. Slightly offsetting the increases was a $16.8 million, or 1.2%, decrease in average residential real estate loans, a $3.0 million, or 0.5%, decrease in average home equity loans and a $2.4 million, or 2.1%, decrease in average construction loans.

Interest expense increased by $2.4 million, or 10.1%, to $26.3 million during the first quarter of 2019, from $23.9 million in the linked quarter. Average interest-bearing deposit balances increased by $41.4 million, or 0.9%, on a linked quarter basis, primarily driven by a $64.5 million, or 3.7%, increase in average certificates of deposit, which was slightly offset by a $16.3 million, or 0.6%, decrease in average NOW and money market account balances and a $6.7 million, or 1.3%, decrease in average savings account balances. Average non-interest bearing deposits decreased by $23.7 million, or 3.1%, as compared to the linked quarter. Average Federal Home Loan Bank advances increased by $67.9 million, or 9.3%.

The tax-equivalent net interest margin decreased by nine basis points to 2.81% in the first quarter of 2019, from 2.90% in the linked period. The decline in the tax-equivalent net interest margin was driven by an 18 basis point increase in the cost of interest-bearing liabilities, which was partially offset by a six basis point increase in the yield of interest-earning assets. The interest-earning asset yield improvement was largely driven by a 29 basis point increase in the yield on construction loans, a 20 basis point increase in the yield on commercial real estate loans, a 16 basis point increase in the yield on home equity loans, a three basis point increase in the yield on residential real estate loans, a two basis point increase in the yield on commercial business loans and a one basis point increase in the yield on other consumer loans. Slightly offsetting the increase in loan yields was a 30 basis point decline in the yield of the investment portfolio, largely resulting from the implementation of ASU No. 2017-08 - Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which caused lower yields on the Company's tax-exempt municipal bonds. The total cost of funds increased by 13 basis points to 1.61% in the first quarter of 2019 driven by a 16 basis point increase in the cost of interest-bearing deposits and a 22 basis point increase in the cost of Federal Home Loan Bank advances.

Provision for Loan Losses

The provision for loan losses totaled $2.0 million for the quarter ended March 31, 2019 as compared to $2.6 million for the linked quarter. Net charge-offs for the quarter ended March 31, 2019 totaled $1.6 million, or 0.11%, as a percentage of average loans outstanding, as compared to $891,000, or 0.06%, as a percentage of average loans for the quarter ended December 31, 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 by $513,000, or 5.4%, to $9.0 million for the quarter ended March 31, 2019 from $9.5 million in the linked quarter. The decrease in the first quarter's non-interest income was driven primarily by a $1.3 million, or 17.0%, decrease in service charges and fee income resulting from lower swap fee income and non-sufficient fund fees as compared to the linked quarter, offset by an increase of $712,000 in net gain from sales of securities and an increase of $429,000, or 28.3%, in bank-owned life insurance income as compared to the linked quarter.

Non-Interest Expense

Non-interest expense for the quarter ended March 31, 2019 totaled $39.2 million and decreased by $4.5 million, or 10.4%, from the linked quarter. The decrease in non-interest expense during the quarter was primarily due to decreases in salaries and employee benefits, occupancy and equipment, and service bureau fees. These decreases were slightly offset by an increase in professional fees as compared to the linked quarter.

The primary driver of the decrease in non-interest expense was a $3.1 million, or 12.4%, decrease in salaries and employee benefits expense as compared to the linked quarter.  This decrease was largely due to a $2.2 million severance expense (pre-tax) that was recorded in the quarter ended December 31, 2018 as a result of the Company's shift in its mortgage banking strategy, which reduced staffing in our mortgage division, as well as decreases in commissions and incentives and other benefits as compared to the linked quarter. Other notable decreases include an $844,000, or 13.2%, decrease in occupancy and equipment and a $272,000, or 11.8%, decrease in service bureau fees during the quarter ended March 31, 2019.

Asset Quality

Asset quality remained strong and stable for the period, with non-performing assets decreasing by $1.4 million to $30.6 million at March 31, 2019 from $32.1 million at December 31, 2018. The ratio of non-performing assets to total assets for the quarter ended March 31, 2019 was 0.42%, as compared to 0.44% in the linked quarter.

Capital

The Company reported Tangible Common Equity ("TCE") of $601.8 million, or 8.2% of average assets, for the quarter ended March 31, 2019. Tangible book value per share increased to $11.78 at March 31, 2019 from $11.54 at December 31, 2018. The increase was primarily driven 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 as well as the impact of the Company's net income of $12.7 million, offset by the cash dividend payment to shareholders of $0.12 per share and the impact of the adoption of ASU No. 2017-08 during the quarter, which resulted in a $10.2 million cumulative effect adjustment to beginning retained earnings. Book value per share at March 31, 2019 was $14.17, as compared to $13.94 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 April 26, 2019 and payable on May 8, 2019. This dividend equates to a 3.17% annualized yield based on the $15.12 average closing price of the Company’s common stock in the first quarter of 2019. The Company has paid dividends for 52 consecutive quarters.

Investor Conference Call

United Financial Bancorp, Inc. will host a conference call on Wednesday, April 17, 2019 at 10:00 a.m. Eastern Time (ET) to discuss the Company’s first 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 May 1, 2019 by calling 1-877-344-7529 and entering conference number 10130129. 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.

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 March 31, 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=8or 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 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.

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

		For the Three Months Ended March 31,
		2019				2018
Interest and dividend income:		(In thousands, except share data)
Loans		$	64,764			$	54,780
Securities-taxable interest		6,475				5,498
Securities-non-taxable interest		1,094				2,429
Securities-dividends		656				637
Interest-bearing deposits		225				150
Total interest and dividend income		73,214				63,494
Interest expense:
Deposits		19,931				11,027
Borrowed funds		6,346				5,924
Total interest expense		26,277				16,951
Net interest income		46,937				46,543
Provision for loan losses		2,043				1,939
Net interest income after provision for loan losses		44,894				44,604
Non-interest income:
Service charges and fees		6,185				6,159
Net gain from sales of securities		737				116
Income from mortgage banking activities		591				1,729
Bank-owned life insurance income		1,946				1,646
Net loss on limited partnership investments		(603		)		(590		)
Other income		124				229
Total non-interest income		8,980				9,289
Non-interest expense:
Salaries and employee benefits		22,202				21,198
Service bureau fees		2,037				2,218
Occupancy and equipment		5,540				4,949
Professional fees		1,293				1,164
Marketing and promotions		858				685
FDIC insurance assessments		659				739
Core deposit intangible amortization		420				337
Other		6,178				5,446
Total non-interest expense		39,187				36,736
Income before income taxes		14,687				17,157
Provision for income taxes		2,030				1,370
Net income		$	12,657			$	15,787
Net income per share:
Basic		$	0.25			$	0.31
Diluted		$	0.25			$	0.31
Weighted-average shares outstanding:
Basic		50,615,059				50,474,942
Diluted		50,907,092				50,996,596

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

		For the Three Months Ended
		March 31, 2019				December 31, 2018				September 30, 2018				June 30, 2018				March 31, 2018
Interest and dividend income:		(In thousands, except share data)
Loans		$	64,764			$	63,227			$	61,061			$	57,958			$	54,780
Securities-taxable interest		6,475				5,705				5,822				5,969				5,498
Securities-non-taxable interest		1,094				2,339				2,347				2,354				2,429
Securities-dividends		656				702				748				736				637
Interest-bearing deposits		225				250				213				113				150
Total interest and dividend income		73,214				72,223				70,191				67,130				63,494
Interest expense:
Deposits		19,931				18,183				15,767				12,864				11,027
Borrowed funds		6,346				5,678				5,995				6,085				5,924
Total interest expense		26,277				23,861				21,762				18,949				16,951
Net interest income		46,937				48,362				48,429				48,181				46,543
Provision for loan losses		2,043				2,618				2,007				2,350				1,939
Net interest income after provision for loan losses		44,894				45,744				46,422				45,831				44,604
Non-interest income:
Service charges and fees		6,185				7,447				6,623				6,542				6,159
Net gain (loss) from sales of securities		737				25				(58		)		62				116
Income from mortgage banking activities		591				698				1,486				846				1,729
Bank-owned life insurance income		1,946				1,517				1,460				1,671				1,646
Net loss on limited partnership investments		(603		)		(405		)		(221		)		(960		)		(590		)
Other income		124				211				265				199				229
Total non-interest income		8,980				9,493				9,555				8,360				9,289
Non-interest expense:
Salaries and employee benefits		22,202				25,341				22,643				22,113				21,198
Service bureau fees		2,037				2,309				2,209				2,165				2,218
Occupancy and equipment		5,540				6,384				4,487				4,668				4,949
Professional fees		1,293				1,136				1,013				1,105				1,164
Marketing and promotions		858				1,108				1,119				1,189				685
FDIC insurance assessments		659				611				655				735				739
Core deposit intangible amortization		420				420				288				305				337
Other		6,178				6,409				6,529				6,090				5,446
Total non-interest expense		39,187				43,718				38,943				38,370				36,736
Income before income taxes		14,687				11,519				17,034				15,821				17,157
Provision (benefit) for income taxes		2,030				(646		)		726				175				1,370
Net income		$	12,657			$	12,165			$	16,308			$	15,646			$	15,787
Net income per share:
Basic		$	0.25			$	0.24			$	0.32			$	0.31			$	0.31
Diluted		$	0.25			$	0.24			$	0.32			$	0.31			$	0.31
Weighted-average shares outstanding:
Basic		50,615,059				50,613,498				50,624,832				50,504,273				50,474,942
Diluted		50,907,092				50,970,000				51,104,776				50,974,283				50,996,596

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

		March 31, 2019				December 31, 2018				September 30, 2018				June 30, 2018				March 31, 2018
ASSETS		(In thousands)
Cash and cash equivalents:
Cash and due from banks		$	50,823			$	36,434			$	48,786			$	62,188			$	45,332
Short-term investments		104,350				61,530				29,809				46,987				23,910
Total cash and cash equivalents		155,173				97,964				78,595				109,175				69,242
Available for sale securities – At fair value		848,541				973,347				972,035				1,006,135				1,031,277
Loans held for sale		16,172				78,788				86,948				85,458				63,394
Loans:
Commercial real estate loans:
Owner-occupied		439,366				443,398				434,906				418,338				442,938
Investor non-owner occupied		1,932,137				1,911,070				1,888,848				1,927,960				1,842,898
Construction		94,649				87,493				78,235				82,883				84,717
Total commercial real estate loans		2,466,152				2,441,961				2,401,989				2,429,181				2,370,553
Commercial business loans		920,165				886,770				861,030				841,142				846,182
Consumer loans:
Residential real estate		1,322,423				1,313,373				1,283,126				1,252,001				1,235,197
Home equity		583,368				583,454				579,907				588,638				582,285
Residential construction		13,620				20,632				32,750				32,063				37,579
Other consumer		425,854				410,249				369,781				332,402				310,439
Total consumer loans		2,345,265				2,327,708				2,265,564				2,205,104				2,165,500
Total loans		5,731,582				5,656,439				5,528,583				5,475,427				5,382,235
Net deferred loan costs and premiums		17,901				17,786				16,603				15,502				14,724
Allowance for loan losses		(52,041		)		(51,636		)		(49,909		)		(49,163		)		(47,915		)
Loans receivable - net		5,697,442				5,622,589				5,495,277				5,441,766				5,349,044
Federal Home Loan Bank of Boston stock, at cost		37,702				41,407				42,032				46,734				49,895
Accrued interest receivable		25,061				24,823				25,485				23,209				22,333
Deferred tax asset, net		27,600				32,706				31,473				30,190				28,710
Premises and equipment, net		63,863				68,657				67,612				67,614				67,619
Operating lease right-of-use assets		44,377				—				—				—				—
Financing lease right-of-use assets		4,356				—				—				—				—
Goodwill		116,727				116,769				115,281				115,281				115,281
Core deposit intangible asset		5,607				6,027				3,561				3,849				4,154
Cash surrender value of bank-owned life insurance		194,496				193,429				181,928				180,490				179,556
Other assets		102,823				100,368				107,271				98,695				88,169
Total assets		$	7,339,940			$	7,356,874			$	7,207,498			$	7,208,596			$	7,068,674
		March 31, 2019				December 31, 2018				September 30, 2018				June 30, 2018				March 31, 2018
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest-bearing		$	777,969			$	799,785			$	759,210			$	770,982			$	753,575
Interest-bearing		4,886,283				4,870,814				4,741,153				4,622,394				4,528,935
Total deposits		5,664,252				5,670,599				5,500,363				5,393,376				5,282,510
Mortgagors’ and investor escrow accounts		11,510				4,685				9,597				14,526				11,096
Federal Home Loan Bank advances and other borrowings		826,668				899,626				926,592				1,041,896				1,030,735
Operating lease liabilities		56,265				—				—				—				—
Financing lease liabilities		4,585				—				—				—				—
Accrued expenses and other liabilities		52,562				69,446				61,128				56,921				51,333
Total liabilities		6,615,842				6,644,356				6,497,680				6,506,719				6,375,674
Total stockholders’ equity		724,098				712,518				709,818				701,877				693,000
Total liabilities and stockholders’ equity		$	7,339,940			$	7,356,874			$	7,207,498			$	7,208,596			$	7,068,674

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

	At or For the Three Months Ended
	March 31,  2019				December 31,  2018				September 30,  2018				June 30,  2018				March 31,  2018
Share Data:
Basic net income per share	$	0.25			$	0.24			$	0.32			$	0.31			$	0.31
Diluted net income per share	0.25				0.24				0.32				0.31				0.31
Dividends declared per share	0.12				0.12				0.12				0.12				0.12
Tangible book value per share	$	11.78			$	11.54			$	11.55			$	11.40			$	11.25
Key Statistics:
Total revenue	$	55,917			$	57,855			$	57,984			$	56,541			$	55,832
Total non-interest expense	39,187				43,718				38,943				38,370				36,736
Average earning assets	6,783,604				6,708,701				6,671,424				6,584,938				6,568,168
Key Ratios:
Return on average assets (annualized)	0.69		%		0.67		%		0.91		%		0.88		%		0.89		%
Return on average equity (annualized)	7.13		%		6.89		%		9.26		%		9.00		%		9.15		%
Tax-equivalent net interest margin (annualized)	2.81		%		2.90		%		2.92		%		2.97		%		2.90		%
Non-interest expense to average assets (annualized)	2.13		%		2.41		%		2.17		%		2.16		%		2.08		%
Cost of funds (annualized) (1)	1.61		%		1.48		%		1.36		%		1.20		%		1.07		%
Total revenue growth rate	(3.35		)%		(0.22		)%		2.55		%		1.27		%		2.58		%
Total revenue growth rate (annualized)	(13.40		)%		(0.89		)%		10.21		%		5.08		%		10.30		%
Average earning asset growth rate	1.12		%		0.56		%		1.31		%		0.26		%		1.35		%
Average earning asset growth rate (annualized)	4.47		%		2.24		%		5.25		%		1.02		%		5.38		%
Residential Mortgage Production:
Dollar volume (total)	$	31,882			$	128,209			$	143,673			$	140,409			$	94,433
Mortgages originated for purchases	21,434				101,266				111,555				110,351				63,193
Loans sold	89,980				108,663				99,372				99,637				99,899
Income from mortgage banking activities	591				698				1,486				846				1,729
Non-performing Assets:
Residential real estate	$	13,742			$	13,217			$	11,949			$	11,221			$	11,663
Home equity	4,577				4,735				4,005				4,607				4,698
Investor-owned commercial real estate	739				1,131				1,525				2,400				2,863
Owner-occupied commercial real estate	1,830				2,450				1,202				2,176				2,326
Construction	171				199				243				250				273
Commercial business	1,627				944				985				1,196				1,579
Other consumer	1,034				1,030				597				237				34
Non-accrual loans	23,720				23,706				20,506				22,087				23,436
Troubled debt restructured – non-accruing	5,479				6,971				6,706				7,330				8,308
Total non-performing loans	29,199				30,677				27,212				29,417				31,744
Other real estate owned	1,429				1,389				1,808				1,855				1,935
Total non-performing assets	$	30,628			$	32,066			$	29,020			$	31,272			$	33,679
Non-performing loans to total loans	0.51		%		0.54		%		0.49		%		0.54		%		0.59		%
Non-performing assets to total assets	0.42		%		0.44		%		0.40		%		0.43		%		0.48		%
Allowance for loan losses to non-performing loans	178.23		%		168.32		%		183.41		%		167.12		%		150.94		%
Allowance for loan losses to total loans	0.91		%		0.91		%		0.90		%		0.90		%		0.89		%
Non-GAAP Ratios: (2)
Efficiency ratio	69.67		%		69.18		%		65.61		%		65.18		%		63.97		%
Return on average tangible common equity (annualized)	8.85		%		8.55		%		11.30		%		11.03		%		11.25		%
Pre-provision net revenue to average assets	0.92		%		1.00		%		1.12		%		1.14		%		1.15		%

(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 page F-9 through page F-11.

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

	For the Three Months Ended
	March 31, 2019											March 31, 2018
	Average Balance				Interest and Dividends				Yield/Cost			Average Balance				Interest and Dividends				Yield/Cost
Interest-earning assets:
Residential real estate	$	1,380,829			$	12,886			3.73	%		$	1,314,219			$	11,506			3.51	%
Commercial real estate	2,358,955				27,302				4.63			2,281,868				23,656				4.15
Construction	111,198				1,426				5.13			119,435				1,325				4.44
Commercial business	888,436				10,612				4.78			842,809				8,382				3.98
Home equity	582,180				7,874				5.48			578,776				6,528				4.57
Other consumer	418,053				5,174				5.02			299,839				3,800				5.14
Investment securities	966,841				7,819				3.23			1,041,849				8,624				3.31
Federal Home Loan Bank stock	40,475				628				6.21			51,458				606				4.71
Other earning assets	36,637				229				2.53			37,915				150				1.61
Total interest-earning assets	6,783,604				73,950				4.37			6,568,168				64,577				3.94
Allowance for loan losses	(52,089		)									(47,780		)
Non-interest-earning assets	639,923											554,333
Total assets	$	7,371,438										$	7,074,721
Interest-bearing liabilities:
NOW and money market	$	2,567,634			$	10,309			1.63	%		$	2,146,945			$	4,892			0.92	%
Savings	500,167				75				0.06			510,904				73				0.06
Certificates of deposit	1,823,867				9,547				2.12			1,796,675				6,062				1.37
Total interest-bearing deposits	4,891,668				19,931				1.65			4,454,524				11,027				1.00
Federal Home Loan Bank advances	800,862				5,045				2.52			1,033,884				4,545				1.76
Other borrowings	88,757				1,301				5.86			118,008				1,379				4.67
Total interest-bearing liabilities	5,781,287				26,277				1.84			5,606,416				16,951				1.22
Non-interest-bearing deposits	745,259											713,364
Other liabilities	134,987											64,596
Total liabilities	6,661,533											6,384,376
Stockholders’ equity	709,905											690,345
Total liabilities and stockholders’ equity	$	7,371,438										$	7,074,721
Net interest-earning assets	$	1,002,317										$	961,752
Tax-equivalent net interest income					47,673											47,626
Tax-equivalent net interest rate spread (1)									2.53	%										2.72	%
Tax-equivalent net interest margin (2)									2.81	%										2.90	%
Average interest-earning assets to average interest-bearing liabilities									117.34	%										117.15	%
Less tax-equivalent adjustment					736											1,083
Net interest income					$	46,937										$	46,543

(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 SubsidiariesAverage Balance Sheets, Interest and Yields/Costs(Dollars In Thousands)(Unaudited)

	For the Three Months Ended
	March 31, 2019											December 31, 2018
	Average Balance				Interest and Dividends				Yield/Cost			Average Balance				Interest and Dividends				Yield/Cost
Interest-earning assets:
Residential real estate	$	1,380,829			$	12,886			3.73	%		$	1,397,669			$	12,929			3.70	%
Commercial real estate	2,358,955				27,302				4.63			2,302,741				26,085				4.43
Construction	111,198				1,426				5.13			113,617				1,405				4.84
Commercial business	888,436				10,612				4.78			861,311				10,481				4.76
Home equity	582,180				7,874				5.48			585,178				7,848				5.32
Other consumer	418,053				5,174				5.02			390,237				4,931				5.01
Investment securities	966,841				7,819				3.23			967,881				8,564				3.53
Federal Home Loan Bank stock	40,475				628				6.21			40,428				665				6.58
Other earning assets	36,637				229				2.53			49,639				253				2.02
Total interest-earning assets	6,783,604				73,950				4.37			6,708,701				73,161				4.31
Allowance for loan losses	(52,089		)									(50,754		)
Non-interest-earning assets	639,923											586,449
Total assets	$	7,371,438										$	7,244,396
Interest-bearing liabilities:
NOW and money market	$	2,567,634			$	10,309			1.63	%		$	2,583,982			$	9,641			1.48	%
Savings	500,167				75				0.06			506,880				76				0.06
Certificates of deposit	1,823,867				9,547				2.12			1,759,382				8,466				1.91
Total interest-bearing deposits	4,891,668				19,931				1.65			4,850,244				18,183				1.49
Federal Home Loan Bank advances	800,862				5,045				2.52			732,995				4,307				2.30
Other borrowings	88,757				1,301				5.86			107,365				1,371				5.00
Total interest-bearing liabilities	5,781,287				26,277				1.84			5,690,604				23,861				1.66
Non-interest-bearing deposits	745,259											768,916
Other liabilities	134,987											78,752
Total liabilities	6,661,533											6,538,272
Stockholders’ equity	709,905											706,124
Total liabilities and stockholders’ equity	$	7,371,438										$	7,244,396
Net interest-earning assets	$	1,002,317										$	1,018,097
Tax-equivalent net interest income					47,673											49,300
Tax-equivalent net interest rate spread (1)									2.53	%										2.65	%
Tax-equivalent net interest margin (2)									2.81	%										2.90	%
Average interest-earning assets to average interest-bearing liabilities									117.34	%										117.89	%
Less tax-equivalent adjustment					736											938
Net interest income					$	46,937										$	48,362

(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 SubsidiariesReconciliation 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-9 through F-11 in the following press release tables:

	Three Months Ended
	March 31,  2019				December 31,  2018				September 30,  2018				June 30,  2018				March 31,  2018
	(Dollars in thousands)
Net Income (GAAP)	$	12,657			$	12,165			$	16,308			$	15,646			$	15,787
Non-GAAP adjustments:
Non-interest income	(1,158		)		(25		)		58				(271		)		(342		)
Non-interest expense	—				2,677				(129		)		215				—
Income tax benefit related to tax reform	—				(1,717		)		—				—				—
Related income tax (benefit) expense	155				(557		)		15				(93		)		72
Net adjustment	(1,003		)		378				(56		)		(149		)		(270		)
Total net income (non-GAAP)	$	11,654			$	12,543			$	16,252			$	15,497			$	15,517
Non-interest income (GAAP)	$	8,980			$	9,493			$	9,555			$	8,360			$	9,289
Non-GAAP adjustments:
Net loss (gain) on sales of securities	(737		)		(25		)		58				(62		)		(116		)
BOLI claim benefit	(421		)		—				—				(209		)		(226		)
Net adjustment	(1,158		)		(25		)		58				(271		)		(342		)
Total non-interest income (non-GAAP)	7,822				9,468				9,613				8,089				8,947
Total net interest income	46,937				48,362				48,429				48,181				46,543
Total revenue (non-GAAP)	$	54,759			$	57,830			$	58,042			$	56,270			$	55,490
Non-interest expense (GAAP)	$	39,187			$	43,718			$	38,943			$	38,370			$	36,736
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)	$	39,187			$	41,041			$	39,072			$	38,155			$	36,736
Total loans	$	5,731,582			$	5,656,439			$	5,528,583			$	5,475,427			$	5,382,235
Non-covered loans (1)	(658,455		)		(675,112		)		(708,621		)		(729,947		)		(771,802		)
Total covered loans	$	5,073,127			$	4,981,327			$	4,819,962			$	4,745,480			$	4,610,433
Allowance for loan losses	$	52,041			$	51,636			$	49,909			$	49,163			$	47,915
Allowance for loan losses to total loans	0.91		%		0.91		%		0.90		%		0.90		%		0.89		%
Allowance for loan losses to total covered loans	1.03		%		1.04		%		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
	March 31,  2019				December 31,  2018				September 30,  2018				June 30,  2018				March 31,  2018
Efficiency Ratio:
Non-Interest Expense (GAAP)	$	39,187			$	43,718			$	38,943			$	38,370			$	36,736
Non-GAAP adjustments:
Other real estate owned expense	(105		)		(108		)		(256		)		(163		)		(167		)
Lease exit/disposal cost obligation	—				(466		)		129				(215		)		—
Effect of position eliminations	—				(2,211		)		—				—				—
Non-Interest Expense for Efficiency Ratio (non-GAAP)	$	39,082			$	40,933			$	38,816			$	37,992			$	36,569
Net Interest Income (GAAP)	$	46,937			$	48,362			$	48,429			$	48,181			$	46,543
Non-GAAP adjustments:
Tax-equivalent adjustment for tax-exempt loans and investment securities	736				938				895				1,059				1,083
Non-Interest Income (GAAP)	8,980				9,493				9,555				8,360				9,289
Non-GAAP adjustments:
Net (gain) loss on sales of securities	(737		)		(25		)		58				(62		)		(116		)
Net loss on limited partnership investments	603				405				221				960				590
BOLI claim benefit	(421		)		—				—				(209		)		(226		)
Total Revenue for Efficiency Ratio (non-GAAP)	$	56,098			$	59,173			$	59,158			$	58,289			$	57,163
Efficiency Ratio (Non-Interest Expense for Efficiency Ratio (non-GAAP)/Total Revenue for Efficiency Ratio (non-GAAP))	69.67		%		69.18		%		65.61		%		65.18		%		63.97		%
	Three Months Ended
	March 31,  2019				December 31,  2018				September 30,  2018				June 30,  2018				March 31,  2018
Pre-Provision Net Revenue ("PPNR") to Average Assets (Annualized):
Net Interest income (GAAP)	$	46,937			$	48,362			$	48,429			$	48,181			$	46,543
Non-GAAP adjustments:
Tax-equivalent adjustment for tax-exempt loans and investment securities	736				938				895				1,059				1,083
Total tax-equivalent net interest income (A)	$	47,673			$	49,300			$	49,324			$	49,240			$	47,626
Non-Interest Income (GAAP)	8,980				9,493				9,555				8,360				9,289
Non-GAAP adjustments:
Net (gain) loss on sales of securities	(737		)		(25		)		58				(62		)		(116		)
Net loss on limited partnership investments	603				405				221				960				590
BOLI claim benefit	(421		)		—				—				(209		)		(226		)
Non-Interest Income for PPNR (non-GAAP) (B)	$	8,425			$	9,873			$	9,834			$	9,049			$	9,537
Non-Interest Expense (GAAP)	$	39,187			$	43,718			$	38,943			$	38,370			$	36,736
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)	$	39,187			$	41,041			$	39,072			$	38,155			$	36,736
Total PPNR (non-GAAP)  (A + B - C) :	$	16,911			$	18,132			$	20,086			$	20,134			$	20,427
Average Assets	7,371,438				7,244,396				7,191,072				7,091,721				7,074,721
PPNR to Average Assets (Annualized)	0.92		%		1.00		%		1.12		%		1.14		%		1.15		%
Return on Average Tangible Common Equity (Annualized):
Net Income (GAAP)	$	12,657			$	12,165			$	16,308			$	15,646			$	15,787
Non-GAAP adjustments:
Intangible assets amortization, tax effected at 21%	332				332				228				241				266
Net Income excluding intangible assets amortization, tax effected at 21%	$	12,989			$	12,497			$	16,536			$	15,887			$	16,053
Average stockholders' equity (non-GAAP)	$	709,905			$	706,124			$	704,306			$	695,301			$	690,345
Average goodwill & other intangible assets (non-GAAP)	122,597				121,614				119,009				119,288				119,611
Average tangible common stockholders' equity (non-GAAP)	$	587,308			$	584,510			$	585,297			$	576,013			$	570,734
Return on Average Tangible Common Equity (non-GAAP)	8.85		%		8.55		%		11.30		%		11.03		%		11.25		%

Investor Relations Contact:Marliese L. ShawExecutive Vice President, Investor Relations OfficerUnited Bank860-291-3622MShaw@bankatunited.com

Media Relations Contact:Adam J. JeamelCorporate CommunicationsUnited Bank860-291-3765AJeamel@bankatunited.com