LAWRENCEBURG, Ind.,
Jan. 31, 2017 /PRNewswire/ -- United
Community Bancorp (the "Company") (Nasdaq: UCBA), the parent
company of United Community Bank (the "Bank"), today reported net
income of $740,000, or $0.18 per diluted share, for the quarter ended
December 31, 2016, which represents
decreases of $238,000, or 24.3%, and
$0.06, or 25.0%, when compared to net
income and earnings per diluted share, respectively, for the
quarter ended December 31,
2015. The Company also reported net income of $1.5 million for the six months ended
December 31, 2016, which represents a
decrease of $155,000, or 9.2%, when
compared to the six months ended December
31, 2015. Earnings per diluted share for the six
months ended December 31, 2016 were
$0.37, which represents a decrease of
5.1% when compared to the same prior year period.
|
United Community
Bancorp
|
|
Summarized Statements
of Income
|
|
(In thousands, except
per share data)
|
|
For the six months
ended
|
|
12/31/2016
|
|
12/31/2015
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Interest
income
|
$7,891
|
|
$7,841
|
|
Interest
expense
|
1,175
|
|
1,127
|
|
Net interest
income
|
6,716
|
|
6,714
|
|
|
|
|
|
Provision for loan
losses
|
32
|
|
89
|
|
Net interest
income after provision for
loan losses
|
6,684
|
|
6,625
|
|
|
|
|
|
Total noninterest
income
|
2,585
|
|
2,420
|
|
Total noninterest
expense
|
7,324
|
|
7,153
|
|
Income before
income taxes
|
1,945
|
|
1,892
|
|
|
|
|
|
Income tax
provision
|
423
|
|
215
|
|
Net
income
|
$1,522
|
|
$1,677
|
|
|
|
|
|
Basic earnings per
share
|
$0.38
|
|
$0.40
|
|
Diluted earnings per
share
|
$0.37
|
|
$0.39
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
4,025,829
|
|
4,245,039
|
|
Diluted
|
4,062,060
|
|
4,275,591
|
|
Summarized
Consolidated Statements of Financial Condition
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
(In thousands,
except for per share data)
|
12/31/2016
|
9/30/2016
|
6/30/2016
|
3/31/2016
|
12/31/2015
|
|
ASSETS
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
$ 31,765
|
$ 28,173
|
$ 28,980
|
$ 23,246
|
$ 23,456
|
|
Investment
Securities
|
180,315
|
188,967
|
193,215
|
188,929
|
186,663
|
|
Loans Receivable,
net
|
274,333
|
273,176
|
267,138
|
269,480
|
263,327
|
|
Other
Assets
|
39,187
|
37,747
|
36,756
|
36,361
|
36,734
|
|
Total
Assets
|
$525,600
|
$
528,063
|
$
526,089
|
$
518,016
|
$
510,180
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Municipal
Deposits
|
$101,676
|
$ 101,763
|
$ 100,203
|
$ 95,089
|
$ 95,192
|
|
Other
Deposits
|
341,872
|
340,211
|
338,682
|
336,895
|
331,894
|
|
FHLB
Advances
|
10,333
|
12,000
|
12,000
|
13,934
|
13,000
|
|
Other
Liabilities
|
2,880
|
3,414
|
4,750
|
3,310
|
2,790
|
|
Total
Liabilities
|
456,761
|
457,388
|
455,635
|
449,228
|
442,876
|
|
Commitments and
contingencies
|
-
|
-
|
-
|
-
|
-
|
|
Total Stockholders'
Equity
|
68,839
|
70,675
|
70,454
|
68,788
|
67,304
|
|
Total Liabilities
& Stockholders' Equity
|
$525,600
|
$528,063
|
$
526,089
|
$
518,016
|
$
510,180
|
|
Outstanding
Shares
|
4,194,404
|
4,198,143
|
4,198,143
|
4,201,326
|
4,201,326
|
|
Tangible Book Value
per share
|
$15.75
|
$16.16
|
$16.11
|
$15.69
|
$15.33
|
|
|
|
|
|
|
|
Summarized
Consolidated Statements of Income
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
12/31/2016
|
9/30/2016
|
6/30/2016
|
3/31/2016
|
12/31/2015
|
|
(for the three
months ended, in thousands, except per share data)
|
|
|
|
|
|
|
|
Interest
Income
|
$ 3,948
|
$
3,943
|
$ 3,966
|
$ 3,891
|
$ 3,883
|
|
Interest
Expense
|
550
|
625
|
544
|
530
|
526
|
|
Net Interest
Income
|
3,398
|
3,318
|
3,422
|
3,361
|
3,357
|
|
|
|
|
|
|
|
Provision for Loan
Losses
|
15
|
17
|
46
|
52
|
45
|
|
Net Interest Income
after Provision
|
|
|
|
|
|
|
for Loan Losses
|
3,383
|
3,301
|
3,376
|
3,309
|
3,312
|
|
|
|
|
|
|
|
Total Noninterest
Income
|
1,277
|
1,308
|
1,098
|
1,121
|
1,353
|
|
Total Noninterest
Expense
|
3,662
|
3,662
|
3,597
|
3,230
|
3,528
|
|
Income before Tax
Provision
|
998
|
947
|
877
|
1,200
|
1,137
|
|
Income Tax
Provision
|
258
|
165
|
67
|
259
|
159
|
|
Net
Income
|
$
740
|
$
782
|
$
810
|
$
941
|
$
978
|
|
|
|
|
|
|
|
Basic Earnings per
Share
|
$ 0.18
|
$ 0.19
|
$ 0.20
|
$ 0.23
|
$ 0.24
|
|
Diluted Earnings per
Share
|
$ 0.18
|
$ 0.19
|
$ 0.20
|
$ 0.23
|
$ 0.24
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
4,027,410
|
4,024,249
|
4,025,088
|
4,027,432
|
4,120,938
|
|
Diluted
|
4,066,647
|
4,058,011
|
4,063,727
|
4,057,600
|
4,156,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
For the three
months ended
|
|
12/31/2016
|
9/30/2016
|
6/30/2016
|
3/31/2016
|
12/31/2015
|
|
Performance
Ratios:
|
|
|
|
|
|
|
Return on average
assets (1)
|
0.56%
|
0.59%
|
0.62%
|
0.73%
|
0.76%
|
|
Return on average
equity (1)
|
4.24%
|
4.43%
|
4.66%
|
5.51%
|
6.07%
|
|
Interest rate
spread (2)
|
2.75%
|
2.66%
|
2.79%
|
2.79%
|
2.74%
|
|
Net interest
margin (3)
|
2.78%
|
2.70%
|
2.83%
|
2.82%
|
2.81%
|
|
Noninterest expense
to average assets (1)
|
2.78%
|
2.77%
|
2.76%
|
2.48%
|
2.74%
|
|
Efficiency
ratio (4)
|
78.33%
|
79.16%
|
79.58%
|
70.82%
|
74.90%
|
|
Average
interest-earning assets to
|
|
|
|
|
|
|
average interest-bearing
liabilities
|
107.61%
|
108.14%
|
108.15%
|
107.88%
|
107.83%
|
|
Average equity to
average assets
|
13.25%
|
13.33%
|
13.34%
|
13.32%
|
12.52%
|
|
|
|
|
|
|
|
Bank Capital
Ratios:
|
|
|
|
|
|
|
Tangible
capital
|
11.34%
|
11.42%
|
11.60%
|
11.69%
|
11.40%
|
|
Core
capital
|
11.34%
|
11.42%
|
11.60%
|
11.69%
|
11.40%
|
|
Total risk-based
capital
|
22.20%
|
22.36%
|
22.70%
|
22.91%
|
22.68%
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
Nonperforming loans
as a percent
|
|
|
|
|
|
|
of total
loans
|
0.96%
|
1.09%
|
1.05%
|
1.31%
|
1.94%
|
|
Nonperforming assets
as a percent
|
|
|
|
|
|
|
of total
assets
|
0.53%
|
0.59%
|
0.56%
|
0.75%
|
1.08%
|
|
Allowance for loan
losses as a percent
|
|
|
|
|
|
|
of total
loans
|
1.63%
|
1.60%
|
1.78%
|
1.82%
|
1.77%
|
|
Allowance for loan
losses as a percent
|
|
|
|
|
|
|
of
nonperforming loans
|
169.05%
|
146.73%
|
169.21%
|
138.71%
|
91.25%
|
|
Net charge-offs
(recoveries) to average
|
|
|
|
|
|
|
outstanding loans during the period (1)
|
(0.11)%
|
0.61%
|
0.27%
|
(0.26)%
|
0.61%
|
|
|
|
|
|
|
|
(1) Quarterly income and
expense amounts used in calculating the ratio have been
annualized.
|
|
(2) Represents the difference
between the weighted average yield on average interest-earning
assets and the weighted average
cost of
average interest-bearing liabilities.
|
|
(3) Represents net interest
income as a percent of average interest-earning assets.
|
|
(4) Represents total
noninterest expense divided by the sum of net interest income and
total other income.
|
For the three months ended December
31, 2016:
Net income totaled $740,000 for
the quarter ended December 31, 2016,
which represented a decrease of $238,000, or 24.3%, when compared to the quarter
ended December 31, 2015.
There were three primary causes of the decrease in
earnings. The first was the receipt in the prior year quarter
of Bank-Owned Life Insurance proceeds due to the death of a
director, which resulted in a gain of $220,000. Bank-Owned Life Insurance
proceeds were also received in the current year quarter due to the
death of a former director, which resulted in a gain of
$45,000. The second was the
accrual of a $196,000 separation
payment made in connection with the departure of the Company's
former Chief Financial Officer as previously reported on
December 23, 2016. There was no
such corresponding event in the prior year quarter. The third
was an additional income tax provision in the current year quarter
of $125,000 related to the expiration
of stock options granted in 2006. There was no such
corresponding event in the prior year quarter.
Net interest income totaled $3.4
million for the quarter ended December 31, 2016, which represents an increase
of $41,000, or 1.2%, when compared to
the quarter ended December 31, 2015.
The growth in the Company's core business was the result of an
increase in interest income of $65,000 partially offset by an increase in
interest expense of $24,000.
Interest income increased due to a $10.2
million increase in the average balance of loans, a
$1.1 million increase in the average
balance of investments, and an increase in the average rate earned
on investment securities from 2.15% in the prior year quarter to
2.22% in the current year quarter. The increase in loan
balances is primarily the result of the execution of our continued
controlled growth strategy in mortgage and commercial
lending. These increases were partially offset by a decrease
in the average rate earned on loans from 4.38% in the prior year
quarter to 4.23% in the current year quarter. Interest expense
increased due to a $13.3 million
increase in the average balance of deposits and an increase in the
average rate paid on deposits from 0.43% in the prior year quarter
to 0.45% in the current year quarter.
Asset quality improved during the quarter ended December 31, 2016 as the Bank continues to focus
on reducing nonperforming assets. Nonperforming assets as a
percentage of total assets decreased from 1.08% at December 31, 2015 and 0.59% at September 30, 2016 to 0.53% at December 31, 2016. Nonperforming loans as a
percentage of total loans decreased from 1.94% at December 31, 2015 and 1.09% at September 30, 2016 to 0.96% at December 31, 2016. The provision for loan
losses was $15,000 for the quarter
ended December 31, 2016, which
represents a decrease of $30,000
compared to the quarter ended December 31,
2015.
Noninterest income totaled $1.3
million for the quarter ended December 31, 2016, which represents a decrease of
$76,000, or 5.6%, when compared to
the prior year quarter. The decrease was primarily due
to the receipt of the Bank-Owned Life Insurance proceeds in the
prior year quarter due to the death of a director, which resulted
in a gain of $220,000.
Bank-Owned Life Insurance proceeds were also received in the
current year quarter due to the death of a former director, which
resulted in a gain of $45,000.
The decrease was partially offset by an increase in mortgage sales
volume, which resulted in a $133,000
increase in gain on the sale of mortgage loans.
Noninterest expense totaled $3.7
million for the quarter ended December 31, 2016, which represents an increase
of $134,000, or 3.8%, when compared
to the prior year quarter. The increase was primarily due to
an increase in compensation expense of $185,000, which was the result of the accrual of
a $196,000 separation payment made in
connection with the departure of the Company's former Chief
Financial Officer. This increase was partially offset by a
$75,000 decrease in FDIC insurance
expense, which is the result of a change to the FDIC insurance
assessment rate, and an $80,000
decrease in other non-interest expenses. Other non-interest
expenses decreased primarily as a result of a $53,000 decrease in loan closing costs associated
with a closing cost promotion. Prior to July 1, 2016, the Company charged certain loan
closing costs immediately to expense. Pursuant to ASC 310-20,
the Company is deferring a portion of these closing costs
associated with new loans and amortizing those costs over the life
of the loan.
The provision for income taxes totaled $258,000 for the quarter ended December 31, 2016, which represents an increase
of $99,000 when compared to the prior
year quarter. The increase was primarily due to a provision
of $125,000 related to the expiration
of stock options granted in 2006. This increase was partially
offset by a decrease in income before taxes during the period.
For the six months ended December
31, 2016:
Net income totaled $1.5 million
for the six months ended December 31,
2016, which represents a decrease of $155,000, or 9.2%, when compared to the six
months ended December 31, 2015.
There were three primary causes of the decrease in
earnings. The first was the receipt in the prior year period
of Bank-Owned Life Insurance proceeds due to the death of a
director and a former director, which resulted in a gain of
$278,000. Bank-Owned Life
Insurance proceeds were also received in the current year quarter
due to the death of a former director, which resulted in a gain of
$45,000. The second was the
accrual of a $196,000 separation
payment to be made in connection with the departure of the
Company's former Chief Financial Officer. There was no such
corresponding event in the prior year period. The third was
an additional income tax provision in the current year period of
$125,000 related to the expiration of
stock options granted in 2006. There was no such
corresponding event in the prior year period.
Net interest income totaled $6.7
million for the six months ended December 31, 2016, which represents an increase
of $2,000, or 0.03%, when compared to
the six months ended December 31,
2015. The growth in the Company's core business was due to a
$50,000 increase in interest income,
partially offset by a $48,000
increase in interest expense. Interest income increased
primarily due to an $11.1 million
increase in the average balance of loans and an increase in the
average rate earned on investment securities from 2.13% in the
prior year period to 2.14% in the current year period. These
increases were partially offset by a decrease in the average rate
earned on loans from 4.43% in the prior year period to 4.29% in the
current year period and a $5.6
million decrease in the average balance of investment
securities. Interest expense increased primarily as a result
of a $12.8 million increase in the
average balance of deposits and an increase in the average rate
paid on deposits from 0.47% in the prior year period to 0.48% in
the current year period.
The provision for loan losses was $32,000 for the six months ended December 31, 2016, a $57,000 decrease compared to the prior year
period. Nonperforming assets as a percentage of total assets
decreased from 0.56% at June 30, 2016
to 0.53% at December 31, 2016
reflecting management's continuing efforts to reduce nonperforming
assets. Nonperforming loans as a percentage of total loans
decreased from 1.05% at June 30, 2016
to 0.96% at December 31, 2016.
Noninterest income totaled $2.6
million for the six months ended December 31, 2016, which represents an increase
of $165,000, or 6.8%, compared to the
prior year period. The increase was primarily due to a $263,000 increase in gain on the sale of mortgage
loans, resulting from increased sales volume. In addition,
service charges on deposit accounts increased by $90,000 in the current year period as compared to
the prior year period. These increases were partially offset
by a $246,000 reduction in Bank-Owned
Life Insurance income, which was primarily due to the
aforementioned death benefit payments received in the prior year
period, which totaled $278,000 as
compared to $45,000 in the current
year period.
Noninterest expense totaled $7.3
million for the six months ended December 31, 2016, which represented an increase
of $171,000, or 2.4%, compared to the
prior year period. The increase in noninterest expense was
primarily the result of an increase of $256,000 in data processing expense and a
$205,000 increase in compensation
expense. The increase in data processing expense is the
result of the expiration of temporary monthly credits and an
increase in fraud prevention services, which serve to protect the
Bank and its customers. The increase in compensation expense
is primarily the result of the accrual of a $196,000 separation payment to be made in
connection with the departure of the Company's former Chief
Financial Officer. These increases were partially offset by
an $86,000 decrease in FDIC insurance
expense, which is the result of a change to the FDIC insurance
assessment rate and a $197,000
decrease in other non-interest expenses. Other non-interest
expenses decreased primarily as a result of a $139,000 decrease in loan closing costs
associated with a closing cost promotion. Prior to
July 1, 2016, the Company charged
certain loan closing costs immediately to expense. Pursuant
to ASC 310-20, the Company is deferring a portion of these closing
costs associated with new loans and amortizing those costs over the
life of the loan.
The provision for income taxes totaled $423,000 for the six months ended December 31, 2016, which represented an increase
of $208,000 when compared to the
prior year period. The increase was primarily due to a
provision of $125,000 related to the
expiration of stock options granted in 2006 as well as an increase
in income before taxes during the period.
Statement of Financial Condition:
Total assets were $525.6 million
at December 31, 2016, compared to
$526.1 million at June 30, 2016. Total assets decreased
during the period primarily due to a $12.9
million decrease in investment securities. This
decrease was partially offset by a $7.2
million increase in loans and a $2.8
million increase in cash and cash equivalents. The
investment balances decreased partially due to routine amortization
and maturities during the period. There were also investment
sales during the period which generated cash proceeds of
$18.0 million. The proceeds
from the sales were used to fund new loans and reinvested into
higher yielding bonds, both of which are expected to enhance the
Bank's net interest margin as well as increase interest income in
the future.
Total liabilities were $456.8
million at December 31, 2016,
compared to $455.6 million at
June 30, 2016. The increase was
primarily due to a $4.7 million
increase in deposits during the period, partially offset by a
$1.7 million decrease in FHLB
advances and a $2.0 million decrease
in other liabilities.
Stockholders' equity totaled $68.8
million as of December 31,
2016, which represented a decrease of $1.6 million when compared to June 30, 2016. The decrease was primarily
due to a $2.9 million decrease in
accumulated other comprehensive income reflecting declines in the
market value of available-for-sale securities, $462,000 in dividends declared during the period,
and stock repurchases totaling $193,000. These decreases were partially
offset by net income of $1.5 million
and $93,000 related to the exercise
of stock options during the period. The decrease in
accumulated other comprehensive income is the result of increasing
market interest rates during the period. In connection with
the preparation of the financial statements for the quarter ended
December 31, 2016, management
evaluated the credit quality of the investment portfolio and
believes all unrealized losses to be temporary. Management
has the intent and the ability to hold these securities until the
value recovers or until maturity.
There were 4,194,404, 4,198,143, and 4,201,326 outstanding
shares of common stock at December 31,
2016, June 30, 2016, and
December 31, 2015, respectively. For
all periods presented, the Bank was considered "well-capitalized"
under applicable regulatory requirements.
United Community Bancorp is the parent company of United
Community Bank, headquartered in Lawrenceburg, Indiana. The Bank
currently operates eight offices in Dearborn and Ripley Counties, Indiana.
This news release may contain forward-looking statements, which
can be identified by the use of words such as "believes,"
"expects," "anticipates," "estimates" or similar expressions. Such
forward-looking statements and all other statements that are not
historic facts are subject to risks and uncertainties which could
cause actual results to differ materially from those currently
anticipated due to a number of factors. These factors include, but
are not limited to, general economic conditions, changes in the
interest rate environment, legislative or regulatory changes that
may adversely affect our business, changes in accounting policies
and practices, changes in competition and demand for financial
services, adverse changes in the securities markets, changes in
deposit flows and changes in the quality or composition of the
Company's loan or investment portfolios. Additionally, other risks
and uncertainties may be described in the Company's annual report
on Form 10-K for the year ended June 30,
2016 filed with the SEC on September
27, 2016 which is available through the SEC's website at
www.sec.gov. Should one or more of these risks materialize, actual
results may vary from those anticipated, estimated or projected.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Except as may be required by applicable law or
regulation, the Company assumes no obligation to update any
forward-looking statements.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/united-community-bancorp-reports-second-quarter-results-300399707.html
SOURCE United Community Bancorp