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

Copyright 2017 PR Newswire

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