United Financial Bancorp Earnings More Than Double to $0.12 Per Share

Announces 17% Increase in Dividend to $0.07 Per Share

WEST SPRINGFIELD, Mass., April 18 /PRNewswire-FirstCall/ -- United Financial Bancorp, Inc. (the "Company") (NASDAQ:UBNK), the holding company for United Bank (the "Bank"), reported net income of $2.0 million, or $0.12 per diluted share, for the first quarter of 2008 compared to net income of $834,000, or $0.05 per diluted share, for the corresponding period in 2007. The Company's improved results were largely due to a significant increase in net interest income, driven by net interest margin expansion and growth in average earning assets largely funded by net cash proceeds of $82.7 million from the Company's December 2007 second-step stock offering. The quarterly operating performance was also favorably impacted by an increase in fee income from deposit and wealth management accounts and a lower provision for loan losses, partially offset by expansion in non-interest expenses. The Company also announced a quarterly cash dividend of $0.07 per share, payable on May 27, 2008 to shareholders of record as of May 13, 2008.

Total assets increased $74.0 million, or 6.9%, to $1.2 billion at March 31, 2008 from $1.1 billion at year end 2007 reflecting growth of $70.1 million, or 34.8%, in securities available for sale. The significant increase in securities available for sale was due to the implementation of a strategy to deploy excess capital and liquidity resulting from the aforementioned stock offering. During the quarter, management purchased agency mortgage-backed securities with predictable cash flows and an average spread to treasury securities in excess of 200 basis points. Balance sheet expansion was funded by an increase of $36.8 million, or 5.1%, in total deposits and an increase of $25.3 million, or 6.8%, in Federal Home Loan Bank advances.

"I am very pleased with the financial results for our first quarter as a fully public company," commented Richard B. Collins, President and Chief Executive Officer. "Although we continue to operate in a challenging banking and economic environment, we have benefited from significant improvement in net interest margin, steady asset quality and growth in average loans, core deposits and fee income. As a result of our improved performance, we are rewarding our shareholders by increasing our quarterly dividend payment to $0.07 per share."

Financial Highlights:
-- At March 31, 2008, outstanding loan balances totaled $825.0 million,
essentially flat in comparison to the prior year end as a result of
payoffs of several large credits and sluggish loan activity.
Origination volume moderated in the first quarter of 2008, reflecting a
slowdown in the real estate market, weaker demand for all loan types
and a very competitive lending environment.

-- Non-performing assets totaled $3.7 million, or 0.32% of total assets,
at March 31, 2008 compared to $2.7 million, or 0.25% of total assets,
at December 31, 2007. The increase of $1.0 million in non-performing
assets was mainly attributable to two residential loans with
outstanding balances totaling $886,000 which became more than 90 days
delinquent in March 2008. Management believes that these loans are
adequately secured. The Company has not historically originated loans
to sub-prime borrowers and approximately 96% of its investment
portfolio consists of mortgage-backed and debt securities issued by
government sponsored enterprises.

-- At March 31, 2008, the ratio of the allowance for loan losses to total
loans was 0.93% and the ratio of the allowance for loan losses to non- performing loans was 285.41%. For the three months ended March 31,
2008, net charge-offs totaled $252,000, or 0.12% of average loans
outstanding on an annualized basis.

-- Total deposits increased $36.8 million, or 5.1%, to $755.5 million at
March 31, 2008 compared to $718.7 million at December 31, 2007 mainly
due to competitive products and pricing, superior customer service,
targeted promotional activities and our new East Longmeadow branch,
which opened in January 2008. Core deposit balances grew $25.3
million, or 6.8%, to $396.3 million at March 31, 2008 from $371.0
million at December 31, 2007.

-- Net interest income increased $2.1 million, or 29.8%, to $9.0 million
for the first quarter of 2008 from the same period in 2007 as a result
of net interest margin expansion and growth in earning assets. Net
interest margin increased 58 basis points to 3.40% due to the use of
net proceeds from the Company's second-step stock offering completed in
December 2007 to fund asset growth as well as a significant decrease in
the cost of deposits as a result of the 300 basis points reduction in
the federal funds rate from 5.25% at September 1, 2007 to 2.25% at
March 31, 2008. Average earning assets expanded $76.9 million, or
7.8%, to $1.1 billion, mainly due to loan growth and purchases of
mortgage-backed securities.

-- Non-interest income expanded $121,000, or 8.7%, to $1.5 million for the
three months ended March 31, 2008 due to increases of $39,000, or 3.8%,
in fee income from deposit accounts and $29,000, or 24.0%, in wealth
management revenue. These results also include a $49,000 gain in the
first quarter of 2008 from VISA Inc.'s redemption of its Class B stock
as part of its initial public offering. Prior to its IPO, VISA Inc.
issued these shares to its members in a reorganization based upon
transaction volume.

-- Non-interest expenses grew $529,000, or 8.0%, to $7.2 million for the
first three months of 2008, mainly attributable to increases of
$203,000, or 5.3%, in salaries and benefits, $54,000, or 13.9%, in
professional services, $77,000, or 12.0%, in data processing expenses
and $36,000, or 11.2%, in marketing expenses. The increase in salaries
and benefits reflect staffing costs for our new East Longmeadow branch,
new employees hired to support and facilitate the growth of the
Company, a higher cash incentive accrual associated with improved
financial performance and annual wage adjustments.

United Financial Bancorp, Inc. is a publicly owned corporation and the holding company for United Bank, a federally chartered savings bank headquartered at 95 Elm Street, West Springfield, MA 01090. The Company's common stock is traded on the NASDAQ Global Select Market under the symbol UBNK. United Bank provides an array of financial products and services through its 14 branch offices located throughout Western Massachusetts. Through its Wealth Management Group and its partnership with NFP Securities, Inc., the Bank is able to offer access to a wide range of investment and insurance products and services, as well as financial, estate and retirement strategies and products. For more information regarding the Bank's products and services and for United Financial Bancorp, Inc. investor relations information, please visit www.bankatunited.com.

Except for the historical information contained in this press release, the matters discussed may be deemed to be forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties, including changes in economic conditions in the Company's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company's market area, competition, and other risks detailed from time to time in the Company's SEC reports. Actual strategies and results in future periods may differ materially from those currently expected. These forward-looking statements represent the Company's judgment as of the date of this release. The Company disclaims, however, any intent or obligation to update these forward-looking statements.

For More Information Contact:
Mark A. Roberts
Executive Vice President & CFO
(413) 787-1700

UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands, except par value amounts)

March 31, December 31, March 31,
Assets 2008 2007 2007
(unaudited) (audited) (unaudited)

Cash and cash equivalents $15,784 $14,254 $42,044
Securities available for sale, at fair
value 271,377 201,257 171,474
Securities held to maturity, at
amortized cost 3,630 3,632 3,913
Federal Home Loan Bank of Boston
stock, at cost 10,257 10,257 9,885
Short-term investments 1,043 1,030 -
Loans:
Residential mortgages 343,480 339,470 325,948
Commercial mortgages 213,322 214,776 197,514
Construction loans 41,002 42,059 48,748
Commercial loans 81,385 81,562 67,723
Home equity loans 115,931 116,241 116,350
Consumer loans 29,867 30,587 29,681
Total loans 824,987 824,695 785,964

Net deferred loan costs and fees 2,171 2,136 1,367
Allowance for loan losses (7,646) (7,714) (7,426)
Loans, net 819,512 819,117 779,905

Other real estate owned 1,030 880 - Premises and equipment, net 10,579 10,600 10,673
Bank-owned life insurance 6,733 6,652 6,473
Other assets 13,352 11,602 9,331

Total assets $1,153,297 $1,079,281 $1,033,698

Liabilities and Stockholders' Equity

Deposits:
Demand $108,819 $102,010 $102,513
NOW 34,159 35,207 38,227
Savings 75,469 65,711 68,006
Money market 177,879 168,107 177,173
Certificates of deposit 359,198 347,647 331,020
Total deposits 755,524 718,682 716,939

Federal Home Loan Bank of Boston advances 141,409 107,997 162,171
Repurchase agreements 9,686 13,864 8,825
Escrow funds held for borrowers 1,514 1,356 1,537
Due to broker 8,410 - - Capitalized lease obligation 1,880 1,890 1,919
Accrued expenses and other liabilities 6,462 9,372 3,822
Total liabilities 924,885 853,161 895,213

Stockholders' Equity:
Preferred stock, par value $0.01 per
share, authorized 50,000,000 shares
at March 31, 2008 and December 31,
2007 and 5,000,000 shares at March
31, 2007; none issued - - - Common stock, par value $0.01 per
share; shares authorized 100,000,000
at March 31, 2008 and at December 31,
2007 and 60,000,000 at March 31, 2007;
shares issued and outstanding:
17,763,747 at March 31, 2008 and at
December 31, 2007; shares issued:
17,205,995 at March 31, 2007 178 178 172
Additional paid-in capital 166,289 165,920 76,197
Retained earnings 74,005 73,026 70,798
Unearned compensation (12,659) (12,835) (5,661)
Accumulated other comprehensive
gain (loss), net of taxes 599 (169) (1,508)
Treasury stock, at cost (109,861
shares at March 31, 2007) - - (1,513)
Total stockholders' equity 228,412 226,120 138,485

Total liabilities and
stockholders' equity $1,153,297 $1,079,281 $1,033,698

UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
(Amounts in thousands, except per share amounts)

Three Months Ended
March 31,
2008 2007
(unaudited)
Interest and dividend income:
Loans $12,547 $11,955
Investments 2,618 1,982
Other interest-earning assets 241 375
Total interest and dividend income 15,406 14,312

Interest expense:
Deposits 4,973 5,181
Borrowings 1,402 2,175
Total interest expense 6,375 7,356

Net interest income before provision for loan losses 9,031 6,956

Provision for loan losses 184 284

Net interest income after provision for loan losses 8,847 6,672

Non-interest income:
Net gain on sales of securities 8 14
Fee income on depositors' accounts 1,077 1,038
Wealth management income 150 121
Other income 284 225
Total non-interest income 1,519 1,398

Non-interest expense:
Salaries and benefits 4,041 3,838
Occupancy expenses 509 491
Marketing expenses 358 322
Data processing expenses 719 642
Professional fees 443 389
Other expenses 1,106 965
Total non-interest expense 7,176 6,647

Income before income taxes 3,190 1,423

Income tax expense 1,224 589

Net income $1,966 $834

Earnings per share:
Basic $0.12 $0.05
Diluted $0.12 $0.05

Weighted average shares outstanding:
Basic 16,231 16,938
Diluted 16,271 16,999

UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY
SELECTED DATA AND RATIOS (unaudited)
(Dollars in thousands, except per share amounts)

At or For The Quarters Ended
Mar. 31 Dec. 31 Sept. 30 Jun. 30 Mar. 31
2008 2007 2007 2007 2007

Operating Results:
Net interest income $9,031 $7,823 $7,253 $7,135 $6,956
Loan loss provision 184 385 436 320 284
Non-interest income 1,519 1,490 1,412 1,435 1,398
Non-interest expenses 7,176 6,686 6,131 6,575 6,647
Net income 1,966 1,274 1,291 978 834

Performance Ratios
(annualized):
Return on average
assets 0.72% 0.48% 0.50% 0.38% 0.33%
Return on average
equity 3.46% 3.02% 3.69% 2.82% 2.41%
Net interest margin 3.40% 3.02% 2.91% 2.90% 2.82%
Non-interest income
to average total
assets 0.55% 0.56% 0.55% 0.56% 0.55%
Non-interest expense
to average total
assets 2.62% 2.50% 2.38% 2.58% 2.62%
Efficiency ratio
(excludes gains/losses
on sales of securities
and loans) 68.07% 70.99% 69.63% 76.34% 79.70%

Per Share Data:
Diluted earnings
per share $0.12 $0.08 $0.08 $0.06 $0.05
Book value per share $12.86 $12.73 $8.28 $8.12 $8.10
Market price at period
end (1) $11.08 $11.10 $12.06 $13.59 $14.27

Risk Profile
Non-performing assets
as a percent of
total assets 0.32% 0.25% 0.18% 0.29% 0.13%
Non-performing loans
as a percent of
total loans, gross 0.32% 0.22% 0.12% 0.37% 0.17%
Allowance for loan
losses as a percent
of total loans, gross 0.93% 0.94% 0.93% 0.96% 0.94%
Allowance for loan
losses as a percent
of non-performing
loans 285.41% 432.16% 755.16% 259.79% 570.35%
Equity as a
percentage of assets 19.81% 20.95% 13.28% 13.55% 13.40%

Average Balances
Loans $828,302 $820,164 $812,756 $797,751 $776,301
Securities 211,880 193,099 168,498 166,163 180,491
Total interest- earning assets 1,061,978 1,036,253 998,336 985,519 985,112
Total assets 1,095,866 1,069,060 1,032,225 1,018,509 1,016,369
Deposits 730,094 721,634 720,330 715,173 691,532
FHLBB advances 116,519 157,819 156,150 149,853 170,727
Capital 227,413 168,910 139,820 138,896 138,296

Average Yields/Rates
(annualized)
Loans 6.06% 6.24% 6.26% 6.19% 6.16%
Securities 4.94% 4.87% 4.79% 4.46% 4.39%
Total interest-earning
assets 5.80% 5.96% 6.00% 5.89% 5.81%

Savings accounts 0.98% 1.05% 0.90% 0.91% 0.86%
Money market/NOW
accounts 2.03% 2.71% 2.81% 2.76% 2.69%
Certificates of deposit 4.24% 4.66% 4.70% 4.58% 4.50%
FHLBB advances 4.47% 4.82% 4.90% 4.75% 4.74%
Total interest-bearing
liabilities 3.37% 3.87% 3.92% 3.79% 3.77%

(1) Prices at September 30, June 30, and March 31, 2007 have been adjusted
by the second step exchange ratio of 1.04079.

First Call Analyst:
FCMN Contact:

Source: United Financial Bancorp, Inc.

CONTACT: Mark A. Roberts, Executive Vice President & CFO of United
Financial Bancorp, Inc., +1-413-787-1700

Web site: http://www.bankatunited.com/

2008-04-18 18:11:40 0339922 PRNEWSWIRE