Press Release
Contact: United Community Bancorp
William F. Ritzmann, President and Chief Executive Officer
(812) 537-4822
United Community Bancorp Reports First Quarter Results
Lawrenceburg, Indiana - November 1, 2006 - United Community Bancorp (the
"Company") (Nasdaq: UCBA), the holding company for United Community Bank (the
"Bank"), announced net income of $662,000, for the quarter ended September 30,
2006 compared to net income of $561,000 for the quarter ended September 30,
2005. The increase in net income was primarily a result of an increase in net
interest income, partially offset by increases in non-interest expenses.
Net interest income for the quarter ended September 30, 2006 totaled $2.9
million compared to $2.3 million for the prior year quarter. The increase from
the prior year quarter is primarily due to an increase in total interest income
of $962,000, partially offset by an increase in total interest expense of
$406,000. Interest income on loans increased by $1.0 million primarily due to
the combined effect of an increase in average balance from $203.7 million to
$252.1 million and an increase in average yield from 6.20% to 6.61%. Interest
income on investment and mortgage-backed securities decreased by $44,000,
primarily due to the impact of a decrease in average balance from $75.9 million
to $69.0 million, partially offset by an increase in average yield from 3.40% to
4.05%. Interest expense on interest-bearing deposits increased by $310,000,
primarily due to the effect of an increase in average rate paid from 2.50% to
3.08%, partially offset by a decrease in average balance from $290.8 million to
$276.6 million. Interest expense on borrowed funds increased $96,000 due to
average outstanding borrowings of $8.2 million for the quarter ended September
30, 2006 compared with no such borrowings during the quarter ended September 30,
2005. The increases in the average yields on loans and investments and in the
average rates paid on interest-bearing deposits is primarily the result of an
increase in market interest rates.
The provision for loan losses was $45,000 for the quarter ended September 30,
2006 compared to $30,000 for the quarter ended September 30, 2005. The increase
is primarily due to the increased size of our loan portfolios, as well as an
increase of $473,000 in nonperforming loans for the quarter ended September 30,
2006 as compared to an increase of $49,000 for the quarter ended September 30,
2005.
Noninterest income remained relatively flat at $367,000 for the quarter ended
September 30, 2006, compared to $360,000 for the same period in 2005. An
increase of $28,000 in service charge income was offset by a $24,000 decrease in
other income. Other income is primarily comprised of rental income, profit on
the sale of real estate owned and income from the sale of non-deposit products
and services.
Noninterest expense was $2.2 million for the quarter ended September 30, 2006
compared to $1.8 million for the same prior year period. The increase in
noninterest expense was primarily the result of a $240,000 increase in
compensation and benefit expense resulting from an increase in the number of
employees to staff our new Aurora and proposed St. Leon branches, annual salary
increases and performance bonuses paid, and a $186,000 increase in other
operating expenses due to additional expenses associated with being a public
company. Other operating expenses are primarily comprised of miscellaneous loan
expense, professional fees, bank fees and office expense.
Income tax expense increased $29,000 to $351,000 for the quarter ended September
30, 2006, compared to $322,000 for the same period in 2005. The increase in
expense is primarily due to a $130,000 increase in pre-tax earnings.
Total assets were $356.1 million at September 30, 2006 and $354.7 million at
June 30, 2006. Nonperforming assets increased from $972,000 at June 30, 2006 to
$1.5 million at September 30, 2006. During the quarter ended September 30, 2006,
cash and cash equivalents decreased $1.0 million to $14.0 million as cash was
redeployed into higher yielding loans. Securities available for sale decreased
$7.9 million to $34.2 million and mortgage backed securities available for sale
decreased $1.7 million to $32.6 million. The decreases are due to the
redeployment of these funds into higher yielding loans. Loans receivable
increased $12.1 million to $256.7 million as a result of increases in our
commercial real estate, residential 1-4 family and consumer loan portfolios.
Loan growth in these portfolios is primarily the result of our marketing efforts
which include media and personal contacts. Loan growth was funded by maturities
of investment securities and Federal Home Loan Bank advances.
Total liabilities increased $200,000 to $292.4 million at September 30, 2006
from $292.2 million at June 30, 2006. The increase in liabilities is the net
effect of a $6.5 million decrease in deposits, primarily relating to reductions
in municipal deposits, and increases of $6.5 million in Federal Home Loan Bank
advances, $114,000 in advances from borrowers for payment of insurance and taxes
and $60,000 in accrued expenses and other liabilities.
Stockholders' equity at September 30, 2006 was $63.7 million compared to $62.5
million at June 30, 2006. The increase is primarily the result of net income of
$662,000 for the quarter ended September 30, 2006, an increase in unrealized
gains on securities available for sale of $705,000 and a reduction in unearned
ESOP shares of $121,000, partially offset by dividends paid of $266,000.
United Community Bancorp is the holding company of United Community Bank
headquartered in Lawrenceburg, Indiana. The Bank currently operates five offices
in Dearborn County, 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, its
quarterly reports on Form 10-Q, which are 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.
UNITED COMMUNITY BANCORP
SUMMARY OF FINANCIAL HIGHLIGHTS
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
AT AT
SEPTEMBER 30, JUNE 30,
2006 2006
(IN THOUSANDS)
ASSETS
Cash and cash equivalents $ 13,996 $ 15,010
Investment securities 67,030 76,591
Loans receivable, net 256,683 244,537
Other Assets 18,420 18,569
TOTAL ASSETS $356,129 $354,707
LIABILITIES
Deposits $283,326 $289,807
Other Liabilities 9,096 2,415
TOTAL LIABILITIES 292,422 292,222
Total Stockholders' Equity 63,707 62,485
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $356,129 $354,707
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED
SEPTEMBER 30,
2006 2005
(IN THOUSANDS)
Interest Income $5,091 $4,129
Interest Expense 2,225 1,819
---------------------------
Net Interest Income 2,866 2,310
Provision for Loan Losses 45 30
---------------------------
Net Interest Income after Provision
for Loan Losses 2,821 2,280
Total Non-Interest Income 367 360
Total Non-Interest Expenses 2,175 1,757
---------------------------
INCOME BEFORE TAX PROVISION (BENEFIT) 1,013 883
Income Tax Provision 351 322
---------------------------
NET INCOME $ 662 $ 561
AT OR FOR THE
THREE MONTHS ENDED
SEPTEMBER 30,
2006 2005
(UNAUDITED)
PERFORMANCE RATIOS:
Return on average assets 0.75% 0.69%
Return on average equity 4.19 7.50
Interest rate spread (1) 3.00 2.88
Net interest margin (2) 3.45 3.01
Noninterest expense to average assets 2.47 2.18
Efficiency ratio (3) 67.27 65.78
Average interest-earning assets to
average interest-bearing liabilities 116.73 105.65
Average equity to average assets 17.91 9.26
CAPITAL RATIOS:
Tangible capital 17.80 9.20
Core capital 17.80 9.19
Total risk-based capital 23.82 16.04
ASSET QUALITY RATIOS:
Nonperforming loans as a percent
of total loans 0.50 0.73
Allowance for loan losses as a percent
of total loans 0.83 1.09
Allowance for loan losses as a percent
of nonperforming loans 166.15 150.13
Net charge-offs to average outstanding
loans during the period 0.00 0.00
(1) Represents the difference between the weighted average yield on average
interest-earning assets and the weighted average cost on average
interest-bearing liabilities.
(2) Represents net interest income as a percent of average interest-earning
assets.
(3) Represents other expense divided by the sum of net interest income and
other income.