PRESS RELEASE
Contact: United Community Bancorp
William F. Ritzmann, President and Chief Executive Officer
(812) 537-4822
UNITED COMMUNITY BANCORP REPORTS FOURTH QUARTER AND YEAR END RESULTS
Lawrenceburg, Indiana - August 7, 2009 - United Community Bancorp (the
"Company") (Nasdaq: UCBA), the holding company for United Community Bank (the
"Bank"), today reported a net loss of $279,000, or ($0.04) per diluted share,
for the quarter ended June 30, 2009, compared to a net loss of $74,000, or
($0.01) per diluted share, for the quarter ended June 30, 2008. Net income for
the year ended June 30, 2009 was $719,000, or $0.10 per diluted share, compared
to a net loss of $1.5 million, or ($0.19) per diluted share, for the year ended
June 30, 2008.
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS ENDED FOR THE YEAR ENDED
(UNAUDITED) (UNAUDITED) (UNAUDITED)
6/30/2009 6/30/2008 6/30/2009 6/30/2008
--------- --------- --------- ---------
Interest income $4,689 $5,191 $19,912 $21,615
Interest expense 1,733 2,419 7,906 11,353
------ ------ ------- -------
Net interest income 2,956 2,772 12,006 10,262
Provision for loan losses 1,052 1,018 2,447 4,718
------ ------ ------- -------
Net interest income after provision
for loan losses 1,904 1,754 9,559 5,544
Total non-interest income 854 820 2,787 2,197
Total non-interest expense 3,480 2,398 11,450 9,850
------ ------ ------- -------
Income (loss) before tax provision
(benefit) (722) 176 896 (2,109)
Income tax provision (benefit) (443) 250 177 (653)
------ ------ ------- -------
Net income (loss) $ (279) $ (74) $ 719 $(1,456)
====== ====== ======= =======
Basic earnings (loss) per share (0.04) (0.01) 0.10 (0.19)
Diluted earnings (loss) per share (1) (0.04) (0.01) 0.10 (0.19)
(1) - Due to the net loss for the three months ended June 30, 2009 and 2008 and
the year ended June 30 2008, no adjustments were made for outstanding stock
options and unearned restricted shares as such effect would be anti-dilutive.
UNITED COMMUNITY BANCORP
SUMMARIZED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN THOUSANDS, AS OF) 6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
--------- --------- ---------- --------- ---------
ASSETS
Cash and cash equivalents $ 27,004 $ 42,029 $ 19,824 $ 27,808 $ 35,710
Investment securities 76,657 58,325 41,614 36,948 38,227
Loans receivable, net 272,270 278,184 288,349 287,486 284,352
Other Assets 25,648 23,076 23,389 23,904 24,437
-------- -------- -------- -------- --------
TOTAL ASSETS $401,579 $401,614 $373,176 $376,146 $382,726
LIABILITIES
Municipal Deposits $124,282 $134,126 $116,343 $120,420 $127,545
Other Deposits 215,334 204,959 194,372 193,879 193,229
FHLB Advances 3,833 4,083 4,333 4,583 4,833
Other Liabilities 3,051 2,844 2,662 2,665 2,630
-------- -------- -------- -------- --------
TOTAL LIABILITIES 346,500 346,012 317,710 321,547 328,237
Total Stockholders' Equity 55,079 55,602 55,466 54,599 54,489
-------- -------- -------- -------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $401,579 $401,614 $373,176 $376,146 $382,726
SUMMARIZED STATEMENTS OF OPERATIONS
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
--------- --------- ---------- --------- ---------
(for the three months ended, in thousands except per share data)
Interest Income $4,689 $5,049 $5,030 $5,144 $5,191
Interest Expense 1,733 1,774 2,091 2,308 2,419
------ ------ ------ ------ ------
Net Interest Income 2,956 3,275 2,939 2,836 2,772
Provision for Loan Losses 1,052 664 396 335 1,018
------ ------ ------ ------ ------
Net Interest Income after Provision
for Loan Losses 1,904 2,611 2,543 2,501 1,754
Total Non-Interest Income 854 735 502 696 820
Total Non-Interest Expenses 3,480 2,738 2,639 2,593 2,398
------ ------ ------ ------ ------
INCOME BEFORE TAX PROVISION (BENEFIT) (722) 608 406 604 176
Income Tax Provision (Benefit) (1) (443) 259 144 217 250
------ ------ ------ ------ ------
NET INCOME (LOSS) $ (279) $ 349 $ 262 $ 387 $ (74)
Basic earnings (loss) per share (2) (0.04) 0.05 0.04 0.05 (0.01)
Diluted earnings (loss) per share (3) (0.04) 0.05 0.03 0.05 (0.01)
(1) - The income tax provision of $250,000 for the three months ended June 30,
2008 is primarily the result of a valuation allowance of $160,000 related to
deferred tax assets for charitable contributions.
(2) - For all periods shown, United Community MHC has held 4,655,200 shares of
outstanding common stock. Since its inception, the MHC has waived receipt of
quarterly dividends on common stock.
(3) - Due to the net loss for the three month periods ended June 30, 2009 and
June 30, 2008, no adjustments were made for outstanding stock options and
unearned restricted shares as such effect would be anti-dilutive.
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
FOR THE THREE MONTHS ENDED
6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
--------- --------- ---------- --------- ---------
PERFORMANCE RATIOS:
Return on average assets (1) (0.28)% 0.35% 0.27% 0.41% (0.08)%
Return on average equity (1) (2.02)% 2.51% 1.91% 2.84% (0.55)%
Interest rate spread (2) 2.93% 3.30% 3.03% 2.91% 2.84%
Net interest margin (3) 3.12% 3.50% 3.28% 3.18% 3.15%
Noninterest expense to average assets (1) 3.46% 2.76% 2.76% 2.72% 2.51%
Efficiency ratio (4) 91.34% 68.28% 76.69% 73.41% 66.78%
Average interest-earning assets to
average interest-bearing liabilities 110.28% 110.51% 110.47% 110.30% 110.29%
Average equity to average assets 13.75% 14.00% 14.33% 14.30% 14.41%
CAPITAL RATIOS:
Tangible capital 12.08% 12.69% 13.58% 13.34% 13.00%
Core capital 12.08% 12.69% 13.58% 13.34% 13.00%
Total risk-based capital 18.40% 20.07% 20.02% 20.64% 20.51%
ASSET QUALITY RATIOS:
Nonperforming loans as a percent
of total loans 2.19% 2.56% 1.96% 2.17% 2.62%
Allowance for loan losses as a percent
of total loans 1.55% 1.53% 1.26% 1.36% 1.62%
Allowance for loan losses as a percent
of nonperforming loans 70.51% 59.65% 64.53% 62.65% 61.98%
Net charge-offs to average outstanding
loans during the period (1) 1.59% 0.07% 0.85% 1.47% 3.65%
(1) Quarterly income and expense amounts used in ratio have been annualized.
(2) Represents the difference between the weighted average yield on average
interest-earning assets and the weighted average cost on average
interest-bearing liabilities.
(3) Represents net interest income as a percent of average interest-earning
assets.
(4) Represents other expense divided by the sum of net interest income and
other income.
FOR THE THREE MONTHS ENDED JUNE 30, 2009:
Net interest income increased $183,000, or 6.6%, for the quarter ended June 30,
2009, as compared to the prior year quarter. The increase is due to a decrease
in the average rate paid on interest-bearing liabilities from 2.98% in the prior
year quarter to 2.01% in the current year quarter, partially offset by a
decrease in the average rate earned on interest-earning assets from 5.82% to
4.94%. The decrease in the average rates was caused by decreases in market
interest rates throughout the year.
Noninterest income increased $36,000, or 4.1%, for the quarter ended June 30,
2009, compared to the prior year quarter. The increase in noninterest income was
the result of an increase of $199,000 in gain on sale of loans, an increase of
$126,000 in other income, an increase of $25,000 in service charges, and an
increase of $17,000 in income from bank-owned life insurance, partially offset
by an increase of $56,000 in loss on sale of investments and a decrease in gain
on sale of land of $275,000. The increase in gain on sale of loans is
attributable to decreases in market interest rates, which caused an increase in
the refinancing of residential mortgage loans into lower fixed rate mortgage
loans that were sold to Freddie Mac for a gain. The increase in other income is
due to the receipt of payments related to one loan after the loan had been
charged off in the quarter ended June 30, 2009. The increase in service charge
income is the result of increased fees from customer account and transaction
programs that were implemented in 2008. The increase in income from bank-owned
life insurance is due to higher cash surrender values in the current year. The
increase in loss on sale of investments is attributable to the sale of mutual
funds that were invested in private label and government agency mortgage-backed
securities. The market value of these securities has been negatively impacted by
the deterioration in the credit markets, and management has decided to exit the
investment in this security within the parameters of the redemption in kind
provision to reduce any further losses. At June 30, 2009, the Bank's remaining
investment in this security was $47,000, which is expected to be sold in the
first fiscal quarter of 2010.
Noninterest expense increased $1.1 million, or 45.1%, for the quarter ended June
30, 2009, compared to the prior year quarter. The increase is the result of an
increase in the FDIC insurance premium of $218,000, including a special five
basis point assessment of $175,000 on the assets of the Bank, payable on
September 30, 2009, an increase in the provision for loss on the sale of other
real estate owned of $503,000, and an increase in other operating expense of
$246,000. The increase in the provision for loss on the sale of other real
estate owned is the result of the impact of the continued deterioration of the
local and national economy on the market value of other real estate owned by the
Bank. The increase in other expense is primarily the result of operating losses
incurred on repossessed properties.
FOR THE YEAR ENDED JUNE 30, 2009:
Net interest income increased $1.7 million, or 17.0%, in the year ended June 30,
2009, as compared to the prior year. The increase is the result of a decrease in
the average interest rate paid on interest-bearing liabilities from 3.55% to
2.36%, partially offset by a decrease in the average rate earned on
interest-earning assets from 5.99% to 5.40%. The decrease in rates has been
driven by decreases in market interest rates in the year ended June 30, 2009.
Noninterest income increased $590,000, or 26.9%, for the year ended June 30,
2009, compared to the prior year. The increase is primarily due to an increase
in gain on sale of loans of $501,000 and an increase in service charge income of
$402,000, partially offset by a decrease in gain on sale of land of $275,000 and
an increase in the loss on sale of investments of $148,000. The increase in gain
on sale of loans is attributable to the previously discussed refinancing of
residential mortgage loans into lower fixed rate mortgage loans that were sold
to Freddie Mac for a gain. The increase in service charge income is the result
of the previously mentioned increased fees from customer account and transaction
programs that were implemented in 2008. The increase in loss on sale of
investments is attributable to the previously mentioned sale of mutual funds
that were invested in private label and government agency mortgage-backed
securities.
Noninterest expense increased $1.6 million, or 16.2%, for the year ended June
30, 2009, compared to the prior year. The increase in noninterest expense is due
to an increase of $532,000 in other operating expenses, an increase of $645,000
in provision for the loss on sale of other real estate owned, and an increase of
$386,000 in the FDIC insurance premium. The increase in other operating expenses
is attributable to operating losses incurred on repossessed properties. The
increase in the provision for the loss on sale of other real estate owned is
attributable to the continued deterioration of the local and national economies
impacting the market value of other real estate owned by the Bank. The increase
in the deposit insurance premium is the result of the previously mentioned FDIC
special assessment and the use of credits that were available and utilized in
the prior year, but are no longer available in the current year.
The provision for loan losses was $2.4 million for the year ended June 30, 2009,
compared to $4.7 million for the prior year. The decrease in the provision is
reflective of the amount of charge-offs which have remained relatively
unchanged. In the prior year, the provision increased as charge-offs increased
by $2.7 million from two years ago. From the prior year to the current,
charge-offs increased only $46,000.
Nonperforming loans decreased to $6.0 million at June 30, 2009, from $7.5
million at June 30, 2008. At June 30, 2009, the Bank had five loans categorized
as troubled debt restructurings, totaling $4.5 million. The Bank did not have
any loans categorized as troubled debt restructurings at June 30, 2008. At June
30, 2009, the Bank had one loan for $1.1 million that was categorized as both a
nonperforming loan and a troubled debt restructuring. Management has reduced the
carrying value of all nonperforming loans and troubled debt restructurings to
their fair market values and does not anticipate any additional material losses
or write-downs related to these loans. Other nonperforming assets (comprised
exclusively of real estate owned ("REO")) decreased to $1.9 million at June 30,
2009 from $2.9 million at June 30, 2008. Four properties are included in REO at
June 30, 2009. The Bank is actively working to sell all of the REO assets, and
continues to maintain and operate the properties and monitor their values based
upon current market conditions. At June 30, 2009, $704,000 was reserved for
losses on the sale of REO.
Total assets were $401.6 million at June 30, 2009, compared to $382.7 million at
June 30, 2008. The increase is primarily due to a $38.4 million increase in
investments, partially offset by a $8.7 million decrease in cash, and a $10.0
million decrease in net loans receivable, which was funded by an $18.8 million
increase in deposits. The increase in investments is the result of purchases of
callable agency securities and municipal bonds throughout the year. The decrease
in net loans receivable is the result of customers refinancing residential
mortgage loans into lower fixed rate mortgage loans that are being sold to
Freddie Mac, with the cash being redeployed into higher yielding investment
securities. The increase in deposits is the result of increased marketing
efforts by the Bank's current branches. Total liabilities were $346.5 million at
June 30, 2009, compared to $328.2 million at June 30, 2008. The increase in
total liabilities is primarily due to the previously mentioned $18.8 million
increase in deposits. Total stockholders' equity was $55.1 million at June 30,
2009, compared to $54.5 million at June 30, 2008. The increase in stockholders'
equity is attributable to $719,000 in net income, a decrease of $1.8 million in
shares purchased for stock plans, and a $663,000 increase in unrealized gains on
securities available for sale, partially offset by a decrease of $1.2 million in
additional paid-in capital, an increase of $325,000 in treasury shares, and $1.1
million in dividends paid to shareholders. The increase in unrealized gains on
securities available for sale is attributable to the impact of falling market
interest rates on securities held at higher fixed rates. The decrease in
additional paid-in capital and shares purchased for stock plans is attributable
to the continued amortization of the cost of shares issued by the stock benefit
plans. The increase in treasury shares is attributable to the purchase of 44,661
shares during the year ended June 30, 2009.
United Community Bancorp is the holding company of United Community Bank,
headquartered in Lawrenceburg, Indiana. The Bank currently operates six 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, or
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.