WEST SPRINGFIELD, Mass., July 17, 2008 /PRNewswire-FirstCall via COMTEX/ ----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 second quarter of 2008 compared to net income of $978,000, or $0.06 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, and to a lesser extent, growth in non-interest income. The quarterly operating performance was also affected by increases in the provision for loan losses and non-interest expenses. For the six months ended June 30, 2008 the Company's net income was $4.0 million, or $0.24 per diluted share, compared to net income of $1.8 million, or $0.11 per diluted share, for the same period in 2007. The Company also announced a quarterly cash dividend of $0.07 per share, payable on August 26, 2008 to shareholders of record as of August 12, 2008.

Total assets increased $134.9 million, or 12.5%, to $1.2 billion at June 30, 2008 from $1.1 billion at year end 2007 reflecting growth of $91.4 million, or 45.4%, in securities available for sale and $33.3 million, or 4.0%, in total loans. Balance sheet expansion was funded by increases of $56.0 million, or 7.8%, in total deposits and $82.4 million, or 76.3%, in Federal Home Loan Bank advances.

"Our financial results benefited from improvement in net interest margin, growth in average loans and deposits and expansion in non-interest income," commented Richard B. Collins, President and Chief Executive Officer. "While I am pleased with our overall performance, we continue to be affected by a difficult economic environment and challenging real estate market. As a result, we have experienced modestly higher levels of loan loss provisions, non-performing assets and delinquent loans in comparison to prior years. However, annualized net charge-offs to average loans were a moderate 9 basis points for the first six months of 2008."

Financial Highlights:

-- Total securities available for sale expanded $91.4 million, or 45.4%, to $292.7 million at June 30, 2008 due to the implementation of a strategy to deploy excess capital and liquidity resulting from the Company's 2007 second-step stock offering. During the period, management purchased agency mortgage-backed securities which are expected to produce steady cash flows and attractive spreads to U.S. Treasury securities. At June 30, 2008, approximately 95% of the investment portfolio consists of mortgage-backed and debt securities issued by government-sponsored enterprises and the Company holds no FNMA or FHLMC preferred stock.

-- Total loans increased $33.3 million, or 4.0%, to $858.0 million at June 30, 2008 from $824.7 million at December 31, 2007 reflecting growth in the residential (5.2%) and commercial real estate (8.3%) portfolios as a result of business development efforts and competitive products and pricing. Construction loan balances declined $4.8 million, or 11.3%, to $37.3 million at June 30, 2008 as a result of pay-downs and conservative underwriting standards. All other categories of loans were essentially flat during the period reflecting sluggish loan origination activity offset by prepayments and scheduled amortization.

-- Non-performing assets totaled $4.8 million, or 0.39% of total assets, at June 30, 2008 compared to $2.7 million, or 0.25% of total assets, at December 31, 2007. The increase of $2.1 million in non-performing assets was mainly attributable to several residential and commercial real estate loans that became more than 90 days delinquent. Management believes that these loans are adequately secured. While total non-performing loans have increased during the period, our portfolio has not been affected by loans to sub-prime borrowers since the Company has not historically originated loans to these customers.

-- At June 30, 2008, the ratio of the allowance for loan losses to total loans was 0.95% and the ratio of the allowance for loan losses to non-performing loans was 197.39%. For the six months ended June 30, 2008, net charge-offs totaled $387,000, or 0.09% of average loans outstanding on an annualized basis.

-- Total deposits increased $56.0 million, or 7.8%, to $774.7 million at June 30, 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 two new branches in East Longmeadow and Agawam, Massachusetts, which are both performing above plan. Core deposit balances grew $34.9 million, or 9.4%, to $405.9 million at June 30, 2008 from $371.0 million at December 31, 2007.

-- Net interest income increased $2.8 million, or 38.9%, to $9.9 million for the second 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 56 basis points to 3.46% due to the use of net proceeds from the Company's second-step stock offering to fund asset growth as well as a significant decrease in the cost of deposits as a result of the 325 basis points reduction in the federal funds rate from 5.25% at September 1, 2007 to 2.00% at June 30, 2008. Average earning assets expanded $160.9 million, or 16.3%, to $1.1 billion, mainly due to loan growth and purchases of mortgage-backed securities.

-- The provision for loan losses increased $331,000 to $651,000 for the three months ended June 30, 2008 as compared to $320,000 for the same period in 2007 resulting primarily from a $7.8 million increase in classified assets to $40.1 million at June 30, 2008 from $33.4 million at June 30, 2007.

-- Non-interest income expanded $139,000, or 9.7%, to $1.6 million for the three months ended June 30, 2008 due to an increase of $59,000, or 5.4%, from deposit account fees and a $43,000 loss on the sale of securities in the second quarter of 2007.

-- Non-interest expenses grew $975,000, or 14.8%, to $7.6 million for the second quarter of 2008 from $6.6 million in the same period last year. Salaries and benefits increased $464,000, or 12.4%, reflecting staffing costs for our new East Longmeadow and Agawam branches opened in 2008, a higher cash incentive accrual associated with improved financial performance and annual wage adjustments. Occupancy costs expanded $97,000, or 20.2%, mainly due to the two branches opened in 2008. Data processing expenses increased $162,000, or 24.8%, as a result of growth in the total number of loan and deposit accounts serviced, new branches opened in 2008 and costs for the new branch imaging process introduced in all branches beginning in 2008. Professional services grew $109,000, or 41.4%, related to the Company's annual meeting of shareholders held in June 2008. Other expenses rose $151,000, or 15.2%, in connection with a higher quarterly Federal Deposit Insurance Corporation insurance assessment as a result of the expiration of the credit used to reduce the premium each quarter.

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 15 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 http://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) June 30, December 31, June 30, Assets 2008 2007 2007 (unaudited)
   (audited) (unaudited) Cash and cash equivalents $17,118 $14,254 $20,561 Securities available for sale, at fair value 292,684
   201,257 161,169 Securities held to maturity, at amortized cost 3,603 3,632 3,686 Federal Home Loan Bank of Boston stock, at
   cost 10,257 10,257 9,885 Short-term investments 1,055 1,030 1,004 Loans: Residential mortgages 357,103 339,470 329,199 Commercial
   mortgages 232,669 214,776 198,938 Construction loans 37,312 42,059 52,191 Commercial loans 83,918 81,562 75,544 Home equity
   loans 117,422 116,241 116,939 Consumer loans 29,610 30,587 30,751 Total loans 858,034 824,695 803,562 Net deferred loan costs
   and fees 2,285 2,136 1,395 Allowance for loan losses (8,162) (7,714) (7,721) Loans, net 852,157 819,117 797,236 Other real
   estate owned 630 880 - Deferred tax asset, net 8,765 4,953 5,083 Premises and equipment, net 12,087 10,600 10,614 Bank-owned
   life insurance 6,945 6,652 6,515 Other assets 8,905 6,649 6,994 Total assets $1,214,206 $1,079,281 $1,022,747 Liabilities
   and Stockholders' Equity Deposits: Demand $111,815 $102,010 $104,773 NOW 38,783 35,207 42,258 Savings 88,230 65,711 63,431
   Money market 167,115 168,107 176,633 Certificates of deposit 368,764 347,647 338,658 Total deposits 774,707 718,682 725,753
   Federal Home Loan Bank of Boston advances 190,389 107,997 142,519 Repurchase agreements 8,963 13,864 7,990 Escrow funds held
   for borrowers 1,324 1,356 1,113 Due to broker 2,829 - - Capitalized lease obligation 3,169 1,890 1,910 Accrued expenses and
   other liabilities 6,199 9,372 4,866 Total liabilities 987,580 853,161 884,151 Stockholders' Equity: Preferred stock, par value
   $0.01 per share, authorized 50,000,000 shares at June 30, 2008 and December 31, 2007 and 5,000,000 shares at June 30, 2007;
   none issued - - - Common stock, par value $0.01 per share; shares authorized 100,000,000 at June 30, 2008 and December 31,
   2007 and 60,000,000 at June 30, 2007; shares issued and outstanding: 17,763,747 at June 30, 2008 and December 31, 2007; shares
   issued: 17,205,995 at June 30, 2007 178 178 172 Additional paid-in capital 166,171 165,920 76,700 Retained earnings 74,858
   73,026 71,337 Unearned compensation (12,486) (12,835) (5,550) Accumulated other comprehensive loss, net of taxes (2,095) (169)
   (2,190) Treasury stock, at cost (134,142 shares at June 30, 2007) - - (1,873) Total stockholders' equity 226,626 226,120 138,596
   Total liabilities and stockholders' equity $1,214,206 $1,079,281 $1,022,747 UNITED FINANCIAL BANCORP, INC. AND SUBSIDIARY
   CONSOLIDATED INCOME STATEMENTS (Amounts in thousands, except per share amounts) Three Months Ended Six Months Ended June 30,
   June 30, 2008 2007 2008 2007 (unaudited) (unaudited) Interest and dividend income: Loans $12,295 $12,350 $24,842 $24,305 Investments
   3,560 1,850 6,178 3,832 Other interest-earning assets 118 313 359 688 Total interest and dividend income 15,973 14,513 31,379
   28,825 Interest expense: Deposits 4,359 5,477 9,332 10,658 Borrowings 1,706 1,901 3,108 4,076 Total interest expense 6,065
   7,378 12,440 14,734 Net interest income before provision for loan losses 9,908 7,135 18,939 14,091 Provision for loan losses
   651 320 835 604 Net interest income after provision for loan losses 9,257 6,815 18,104 13,487 Non-interest income: Net (loss)
   gain on sales of securities - (43) 8 (29) Fee income on depositors' accounts 1,156 1,097 2,233 2,135 Wealth management income
   136 170 286 291 Other income 282 211 566 436 Total non-interest income 1,574 1,435 3,093 2,833 Non-interest expense: Salaries
   and benefits 4,199 3,735 8,240 7,573 Occupancy expenses 578 481 1,087 972 Marketing expenses 441 449 799 771 Data processing
   expenses 815 653 1,534 1,295 Professional fees 372 263 815 652 Other expenses 1,145 994 2,251 1,959 Total non-interest expense
   7,550 6,575 14,726 13,222 Income before income taxes 3,281 1,675 6,471 3,098 Income tax expense 1,272 697 2,496 1,286 Net
   income $2,009 $978 $3,975 $1,812 Earnings per share: Basic $0.12 $0.06 $0.24 $0.11 Diluted $0.12 $0.06 $0.24 $0.11 Weighted
   average shares outstanding: Basic 16,248 16,888 16,240 16,913 Diluted 16,336 16,975 16,304 16,987 UNITED FINANCIAL BANCORP,
   INC. AND SUBSIDIARY SELECTED DATA AND RATIOS (unaudited) (Dollars in thousands, except per share amounts) At or For The Quarters
   Ended Jun. 30 Mar. 31 Dec. 31 Sept. 30 Jun. 30 2008 2008 2007 2007 2007 Operating Results: Net interest income $9,908 $9,031
   $7,823 $7,253 $7,135 Loan loss provision 651 184 385 436 320 Non-interest income 1,574 1,519 1,490 1,412 1,435 Non-interest
   expenses 7,550 7,176 6,686 6,131 6,575 Net income 2,009 1,966 1,274 1,291 978 Performance Ratios (annualized): Return on average
   assets 0.68% 0.72% 0.48% 0.50% 0.38% Return on average equity 3.52% 3.46% 3.02% 3.69% 2.82% Net interest margin 3.46% 3.40%
   3.02% 2.91% 2.90% Non-interest income to average total assets 0.53% 0.55% 0.56% 0.55% 0.56% Non-interest expense to average
   total assets 2.55% 2.62% 2.50% 2.38% 2.58% Efficiency ratio (excludes gains/ losses on sales of securities and loans) 65.76%
   68.07% 70.99% 69.63% 76.34% Per Share Data: Diluted earnings per share $0.12 $0.12 $0.08 $0.08 $0.06 Book value per share
   $12.76 $12.86 $12.73 $8.28 $8.12 Market price at period end (1) $11.17 $11.08 $11.10 $12.06 $13.59 Risk Profile Equity as
   a percentage of assets 18.66% 19.81% 20.95% 13.28% 13.55% Net charge-offs to average loans outstanding 0.06% 0.12% 0.13% 0.27%
   0.01% Non-performing assets as a percent of total assets 0.39% 0.32% 0.25% 0.18% 0.29% Non-performing loans as a percent of
   total loans, gross 0.48% 0.32% 0.22% 0.12% 0.37% Allowance for loan losses as a percent of total loans, gross 0.95% 0.93%
   0.94% 0.93% 0.96% Allowance for loan losses as a percent of non-performing loans 197.39% 285.41% 432.16% 755.16% 259.79% Loans
   delinquent 60 days or more as a percent of total loans 0.74% 0.81% 0.66% 0.48% 0.66% Average Balances Loans $845,304 $828,302
   $820,164 $812,756 $797,751 Securities 288,502 211,880 193,099 168,498 166,163 Total interest-earning assets 1,146,397 1,061,978
   1,036,253 998,336 985,519 Total assets 1,183,627 1,095,866 1,069,060 1,032,225 1,018,509 Deposits 761,990 730,094 721,634
   720,330 715,173 FHLBB advances 170,052 116,519 157,819 156,150 149,853 Capital 228,241 227,413 168,910 139,820 138,896 Average
   Yields/Rates (annualized) Loans 5.82% 6.06% 6.24% 6.26% 6.19% Securities 4.94% 4.94% 4.87% 4.79% 4.46% Total interest-earning
   assets 5.57% 5.80% 5.96% 6.00% 5.89% Savings accounts 1.14% 0.98% 1.05% 0.90% 0.91% Money market/NOW accounts 1.60% 2.03%
   2.71% 2.81% 2.76% Certificates of deposit 3.62% 4.24% 4.66% 4.70% 4.58% FHLBB advances 3.77% 4.47% 4.82% 4.90% 4.75% Total
   interest-bearing liabilities 2.90% 3.37% 3.87% 3.92% 3.79% (1) Prices at September 30, and June 30, 2007 have been adjusted
   by the second step exchange ratio of 1.04079. 

SOURCE United Financial Bancorp, Inc.

http://www.bankatunited.com
   

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