United Financial Bancorp posted declines in its second quarter net income as it scaled back its balance sheet exposure to residential mortgage loans.

The Glastonbury-based holding company for United Bank posted net income totaling $9.1 million in the period ended June 30, compared with $11.9 million in the prior quarter and $13.3 million in the year-ago quarter. Per share, net income slid from 27 cents per share to 18 cents per share over that time frame.

“In the second quarter of 2016, operating revenue increased 2 percent, but operating net income declined to 20 cents per diluted share from 22 cents per diluted share for the linked quarter. Despite record low interest rates, our operating net interest margin declined only one basis point and we maintained strong expense discipline evidenced in our ratio of operating non-interest expense to average assets at 2.08 percent,” CEO William H. W. Crawford, IV said in a statement. “Management remains focused on its previously disclosed four key objectives to enhance shareholder value in this difficult operating environment for banks. Tangible book value per share increased to $10.39 from $10.20 after paying a dividend of 12 cents per share. Asset quality remains strong and non-interest bearing deposits increased by 10 percent year over year.”

Total assets increased 12.9 percent to $6.4 billion on June 30. Total loans increased 16 percent year-over-year to $4.7 billion at June 30. Loan growth was driven largely by growth in commercial business loans, home equity loans and owner-occupied commercial real estate loans, which increased 9 percent, 3 percent and 2 percent on a linked-quarter basis. Residential mortgages, however, declined $5 million during the second quarter, as United sought to reduce its on-balance sheet exposure to residential mortgage loans.

Deposits totaled $4.46 billion on June 30, representing a 2 percent decline from the prior quarter and a 6.5 percent increase from the year-ago period. The company said in a statement that the linked-quarter shift in the deposit mix was reflective of its strategy to focus on low cost core deposit growth.

Net interest income totaled $41.9 million, representing a $1.9 million decline from the linked quarter. Interest income declined $2 million, or 4 percent, from the linked quarter to $51.6 million. The company attributed that decrease largely to the reduced benefit of purchase mark accretion compared with the linked quarter.

Non-interest expenses increased 3 percent from the linked quarter and 14 percent from the year-ago quarter to $34.7 million. In its statement, the company noted the impact of $1.4 million of one-time expenses recognized in the second quarter related to its recent execution of a reorganization plan that centralized operational responsibilities into the back office from its retail network. United said it anticipates the reorganization will ultimately save it $3 million annually.

The company’s efficiency ratio stood at 64.54 percent, compared with 57.36 percent a year ago.

Non-performing assets increased $2.4 million to $39.5 million at June 30 from $37.1 million in the first quarter. The ratio of non-performing assets to total assets increased to 0.61 percent at June 30 from 0.59 percent at March 31. The allowance for loan losses as a percentage of total covered loans outstanding increased to 1.09 percent at June 30 from 1.07 percent at March 31.