EX-99.1 2 exh99-1.htm THIRD QUARTER EARNINGS PRESS RELEASE exh99-1.htm
                                      
Unity Bancorp, Inc.
64 Old Highway 22
Clinton, NJ 08809
800 618-BANK
                                                www.unitybank.com
 
NewsNewsNewsNewsNews

For Immediate Release:

October 24, 2008

News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308
 

Unity Bancorp Reports Third Quarter and Nine Month Results

Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported a net loss of $1.0 million, or $(0.14) per diluted share, for the quarter ended September 30, 2008, compared to net income of $1.1 million, or $0.14 per diluted share, for the quarter ended September 30, 2007.

For the nine months ended September 30, 2008, net income was $1.3 million, or $0.19 per diluted share, compared to $4.0 million, or $0.53 per diluted share for the same period a year ago.  Return on average assets and average common equity for the nine months ended September 30, 2008, were 0.22% and 3.77%, respectively, as compared to 0.77% and 11.57%, respectively, for the prior year’s comparable period.

Earnings for the quarter and nine months ended were impacted by an other-than-temporary impairment (“OTTI”) charge and sale of Federal Home Loan Mortgage Corporation (“FHLMC” or “Freddie Mac”) perpetual callable preferred securities. Unity sold approximately $909 thousand in book value of these securities in August 2008 and recorded a pretax loss of approximately $518 thousand on this sale.  In addition, the market value of the remaining securities was written down as of September 30, 2008, due to actions by the Treasury of the United States and the OFHEO (now FHFA) placing Freddie Mac under conservatorship.  The aggregate amount of security losses and other-than-temporary impairment charges related to Freddie Mac perpetual preferred stock for the third quarter of 2008 was $1.4 million.

While the reported results for the three and nine month periods reflect the effects of the OTTI charge, they do not reflect the change in tax treatment enacted as part of the Emergency Economic Stabilization Act of 2008 (the “Act”), which was adopted on October 3, 2008. Under the Act, the Company is permitted to deduct the loss as an ordinary loss for tax purposes, thereby offsetting a portion of the Company’s ordinary income. However, since the Act was not enacted until the fourth quarter, the Company cannot recognize this tax benefit as part of its third quarter results. The tax benefit will be recognized in the fourth quarter, and it is expected to amount to approximately $239 thousand or $.03 per diluted share, based on the average shares outstanding for the quarter ended September 30, 2008.
 
James A. Hughes, Unity Bancorp’s President and CEO said, “The crisis in the financial markets has had a material impact on our operating results.  In addition to the charges we have taken on our investment in Freddie Mac preferred stock, we have significantly increased our provision for loan losses this quarter due to the inherent increase in credit risk resulting from the downturn in the economy.  Although Unity Bank was not a producer of subprime residential mortgage loans, the continued decline in real estate values has impacted the level of credit losses in our loan portfolios.  We are taking proactive steps to mitigate credit risk by aggressively dealing with problem loans and tightening our credit standards.  In addition, the shortage of credit in the marketplace has virtually eliminated the salability of SBA loans.  As a result, Unity has closed all SBA offices outside of our New Jersey, Pennsylvania and New York primary market.  We have taken aggressive steps to reduce expenses, and will continue to review all potential expense savings.”

 
Net Interest Income
 
Net interest income for the third quarter of 2008 was $7.1 million, compared to the $6.0 million earned in the third quarter of 2007, an increase of 19%. Net interest margin for the third quarter of 2008 was 3.55%, an 11 basis point improvement from the 3.44% reported in the third quarter of 2007. Average earning assets rose 15% from the third quarter of 2007. As a result of the lower rate environment, the yield on interest-earning assets decreased by 71 basis points to 6.45% in the third quarter of 2008, from 7.16% for the same period last year.  The cost of interest-bearing liabilities decreased 99 basis points from 4.27% in the third quarter of 2007 to 3.28% in the third quarter of 2008.  The decreased liability cost was primarily due to the lower interest rate environment.
 
Year-to-date, net interest income was $20.6 million, or 14% higher than the $18.1 million reported for the first nine months of 2007. Net interest margin for the nine months ended 2008 was 3.61%, relatively flat from the same period last year.  The Company's yield on earning assets decreased from 7.26% for the first nine months of 2007, to 6.64% for the first nine months of 2008. The Company's cost of interest-bearing liabilities decreased from 4.20% for the first nine months of 2007, to 3.43% for the first nine months of 2008.

 
Noninterest Income
 
Noninterest income, excluding losses on investment securities, totaled $1.1 million for the third quarter of 2008, as compared to $1.4 million for the same period last year, a decrease of 23%. Gains on sales of SBA loans amounted to $215 thousand in the third quarter of 2008, compared to $316 thousand for the quarter ended September 30, 2007, reflecting both a lower volume of loans sold and lower premiums on loans sold, due to current market conditions.  As a result of the significantly reduced premiums resulting from the recent credit crisis, Unity has decided to significantly reduce future SBA production.  Consequently, gains on SBA loans will decline substantially for the foreseeable future.  Service charges on deposit accounts amounted to $381 thousand for the third quarter of 2008, an increase of $43 thousand, or 13%, as compared to the same period last year, primarily due to higher levels of commercial analysis charges.
 
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Noninterest income, excluding losses on investment securities, totaled $3.7 million for the first nine months of 2008, as compared to $4.9 million for the same period last year, a decrease of 23%. Gains on sales of SBA loans amounted to $1.2 million for the first nine months of 2008, compared to $1.8 million for the same period a year ago, reflecting a lower volume of loans sold and lower premiums on loans sold, due to current market conditions.  Service charges on deposit accounts totaled $1.0 million and were flat from the same period a year ago.  Service and loan fee income amounted to $936 thousand for the nine months ended 2008, a decrease of $238 thousand, or 20%, as compared to the same period last year, primarily due to lower levels of prepayment penalties and SBA servicing income.  Other income amounted to $390 thousand for the nine months ended 2008, a decrease of $298 thousand, or 43%, as compared to the same period last year, primarily due to lower levels of loan referral fees.

 
Noninterest Expense
 
Noninterest expense for the third quarter of 2008 was $5.8 million, as compared to $5.5 million for the same period last year, an increase of 5%.  Compensation and benefits expense amounted to $2.9 million for the third quarter of 2008, an increase of $132 thousand, or 5% compared to the same period a year ago, primarily due to annual merit increases.  Processing and communications and occupancy expense for the third quarter of 2008, declined by 14% and 2%, respectively, from the same period a year ago due to reduced communications costs from renegotiated contracts and a decline in capital expenditures.  Professional fees amounted to $285 thousand for the third quarter of 2008, an increase of $169 thousand from the same period a year ago, due to increased consulting costs.  Loan servicing costs amounted to $206 thousand for the third quarter of 2008, an increase of $22 thousand from the same period a year ago, due to increased collection costs on delinquent loans.
 
For the first nine months of 2008, noninterest expense was $17.2 million, compared to $16.2 million in 2007, an increase of 6%. Compensation and benefits expense for the nine months ended 2008 amounted to $9.1 million, an increase of $654 thousand, or 8%, primarily related to an increase in average head count and annual merit increases. During September and October of 2008, Unity significantly reduced its head count.  The full benefit of this reduction will not be realized until the first quarter of 2009.  Processing and communications expense for the first nine months of 2008 declined 5% from the same period a year ago, due to renegotiated contracts and lower items processing costs.  Professional services expense for the first nine months amounted to $626 thousand an increase of $212 thousand, due to increased consulting costs related to tax planning and compliance with the Sarbanes Oxley Act of 2002.  Other expense for the nine months ended 2008 amounted to $1.7 million, an increase of $118 thousand or 8%, primarily related to the increase in FDIC deposit insurance premiums.
 
 
Financial Condition
 
At September 30, 2008, total assets were $864.1 million. Total loans were $685.0 million, up $117.4 million, or 21%, from $567.6 million at September 30, 2007. The increase was across all product lines. SBA, commercial, residential and consumer loans increased 23%, 10%, 78%, and 9% respectively.  Total deposits were $684.7 million, an increase of $72.5 million from September 30, 2007. This increase was partially due to a $103.4 million increase in time deposits, an $8.8 million increase in demand deposits and $5.6 million in interest bearing checking accounts, offset by a $45.4 million decline in savings deposits.
 
 
Asset Quality
 
At September 30, 2008, nonperforming assets totaled $11.0 million, an increase of $6.6 million compared to $4.3 million at September 30, 2007.  The increase in nonperforming assets was primarily related to three commercial mortgage loans totaling $5.2 million.  The composition of nonperforming loans was as follows: commercial $6.1 million, SBA $3.3 million, residential $1.3 million and consumer $262 thousand.  The allowance for loan losses totaled $9.9 million at September 30, 2008, and represented 1.45% of total loans, as compared to $8.2 million and 1.44% of total loans at September 30, 2007.  The provision for loan losses for the three months ended September 30, 2008, amounted to $2.1 million, an increase of $1.7 million from the same period a year ago.  Net charge-offs for the three months ended September 30, 2008, amounted to $1.1 million, compared to $264 thousand for the same period a year ago. The provision for loan losses for the first nine months of 2008 amounted to $3.2 million, an increase of $2.2 million from the same period a year ago.  During the first nine months of 2008, the Company had net charge-offs of $1.7 million, compared to $441 thousand for the same period a year ago.
 
 
Capital
 
As of September 30, 2008, shareholders’ equity was $46.5 million, and book value per common share was $6.55. As of September 30, 2008, the Company's leverage ratio was 7.42%. Tier I and total risk based capital ratios were 9.07% and 10.33%, respectively. All regulatory capital ratios exceeded the well-capitalized, federal capital adequacy requirements as of September 30, 2008.
 
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $864 million in assets and $685 million in deposits.  Unity Bank provides financial services to retail, corporate and small business customers through its 16 retail service centers located in Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County, Pennsylvania.  For additional information about Unity, visit our website at www.unitybank.com, or call 800- 618-BANK.

This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance.  These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company’s control and could impede its ability to achieve these goals.  These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors
 
 
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Unity Bancorp, Inc.
                            
Consolidated Financial Highlights
                            
(Dollars in thousands, except per share data)
                        
                             
                     
Sep. 08
  
  vs.
  
BALANCE SHEET DATA:
  
Sep. 30, 2008
    
Jun. 30, 2008
    
Sep. 30, 2007
    
Jun. 08
  
Sep. 07
  
Assets
$
864,083
  
$
832,315
  
$
746,821
    
              3.8
%
              15.7
%
Deposits
  
684,680
    
671,881
    
612,215
    
              1.9
  
              11.8
  
Loans
  
685,023
    
643,039
    
567,597
    
              6.5
  
              20.7
  
Securities
  
99,410
    
106,972
    
108,476
    
            (7.1)
  
              (8.4)
  
Shareholders' equity
  
46,539
    
47,951
    
47,261
    
            (2.9)
  
              (1.5)
  
Allowance for loan losses
  
9,913
    
8,945
    
8,183
    
            10.8
  
              21.1
  
                             
FINANCIAL DATA - QUARTER TO DATE:
                            
Net income before taxes
$
(1,141)
  
$
1,599
  
$
1,482
    
        (171.4)
%
          (177.0)
%
Federal and state income tax provision
  
(139)
    
495
    
430
    
        (128.1)
  
          (132.3)
  
Net income
  
(1,002)
    
1,104
    
1,052
    
        (190.8)
  
          (195.2)
  
                             
Per share-basic
  
                        (0.14)
    
                           0.16
    
                               0.15
    
        (187.5)
  
          (196.0)
  
Per share-diluted
  
                        (0.14)
    
                           0.15
    
                               0.14
    
        (193.3)
  
          (199.3)
  
                             
Return on average assets
  
(0.47)
%
0.56
%
0.57
%
  
        (183.9)
  
          (182.5)
  
Return on average common equity
  
(8.45)
    
9.29
    
8.89
    
        (190.9)
  
          (195.0)
  
Efficiency ratio
  
70.51
    
69.59
    
74.23
    
              1.3
  
              (5.0)
  
                             
                             
FINANCIAL DATA - YEAR TO DATE:
                            
Net income before taxes
$
2,328
    
                                -
  
$
5,781
    
                  -
  
            (59.7)
%
Federal and state income tax provision
  
982
    
                                -
    
1,736
    
                  -
  
            (43.4)
  
Net income
  
1,346
    
                                -
    
4,045
    
                  -
  
            (66.7)
  
                             
Per share-basic
  
0.19
    
                                -
    
0.55
    
                  -
  
            (65.5)
  
Per share-diluted
  
0.19
    
                                -
    
0.53
    
                  -
  
            (64.2)
  
                             
Return on average assets
  
0.22
%
                                -
    
0.77
%
  
                  -
  
            (71.4)
  
Return on average common equity
  
3.77
    
                                -
    
11.57
    
                  -
  
            (67.4)
  
Efficiency ratio
  
70.68
    
                                -
    
70.57
    
                  -
  
                0.2
  
                             
SHARE INFORMATION:
                            
Closing price per share
$
4.00
  
$
6.95
  
$
10.55
    
          (42.4)
%
            (62.1)
%
Cash dividends declared
  
0.00
    
0.05
    
0.05
    
 -
  
 -
  
Book value per share
  
6.55
    
6.76
    
6.61
    
            (3.1)
  
              (0.9)
  
Average diluted shares outstanding (QTD)
7,259
    
7,275
    
7,462
    
            (0.2)
  
              (2.7)
  
                             
CAPITAL RATIOS:
                            
Total equity to total assets
  
5.39
%
5.76
%
6.33
%
  
            (6.4)
%
            (14.8)
%
Tier I capital to average assets (leverage)
  
7.42
    
8.01
    
8.37
    
            (7.4)
  
            (11.4)
  
Tier I capital to risk-adjusted assets
  
9.07
    
9.42
    
10.51
    
            (3.7)
  
            (13.7)
  
Total risk-based capital
  
10.33
    
10.67
    
11.76
    
            (3.2)
  
            (12.2)
  
                             
CREDIT QUALITY AND RATIOS:
                            
Nonperforming assets
$
10,955
  
$
6,887
  
$
4,319
    
            59.1
%
            153.6
%
Net charge offs to average loans (QTD)
  
0.67
%
0.23
%
0.19
%
  
          191.3
  
            252.6
  
Allowance for loan losses to total loans
  
1.45
    
1.39
    
1.44
    
              4.3
  
                0.7
  
Nonperforming assets to total loans and OREO
1.60
    
1.07
    
0.76
    
            49.5
  
            110.5
  

 
Page 3 of 11
 

 
Unity Bancorp, Inc.
                            
Consolidated Balance Sheets
                            
(In thousands)
                    
Sep. 08
  
vs.
  
   
Sep. 30, 2008
    
Jun. 30, 2008
    
Sep. 30, 2007
    
Jun. 08
  
Sep. 07
  
ASSETS
                            
Cash and due from banks
$
                     21,987
  
$
                       20,368
  
$
                           12,826
    
              7.9
 %
              71.4
%
Federal funds sold and interest bearing deposits
                     29,356
    
                       33,678
    
                           32,495
    
          (12.8)
  
              (9.7)
  
Securities:
                            
  Available for sale
  
                     70,144
    
                       77,110
    
                           72,980
    
            (9.0)
  
              (3.9)
  
  Held to maturity
  
                     29,266
    
                       29,862
    
                           35,496
    
            (2.0)
  
            (17.6)
  
      Total securities
  
                     99,410
    
                     106,972
    
                         108,476
    
            (7.1)
  
              (8.4)
  
Loans:
                            
  SBA - Held for sale
  
                     19,863
    
                       25,605
    
                           17,014
    
          (22.4)
  
              16.7
  
  SBA - Held to Maturity
  
                     82,551
    
                       75,988
    
                           66,255
    
              8.6
  
              24.6
  
  Commercial
  
                   394,215
    
                     387,302
    
                         356,964
    
              1.8
  
              10.4
  
  Residential mortgage
  
                   128,216
    
                       95,100
    
                           72,177
    
            34.8
  
              77.6
  
  Consumer
  
                     60,178
    
                       59,044
    
                           55,187
    
              1.9
  
                9.0
  
      Total loans
  
                   685,023
    
                     643,039
    
                         567,597
    
              6.5
  
              20.7
  
  Less: Allowance for loan losses
  
                       9,913
    
                         8,945
    
                             8,183
    
            10.8
  
              21.1
  
      Net loans
  
                   675,110
    
                     634,094
    
                         559,414
    
              6.5
  
              20.7
  
Goodwill and other intangibles
  
                       1,577
    
                         1,581
    
                             1,592
    
            (0.3)
  
              (0.9)
  
Premises and equipment, net
  
                     12,475
    
                       12,372
    
                           11,729
    
              0.8
  
                6.4
  
Accrued interest receivable
  
                       4,364
 
 
                         4,095
 
 
                             4,073
  
 
              6.6
  
                7.1
  
Loan servicing asset
  
                       1,721
 
 
                         1,877
 
 
                             2,139
  
 
            (8.3)
  
            (19.5)
  
Bank Owned Life Insurance
  
                       5,727
    
                         5,674
 
 
                             5,520
    
              0.9
  
                3.8
  
FHLB/ACBB Stock
  
                       5,307
    
                         4,407
    
                             3,720
    
            20.4
  
              42.7
  
Other assets
  
                       7,049
    
                         7,197
    
                             4,837
    
            (2.1)
  
              45.7
  
Total Assets
$
                   864,083
  
$
                     832,315
  
$
                         746,821
    
              3.8
 %
              15.7
%
                             
LIABILITIES AND SHAREHOLDERS' EQUITY
                        
Deposits:
                            
  Noninterest-bearing demand deposits
$
                     82,167
  
$
                       81,273
  
$
                           73,355
    
              1.1
 %
              12.0
%
  Interest-bearing deposits:
                            
    Interest bearing checking
  
                     87,587
    
                       88,551
    
                           81,985
    
            (1.1)
  
                6.8
  
    Savings
  
                   148,026
    
                     180,665
    
                         193,387
    
          (18.1)
  
            (23.5)
  
    Time, under $100,000
  
                   274,845
    
                     236,241
    
                         181,776
    
            16.3
  
              51.2
  
    Time, $100,000 and over
  
                     92,055
    
                       85,151
    
                           81,712
    
              8.1
  
              12.7
  
       Total deposits
  
                   684,680
    
                     671,881
    
                         612,215
    
              1.9
  
              11.8
  
Borrowed funds and subordinated debentures
                   130,465
    
                     110,465
    
                           85,465
    
            18.1
  
              52.7
  
Accrued interest payable
  
                           869
    
                            779
    
                                757
    
            11.6
  
              14.8
  
Accrued expenses and other liabilities
  
                       1,530
    
                         1,239
    
                             1,123
    
            23.5
  
              36.2
  
  Total liabilities
  
                   817,544
    
                     784,364
    
                         699,560
    
              4.2
  
              16.9
  
Commitments and Contingencies
  
                                -
    
                                -
    
                                    -
            
Shareholders' equity:
                            
  Common stock, no par value, 12,500 shares authorized
                     52,453
    
                       52,281
    
                           49,282
    
              0.3
  
                6.4
  
  Retained earnings
  
                           591
    
                         1,593
    
                             2,128
    
          (62.9)
  
            (72.2)
  
  Treasury stock at cost
  
                      (4,169)
    
                       (4,169)
    
                           (3,218)
    
                 -
  
              29.6
  
  Accumulated other comprehensive loss, net of tax
                      (2,336)
    
                       (1,754)
    
                              (931)
    
            33.2
  
            150.9
  
      Total shareholders' equity
  
                     46,539
    
                       47,951
    
                           47,261
    
            (2.9)
  
              (1.5)
  
Total Liabilities and Shareholders' Equity
$
                   864,083
  
$
                     832,315
  
$
                         746,821
    
              3.8
 %
              15.7
%
                             
COMMON SHARES AT PERIOD END:
                            
  Issued
  
7,535
    
                         7,520
    
                             7,478
            
  Outstanding
  
7,110
    
                         7,095
    
                             7,154
            
  Treasury
  
425
    
                            425
    
                                324
            
 N/M= Not meaningful
                            

 
Page 4 of 11
 
 
Unity Bancorp, Inc.
                            
Consolidated Statements of Income
                            
(In thousands, except per share data)
                            
                     
Sep. 08
  
vs.
  
FOR THE THREE MONTHS ENDED:
  
Sep. 30, 2008
    
Jun. 30, 2008
    
Sep. 30, 2007
    
Jun. 08
  
Sep. 07
  
INTEREST INCOME
                            
Fed funds sold and interest on deposits
$
                           113
  
$
                            111
  
$
                                390
    
              1.8
 %
            (71.0)
%
FHLB/ACBB Stock
  
                             58
    
                              76
    
                                  66
    
          (23.7)
  
            (12.1)
  
Securities:
                            
  Available for sale
  
                           907
    
                            932
    
                                888
    
            (2.7)
  
                2.1
  
  Held to maturity
  
                           381
    
                            398
    
                                452
    
            (4.3)
  
            (15.7)
  
    Total securities
  
                       1,288
    
                         1,330
    
                             1,340
    
            (3.2)
  
              (3.9)
  
Loans:
                            
  SBA
  
                       2,043
    
                         2,028
    
                             2,190
    
              0.7
  
              (6.7)
  
  Commercial
  
                       6,877
    
                         6,667
    
                             6,600
    
              3.1
  
                4.2
  
  Residential mortgage
  
                       1,720
    
                         1,209
    
                             1,047
    
            42.3
  
              64.3
  
  Consumer
  
                           866
    
                            846
    
                                933
    
              2.4
  
              (7.2)
  
    Total loan interest income
  
                     11,506
    
                       10,750
    
                           10,770
    
              7.0
  
                6.8
  
    Total interest income
  
                     12,965
    
                       12,267
    
                           12,566
    
              5.7
  
                3.2
  
INTEREST EXPENSE
                            
Interest bearing demand deposits
  
                           404
    
                            350
    
                                451
    
            15.4
  
            (10.4)
  
Savings deposits
  
                           774
    
                            918
    
                             1,995
    
          (15.7)
  
            (61.2)
  
Time deposits
  
                       3,553
    
                         3,006
    
                             2,994
    
            18.2
  
              18.7
  
Borrowed funds and subordinated debentures
                       1,152
    
                         1,155
    
                             1,153
    
            (0.3)
  
              (0.1)
  
    Total interest expense
  
                       5,883
    
                         5,429
    
                             6,593
    
              8.4
  
            (10.8)
  
    Net interest income
  
                       7,082
    
                         6,838
    
                             5,973
    
              3.6
  
              18.6
  
Provision for loan losses
  
                       2,100
    
                            650
    
                                450
    
          223.1
  
            366.7
  
    Net interest income after provision for loan losses
                       4,982
    
                         6,188
    
                             5,523
    
          (19.5)
  
              (9.8)
  
NONINTEREST INCOME
                            
Service charges on deposit accounts
  
                           381
    
                            341
    
                                338
    
            11.7
  
              12.7
  
Service and loan fee income
  
                           334
    
                            302
    
                                428
    
            10.6
  
            (22.0)
  
Gain on SBA loan sales
  
                           215
    
                            417
    
                                316
    
          (48.4)
  
            (32.0)
  
Bank owned life insurance
  
                             53
    
                              53
    
                                  53
    
                -
  
                  -
  
Net securities (loss) gains
  
                      (1,458)
    
                          (206)
    
                                  22
    
          100.0
  
            100.0
  
Other income
  
                           131
    
                            121
    
                                303
    
              8.3
  
            (56.8)
  
    Total noninterest income
  
                         (344)
    
                         1,028
    
                             1,460
    
        (133.5)
  
          (123.6)
  
NONINTEREST EXPENSES
                            
Compensation and benefits
  
                       2,948
    
                         2,980
    
                             2,816
    
            (1.1)
  
                4.7
  
Processing and communications
  
                           554
    
                            544
    
                                645
    
              1.8
  
            (14.1)
  
Occupancy, net
  
                           688
    
                            713
    
                                699
    
            (3.5)
  
              (1.6)
  
Furniture and equipment
  
                           423
    
                            413
    
                                419
    
              2.4
  
                1.0
  
Professional fees
  
                           285
    
                            143
    
                                116
    
            99.3
  
            145.7
  
Loan servicing costs
  
                           206
    
                            138
    
                                184
    
            49.3
  
              12.0
  
Advertising
  
                           158
    
                              79
    
                                113
    
          100.0
  
              39.8
  
Other
  
                           517
    
                            607
    
                                509
    
          (14.8)
  
                1.6
  
    Total noninterest expenses
  
                       5,779
    
                         5,617
    
                             5,501
    
              2.9
  
                5.1
  
Income before taxes
  
                      (1,141)
    
                         1,599
    
                             1,482
    
        (171.4)
  
          (177.0)
  
  Federal and state income tax provision
  
                         (139)
    
                            495
    
                                430
    
        (128.1)
  
          (132.3)
  
Net Income
$
                      (1,002)
  
$
                         1,104
  
$
                             1,052
    
        (190.8)
 %
          (195.2)
%
                             
                             
Net Income Per Common Share-Basic
$
                        (0.14)
  
$
                           0.16
  
$
                               0.15
    
        (187.5)
 %
          (196.0)
%
Net Income Per Common Share-Diluted
$
                        (0.14)
  
$
                           0.15
  
$
                               0.14
    
        (193.3)
 %
          (199.3)
%
                             
                             
AVERAGE COMMON SHARES OUTSTANDING:
                            
   Basic
  
7,107
    
7,092
    
7,215
            
   Diluted
  
7,259
    
7,275
    
7,462
            

 
Page 5 of 11
 


Unity Bancorp, Inc.
                    
Consolidated Statements of Income
                    
(Dollars in thousands, except per share data)
                
               
Sep. 08 vs.
 
  
YEAR TO DATE
  
Sep. 30, 2008
    
Sep. 30, 2007
    
Sep. 07
    
INTEREST INCOME
                    
Fed funds sold and interest on deposits
$
404
  
$
                            873
    
(53.7)
%
  
FHLB/ACBB Stock
  
234
    
                            180
    
30.0
    
Securities:
                    
  Available for sale
  
2,714
    
                         2,332
    
16.4
    
  Held to maturity
  
1,216
    
                         1,470
    
(17.3)
    
    Total securities
  
3,930
    
                         3,802
    
3.4
    
Loans:
                    
  SBA
  
6,399
    
                         6,732
    
(4.9)
    
  Commercial
  
20,279
    
                       18,966
    
6.9
    
  Residential mortgage
  
4,008
    
                         2,902
    
38.1
    
  Consumer
  
2,613
    
                         2,788
    
(6.3)
    
    Total loan interest income
  
33,299
    
                       31,388
    
6.1
    
    Total interest income
  
37,867
    
36,243
    
4.5
    
INTEREST EXPENSE
                    
Interest bearing demand deposits
  
1,120
    
                         1,480
    
(24.3)
    
Savings deposits
  
3,041
    
                         6,288
    
(51.6)
    
Time deposits
  
9,779
    
                         7,117
    
37.4
    
Borrowed funds and subordinated debentures
3,372
    
                         3,279
    
2.8
    
    Total interest expense
  
17,312
    
                       18,164
    
(4.7)
    
    Net interest income
  
20,555
    
                       18,079
    
13.7
    
Provision for loan losses
  
3,200
    
                         1,000
    
220.0
    
    Net interest income after provision for loan losses
17,355
    
                       17,079
    
1.6
    
NONINTEREST INCOME
                    
Service charges on deposit accounts
  
1,042
    
                         1,026
    
1.6
    
Service and loan fee income
  
936
    
                         1,174
    
(20.3)
    
Gain on SBA loan sales
  
1,208
    
                         1,819
    
(33.6)
    
Bank owned life insurance
  
157
    
                            148
    
6.1
    
Net securities (loss) gains
  
(1,594)
    
                              32
    
100.0
    
Other income
  
                           390
    
                            688
    
(43.3)
    
    Total noninterest income
  
2,139
    
                         4,887
    
(56.2)
    
NONINTEREST EXPENSES
                    
Compensation and benefits
  
9,148
    
                         8,494
    
7.7
    
Processing and communications
  
1,668
    
                         1,758
    
(5.1)
    
Occupancy, net
  
2,102
    
                         2,016
    
4.3
    
Furniture and equipment
  
1,224
    
                         1,213
    
0.9
    
Professional fees
  
626
    
                            414
    
51.2
    
Loan servicing costs
  
446
    
                            443
    
0.7
    
Advertising
  
299
    
                            312
    
(4.2)
    
Other
  
1,653
    
                         1,535
    
7.7
    
    Total noninterest expenses
  
17,166
    
                       16,185
    
6.1
    
Income before taxes
  
2,328
    
                         5,781
    
(59.7)
    
  Federal and state income tax provision
  
982
    
                         1,736
    
(43.4)
    
Net Income
$
1,346
  
$
                         4,045
    
(66.7)
%
  
                     
                     
Net Income Per Common Share-Basic
$
0.19
  
$
0.55
    
(65.5)
%
  
Net Income Per Common Share-Diluted
$
0.19
  
$
0.53
    
(64.2)
%
  
                     
Average common shares outstanding:
                    
   Basic
  
7,091
    
7,291
          
   Diluted
  
7,268
    
7,596
          

 
Page 6 of 11
 

Unity Bancorp, Inc.
                            
Consolidated Average Balance Sheets
                            
with Resultant Interest and Rates
                            
(Tax-equivalent basis, dollars in thousands)
                            
   
Three Months Ended
  
   
September 30, 2008
    
June 30, 2008
  
   
Balance
  
Interest
  
Rate
    
Balance
  
Interest
  
Rate
  
ASSETS
                            
Interest-earning assets:
                            
                             
  Federal funds sold and interest-bearing deposits with banks
$
            24,118
$
113
  
           1.86
%
$
      22,351
$
111
  
     2.00
%
  FHLB/ACBB Stock
  
              4,415
  
58
  
           5.23
    
        4,400
  
76
  
     6.95
  
  Securities:
                            
    Available for sale
  
            72,658
  
920
  
           5.06
    
      76,613
  
961
  
     5.02
  
    Held to maturity
  
            31,209
  
399
  
           5.11
    
      31,547
  
416
  
     5.27
  
      Total securities
  
          103,867
  
1,319
  
           5.08
    
    108,160
  
1,377
  
     5.09
  
  Loans, net of unearned discount:
                            
    SBA
  
          102,383
  
            2,043
  
           7.98
    
    101,006
  
       2,028
  
     8.03
  
    Commercial
  
          393,626
  
            6,877
  
           6.95
    
    378,389
  
       6,667
  
     7.09
  
    Residential mortgage
  
          114,058
  
            1,720
  
           6.03
    
      79,985
  
       1,209
  
     6.05
  
    Consumer
  
            59,933
  
               866
  
           5.75
    
      58,608
  
          846
  
     5.81
  
      Total loans
  
          670,000
  
          11,506
  
6.84
    
    617,988
  
     10,750
  
6.99
  
      Total interest-earning assets
  
          802,400
  
          12,996
  
6.45
    
    752,899
  
     12,314
  
6.57
  
Noninterest-earning assets:
                            
  Cash and due from banks
  
            19,166
            
      14,377
          
  Allowance for loan losses
  
             (9,092)
            
      (8,814)
          
  Other assets
  
            32,229
            
      31,262
          
      Total noninterest-earning assets
  
            42,303
            
      36,825
          
Total Assets
$
          844,703
          
$
    789,724
          
                             
LIABILITIES AND SHAREHOLDERS' EQUITY
                            
Interest-bearing liabilities:
                            
  Interest-bearing demand deposits
$
            87,903
  
               404
  
           1.83
  
$
      82,195
  
          350
  
     1.71
  
  Savings deposits
  
          161,707
  
               774
  
           1.90
    
    185,674
  
          918
  
     1.99
  
  Time deposits
  
          353,743
  
            3,553
  
           4.00
    
    282,182
  
       3,006
  
     4.28
  
      Total interest-bearing deposits
  
          603,353
  
            4,731
  
           3.12
    
    550,051
  
       4,274
  
     3.13
  
Borrowed funds and subordinated debentures
  
          110,684
  
            1,152
  
           4.14
    
    110,464
  
       1,155
  
     4.21
  
      Total interest-bearing liabilities
  
          714,037
  
            5,883
  
           3.28
    
    660,515
  
       5,429
  
     3.31
  
Noninterest-bearing liabilities:
                            
  Demand deposits
  
            81,157
            
      78,879
          
  Other liabilities
  
              2,321
            
        2,553
          
      Total noninterest-bearing liabilities
  
            83,478
            
      81,432
          
  Shareholders' equity
  
            47,188
            
      47,777
          
Total Liabilities and Shareholders' Equity
$
          844,703
          
$
    789,724
          
                             
Net interest spread
      
            7,113
  
           3.17
%
      
       6,885
  
     3.26
%
Tax-equivalent basis adjustment
      
               (31)
            
          (47)
      
Net interest income
    
$
7,082
          
$
6,838
      
                             
Net interest margin
          
           3.55
%
          
     3.66
%

 
Page 7 of 11
 

Unity Bancorp, Inc.
                            
Consolidated Average Balance Sheets
                            
with Resultant Interest and Rates
                            
(Tax-equivalent basis, dollars in thousands)
                            
   
Three Months Ended
  
   
September 30, 2008
    
September 30, 2007
  
   
Balance
  
Interest
  
Rate
    
Balance
  
Interest
  
Rate
  
ASSETS
                            
Interest-earning assets:
                            
                             
  Federal funds sold and interest-bearing deposits with banks
$
            24,118
$
               113
  
           1.86
%
$
      31,449
$
          390
  
     4.92
%
  FHLB/ACBB Stock
  
              4,415
  
58
  
           5.23
    
        3,509
  
66
  
     7.46
  
  Securities:
                            
    Available for sale
  
            72,658
  
               920
  
           5.06
    
      71,522
  
910
  
     5.09
  
    Held to maturity
  
            31,209
  
               399
  
           5.11
    
      36,047
  
471
  
     5.23
  
      Total securities
  
          103,867
  
            1,319
  
           5.08
    
    107,569
  
1,381
  
     5.14
  
  Loans, net of unearned discount:
                            
    SBA
  
          102,383
  
            2,043
  
           7.98
    
      81,693
  
       2,190
  
   10.72
  
    Commercial
  
          393,626
  
            6,877
  
           6.95
    
    350,555
  
       6,600
  
     7.47
  
    Residential mortgage
  
          114,058
  
            1,720
  
           6.03
    
      71,401
  
       1,047
  
     5.87
  
    Consumer
  
            59,933
  
               866
  
           5.75
    
      54,064
  
          933
  
     6.85
  
      Total loans
  
          670,000
  
          11,506
  
           6.84
    
    557,713
  
     10,770
  
7.68
  
      Total interest-earning assets
  
          802,400
  
          12,996
  
           6.45
    
    700,240
  
     12,607
  
7.16
  
Noninterest-earning assets:
                            
  Cash and due from banks
  
            19,166
            
      14,911
          
  Allowance for loan losses
  
             (9,092)
            
      (8,330)
          
  Other assets
  
            32,229
            
      29,503
          
      Total noninterest-earning assets
  
            42,303
            
      36,084
          
Total Assets
$
          844,703
          
$
    736,324
          
                             
LIABILITIES AND SHAREHOLDERS' EQUITY
                            
Interest-bearing liabilities:
                            
  Interest-bearing demand deposits
$
            87,903
  
               404
  
           1.83
  
$
      79,188
  
          451
  
     2.26
  
  Savings deposits
  
          161,707
  
               774
  
           1.90
    
    199,483
  
       1,995
  
     3.97
  
  Time deposits
  
          353,743
  
            3,553
  
           4.00
    
    243,358
  
       2,994
  
     4.88
  
      Total interest-bearing deposits
  
          603,353
  
            4,731
  
           3.12
    
    522,029
  
       5,440
  
     4.13
  
Borrowed funds and subordinated debentures
  
          110,684
  
            1,152
  
           4.14
    
      89,892
  
       1,153
  
     5.09
  
      Total interest-bearing liabilities
  
          714,037
  
            5,883
  
           3.28
    
    611,921
  
       6,593
  
     4.27
  
Noninterest-bearing liabilities:
                            
  Demand deposits
  
            81,157
            
      75,218
          
  Other liabilities
  
              2,321
            
        2,216
          
      Total noninterest-bearing liabilities
  
            83,478
            
      77,434
          
  Shareholders' equity
  
            47,188
            
      46,969
          
Total Liabilities and Shareholders' Equity
$
          844,703
          
$
    736,324
          
                             
Net interest spread
      
            7,113
  
           3.17
%
      
       6,014
  
     2.89
%
Tax-equivalent basis adjustment
      
               (31)
            
          (41)
      
Net interest income
    
$
7,082
          
$
5,973
      
Net interest margin
          
           3.55
%
          
     3.44
%
                             

 
Page 8 of 11
 

Unity Bancorp, Inc.
                            
Consolidated Average Balance Sheets
                            
with Resultant Interest and Rates
                            
(Tax-equivalent basis, dollars in thousands)
                            
   
Year to Date
  
   
September 30, 2008
    
September 30, 2007
  
   
Balance
  
Interest
  
Rate
    
Balance
  
Interest
  
Rate
  
ASSETS
                            
Interest-earning assets:
                            
                             
  Federal funds sold and interest-bearing deposits with banks
$
            23,135
$
404
  
2.33
%
$
      23,749
$
          873
  
     4.91
%
  FHLB/ACBB Stock
  
              4,330
  
234
  
7.22
    
        3,185
  
          180
  
     7.56
  
  Securities:
                            
    Available for sale
  
            73,337
  
2,789
  
5.07
    
      65,208
  
2,378
  
4.86
  
    Held to maturity
  
            32,297
  
1,270
  
5.24
    
      38,589
  
1,525
  
5.27
  
      Total securities
  
          105,634
  
4,059
  
5.12
    
    103,797
  
3,903
  
5.01
  
  Loans, net of unearned discount:
                            
    SBA
  
          100,674
  
            6,399
  
8.47
    
      82,185
  
       6,732
  
10.92
  
    Commercial
  
          381,497
  
          20,279
  
7.10
    
    334,875
  
     18,966
  
7.57
  
    Residential mortgage
  
            89,551
  
            4,008
  
5.97
    
      66,551
  
       2,902
  
5.81
  
    Consumer
  
            58,679
  
            2,613
  
5.95
    
      54,239
  
       2,788
  
6.87
  
      Total loans
  
          630,401
  
          33,299
  
7.05
    
    537,850
  
     31,388
  
7.79
  
      Total interest-earning assets
  
          763,500
  
          37,996
  
6.64
    
    668,581
  
     36,344
  
7.26
  
Noninterest-earning assets:
                            
  Cash and due from banks
  
            16,189
            
      13,113
          
  Allowance for loan losses
  
             (8,866)
            
      (8,078)
          
  Other assets
  
            31,268
            
      29,363
          
      Total noninterest-earning assets
  
            38,591
            
      34,398
          
Total Assets
$
          802,091
          
$
    702,979
          
                             
LIABILITIES AND SHAREHOLDERS' EQUITY
                            
Interest-bearing liabilities:
                            
  Interest-bearing demand deposits
$
            83,050
  
            1,120
  
1.80
  
$
      87,095
  
       1,480
  
2.27
  
  Savings deposits
  
          179,254
  
            3,041
  
2.27
    
    207,238
  
       6,288
  
4.06
  
  Time deposits
  
          304,298
  
            9,779
  
4.29
    
    199,798
  
       7,117
  
4.76
  
      Total interest-bearing deposits
  
          566,602
  
          13,940
  
3.29
    
    494,131
  
     14,885
  
4.03
  
Borrowed funds and subordinated debentures
  
          107,345
  
            3,372
  
4.20
    
      84,334
  
       3,279
  
5.20
  
      Total interest-bearing liabilities
  
          673,947
  
          17,312
  
3.43
    
    578,465
  
     18,164
  
4.20
  
Noninterest-bearing liabilities:
                            
  Demand deposits
  
            78,259
            
      75,303
          
  Other liabilities
  
              2,354
            
        2,466
          
      Total noninterest-bearing liabilities
  
            80,613
            
      77,769
          
  Shareholders' equity
  
            47,531
            
      46,745
          
Total Liabilities and Shareholders' Equity
$
          802,091
          
$
    702,979
          
                             
Net interest spread
      
          20,684
  
           3.21
%
      
     18,180
  
     3.06
%
Tax-equivalent basis adjustment
      
             (129)
            
        (101)
      
Net interest income
    
$
20,555
          
$
18,079
      
Net interest margin
          
           3.61
%
          
     3.63
%

 
Page 9 of 11
 

 
Unity Bancorp, Inc.
                      
 
Allowance for Loan Losses and Loan Quality Schedules
                  
 
(Dollars in thousands)
                      
                         
     
9/30/2008
  
6/30/2008
  
3/31/2008
  
12/31/2007
  
9/30/2007
  
 
ALLOWANCE FOR LOAN LOSSES:
                      
 
Balance, beginning of quarter
$
                     8,945
$
                      8,650
$
                      8,383
 $
8,183
 $
                      7,997
  
 
    Provision charged to expense
  
                     2,100
  
                         650
  
                         450
  
550
  
                         450
  
     
                   11,045
  
                      9,300
  
                      8,833
  
8,733
  
                      8,447
  
 
Less:  Charge offs
                      
 
    SBA
  
                        423
  
                         249
  
                         264
  
260
  
                         270
  
 
    Commercial
  
                        700
  
                           60
  
                              -
  
126
  
                           24
  
 
    Residential mortgage
  
                              -
  
                              -
  
                           25
  
0
  
                              -
  
 
    Consumer
  
                           78
  
                           56
  
                             6
  
20
  
                           28
  
 
      Total Charge Offs
  
                     1,201
  
                         365
  
                         295
  
406
  
                         322
  
 
Add:   Recoveries
                      
 
    SBA
  
                           40
  
                             5
  
                           60
  
53
  
                           41
  
 
    Commercial
  
                           29
  
                             4
  
                             2
  
3
  
                             7
  
 
    Residential mortgage
  
                              -
  
                              -
  
                              -
  
0
  
                              -
  
 
    Consumer
  
                              -
  
                             1
  
                           50
  
0
  
                           10
  
 
      Total Recoveries
  
                           69
  
                           10
  
                         112
  
56
  
                           58
  
 
  Net Charge Offs
  
                     1,132
  
                         355
  
                         183
  
350
  
                         264
  
 
Balance, end of quarter
$
                     9,913
$
                      8,945
$
                      8,650
 $
8,383
 $
                      8,183
  
         
                              -
              
                         
 
LOAN QUALITY INFORMATION:
                      
 
Nonperforming loans
$
10,637
$
6,621
$
4,142
$
5,461
$
4,185
  
 
Other real estate owned, net
  
                        318
  
                         266
  
                         266
  
106
  
                         134
  
 
Nonperforming assets
$
10,955
$
6,887
$
4,408
$
5,567
$
4,319
  
                         
 
Loans 90 days past due and still accruing
$
                     3,532
 $
                           76
 $
                         546
 $
155
 $
                         340
  
                         
 
Allowance for loan losses to:
                      
 
  Total loans at period end
  
                       1.45
 %
                        1.39
 %
                        1.43
 %
1.42
 %
                        1.44
%
 
  Nonperforming loans
  
                     93.19
  
                    135.10
  
                    208.84
  
153.51
  
                    195.53
  
 
  Nonperforming assets
  
                     90.49
  
                    129.88
  
                    196.23
  
150.58
  
                    189.47
  
 
Net charge offs to average loans (QTD)
  
                       0.67
  
                        0.23
  
                        0.12
  
0.24
  
                        0.19
  
 
Net charge offs to average loans (YTD)
  
                       0.35
  
                        0.18
  
                        0.12
  
0.14
  
                        0.11
  
 
Nonperforming loans to total loans
  
                       1.55
  
                        1.03
  
                        0.69
  
0.93
  
                        0.74
  
 
Nonperforming assets to total loans and OREO
                       1.60
  
                        1.07
  
                        0.73
  
0.94
  
                        0.76
  

 
Page 10 of 11
 
 


Unity Bancorp, Inc.
                      
Quarterly Financial Data
                      
   
09/30/08
  
06/30/08
  
03/31/08
  
12/31/07
  
09/30/07
  
SUMMARY OF INCOME (in thousands) :
                  
Interest income
$
                    12,965
$
                    12,267
$
                    12,635
$
12,657
$
                    12,566
  
Interest expense
  
                      5,883
  
                      5,429
  
                      6,000
  
6,310
  
                      6,593
  
  Net interest income
  
                      7,082
  
                      6,838
  
                      6,635
  
6,347
  
                      5,973
  
Provision for loan losses
  
                      2,100
  
                         650
  
                         450
  
550
  
                         450
  
  Net interest income after provision
  
                      4,982
  
                      6,188
  
                      6,185
  
5,797
  
                      5,523
  
Noninterest income
  
                        (344)
  
                      1,028
  
                      1,455
  
1,053
  
                      1,460
  
Noninterest expense
  
                      5,779
  
                      5,617
  
                      5,770
  
5,928
  
                      5,501
  
  Income before income taxes
  
                     (1,141)
  
                      1,599
  
                      1,870
  
922
  
                      1,482
  
Federal and state income tax provision
  
                        (139)
  
                         495
  
                         626
  
242
  
                         430
  
  Net Income
  
                     (1,002)
  
                      1,104
  
                      1,244
  
680
  
                      1,052
  
Net Income per Common Share:
                      
      Basic
$
                       (0.14)
$
                        0.16
 $
                        0.18
 $
0.10
 $
                        0.15
  
      Diluted
  
                       (0.14)
  
                        0.15
  
                        0.17
  
0.09
  
                        0.14
  
COMMON SHARE DATA:
                    
Cash dividends declared
$
                            -
 $
                        0.05
 $
                        0.05
 $
0.05
 $
                        0.05
  
Book value at quarter end
  
                        6.55
  
                        6.76
  
                        6.76
  
6.70
  
                        6.61
  
Market value at quarter end
  
                        4.00
  
                        6.95
  
                        7.48
  
8.10
  
                      10.55
  
Average common shares outstanding: (000's)
                      
   Basic
  
                      7,107
  
                      7,092
  
                      7,075
  
7,107
  
                      7,215
  
   Diluted
  
                      7,259
  
                      7,275
  
                      7,271
  
7,328
  
                      7,462
  
Common shares outstanding at period end (000's)
  
                      7,110
  
                      7,095
  
                      7,084
  
7,063
  
                      7,154
  
OPERATING RATIOS:
              
Return on average assets
  
                       (0.47)
 %
                        0.56
 %
                        0.65
 %
0.36
 %
                        0.57
%
Return on average common equity
  
                       (8.45)
  
                        9.29
  
                      10.50
  
5.78
  
                        8.89
  
Efficiency ratio
  
                      70.51
  
                      69.59
  
                      71.95
  
74.07
  
                      74.23
  
BALANCE SHEET DATA (in thousands):
              
Assets
$
                  864,083
 $
                  832,315
 $
                  807,874
 $
752,196
 $
                  746,821
  
Deposits
  
                  684,680
  
                  671,881
  
                  642,282
  
601,268
  
                  612,215
  
Loans
  
                  685,023
  
                  643,039
  
                  602,943
  
590,132
  
                  567,597
  
Shareholders' equity
  
                    46,539
  
                    47,951
  
                    47,896
  
47,260
  
                    47,261
  
Allowance for loan losses
  
                      9,913
  
                      8,945
  
                      8,650
  
8,383
  
                      8,183
  
TAX-EQUIVALENT YIELDS AND RATES:
              
Interest-earning assets
  
                        6.45
 %
                        6.57
 %
                        6.93
 %
7.15
 %
                        7.16
%
Interest-bearing liabilities
  
                        3.28
  
                        3.31
  
                        3.73
  
4.05
  
                        4.27
  
Net interest spread
  
                        3.17
  
                        3.26
  
                        3.20
  
3.10
  
                        2.89
  
Net interest margin
  
                        3.55
  
                        3.66
  
                        3.64
  
3.62
  
                        3.44
  
CREDIT QUALITY:
                      
Nonperforming assets (in thousands)
$
                    10,955
 $
                      6,887
 $
                      4,408
 $
5,567
 $
                      4,319
  
Allowance for loan losses to period-end loans
  
                        1.45
 %
                        1.39
 %
                        1.43
 %
1.42
 %
                        1.44
%
Net charge offs to average loans
  
                        0.67
  
                        0.23
  
                        0.12
  
0.24
  
                        0.19
  
Nonperforming assets to loans and OREO
  
                        1.60
  
                        1.07
  
                        0.73
  
0.94
  
                        0.76
  
CAPITAL AND OTHER:
              
Total equity to assets
  
                        5.39
 %
                        5.76
 %
                        5.93
 %
6.28
 %
                        6.33
%
Tier I capital to average assets (leverage)
  
                        7.42
  
                        8.01
  
                        8.06
  
8.25
  
                        8.37
  
Tier I capital to risk-adjusted assets
  
                        9.07
  
                        9.42
  
                        9.66
  
9.81
  
                      10.51
  
Total capital to risk-adjusted assets
  
                      10.33
  
                      10.67
  
                      10.91
  
11.06
  
                      11.76
  
Number of banking offices
  
                           16
  
                           16
  
                           17
  
17
  
                           16
  
Number of ATMs
  
                           19
  
                           19
  
                           20
  
20
  
                           19
  
Number of employees
  
                         176
  
                         191
  
                         188
  
201
  
                         197
  
                       

 
Page 11 of 11