EX-99.1 2 exh99-1.htm FIRST 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:

April 23, 2009

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


Unity Bancorp Reports First Quarter Earnings

Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $731 thousand or $0.05 per diluted share, for the quarter ended March 31, 2009, compared to net income of $584 thousand or $0.07 per diluted share, for the quarter ended December 31, 2008, and $1.2 million, or $0.17 per diluted share, for the quarter ended March 31, 2008.  Earnings per share for the first quarter of 2009 have been adjusted to reflect the full impact of the dividend on the preferred stock issued to the United States Treasury on December 5, 2008.  Return on average assets and average common equity for the quarter ended March 31, 2009, was 0.33% and 2.90%, respectively, as compared to 0.26% and 3.56%, respectively, for the quarter ended December 31, 2008 and 0.65% and 10.50%, respectively, for the quarter ended March 31, 2008.

James A. Hughes, Unity Bancorp’s President and CEO, said, “The times are indeed challenging; however they are also a time of great opportunity.  As the larger banks contract inward, it is time for community banks to increase market share by selling the message that when it comes to banking, smaller is better.  We approach these opportunities as a well capitalized institution, ready to lend in our communities.” Mr. Hughes added, “I am pleased that our operating results increased quarter over quarter and that Unity continues to remain a profitable institution.  However, operating results continue to be affected by the downturn in the economy.  We have taken proactive steps to decrease our expense base.  In the fourth quarter of 2008, Unity decided to exit the SBA program as a line of business and closed all SBA loan production offices outside our primary trade area.  We now offer SBA loans only as an additional credit product to customers in our markets. The decision to reduce our SBA activity was made due to deterioration in the loan portfolio and the reduced profitability on the sale of this product into the secondary markets.  We continue to experience challenges with our existing small business customers, many of which continue to experience stress due to the economy.  As a result, we will continue to have elevated provisions for loan losses.  We continue to be aggressive in working with and managing delinquent borrowers and are making every attempt to bring credit quality to more normalized levels.”
 
 
Net Interest Income
 
Since March 31, 2008, the Federal Open Market Committee has lowered interest rates 200 basis points in an attempt to stimulate economic activity. These decreases have resulted in lower yields on earning assets in addition to lower funding costs.  During the remainder of 2009, we expect net interest margin to expand as higher cost certificates of deposit re-price in the current lower rate environment. For the quarter ended March 31, 2009, net interest income was $6.8 million, an increase of 2.1% from March 31, 2008.  Factors affecting first quarter net interest income include:
 
·  
The yield on interest-earning assets decreased 106 basis points to 5.87% from 6.93% for the same period last year.
 
·  
The cost of interest-bearing liabilities decreased 63 basis points from 3.73% to 3.10% in the first quarter of 2009.
 
·  
Average earning assets, consisting primarily of loans, rose 18.0%.
 
·  
Net interest margin was 3.14%, a 50 basis point decline from 3.64% in the first quarter of 2008.
 
 
Noninterest Income
 
Historically, Unity has generated noninterest income from gains on the sale of its SBA loans.  In the fourth quarter of 2008, Unity decided to exit the SBA program as a line of business and closed all SBA loan production offices outside its primary trade area.  Consequently, this decision will result in reduced noninterest income.
 
For the quarter ended March 31, 2009, noninterest income was $1.3 million, a decrease of 7.4% from March 31, 2008. Non-interest income was affected by the following factors:
 
·  
Service charges on deposit accounts remained relatively flat compared to the prior year’s period.
 
·  
Service and loan fee income decreased 16% to $252 thousand in 2009, due to lower levels of prepayment fees.
 
·  
Net security gains amounted to $515 thousand, compared to $70 thousand from the prior period.  The gains were the result of the sale of approximately $20 million dollars of fixed income securities.
 
·  
Gains on sales of SBA loans amounted to $29 thousand, compared to $576 thousand a year ago.
 
·  
Gains on the sales of residential mortgage loans amounted to $64 thousand, compared to $21 thousand from the prior year’s period.
 
 
 
Noninterest Expense
 
As a result of current market conditions, there were significant head-count reductions enacted in the fourth quarter of 2008, primarily related to the closing of SBA loan production offices outside of the Company’s primary trade area.  In addition, the Company undertook other expense saving measures which will benefit 2009.  However, these expense reductions will be partially offset by increases in FDIC insurance premiums.  In addition, the banking industry and the Company will be assessed a substantial one-time FDIC insurance premium in either the second or third quarter of 2009, depending on final legislation.
 
For the quarter ended March 31, 2009, noninterest expenses were $5.6 million, a decrease of 3.7% from March 31, 2008. The following factors affected our noninterest expense:
 
·  
Compensation and benefits expense amounted to $2.6 million, a decrease of $596 thousand, or 18.5% due to reduced head count.
 
·  
Processing and communications and occupancy expense declined by 5.1% and 2.0%, respectively, due to reduced communications costs from renegotiated contracts and a decline in capital expenditures.
 
·  
FF&E expense increased $107 thousand, primarily due to depreciation expense on new equipment and software and increased software maintenance charges.
 
·  
Professional fees increased $48 thousand, due to increased consulting, legal and audit costs.
 
·  
Loan collection costs increased $96 thousand, due to increased collection costs on delinquent loans.
 
·  
FDIC insurance premiums increased $238 thousand, due primarily to the increase in FDIC insurance rates.
 
 
Financial Condition
 
At March 31, 2009, total assets were $886.7 million, a 9.8% increase from a year ago.
 
·  
Total loans increased $67.0 million, or 11.1%, from $602.9 million at March 31, 2008. The increase was across all product lines. SBA 7(a), SBA 504, commercial, residential and consumer loans increased 7.5%, 7.3%, 0.6%, 62.9% and 8.1%, respectively.  Growth in the residential mortgage portfolio was due to a decision to originate and retain Jumbo mortgages.
 
·  
Total securities increased $43.7 million as Unity took advantage of favorable credit spreads to invest excess liquidity.
 
·  
Total deposits increased 9.5% or $61.0 million to $703.3 million at March 31, 2009.  This increase was due to an $82.0 million increase in time deposits and a $9.1 million increase in interest-bearing checking accounts. These increases were partially offset by a $5.1 million decrease in demand deposits and a $25.0 million decline in savings deposits.  During 2009, the Company expects run off in time deposits to migrate to its lower cost accounts.
 
·  
Total borrowed funds increased $2.0 million to support the growth in the investment portfolio.
 
·  
Shareholders’ equity was $67.5 million at March 31, 2009, an increase of $19.6 million, primarily due to the issuance of $20.6 million of preferred stock under the U.S. Department of Treasury’s Capital Purchase Program.
 
·  
Book value per common share was $6.93.
 
·  
At March 31, 2009 the leverage, Tier I and total risk based capital ratios were 9.28%, 12.32% and 13.57%, respectively.
 
 
Credit Quality
 
·  
Nonperforming assets totaled $20.7 million at March 31, 2009, or 3.1% of total loans and “OREO” compared to $4.4 million, or 0.7% of total loans and “OREO” a year ago. The increase in nonperforming assets was primarily related to the credit deterioration in the SBA 7(a) and SBA 504 portfolios, most of which is secured by real estate.
 
·  
The allowance for loan losses totaled $10.3 million at March 31, 2009, or 1.54% of total loans. The provision for loan losses for the first three months of 2009 amounted to $1.5 million, an increase of $1.1 million from the same period a year ago.
 
·  
Net charge-offs were $1.5 million for the first three months of 2009, compared to $183 thousand for the same period a year ago.  The increase in net charge-offs for the quarter was primarily related to credit deterioration in SBA 7(a) and 504 loans.
 

Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $900 million in assets and $700 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.


 
 
 

Unity Bancorp, Inc.
                            
Consolidated Financial Highlights
                            
(Dollars in thousands, except per share data)
                        
                             
                     
March 09  vs.
  
BALANCE SHEET DATA:
  
March 31, 2009
    
December 31, 2008
    
March 31, 2008
    
December 08
  
March 08
  
Assets
   $ 886,677     $ 898,310     $ 807,874       (1.3 ) % 9.8 %
Deposits
     703,266       707,117       642,282       (0.5 ) 9.5  
Loans
     669,902       685,946       602,943       (2.3 ) 11.1  
Securities
     158,022       149,509       114,348       5.7   38.2  
Shareholders' equity
     67,525       67,803       47,896       (0.4 ) 41.0  
Allowance for loan losses
     10,307       10,326       8,650       (0.2 ) 19.2  
                                     
FINANCIAL DATA - QUARTER TO DATE:
                                    
Net income before taxes
   $ 1,067     $ 218     $ 1,870       389.4 % (42.9 ) %
Federal and state income tax provision (benefit)
     336       (366 )     626       (191.8 ) (46.3 )
Net income
     731       584       1,244       25.2   (41.2 )
                                     
Per share-basic
     0.05       0.07       0.18       (28.6 ) (72.2 )
Per share-diluted
     0.05       0.07       0.17       (28.6 ) (70.6 )
                                     
Return on average assets
     0.33
%
     0.26
%
     0.65 %     26.9   (49.2 )
Return on average common equity
     2.90       3.56       10.50       (18.4 ) (72.3 )
Efficiency ratio
     73.02       75.81       71.95       (3.7 ) 1.5  
                                     
                                     
SHARE INFORMATION:
                                    
Closing price per share
   $ 3.19     $ 3.90     $ 7.48       (18.2 ) % (57.3 ) %
Cash dividends declared
     0.00       0.00       0.05       -   -  
Book value per common share
     6.93       6.99       6.76       (0.9 ) 2.5  
Average diluted shares outstanding (QTD)
     7,148       7,190       7,271       (0.6 ) (1.7 )
                                     
CAPITAL RATIOS:
                                    
Total equity to total assets
     7.62
%
     7.55
%
     6.28 %     0.9 % 21.3 %
Tier I capital to average assets (leverage)
     9.28       9.54       8.06       (2.7 ) 15.1  
Tier I capital to risk-adjusted assets
     12.32       12.02       9.66       2.5   27.5  
Total risk-based capital
     13.57       13.27       10.91       2.3   24.4  
                                     
CREDIT QUALITY AND RATIOS:
                                    
Nonperforming assets
   $ 20,650     $ 16,830     $ 4,408       22.7 % 368.5 %
Net charge offs to average loans (QTD)
     0.91
%
     0.52
%
     0.12 %     75.0   658.3  
Allowance for loan losses to total loans
     1.54       1.51       1.43       2.0   7.7  
Nonperforming assets to total loans and OREO
     3.08       2.45       0.73       25.7   321.9  

 
 
 


Unity Bancorp, Inc.
                              
Consolidated Balance Sheets
                              
(In thousands)
                    
March 09 vs.
  
   
March 31, 2009
    
December 31, 2008
    
March 31, 2008
    
December 08
    
March 08
  
ASSETS
                              
Cash and due from banks
   $ 17,896     $ 18,902     $ 19,698       (5.3 )%     (9.1 )%
Federal funds sold and interest-bearing deposits
     12,329       15,529       44,042       (20.6 )     (72.0 )
Securities:
                                        
  Available for sale
     122,873       117,348       79,726       4.7       54.1  
  Held to maturity
     35,149       32,161       34,622       9.3       1.5  
      Total securities
     158,022       149,509       114,348       5.7       38.2  
Loans:
                                        
  SBA - held for sale
     22,559       22,181       23,632       1.7       (4.5 )
  SBA - held to maturity
     80,008       83,127       71,798       (3.8 )     11.4  
  SBA 504 Loans
     75,556       76,802       70,446       (1.6 )     7.3  
  Commercial
     303,991       308,165       302,249       (1.4 )     0.6  
  Residential mortgage
     125,007       133,110       76,734       (6.1 )     62.9  
  Consumer
     62,781       62,561       58,084       0.4       8.1  
      Total loans
     669,902       685,946       602,943       (2.3 )     11.1  
  Less: Allowance for loan losses
     10,307       10,326       8,650       (0.2 )     19.2  
      Net loans
     659,595       675,620       594,293       (2.4 )     11.0  
Goodwill and other intangibles
     1,570       1,574       1,585       (0.3 )     (0.9 )
Premises and equipment, net
     12,329       12,580       12,067       (2.0 )     2.2  
Accrued interest receivable
     4,328       4,712       4,131       (8.1 )     4.8  
Loan servicing asset
     1,320       1,503       1,990       (12.2 )     (33.7 )
Bank Owned Life Insurance
     5,835       5,780       5,622       1.0       3.8  
FHLB/ACBB Stock
     4,947       4,857       4,170       1.9       18.6  
Other assets
     8,506       7,744       5,928       9.8       43.5  
Total Assets
   $ 886,677     $ 898,310     $ 807,874       (1.3 )%     9.8 %
                                         
LIABILITIES AND SHAREHOLDERS' EQUITY
                                  
Deposits:
                                        
  Noninterest-bearing demand deposits
   $ 75,857     $ 74,090     $ 80,960       2.4 %     (6.3 )%
  Interest-bearing deposits:
                                        
    Interest bearing checking
     85,390       87,046       76,256       (1.9 )     12.0  
    Savings
     163,606       134,875       188,628       21.3       (13.3 )
    Time, under $100,000
     258,890       270,275       211,739       (4.2 )     22.3  
    Time, $100,000 and over
     119,523       140,831       84,699       (15.1 )     41.1  
       Total deposits
     703,266       707,117       642,282       (0.5 )     9.5  
Borrowed funds and subordinated debentures
     112,465       120,465       110,465       (6.6 )     1.8  
Accrued interest payable
     841       805       794       4.5       5.9  
Accrued expenses and other liabilities
     2,580       2,120       6,437       21.7       (59.9 )
  Total liabilities
     819,152       830,507       759,978       (1.4 )     7.8  
Commitments and Contingencies
     -       -       -                  
Shareholders' equity:
                                        
  Common stock, no par value, 12,500 shares authorized
     55,179       55,179       49,600       -       11.2  
  Preferred stock, no par value, 500 shares authorized
     18,194       18,064       -       0.7       -  
  Retained earnings
     1,437       1,085       3,379       32.4       (57.5 )
  Treasury stock at cost
     (4,169 )     (4,169 )     (4,169 )     -       -  
  Accumulated other comprehensive loss, net of tax
     (3,116 )     (2,356 )     (914 )     32.3       240.9  
      Total shareholders' equity
     67,525       67,803       47,896       (0.4 )     41.0  
Total Liabilities and Shareholders' Equity
   $ 886,677     $ 898,310     $ 807,874       (1.3 )%     9.8 %
                                         
COMMON SHARES AT PERIOD END:
                                        
  Issued
     7,544       7,544       7,509                  
  Outstanding
     7,119       7,119       7,084                  
  Treasury
     425       425       425                  
 N/M= Not meaningful
                                        

 
 
 

Unity Bancorp, Inc.
                              
Consolidated Statements of Income
                              
(In thousands, except per share data)
                              
                     
March 09 vs.
  
FOR THE THREE MONTHS ENDED:
  
March 31, 2009
    
December 31, 2008
    
March 31, 2008
    
December 08
    
March 08
  
INTEREST INCOME
                              
Fed funds sold and interest-bearing deposits
   $ 13     $ 67     $ 180       (80.6 )%     (92.8 )%
FHLB/ACBB Stock
     -       6       100       -       -  
Securities:
                                        
  Available for sale
     1,679       959       875       75.1       91.9  
  Held to maturity
     386       366       437       5.5       (11.7 )
    Total securities
     2,065       1,325       1,312       55.8       57.4  
Loans:
                                        
  SBA
     1,607       1,971       2,328       (18.5 )     (31.0 )
  SBA 504
     1,231       1,438       1,450       (14.4 )     (15.1 )
  Commercial
     5,016       5,279       5,285       (5.0 )     (5.1 )
  Residential mortgage
     1,864       1,963       1,079       (5.0 )     72.8  
  Consumer
     794       849       901       (6.5 )     (11.9 )
    Total loans
     10,512       11,500       11,043       (8.6 )     (4.8 )
    Total interest income
     12,590       12,898       12,635       (2.4 )     (0.4 )
INTEREST EXPENSE
                                        
Interest-bearing demand deposits
     270       348       366       (22.4 )     (26.2 )
Savings deposits
     644       603       1,349       6.8       (52.3 )
Time deposits
     3,723       4,057       3,220       (8.2 )     15.6  
Borrowed funds and subordinated debentures
     1,179       1,154       1,065       2.2       10.7  
    Total interest expense
     5,816       6,162       6,000       (5.6 )     (3.1 )
    Net interest income
     6,774       6,736       6,635       0.6       2.1  
Provision for loan losses
     1,500       1,300       450       15.4       233.3  
    Net interest income after provision for loan losses
     5,274       5,436       6,185       (3.0 )     (14.7 )
NONINTEREST INCOME
                                        
Service charges on deposit accounts
     330       351       320       (6.0 )     3.1  
Service and loan fee income
     252       335       300       (24.8 )     (16.0 )
Gain on Mortgage loan sales
     64       19       21       236.8       204.8  
Gain on SBA loan sales
     29       9       576       222.2       (95.0 )
Bank owned life insurance
     55       53       51       3.8       7.8  
Net securities (loss) gains
     515       (324 )     70       100.0       100.0  
Other income
     103       112       117       (8.0 )     (12.0 )
    Total noninterest income
     1,348       555       1,455       142.9       (7.4 )
NONINTEREST EXPENSE
                                        
Compensation and benefits
     2,624       2,837       3,220       (7.5 )     (18.5 )
Processing and communications
     541       583       570       (7.2 )     (5.1 )
Occupancy, net
     687       671       701       2.4       (2.0 )
Furniture and equipment
     495       451       388       9.8       27.6  
Professional services
     246       272       198       (9.6 )     24.2  
Loan collection costs
     198       216       102       (8.3 )     94.1  
Advertising
     75       152       62       (50.7 )     21.0  
FDIC Insurance
     301       298       63       1.0       377.8  
Other
     388       293       466       32.4       (16.7 )
    Total noninterest expense
     5,555       5,773       5,770       (3.8 )     (3.7 )
Income before taxes
     1,067       218       1,870       389.4       (42.9 )
  Federal and state income tax provision (benefit)
     336       (366 )     626       (191.8 )     (46.3 )
Net Income
   $ 731     $ 584     $ 1,244       25.2 %     (41.2 )%
  Preferred dividends & discount accretion
     379       110       -       245.6       -  
Income available to common shareholders
   $ 352     $ 474     $ 1,244       (25.8 )%     (71.7 )%
                                         
                                         
Net Income Per Common Share-Basic
   $ 0.05     $ 0.07     $ 0.18       (28.6 )%     (72.2 )%
Net Income Per Common Share-Diluted
   $ 0.05     $ 0.07     $ 0.17       (28.6 )%     (70.6 )%
                                         
                                         
Weighted average common shares outstanding:
                                        
   Basic
     7,119       7,113       7,076                  
   Diluted
     7,148       7,190       7,271                  

 
 
 

Unity Bancorp, Inc.
                                    
Consolidated Average Balance Sheets
                                    
with Resultant Interest and Rates
                                    
(Tax-equivalent basis, dollars in thousands)
                                    
   
Three Months Ended
  
   
March 31, 2009      
    
December 31, 2008      
  
   
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
ASSETS
                                    
Interest-earning assets:
                                    
                                     
  Federal funds sold and interest-bearing deposits with banks
   $ 10,324     $ 13       0.51 %   $ 37,262     $ 67       0.72 %
  FHLB/ACBB Stock
     5,936       -       -       4,422       6       0.54  
  Securities:
                                                
    Available for sale
     138,302       1,692       4.89       76,941       972       5.05  
    Held to maturity
     33,984       404       4.76       29,962       384       5.13  
      Total securities
     172,286       2,096       4.87       106,903       1,356       5.07  
  Loans, net of unearned discount:
                                                
    SBA
     105,044       1,607       6.12       103,682       1,971       7.60  
    SBA 504
     76,882       1,231       6.49       78,466       1,438       7.29  
    Commercial
     305,148       5,016       6.67       310,474       5,279       6.76  
    Residential mortgage
     129,045       1,864       5.78       131,557       1,963       5.97  
    Consumer
     62,148       794       5.18       61,114       849       5.53  
      Total loans
     678,267       10,512       6.26       685,293       11,500       6.69  
      Total interest-earning assets
     866,813       12,621       5.87       833,880       12,929       6.18  
Noninterest-earning assets:
                                                
  Cash and due from banks
     19,627                       21,520                  
  Allowance for loan losses
     (10,939 )                     (10,111 )                
  Other assets
     33,179                       32,855                  
      Total noninterest-earning assets
     41,867                       44,264                  
Total Assets
   $ 908,680                     $ 878,144                  
                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                                                
Interest-bearing liabilities:
                                                
  Interest-bearing demand deposits
   $ 85,064       270       1.29     $ 88,166       348       1.57  
  Savings deposits
     147,260       644       1.77       137,602       603       1.74  
  Time deposits
     387,554       3,723       3.90       407,239       4,057       3.96  
      Total interest-bearing deposits
     619,878       4,637       3.03       633,007       5,008       3.15  
Borrowed funds and subordinated debentures
     142,109       1,179       3.36       110,802       1,154       4.14  
      Total interest-bearing liabilities
     761,987       5,816       3.10       743,809       6,162       3.30  
Noninterest-bearing liabilities:
                                                
  Demand deposits
     75,546                       78,351                  
  Other liabilities
     3,879                       3,058                  
      Total noninterest-bearing liabilities
     79,425                       81,409                  
  Shareholders' equity
     67,268                       52,926                  
Total Liabilities and Shareholders' Equity
   $ 908,680                     $ 878,144                  
                                                 
Net interest spread
             6,805       2.77 %             6,767       2.88 %
Tax-equivalent basis adjustment
             (31 )                     (31 )        
Net interest income
           $ 6,774                     $ 6,736          
                                                 
Net interest margin
                     3.14 %                     3.25 %

 
 
 

Unity Bancorp, Inc.
                                    
Consolidated Average Balance Sheets
                                    
with Resultant Interest and Rates
                                    
(Tax-equivalent basis, dollars in thousands)
                                    
   
Three Months Ended
  
   
March 31, 2009      
    
March 31, 2008      
  
   
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
ASSETS
                                    
Interest-earning assets:
                                    
                                     
  Federal funds sold and interest-bearing deposits with banks
   $ 10,324     $ 13       0.51 %   $ 22,925     $ 180       3.16 %
  Federal Home Loan Bank stock
     5,936       0       -       4,174       100       9.64  
  Securities:
                                                
    Available for sale
     138,302       1,692       4.89       70,757       908       5.13  
    Held to maturity
     33,984       404       4.76       34,147       455       5.33  
      Total securities
     172,286       2,096       4.87       104,904       1,363       5.20  
  Loans, net of unearned discount:
                                                
    SBA
     105,044       1,607       6.12       98,614       2,328       9.44  
    SBA 504
     76,882       1,231       6.49       74,345       1,450       7.84  
    Commercial
     305,148       5,016       6.67       297,998       5,285       7.13  
    Residential mortgage
     129,045       1,864       5.78       74,341       1,079       5.81  
    Consumer
     62,148       794       5.18       57,482       901       6.30  
      Total loans
     678,267       10,512       6.26       602,780       11,043       7.36  
      Total interest-earning assets
     866,813       12,621       5.87       734,783       12,686       6.93  
Noninterest-earning assets:
                                                
  Cash and due from banks
     19,627                       14,991                  
  Allowance for loan losses
     (10,939 )                     (8,690 )                
  Other assets
     33,179                       30,304                  
      Total noninterest-earning assets
     41,867                       36,605                  
Total Assets
   $ 908,680                     $ 771,388                  
                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                                                
Interest-bearing liabilities:
                                                
  Interest-bearing demand deposits
   $ 85,064       270       1.29     $ 78,999       366       1.86  
  Savings deposits
     147,260       644       1.77       190,574       1,349       2.85  
  Time deposits
     387,554       3,723       3.90       276,426       3,220       4.69  
      Total interest-bearing deposits
     619,878       4,637       3.03       545,999       4,935       3.64  
Borrowed funds and subordinated debentures
     142,109       1,179       3.36       100,850       1,065       4.25  
      Total interest-bearing liabilities
     761,987       5,816       3.10       646,849       6,000       3.73  
Noninterest-bearing liabilities:
                                                
  Demand deposits
     75,546                       74,709                  
  Other liabilities
     3,879                       2,191                  
      Total noninterest-bearing liabilities
     79,425                       76,900                  
  Shareholders' equity
     67,268                       47,639                  
Total Liabilities and Shareholders' Equity
   $ 908,680                     $ 771,388                  
                                                 
Net interest spread
             6,805       2.77 %             6,686       3.20 % 
Tax-equivalent basis adjustment             (31 )                      (51 )         
Net interest income
           $ 6,774                     $ 6,635          
                                                 
Net interest margin
                     3.14 %                     3.64 %
                                                 
                                                 

 
 
 


Unity Bancorp, Inc.
                              
Allowance for Loan Losses and Loan Quality Schedules
                    
(Dollars in thousands)
                              
                               
   
3/31/2009
    
12/31/2008
    
9/30/2008
    
6/30/2008
    
3/31/2008
  
ALLOWANCE FOR LOAN LOSSES:
                              
Balance, beginning of quarter
   $ 10,326     $ 9,913     $ 8,945     $ 8,650     $ 8,183  
Provision charged to expense
     1,500       1,300       2,100       650       450  
      11,826       11,213       11,045       9,300       8,633  
Less: Charge-offs
                                        
    SBA
     1,106       310       423       249       264  
    SBA 504
     200       500       500       -       -  
    Commercial
     249       148       200       60       -  
    Residential mortgage
     58       -       -       0       25  
    Consumer
     -       5       78       56       6  
      Total Charge-offs
     1,613       963       1,201       365       295  
Add: Recoveries
                                        
    SBA
     33       72       40       5       60  
    SBA 504
     5       -       -       0       -  
    Commercial
     53       4       29       4       2  
    Residential mortgage
     -       -       -       0       -  
    Consumer
     3       0       -       1       50  
      Total Recoveries
     94       76       69       10       112  
Net Charge-offs
     1,519       887       1,132       355       183  
Balance, end of quarter
   $ 10,307     $ 10,326     $ 9,913     $ 8,945     $ 8,650  
                                         
LOAN QUALITY INFORMATION:
                                        
Nonperforming loans
   $ 19,887     $ 16,120     $ 10,636     $ 6,621     $ 4,142  
Other real estate owned, net
     763       710       318       266       266  
Nonperforming assets
   $ 20,650     $ 16,830     $ 10,954     $ 6,887     $ 4,408  
                                         
Loans 90 days past due and still accruing
   $ 854     $ 2,536     $ 3,532     $ 76     $ 546  
                                         
Allowance for loan losses to:
                                        
  Total loans at period end
     1.54
%
     1.51
%
     1.45
%
     1.39
%
     1.43 %
  Nonperforming loans
     51.83       64.06       93.20       135.10       208.85  
  Nonperforming assets
     49.91       61.36       90.50       129.88       196.23  
Net charge offs to average loans (QTD)
     0.91       0.52       0.67       0.23       0.12  
Net charge offs to average loans (YTD)
     0.91       0.40       0.35       0.18       0.12  
Nonperforming loans to total loans
     2.97       2.35       1.55       1.03       0.69  
Nonperforming assets to total loans and OREO
     3.08       2.45       1.60       1.07       0.73  
                                         

 
 
 

Unity Bancorp, Inc.
                      
Quarterly Financial Data
                      
   
03/31/09
  
12/31/08
  
09/30/08
  
06/30/08
  
03/31/08
  
SUMMARY OF INCOME (in thousands) :
                  
Interest income
   $ 12,590   $ 12,898   $ 12,965   $ 12,267   $ 12,635  
Interest expense
     5,816     6,162     5,883     5,429     6,000  
  Net interest income
     6,774     6,736     7,082     6,838     6,635  
Provision for loan losses
     1,500     1,300     2,100     650     450  
  Net interest income after provision
     5,274     5,436     4,982     6,188     6,185  
Noninterest income
     1,348     555     (344 )   1,028     1,455  
Noninterest expense
     5,555     5,773     5,779     5,617     5,770  
  Income before income taxes
     1,067     218     (1,141 )   1,599     1,870  
Federal and state income tax provision (benefit)
     336     (366 )   (139 )   495     626  
  Net Income (loss)
     731     584     (1,002 )   1,104     1,244  
      Basic
   $ 0.05   $ 0.07   $ (0.14 ) $ 0.16   $ 0.18  
      Diluted
     0.05     0.07     (0.14 )   0.15     0.17  
COMMON SHARE DATA:
                                
Cash dividends declared
   $ -   $ -   $ -   $ 0.05   $ 0.05  
Book value per common share at quarter end
     6.93     6.99     6.55     6.76     6.76  
Market value at quarter end
     3.19     3.90     4.00     6.95     7.48  
Average common shares outstanding: (000's)
                                
   Basic
     7,119     7,113     7,107     7,092     7,076  
   Diluted
     7,148     7,190     7,259     7,275     7,271  
Common shares outstanding at period end (000's)
     7,119     7,119     7,110     7,095     7,084  
OPERATING RATIOS:
                                
Return on average assets
     0.33
%
   0.26
%
   (0.50 )%   0.56
%
   0.65 %
Return on average common equity
     2.90     3.56     (8.39 )   9.29     10.50  
Efficiency ratio
     73.02     75.81     70.51     69.59     71.95  
BALANCE SHEET DATA (in thousands):
                                
Assets
   $ 886,677   $ 898,310   $ 864,083   $ 832,315   $ 807,874  
Deposits
     703,266     707,117     684,680     671,881     642,282  
Loans
     669,902     685,946     685,023     643,039     602,943  
Shareholders' equity
     67,525     67,803     46,539     47,951     47,896  
Allowance for loan losses
     10,307     10,326     9,913     8,945     8,650  
TAX-EQUIVALENT YIELDS AND RATES:
                                
Interest-earning assets
     5.87
%
   6.18 %   6.45 %   6.57
%
   6.93 %
Interest-bearing liabilities
     3.10     3.30     3.28     3.31     3.73  
Net interest spread
     2.77     2.88     3.17     3.26     3.20  
Net interest margin
     3.14     3.25     3.55     3.66     3.64  
CREDIT QUALITY:
                                
Nonperforming assets (in thousands)
   $ 20,650   $ 16,830   $ 10,954   $ 6,887   $ 4,408  
Allowance for loan losses to period-end loans
     1.54
%
   1.51 %   1.45 %   1.39
%
   1.43 %
Net charge offs to average loans
     0.91     0.52     0.67     0.23     0.12  
Nonperforming assets to loans and OREO
     3.08     2.45     1.60     1.07     0.73  
CAPITAL AND OTHER:
                                
Total equity to assets
     7.62
%
   7.55 %   5.39 %   5.76
%
   5.93 %
Tier I capital to average assets (leverage)
     9.28     9.54     7.42     8.01     8.06  
Tier I capital to risk-adjusted assets
     12.32     12.02     9.07     9.42     9.66  
Total capital to risk-adjusted assets
     13.57     13.27     10.33     10.67     10.91  
Number of banking offices
     16     16     16     16     17  
Number of ATMs
     19     19     19     19     20  
Number of employees
     162     167     176     191     188