EX-99.1 2 a3q17earningsexhibit991.htm EXHIBIT 99.1 Exhibit


unitybancorpinca04.jpg
Unity Bancorp, Inc.
64 Old Highway 22
Clinton, NJ 08809
800-618-BANK
www.unitybank.com
NewsNewsNewsNewsNews

For Immediate Release:

October 19, 2017
News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308


Unity Bancorp Reports 24.4% Increase in Quarterly Net Income

Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported a 24.4% increase in quarterly earnings and a 21.2% increase in year-to-date earnings. The year-to-date results exclude the effect of a nonrecurring gain during the prior year’s period.   Contributing factors included strong loan and deposit growth, increased net interest income and expanded net interest margins. 

Net income for the three months ended September 30, 2017 was $3.8 million, or $0.35 per diluted share, a 24.4 percent increase compared to net income of $3.0 million, or $0.32 per diluted share, for the three months ended September 30, 2016. Return on average assets and average common equity for the quarter were 1.17% and 13.00%, respectively, compared to 1.05% and 13.90% for the same period a year ago.

Year-to-date net income was $10.4 million, or $0.97 per diluted share, for the nine months ended September 30, 2017. Year-to-date net income, excluding the nonrecurring gain on the repurchase of subordinated debentures, was $8.6 million, or $0.91 per diluted share, for the same period a year ago. Current year-to-date net income represents a 21.2% increase over the prior year’s year-to-date net income excluding the nonrecurring gain. Return on average assets and average common equity for the nine months ended September 30, 2017 were 1.12% and 12.51%, respectively, compared to 1.03% and 13.73% for the same period a year ago, excluding the nonrecurring gain described below.

In February 2016, the Company repurchased $5.0 million of its outstanding subordinated “capital qualifying” debentures at a price of $0.5475 per dollar, thus reducing its outstanding subordinated debt to $10.3 million. The repurchase resulted in a nonrecurring pre-tax gain of approximately $2.26 million. Management believes excluding the nonrecurring gain from net income and reporting it in a format which is not in compliance with generally accepted accounting principles (“non-GAAP”) is beneficial to the reader and provides better comparability of the Company’s performance over both periods.

Net income for the nine months ended September 30, 2017 increased 3.4% compared to the prior year period net income, which included the nonrecurring gain on the repurchase of subordinated debentures, of $10.0 million or $1.06 per diluted share. Return on average assets and average common equity for the nine months ended September 30, 2017 was 1.12% and 12.51%, respectively compared to 1.20% and 16.09% for the prior year period, including the 2016 nonrecurring gain.




Third quarter highlights included:

•
Announcing two new branches - Bethlehem, PA and Ramsey, NJ which will open later this year. Also, the Phillipsburg branch will be relocated.
•
Loans grew 12.3% from year-end: 19.5% increase in consumer loans, 14.4% increase in residential mortgage loans and 11.7% increase in commercial loans.
•
Deposits increased 10.4%: 19.7% increase in noninterest-bearing demand deposits, 14.3% increase in interest-bearing deposits and an 11.1% increase in savings deposits.
•
Net interest income increased 19.7% to $11.8 million compared to the prior year’s quarter due to earning asset growth and improved margins.
•
Net interest margin increased to 3.88% this quarter compared to 3.63% in the prior year’s quarter due to strong loan growth and the benefit of a rising rate environment.
•
Credit quality continues to improve. Nonperforming loans fell 48.3% from year-end to $3.7 million.

“We had another quarter of record earnings,” stated James A. Hughes, President and CEO. “Loan and deposit growth remains extremely robust and I expect that to continue for the remainder of this year and into 2018. We recently announced the opening of 2 branches in Bethlehem, PA and Ramsey, NJ which will add to our geographic presence in the Lehigh Valley and Bergen County markets. We feel confident that we can continue to expand our franchise while we grow our profitability. Our balance sheet is well positioned and has benefited from the increase in interest rates. I look forward to reporting on our future successes.”

Net Interest Income

Net interest income, our core driver of earnings, increased $1.9 million to $11.8 million for the quarter ended September 30, 2017 compared to the prior year’s quarter. In addition, the net interest margin expanded 25 basis points to 3.88%, compared to 3.63% for the prior year’s quarter. For the nine months ended September 30, 2017, net interest income increased $5.2 million to $33.4 million, and the net interest margin expanded 19 basis points to 3.79%. Each period benefited from strong loan growth and the rising interest rate environment.
The yield on earning assets increased 21 basis points to 4.66% for the quarter ended September 30, 2017 compared to 4.45% for the prior year’s quarter. This increase was the result of strong commercial, residential mortgage and consumer loan growth over the prior year’s period and the benefit of a rising rate environment. Quarterly average commercial loans increased $62.7 million, average residential mortgage loans have increased $45.8 million and consumer loans increased $21.3 million compared to the third quarter in 2016.
The cost of interest-bearing liabilities remained consistent at 1.04% for the quarter ended September 30, 2017. While the cost of deposits increased 3 basis points to 0.87%, the cost of borrowed funds and subordinated debentures decreased 17 basis points compared to the prior year due to the modification of borrowings with the Federal Home Loan Bank (“FHLB”) and the addition of new borrowings at lower rates over the past year. The increase in the cost of deposits was primarily driven by the growth in savings deposits.

Provision for Loan Losses

The provision for loan losses increased during the quarter and nine month periods ended September 30, 2017 despite reduced net charge-offs due to the growth in the loan portfolio. The provision for loan losses was $500 thousand and $420 thousand for each of the quarters ended September 30, 2017 and September 30, 2016, respectively. Year-to-date the provision for loan losses increased $130 thousand to $1.2 million for the nine months ended September 30, 2017 compared to the prior year period. Quarterly net charge-offs declined $306 thousand to $187 thousand from $493 thousand in the prior year’s quarter. Year-to-date charge-offs declined $478 thousand over the prior year period to $616 thousand for the nine months ended September 30, 2017.

Noninterest Income

Noninterest income decreased $165 thousand to $2.0 million for the three months ended September 30, 2017 and declined $189 thousand to $6.2 million for the nine month period ended September 30, 2017, compared to the same period last year due to a lower volume of sales of both mortgage and SBA loans.
Quarterly gains on the sale of mortgage loans declined $217 thousand and year-to-date gains declined $729 thousand compared to the prior year periods due to lower sales volumes in each period. During 2017, management elected to hold more of the residential loans it originates in portfolio for long term investment rather than sell the loans. In the nine months ended September 30, 2017, $151.5 million in mortgage loans were originated with $66.2 million being sold for a net gain of $1.2 million. By comparison, $135.1 million in mortgage loans were originated in the nine months ended September 30, 2016, of




which $76.7 million were sold for a gain of $1.9 million. Mortgage loan sale volume totaled $23.8 million for the three months ended September 30, 2017 compared to $25.6 million in sales in the prior year’s period.
Gains on the sale of SBA loans decreased due to a lower volume of loan sales this quarter compared with the prior year’s quarter. SBA loan sales totaled $4.3 million with net gains on sale of $385 thousand for the quarter ended September 30, 2017, compared to $7.8 million in sales and a net gain of $639 thousand in the prior year’s quarter. Year-to-date, gains on the sale of $15.7 million in SBA loans were $1.3 million compared to $1.6 million on $18.4 million in sales in the prior year-to-date period.
Other notable items included service and loan fee income which increased $174 thousand and $676 thousand in the quarterly and year-to-date periods, respectively due to loan application, servicing and payoff fees.

Noninterest Expense

Noninterest expense increased $561 thousand, or 8.0%, to $7.6 million for the quarter and increased $2.1 million, or 10.3%, to $22.4 million for the nine months ended September 30, 2017 over the prior year periods. These increases are attributed to costs of expanding our retail branch and lending networks which resulted in higher compensation and occupancy expenses. Notable items for the periods include:
•
Compensation and benefits expense increased $396 thousand to $4.3 million for the three months ended September 30, 2017 and increased $1.5 million to $12.7 million for the nine months ended September 30, 2017. Compensation and benefit expenses have risen in each of these periods due to the addition of two new retail branches, additional lending and operational staff.
•
Furniture and equipment expense increased $81 thousand and $290 thousand for the quarter and year-to-date periods, respectively due to continued investment in technology in the form of equipment, network maintenance and software.
•
Year-to-date, loan collection and OREO expenses increased as the result of a $253 thousand loss on the sale of an OREO property in the first quarter of 2017 and $151 thousand in valuation adjustments on two OREO properties.
•
Deposit insurance expense declined for the quarter and year-to-date period as our assessment rate dropped as a result of the capital raise in December 2016.

Financial Condition

At September 30, 2017, total assets were $1.3 billion, an increase of $139.9 million from year-end 2016:
•
Total securities increased $10.6 million due to purchases of $26.0 million during the period.
•
Total loans increased $119.5 million or 12.3%, from year-end 2016 to $1.0 billion at September 30, 2017. Commercial, residential mortgage, consumer and SBA loan portfolios increased $59.6 million, $41.7 million, $17.8 million and $4.5 million, respectively. Our pipeline in all categories remains strong and loan growth is expected to continue in future quarters.
•
Total deposits increased $97.9 million or 10.4%, to $1.0 billion at September 30, 2017. Noninterest-bearing demand deposits, savings deposits and interest-bearing demand deposits have increased $42.6 million, $40.4 million and $20.9 million, respectively.
•
Borrowed funds increased $31.0 million to $152.0 million at September 30, 2017 due to increased overnight borrowings.
•
Shareholders’ equity was $115.8 million at September 30, 2017, an increase of $9.5 million from year-end 2016, due to retained net income.
•
Book value per common share was $10.94 as of September 30, 2017 compared to $10.14 at December 31, 2016.
•
At September 30, 2017, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 9.70%, 11.27%, 12.26% and 13.30% respectively, all in excess of the ratios required to be deemed “well-capitalized”.

Credit Quality

•
Nonperforming assets totaled $4.4 million at September 30, 2017, or 0.41% of total loans and OREO, compared to $8.3 million or 0.85% of total loans and OREO at year-end 2016.
•
Nonperforming loans totaled $3.7 million at September 30, 2017. Included in this balance is a $2.0 million consumer loan that is under contract at par value and is expected to settle in the fourth quarter.
•
The allowance for loan losses totaled $13.1 million at September 30, 2017, or 1.20% of total loans compared to $12.7 million and 1.34% at September 30, 2016.
•
Net charge-offs were $187 thousand for the three months ended September 30, 2017, compared to $493 thousand for the same period a year ago. Year-to-date net charge-offs were $616 thousand compared to $1.1 million for the prior year’s period.




Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.3 billion in assets and $1.0 billion in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 17 retail service centers located in Bergen, Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County in 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 may be identified by use of the words “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions. 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 those items included in our Annual Report on Form 10-K under the heading “Item IA-Risk Factors” as well as general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, our ability to manage and reduce the level of our nonperforming assets, and results of regulatory exams, among other factors.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.





UNITY BANCORP, INC.
SUMMARY FINANCIAL HIGHLIGHTS
NON-GAAP
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017 vs.
 
 
 
 
 
 
 
 
 
 
Jun 30, 2017
 
Sep 30, 2016
 
(In thousands, except percentages and per share amounts)
 
Sep 30, 2017
 
Jun 30, 2017
 
Sep 30, 2016
 
 
 %
 
 %
 
BALANCE SHEET DATA:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
1,329,834

 
$
1,275,517

 
$
1,152,896

 
 
4.3
 %
 
15.3
 %
 
Total deposits
 
1,043,632

 
1,003,967

 
933,320

 
 
4.0

 
11.8

 
Total loans
 
1,092,873

 
1,046,804

 
949,832

 
 
4.4

 
15.1

 
Total securities
 
72,105

 
75,066

 
72,360

 
 
(3.9
)
 
(0.4
)
 
Total shareholders' equity
 
115,814

 
112,447

 
88,152

 
 
3.0

 
31.4

 
Allowance for loan losses
 
(13,113
)
 
(12,800
)
 
(12,685
)
 
 
(2.4
)
 
3.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL DATA - QUARTER TO DATE:
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
$
5,771

 
$
5,350

 
$
4,633

 
 
7.9

 
24.6

 
Provision for income taxes
 
2,014

 
1,906

 
1,613

 
 
5.7

 
24.9

 
Net income
 
$
3,757

 
$
3,444

 
$
3,020

 
 
9.1

 
24.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per:
 
 
 
 
 
 
 
 
 
 
 
 
Common share - basic
 
$
0.36

 
$
0.33

 
$
0.32

 
 
9.1

 
12.5

 
Common share - diluted
 
$
0.35

 
$
0.32

 
$
0.32

 
 
9.4

 
9.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.17

%
1.11

%
1.05

%
 
5.4

 
11.4

 
Return on average equity
 
13.00

%
12.47

%
13.90

%
 
4.3

 
(6.5
)
 
Efficiency ratio
 
54.86

%
56.41

%
58.11

%
 
(2.7
)
 
(5.6
)
 
Net interest margin
 
3.88

%
3.79

%
3.63

%
 
2.4

 
6.9

 
Noninterest expense to average assets
 
2.35

%
2.39

%
2.44

%
 
(1.7
)
 
(3.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL DATA - YEAR TO DATE:
 
 
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes and gain on subordinated debenture
 
$
16,025

 
 
 
$
13,276

 
 
 
 
20.7

 
Provision for income taxes
 
5,632

 
 
 
4,700

 
 
 
 
19.8

 
Net income before gain on subordinated debenture
 
$
10,393

 
 
 
$
8,576

 
 
 
 
21.2

 
Gain on subordinated debenture, net of tax
 
—

 
 
 
1,473

 
 
 
 
 NM
 
Net income
 
$
10,393

 
 
 
$
10,049

 
 
 
 
3.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income before gain on subordinated debenture per:
 
 
 
 
 
 
 
 
 
 
 
 
Common share - basic
 
$
0.99

 
 
 
$
0.92

 
 
 
 
7.6

 
Common share - diluted
 
$
0.97

 
 
 
$
0.91

 
 
 
 
6.6

 
 
 
 
 
 
 

 
 
 
 

 
Net income per:
 
 
 
 
 

 
 
 
 

 
Common share - basic
 
$
0.99

 
 
 
$
1.08

 
 
 
 
(8.3
)
 
Common share - diluted
 
$
0.97

 
 
 
$
1.06

 
 
 
 
(8.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income before gain on subordinated debenture ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.12

%
 
 
1.03

%
 
 
 
(6.7
)
 
Return on average equity
 
12.51

%
 
 
13.73

%
 
 
 
(22.2
)
 
Efficiency ratio
 
56.72

%
 
 
59.03

%
 
 
 
2.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.12

%
 
 
1.20

%
 
 
 
(6.7
)
 
Return on average equity
 
12.51

%
 
 
16.09

%
 
 
 
(22.2
)
 
Efficiency ratio
 
56.72

%
 
 
55.39

%
 
 
 
2.4

 




Net interest margin
 
3.79

%
 
 
3.58

%
 
 
 
5.9

 
Noninterest expense to average assets
 
2.35

%
 
 
2.38

%
 
 
 
(1.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SHARE INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
 
Market price per share
 
$
19.80

 
$
17.20

 
$
12.82

 
 
15.1

 
54.4

 
Dividends paid
 
$
0.06

 
$
0.06

 
$
0.05

 
 
—

 
0.2

 
Book value per common share
 
$
10.94

 
$
10.64

 
$
9.45

 
 
2.8

 
15.8

 
Average diluted shares outstanding (QTD)
 
10,761

 
10,735

 
9,496

 
 
0.2

 
13.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
Total equity to total assets
 
8.71

%
8.82

%
7.65

%
 
(1.2
)
 
13.9

 
Leverage ratio
 
9.70

%
9.66

%
8.49

%
 
0.3

 
14.1

 
Common equity tier 1 risk-based capital ratio
 
11.27

%
11.32

%
9.63

%
 
(0.3
)
 
17.2
 
Tier 1 risk-based capital ratio
 
12.26

%
12.34

%
10.74

%
 
(0.6
)
 
14.2

 
Total risk-based capital ratio
 
13.30

%
13.59

%
11.48

%
 
(2.1
)
 
15.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY AND RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
$
4,449

 
$
6,262

 
$
8,230

 
 
(29.0
)
 
(45.9
)
 
QTD net chargeoffs (annualized) to QTD average loans
 
0.07

%
0.11

%
0.21

%
 
(36.4
)
 
(66.7
)
 
Allowance for loan losses to total loans
 
1.20

%
1.22

%
1.34

%
 
(1.6
)
 
(10.4
)
 
Nonperforming assets to total loans
and OREO
 
0.41

%
0.60

%
0.86

%
 
(31.7
)
 
(52.3
)
 
Nonperforming assets to total assets
 
0.33

%
0.49

%
0.71

%
 
(32.7
) %
 
(53.5
) %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All share information has been adjusted for the 10% stock dividend paid September 30, 2016.




UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017 vs.
 
 
 
 
 
 
 
 
 
 
Dec 31, 2016
 
Sep 30, 2016
 
(In thousands, except percentages)
 
Sep 30, 2017
 
Dec 31, 2016
 
Sep 30, 2016
 
 
 %
 
 %
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
20,318

 
$
22,105

 
$
23,811

 
 
(8.1
) %
 
(14.7
) %
 
Federal funds sold, interest-bearing deposits and repos
 
84,512

 
83,790

 
60,859

 
 
0.9

 
38.9

 
Cash and cash equivalents
 
104,830

 
105,895

 
84,670

 
 
(1.0
)
 
23.8

 
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Securities available for sale
 
52,750

 
40,568

 
44,186

 
 
30.0

 
19.4

 
Securities held to maturity
 
19,355

 
20,979

 
28,174

 
 
(7.7
)
 
(31.3
)
 
Total securities
 
72,105

 
61,547

 
72,360

 
 
17.2

 
(0.4
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans held for sale
 
17,724

 
14,773

 
15,611

 
 
20.0

 
13.5

 
SBA loans held for investment
 
44,001

 
42,492

 
41,795

 
 
3.6

 
5.3

 
SBA 504 loans
 
22,239

 
26,344

 
26,067

 
 
(15.6
)
 
(14.7
)
 
Commercial loans
 
568,766

 
509,171

 
496,008

 
 
11.7

 
14.7

 
Residential mortgage loans
 
330,787

 
289,093

 
282,317

 
 
14.4

 
17.2

 
Consumer loans
 
109,356

 
91,541

 
88,034

 
 
19.5

 
24.2

 
Total loans
 
1,092,873

 
973,414

 
949,832

 
 
12.3

 
15.1

 
Allowance for loan losses
 
(13,113
)
 
(12,579
)
 
(12,685
)
 
 
4.2

 
3.4

 
Net loans
 
1,079,760

 
960,835

 
937,147

 
 
12.4

 
15.2

 
Premises and equipment, net
 
23,080

 
23,398

 
22,302

 
 
(1.4
)
 
3.5

 
Bank owned life insurance ("BOLI")
 
24,047

 
13,758

 
13,664

 
 
74.8

 
76.0

 
Deferred tax assets
 
5,842

 
5,512

 
6,008

 
 
6.0

 
(2.8
)
 
Federal Home Loan Bank ("FHLB") stock
 
7,328

 
6,037

 
5,767

 
 
21.4

 
27.1

 
Accrued interest receivable
 
5,222

 
4,462

 
4,165

 
 
17.0

 
25.4

 
Other real estate owned ("OREO")
 
707

 
1,050

 
1,703

 
 
(32.7
)
 
(58.5
)
 
Goodwill
 
1,516

 
1,516

 
1,516

 
 
—

 
—

 
Other assets
 
5,397

 
5,896

 
3,594

 
 
(8.5
)
 
50.2

 
Total assets
 
$
1,329,834

 
$
1,189,906

 
$
1,152,896

 
 
11.8
 %
 
15.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
 
$
258,519

 
$
215,963

 
$
209,122

 
 
19.7
 %
 
23.6
 %
 
Interest-bearing demand
 
166,529

 
145,654

 
127,845

 
 
14.3

 
30.3

 
Savings
 
403,871

 
363,462

 
344,772

 
 
11.1

 
17.1

 
Time, under $100,000
 
122,410

 
123,724

 
134,448

 
 
(1.1
)
 
(9.0
)
 
Time, $100,000 and over, under $250,000
 
71,155

 
75,567

 
86,366

 
 
(5.8
)
 
(17.6
)
 
Time, $250,000 and over
 
21,148

 
21,353

 
30,767

 
 
(1.0
)
 
(31.3
)
 
Total deposits
 
1,043,632

 
945,723

 
933,320

 
 
10.4

 
11.8

 
Borrowed funds
 
152,000

 
121,000

 
115,000

 
 
25.6

 
32.2

 
Subordinated debentures
 
10,310

 
10,310

 
10,310

 
 
—

 
—

 
Accrued interest payable
 
400

 
430

 
446

 
 
(7.0
)
 
(10.3
)
 
Accrued expenses and other liabilities
 
7,678

 
6,152

 
5,668

 
 
24.8

 
35.5

 
Total liabilities
 
1,214,020

 
1,083,615

 
1,064,744

 
 
12.0

 
14.0

 
Shareholders' equity:
 
 
 
 
 
 
 
 
 
 
 
 
Common stock
 
86,423

 
85,383

 
70,450

 
 
1.2

 
22.7

 
Retained earnings
 
29,260

 
20,748

 
18,117

 
 
41.0

 
61.5

 
Accumulated other comprehensive (loss)
 
131

 
160

 
(415
)
 
 
 NM
 
 NM
 
Total shareholders' equity
 
115,814

 
106,291

 
88,152

 
 
9.0

 
31.4

 
Total liabilities and shareholders' equity
 
$
1,329,834

 
$
1,189,906

 
$
1,152,896

 
 
11.8
 %
 
15.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issued and outstanding common shares
 
10,586

 
10,477

 
9,331

 
 
 
 
 
 




UNITY BANCORP, INC.
QTD CONSOLIDATED STATEMENTS OF INCOME
NON-GAAP
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017 vs.
 
 
 
 For the three months ended
 
 
Jun 30, 2017
 
Sep 30, 2016
 
(In thousands, except percentages and per share amounts)
 
Sep 30, 2017
 
Jun 30, 2017
 
Sep 30, 2016
 
 
$
 
%
 
$
 
%
 
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
262

 
$
203

 
$
50

 
 
$
59

 
29.1
%
 
$
212

 
424.0
%
 
FHLB stock
 
85

 
73

 
67

 
 
12

 
16.4

 
18

 
26.9

 
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
512

 
538

 
456

 
 
(26
)
 
(4.8
)
 
56

 
12.3

 
Tax-exempt
 
40

 
44

 
43

 
 
(4
)
 
(9.1
)
 
(3
)
 
(7.0
)
 
Total securities
 
552

 
582

 
499

 
 
(30
)
 
(5.2
)
 
53

 
10.6

 
Loans:
 


 


 


 
 
 
 
 
 
 
 
 
 
SBA loans
 
1,042

 
886

 
822

 
 
156

 
17.6

 
220

 
26.8

 
SBA 504 loans
 
287

 
309

 
321

 
 
(22
)
 
(7.1
)
 
(34
)
 
(10.6
)
 
Commercial loans
 
6,924

 
6,573

 
6,138

 
 
351

 
5.3

 
786

 
12.8

 
Residential mortgage loans
 
3,636

 
3,584

 
3,138

 
 
52

 
1.5

 
498

 
15.9

 
Consumer loans
 
1,407

 
1,267

 
1,046

 
 
140

 
11.0

 
361

 
34.5

 
Total loans
 
13,296

 
12,619

 
11,465

 
 
677

 
5.4

 
1,831

 
16.0

 
Total interest income
 
14,195

 
13,477

 
12,081

 
 
718

 
5.3

 
2,114

 
17.5

 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
168

 
161

 
129

 
 
7

 
4.3

 
39

 
30.2

 
Savings deposits
 
733

 
678

 
458

 
 
55

 
8.1

 
275

 
60.0

 
Time deposits
 
823

 
814

 
920

 
 
9

 
1.1

 
(97
)
 
(10.5
)
 
Borrowed funds and subordinated debentures
 
654

 
674

 
701

 
 
(20
)
 
(3.0
)
 
(47
)
 
(6.7
)
 
Total interest expense
 
2,378

 
2,327

 
2,208

 
 
51

 
2.2

 
170

 
7.7

 
Net interest income
 
11,817

 
11,150

 
9,873

 
 
667

 
6.0

 
1,944

 
19.7

 
Provision for loan losses
 
500

 
400

 
420

 
 
100

 
25.0

 
80

 
19.0

 
Net interest income after provision for loan losses
 
11,317

 
10,750

 
9,453

 
 
567

 
5.3

 
1,864

 
19.7

 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branch fee income
 
355

 
344

 
321

 
 
11

 
3.2

 
34

 
10.6

 
Service and loan fee income
 
448

 
512

 
274

 
 
(64
)
 
(12.5
)
 
174

 
63.5

 
Gain on sale of SBA loans held for sale, net
 
385

 
479

 
639

 
 
(94
)
 
(19.6
)
 
(254
)
 
(39.7
)
 
Gain on sale of mortgage loans, net
 
392

 
264

 
609

 
 
128

 
48.5

 
(217
)
 
(35.6
)
 
BOLI income
 
111

 
89

 
97

 
 
22

 
24.7

 
14

 
14.4

 
Net security gains
 
53

 
16

 
11

 
 
37

 
231.3

 
42

 
381.8

 
Other income
 
264

 
317

 
222

 
 
(53
)
 
(16.7
)
 
42

 
18.9

 
Total noninterest income
 
2,008

 
2,021

 
2,173

 
 
(13
)
 
(0.6
)
 
(165
)
 
(7.6
)
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
4,268

 
4,299

 
3,872

 
 
(31
)
 
(0.7
)
 
396

 
10.2

 
Occupancy
 
600

 
590

 
611

 
 
10

 
1.7

 
(11
)
 
(1.8
)
 
Processing and communications
 
656

 
632

 
647

 
 
24

 
3.8

 
9

 
1.4

 
Furniture and equipment
 
513

 
513

 
432

 
 
—

 
—

 
81

 
18.8

 
Professional services
 
247

 
251

 
216

 
 
(4
)
 
(1.6
)
 
31

 
14.4

 
Loan collection & OREO expenses
 
114

 
38

 
141

 
 
76

 
200.0

 
(27
)
 
(19.1
)
 
Other loan expenses
 
47

 
18

 
19

 
 
29

 
161.1

 
28

 
147.4

 
Deposit insurance
 
156

 
144

 
168

 
 
12

 
8.3

 
(12
)
 
(7.1
)
 
Advertising
 
299

 
323

 
304

 
 
(24
)
 
(7.4
)
 
(5
)
 
(1.6
)
 
Director fees
 
150

 
149

 
141

 
 
1

 
0.7

 
9

 
6.4

 
Other expenses
 
504

 
464

 
442

 
 
40

 
8.6

 
62

 
14.0

 
Total noninterest expense
 
7,554

 
7,421

 
6,993

 
 
133

 
1.8

 
561

 
8.0

 
Income before provision for income taxes
 
5,771

 
5,350

 
4,633

 
 
421

 
7.9

 
1,138

 
24.6

 
Provision for income taxes
 
2,014

 
1,906

 
1,613

 
 
108

 
5.7

 
401

 
24.9

 




Net income
 
$
3,757

 
$
3,444

 
$
3,020

 
 
$
313

 
9.1
%
 
$
737

 
24.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
34.9
%
 
35.6
%
 
34.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.36

 
$
0.33

 
$
0.32

 
 
 
 
 
 
 
 
 
 
Net income per common share - Diluted
 
$
0.35

 
$
0.32

 
$
0.32

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,572

 
10,546

 
9,339

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Diluted
 
10,761

 
10,735

 
9,496

 
 
 
 
 
 
 
 
 
 





UNITY BANCORP, INC.
YTD CONSOLIDATED STATEMENTS OF INCOME
NON-GAAP
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
For the nine months ended September 30,
 
 
Current YTD vs. Prior YTD
 
(In thousands, except percentages and per share amounts)
 
2017
 
2016
 
 
$
 
%
 
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
595

 
$
135

 
 
$
460

 
340.7
%
 
FHLB stock
 
252

 
173

 
 
79

 
45.7

 
Securities:
 
 
 
 
 
 
 
 
 
 
Taxable
 
1,543

 
1,246

 
 
297

 
23.8

 
Tax-exempt
 
127

 
160

 
 
(33
)
 
(20.6
)
 
Total securities
 
1,670

 
1,406

 
 
264

 
18.8

 
Loans:
 
 
 
 
 
 
 
 
 
 
SBA loans
 
2,781

 
2,331

 
 
450

 
19.3

 
SBA 504 loans
 
896

 
1,050

 
 
(154
)
 
(14.7
)
 
Commercial loans
 
19,666

 
17,676

 
 
1,990

 
11.3

 
Residential mortgage loans
 
10,603

 
9,017

 
 
1,586

 
17.6

 
Consumer loans
 
3,806

 
2,956

 
 
850

 
28.8

 
Total loans
 
37,752

 
33,030

 
 
4,722

 
14.3

 
Total interest income
 
40,269

 
34,744

 
 
5,525

 
15.9

 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
482

 
390

 
 
92

 
23.6

 
Savings deposits
 
1,994

 
1,206

 
 
788

 
65.3

 
Time deposits
 
2,441

 
2,824

 
 
(383
)
 
(13.6
)
 
Borrowed funds and subordinated debentures
 
1,992

 
2,122

 
 
(130
)
 
(6.1
)
 
Total interest expense
 
6,909

 
6,542

 
 
367

 
5.6

 
Net interest income
 
33,360

 
28,202

 
 
5,158

 
18.3

 
Provision for loan losses
 
1,150

 
1,020

 
 
130

 
12.7

 
Net interest income after provision for loan losses
 
32,210

 
27,182

 
 
5,028

 
18.5

 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
Branch fee income
 
1,029

 
940

 
 
89

 
9.5

 
Service and loan fee income
 
1,472

 
796

 
 
676

 
84.9

 
Gain on sale of SBA loans held for sale, net
 
1,348

 
1,584

 
 
(236
)
 
(14.9
)
 
Gain on sale of mortgage loans, net
 
1,188

 
1,917

 
 
(729
)
 
(38.0
)
 
BOLI income
 
289

 
283

 
 
6

 
2.1

 
Net security gains
 
69

 
186

 
 
(117
)
 
(62.9
)
 
Other income
 
838

 
716

 
 
122

 
17.0

 
Total noninterest income
 
6,233

 
6,422

 
 
(189
)
 
(2.9
)
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
12,662

 
11,130

 
 
1,532

 
13.8

 
Occupancy
 
1,791

 
1,742

 
 
49

 
2.8

 
Processing and communications
 
1,892

 
1,845

 
 
47

 
2.5

 
Furniture and equipment
 
1,537

 
1,247

 
 
290

 
23.3

 
Professional services
 
724

 
710

 
 
14

 
2.0

 
Loan costs
 
493

 
402

 
 
91

 
22.6

 
OREO expenses
 
149

 
120

 
 
29

 
24.2

 
Deposit insurance
 
376

 
494

 
 
(118
)
 
(23.9
)
 
Advertising
 
859

 
848

 
 
11

 
1.3

 
Director fees
 
496

 
415

 
 
81

 
19.5

 
Other expenses
 
1,439

 
1,374

 
 
65

 
4.7

 
Total noninterest expense
 
22,418

 
20,328

 
 
2,090

 
10.3

 
Income before provision for income taxes and gain on subordinated debenture
 
16,025

 
13,276

 
 
2,749

 
20.7

 
Provision for income taxes
 
5,632

 
4,700

 
 
932

 
19.8

 
Net income before gain on subordinated debenture
 
10,393

 
8,576

 
 
1,817

 
21.2

 




Gain on subordinated debenture, net of tax
 
—

 
1,473

 
 
(1,473
)
 
(100.0
)
 
Net income
 
$
10,393

 
$
10,049

 
 
$
344

 
3.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
35.1
%
 
35.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income before gain on subordinated debenture per:
 
 
 
 
 
 
 
 
 
 
Common share - basic
 
0.99

 
1.08

 
 
 
 
 
 
Common share - diluted
 
0.97

 
1.06

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per:
 
 
 
 
 
 
 
 
 
 
Common share - basic
 
0.99

 
1.08

 
 
 
 
 
 
Common share - diluted
 
0.97

 
1.06

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,543

 
9,320

 
 
 
 
 
 
Weighted average common shares outstanding - Diluted
 
10,734

 
9,468

 
 
 
 
 
 





UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
September 30, 2017
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
For the three months ended
 
 
September 30, 2017
 
June 30, 2017
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
64,579

 
$
262

 
1.61
%
 
$
76,656

 
$
203

 
1.06
%
FHLB stock
 
5,697

 
85

 
5.92

 
5,912

 
73

 
4.95

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
67,178

 
512

 
3.02

 
67,102

 
538

 
3.22

Tax-exempt
 
6,234

 
60

 
3.82

 
6,764

 
67

 
3.97

Total securities (A)
 
73,412

 
572

 
3.09

 
73,866

 
605

 
3.29

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
60,221

 
1,042

 
6.86

 
55,650

 
886

 
6.39

SBA 504 loans
 
22,596

 
287

 
5.04

 
23,986

 
309

 
5.17

Commercial loans
 
553,443

 
6,924

 
4.96

 
532,659

 
6,573

 
4.95

Residential mortgage loans
 
322,172

 
3,636

 
4.48

 
311,730

 
3,584

 
4.61

Consumer loans
 
106,976

 
1,407

 
5.22

 
100,889

 
1,267

 
5.04

Total loans (B)
 
1,065,408

 
13,296

 
4.95

 
1,024,914

 
12,619

 
4.94

Total interest-earning assets
 
$
1,209,096

 
$
14,215

 
4.66
%
 
$
1,181,348

 
$
13,500

 
4.58
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
23,407

 
 
 
 
 
23,055

 
 
 
 
Allowance for loan losses
 
(13,053
)
 
 
 
 
 
(12,916
)
 
 
 
 
Other assets
 
57,179

 
 
 
 
 
55,367

 
 
 
 
Total noninterest-earning assets
 
67,533

 
 
 
 
 
65,506

 
 
 
 
Total assets
 
$
1,276,629

 
 
 
 
 
$
1,246,854

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
160,184

 
$
168

 
0.42
%
 
$
157,896

 
$
161

 
0.41
%
Total savings deposits
 
406,064

 
733

 
0.72

 
397,813

 
678

 
0.68

Total time deposits
 
215,501

 
823

 
1.52

 
221,636

 
814

 
1.47

Total interest-bearing deposits
 
781,749

 
1,724

 
0.87

 
777,345

 
1,653

 
0.85

Borrowed funds and subordinated debentures
 
124,369

 
654

 
2.09

 
126,057

 
674

 
2.14

Total interest-bearing liabilities
 
$
906,118

 
$
2,378

 
1.04
%
 
$
903,402

 
$
2,327

 
1.03
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
248,259

 
 
 
 
 
225,909

 
 
 
 
Other liabilities
 
7,598

 
 
 
 
 
6,752

 
 
 
 
Total noninterest-bearing liabilities
 
255,857

 
 
 
 
 
232,661

 
 
 
 
Total shareholders' equity
 
114,654

 
 
 
 
 
110,791

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,276,629

 
 
 
 
 
$
1,246,854

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
11,837

 
3.62
%
 
 
 
$
11,173

 
3.55
%
Tax-equivalent basis adjustment
 
 
 
(20
)
 
 
 
 
 
(23
)
 
 
Net interest income
 
 
 
$
11,817

 
 
 
 
 
$
11,150

 
 
Net interest margin
 
 
 
 
 
3.88
%
 
 
 
 
 
3.79
%
(A)
Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 35 percent and applicable state rates.
(B)
The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.




UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
September 30, 2017
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
For the three months ended
 
 
September 30, 2017
 
September 30, 2016
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
64,579

 
$
262

 
1.61
%
 
$
70,628

 
$
50

 
0.28
%
FHLB stock
 
5,697

 
85

 
5.92

 
5,728

 
67

 
4.65

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
67,178

 
512

 
3.02

 
63,871

 
456

 
2.84

Tax-exempt
 
6,234

 
60

 
3.82

 
6,478

 
66

 
4.05

Total securities (A)
 
73,412

 
572

 
3.09

 
70,349

 
522

 
2.95

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
60,221

 
1,042

 
6.86

 
57,122

 
822

 
5.72

SBA 504 loans
 
22,596

 
287

 
5.04

 
26,562

 
321

 
4.81

Commercial loans
 
553,443

 
6,924

 
4.96

 
490,776

 
6,138

 
4.98

Residential mortgage loans
 
322,172

 
3,636

 
4.48

 
276,413

 
3,138

 
4.52

Consumer loans
 
106,976

 
1,407

 
5.22

 
85,632

 
1,046

 
4.86

Total loans (B)
 
1,065,408

 
13,296

 
4.95

 
936,505

 
11,465

 
4.87

Total interest-earning assets
 
$
1,209,096

 
$
14,215

 
4.66
%
 
$
1,083,210

 
$
12,104

 
4.45
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
23,407

 
 
 
 
 
19,831

 
 
 
 
Allowance for loan losses
 
(13,053
)
 
 
 
 
 
(12,769
)
 
 
 
 
Other assets
 
57,179

 
 
 
 
 
52,000

 
 
 
 
Total noninterest-earning assets
 
67,533

 
 
 
 
 
59,062

 
 
 
 
Total assets
 
$
1,276,629

 
 
 
 
 
$
1,142,272

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
160,184

 
$
168

 
0.42
%
 
$
129,310

 
$
129

 
0.40
%
Total savings deposits
 
406,064

 
733

 
0.72

 
331,588

 
458

 
0.55

Total time deposits
 
215,501

 
823

 
1.52

 
256,884

 
920

 
1.42

Total interest-bearing deposits
 
781,749

 
1,724

 
0.87

 
717,782

 
1,507

 
0.84

Borrowed funds and subordinated debentures
 
124,369

 
654

 
2.09

 
123,136

 
701

 
2.26

Total interest-bearing liabilities
 
$
906,118

 
$
2,378

 
1.04
%
 
$
840,918

 
$
2,208

 
1.04
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
248,259

 
 
 
 
 
197,937

 
 
 
 
Other liabilities
 
7,598

 
 
 
 
 
16,990

 
 
 
 
Total noninterest-bearing liabilities
 
255,857

 
 
 
 
 
214,927

 
 
 
 
Total shareholders' equity
 
114,654

 
 
 
 
 
86,427

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,276,629

 
 
 
 
 
$
1,142,272

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
11,837

 
3.62
%
 
 
 
$
9,896

 
3.41
%
Tax-equivalent basis adjustment
 
 
 
(20
)
 
 
 
 
 
(23
)
 
 
Net interest income
 
 
 
$
11,817

 
 
 
 
 
$
9,873

 
 
Net interest margin
 
 
 
 
 
3.88
%
 
 
 
 
 
3.63
%
(A)
Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 35 percent and applicable state rates.
(B)
The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.





UNITY BANCORP, INC.
YEAR TO DATE NET INTEREST MARGIN
September 30, 2017
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
 
 
For the nine months ended
 
 
September 30, 2017
 
September 30, 2016
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
73,011

 
$
595

 
1.09
%
 
$
70,654

 
$
135

 
0.26
%
FHLB stock
 
5,795

 
252

 
5.81

 
5,063

 
173

 
4.56

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
66,155

 
1,543

 
3.12

 
61,869

 
1,246

 
2.69

Tax-exempt
 
6,479

 
192

 
3.96

 
8,062

 
241

 
3.99

Total securities (A)
 
72,634

 
1,735

 
3.19

 
69,931

 
1,487

 
2.84

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
57,951

 
2,781

 
6.42

 
55,932

 
2,331

 
5.57

SBA 504 loans
 
24,198

 
896

 
4.95

 
27,685

 
1,050

 
5.07

Commercial loans
 
533,033

 
19,666

 
4.93

 
476,477

 
17,676

 
4.96

Residential mortgage loans
 
310,460

 
10,603

 
4.57

 
268,436

 
9,017

 
4.49

Consumer loans
 
100,740

 
3,806

 
5.05

 
82,098

 
2,956

 
4.81

Total loans (B)
 
1,026,382

 
37,752

 
4.92

 
910,628

 
33,030

 
4.85

Total interest-earning assets
 
$
1,177,822

 
$
40,334

 
4.58
%
 
$
1,056,276

 
$
34,825

 
4.40
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
23,346

 
 
 
 
 
24,261

 
 
 
 
Allowance for loan losses
 
(12,919
)
 
 
 
 
 
(12,848
)
 
 
 
 
Other assets
 
56,018

 
 
 
 
 
48,922

 
 
 
 
Total noninterest-earning assets
 
66,445

 
 
 
 
 
60,335

 
 
 
 
Total assets
 
$
1,244,267

 
 
 
 
 
$
1,116,611

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
156,853

 
$
482

 
0.41
%
 
$
129,968

 
$
390

 
0.40
%
Total savings deposits
 
394,206

 
1,994

 
0.68

 
317,441

 
1,206

 
0.51

Total time deposits
 
219,790

 
2,441

 
1.48

 
271,511

 
2,824

 
1.39

Total interest-bearing deposits
 
770,849

 
4,917

 
0.85

 
718,920

 
4,420

 
0.82

Borrowed funds and subordinated debentures
 
125,304

 
1,992

 
2.13

 
111,298

 
2,122

 
2.55

Total interest-bearing liabilities
 
$
896,153

 
$
6,909

 
1.03
%
 
$
830,218

 
$
6,542

 
1.05
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
229,978

 
 
 
 
 
193,288

 
 
 
 
Other liabilities
 
7,050

 
 
 
 
 
9,656

 
 
 
 
Total noninterest-bearing liabilities
 
237,028

 
 
 
 
 
202,944

 
 
 
 
Total shareholders' equity
 
111,086

 
 
 
 
 
83,449

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,244,267

 
 
 
 
 
$
1,116,611

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
33,425

 
3.55
%
 
 
 
$
28,283

 
3.35
%
Tax-equivalent basis adjustment
 
 
 
(65
)
 
 
 
 
 
(81
)
 
 
Net interest income
 
 
 
$
33,360

 
 
 
 
 
$
28,202

 
 
Net interest margin
 
 
 
 
 
3.79
%
 
 
 
 
 
3.58
%
(A)
Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 35 percent and applicable state rates.
(B)
The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.





UNITY BANCORP, INC.
QUARTERLY ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY SCHEDULES
September 30, 2017
Amounts in thousands, except percentages
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
ALLOWANCE FOR LOAN LOSSES:
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
12,800

 
$
12,681

 
$
12,579

 
$
12,685

 
$
12,758

Provision for loan losses charged to expense
 
500

 
400

 
250

 
200

 
420

 
 
13,300

 
13,081

 
12,829

 
12,885

 
13,178

Less: Chargeoffs
 
 
 
 
 
 
 
 
 
 
SBA loans
 
34

 
150

 
109

 
189

 
140

Commercial loans
 
31

 
120

 
76

 
19

 
376

Residential mortgage loans
 
5

 
—

 
—

 
101

 
—

Consumer loans
 
170

 
17

 
66

 
2

 
—

Total chargeoffs
 
240

 
287

 
251

 
311

 
516

Add: Recoveries
 
 
 
 
 
 
 
 
 
 
SBA loans
 
36

 
3

 
37

 
1

 
17

SBA 504 loans
 
2

 
—

 
—

 
—

 
—

Commercial loans
 
13

 
3

 
53

 
4

 
6

Residential mortgage loans
 
—

 
—

 
12

 
—

 
—

Consumer loans
 
2

 
—

 
1

 
—

 
—

Total recoveries
 
53

 
6

 
103

 
5

 
23

Net chargeoffs
 
187

 
281

 
148

 
306

 
493

Balance, end of period
 
$
13,113

 
$
12,800

 
$
12,681

 
$
12,579

 
$
12,685

 
 
 
 
 
 
 
 
 
 
 
LOAN QUALITY INFORMATION:
 
 
 
 
 
 
 
 
 
 
Nonperforming loans (1)
 
$
3,742

 
$
5,681

 
$
7,758

 
$
7,237

 
$
6,527

Other real estate owned ("OREO")
 
707

 
581

 
1,172

 
1,050

 
1,703

Nonperforming assets
 
4,449

 
6,262

 
8,930

 
8,287

 
8,230

Less: Amount guaranteed by SBA
 
27

 
41

 
60

 
60

 
624

Net nonperforming assets
 
$
4,422

 
$
6,221

 
$
8,870

 
$
8,227

 
$
7,606

 
 
 
 
 
 
 
 
 
 
 
 Loans 90 days past due & still accruing
 
$
2,216

 
$
230

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
Performing Troubled Debt Restructurings (TDRs)
 
$
—

 
$
—

 
$
—

 
$
—

 
$
665

(1) Nonperforming TDRs included in nonperforming loans
 
—

 
—

 
—

 
153

 
154

Total TDRs
 
$
—

 
$
—

 
$
—

 
$
153

 
$
819

 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses to:
 
 
 
 
 
 
 
 
 
 
Total loans at quarter end
 
1.20
%
 
1.22
%
 
1.27
%
 
1.29
%
 
1.34
%
Nonperforming loans (1)
 
350.43

 
225.31

 
163.46

 
173.82

 
194.35

Nonperforming assets
 
294.74

 
204.41

 
142.00

 
151.79

 
154.13

Net nonperforming assets
 
296.54

 
205.75

 
142.97

 
152.90

 
166.78

 
 
 
 
 
 
 
 
 
 
 
QTD net chargeoffs (annualized) to QTD average loans:
 
 
 
 
 
 
 
 
 
 
SBA loans
 
(0.01
)%
 
1.06
%
 
0.50
%
 
1.26
%
 
0.86
%
Commercial loans
 
0.01

 
0.09

 
0.02

 
0.01

 
0.30

Residential mortgage loans
 
0.01

 
—

 
(0.02
)
 
0.14

 
—

Consumer loans
 
0.62

 
0.07

 
0.28

 
0.01

 
—

Total loans
 
0.07
%
 
0.11
%
 
0.06
%
 
0.13
%
 
0.21
%
 
 
 
 
 
 
 
 
 
 
 
Nonperforming loans to total loans
 
0.34
%
 
0.54
%
 
0.78
%
 
0.74
%
 
0.69
%
Nonperforming loans and TDRs to total loans
 
0.34

 
0.54

 
0.78

 
0.74

 
0.76

Nonperforming assets to total loans and OREO
 
0.41

 
0.60

 
0.89

 
0.85

 
0.86

Nonperforming assets to total assets
 
0.33

 
0.49

 
0.73

 
0.70

 
0.71





UNITY BANCORP, INC.
QUARTERLY FINANCIAL DATA
NON-GAAP
September 30, 2017
(In thousands, except percentages and per share amounts)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
SUMMARY OF INCOME:
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
14,195

 
$
13,477

 
$
12,594

 
$
12,280

 
$
12,081

Total interest expense
 
2,378

 
2,327

 
2,204

 
2,225

 
2,208

Net interest income
 
11,817

 
11,150

 
10,390

 
10,055

 
9,873

Provision for loan losses
 
500

 
400

 
250

 
200

 
420

Net interest income after provision for loan losses
 
11,317

 
10,750

 
10,140

 
9,855

 
9,453

Total noninterest income
 
2,008

 
2,021

 
2,204

 
2,373

 
2,173

Total noninterest expense
 
7,554

 
7,421

 
7,440

 
7,303

 
6,993

Income before provision for income taxes and gain on subordinated debenture
 
5,771

 
5,350

 
4,904

 
4,925

 
4,633

Provision for income taxes
 
2,014

 
1,906

 
1,712

 
1,765

 
1,613

Net income
 
$
3,757

 
$
3,444

 
$
3,192

 
$
3,160

 
$
3,020

 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.36

 
$
0.33

 
$
0.30

 
$
0.33

 
$
0.32

Net income per common share - Diluted
 
$
0.35

 
$
0.32

 
$
0.30

 
$
0.32

 
$
0.32

 
 
 
 
 
 
 
 
 
 
 
COMMON SHARE DATA:
 
 
 
 
 
 
 
 
 
 
Market price per share
 
$
19.80

 
$
17.20

 
$
16.95

 
$
15.70

 
$
12.82

Dividends paid
 
$
0.06

 
$
0.06

 
$
0.05

 
$
0.05

 
$
0.05

Book value per common share
 
$
10.94

 
$
10.64

 
$
10.38

 
$
10.14

 
$
9.45

Weighted average common shares outstanding - Basic
 
10,572

 
10,546

 
10,509

 
9,700

 
9,339

Weighted average common shares outstanding - Diluted
 
10,761

 
10,735

 
10,705

 
9,878

 
9,496

Issued and outstanding common shares
 
10,586

 
10,567

 
10,535

 
10,477

 
9,331

 
 
 
 
 
 
 
 
 
 
 
OPERATING RATIOS (Annualized):
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.17
%
 
1.11
%
 
1.07
%
 
1.07
%
 
1.05
%
Return on average equity
 
13.00

 
12.47

 
12.02

 
13.47

 
13.90

Efficiency ratio
 
54.86

 
56.41

 
59.08

 
59.90

 
58.11

Noninterest expense to average assets
 
2.35

 
2.39

 
2.50

 
2.47

 
2.44

 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET DATA:
 
 
 
 
 
 
 
 
 
 
Total assets
 
1,329,834

 
1,275,517

 
1,226,168

 
1,189,906

 
1,152,896

Total deposits
 
1,043,632

 
1,003,967

 
980,703

 
945,723

 
933,320

Total loans
 
1,092,873

 
1,046,804

 
1,000,677

 
973,414

 
949,832

Total securities
 
72,105

 
75,066

 
73,022

 
61,547

 
72,360

Total shareholders' equity
 
115,814

 
112,447

 
109,305

 
106,291

 
88,152

Allowance for loan losses
 
(13,113
)
 
(12,800
)
 
(12,681
)
 
(12,579
)
 
(12,685
)
 
 
 
 
 
 
 
 
 
 
 
TAX EQUIVALENT YIELDS AND RATES:
 
 
 
 
 
 
 
 
 
 
Interest-earning assets
 
4.66
%
 
4.58
%
 
4.48
%
 
4.40
%
 
4.45
%
Interest-bearing liabilities
 
1.04

 
1.03

 
1.02

 
1.03

 
1.04

Net interest spread
 
3.62

 
3.55

 
3.46

 
3.37

 
3.41

Net interest margin
 
3.88

 
3.79

 
3.70

 
3.60

 
3.63

 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY:
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
$
4,449

 
$
6,262

 
$
8,930

 
$
8,287

 
$
8,230

QTD net chargeoffs (annualized) to QTD average loans
 
0.07
%
 
0.11
%
 
0.06
%
 
0.13
%
 
0.21
%
Allowance for loan losses to total loans
 
1.20

 
1.22

 
1.27

 
1.29

 
1.34

Nonperforming assets to total loans and OREO
 
0.41

 
0.60

 
0.89

 
0.85

 
0.86

Nonperforming assets to total assets
 
0.33

 
0.49

 
0.73

 
0.70

 
0.71





 
 
 
 
 
 
 
 
 
 
 
(In thousands, except percentages and per share amounts)
 
Sep 30, 2017
 
Jun 30, 2017
 
Mar 31, 2017
 
Dec 31, 2016
 
Sep 30, 2016
CAPITAL RATIOS AND OTHER:
 
 
 
 
 
 
 
 
 
 
Total equity to total assets
 
8.71

 
8.82

 
8.91

 
8.93

 
7.65

Leverage ratio
 
9.70

 
9.66

 
9.72

 
9.73

 
8.49

Common equity tier 1 risk-based capital ratio
 
11.27

 
11.32

 
11.46

 
11.49

 
9.63

Tier 1 risk-based capital ratio
 
12.26

 
12.34

 
12.53

 
12.58

 
10.74

Total risk-based capital ratio
 
13.30

 
13.59

 
13.78

 
13.84

 
11.48

Number of banking offices
 
17

 
17

 
17

 
17

 
15

Number of ATMs
 
18

 
18

 
18

 
18

 
16

Number of employees
 
166

 
186

 
181

 
184

 
180