0000920427-19-000050.txt : 20190123 0000920427-19-000050.hdr.sgml : 20190123 20190123163700 ACCESSION NUMBER: 0000920427-19-000050 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20190123 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20190123 DATE AS OF CHANGE: 20190123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITY BANCORP INC /NJ/ CENTRAL INDEX KEY: 0000920427 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 223282551 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12431 FILM NUMBER: 19537794 BUSINESS ADDRESS: STREET 1: 64 OLD HIGHWAY 22 CITY: CLINTON STATE: NJ ZIP: 08809 BUSINESS PHONE: 9087307630 MAIL ADDRESS: STREET 1: 64 OLD HIGHWAY 22 CITY: CLINTON STATE: NJ ZIP: 08809 FORMER COMPANY: FORMER CONFORMED NAME: UNITY BANCORP INC /DE/ DATE OF NAME CHANGE: 19940316 8-K 1 unty-8k4q18earnings.htm 8-K Document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

January 23, 2019
Date of Report (Date of earliest event reported)
__________________________________
unitylogoa13.jpg
UNITY BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)

New Jersey
(State or Other Jurisdiction of Incorporation)

1-12431
(Commission File Number)

22-3282551
(IRS Employer Identification No.)

64 Old Highway 22
Clinton, NJ 08809
(Address of Principal Executive Office)

(908) 730-7630
(Registrant's Telephone Number, Including Area Code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))




¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02     Results of Operation and Financial Condition

The Registrant issued a press release on January 23, 2019 announcing results for the three and twelve months ended December 31, 2018, the full text of which is incorporated by reference to this Item.

Item 9.01    Financial Statements and Exhibits

(d) Exhibits

Exhibit 99.1Press release issued by the Registrant on January 23, 2019.



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.



UNITY BANCORP, INC.
(Registrant)


Date: January 23, 2019
By: /s/ Alan J. Bedner
Alan J. Bedner
EVP and Chief Financial Officer






EXHIBIT INDEX
 

EXHIBIT #    DESCRIPTION

99.1        Press release issued by the Registrant on January 23, 2019




EX-99.1 2 a4q18earningsexhibit991.htm EXHIBIT 99.1 Exhibit


For Immediate Release
News Media & Financial Analyst Contact:
Unity Bancorp, Inc. (NSDQ: UNTY)
Alan J. Bedner, EVP and CFO
January 23, 2019
(908) 713-4308

ulogoa04.jpg Unity Bancorp Reports ulogoa05.jpg
Quarterly Earnings of $5.8 Million
prsnippeta02.jpg

Clinton, NJ, January 23, 2019 - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported record net income of $5.8 million, or $0.53 per diluted share, for the quarter ended December 31, 2018, compared to $2.5 million, or $0.23 per diluted share, for the prior year’s quarter.  Approximately $912 thousand, or $0.08 per diluted share, of this increase is attributed to the lower effective tax rate due to the Tax Cuts and Jobs Act (the “Tax Act.”)






For the year ended December 31, 2018, Unity reported net income of $21.9 million, or $2.01 per diluted share, compared to $12.9 million, or $1.20 per diluted share for the prior year’s period. Approximately $3.2 million, or $0.29 per diluted share, of this increase is attributed to the lower effective tax rate due to the Tax Act.
Net income for the fourth quarter and year-ended December 31, 2017, includes an additional $1.7 million in income tax expense as a result of the Company adjusting its deferred income tax balances in response to the Tax Act which was signed into law on December 22, 2017.
Fourth Quarter Earnings Highlights
Net interest income, our primary driver of earnings, increased $1.7 million to $14.2 million for the quarter ended December 31, 2018, compared to the prior year’s quarter, due to strong loan growth and an increased net interest margin.
Net interest margin expanded 10 basis points to 4.01%, compared to 3.91% for the prior year’s quarter and increased 9 basis points from 3.92% in the prior sequential quarter ended September 30, 2018. The net interest margin is expected to remain stable.
The provision for loan losses was $500 thousand for the quarters ended December 31, 2018 and 2017. Asset quality remains favorable.
Noninterest income decreased $83 thousand to $2.0 million compared to the prior year’s quarter and $525 thousand compared to the prior sequential quarter. The quarter included $193 thousand in write-downs on equity securities.
Noninterest expense increased $639 thousand to $8.3 million compared to the prior year’s quarter and decreased $533 thousand compared to the prior sequential quarter. The year-over-year increase was the result of expansion costs from two additional branches and increased headcount which resulted in higher compensation, benefits, occupancy and equipment expenses. The decline over the quarter ended September 30, 2018 was due to the two nonrecurring transactions last quarter: an $850 thousand supplemental executive retirement (“SERP”) benefit expense, partially offset by a $317 thousand recovery related to an OREO property.
The effective tax rate declined to 21.0% for the quarter compared to 61.0% in the prior year’s quarter, as a result of the Tax Act, which was enacted December 22, 2017, and lowered the federal corporate tax rate. In addition, the prior year’s quarter included a $1.7 million adjustment to our deferred tax asset as a result of the Tax Act.

Balance Sheet Highlights

Total loans increased $133.9 million, or 11.4%, from year-end 2017 to $1.3 billion at December 31, 2018. Residential mortgage, commercial and consumer loan portfolios increased $70.9 million, $65.2 million, and $14.0 million, respectively, partially offset by a decline of $16.3 million in SBA loans. Our pipeline remains strong. Mortgage originations for the year totaled $225.0 million and reached a record level.
Total deposits increased $164.6 million, or 15.8%, from year-end 2017 to $1.2 billion at December 31, 2018. Growth in noninterest-bearing demand deposits was 5.5% from year-end 2017.
Borrowed funds decreased $65.0 million to $210.0 million at December 31, 2018, due to decreased overnight borrowings, the maturity of a repo and FHLB advances being called.
Shareholders’ equity was $138.5 million at December 31, 2018, an increase of $20.4 million from year-end 2017, due to retained net income offset in part by declines in other comprehensive income resulting from unrealized losses on securities and the payment of dividends.
Book value per common share was $12.85 as of December 31, 2018.
At December 31, 2018, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 9.90%, 11.40%, 12.24% and 13.49% respectively, all in excess of the ratios required to be deemed “well-capitalized.”
Credit quality remains strong with nonperforming assets to total assets of 0.44% at December 31, 2018.


Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.6 billion in assets and $1.2 billion in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 19 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
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dec 31, 2018 vs.
 
 
 
 
 
 
 
 
 
 
Sep 30, 2018
 
Dec 31, 2017
 
(In thousands, except percentages and per share amounts)
 
Dec 31, 2018
 
Sep 30, 2018
 
Dec 31, 2017
 
 
 %
 
 %
 
BALANCE SHEET DATA:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
1,579,157

 
$
1,553,152

 
$
1,455,496

 
 
1.7
 %
 
8.5
 %
 
Total deposits
 
1,207,687

 
1,219,473

 
1,043,137

 
 
(1.0
)
 
15.8

 
Total loans
 
1,304,566

 
1,283,304

 
1,170,674

 
 
1.7

 
11.4

 
Total securities
 
63,732

 
63,399

 
69,800

 
 
0.5

 
(8.7
)
 
Total shareholders' equity
 
138,488

 
133,067

 
118,105

 
 
4.1

 
17.3

 
Allowance for loan losses
 
(15,488
)
 
(14,988
)
 
(13,556
)
 
 
3.3

 
14.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL DATA - QUARTER TO DATE:
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
$
7,350

 
$
6,745

 
$
6,408

 
 
9.0

 
14.7

 
Provision for income taxes
 
1,547

 
1,255

 
2,175

 
 
23.3

 
(28.9
)
 
Impact of Tax Reform Bill
 

 

 
1,733

 
 

 
(100.0
)
 
Net income
 
$
5,803

 
$
5,490

 
$
2,500

 
 
5.7

 
132.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.54

 
$
0.51

 
$
0.24

 
 
5.9

 
125.0

 
Net income per common share - Diluted
 
$
0.53

 
$
0.50

 
$
0.23

 
 
6.0

 
130.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.56

%
1.50

%
0.74

%
 
4.0

 
110.8

 
Return on average equity
 
17.00

%
16.64

%
8.54

%
 
2.2

 
99.1

 
Efficiency ratio
 
50.69

%
54.86

%
52.45

%
 
(7.6
)
 
(3.4
)
 
Net interest margin
 
4.01

%
3.92

%
3.91

%
 
2.3

 
2.6

 
Noninterest expense to average assets
 
2.22

%
2.41

%
2.25

%
 
(7.9
)
 
(1.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL DATA - YEAR TO DATE:
 
 
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
$
27,307

 
 
 
$
22,433

 
 
 
 
21.7

 
Provision for income taxes
 
5,388

 
 
 
7,807

 
 
 
 
(31.0
)
 
Impact of Tax Reform Bill
 

 
 
 
1,733

 
 
 
 
(100.0
)
 
Net income
 
$
21,919

 
 
 
$
12,893

 
 
 
 
70.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
2.04

 
 
 
$
1.22

 
 
 
 
67.2

 
Net income per common share - Diluted
 
$
2.01

 
 
 
$
1.20

 
 
 
 
67.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.53

%
 
 
1.02

%
 
 
 
50.0

 
Return on average equity
 
17.10

%
 
 
11.47

%
 
 
 
49.1

 
Efficiency ratio
 
53.07

%
 
 
55.57

%
 
 
 
(4.5
)
 
Net interest margin
 
3.97

%
 
 
3.83

%
 
 
 
3.7

 
Noninterest expense to average assets
 
2.34

%
 
 
2.37

%
 
 
 
(1.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SHARE INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
 
Market price per share
 
$
20.76

 
$
22.90

 
$
19.75

 
 
(9.3
)
 
5.1

 
Dividends paid
 
$
0.07

 
$
0.07

 
$
0.06

 
 

 
16.7

 
Book value per common share
 
$
12.85

 
$
12.37

 
$
11.13

 
 
3.9

 
15.5

 
Average diluted shares outstanding (QTD)
 
10,935

 
10,936

 
10,794

 
 

 
1.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
Total equity to total assets
 
8.77

%
8.57

%
8.11

%
 
2.3

 
8.1

 
Leverage ratio
 
9.90

%
9.74

%
9.37

%
 
1.6

 
5.7

 
Common equity tier 1 risk-based capital ratio
 
11.40

%
11.15

%
10.81

%
 
2.2

 
5.5

 
Tier 1 risk-based capital ratio
 
12.24

%
12.00

%
11.75

%
 
2.0

 
4.2

 
Total risk-based capital ratio
 
13.49

%
13.25

%
12.87

%
 
1.8

 
4.8

 





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY AND RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
$
6,929

 
$
6,251

 
$
3,420

 
 
10.8

 
102.6

 
QTD net chargeoffs (annualized) to QTD average loans
 

%
0.05

%
0.02

%
 
(100.0
)
 
(100.0
)
 
Allowance for loan losses to total loans
 
1.19

%
1.17

%
1.16

%
 
1.7

 
2.6

 
Nonperforming assets to total loans
and OREO
 
0.53

%
0.49

%
0.29

%
 
8.2

 
82.8

 
Nonperforming assets to total assets
 
0.44

%
0.40

%
0.23

%
 
10.0
 %
 
91.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 






UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dec 31, 2018 vs.
 
 
 
 
 
 
 
 
 
 
Sep 30, 2018
 
Dec 31, 2017
 
(In thousands, except percentages)
 
Dec 31, 2018
 
Sep 30, 2018
 
Dec 31, 2017
 
 
 %
 
 %
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
20,028

 
$
23,217

 
$
23,701

 
 
(13.7
) %
 
(15.5
) %
 
Federal funds sold, interest-bearing deposits and repos
 
125,487

 
121,339

 
126,553

 
 
3.4

 
(0.8
)
 
Cash and cash equivalents
 
145,515

 
144,556

 
150,254

 
 
0.7

 
(3.2
)
 
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Securities available for sale
 
46,713

 
46,874

 
52,287

 
 
(0.3
)
 
(10.7
)
 
Securities held to maturity
 
14,875

 
15,325

 
16,307

 
 
(2.9
)
 
(8.8
)
 
Equity securities
 
2,144

 
1,200

 
1,206

 
 
78.7

 
77.8

 
Total securities
 
63,732

 
63,399

 
69,800

 
 
0.5

 
(8.7
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans held for sale
 
11,171

 
13,029

 
22,810

 
 
(14.3
)
 
(51.0
)
 
SBA loans held for investment
 
39,333

 
41,051

 
43,999

 
 
(4.2
)
 
(10.6
)
 
Commercial loans
 
694,102

 
697,075

 
628,865

 
 
(0.4
)
 
10.4

 
Residential mortgage loans
 
436,056

 
413,652

 
365,145

 
 
5.4

 
19.4

 
Consumer loans
 
123,904

 
118,497

 
109,855

 
 
4.6

 
12.8

 
Total loans
 
1,304,566

 
1,283,304

 
1,170,674

 
 
1.7

 
11.4

 
Allowance for loan losses
 
(15,488
)
 
(14,988
)
 
(13,556
)
 
 
3.3

 
14.3

 
Net loans
 
1,289,078

 
1,268,316

 
1,157,118

 
 
1.6

 
11.4

 
Premises and equipment, net
 
23,371

 
23,416

 
23,470

 
 
(0.2
)
 
(0.4
)
 
Bank owned life insurance ("BOLI")
 
24,710

 
24,544

 
24,227

 
 
0.7

 
2.0

 
Deferred tax assets
 
5,350

 
5,310

 
4,017

 
 
0.8

 
33.2

 
Federal Home Loan Bank ("FHLB") stock
 
10,795

 
9,445

 
12,863

 
 
14.3

 
(16.1
)
 
Accrued interest receivable
 
6,399

 
6,412

 
5,447

 
 
(0.2
)
 
17.5

 
Other real estate owned ("OREO")
 
56

 
56

 
426

 
 

 
(86.9
)
 
Goodwill
 
1,516

 
1,516

 
1,516

 
 

 

 
Other assets
 
8,635

 
6,182

 
6,358

 
 
39.7

 
35.8

 
Total assets
 
$
1,579,157

 
$
1,553,152

 
$
1,455,496

 
 
1.7
 %
 
8.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
 
$
270,152

 
$
271,321

 
$
256,119

 
 
(0.4
) %
 
5.5
 %
 
Interest-bearing demand
 
185,792

 
180,189

 
164,997

 
 
3.1

 
12.6

 
Savings
 
394,727

 
408,927

 
396,557

 
 
(3.5
)
 
(0.5
)
 
Time Deposits
 
357,016

 
359,036

 
225,464

 
 
(0.6
)
 
58.3

 
Total deposits
 
1,207,687

 
1,219,473

 
1,043,137

 
 
(1.0
)
 
15.8

 
Borrowed funds
 
210,000

 
180,000

 
275,000

 
 
16.7

 
(23.6
)
 
Subordinated debentures
 
10,310

 
10,310

 
10,310

 
 

 

 
Accrued interest payable
 
406

 
506

 
436

 
 
(19.8
)
 
(6.9
)
 
Accrued expenses and other liabilities
 
12,266

 
9,796

 
8,508

 
 
25.2

 
44.2

 
Total liabilities
 
1,440,669

 
1,420,085

 
1,337,391

 
 
1.4

 
7.7

 
Shareholders' equity:
 
 
 
 
 
 
 
 
 
 
 
 
Common stock
 
88,484

 
88,149

 
86,782

 
 
0.4

 
2.0

 
Retained earnings
 
50,161

 
45,121

 
31,117

 
 
11.2

 
61.2

 
Accumulated other comprehensive (loss)
 
(157
)
 
(203
)
 
206

 
 
 NM
 
 NM
 
Total shareholders' equity
 
138,488

 
133,067

 
118,105

 
 
4.1

 
17.3

 
Total liabilities and shareholders' equity
 
$
1,579,157

 
$
1,553,152

 
$
1,455,496

 
 
1.7
 %
 
8.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issued and outstanding common shares
 
10,780

 
10,756

 
10,615

 
 
 
 
 
 
NM=Not meaningful





UNITY BANCORP, INC.
QTD CONSOLIDATED STATEMENTS OF INCOME
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dec 31, 2018 vs.
 
 
 
 For the three months ended
 
 
Sep 30, 2018
 
Dec 31, 2017
 
(In thousands, except percentages and per share amounts)
 
Dec 31, 2018
 
Sep 30, 2018
 
Dec 31, 2017
 
 
$
 
%
 
$
 
%
 
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
210

 
$
187

 
$
257

 
 
$
23

 
12.3
%
 
$
(47
)
 
(18.3
)%
 
FHLB stock
 
104

 
101

 
119

 
 
3

 
3.0

 
(15
)
 
(12.6
)
 
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
466

 
465

 
488

 
 
1

 
0.2

 
(22
)
 
(4.5
)
 
Tax-exempt
 
28

 
28

 
31

 
 

 

 
(3
)
 
(9.7
)
 
Total securities
 
494

 
493

 
519

 
 
1

 
0.2

 
(25
)
 
(4.8
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
974

 
1,050

 
1,023

 
 
(76
)
 
(7.2
)
 
(49
)
 
(4.8
)
 
Commercial loans
 
9,167

 
8,784

 
7,590

 
 
383

 
4.4

 
1,577

 
20.8

 
Residential mortgage loans
 
5,172

 
4,803

 
4,046

 
 
369

 
7.7

 
1,126

 
27.8

 
Consumer loans
 
1,939

 
1,776

 
1,490

 
 
163

 
9.2

 
449

 
30.1

 
Total loans
 
17,252

 
16,413

 
14,149

 
 
839

 
5.1

 
3,103

 
21.9

 
Total interest income
 
18,060

 
17,194

 
15,044

 
 
866

 
5.0

 
3,016

 
20.0

 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
389

 
330

 
183

 
 
59

 
17.9

 
206

 
112.6

 
Savings deposits
 
1,103

 
1,049

 
744

 
 
54

 
5.1

 
359

 
48.3

 
Time deposits
 
1,861

 
1,739

 
837

 
 
122

 
7.0

 
1,024

 
122.3

 
Borrowed funds and subordinated debentures
 
543

 
509

 
780

 
 
34

 
6.7

 
(237
)
 
(30.4
)
 
Total interest expense
 
3,896

 
3,627

 
2,544

 
 
269

 
7.4

 
1,352

 
53.1

 
Net interest income
 
14,164

 
13,567

 
12,500

 
 
597

 
4.4

 
1,664

 
13.3

 
Provision for loan losses
 
500

 
500

 
500

 
 

 

 

 

 
Net interest income after provision for loan losses
 
13,664

 
13,067

 
12,000

 
 
597

 
4.6

 
1,664

 
13.9

 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branch fee income
 
413

 
357

 
354

 
 
56

 
15.7

 
59

 
16.7

 
Service and loan fee income
 
690

 
465

 
628

 
 
225

 
48.4

 
62

 
9.9

 
Gain on sale of SBA loans held for sale, net
 
298

 
253

 
268

 
 
45

 
17.8

 
30

 
11.2

 
Gain on sale of mortgage loans, net
 
277

 
597

 
343

 
 
(320
)
 
(53.6
)
 
(66
)
 
(19.2
)
 
BOLI income
 
165

 
464

 
181

 
 
(299
)
 
(64.4
)
 
(16
)
 
(8.8
)
 
Net security (losses) gains
 
(193
)
 
2

 
(7
)
 
 
(195
)
 
(9,750.0
)
 
(186
)
 
(2,657.1
)
 
Other income
 
304

 
341

 
270

 
 
(37
)
 
(10.9
)
 
34

 
12.6

 
Total noninterest income
 
1,954

 
2,479

 
2,037

 
 
(525
)
 
(21.2
)
 
(83
)
 
(4.1
)
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
4,845

 
5,704

 
4,455

 
 
(859
)
 
(15.1
)
 
390

 
8.8

 
Occupancy
 
681

 
675

 
591

 
 
6

 
0.9

 
90

 
15.2

 
Processing and communications
 
716

 
709

 
659

 
 
7

 
1.0

 
57

 
8.6

 
Furniture and equipment
 
616

 
586

 
542

 
 
30

 
5.1

 
74

 
13.7

 
Professional services
 
252

 
270

 
298

 
 
(18
)
 
(6.7
)
 
(46
)
 
(15.4
)
 
Loan collection & OREO expenses (recoveries)
 
31

 
(331
)
 
(30
)
 
 
362

 
109.4

 
61

 
203.3

 
Other loan (recoveries) expenses
 
(2
)
 
51

 
38

 
 
(53
)
 
(103.9
)
 
(40
)
 
(105.3
)
 
Deposit insurance
 
189

 
191

 
170

 
 
(2
)
 
(1.0
)
 
19

 
11.2

 
Advertising
 
360

 
370

 
321

 
 
(10
)
 
(2.7
)
 
39

 
12.1

 
Director fees
 
169

 
175

 
141

 
 
(6
)
 
(3.4
)
 
28

 
19.9

 
Other expenses
 
411

 
401

 
444

 
 
10

 
2.5

 
(33
)
 
(7.4
)
 
Total noninterest expense
 
8,268

 
8,801

 
7,629

 
 
(533
)
 
(6.1
)
 
639

 
8.4

 
Income before provision for income taxes
 
7,350

 
6,745

 
6,408

 
 
605

 
9.0

 
942

 
14.7

 
Provision for income taxes
 
1,547

 
1,255

 
2,175

 
 
292

 
23.3

 
(628
)
 
(28.9
)
 
Impact of Tax Reform Bill
 

 

 
1,733

 
 

 

 
(1,733
)
 
(100.0
)
 





Net income
 
$
5,803

 
$
5,490

 
$
2,500

 
 
$
313

 
5.7
%
 
$
3,303

 
132.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
21.0
%
 
18.6
%
 
61.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.54

 
$
0.51

 
$
0.24

 
 
 
 
 
 
 
 
 
 
Net income per common share - Diluted
 
$
0.53

 
$
0.50

 
$
0.23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,765

 
10,743

 
10,604

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Diluted
 
10,935

 
10,936

 
10,794

 
 
 
 
 
 
 
 
 
 






UNITY BANCORP, INC.
YTD CONSOLIDATED STATEMENTS OF INCOME
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
For the twelve months ended December 31,
 
 
Current YTD vs. Prior YTD
 
(In thousands, except percentages and per share amounts)
 
2018
 
2017
 
 
$
 
%
 
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
773

 
$
851

 
 
$
(78
)
 
(9.2
)%
 
FHLB stock
 
462

 
370

 
 
92

 
24.9

 
Securities:
 
 
 
 
 
 
 
 
 
 
Taxable
 
1,907

 
2,029

 
 
(122
)
 
(6.0
)
 
Tax-exempt
 
117

 
159

 
 
(42
)
 
(26.4
)
 
Total securities
 
2,024

 
2,188

 
 
(164
)
 
(7.5
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
SBA loans
 
4,338

 
3,805

 
 
533

 
14.0

 
Commercial loans
 
33,886

 
28,150

 
 
5,736

 
20.4

 
Residential mortgage loans
 
18,837

 
14,650

 
 
4,187

 
28.6

 
Consumer loans
 
6,943

 
5,296

 
 
1,647

 
31.1

 
Total loans
 
64,004

 
51,901

 
 
12,103

 
23.3

 
Total interest income
 
67,263

 
55,310

 
 
11,953

 
21.6

 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
1,202

 
665

 
 
537

 
80.8

 
Savings deposits
 
3,871

 
2,738

 
 
1,133

 
41.4

 
Time deposits
 
5,903

 
3,278

 
 
2,625

 
80.1

 
Borrowed funds and subordinated debentures
 
2,540

 
2,772

 
 
(232
)
 
(8.4
)
 
Total interest expense
 
13,516

 
9,453

 
 
4,063

 
43.0

 
Net interest income
 
53,747

 
45,857

 
 
7,890

 
17.2

 
Provision for loan losses
 
2,050

 
1,650

 
 
400

 
24.2

 
Net interest income after provision for loan losses
 
51,697

 
44,207

 
 
7,490

 
16.9

 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
Branch fee income
 
1,519

 
1,384

 
 
135

 
9.8

 
Service and loan fee income
 
2,130

 
2,100

 
 
30

 
1.4

 
Gain on sale of SBA loans held for sale, net
 
1,680

 
1,617

 
 
63

 
3.9

 
Gain on sale of mortgage loans, net
 
1,719

 
1,530

 
 
189

 
12.4

 
BOLI income
 
975

 
469

 
 
506

 
107.9

 
Net security (losses) gains
 
(199
)
 
62

 
 
(261
)
 
(421.0
)
 
Other income
 
1,207

 
1,108

 
 
99

 
8.9

 
Total noninterest income
 
9,031

 
8,270

 
 
761

 
9.2

 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
20,119

 
17,117

 
 
3,002

 
17.5

 
Occupancy
 
2,739

 
2,381

 
 
358

 
15.0

 
Processing and communications
 
2,788

 
2,551

 
 
237

 
9.3

 
Furniture and equipment
 
2,348

 
2,079

 
 
269

 
12.9

 
Professional services
 
934

 
1,022

 
 
(88
)
 
(8.6
)
 
Loan collection & OREO (recoveries) expenses
 
(288
)
 
463

 
 
(751
)
 
(162.2
)
 
Other loan expenses
 
135

 
186

 
 
(51
)
 
(27.4
)
 
Deposit insurance
 
782

 
546

 
 
236

 
43.2

 
Advertising
 
1,411

 
1,179

 
 
232

 
19.7

 
Director fees
 
671

 
637

 
 
34

 
5.3

 
Other expenses
 
1,782

 
1,883

 
 
(101
)
 
(5.4
)
 
Total noninterest expense
 
33,421

 
30,044

 
 
3,377

 
11.2

 
Income before provision for income taxes
 
27,307

 
22,433

 
 
4,874

 
21.7

 
Provision for income taxes
 
5,388

 
7,807

 
 
(2,419
)
 
(31.0
)
 
Impact of Tax Reform Bill
 

 
1,733

 
 
(1,733
)
 
(100.0
)
 
Net income
 
$
21,919

 
$
12,893

 
 
$
9,026

 
70.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





 
 
 
 
 
 
 
 
 
 
 
 
 
For the twelve months ended December 31,
 
 
 
 
 
 
(In thousands, except percentages and per share amounts)
 
2018
 
2017
 
 
 
 
 
 
Effective tax rate
 
19.7
%
 
42.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
2.04

 
1.22

 
 
 
 
 
 
Net income per common share - Diluted
 
2.01

 
1.20

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,726

 
10,558

 
 
 
 
 
 
Weighted average common shares outstanding - Diluted
 
10,916

 
10,749

 
 
 
 
 
 






UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
December 31, 2018
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
For the three months ended
 
 
December 31, 2018
 
September 30, 2018
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
34,551

 
$
210

 
2.41
%
 
$
40,060

 
$
187

 
1.85
%
FHLB stock
 
5,762

 
104

 
7.16

 
5,805

 
101

 
6.90

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
58,350

 
466

 
3.17

 
59,916

 
465

 
3.08

Tax-exempt
 
4,776

 
35

 
2.91

 
5,095

 
35

 
2.73

Total securities (A)
 
63,126

 
501

 
3.15

 
65,011

 
500

 
3.05

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
53,803

 
974

 
7.18

 
56,837

 
1,050

 
7.33

Commercial loans
 
698,609

 
9,167

 
5.21

 
683,632

 
8,784

 
5.10

Residential mortgage loans
 
423,674

 
5,172

 
4.84

 
404,439

 
4,803

 
4.71

Consumer loans
 
121,214

 
1,939

 
6.35

 
116,421

 
1,776

 
6.05

Total loans (B)
 
1,297,300

 
17,252

 
5.28

 
1,261,329

 
16,413

 
5.16

Total interest-earning assets
 
$
1,400,739

 
$
18,067

 
5.12
%
 
$
1,372,205

 
$
17,201

 
4.97
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
25,410

 
 
 
 
 
25,560

 
 
 
 
Allowance for loan losses
 
(15,266
)
 
 
 
 
 
(14,909
)
 
 
 
 
Other assets
 
66,925

 
 
 
 
 
65,645

 
 
 
 
Total noninterest-earning assets
 
77,069

 
 
 
 
 
76,296

 
 
 
 
Total assets
 
$
1,477,808

 
 
 
 
 
$
1,448,501

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
187,827

 
$
389

 
0.82
%
 
$
173,515

 
$
330

 
0.75
%
Total savings deposits
 
406,681

 
1,103

 
1.08

 
407,287

 
1,049

 
1.02

Total time deposits
 
356,520

 
1,861

 
2.07

 
350,747

 
1,739

 
1.97

Total interest-bearing deposits
 
951,028

 
3,353

 
1.40

 
931,549

 
3,118

 
1.33

Borrowed funds and subordinated debentures
 
108,465

 
543

 
1.99

 
109,408

 
509

 
1.85

Total interest-bearing liabilities
 
$
1,059,493

 
$
3,896

 
1.46
%
 
$
1,040,957

 
$
3,627

 
1.38
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
271,440

 
 
 
 
 
266,833

 
 
 
 
Other liabilities
 
11,454

 
 
 
 
 
9,805

 
 
 
 
Total noninterest-bearing liabilities
 
282,894

 
 
 
 
 
276,638

 
 
 
 
Total shareholders' equity
 
135,421

 
 
 
 
 
130,906

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,477,808

 
 
 
 
 
$
1,448,501

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
14,171

 
3.66
%
 
 
 
$
13,574

 
3.59
%
Tax-equivalent basis adjustment
 
 
 
(7
)
 
 
 
 
 
(7
)
 
 
Net interest income
 
 
 
$
14,164

 
 
 
 
 
$
13,567

 
 
Net interest margin
 
 
 
 
 
4.01
%
 
 
 
 
 
3.92
%
(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 21 percent in 2018 and 35 percent in 2017 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
December 31, 2018
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
For the three months ended
 
 
December 31, 2018
 
December 31, 2017
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
34,551

 
$
210

 
2.41
%
 
$
61,621

 
$
257

 
1.65
%
FHLB stock
 
5,762

 
104

 
7.16

 
7,523

 
119

 
6.28

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
58,350

 
466

 
3.17

 
65,967

 
488

 
2.93

Tax-exempt
 
4,776

 
35

 
2.91

 
5,469

 
47

 
3.41

Total securities (A)
 
63,126

 
501

 
3.15

 
71,436

 
535

 
2.97

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
53,803

 
974

 
7.18

 
63,275

 
1,023

 
6.41

Commercial loans
 
698,609

 
9,167

 
5.21

 
611,863

 
7,590

 
4.92

Residential mortgage loans
 
423,674

 
5,172

 
4.84

 
344,636

 
4,046

 
4.66

Consumer loans
 
121,214

 
1,939

 
6.35

 
109,300

 
1,490

 
5.41

Total loans (B)
 
1,297,300

 
17,252

 
5.28

 
1,129,074

 
14,149

 
4.97

Total interest-earning assets
 
$
1,400,739

 
$
18,067

 
5.12
%
 
$
1,269,654

 
$
15,060

 
4.71
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
25,410

 
 
 
 
 
23,248

 
 
 
 
Allowance for loan losses
 
(15,266
)
 
 
 
 
 
(13,373
)
 
 
 
 
Other assets
 
66,925

 
 
 
 
 
65,785

 
 
 
 
Total noninterest-earning assets
 
77,069

 
 
 
 
 
75,660

 
 
 
 
Total assets
 
$
1,477,808

 
 
 
 
 
$
1,345,314

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
187,827

 
$
389

 
0.82
%
 
$
167,918

 
$
183

 
0.43
%
Total savings deposits
 
406,681

 
1,103

 
1.08

 
406,281

 
744

 
0.73

Total time deposits
 
356,520

 
1,861

 
2.07

 
220,062

 
837

 
1.51

Total interest-bearing deposits
 
951,028

 
3,353

 
1.40

 
794,261

 
1,764

 
0.88

Borrowed funds and subordinated debentures
 
108,465

 
543

 
1.99

 
166,669

 
780

 
1.86

Total interest-bearing liabilities
 
$
1,059,493

 
$
3,896

 
1.46
%
 
$
960,930

 
$
2,544

 
1.05
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
271,440

 
 
 
 
 
258,616

 
 
 
 
Other liabilities
 
11,454

 
 
 
 
 
9,615

 
 
 
 
Total noninterest-bearing liabilities
 
282,894

 
 
 
 
 
268,231

 
 
 
 
Total shareholders' equity
 
135,421

 
 
 
 
 
116,153

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,477,808

 
 
 
 
 
$
1,345,314

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
14,171

 
3.66
%
 
 
 
$
12,516

 
3.66
%
Tax-equivalent basis adjustment
 
 
 
(7
)
 
 
 
 
 
(16
)
 
 
Net interest income
 
 
 
$
14,164

 
 
 
 
 
$
12,500

 
 
Net interest margin
 
 
 
 
 
4.01
%
 
 
 
 
 
3.91
%
(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 21 percent in 2018 and 35 percent in 2017 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
December 31, 2018
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
 
 
For the twelve months ended
 
 
December 31, 2018
 
December 31, 2017
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
40,700

 
$
773

 
1.90
%
 
$
70,139

 
$
851

 
1.21
%
FHLB stock
 
6,786

 
462

 
6.81

 
6,230

 
370

 
5.94

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
60,734

 
1,907

 
3.14

 
66,107

 
2,029

 
3.07

Tax-exempt
 
5,104

 
145

 
2.84

 
6,225

 
240

 
3.86

Total securities (A)
 
65,838

 
2,052

 
3.12

 
72,332

 
2,269

 
3.14

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
60,321

 
4,338

 
7.19

 
59,293

 
3,805

 
6.42

Commercial loans
 
668,144

 
33,886

 
5.07

 
571,001

 
28,150

 
4.93

Residential mortgage loans
 
396,731

 
18,837

 
4.75

 
319,074

 
14,650

 
4.59

Consumer loans
 
116,311

 
6,943

 
5.97

 
102,898

 
5,296

 
5.15

Total loans (B)
 
1,241,507

 
64,004

 
5.16

 
1,052,266

 
51,901

 
4.93

Total interest-earning assets
 
$
1,354,831

 
$
67,291

 
4.97
%
 
$
1,200,967

 
$
55,391

 
4.61
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
24,598

 
 
 
 
 
23,321

 
 
 
 
Allowance for loan losses
 
(14,640
)
 
 
 
 
 
(13,033
)
 
 
 
 
Other assets
 
65,770

 
 
 
 
 
58,481

 
 
 
 
Total noninterest-earning assets
 
75,728

 
 
 
 
 
68,769

 
 
 
 
Total assets
 
$
1,430,559

 
 
 
 
 
$
1,269,736

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
177,022

 
$
1,202

 
0.68
%
 
$
159,642

 
$
665

 
0.42
%
Total savings deposits
 
404,613

 
3,871

 
0.96

 
397,250

 
2,738

 
0.69

Total time deposits
 
314,224

 
5,903

 
1.88

 
219,847

 
3,278

 
1.49

Total interest-bearing deposits
 
895,859

 
10,976

 
1.23

 
776,739

 
6,681

 
0.86

Borrowed funds and subordinated debentures
 
134,664

 
2,540

 
1.89

 
135,730

 
2,772

 
2.04

Total interest-bearing liabilities
 
$
1,030,523

 
$
13,516

 
1.32
%
 
$
912,469

 
$
9,453

 
1.04
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
261,976

 
 
 
 
 
237,207

 
 
 
 
Other liabilities
 
9,903

 
 
 
 
 
7,090

 
 
 
 
Total noninterest-bearing liabilities
 
271,879

 
 
 
 
 
244,297

 
 
 
 
Total shareholders' equity
 
128,157

 
 
 
 
 
112,970

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,430,559

 
 
 
 
 
$
1,269,736

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
53,775

 
3.65
%
 
 
 
$
45,938

 
3.57
%
Tax-equivalent basis adjustment
 
 
 
(28
)
 
 
 
 
 
(81
)
 
 
Net interest income
 
 
 
$
53,747

 
 
 
 
 
$
45,857

 
 
Net interest margin
 
 
 
 
 
3.97
%
 
 
 
 
 
3.83
%
(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 21 percent in 2018 and 35 percent in 2017 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
December 31, 2018
Amounts in thousands, except percentages
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
ALLOWANCE FOR LOAN LOSSES:
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
14,988

 
$
14,634

 
$
14,196

 
$
13,556

 
$
13,113

Provision for loan losses charged to expense
 
500

 
500

 
550

 
500

 
500

 
 
15,488

 
15,134

 
14,746

 
14,056

 
13,613

Less: Chargeoffs
 
 
 
 
 
 
 
 
 
 
SBA loans
 

 
169

 
104

 
81

 

Commercial loans
 
10

 

 

 

 

Residential mortgage loans
 

 

 

 

 
50

Consumer loans
 

 

 
16

 
6

 
83

Total chargeoffs
 
10

 
169

 
120

 
87

 
133

Add: Recoveries
 
 
 
 
 
 
 
 
 
 
SBA loans
 
3

 
1

 
3

 
64

 
45

Commercial loans
 
5

 
5

 
4

 
16

 
31

Residential mortgage loans
 

 

 

 
13

 

Consumer loans
 
2

 
17

 
1

 
134

 

Total recoveries
 
10

 
23

 
8

 
227

 
76

Net chargeoffs (recoveries)
 

 
146

 
112

 
(140
)
 
57

Balance, end of period
 
$
15,488

 
$
14,988

 
$
14,634

 
$
14,196

 
$
13,556

 
 
 
 
 
 
 
 
 
 
 
LOAN QUALITY INFORMATION:
 
 
 
 
 
 
 
 
 
 
Nonperforming loans (1)
 
$
6,873

 
$
6,195

 
$
5,209

 
$
4,277

 
$
2,994

Other real estate owned ("OREO")
 
56

 
56

 
56

 
56

 
426

Nonperforming assets
 
6,929

 
6,251

 
5,265

 
4,333

 
3,420

Less: Amount guaranteed by SBA
 
89

 
104

 
129

 
27

 
27

Net nonperforming assets
 
$
6,840

 
$
6,147

 
$
5,136

 
$
4,306

 
$
3,393

 
 
 
 
 
 
 
 
 
 
 
 Loans 90 days past due & still accruing
 
$
98

 
$
546

 
$
286

 
$

 
$
60

 
 
 
 
 
 
 
 
 
 
 
Performing Troubled Debt Restructurings (TDRs)
 
$
745

 
$
755

 
$
767

 
$
774

 
$
786

(1) Nonperforming TDRs included in nonperforming loans
 

 

 

 

 

Total TDRs
 
$
745

 
$
755

 
$
767

 
$
774

 
$
786

 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses to:
 
 
 
 
 
 
 
 
 
 
Total loans at quarter end
 
1.19
%
 
1.17
%
 
1.17
%
 
1.19
%
 
1.16
%
Nonperforming loans (1)
 
225.35

 
241.94

 
280.94

 
331.91

 
452.77

Nonperforming assets
 
223.52

 
239.77

 
277.95

 
327.63

 
396.37

Net nonperforming assets
 
226.43

 
243.83

 
284.93

 
329.68

 
399.53

 
 
 
 
 
 
 
 
 
 
 
QTD net chargeoffs (annualized) to QTD average loans:
 
 
 
 
 
 
 
 
 
 
SBA loans
 
(0.02
)%
 
1.17
%
 
0.65
%
 
0.10
%
 
(0.28
)%
Commercial loans
 

 

 

 
(0.01
)
 
(0.02
)
Residential mortgage loans
 

 

 

 
(0.01
)
 
0.06

Consumer loans
 
(0.01
)
 
(0.06
)
 
0.05

 
(0.47
)
 
0.30

Total loans
 
%
 
0.05
%
 
0.04
%
 
(0.05
)%
 
0.02
%
 
 
 
 
 
 
 
 
 
 
 
Nonperforming loans to total loans
 
0.53
%
 
0.48
%
 
0.42
%
 
0.36
%
 
0.26
%
Nonperforming loans and TDRs to total loans
 
0.58

 
0.54

 
0.48

 
0.42

 
0.32

Nonperforming assets to total loans and OREO
 
0.53

 
0.49

 
0.42

 
0.36

 
0.29

Nonperforming assets to total assets
 
0.44

 
0.40

 
0.35

 
0.30

 
0.23






UNITY BANCORP, INC.
QUARTERLY FINANCIAL DATA
December 31, 2018
(In thousands, except percentages and per share amounts)
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
SUMMARY OF INCOME:
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
18,060

 
$
17,194

 
$
16,369

 
$
15,640

 
$
15,044

Total interest expense
 
3,896

 
3,627

 
3,225

 
2,768

 
2,544

Net interest income
 
14,164

 
13,567

 
13,144

 
12,872

 
12,500

Provision for loan losses
 
500

 
500

 
550

 
500

 
500

Net interest income after provision for loan losses
 
13,664

 
13,067

 
12,594

 
12,372

 
12,000

Total noninterest income
 
1,954

 
2,479

 
2,312

 
2,286

 
2,037

Total noninterest expense
 
8,268

 
8,801

 
8,158

 
8,194

 
7,629

Income before provision for income taxes
 
7,350

 
6,745

 
6,748

 
6,464

 
6,408

Provision for income taxes
 
1,547

 
1,255

 
1,351

 
1,235

 
2,175

Impact of Tax Reform Bill
 

 

 

 

 
1,733

Net income
 
$
5,803

 
$
5,490

 
$
5,397

 
$
5,229

 
$
2,500

 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.54

 
$
0.51

 
$
0.50

 
$
0.49

 
$
0.24

Net income per common share - Diluted
 
$
0.53

 
$
0.50

 
$
0.49

 
$
0.48

 
$
0.23

 
 
 
 
 
 
 
 
 
 
 
COMMON SHARE DATA:
 
 
 
 
 
 
 
 
 
 
Market price per share
 
$
20.76

 
$
22.90

 
$
22.75

 
$
22.00

 
$
19.75

Dividends paid
 
$
0.07

 
$
0.07

 
$
0.07

 
$
0.06

 
$
0.06

Book value per common share
 
$
12.85

 
$
12.37

 
$
11.94

 
$
11.50

 
$
11.13

 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,765

 
10,743

 
10,717

 
10,678

 
10,604

Weighted average common shares outstanding - Diluted
 
10,935

 
10,936

 
10,915

 
10,853

 
10,794

Issued and outstanding common shares
 
10,780

 
10,756

 
10,731

 
10,709

 
10,615

 
 
 
 
 
 
 
 
 
 
 
PERFORMANCE RATIOS (Annualized):
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.56
%
 
1.50
%
 
1.53
%
 
1.53
%
 
0.74
%
Return on average equity
 
17.00

 
16.64

 
17.32

 
17.69

 
8.54

Efficiency ratio
 
50.69

 
54.86

 
52.80

 
54.00

 
52.45

Noninterest expense to average assets
 
2.22

 
2.41

 
2.32

 
2.40

 
2.25

 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET DATA:
 
 
 
 
 
 
 
 
 
 
Total assets
 
1,579,157

 
1,553,152

 
1,514,120

 
1,439,902

 
1,455,496

Total deposits
 
1,207,687

 
1,219,473

 
1,146,399

 
1,117,514

 
1,043,137

Total loans
 
1,304,566

 
1,283,304

 
1,246,511

 
1,195,110

 
1,170,674

Total securities
 
63,732

 
63,399

 
65,682

 
67,521

 
69,800

Total shareholders' equity
 
138,488

 
133,067

 
128,141

 
123,104

 
118,105

Allowance for loan losses
 
(15,488
)
 
(14,988
)
 
(14,634
)
 
(14,196
)
 
(13,556
)
 
 
 
 
 
 
 
 
 
 
 
TAX EQUIVALENT YIELDS AND RATES:
 
 
 
 
 
 
 
 
 
 
Interest-earning assets
 
5.12
%
 
4.97
%
 
4.91
%
 
4.85
%
 
4.71
%
Interest-bearing liabilities
 
1.46

 
1.38

 
1.27

 
1.12

 
1.05

Net interest spread
 
3.66

 
3.59

 
3.64

 
3.73

 
3.66

Net interest margin
 
4.01

 
3.92

 
3.95

 
3.99

 
3.91

 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY:
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
6,929

 
6,251

 
5,265

 
4,333

 
3,420

QTD net chargeoffs (annualized) to QTD average loans
 
%
 
0.05
%
 
0.04
%
 
(0.05
)%
 
0.02
%
Allowance for loan losses to total loans
 
1.19

 
1.17

 
1.17

 
1.19

 
1.16

Nonperforming assets to total loans and OREO
 
0.53

 
0.49

 
0.42

 
0.36

 
0.29

Nonperforming assets to total assets
 
0.44

 
0.40

 
0.35

 
0.30

 
0.23

 
 
 
 
 
 
 
 
 
 
 





(In thousands, except percentages and per share amounts)
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
CAPITAL RATIOS AND OTHER:
 
 
 
 
 
 
 
 
 
 
Total equity to total assets
 
8.77
%
 
8.57
%
 
8.46
%
 
8.55
%
 
8.11
%
Leverage ratio
 
9.90

 
9.74

 
9.63

 
9.46

 
9.37

Common equity tier 1 risk-based capital ratio
 
11.40

 
11.15

 
11.05

 
11.14

 
10.81

Tier 1 risk-based capital ratio
 
12.24

 
12.00

 
11.92

 
12.07

 
11.75

Total risk-based capital ratio
 
13.49

 
13.25

 
13.14

 
13.24

 
12.87

Number of banking offices
 
19

 
19

 
19

 
18

 
18

Number of ATMs
 
20

 
20

 
20

 
19

 
19

Number of employees
 
200

 
195

 
197

 
199

 
199







UNITY BANCORP, INC.
RECONCILIATION OF GAAP vs. NON-GAAP FINANCIALS
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QTD
 
YTD
 
QTD
 
YTD
 
 
Current QTD vs Prior QTD
 
 
Current YTD vs. Prior YTD
 
(In thousands, except percentages and per share amounts)
 
Dec 31, 2018
 
Dec 31, 2018
 
Dec 31, 2017
 
Dec 31, 2017
 
 
$
 
%
 
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
$
7,350

 
$
27,307

 
$
6,408

 
$
22,433

 
 
942

 
14.7

 
 
4,874

 
21.7

 
Provision for income taxes
 
1,547

 
5,388

 
3,908

 
9,540

 
 
(2,361
)
 
(60.4
)
 
 
(4,152
)
 
(43.5
)
 
Net Income
 
$
5,803

 
$
21,919

 
$
2,500

 
$
12,893

 
 
3,303

 
132.1

 
 
9,026

 
70.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Tax Rate
 
21.0
%
 
19.7
%
 
61.0
%
 
42.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common share - basic
 
$
0.54

 
$
2.04

 
$
0.24

 
$
1.22

 
 
0.30

 
125.0

 
 
0.82

 
67.2

 
Common share - diluted
 
$
0.53

 
$
2.01

 
$
0.23

 
$
1.20

 
 
0.30

 
130.4

 
 
0.81

 
67.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.56
%
 
1.53
%
 
0.74
%
 
1.02
%
 
 
 
 
110.8

 
 
 
 
50.0

 
Return on average equity
 
17.00
%
 
17.10
%
 
8.54
%
 
11.47
%
 
 
 
 
99.1

 
 
 
 
49.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NON-GAAP
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
7,350

 
27,307

 
6,408

 
22,433

 
 
942

 
14.7

 
 
4,874

 
21.7

 
Provision for income taxes
 
1,547

 
5,388

 
3,908

 
9,540

 
 
(2,361
)
 
(60.4
)
 
 
(4,152
)
 
(43.5
)
 
Net income before nonrecurring adjustments
 
5,803

 
21,919

 
2,500

 
12,893

 
 
3,303

 
132.1

 
 
9,026

 
70.0

 
Nonrecurring adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impact of tax reform bill
 

 

 
1,733

 
1,733

 
 
(1,733
)
 
(100.0
)
 
 
(1,733
)
 
(100.0
)
 
Adjusted net income
 
5,803

 
21,919

 
4,233

 
14,626

 
 
1,570

 
37.1

 
 
7,293

 
49.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
21.0
%
 
19.7
%
 
33.9
%
 
34.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income before nonrecurring adjustments per:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common share - basic
 
$
0.54

 
$
2.04

 
$
0.40

 
$
1.38

 
 
0.14

 
35.0

 
 
0.66

 
47.8

 
Common share - diluted
 
$
0.53

 
$
2.01

 
$
0.39

 
$
1.36

 
 
0.14

 
35.9

 
 
0.65

 
47.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios before nonrecurring adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.56
%
 
1.53
%
 
1.25
%
 
1.15
%
 
 
 
 
24.8

 
 
 
 
33.0

 
Return on average equity
 
17.00
%
 
17.10
%
 
14.46
%
 
13.02
%
 
 
 
 
17.6

 
 
 
 
31.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



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