-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D/FY0jdpGlLrb8kX8MhDobbeUzHq3i0jK1u/MKGstBc7hOtjVedgbOrbWl4rp329 ZtqOpvWJmvpMahlWfi67DA== 0001144204-07-020329.txt : 20070424 0001144204-07-020329.hdr.sgml : 20070424 20070424141651 ACCESSION NUMBER: 0001144204-07-020329 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070424 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070424 DATE AS OF CHANGE: 20070424 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: 07784062 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 v072373_8k.txt 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 April 24, 2007 Date of Report (Date of earliest event reported) UNITY BANCORP, INC. (Exact Name of Registrant as Specified in its Charter) New Jersey (State or Other Jurisdiction of Incorporation) 1-12431 22-3282551 (Commission File Number) (IRS Employer Identification No.) 64 OLD HIGHWAY 22, CLINTON, NEW JERSEY, 08809 (Address of Principal Executive Office) (Zip Code) (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 April 24, 2007 announcing earnings for the quarter ended March 31, 2007, the full text of which is incorporated by reference to this Item. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. EXHIBIT 99.1 Press release issued by the Registrant on April 24, 2007 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. Date: April 24, 2007 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 April 24, 2007 EX-99.1 2 v072373_ex99-1.txt Unity Bancorp Reports First Quarter Earnings CLINTON, N.J., April 24 /PRNewswire-FirstCall/ -- Unity Bancorp, Inc. (Nasdaq: UNTY), parent company of Unity Bank, reported net income of $1.5 million, or $0.21 per diluted share, for the quarter ended March 31, 2007, compared to net income of $1.7 million, or $0.24 per diluted share, for the quarter ended March 31, 2006. Return on average assets and average common equity for the first quarter of 2007 were 0.87% and 12.74%, respectively, as compared to 1.08% and 16.26%, respectively, for the first quarter of 2006. "Although we are pleased with the growth in our balance sheet and our customer base, the continued flat yield curve has significantly impacted our net interest margin," said Unity President and Chief Executive Officer, James A. Hughes. "Although the rate environment is a challenge, we are confident we can continue to grow our asset base, which will have a favorable effect on future earnings." Net interest income was $6.0 million for the first quarter of 2007, flat from the same period a year ago. Net interest income was impacted by a decrease in net interest margin offset by an increase in interest-earning assets. Net interest margin was 3.75% for the first quarter of 2007, compared to 4.12% for the first quarter of 2006. The Federal Reserve Board has raised rates 17 times, or 425 basis points, since 2004. These increases have resulted in an inverted yield curve; substantially increasing the Company's cost of funds. The sustained effect of the yield curve may cause the net interest margin to further contract during 2007. The provision for loan losses for the first quarter of 2007 was $200 thousand, compared to $300 thousand for the quarter ended March 31, 2006. Net loan charge-offs for the quarter ended March 31, 2007 were $67 thousand, compared to net-charge offs of $72 thousand for the quarter ended March 31, 2006. Total non-interest income for the first quarter of 2007 was $1.7 million, down 16.1% from the same period a year ago. Service charges on deposits for the first quarter were $349 thousand, a decrease of $84 thousand compared to the first quarter of 2006, primarily due to the abatement of fees due to competitive pricing and the acceleration of Check 21. Service and loan fees were $366 thousand for the first quarter of 2007, a decrease of $29 thousand from a year ago, due to a decline in SBA servicing income from increased prepayment on loans in a higher rate environment. Gains on sales of SBA loans amounted to $679 thousand for the first quarter of 2007, compared to $700 thousand for the quarter ended March 31, 2006, primarily due to reduced premiums. Total non-interest expenses for the first quarter of 2007 were $5.4 million, an increase of 3.1% from the prior year's comparable quarter. Compensation and benefits increased 8.4% due to merit increases and rising health insurance costs, partially offset by a planned reduction in the employee base. Processing and communications increased 4.4%, due to increased transactional volume. Furniture and equipment, and occupancy costs increased 1.8% and 3.9% respectively from the prior year, primarily due to the increased branch count and refurbishment of our existing branch network. Loan servicing costs decreased 10.9% due to the collection of expenses on past due loans. Total assets at March 31, 2007 were $681.3 million, an 8.5% increase from March 31, 2006. The increase in assets from the prior year was primarily due to growth in the Company's loan portfolio. Total loans at March 31, 2007 were $515.6 million, a 10.2% increase from March 31, 2006. The growth in the loan portfolio occurred in commercial, consumer and residential lending. "In the first quarter of 2007, the Company expanded its SBA program," said Mr. Hughes. "We have opened two loan production offices in Florida and one in North Carolina, and are actively looking for growth areas east of the Mississippi River where we can increase our position as a National SBA lender." At March 31, 2007 the allowance for loan losses was $7.8 million, or 1.50% of total loans, compared to 1.52% at March 31, 2006. Non-performing assets at March 31, 2007 were $6.8 million, or 1.31% of total loans and other real estate owned "OREO", as compared to $9.1 million or 1.80% of total loans and OREO at December 31, 2006, and $3.8 million or 0.81% of total loans and OREO from a year ago. Included in non-performing assets at March 31, 2007 are approximately $1.4 million of loans guaranteed by the SBA. Credit quality improved during the quarter due to increased collection efforts and the payoff of problem credits. Due to the current rate environment, the cost of gathering deposits has increased considerably. As a result, the Company has chosen not to compete for high rate deposits in order to enhance net interest margin. Loan growth was funded with cash flow from investment securities, federal funds sold and borrowings. The reduction in deposits from the fourth quarter of 2006 was due to the planned run off of municipal deposits, while core deposits remained relatively flat. Total deposits at March 31, 2007 were $541.4 million, a 1.3% increase from March 31, 2006. This increase was primarily the result of growth in savings accounts, partially offset by the decline in interest bearing checking accounts and demand deposit accounts. Savings accounts increased $35.8 million, or 20.0% from March 31, 2006, due to a high-yield savings product. "During the second quarter of 2007, the Company will implement remote deposit capture," said Mr. Hughes. "This unique product will allow customers to deposit checks from their business locations. We believe this will increase the number of transactional relationships inside and outside of our local market areas." Total shareholders' equity was $47.8 million at March 31, 2007, a 13.9% increase from March 31, 2006. The increase in shareholders' equity was primarily due to retained profits and an increase in other comprehensive income, partially offset by the payment of cash dividends. As of March 31, 2007, the Company's Tier I leverage capital ratio was 9.24%, Tier I risk-based capital ratio was 11.06%, and total risk-based capital ratio was 13.80%. All regulatory capital ratios exceeded the well- capitalized, federal capital adequacy requirements as of March 31, 2007. Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $681 million in assets and $541 million in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 15 retail service centers located in Hunterdon, Middlesex, Somerset, Union and Warren counties in New Jersey and Northampton County, Pennsylvania. For additional information about Unity visit our website at www.unitybank.com or call 800 618-BANK. This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company's control and could impede its ability to achieve these goals. These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors. Unity Bancorp, Inc. Consolidated Financial Highlights (Dollars in thousands, except per share data) Mar. 07 vs. Mar. 31, Dec. 31, Mar. 31, Dec. Mar. BALANCE SHEET DATA: 2007 2006 2006 06 06 Assets $681,302 $694,106 $628,055 (1.8)% 8.5 % Deposits 541,399 566,465 534,437 (4.4) 1.3 Loans 515,562 507,690 467,963 1.6 10.2 Securities 104,318 108,410 101,641 (3.8) 2.6 Shareholders' equity 47,825 46,228 41,985 3.5 13.9 Allowance for loan losses 7,757 7,624 7,120 1.7 8.9 FINANCIAL DATA - QUARTER TO DATE: Net income before taxes $2,081 $1,389 $2,499 49.8 % (16.7)% Federal and state income tax provision 630 465 842 35.5 (25.2) Net income 1,451 924 1,657 57.0 (12.4) Per share-basic 0.22 0.14 0.25 57.1 (12.0) Per share-diluted 0.21 0.13 0.24 61.5 (12.5) Return on average assets 0.87% 0.55% 1.08% 58.2 (19.4) Return on average common equity 12.74 8.05 16.26 58.3 (21.6) Efficiency ratio 70.46 73.34 65.25 (3.9) 8.0 SHARE INFORMATION: Closing price per share $11.86 $14.71 $15.29 (19.4)% (22.4)% Cash dividends declared 0.05 0.05 0.05 - - Book value per share 7.18 6.99 6.47 2.7 11.0 Average diluted shares outstanding (QTD) 6,953 6,917 6,896 0.5 0.8 CAPITAL RATIOS: Total equity to total assets 7.02% 6.66% 6.76% 5.4 % 3.8 % Tier I capital to average assets (leverage) 9.24 9.13 8.26 1.2 11.9 Tier I capital to risk-adjusted assets 11.06 10.92 9.93 1.3 11.4 Total risk-based capital 13.80 13.72 11.18 0.6 23.4 CREDIT QUALITY AND RATIOS: Nonperforming assets $6,771 $9,120 $3,781 (25.8)% 79.1 % Net charge offs to average loans (QTD) 0.05% 0.35% 0.06% (85.7) (16.7) Allowance for loan losses to total loans 1.50 1.50 1.52 - (1.3) Nonperforming assets to total loans and OREO 1.31 1.80 0.81 (27.2) 61.7 Unity Bancorp, Inc. Consolidated Balance Sheets (In thousands) Mar. 07 vs. Mar. 31, Dec. 31, Mar. 31, Dec. Mar. 2007 2006 2006 06 06 ASSETS Cash and due from banks $15,697 14,727 12,171 6.6 % 29.0 % Federal funds sold and interest bearing deposits 23,417 40,709 25,726 (42.5) (9.0) Securities: Available for sale 66,197 65,595 63,411 0.9 4.4 Held to maturity 38,121 42,815 38,230 (11.0) (0.3) Total securities 104,318 108,410 101,641 (3.8) 2.6 Loans: SBA - Held for sale 9,298 12,273 16,826 (24.2) (44.7) SBA - Held to Maturity 68,314 66,802 65,305 2.3 4.6 Commercial 318,905 312,195 279,369 2.1 14.2 Residential mortgage 63,615 63,493 60,194 0.2 5.7 Consumer 55,430 52,927 46,269 4.7 19.8 Total loans 515,562 507,690 467,963 1.6 10.2 Less: Allowance for loan losses 7,757 7,624 7,120 1.7 8.9 Net loans 507,805 500,066 460,843 1.5 10.2 Goodwill and other intangibles 1,599 1,603 1,614 (0.2) (0.9) Premises and equipment, net 11,525 11,610 10,723 (0.7) 7.5 Accrued interest receivable 3,594 3,926 3,350 (8.5) 7.3 Loan servicing asset 2,261 2,294 2,476 (1.4) (8.7) Bank Owned Life Insurance 5,421 5,372 5,232 0.9 3.6 Other assets 5,665 5,389 4,279 5.1 32.4 Total Assets $681,302 694,106 628,055 (1.8)% 8.5 % LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Noninterest-bearing demand deposits $75,928 79,772 81,210 (4.8)% (6.5)% Interest-bearing deposits: Interest bearing checking 89,313 105,382 113,441 (15.2) (21.3) Savings 214,636 205,919 178,848 4.2 20.0 Time, under $100,000 105,724 111,070 108,211 (4.8) (2.3) Time, $100,000 and over 55,798 64,322 52,727 (13.3) 5.8 Total deposits 541,399 566,465 534,437 (4.4) 1.3 Borrowed funds and subordinated debentures 89,744 79,744 49,279 12.5 82.1 Accrued interest payable 523 475 298 10.1 75.5 Accrued expenses and other liabilities 1,811 1,194 2,056 51.7 (11.9) Total liabilities 633,477 647,878 586,070 (2.2) 8.1 Commitments and Contingencies - - - Shareholders' equity: Common stock, no par value, 12,500 shares authorized 44,677 44,343 38,697 0.8 15.5 Retained earnings 4,067 2,951 4,749 37.8 (14.4) Treasury stock at cost (242) (242) (242) - - Accumulated other comprehensive loss, net of tax (677) (824) (1,219) (17.8) (44.5) Total shareholders' equity 47,825 46,228 41,985 3.5 13.9 Total Liabilities and Shareholders' Equity $681,302 694,106 628,055 (1.8)% 8.5 % COMMON SHARES AT PERIOD END: Issued 6,685 6,641 6,589 Outstanding 6,662 6,618 6,566 Treasury 23 23 23 N/M= Not meaningful Unity Bancorp, Inc. Consolidated Statements of Income (In thousands, except per share data) Mar. 07 vs. Mar. 31, Dec. 31, Mar. 31, Dec. Mar. FOR THE THREE MONTHS ENDED: 2007 2006 2006 06 06 INTEREST INCOME Fed funds sold and interest on deposits $262 $211 $207 24.2 % 26.6 % Securities: Available for sale 780 788 708 (1.0) 10.2 Held to maturity 540 551 476 (2.0) 13.4 Total securities 1,320 1,339 1,184 (1.4) 11.5 Loans: SBA 2,340 2,108 2,153 11.0 8.7 Commercial 5,988 5,875 4,892 1.9 22.4 Residential mortgage 888 887 820 0.1 8.3 Consumer 904 855 744 5.7 21.5 Total loan interest income 10,120 9,725 8,609 4.1 17.6 Total interest income 11,702 11,275 10,000 3.8 17.0 INTEREST EXPENSE Interest bearing demand deposits 552 664 694 (16.9) (20.5) Savings deposits 2,171 2,081 1,192 4.3 82.1 Time deposits 1,970 1,963 1,499 0.4 31.4 Borrowed funds and subordinated debentures 990 852 562 16.2 76.2 Total interest expense 5,683 5,560 3,947 2.2 44.0 Net interest income 6,019 5,715 6,053 5.3 (0.6) Provision for loan losses 200 600 300 (66.7) (33.3) Net interest income after provision for loan losses 5,819 5,115 5,753 13.8 1.1 NONINTEREST INCOME Service charges on deposit accounts 349 374 433 (6.7) (19.4) Service and loan fee income 366 345 395 6.1 (7.3) Gain on SBA loan sales 679 787 700 (13.7) (3.0) Gain on Mortgage loan sales 9 72 62 (87.5) (85.5) Gain on sales of other loans - - 82 - (100.0) Bank owned life insurance 49 47 47 4.3 4.3 Net securities gains 10 - - 100.0 100.0 Other income 217 121 283 79.3 (23.3) Total noninterest income 1,679 1,746 2,002 (3.8) (16.1) NONINTEREST EXPENSES Compensation and benefits 2,955 2,830 2,725 4.4 8.4 Processing and communications 550 585 527 (6.0) 4.4 Occupancy, net 673 655 648 2.7 3.9 Furniture and equipment 400 392 393 2.0 1.8 Professional fees 136 131 132 3.8 3.0 Loan servicing costs 90 211 101 (57.3) (10.9) Advertising 94 156 170 (39.7) (44.7) Other 519 512 560 1.4 (7.3) Total noninterest expenses 5,417 5,472 5,256 (1.0) 3.1 Income before taxes 2,081 1,389 2,499 49.8 (16.7) Federal and state income tax provision 630 465 842 35.5 (25.2) Net Income $1,451 $924 $1,657 57.0 % (12.4)% Net Income Per Common Share- Basic $0.22 $0.14 $0.25 57.1 % (12.0)% Net Income Per Common Share- Diluted $0.21 $0.13 $0.24 61.5 % (12.5)% AVERAGE COMMON SHARES OUTSTANDING: Basic 6,644 6,610 6,556 Diluted 6,953 6,917 6,896 Unity Bancorp, Inc. Consolidated Average Balance Sheets with Resultant Interest and Rates (Tax-equivalent basis, dollars in thousands) Three Months Ended March 31, 2007 December 31, 2006 Balance Interest Rate Balance Interest Rate ASSETS Interest-earning assets: Federal funds sold and interest- bearing deposits with banks $20,650 $262 5.15 % $16,274 $211 5.14 % Securities: Available for sale 64,905 792 4.88 67,266 801 4.76 Held to maturity 42,287 558 5.28 43,465 568 5.23 Total securities 107,192 1,350 5.04 110,731 1,369 4.95 Loans, net of unearned discount: SBA 81,783 2,340 11.44 83,828 2,108 10.06 Commercial 318,638 5,988 7.62 314,370 5,875 7.41 Residential mortgage 62,903 888 5.65 62,909 887 5.64 Consumer 53,419 904 6.86 49,590 855 6.84 Total loans 516,743 10,120 7.91 510,697 9,725 7.57 Total interest- earning assets 644,585 11,732 7.34 637,702 11,305 7.05 Noninterest-earning assets: Cash and due from banks 12,228 12,495 Allowance for loan losses (7,877) (7,763) Other assets 29,494 28,780 Total noninterest- earning assets 33,845 33,512 Total Assets $678,430 $671,214 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Interest-bearing demand deposits $97,570 552 2.29 $110,635 664 2.38 Savings deposits 210,879 2,171 4.18 199,643 2,081 4.14 Time deposits 170,508 1,970 4.69 169,889 1,963 4.58 Total interest- bearing deposits 478,957 4,693 3.97 480,167 4,708 3.89 Borrowed funds and subordinated debentures 75,133 990 5.34 67,083 852 5.04 Total interest- bearing liabilities 554,090 5,683 4.16 547,250 5,560 4.03 Noninterest-bearing liabilities: Demand deposits 75,222 76,168 Other liabilities 2,927 2,244 Total noninterest- bearing liabilities 78,149 78,412 Shareholders' equity 46,191 45,552 Total Liabilities and Shareholders' Equity $678,430 $671,214 Net interest spread 6,049 3.18 % 5,745 3.02 % Tax-equivalent basis adjustment (30) (30) Net interest income $6,019 $5,715 Net interest margin 3.75 % 3.60 % Unity Bancorp, Inc. Consolidated Average Balance Sheets with Resultant Interest and Rates (Tax-equivalent basis, dollars in thousands) Three Months Ended March 31, 2007 March 31, 2006 Balance Interest Rate Balance Interest Rate ASSETS Interest-earning assets: Federal funds sold and interest- bearing deposits with banks $20,650 $262 5.15 % $19,493 $207 4.31 % Securities: Available for sale 64,905 792 4.88 64,812 721 4.45 Held to maturity 42,287 558 5.28 39,291 476 4.85 Total securities 107,192 1,350 5.04 104,103 1,197 4.60 Loans, net of unearned discount: SBA 81,783 2,340 11.44 85,931 2,153 10.02 Commercial 318,638 5,988 7.62 271,323 4,892 7.31 Residential mortgage 62,903 888 5.65 61,126 820 5.37 Consumer 53,419 904 6.86 46,501 744 6.49 Total loans 516,743 10,120 7.91 464,881 8,609 7.47 Total interest- earning assets 644,585 11,732 7.34 588,477 10,013 6.86 Noninterest-earning assets: Cash and due from banks 12,228 11,698 Allowance for loan losses (7,877) (7,154) Other assets 29,494 26,847 Total noninterest- earning assets 33,845 31,391 Total Assets $678,430 $619,868 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Interest-bearing demand deposits $97,570 552 2.29 $128,150 694 2.20 Savings deposits 210,879 2,171 4.18 158,058 1,192 3.06 Time deposits 170,508 1,970 4.69 162,533 1,499 3.74 Total interest- bearing deposits 478,957 4,693 3.97 448,741 3,385 3.06 Borrowed funds and subordinated debentures 75,133 990 5.34 49,279 562 4.63 Total interest- bearing liabilities 554,090 5,683 4.16 498,020 3,947 3.21 Noninterest-bearing liabilities: Demand deposits 75,222 78,179 Other liabilities 2,927 2,339 Total noninterest- bearing liabilities 78,149 80,518 Shareholders' equity 46,191 41,330 Total Liabilities and Shareholders' Equity $678,430 $619,868 Net interest spread 6,049 3.18 % 6,066 3.65 % Tax-equivalent basis adjustment (30) (13) Net interest income $6,019 $6,053 Net interest margin 3.75 % 4.12 % Unity Bancorp, Inc. Allowance for Loan Losses and Loan Quality Schedules (Dollars in thousands) 3/31/2007 12/31/2006 9/30/2006 6/30/2006 3/31/2006 ALLOWANCE FOR LOAN LOSSES: Balance, beginning $ 7,624 $ 7,480 $ 7,257 $7,120 $6,892 Provision charged to expense 200 600 400 250 300 7,824 8,080 7,657 7,370 7,192 Less: Charge offs SBA 116 320 141 66 46 Commercial - 196 50 48 4 Residential mortgage - - - - - Consumer 2 10 3 14 35 Total Charge Offs 118 526 194 128 85 Add: Recoveries SBA 41 20 - - - Commercial 6 50 12 2 11 Residential mortgage - - - - - Consumer 4 - 5 13 2 Total Recoveries 51 70 17 15 13 Net Charge Offs 67 456 177 113 72 Balance, ending $ 7,757 $ 7,624 $ 7,480 $7,257 $7,120 LOAN QUALITY INFORMATION: Nonperforming loans $6,515 $8,909 $6,473 $2,552 $3,605 Other real estate owned, net 256 211 - - 176 Nonperforming assets $6,771 $9,120 $6,473 $2,552 $3,781 Loans 90 days past due and still accruing $ 145 $78 $658 $- $326 Allowance for loan losses to: Total loans at period end 1.50 % 1.50 % 1.50 % 1.50 % 1.52 % Nonperforming loans 119.06 85.58 115.56 284.37 197.50 Nonperforming assets 114.56 83.60 115.56 284.37 188.31 Net charge offs to average loans (QTD) 0.05 0.35 0.14 0.10 0.06 Net charge offs to average loans (YTD) 0.05 0.17 0.10 0.08 0.06 Nonperforming loans to total loans 1.26 1.75 1.30 0.53 0.77 Nonperforming assets to total loans and OREO 1.31 1.80 1.30 0.53 0.81 Unity Bancorp, Inc. Quarterly Financial Data 03/31/07 12/31/06 09/30/06 06/30/06 03/31/06 SUMMARY OF INCOME (in thousands) : Interest income $11,702 $11,275 $11,258 $10,644 $10,000 Interest expense 5,683 5,560 5,314 4,611 3,947 Net interest income 6,019 5,715 5,944 6,033 6,053 Provision for loan losses 200 600 400 250 300 Net interest income after provision 5,819 5,115 5,544 5,783 5,753 Noninterest income 1,679 1,746 2,243 1,647 2,002 Noninterest expense 5,417 5,472 5,316 5,001 5,256 Income before income taxes 2,081 1,389 2,471 2,429 2,499 Federal and state income tax provision 630 465 844 792 842 Net Income 1,451 924 1,627 1,637 1,657 Net Income per Common Share: Basic $0.22 $0.14 $0.25 $0.25 $0.25 Diluted 0.21 0.13 0.23 0.24 0.24 COMMON SHARE DATA: Cash dividends declared $0.05 $0.05 $0.05 $0.05 $0.05 Book value at quarter end 7.18 6.99 6.92 6.60 6.47 Market value at quarter end 11.86 14.71 15.28 15.49 15.29 Average common shares outstanding: (000's) Basic 6,644 6,610 6,591 6,574 6,556 Diluted 6,953 6,917 6,925 6,905 6,896 Common shares outstanding at period end (000's) 6,662 6,618 6,600 6,579 6,566 OPERATING RATIOS: Return on average assets 0.87 % 0.55 % 1.00 % 1.03 % 1.08 % Return on average common equity 12.74 8.05 15.26 15.39 16.26 Efficiency ratio 70.46 73.34 65.48 65.12 65.25 BALANCE SHEET DATA (in thousands): Assets $681,302 $694,106 $671,811 $670,870 $628,055 Deposits 541,399 566,465 557,451 576,376 534,437 Loans 515,562 507,690 498,842 484,622 467,963 Shareholders' equity 47,825 46,228 45,643 43,446 41,985 Allowance for loan losses 7,757 7,624 7,480 7,257 7,120 TAX-EQUIVALENT YIELDS AND RATES: Interest-earning assets 7.34 % 7.05 % 7.13 % 7.04 % 6.86 % Interest-bearing liabilities 4.16 4.03 3.87 3.58 3.21 Net interest spread 3.18 3.02 3.26 3.46 3.65 Net interest margin 3.75 3.60 3.79 3.99 4.12 CREDIT QUALITY: Nonperforming assets (in thousands) $6,771 $9,120 $6,473 $2,552 $3,781 Allowance for loan losses to period- end loans 1.50 % 1.50 % 1.50 % 1.50 % 1.52 % Net charge offs to average loans 0.05 0.35 0.14 0.10 0.06 Nonperforming assets to loans and OREO 1.31 1.80 1.30 0.53 0.81 CAPITAL AND OTHER: Total equity to assets 7.02 % 6.66 % 6.79 % 6.48 % 6.68 % Tier I capital to average assets (leverage) 9.24 9.13 9.12 8.22 8.26 Tier I capital to risk-adjusted assets 11.06 10.92 10.92 9.85 9.93 Total capital to risk-adjusted assets 13.80 13.72 12.91 11.10 11.18 Number of banking offices 15 15 14 14 14 Number of ATMs 16 16 16 16 16 Number of employees 179 185 205 191 190 SOURCE Unity Bancorp, Inc. 04/24/2007 /CONTACT: Alan Bedner, EVP and Chief Financial Officer of Unity Bancorp, Inc., +1-908-713-4308 / /Web site: http://www.unitybank.com / (UNTY) -----END PRIVACY-ENHANCED MESSAGE-----