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Unity Bancorp Reports Net Income Increased 50%

CLINTON, N.J., April 22, 2015 (GLOBE NEWSWIRE) -- Unity Bancorp, Inc. (Nasdaq:UNTY), parent company of Unity Bank, reported net income of $1.9 million, or $0.23 per diluted share, for the three months ended March 31, 2015, a 50.0% increase compared to net income of $1.3 million, or $0.17 per diluted share, for the same period a year ago. Return on average assets and average common equity for the quarter were 0.82% and 11.08%, respectively, compared to 0.59% and 9.06% for the same period a year ago.

Highlights include:

  • 3.0% loan growth since year-end 2014 – 6.6% growth in residential mortgage loans, 5.8% growth in consumer loans and 2.2% growth in commercial loans.
  • 10.1% increase in net interest income compared to the prior year's quarter due to strong loan growth.
  • Net interest margin of 3.64% this quarter compared to 3.57% in the prior year's quarter.
  • Improved credit quality metrics and reduced loan loss provision - 24.1% decrease in nonperforming loans and lower level of net charge-offs compared to the prior year's quarter.

"Our continued earnings momentum is a direct result of our commitment to providing exceptional service to our customers," reported James A. Hughes, President and CEO. "We are realizing record loan volume, as all of our loan departments are exceeding their goals. I have never been more confident about our ability to continue to grow market share, which in turn will result in increased shareholder value. I know this year will be a defining year for Unity, as we continue to build an organization that focuses on service and sales. I look forward to reporting our future successes."

Net Interest Income

Our core source of earnings, net interest income, increased $733 thousand to $8.0 million for the quarter ended March 31, 2015 compared to the prior year's period. This increase was the result of the strong loan growth over the past twelve months in commercial, residential mortgage and consumer loans. Quarterly average residential mortgage loans have increased $45.1 million, average commercial loans increased $41.8 million and consumer loans increased $16.4 million compared to the comparable quarter in 2014. Partially offsetting this increase was the lower level of interest income due to our smaller investment portfolio and the increase in deposit interest expense.

The net interest margin increased 7 basis points to 3.64% for the quarter ended March 31, 2015 compared to 3.57% for the prior year's quarter. We expect net interest income and net interest margin to continue to expand in future quarters due to strong loan growth.

Provision for Loan Losses

The provision for loan losses decreased $400 thousand to $200 thousand for the quarter ended March 31, 2015, compared to $600 thousand for the prior year period. The decrease was the result of improving credit quality as evidenced by lower levels of net charge-offs and reduced nonperforming assets.

Noninterest Income

Noninterest income increased $115 thousand to $1.6 million for the three months ended March 31, 2015, compared to the same period last year. Quarterly noninterest income increased due to higher gains on the sale of SBA loans. SBA loan sales totaled $3.5 million with net gains on sale of $363 thousand this quarter compared to sales of $928 thousand and net gains of $83 thousand in the prior year's quarter.

Quarterly gains on the sale of mortgage loans decreased slightly on a lower sales volume. During the quarter, $37.1 million in residential mortgage loans were originated, of which $15.0 million were sold at a gain of $344 thousand, compared to $22.2 million originated and $17.4 million sold at a gain of $365 thousand during the prior year's quarter. Approximately $7.5 million of the loans sold during the first quarter 2014 were from our portfolio, with the remainder consisting of new production.

Security gains totaled $110 thousand for the prior year's quarter. There were no security gains or losses on sales realized during the quarter.

Branch fee income, which consists of service charges and overdraft fees, declined $31 thousand in the quarter. The decreases were due to a lower volume of overdraft fees.

Noninterest Expense

Noninterest expense increased $244 thousand to $6.5 million for the quarter ended March 31, 2015. Compensation and benefits expenses have increased over the past twelve months due to increased head count in loan origination and support staff. Other expense increases included professional services, advertising, marketing agreements and promotional gift expense as well as director fees. Other real estate owned ("OREO") expenses decreased $212 thousand this quarter compared to a year ago due to the disposition of properties which had higher holding costs such as property maintenance, taxes and legal costs in the prior year's period.

Financial Condition

At March 31, 2015, total assets were $1.0 billion, an increase of $26.6 million from year-end 2014:

  • Total loans increased $22.8 million or 3.0%, from year-end 2014 to $784.6 million at March 31, 2015. The majority of the growth came in our residential mortgage, commercial and consumer loan portfolios which increased $14.5 million, $8.8 million and $3.5 million, respectively.
  • Total deposits decreased $4.9 million or 0.6%, to $789.4 million at March 31, 2015, due primarily to decreased savings, interest-bearing demand and time deposits, partially offset by an increase in noninterest-bearing demand deposits. The decreased savings and interest-bearing demand deposit balances were due to seasonal reductions in municipal deposits.
  • Shareholders' equity was $72.0 million at March 31, 2015, an increase of $1.9 million from year-end 2014, due to year-to-date net income less the dividends paid.
  • Book value per common share was $8.55 as of March 31, 2015.
  • At March 31, 2015, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 8.93%, 9.25, 11.22% and 12.48% respectively, all in excess of the ratios required to be deemed "well-capitalized".

Credit Quality

  • Nonperforming assets totaled $11.1 million at March 31, 2015, or 1.41% of total loans and OREO, compared to $12.5 million or 1.64% of total loans and OREO at year-end 2014.
  • Nonperforming loans decreased 19.6% to $9.1 million at March 31, 2015 from year-end.
  • OREO increased $813 thousand to $2.0 million at March 31, 2015 from year-end.
  • The allowance for loan losses totaled $12.2 million at March 31, 2015, or 1.55% of total loans compared to $12.6 million and 1.65% at December 31, 2014.
  • Net charge-offs were $570 thousand for the three months ended March 31, 2015, down from $934 thousand for the same period a year ago.

Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.0 billion in assets and $789 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 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
March 31, 2015
March 31, 2015 vs.
December 31, 2014 March 31, 2014
(In thousands, except percentages and per share amounts) March 31, 2015 December 31, 2014 March 31, 2014 % %
BALANCE SHEET DATA:
Total assets $ 1,035,404 $ 1,008,788 $ 961,168 2.6 % 7.7 %
Total deposits 789,441 794,341 767,624 (0.6) 2.8
Total loans 784,642 761,825 683,951 3.0 14.7
Total securities 77,308 80,082 109,459 (3.5) (29.4)
Total shareholders' equity 71,987 70,123 58,810 2.7 22.4
Allowance for loan losses (12,181) (12,551) (12,807) (2.9) (4.9)
FINANCIAL DATA - QUARTER TO DATE:
Income before provision for income taxes $ 2,959 $ 2,653 $ 1,955 11.5 51.4
Provision for income taxes 1,020 952 662 7.1 54.1
Net income $ 1,939 $ 1,701 $ 1,293 14.0 50.0
Net income per common share - Basic (1) $ 0.23 $ 0.21 $ 0.17 15.0 35.3
Net income per common share - Diluted (1) $ 0.23 $ 0.20 $ 0.17 15.0 35.3
Return on average assets 0.82 % 0.70 % 0.59 % 17.1 39.0
Return on average equity (2) 11.08 % 9.78 % 9.06 % 13.3 22.3
Efficiency ratio 67.30 % 63.68 % 71.91 % 5.7 (6.4)
SHARE INFORMATION:
Market price per share $ 9.08 $ 9.43 $ 7.95 (3.7) 14.2
Dividends paid $ 0.03 $ 0.03 $ 0.02 -- 0.5
Book value per common share $ 8.55 $ 8.36 $ 7.74 2.3 10.5
Average diluted shares outstanding (QTD) 8,514 8,478 7,654 0.4 11.2
CAPITAL RATIOS:
Total equity to total assets 6.95 % 6.95 % 6.12 % -- 13.6
Leverage ratio 8.93 % 8.71 % 8.19 % 2.5 9.0
Common equity tier 1 risk-based capital ratio 9.25 % n/a n/a n/a n/a
Tier 1 risk-based capital ratio 11.22 % 11.57 % 10.77 % (3.0) 4.2
Total risk-based capital ratio 12.48 % 12.83 % 12.03 % (2.7) 3.7
CREDIT QUALITY AND RATIOS:
Nonperforming assets $ 11,116 $ 12,530 $ 14,513 (11.3) (23.4)
QTD net chargeoffs (annualized) to QTD average loans 0.30 % 0.63 % 0.56 % (52.4) (46.4)
Allowance for loan losses to total loans 1.55 % 1.65 % 1.87 % (6.1) (17.1)
Nonperforming assets to total loans and OREO 1.41 % 1.64 % 2.11 % (14.0) (33.2)
Nonperforming assets to total assets 1.07 % 1.24 % 1.51 % (13.7) % (29.1) %
(1) Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by weighted average shares outstanding.
(2) Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by average shareholders' equity (excluding preferred stock).
UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2015
March 31, 2015 vs.
December 31, 2014 March 31, 2014
(In thousands, except percentages) March 31, 2015 December 31, 2014 March 31, 2014 % %
ASSETS
Cash and due from banks $ 25,282 $ 29,351 $ 30,025 (13.9) % (15.8) %
Federal funds sold and interest-bearing deposits 108,563 100,470 98,188 8.1 10.6
Cash and cash equivalents 133,845 129,821 128,213 3.1 4.4
Securities:
Securities available for sale 57,875 60,073 86,154 (3.7) (32.8)
Securities held to maturity 19,433 20,009 23,305 (2.9) (16.6)
Total securities 77,308 80,082 109,459 (3.5) (29.4)
Loans:
SBA loans held for sale 6,929 5,179 6,517 33.8 6.3
SBA loans held for investment 39,155 40,401 47,737 (3.1) (18.0)
SBA 504 loans 29,893 34,322 33,550 (12.9) (10.9)
Commercial loans 410,742 401,949 368,909 2.2 11.3
Residential mortgage loans 235,371 220,878 180,129 6.6 30.7
Consumer loans 62,552 59,096 47,109 5.8 32.8
Total loans 784,642 761,825 683,951 3.0 14.7
Allowance for loan losses (12,181) (12,551) (12,807) 2.9 4.9
Net loans 772,461 749,274 671,144 3.1 15.1
Premises and equipment, net 15,465 15,231 15,474 1.5 (0.1)
Bank owned life insurance ("BOLI") 13,095 13,001 12,845 0.7 1.9
Deferred tax assets 5,743 5,860 6,308 (2.0) (9.0)
Federal Home Loan Bank stock 7,382 6,032 5,752 22.4 28.3
Accrued interest receivable 3,637 3,518 3,212 3.4 13.2
Other real estate owned ("OREO") 1,975 1,162 2,467 70.0 (19.9)
Goodwill and other intangibles 1,516 1,516 1,516 -- --
Other assets 2,977 3,291 4,778 (9.5) (37.7)
Total assets $ 1,035,404 $ 1,008,788 $ 961,168 2.6 % 7.7 %
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand deposits $ 163,535 $ 152,785 $ 172,010 7.0 % (4.9) %
Interest-bearing demand deposits 124,110 128,875 134,321 (3.7) (7.6)
Savings deposits 290,843 300,348 253,109 (3.2) 14.9
Time deposits, under $100,000 112,671 113,119 112,150 (0.4) 0.5
Time deposits, $100,000 and over 98,282 99,214 96,034 (0.9) 2.3
Total deposits 789,441 794,341 767,624 (0.6) 2.8
Borrowed funds 155,000 125,000 115,000 24.0 34.8
Subordinated debentures 15,465 15,465 15,465 -- --
Accrued interest payable 478 474 455 0.8 5.1
Accrued expenses and other liabilities 3,033 3,385 3,814 (10.4) (20.5)
Total liabilities 963,417 938,665 902,358 2.6 6.8
Shareholders' equity:
Common stock 58,927 58,785 52,237 0.2 12.8
Retained earnings 12,880 11,195 6,739 15.1 91.3
Accumulated other comprehensive income (loss) 180 143 (166) 25.9 208.4
Total shareholders' equity 71,987 70,123 58,810 2.7 22.4
Total liabilities and shareholders' equity $ 1,035,404 $ 1,008,788 $ 961,168 2.6 % 7.7 %
Issued and outstanding common shares 8,423 8,388 7,602
UNITY BANCORP, INC.
QTD CONSOLIDATED STATEMENTS OF INCOME
March 31, 2015
March 31, 2015 vs.
For the three months ended December 31, 2014 March 31, 2014
(In thousands, except percentages and per share amounts) March 31, 2015 December 31, 2014 March 31, 2014 $ % $ %
INTEREST INCOME
Federal funds sold and interest-bearing deposits $ 9 $ 13 $ 9 $ (4) (30.8) % $ -- -- %
Federal Home Loan Bank stock 44 38 47 6 15.8 (3) (6.4)
Securities:
Taxable 387 444 726 (57) (12.8) (339) (46.7)
Tax-exempt 72 79 105 (7) (8.9) (33) (31.4)
Total securities 459 523 831 (64) (12.2) (372) (44.8)
Loans:
SBA loans 679 605 583 74 12.2 96 16.5
SBA 504 loans 346 425 399 (79) (18.6) (53) (13.3)
Commercial loans 5,066 5,064 4,601 2 -- 465 10.1
Residential mortgage loans 2,582 2,461 2,058 121 4.9 524 25.5
Consumer loans 699 673 495 26 3.9 204 41.2
Total loans 9,372 9,228 8,136 144 1.6 1,236 15.2
Total interest income 9,884 9,802 9,023 82 0.8 861 9.5
INTEREST EXPENSE
Interest-bearing demand deposits 106 112 111 (6) (5.4) (5) (4.5)
Savings deposits 264 270 182 (6) (2.2) 82 45.1
Time deposits 686 715 644 (29) (4.1) 42 6.5
Borrowed funds and subordinated debentures 808 817 799 (9) (1.1) 9 1.1
Total interest expense 1,864 1,914 1,736 (50) (2.6) 128 7.4
Net interest income 8,020 7,888 7,287 132 1.7 733 10.1
Provision for loan losses 200 850 600 (650) (76.5) (400) (66.7)
Net interest income after provision for loan losses 7,820 7,038 6,687 782 11.1 1,133 16.9
NONINTEREST INCOME
Branch fee income 346 362 377 (16) (4.4) (31) (8.2)
Service and loan fee income 296 388 295 (92) (23.7) 1 0.3
Gain on sale of SBA loans held for sale, net 363 342 83 21 6.1 280 337.3
Gain on sale of mortgage loans, net 344 323 365 21 6.5 (21) (5.8)
Net security gains -- 55 110 (55) (100.0) (110) (100.0)
Other income 292 190 296 102 53.7 (4) (1.4)
Total noninterest income 1,641 1,660 1,526 (19) (1.1) 115 7.5
NONINTEREST EXPENSE
Compensation and benefits 3,472 3,197 3,217 275 8.6 255 7.9
Occupancy 672 596 659 76 12.8 13 2.0
Processing and communications 596 615 582 (19) (3.1) 14 2.4
Furniture and equipment 373 397 357 (24) (6.0) 16 4.5
Professional services 236 131 211 105 80.2 25 11.8
Loan costs 221 211 170 10 4.7 51 30.0
OREO expenses 35 72 247 (37) (51.4) (212) (85.8)
Deposit insurance 183 162 178 21 13.0 5 2.8
Advertising 182 269 151 (87) (32.3) 31 20.5
Other expenses 532 395 486 137 34.7 46 9.5
Total noninterest expense 6,502 6,045 6,258 457 7.6 244 3.9
Income before provision for income taxes 2,959 2,653 1,955 306 11.5 1,004 51.4
Provision for income taxes 1,020 952 662 68 7.1 358 54.1
Net income $ 1,939 $ 1,701 $ 1,293 $ 238 14.0 % $ 646 50.0 %
Effective tax rate 34.5 % 35.9 % 33.9 %
Net income per common share - Basic (1) $ 0.23 $ 0.21 $ 0.17
Net income per common share - Diluted (1) $ 0.23 $ 0.20 $ 0.17
Weighted average common shares outstanding - Basic 8,417 8,378 7,586
Weighted average common shares outstanding - Diluted 8,514 8,478 7,654
(1) Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by weighted average shares outstanding.
UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
March 31, 2015
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
For the three months ended
March 31, 2015 December 31, 2014
Average Balance Interest Rate/Yield Average Balance Interest Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits $ 37,280 $ 9 0.10 % $ 50,929 $ 13 0.10 %
Federal Home Loan Bank stock 3,847 44 4.64 3,807 38 3.96
Securities:
Taxable 67,046 387 2.34 71,542 444 2.48
Tax-exempt 11,984 106 3.59 13,226 117 3.54
Total securities (A) 79,030 493 2.53 84,768 561 2.65
Loans:
SBA loans 48,405 679 5.69 50,816 605 4.76
SBA 504 loans 33,397 346 4.20 34,533 425 4.88
Commercial loans 406,095 5,066 5.06 401,215 5,064 5.01
Residential mortgage loans 226,125 2,582 4.63 217,008 2,461 4.54
Consumer loans 62,355 699 4.55 57,923 673 4.61
Total loans (B) 776,377 9,372 4.90 761,495 9,228 4.82
Total interest-earning assets $ 896,534 $ 9,918 4.49 % $ 900,999 $ 9,840 4.35 %
Noninterest-earning assets:
Cash and due from banks 29,908 30,346
Allowance for loan losses (12,701) (13,074)
Other assets 43,206 43,577
Total noninterest-earning assets 60,413 60,849
Total assets $ 956,947 $ 961,848
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits $ 126,593 $ 106 0.34 % $ 126,788 $ 112 0.35 %
Savings deposits 290,006 264 0.37 298,166 270 0.36
Time deposits 211,425 686 1.32 219,866 715 1.29
Total interest-bearing deposits 628,024 1,056 0.68 644,820 1,097 0.68
Borrowed funds and subordinated debentures 91,909 808 3.57 91,009 817 3.51
Total interest-bearing liabilities $ 719,933 $ 1,864 1.05 % $ 735,829 $ 1,914 1.03 %
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits 161,729 152,359
Other liabilities 4,307 4,616
Total noninterest-bearing liabilities 166,036 156,975
Total shareholders' equity 70,978 69,044
Total liabilities and shareholders' equity $ 956,947 $ 961,848
Net interest spread $ 8,054 3.44 % $ 7,926 3.32 %
Tax-equivalent basis adjustment (34) (38)
Net interest income $ 8,020 $ 7,888
Net interest margin 3.64 % 3.49 %
(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 nondeductible
portion of interest expense, assuming a federal tax rate of 34 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
March 31, 2015
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
For the three months ended
March 31, 2015 March 31, 2014
Average Balance Interest Rate/Yield Average Balance Interest Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits $ 37,280 $ 9 0.10 % $ 42,029 $ 9 0.09 %
Federal Home Loan Bank stock 3,847 44 4.64 3,988 47 4.78
Securities:
Taxable 67,046 387 2.34 92,808 726 3.13
Tax-exempt 11,984 106 3.59 16,841 155 3.68
Total securities (A) 79,030 493 2.53 109,649 881 3.21
Loans:
SBA loans 48,405 679 5.69 54,790 583 4.26
SBA 504 loans 33,397 346 4.20 31,719 399 5.10
Commercial loans 406,095 5,066 5.06 364,343 4,601 5.12
Residential mortgage loans 226,125 2,582 4.63 181,058 2,058 4.55
Consumer loans 62,355 699 4.55 45,939 495 4.37
Total loans (B) 776,377 9,372 4.90 677,849 8,136 4.85
Total interest-earning assets $ 896,534 $ 9,918 4.49 % $ 833,515 $ 9,073 4.39 %
Noninterest-earning assets:
Cash and due from banks 29,908 23,389
Allowance for loan losses (12,701) (13,410)
Other assets 43,206 43,599
Total noninterest-earning assets 60,413 53,578
Total assets $ 956,947 $ 887,093
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing demand deposits $ 126,593 $ 106 0.34 % $ 131,187 $ 111 0.34 %
Savings deposits 290,006 264 0.37 266,321 182 0.28
Time deposits 211,425 686 1.32 205,130 644 1.27
Total interest-bearing deposits 628,024 1,056 0.68 602,638 937 0.63
Borrowed funds and subordinated debentures 91,909 808 3.57 91,265 799 3.50
Total interest-bearing liabilities $ 719,933 $ 1,864 1.05 % $ 693,903 $ 1,736 1.01 %
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits 161,729 132,167
Other liabilities 4,307 3,169
Total noninterest-bearing liabilities 166,036 135,336
Total shareholders' equity 70,978 57,854
Total liabilities and shareholders' equity $ 956,947 $ 887,093
Net interest spread $ 8,054 3.44 % $ 7,337 3.38 %
Tax-equivalent basis adjustment (34) (50)
Net interest income $ 8,020 $ 7,287
Net interest margin 3.64 % 3.57 %
(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 nondeductible portion of interest expense, assuming a federal tax rate of 34 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
March 31, 2015
Amounts in thousands, except percentages March 31, 2015 December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014
ALLOWANCE FOR LOAN LOSSES:
Balance, beginning of period $ 12,551 $ 12,918 $ 12,858 $ 12,807 $ 13,141
Provision for loan losses charged to expense 200 850 550 550 600
12,751 13,768 13,408 13,357 13,741
Less: Chargeoffs
SBA loans 128 569 232 199 53
SBA 504 loans 589 -- -- -- 92
Commercial loans 100 377 72 134 454
Residential mortgage loans -- 362 201 5 172
Consumer loans 30 -- 211 203 179
Total chargeoffs 847 1,308 716 541 950
Add: Recoveries
SBA loans 37 12 111 10 7
SBA 504 loans -- -- -- -- --
Commercial loans 201 31 95 31 9
Residential mortgage loans 39 40 20 -- --
Consumer loans -- 8 -- 1 --
Total recoveries 277 91 226 42 16
Net chargeoffs 570 1,217 490 499 934
Balance, end of period $ 12,181 $ 12,551 $ 12,918 $ 12,858 $ 12,807
LOAN QUALITY INFORMATION:
Nonperforming loans (1) $ 9,141 $ 11,368 $ 11,212 $ 11,929 $ 12,046
Other real estate owned ("OREO") 1,975 1,162 1,658 1,115 2,467
Nonperforming assets 11,116 12,530 12,870 13,044 14,513
Less: Amount guaranteed by SBA 270 1,569 200 2,305 1,320
Net nonperforming assets $ 10,846 $ 10,961 $ 12,670 $ 10,739 $ 13,193
Loans 90 days past due & still accruing $ 5 $ 890 $ -- $ -- $ 5
Performing Troubled Debt Restructurings (TDRs) $ 3,458 $ 3,548 $ 4,194 $ 6,965 $ 7,363
(1) Nonperforming TDRs included in nonperforming loans 2,911 2,960 3,473 741 448
Total TDRs $ 6,369 $ 6,508 $ 7,667 $ 7,706 $ 7,811
Allowance for loan losses to:
Total loans at quarter end 1.55 % 1.65 % 1.74 % 1.81 % 1.87 %
Nonperforming loans (1) 133.26 110.41 115.22 107.79 106.32
Nonperforming assets 109.58 100.17 100.37 98.57 88.25
Net nonperforming assets 112.31 114.51 101.96 119.73 97.07
QTD net chargeoffs (annualized) to QTD average loans:
SBA loans 0.76 % 4.35 % 0.90 % 1.40 % 0.34 %
SBA 504 loans 7.15 -- -- -- 1.18
Commercial loans (0.10) 0.34 (0.02) 0.11 0.50
Residential mortgage loans (0.07) 0.59 0.36 0.01 0.39
Consumer loans 0.20 (0.05) 1.58 1.70 1.58
Total loans 0.30 % 0.63 % 0.27 % 0.29 % 0.56 %
Nonperforming loans to total loans 1.16 % 1.49 % 1.51 % 1.68 % 1.76 %
Nonperforming loans and TDRs to total loans 1.61 1.96 2.07 2.67 2.84
Nonperforming assets to total loans and OREO 1.41 1.64 1.73 1.84 2.11
Nonperforming assets to total assets 1.07 1.24 1.33 1.40 1.51
UNITY BANCORP, INC.
QUARTERLY FINANCIAL DATA
March 31, 2015
(In thousands, except percentages and per share amounts) March 31, 2015 December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014
SUMMARY OF INCOME:
Total interest income $ 9,884 $ 9,802 $ 9,491 $ 9,102 $ 9,023
Total interest expense 1,864 1,914 1,859 1,797 1,736
Net interest income 8,020 7,888 7,632 7,305 7,287
Provision for loan losses 200 850 550 550 600
Net interest income after provision for loan losses 7,820 7,038 7,082 6,755 6,687
Total noninterest income 1,641 1,660 1,853 1,640 1,526
Total noninterest expense 6,502 6,045 6,241 6,144 6,258
Income before provision for income taxes 2,959 2,653 2,694 2,251 1,955
Provision for income taxes 1,020 952 808 723 662
Net income $ 1,939 $ 1,701 $ 1,886 $ 1,528 $ 1,293
Net income per common share - Basic (1) $ 0.23 $ 0.21 $ 0.24 $ 0.20 $ 0.17
Net income per common share - Diluted (1) $ 0.23 $ 0.20 $ 0.24 $ 0.20 $ 0.17
COMMON SHARE DATA:
Market price per share $ 9.08 $ 9.43 $ 9.63 $ 9.28 $ 7.95
Dividends paid $ 0.03 $ 0.03 $ 0.03 $ 0.02 $ 0.02
Book value per common share $ 8.55 $ 8.36 $ 8.17 $ 7.95 $ 7.74
Weighted average common shares outstanding - Basic 8,417 8,378 7,847 7,605 7,586
Weighted average common shares outstanding - Diluted 8,514 8,478 7,946 7,690 7,654
Issued and outstanding common shares 8,423 8,388 8,370 7,607 7,602
OPERATING RATIOS (Annualized):
Return on average assets 0.82 % 0.70 % 0.82 % 0.68 % 0.59 %
Return on average equity (2) 11.08 9.78 11.89 10.31 9.06
Efficiency ratio 67.30 63.68 65.80 70.81 71.91
BALANCE SHEET DATA:
Total assets $ 1,035,404 $ 1,008,788 $ 969,593 $ 932,414 $ 961,168
Total deposits 789,441 794,341 781,920 728,083 767,624
Total loans 784,642 761,825 744,366 708,889 683,951
Total securities 77,308 80,082 86,879 90,470 109,459
Total shareholders' equity 71,987 70,123 68,384 60,477 58,810
Allowance for loan losses (12,181) (12,551) (12,918) (12,858) (12,807)
TAX EQUIVALENT YIELDS AND RATES:
Interest-earning assets 4.49 % 4.35 % 4.43 % 4.34 % 4.39 %
Interest-bearing liabilities 1.05 1.03 1.05 1.03 1.01
Net interest spread 3.44 3.32 3.38 3.31 3.38
Net interest margin 3.64 3.49 3.56 3.49 3.57
CREDIT QUALITY:
Nonperforming assets 11,116 12,530 12,870 13,044 14,513
QTD net chargeoffs (annualized) to QTD average loans 0.30 % 0.63 % 0.27 % 0.29 % 0.56 %
Allowance for loan losses to total loans 1.55 1.65 1.74 1.81 1.87
Nonperforming assets to total loans and OREO 1.41 1.64 1.73 1.84 2.11
Nonperforming assets to total assets 1.07 1.24 1.33 1.40 1.51
CAPITAL RATIOS AND OTHER:
Total equity to total assets 6.95 % 6.95 % 7.05 % 6.49 % 6.12 %
Leverage ratio 8.93 8.71 8.96 8.24 8.19
Common equity tier 1 risk-based capital ratio 9.25 n/a n/a n/a n/a
Tier 1 risk-based capital ratio 11.22 11.57 11.58 10.86 10.77
Total risk-based capital ratio 12.48 12.83 12.84 12.12 12.03
Number of banking offices 15 15 15 15 15
Number of ATMs 16 16 16 16 16
Number of employees 166 169 163 171 162
(1) Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by weighted average shares outstanding.
(2) Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by average shareholders' equity (excluding preferred stock).

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

Source:Unity Bancorp, Inc.