Unity Bancorp, Inc.
64 Old Highway 22
Clinton, NJ 08809
800 618-BANK
www.unitybank.com
NewsNewsNewsNewsNews
For Immediate Release:
February 4, 2009
News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308
Unity Bancorp Reports Fourth Quarter and Twelve Month Earnings
Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $584 thousand, or $0.07 per diluted share, for the quarter ended December 31, 2008, compared to net income of $680 thousand, or $0.09 per diluted share, for the quarter ended December 31, 2007.
For the year ended December 31, 2008, net income was $1.9 million, or $0.25 per diluted share, compared to $4.7 million, or $0.63 per diluted share for the same period a year ago. Return on average assets and average common equity for the year ended December 31, 2008, were 0.23% and 3.71%, respectively, as compared to 0.66% and 10.11%, respectively, for the prior year’s comparable period.
James A. Hughes, Unity Bancorp’s President and CEO, said, “Everyday there seems to be more negative news reporting increased turmoil in the financial markets, corporate bankruptcies, layoffs, rising unemployment, etc. Clearly, the economy is under considerable stress, and the financial institution sector has been hit the hardest. Our results have been affected by the economic downturn through higher loan loss provisions, security write-downs on FHLMC preferred stock and the collapse of the secondary market for Small Business Administration (“SBA”) loan sales. However, throughout this period Unity has remained a profitable institution.”
Mr. Hughes added, “The times are indeed challenging, however they are also a time of great opportunity. As the larger banks contract inward, it is time for community banks to increase market share by selling the message that when it comes to banking, smaller is better. We approach these opportunities as a well capitalized institution, ready to lend in our communities. The recent $20.6 million investment in the Company by the U.S. Treasury under the Capital Purchase Program will help us to continue to serve as a source of credit.”
Net Interest Income
Since December 31, 2007, the Federal Open Market Committee has lowered interest rates 400 basis points in an attempt to stimulate economic activity. These decreases have resulted in lower yields on earning assets. During this period, our funding costs have also fallen. Unity has a large portfolio of variable rate, prime based loans. As a result of the drop in rates in the fourth quarter, the yield on the Company’s interest-earning assets may continue to contract early in 2009. However, lower deposit pricing and additional equity capital should mitigate any material decline in net interest income.
For the quarter ended December 31, 2008, net interest income was $6.7 million, an increase of 6.1% from December 31, 2007. Factors affecting fourth quarter net interest income include:
| · | The yield on interest-earning assets decreased 96 basis points to 6.18% from 7.14% for the same period last year. |
| · | The cost of interest-bearing liabilities decreased 75 basis points from 4.05% to 3.30% in the fourth quarter of 2008. |
| · | Average earning assets, consisting primarily of loans, rose 17.8%. |
| · | Net interest margin was 3.25%, a 37 basis point decline from 3.62% in the fourth quarter of 2007. |
For the year ended December 31, 2008, net interest income was $27.3 million, an increase of 11.7% from the year ended December 31, 2007. Factors affecting net interest income for the year ended December 31 include:
| · | The yield on interest-earning assets decreased from 7.23% in 2007 to 6.52% for 2008. |
| · | The cost of interest-bearing liabilities decreased from 4.16% in 2007 to 3.39% in 2008. |
| · | Average earning assets, consisting primarily of loans, rose 15.1%. |
| · | Net interest margin for 2008 was 3.51%, compared to 3.62% in 2007. |
Noninterest income
Historically, Unity has had a strong source of noninterest income in the form of gains on the sale of its SBA loans. However, during the second half of 2008, pricing in the secondary market for SBA loans began to deteriorate in response to the credit crisis. Consequently, Unity held all current production of SBA loans. This decision resulted in reduced noninterest income for the quarter and will likely continue in the foreseeable future. In addition, other than temporarily impaired charges and losses on the sales of Federal Home Loan Mortgage Corporation (“FHLMC”) perpetual preferred callable securities of $1.6 million have significantly reduced noninterest income during 2008.
For the quarter ended December 31, 2008, noninterest income was $555 thousand, a decrease of 47% from December 31, 2007:
| · | Service charges on deposit accounts remained relatively flat compared to the prior year’s period. |
| · | Service and loan fee income decreased 22.6% to $335 thousand in 2008, due to lower levels of prepayment fees. |
| · | Net security losses amounted to $324 thousand, primarily due to other-than-temporary impairment charges on a pooled trust preferred security. |
| · | There were no gains on sales of SBA loans, compared to $580 thousand a year ago. |
For the year ended December 31, 2008, noninterest income was $2.7 million, a decrease of 55% from December 31, 2007:
| · | Service charges on deposit accounts were flat at $1.4 million. |
| · | Service and loan fee income amounted to $1.3 million for the twelve months ended 2008, a decrease of $336 thousand, or 20.9%, as compared to the same period last year, primarily due to lower levels of prepayment penalties and SBA servicing income. |
| · | Gains on sales of SBA loans amounted to $1.2 million for 2008, compared to $2.4 million for the same period a year ago, reflecting a lower volume of loans sold and lower premiums on loans sold. |
| · | Net security losses amounted to $1.9 million primarily related to other-than-temporarily impaired charges and losses on the sales of FHLMC perpetual preferred callable securities. |
| · | Other income amounted to $481 thousand for the twelve months ended 2008, a decrease of $391 thousand, or 44.8%, as compared to the same period last year, primarily due to lower levels of loan referral fees. |
Noninterest Expense
As a result of current market conditions, there were significant head-count reductions enacted in the fourth quarter of 2008 and the Company undertook other expense saving measures which will benefit 2009. Unfortunately, some of these benefits which will be realized in 2009, will be offset by the anticipated increase in FDIC insurance premiums.
For the quarter ended December 31, 2008, noninterest expenses were $5.8 million, a decrease of 2.6% from December 31, 2007:
| · | Compensation and benefits expense decreased $115 thousand, due to reduced head count. |
| · | Processing and communications and occupancy expense declined by 13.6% and 11.8%, respectively, due to reduced communications costs from renegotiated contracts and a decline in capital expenditures. |
| · | Professional fees increased $88 thousand, due to increased consulting, legal and audit costs. |
| · | Loan collection costs increased $55 thousand, due to increased collection costs on delinquent loans. |
| · | FDIC insurance premiums increased $281 thousand, due primarily to the increase in FDIC insurance rates. |
| · | Tax expense was reduced by the benefit from the other-than-temporary impairment charge for FHLMC preferred stock recognized in the third quarter. |
For the year ended December 31, 2008, noninterest expenses were $22.9 million, an increase of 3.7% from December 31, 2007:
| · | Compensation and benefits expense increased $539 thousand, primarily due to annual cost of living increases. |
| · | Processing and communications expense declined 7.5%, due to renegotiated contracts and lower items processing costs. |
| · | Professional services expense increased $300 thousand, due to increased consulting costs related to tax planning, compliance with the Sarbanes Oxley and outsourced credit review fees. |
| · | FDIC insurance premiums increased $522 thousand, due to the increase in FDIC insurance rates. |
| · | Other expense decreased $401 thousand or 20%, primarily related to the collection of prior period retail losses, and reduced recruiting and stationary and supplies expense. |
Financial Condition
At December 31, 2008, total assets were $898.3 million, a 19.4% increase from a year ago.
| · | Total loans increased $95.8 million, or 16.2%, from $590.1 million at December 31, 2007. The increase was across all product lines. SBA, commercial, residential and consumer loans increased 12.6%, 5.2%, 80.6% and 9.5%, respectively. |
| · | Total securities increased $50.9 million as Unity took advantage of favorable credit spreads to invest excess liquidity. |
| · | Total deposits increased 17.6% or $105.8 million to $707 million at December 31, 2008. This increase was due to a $154.8 million increase in time deposits, a $9.0 million increase in interest-bearing checking accounts and a $3.5 million increase in demand deposits, partially offset by a $61.5 million decline in savings deposits. |
| · | Total borrowed funds increased $20.0 million to support the growth in the investment portfolio. |
| · | The allowance for loan losses totaled $10.3 million at December 31, 2008, or 1.51% of total loans. The provision for loan losses for the first twelve months of 2008 amounted to $4.5 million, an increase of $3.0 million from the same period a year ago. Net charge-offs were $2.6 million for the year ended 2008, compared to $791 thousand for the same period a year ago. |
| · | Nonperforming assets totaled $16.8 million at December 31, 2008, or 2.45% of total loans and “OREO” compared to $5.6 million, or 0.94% of total loans and “OREO” a year ago. The increase in nonperforming assets was primarily related to the credit deterioration in the SBA 7(a) and SBA 504 portfolios most of which is secured by real estate. |
| · | Shareholders’ equity was $67.8 million at December 31, 2008 an increase of $20.5 million, primarily due to the issuance of preferred stock, and book value per common share was $6.99. |
| · | At December 31, 2008 the leverage, Tier I and total risk based capital ratios were 9.55%, 12.03% and 13.28%, respectively. |
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $900 million in assets and $700 million in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 16 retail service centers located in Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County, Pennsylvania. For additional information about Unity, visit our website at www.unitybank.com, or call 800- 618-BANK.
This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company’s control and could impede its ability to achieve these goals. These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.
| Unity Bancorp, Inc. | | | | | | | | | | | | | | | |
| Consolidated Financial Highlights | | | | | | | | | | | | | | | |
| (Dollars in thousands, except per share data) | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Dec. 08 | | vs. | | |
| BALANCE SHEET DATA: | | Dec. 31, 2008 | | | Sep. 30, 2008 | | | Dec. 31, 2007 | | | Sep. 08 | | Dec. 07 | | |
| Assets | $ | 898,310 | | $ | 864,083 | | $ | 752,196 | | | 4.0 | % | 19.4 | % | |
| Deposits | | 707,117 | | | 684,680 | | | 601,268 | | | 3.3 | | 17.6 | | |
| Loans | | 685,946 | | | 685,023 | | | 590,132 | | | 0.1 | | 16.2 | | |
| Securities | | 149,509 | | | 99,410 | | | 98,591 | | | 50.4 | | 51.6 | | |
| Shareholders' equity | | 67,803 | | | 46,539 | | | 47,260 | | | 45.7 | | 43.5 | | |
| Allowance for loan losses | | 10,326 | | | 9,913 | | | 8,383 | | | 4.2 | | 23.2 | | |
| | | | | | | | | | | | | | | | |
| FINANCIAL DATA - QUARTER TO DATE: | | | | | | | | | | | | | | | |
| Net income (loss) before taxes | $ | 218 | | $ | (1,141) | | $ | 922 | | | (119.1) | % | (76.4) | % | |
| Federal and state income tax provision (benefit) | (366) | | | (139) | | | 242 | | | 163.3 | | (251.2) | | |
| Net income (loss) | | 584 | | | (1,002) | | | 680 | | | (158.3) | | (14.1) | | |
| | | | | | | | | | | | | | | | |
| Per share-basic | | 0.07 | | | (0.14) | | | 0.10 | | | (150.0) | | (26.8) | | |
| Per share-diluted | | 0.07 | | | (0.14) | | | 0.09 | | | (150.0) | | (24.6) | | |
| | | | | | | | | | | | | | | | |
| Return on average assets | | 0.26 | % | (0.50) | % | 0.36 | % | | (152.0) | | (27.8) | | |
| Return on average common equity | | 3.56 | | | (8.39) | | | 5.78 | | | (142.5) | | (38.4) | | |
| Efficiency ratio | | 75.81 | | | 70.51 | | | 74.07 | | | 7.5 | | 2.4 | | |
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| | | | | | | | | | | | | | | | |
| FINANCIAL DATA - YEAR TO DATE: | | | | | | | | | | | | | | | |
| Net income before taxes | $ | 2,546 | | | - | | $ | 6,703 | | | - | | (62.0) | % | |
| Federal and state income tax provision | | 616 | | | - | | | 1,978 | | | - | | (68.9) | | |
| Net income | | 1,930 | | | - | | | 4,725 | | | - | | (59.2) | | |
| | | | | | | | | | | | | | | | |
| Per share-basic | | 0.26 | | | - | | | 0.65 | | | - | | (60.0) | | |
| Per share-diluted | | 0.25 | | | - | | | 0.63 | | | - | | (60.3) | | |
| | | | | | | | | | | | | | | | |
| Return on average assets | | 0.23 | % | - | | | 0.66 | % | | - | | (65.2) | | |
| Return on average common equity | | 3.71 | | | - | | | 10.11 | | | - | | (63.3) | | |
| Efficiency ratio | | 71.90 | | | - | | | 71.48 | | | - | | 0.6 | | |
| | | | | | | | | | | | | | | | |
| SHARE INFORMATION: | | | | | | | | | | | | | | | |
| Closing price per share | $ | 3.90 | | $ | 4.00 | | $ | 8.10 | | | (2.5) | % | (51.8) | % | |
| Cash dividends declared | | 0.00 | | | 0.00 | | | 0.05 | | | - | | - | | |
| Book value per common share | | 6.99 | | | 6.76 | | | 6.70 | | | 3.4 | | 4.4 | | |
| Average diluted shares outstanding (QTD) | 7,190 | | | 7,259 | | | 7,328 | | | (1.0) | | (1.9) | | |
| | | | | | | | | | | | | | | | |
| CAPITAL RATIOS: | | | | | | | | | | | | | | | |
| Total equity to total assets | | 7.55 | % | 5.76 | % | 6.33 | % | | 31.1 | % | 19.3 | % | |
| Tier I capital to average assets (leverage) | | 9.54 | | | 7.42 | | | 8.25 | | | 28.6 | | 15.6 | | |
| Tier I capital to risk-adjusted assets | | 12.02 | | | 9.07 | | | 9.81 | | | 32.5 | | 22.5 | | |
| Total risk-based capital | | 13.27 | | | 10.33 | | | 11.06 | | | 28.5 | | 20.0 | | |
| | | | | | | | | | | | | | | | |
| CREDIT QUALITY AND RATIOS: | | | | | | | | | | | | | | | |
| Nonperforming assets | $ | 16,830 | | $ | 10,954 | | $ | 5,567 | | | 53.6 | % | 202.3 | % | |
| Net charge offs to average loans (QTD) | | 0.52 | % | 0.67 | % | 0.24 | % | | (22.4) | | 116.7 | | |
| Allowance for loan losses to total loans | | 1.51 | | | 1.45 | | | 1.42 | | | 4.1 | | 6.3 | | |
| Nonperforming assets to total loans and OREO | 2.45 | | | 1.60 | | | 0.94 | | | 53.1 | | 160.6 | | |
| Unity Bancorp, Inc. | | | | | | | | | | | | | | | |
| Consolidated Balance Sheets | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | Dec. 08 | | vs. | | |
| | | Dec. 31, 2008 | | | Sep. 30, 2008 | | | Dec. 31, 2007 | | | Sep. 08 | | Dec. 07 | | |
| ASSETS | | | | | | | | | | | | | | | |
| Cash and due from banks | $ | 18,902 | | $ | 21,987 | | $ | 14,336 | | | (14.0) | % | 31.8 | % | |
| Federal funds sold and interest bearing deposits | 15,529 | | | 29,356 | | | 21,976 | | | (47.1) | | (29.3) | | |
| Securities: | | | | | | | | | | | | | | | |
| Available for sale | | 117,348 | | | 70,144 | | | 64,855 | | | 67.3 | | 80.9 | | |
| Held to maturity | | 32,161 | | | 29,266 | | | 33,736 | | | 9.9 | | (4.7) | | |
| Total securities | | 149,509 | | | 99,410 | | | 98,591 | | | 50.4 | | 51.6 | | |
| Loans: | | | | | | | | | | | | | | | |
| SBA - Held for sale | | 22,181 | | | 19,863 | | | 24,640 | | | 11.7 | | (10.0) | | |
| SBA - Held to Maturity | | 83,127 | | | 82,551 | | | 68,875 | | | 0.7 | | 20.7 | | |
| Commercial | | 384,967 | | | 394,215 | | | 365,786 | | | (2.3) | | 5.2 | | |
| Residential mortgage | | 133,110 | | | 128,216 | | | 73,697 | | | 3.8 | | 80.6 | | |
| Consumer | | 62,561 | | | 60,178 | | | 57,134 | | | 4.0 | | 9.5 | | |
| Total loans | | 685,946 | | | 685,023 | | | 590,132 | | | 0.1 | | 16.2 | | |
| Less: Allowance for loan losses | | 10,326 | | | 9,913 | | | 8,383 | | | 4.2 | | 23.2 | | |
| Net loans | | 675,620 | | | 675,110 | | | 581,749 | | | 0.1 | | 16.1 | | |
| Goodwill and other intangibles | | 1,574 | | | 1,577 | | | 1,588 | | | (0.2) | | (0.9) | | |
| Premises and equipment, net | | 12,580 | | | 12,475 | | | 12,102 | | | 0.8 | | 3.9 | | |
| Accrued interest receivable | | 4,712 | | | 4,364 | | | 3,994 | | | 8.0 | | 18.0 | | |
| Loan servicing asset | | 1,503 | | | 1,721 | | | 2,056 | | | (12.7) | | �� (26.9) | | |
| Bank Owned Life Insurance | | 5,780 | | | 5,727 | | | 5,570 | | | 0.9 | | 3.8 | | |
| FHLB/ACBB Stock | | 4,857 | | | 5,307 | | | 4,395 | | | (8.5) | | 10.5 | | |
| Other assets | | 7,744 | | | 7,049 | | | 5,839 | | | 9.9 | | 32.6 | | |
| Total Assets | $ | 898,310 | | $ | 864,083 | | $ | 752,196 | | | 4.0 | % | 19.4 | % | |
| | | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | $ | 74,090 | | $ | 82,167 | | $ | 70,600 | | | (9.8) | % | 4.9 | % | |
| Interest-bearing deposits: | | | | | | | | | | | | | | | |
| Interest bearing checking | | 87,046 | | | 87,587 | | | 78,019 | | | (0.6) | | 11.6 | | |
| Savings | | 134,875 | | | 148,026 | | | 196,390 | | | (8.9) | | (31.3) | | |
| Time, under $100,000 | | 270,275 | | | 274,845 | | | 168,244 | | | (1.7) | | 60.6 | | |
| Time, $100,000 and over | | 140,831 | | | 92,055 | | | 88,015 | | | 53.0 | | 60.0 | | |
| Total deposits | | 707,117 | | | 684,680 | | | 601,268 | | | 3.3 | | 17.6 | | |
| Borrowed funds and subordinated debentures | 120,465 | | | 130,465 | | | 100,465 | | | (7.7) | | 19.9 | | |
| Accrued interest payable | | 805 | | | 869 | | | 635 | | | (7.4) | | 26.8 | | |
| Accrued expenses and other liabilities | | 2,120 | | | 1,530 | | | 2,568 | | | 38.6 | | (17.4) | | |
| Total liabilities | | 830,507 | | | 817,544 | | | 704,936 | | | 1.6 | | 17.8 | | |
| Commitments and Contingencies | | - | | | - | | | - | | | | | | | |
| Shareholders' equity: | | | | | | | | | | | | | | | |
| Common stock, no par value, 12,500 shares authorized | 55,179 | | | 52,453 | | | 49,447 | | | 5.2 | | 11.6 | | |
| Preferred stock, no par value, 500 shares authorized | 18,064 | | | - | | | - | | | - | | - | | |
| Retained earnings | | 1,085 | | | 591 | | | 2,472 | | | 83.6 | | (56.1) | | |
| Treasury stock at cost | | (4,169) | | | (4,169) | | | (4,169) | | | - | | - | | |
| Accumulated other comprehensive loss, net of tax | (2,356) | | | (2,336) | | | (490) | | | 0.9 | | 380.8 | | |
| Total shareholders' equity | | 67,803 | | | 46,539 | | | 47,260 | | | 45.7 | | 43.5 | | |
| Total Liabilities and Shareholders' Equity | $ | 898,310 | | $ | 864,083 | | $ | 752,196 | | | 4.0 | % | 19.4 | % | |
| | | | | | | | | | | | | | | | |
| COMMON SHARES AT PERIOD END: | | | | | | | | | | | | | | | |
| Issued | | 7,544 | | | 7,535 | | | 7,488 | | | | | | | |
| Outstanding | | 7,119 | | | 7,110 | | | 7,063 | | | | | | | |
| Treasury | | 425 | | | 425 | | | 425 | | | | | | | |
| N/M= Not meaningful | | | | | | | | | | | | | | | |
| Unity Bancorp, Inc. | | | | | | | | | | | | | | | |
| Consolidated Statements of Income | | | | | | | | | | | | | | | |
| (In thousands, except per share data) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Dec. 08 | | vs. | | |
| FOR THE THREE MONTHS ENDED: | | Dec. 31, 2008 | | | Sep. 30, 2008 | | | Dec. 31, 2007 | | | Sep. 08 | | Dec. 07 | | |
| INTEREST INCOME | | | | | | | | | | | | | | | |
| Fed funds sold and interest on deposits | $ | 67 | | $ | 113 | | $ | 195 | | | (40.7) | % | (65.6) | % | |
| FHLB/ACBB Stock | | 6 | | | 58 | | | 78 | | | (89.7) | | (92.3) | | |
| Securities: | | | | | | | | | | | | | | | |
| Available for sale | | 959 | | | 907 | | | 835 | | | 5.7 | | 14.9 | | |
| Held to maturity | | 366 | | | 381 | | | 443 | | | (3.9) | | (17.4) | | |
| Total securities | | 1,325 | | | 1,288 | | | 1,278 | | | 2.9 | | 3.7 | | |
| Loans: | | | | | | | | | | | | | | | |
| SBA | | 1,971 | | | 2,043 | | | 2,307 | | | (3.5) | | (14.6) | | |
| Commercial | | 6,717 | | | 6,877 | | | 6,772 | | | (2.3) | | (0.8) | | |
| Residential mortgage | | 1,963 | | | 1,720 | | | 1,093 | | | 14.1 | | 79.6 | | |
| Consumer | | 849 | | | 866 | | | 934 | | | (2.0) | | (9.1) | | |
| Total loan interest income | | 11,500 | | | 11,506 | | | 11,106 | | | (0.1) | | 3.5 | | |
| Total interest income | | 12,898 | | | 12,965 | | | 12,657 | | | (0.5) | | 1.9 | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | 348 | | | 404 | | | 448 | | | (13.9) | | (22.3) | | |
| Savings deposits | | 603 | | | 774 | | | 1,776 | | | (22.1) | | (66.0) | | |
| Time deposits | | 4,057 | | | 3,553 | | | 3,089 | | | 14.2 | | 31.3 | | |
| Borrowed funds and subordinated debentures | 1,154 | | | 1,152 | | | 997 | | | 0.2 | | 15.7 | | |
| Total interest expense | | 6,162 | | | 5,883 | | | 6,310 | | | 4.7 | | (2.3) | | |
| Net interest income | | 6,736 | | | 7,082 | | | 6,347 | | | (4.9) | | 6.1 | | |
| Provision for loan losses | | 1,300 | | | 2,100 | | | 550 | | | (38.1) | | 136.4 | | |
| Net interest income after provision for loan losses | 5,436 | | | 4,982 | | | 5,797 | | | 9.1 | | (6.2) | | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | 351 | | | 381 | | | 357 | | | (7.9) | | (1.7) | | |
| Service and loan fee income | | 335 | | | 334 | | | 433 | | | 0.3 | | (22.6) | | |
| Gain on Mortgage loan sales | | 19 | | | - | | | (9) | | | - | | (311.1) | | |
| Gain on SBA loan sales | | 9 | | | 215 | | | 580 | | | (95.8) | | (98.4) | | |
| Bank owned life insurance | | 53 | | | 53 | | | 50 | | | - | | 6.0 | | |
| Net securities (loss) gains | | (324) | | | (1,458) | | | (603) | | | 100.0 | | 100.0 | | |
| Other income | | 112 | | | 131 | | | 245 | | | (14.5) | | (54.3) | | |
| Total noninterest income | | 555 | | | (344) | | | 1,053 | | | (261.3) | | (47.3) | | |
| NONINTEREST EXPENSES | | | | | | | | | | | | | | | |
| Compensation and benefits | | 2,837 | | | 2,948 | | | 2,952 | | | (3.8) | | (3.9) | | |
| Processing and communications | | 583 | | | 554 | | | 675 | | | 5.2 | | (13.6) | | |
| Occupancy, net | | 671 | | | 688 | | | 761 | | | (2.5) | | (11.8) | | |
| Furniture and equipment | | 451 | | | 423 | | | 462 | | | 6.6 | | (2.4) | | |
| Professional fees | | 272 | | | 285 | | | 184 | | | (4.6) | | 47.8 | | |
| Loan collection costs | | 216 | | | 206 | | | 161 | | | 4.9 | | 34.2 | | |
| Advertising | | 152 | | | 158 | | | 145 | | | (3.8) | | 4.8 | | |
| FDIC Insurance | | 298 | | | 117 | | | 17 | | | 154.7 | | 1,652.9 | | |
| Other | | 293 | | | 400 | | | 571 | | | (26.8) | | (48.7) | | |
| Total noninterest expenses | | 5,773 | | | 5,779 | | | 5,928 | | | (0.1) | | (2.6) | | |
| Income (loss) before taxes | | 218 | | | (1,141) | | | 922 | | | (119.1) | | (76.4) | | |
| Federal and state income tax provision (benefit) | (366) | | | (139) | | | 242 | | | 163.3 | | (251.2) | | |
| Net Income (loss) | $ | 584 | | $ | (1,002) | | $ | 680 | | | (158.3) | % | (14.1) | % | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Net Income Per Common Share-Basic | $ | 0.07 | | $ | (0.14) | | $ | 0.10 | | | (150.0) | % | (26.8) | % | |
| Net Income Per Common Share-Diluted | $ | 0.07 | | $ | (0.14) | | $ | 0.09 | | | (150.0) | % | (24.6) | % | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| AVERAGE COMMON SHARES OUTSTANDING: | | | | | | | | | | | | | | | |
| Basic | | 7,113 | | | 7,107 | | | 7,107 | | | | | | | |
| Diluted | | 7,190 | | | 7,259 | | | 7,328 | | | | | | | |
| | | | | | | | | | | | | | | | |
| Unity Bancorp, Inc. | | | | | | | | | | | |
| Consolidated Statements of Income | | | | | | | | | | | |
| (Dollars in thousands, except per share data) | | | | | | | | | |
| | | | | | | | | Dec. 08 vs. | | | |
| YEAR TO DATE: | | Dec. 31, 2008 | | | Dec. 31, 2007 | | | Dec. 07 | | | |
| INTEREST INCOME | | | | | | | | | | | |
| Fed funds sold and interest on deposits | $ | 471 | | $ | 1,068 | | | (55.9) | % | | |
| FHLB/ACBB Stock | | 240 | | | 258 | | | (7.0) | | | |
| Securities: | | | | | | | | | | | |
| Available for sale | | 3,673 | | | 3,167 | | | 16.0 | | | |
| Held to maturity | | 1,582 | | | 1,913 | | | (17.3) | | | |
| Total securities | | 5,255 | | | 5,080 | | | 3.4 | | | |
| Loans: | | | | | | | | | | | |
| SBA | | 8,370 | | | 9,039 | | | (7.4) | | | |
| Commercial | | 26,996 | | | 25,738 | | | 4.9 | | | |
| Residential mortgage | | 5,971 | | | 3,995 | | | 49.5 | | | |
| Consumer | | 3,462 | | | 3,722 | | | (7.0) | | | |
| Total loan interest income | | 44,799 | | | 42,494 | | | 5.4 | | | |
| Total interest income | | 50,765 | | | 48,900 | | | 3.8 | | | |
| INTEREST EXPENSE | | | | | | | | | | | |
| Interest-bearing demand deposits | | 1,468 | | | 1,928 | | | (23.9) | | | |
| Savings deposits | | 3,644 | | | 8,064 | | | (54.8) | | | |
| Time deposits | | 13,836 | | | 10,206 | | | 35.6 | | | |
| Borrowed funds and subordinated debentures | 4,526 | | | 4,276 | | | 5.8 | | | |
| Total interest expense | | 23,474 | | | 24,474 | | | (4.1) | | | |
| Net interest income | | 27,291 | | | 24,426 | | | 11.7 | | | |
| Provision for loan losses | | 4,500 | | | 1,550 | | | 190.3 | | | |
| Net interest income after provision for loan losses | 22,791 | | | 22,876 | | | (0.4) | | | |
| NONINTEREST INCOME | | | | | | | | | | | |
| Service charges on deposit accounts | | 1,393 | | | 1,383 | | | 0.7 | | | |
| Service and loan fee income | | 1,271 | | | 1,607 | | | (20.9) | | | |
| Gain on of Mortgage Loans | | 40 | | | 52 | | | (23.1) | | | |
| Gain on SBA loan sales | | 1,217 | | | 2,399 | | | (49.3) | | | |
| Bank owned life insurance | | 210 | | | 198 | | | 6.1 | | | |
| Net securities (loss) gains | | (1,918) | | | (571) | | | 100.0 | | | |
| Other income | | 481 | | | 872 | | | (44.8) | | | |
| Total noninterest income | | 2,694 | | | 5,940 | | | (54.6) | | | |
| NONINTEREST EXPENSES | | | | | | | | | | | |
| Compensation and benefits | | 11,985 | | | 11,446 | | | 4.7 | | | |
| Processing and communications | | 2,251 | | | 2,433 | | | (7.5) | | | |
| Occupancy, net | | 2,773 | | | 2,777 | | | (0.1) | | | |
| Furniture and equipment | | 1,675 | | | 1,675 | | | 0.0 | | | |
| Professional fees | | 898 | | | 598 | | | 50.2 | | | |
| Loan collection costs | | 662 | | | 604 | | | 9.6 | | | |
| Advertising | | 451 | | | 457 | | | (1.3) | | | |
| FDIC Insurance | | 589 | | | 67 | | | 779.1 | | | |
| Other | | 1,655 | | | 2,056 | | | (19.5) | | | |
| Total noninterest expenses | | 22,939 | | | 22,113 | | | 3.7 | | | |
| Income before taxes | | 2,546 | | | 6,703 | | | (62.0) | | | |
| Federal and state income tax provision | | 616 | | | 1,978 | | | (68.9) | | | |
| Net Income | $ | 1,930 | | $ | 4,725 | | | (59.2) | % | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Net Income Per Common Share-Basic | $ | 0.26 | | $ | 0.65 | | | (60.0) | % | | |
| Net Income Per Common Share-Diluted | $ | 0.25 | | $ | 0.63 | | | (60.3) | % | | |
| | | | | | | | | | | | |
| Average common shares outstanding: | | | | | | | | | | | |
| Basic | | 7,097 | | | 7,245 | | | | | | |
| Diluted | | 7,249 | | | 7,527 | | | | | | |
| Unity Bancorp, Inc. | | | | | | | | | | | | | | |
| Consolidated Average Balance Sheets | | | | | | | | | | | | | | |
| with Resultant Interest and Rates | | | | | | | | | | | | | | |
| (Tax-equivalent basis, dollars in thousands) | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31, 2008 | | | September 30, 2008 | |
| | | Balance | | Interest | | Rate | | | Balance | | Interest | | Rate | |
| ASSETS | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | |
| Federal funds sold and interest-bearing deposits with banks | $ | 37,262 | $ | 67 | | 0.72 | % | $ | 24,118 | $ | 113 | | 1.86 | % |
| FHLB/ACBB Stock | | 4,422 | | 6 | | 0.54 | | | 4,415 | | 58 | | 5.23 | |
| Securities: | | | | | | | | | | | | | | |
| Available for sale | | 76,941 | | 972 | | 5.05 | | | 72,658 | | 920 | | 5.06 | |
| Held to maturity | | 29,962 | | 384 | | 5.13 | | | 31,209 | | 399 | | 5.11 | |
| Total securities | | 106,903 | | 1,356 | | 5.07 | | | 103,867 | | 1,319 | | 5.08 | |
| Loans, net of unearned discount: | | | | | | | | | | | | | | |
| SBA | | 103,682 | | 1,971 | | 7.60 | | | 102,383 | | 2,043 | | 7.98 | |
| Commercial | | 388,940 | | 6,717 | | 6.87 | | | 393,626 | | 6,877 | | 6.95 | |
| Residential mortgage | | 131,557 | | 1,963 | | 5.97 | | | 114,058 | | 1,720 | | 6.03 | |
| Consumer | | 61,114 | | 849 | | 5.53 | | | 59,933 | | 866 | | 5.75 | |
| Total loans | | 685,293 | | 11,500 | | 6.69 | | | 670,000 | | 11,506 | | 6.84 | |
| Total interest-earning assets | | 833,880 | | 12,929 | | 6.18 | | | 802,400 | | 12,996 | | 6.45 | |
| Noninterest-earning assets: | | | | | | | | | | | | | | |
| Cash and due from banks | | 21,520 | | | | | | | 19,166 | | | | | |
| Allowance for loan losses | | (10,111) | | | | | | | (9,092) | | | | | |
| Other assets | | 32,855 | | | | | | | 32,229 | | | | | |
| Total noninterest-earning assets | | 44,264 | | | | | | | 42,303 | | | | | |
| Total Assets | $ | 878,144 | | | | | | $ | 844,703 | | | | | |
| | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | $ | 88,166 | | 348 | | 1.57 | | $ | 87,903 | | 404 | | 1.83 | |
| Savings deposits | | 137,602 | | 603 | | 1.74 | | | 161,707 | | 774 | | 1.90 | |
| Time deposits | | 407,239 | | 4,057 | | 3.96 | | | 353,743 | | 3,553 | | 4.00 | |
| Total interest-bearing deposits | | 633,007 | | 5,008 | | 3.15 | | | 603,353 | | 4,731 | | 3.12 | |
| Borrowed funds and subordinated debentures | | 110,802 | | 1,154 | | 4.14 | | | 110,684 | | 1,152 | | 4.14 | |
| Total interest-bearing liabilities | | 743,809 | | 6,162 | | 3.30 | | | 714,037 | | 5,883 | | 3.28 | |
| Noninterest-bearing liabilities: | | | | | | | | | | | | | | |
| Demand deposits | | 78,351 | | | | | | | 81,157 | | | | | |
| Other liabilities | | 3,058 | | | | | | | 2,321 | | | | | |
| Total noninterest-bearing liabilities | | 81,409 | | | | | | | 83,478 | | | | | |
| Shareholders' equity | | 52,926 | | | | | | | 47,188 | | | | | |
| Total Liabilities and Shareholders' Equity | $ | 878,144 | | | | | | $ | 844,703 | | | | | |
| | | | | | | | | | | | | | | |
| Net interest spread | | | | 6,767 | | 2.88 | % | | | | 7,113 | | 3.17 | % |
| Tax-equivalent basis adjustment | | | | (31) | | | | | | | (31) | | | |
| Net interest income | | | $ | 6,736 | | | | | | $ | 7,082 | | | |
| | | | | | | | | | | | | | | |
| Net interest margin | | | | | | 3.25 | % | | | | | | 3.55 | % |
| Unity Bancorp, Inc. | | | | | | | | | | | | | | |
| Consolidated Average Balance Sheets | | | | | | | | | | | | | | |
| with Resultant Interest and Rates | | | | | | | | | | | | | | |
| (Tax-equivalent basis, dollars in thousands) | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31, 2008 | | | December 31, 2007 | |
| | | Balance | | Interest | | Rate | | | Balance | | Interest | | Rate | |
| ASSETS | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | |
| Federal funds sold and interest-bearing deposits with banks | $ | 37,262 | $ | 67 | | 0.72 | % | $ | 17,961 | $ | 195 | | 4.31 | % |
| FHLB/ACBB Stock | | 4,422 | | 6 | | 0.54 | | | 3,786 | | 78 | | 8.17 | |
| Securities: | | | | | | | | | | | | | | |
| Available for sale | | 76,941 | | 972 | | 5.05 | | | 67,765 | | 875 | | 5.16 | |
| Held to maturity | | 29,962 | | 384 | | 5.13 | | | 35,157 | | 461 | | 5.25 | |
| Total securities | | 106,903 | | 1,356 | | 5.07 | | | 102,922 | | 1,336 | | 5.19 | |
| Loans, net of unearned discount: | | | | | | | | | | | | | | |
| SBA | | 103,682 | | 1,971 | | 7.60 | | | 90,120 | | 2,307 | | 10.24 | |
| Commercial | | 388,940 | | 6,717 | | 6.87 | | | 362,512 | | 6,772 | | 7.41 | |
| Residential mortgage | | 131,557 | | 1,963 | | 5.97 | | | 74,057 | | 1,093 | | 5.90 | |
| Consumer | | 61,114 | | 849 | | 5.53 | | | 56,421 | | 934 | | 6.57 | |
| Total loans | | 685,293 | | 11,500 | | 6.69 | | | 583,110 | | 11,106 | | 7.57 | |
| Total interest-earning assets | | 833,880 | | 12,929 | | 6.18 | | | 707,779 | | 12,715 | | 7.14 | |
| Noninterest-earning assets: | | | | | | | | | | | | | | |
| Cash and due from banks | | 21,520 | | | | | | | 14,518 | | | | | |
| Allowance for loan losses | | (10,111) | | | | | | | (8,499) | | | | | |
| Other assets | | 32,855 | | | | | | | 29,130 | | | | | |
| Total noninterest-earning assets | | 44,264 | | | | | | | 35,149 | | | | | |
| Total Assets | $ | 878,144 | | | | | | $ | 742,928 | | | | | |
| | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | $ | 88,166 | | 348 | | 1.57 | | $ | 81,759 | | 448 | | 2.17 | |
| Savings deposits | | 137,602 | | 603 | | 1.74 | | | 195,241 | | 1,776 | | 3.61 | |
| Time deposits | | 407,239 | | 4,057 | | 3.96 | | | 253,790 | | 3,089 | | 4.83 | |
| Total interest-bearing deposits | | 633,007 | | 5,008 | | 3.15 | | | 530,790 | | 5,313 | | 3.97 | |
| Borrowed funds and subordinated debentures | | 110,802 | | 1,154 | | 4.14 | | | 86,826 | | 997 | | 4.56 | |
| Total interest-bearing liabilities | | 743,809 | | 6,162 | | 3.30 | | | 617,616 | | 6,310 | | 4.05 | |
| Noninterest-bearing liabilities: | | | | | | | | | | | | | | |
| Demand deposits | | 78,351 | | | | | | | 76,406 | | | | | |
| Other liabilities | | 3,058 | | | | | | | 2,267 | | | | | |
| Total noninterest-bearing liabilities | | 81,409 | | | | | | | 78,673 | | | | | |
| Shareholders' equity | | 52,926 | | | | | | | 46,639 | | | | | |
| Total Liabilities and Shareholders' Equity | $ | 878,144 | | | | | | $ | 742,928 | | | | | |
| | | | | | | | | | | | | | | |
| Net interest spread | | | | 6,767 | | 2.88 | % | | | | 6,405 | | 3.09 | % |
| Tax-equivalent basis adjustment | | | | (31) | | | | | | | (58) | | | |
| Net interest income | | | $ | 6,736 | | | | | | $ | 6,347 | | | |
| Net interest margin | | | | | | 3.25 | % | | | | | | 3.62 | % |
| | | | | | | | | | | | | | | |
| Unity Bancorp, Inc. | | | | | | | | | | | | | | |
| Consolidated Average Balance Sheets | | | | | | | | | | | | | | |
| with Resultant Interest and Rates | | | | | | | | | | | | | | |
| (Tax-equivalent basis, dollars in thousands) | | | | | | | | | | | | | | |
| | | Year to Date | |
| | | December 31, 2008 | | | December 31, 2007 | |
| | | Balance | | Interest | | Rate | | | Balance | | Interest | | Rate | |
| ASSETS | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | |
| Federal funds sold and interest-bearing deposits with banks | $ | 26,686 | $ | 471 | | 1.76 | % | $ | 22,290 | $ | 1,068 | | 4.79 | % |
| FHLB/ACBB Stock | | 4,353 | | 240 | | 5.51 | | | 3,336 | | 258 | | 7.73 | |
| Securities: | | | | | | | | | | | | | | |
| Available for sale | | 74,243 | | 3,761 | | 5.07 | | | 65,853 | | 3,253 | | 4.94 | |
| Held to maturity | | 31,710 | | 1,654 | | 5.22 | | | 37,724 | | 1,986 | | 5.26 | |
| Total securities | | 105,953 | | 5,415 | | 5.11 | | | 103,577 | | 5,239 | | 5.06 | |
| Loans, net of unearned discount: | | | | | | | | | | | | | | |
| SBA | | 101,430 | | 8,370 | | 8.25 | | | 84,185 | | 9,039 | | 10.74 | |
| Commercial | | 383,368 | | 26,996 | | 7.04 | | | 341,841 | | 25,738 | | 7.53 | |
| Residential mortgage | | 100,110 | | 5,971 | | 5.96 | | | 68,443 | | 3,995 | | 5.84 | |
| Consumer | | 59,291 | | 3,462 | | 5.84 | | | 54,789 | | 3,722 | | 6.79 | |
| Total loans | | 644,199 | | 44,799 | | 6.95 | | | 549,258 | | 42,494 | | 7.74 | |
| Total interest-earning assets | | 781,191 | | 50,925 | | 6.52 | | | 678,461 | | 49,059 | | 7.23 | |
| Noninterest-earning assets: | | | | | | | | | | | | | | |
| Cash and due from banks | | 17,529 | | | | | | | 13,467 | | | | | |
| Allowance for loan losses | | (9,179) | | | | | | | (8,184) | | | | | |
| Other assets | | 31,667 | | | | | | | 29,304 | | | | | |
| Total noninterest-earning assets | | 40,017 | | | | | | | 34,587 | | | | | |
| Total Assets | $ | 821,208 | | | | | | $ | 713,048 | | | | | |
| | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | $ | 84,336 | | 1,468 | | 1.74 | | $ | 85,750 | | 1,928 | | 2.25 | |
| Savings deposits | | 168,784 | | 3,644 | | 2.16 | | | 204,214 | | 8,064 | | 3.95 | |
| Time deposits | | 330,174 | | 13,836 | | 4.19 | | | 213,407 | | 10,206 | | 4.78 | |
| Total interest-bearing deposits | | 583,294 | | 18,948 | | 3.25 | | | 503,371 | | 20,198 | | 4.01 | |
| Borrowed funds and subordinated debentures | | 108,214 | | 4,526 | | 4.18 | | | 84,962 | | 4,276 | | 5.03 | |
| Total interest-bearing liabilities | | 691,508 | | 23,474 | | 3.39 | | | 588,333 | | 24,474 | | 4.16 | |
| Noninterest-bearing liabilities: | | | | | | | | | | | | | | |
| Demand deposits | | 78,282 | | | | | | | 75,581 | | | | | |
| Other liabilities | | 2,531 | | | | | | | 2,416 | | | | | |
| Total noninterest-bearing liabilities | | 80,813 | | | | | | | 77,997 | | | | | |
| Shareholders' equity | | 48,887 | | | | | | | 46,718 | | | | | |
| Total Liabilities and Shareholders' Equity | $ | 821,208 | | | | | | $ | 713,048 | | | | | |
| | | | | | | | | | | | | | | |
| Net interest spread | | | | 27,451 | | 3.13 | % | | | | 24,585 | | 3.07 | % |
| Tax-equivalent basis adjustment | | | | (160) | | | | | | | (159) | | | |
| Net interest income | | | $ | 27,291 | | | | | | $ | 24,426 | | | |
| Net interest margin | | | | | | 3.51 | % | | | | | | 3.62 | % |
| | | | | | | | | | | | | | | |
| Unity Bancorp, Inc. | | | | | | | | | | | |
| Allowance for Loan Losses and Loan Quality Schedules | | | | | | | | | |
| (Dollars in thousands) | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | 12/31/2008 | | 9/30/2008 | | 6/30/2008 | | 3/31/2008 | | 12/31/2007 | |
| ALLOWANCE FOR LOAN LOSSES: | | | | | | | | | | | |
| Balance, beginning of quarter | $ | 9,913 | $ | 8,945 | $ | 8,650 | $ | 8,383 | $ | 8,183 | |
| Provision charged to expense | | 1,300 | | 2,100 | | 650 | | 450 | | 550 | |
| | | 11,213 | | 11,045 | | 9,300 | | 8,833 | | 8,733 | |
| Less: Charge offs | | | | | | | | | | | |
| SBA | | 310 | | 423 | | 249 | | 264 | | 260 | |
| Commercial | | 648 | | 700 | | 60 | | 0 | | 126 | |
| Residential mortgage | | - | | - | | - | | 25 | | - | |
| Consumer | | 5 | | 78 | | 56 | | 6 | | 20 | |
| Total Charge Offs | | 963 | | 1,201 | | 365 | | 295 | | 406 | |
| Add: Recoveries | | | | | | | | | | | |
| SBA | | 72 | | 40 | | 5 | | 60 | | 53 | |
| Commercial | | 4 | | 29 | | 4 | | 2 | | 3 | |
| Residential mortgage | | - | | - | | - | | 0 | | - | |
| Consumer | | 0 | | - | | 1 | | 50 | | - | |
| Total Recoveries | | 76 | | 69 | | 10 | | 112 | | 56 | |
| Net Charge Offs | | 887 | | 1,132 | | 355 | | 183 | | 350 | |
| Balance, end of quarter | $ | 10,326 | $ | 9,913 | $ | 8,945 | $ | 8,650 | $ | 8,383 | |
| | | | | | | | | | | | |
| LOAN QUALITY INFORMATION: | | | | | | | | | | | |
| Nonperforming loans | $ | 16,120 | $ | 10,636 | $ | 6,621 | $ | 4,142 | $ | 5,461 | |
| Other real estate owned, net | | 710 | | 318 | | 266 | | 266 | | 106 | |
| Nonperforming assets | $ | 16,830 | $ | 10,954 | $ | 6,887 | $ | 4,408 | $ | 5,567 | |
| | | | | | | | | | | | |
| Loans 90 days past due and still accruing | $ | 2,536 | $ | 3,532 | $ | 76 | $ | 546 | $ | 155 | |
| | | | | | | | | | | | |
| Allowance for loan losses to: | | | | | | | | | | | |
| Total loans at period end | | 1.51 | % | 1.45 | % | 1.39 | % | 1.43 | % | 1.42 | % |
| Nonperforming loans | | 64.06 | | 93.20 | | 135.10 | | 208.85 | | 153.49 | |
| Nonperforming assets | | 61.36 | | 90.50 | | 129.88 | | 196.23 | | 150.58 | |
| Net charge offs to average loans (QTD) | | 0.52 | | 0.67 | | 0.23 | | 0.12 | | 0.24 | |
| Net charge offs to average loans (YTD) | | 0.40 | | 0.35 | | 0.18 | | 0.12 | | 0.14 | |
| Nonperforming loans to total loans | | 2.35 | | 1.55 | | 1.03 | | 0.69 | | 0.93 | |
| Nonperforming assets to total loans and OREO | 2.45 | | 1.60 | | 1.07 | | 0.73 | | 0.94 | |
| Unity Bancorp, Inc. | | | | | | | | | | | |
| Quarterly Financial Data | | | | | | | | | | | |
| | | 12/31/08 | | 09/30/08 | | 06/30/08 | | 03/31/08 | | 12/31/07 | |
| SUMMARY OF INCOME (in thousands) : | | | | | | | | | |
| Interest income | $ | 12,898 | $ | 12,965 | $ | 12,267 | $ | 12,635 | $ | 12,657 | |
| Interest expense | | 6,162 | | 5,883 | | 5,429 | | 6,000 | | 6,310 | |
| Net interest income | | 6,736 | | 7,082 | | 6,838 | | 6,635 | | 6,347 | |
| Provision for loan losses | | 1,300 | | 2,100 | | 650 | | 450 | | 550 | |
| Net interest income after provision | | 5,436 | | 4,982 | | 6,188 | | 6,185 | | 5,797 | |
| Noninterest income | | 555 | | (344) | | 1,028 | | 1,455 | | 1,053 | |
| Noninterest expense | | 5,773 | | 5,779 | | 5,617 | | 5,770 | | 5,928 | |
| Income before income taxes | | 218 | | (1,141) | | 1,599 | | 1,870 | | 922 | |
| Federal and state income tax provision (benefit) | | (366) | | (139) | | 495 | | 626 | | 242 | |
| Net Income (loss) | | 584 | | (1,002) | | 1,104 | | 1,244 | | 680 | |
| | | | | | | | | | | | |
| Per share - Basic | $ | 0.07 | $ | (0.14) | $ | 0.16 | $ | 0.18 | $ | 0.10 | |
| Per share - Diluted | | 0.07 | | (0.14) | | 0.15 | | 0.17 | | 0.09 | |
| COMMON SHARE DATA: | | | | | | | | | | |
| Cash dividends declared | $ | - | $ | - | $ | 0.05 | $ | 0.05 | $ | 0.05 | |
| Book value per common share at quarter end | 6.99 | | 6.55 | | 6.76 | | 6.76 | | 6.70 | |
| Market value at quarter end | | 3.90 | | 4.00 | | 6.95 | | 7.48 | | 8.10 | |
| Average common shares outstanding: (000's) | | | | | | | | | | | |
| Basic | | 7,113 | | 7,107 | | 7,092 | | 7,075 | | 7,107 | |
| Diluted | | 7,190 | | 7,259 | | 7,275 | | 7,271 | | 7,328 | |
| Common shares outstanding at period end (000's) | | 7,119 | | 7,110 | | 7,095 | | 7,063 | | 7,063 | |
| OPERATING RATIOS: | | | | | | | |
| Return on average assets | | 0.26 | % | (0.50) | % | 0.56 | % | 0.65 | % | 0.36 | % |
| Return on average common equity | | 3.56 | | (8.39) | | 9.29 | | 10.50 | | 5.78 | |
| Efficiency ratio | | 75.81 | | 70.51 | | 69.59 | | 71.95 | | 74.07 | |
| BALANCE SHEET DATA (in thousands): | | | | | | | |
| Assets | $ | 898,310 | $ | 864,083 | $ | 832,315 | $ | 807,874 | $ | 752,196 | |
| Deposits | | 707,117 | | 684,680 | | 671,881 | | 642,282 | | 601,267 | |
| Loans | | 685,946 | | 685,023 | | 643,039 | | 602,943 | | 590,132 | |
| Shareholders' equity | | 67,803 | | 46,539 | | 47,951 | | 47,896 | | 47,260 | |
| Allowance for loan losses | | 10,326 | | 9,913 | | 8,945 | | 8,650 | | 8,383 | |
| TAX-EQUIVALENT YIELDS AND RATES: | | | | | | | |
| Interest-earning assets | | 6.18 | % | 6.45 | % | 6.57 | % | 6.93 | % | 7.14 | % |
| Interest-bearing liabilities | | 3.30 | | 3.28 | | 3.31 | | 3.73 | | 4.05 | |
| Net interest spread | | 2.88 | | 3.17 | | 3.26 | | 3.20 | | 3.09 | |
| Net interest margin | | 3.25 | | 3.55 | | 3.66 | | 3.64 | | 3.62 | |
| CREDIT QUALITY: | | | | | | | | | | | |
| Nonperforming assets (in thousands) | $ | 16,830 | $ | 10,954 | $ | 6,887 | $ | 4,408 | $ | 5,567 | |
| Allowance for loan losses to period-end loans | | 1.51 | % | 1.45 | % | 1.39 | % | 1.43 | % | 1.42 | % |
| Net charge offs to average loans | | 0.52 | | 0.67 | | 0.23 | | 0.12 | | 0.24 | |
| Nonperforming assets to loans and OREO | | 2.45 | | 1.60 | | 1.07 | | 0.73 | | 0.94 | |
| CAPITAL AND OTHER: | | | | | | | |
| Total equity to assets | | 7.55 | % | 5.39 | % | 5.76 | % | 5.93 | % | 6.28 | % |
| Tier I capital to average assets (leverage) | | 9.54 | | 7.42 | | 8.01 | | 8.06 | | 8.25 | |
| Tier I capital to risk-adjusted assets | | 12.02 | | 9.07 | | 9.42 | | 9.66 | | 9.81 | |
| Total capital to risk-adjusted assets | | 13.27 | | 10.33 | | 10.67 | | 10.91 | | 11.06 | |
| Number of banking offices | | 16 | | 16 | | 16 | | 17 | | 17 | |
| Number of ATMs | | 19 | | 19 | | 19 | | 20 | | 20 | |
| Number of employees | | 167 | | 176 | | 191 | | 188 | | 201 | |
| | | | | | | | | | | | |
| Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with $898 million in assets and $707 million in deposits. Unity |
| Bank provides financial services to retail, corporate & small business customers through its 16 retail service centers located in 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. | | | | | | | | | | | |
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| This letter 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. |
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