Unity Bancorp, Inc.
64 Old Highway 22
Clinton, NJ 08809
800-618-BANK
www.unitybank.com
NewsNewsNewsNewsNews
For Immediate Release:
January 27, 2016
News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308
Unity Bancorp Reports Quarterly Net Income Increased 55%
and Annual Earnings Increased 49%
Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported increased fourth quarter and year-to-date earnings. Major contributing factors included strong loan growth, increased deposits and improved credit quality. Commercial, residential mortgage and consumer lending were up; with over 16% annual growth in total loans.
“The performance this year is a reflection of the power of an organization that focuses on culture” reported James A Hughes, President and CEO. “Our employees are joined together to provide an exceptional banking experience for the benefit of all our stakeholders. As a result of their efforts, we had an exceptional year, and I have never felt more invigorated about 2016 and beyond.”
Net income was $2.6 million, or $0.31 per diluted share, for the three months ended December 31, 2015, a 55% increase compared to net income of $1.7 million, or $0.20 per diluted share, for the same period a year ago. Return on average assets and average common equity for the quarter were 1.00% and 13.59%, respectively, compared to 0.70% and 9.78% for the same period a year ago.
Highlights include:
| · | | 16.7% loan growth since year-end 2014 – 30.4% growth in consumer loans, 19.8% growth in residential mortgage loans, and 15.8% growth in commercial loans. |
| · | | 21.3% increase in noninterest-bearing demand deposits since year-end 2014. |
| · | | 13.8% increase in net interest income compared to the prior year’s quarter due to strong loan growth. |
| · | | Net interest margin of 3.60% this quarter compared to 3.49% in the prior year’s quarter. |
| · | | Improved credit quality metrics and reduced loan loss provision due to a significant reduction in loan charge-offs and a 36.1% decrease in nonperforming loans. |
“In 2016, we will continue on our journey of growth and increased profitability” said James A Hughes, President and CEO. “Strategically, we will set our sights on growing our branches, improving our array of products and continuing our investment in technology to maintain our relevance to our customer base.”
For the twelve months ended December 31, 2015, net income totaled $9.6 million, or $1.12 per diluted share, compared to $6.4 million or $0.81 per diluted share in the prior year. Return on average assets and average common equity for the year ended December 31, 2015 were 0.96% and 12.92%, respectively, compared to 0.70% and 10.28% for the prior year.
Net Interest Income
Our core source of earnings, net interest income, increased $1.1 million to $9.0 million for the quarter ended December 31, 2015 compared to the prior year’s period. This increase was the result of the strong loan growth in residential mortgage, commercial and consumer loans. Quarterly average commercial loans increased $51.3 million, average residential mortgage loans have increased $42.9 million and consumer loans increased $17.9 million compared to the comparable quarter in 2014. Partially offsetting this increase was the lower level of interest income from our reduced investment portfolio and a slight increase in deposit interest expense.
The net interest margin increased 11 basis points to 3.60% for the quarter ended December 31, 2015 compared to 3.49% for the prior year’s quarter. The expansion in the net interest margin was due to strong loan growth and the increase in noninterest-bearing demand deposits, partially offset by lower balances of investment securities.
Provision for Loan Losses
The provision for loan losses totaled $100 thousand for the quarter ended December 31, 2015, compared to $850 thousand for the prior year period. For the twelve months ended December 31, 2015, the provision for loan losses was $500 thousand compared to $2.6 million for the same period last year. The decrease was the result of significantly lower levels of net charge-offs and reduced nonperforming assets. Quarterly net charge-offs declined $1.5 million compared to the fourth quarter 2014, while annual net charge-offs decreased $2.8 million.
Noninterest Income
Noninterest income increased $260 thousand to $1.9 million for the three months ended December 31, 2015, compared to the same period last year. For the year ended December 31, 2015, noninterest income increased $1.1 million to $7.7 million, compared to the same period a year ago. Quarterly and year-to-date noninterest income increased due to higher gains on the sale of residential mortgage and SBA loans.
During the quarter, $36.3 million in residential mortgage loans were originated, of which $16.3 million were sold at a gain of $379 thousand, compared to $31.1 million originated and $14.1 million sold at a gain of $323 thousand during the prior year’s quarter. For the twelve month period, $181.0 million in residential mortgage loans were originated, of which $94.3 million were sold at a gain of $2.3 million, compared to $129.8 million originated and $59.2 million sold at a gain of $1.1 million in the prior year. All residential mortgage loans originated in 2015 that are held in portfolio for investment are adjustable rate mortgages or fixed rate mortgages with a term of 15 years or less.
SBA loan sales totaled $7.2 million with net gains on sale of $533 thousand for the quarter. There were $4.0 million in SBA loan sales with net gains of $342 thousand in the prior year’s quarter. For the year, SBA loan sales totaled $14.1 million with net gains of $1.2 million in 2015 and $10.4 million with net gains of $975 thousand in 2014. The increased sale volume is directly related to the increase in the origination of SBA loans within our lending area.
In addition to the noninterest income increases noted above, other notable items included:
| · | | Branch fee income rose in both the quarterly and year over year periods due to increased fees as our volume of commercial checking account customers has risen. |
| · | | Service and loan fee income declined in the quarterly period due to reduced loan late charges and payoff fees, combined with lower SBA servicing fees as our serviced loan portfolio declined compared to the same quarter a year ago. For the year, increased loan volume drove loan processing and mortgage application fees higher, offsetting the decline in SBA servicing income. |
| · | | BOLI income declined for the year as the prior year’s period included a death benefit. |
Noninterest Expense
Noninterest expense increased $801 thousand to $6.8 million for the quarter and increased $2.2 million to $26.9 million for the year ended December 31, 2015, respectively. The majority of the increase was due to higher compensation and benefits expenses of $331 thousand for the quarter and $1.5 million for the year. Compensation and benefits expenses have increased over the past twelve months due to increased head count in loan origination and support staff, and a lower overall vacancy rate when compared to the prior year. In addition, mortgage commission expense increased due to the larger volume of mortgages originated. Benefits expense also increased due to the adoption of supplemental executive retirement plans.
Other expense fluctuations included: higher software maintenance and network monitoring expense, increased audit expenses related to Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) testing and director fees. As credit quality improved this year, our loan and OREO expenses have decreased despite an OREO expense increase quarter over quarter due to a $263 thousand loss on a sale in the fourth quarter.
Financial Condition
At December 31, 2015, total assets were $1.1 billion, an increase of $76.1 million from year-end 2014:
| · | | Total loans increased $127.1 million or 16.7%, from year-end 2014 to $889.0 million at December 31, 2015. The majority of the growth came in our commercial, residential mortgage and consumer loan portfolios which increased $63.6 million, $43.6 million and $18.0 million, respectively. |
| · | | Total deposits increased $100.2 million or 12.6%, to $894.5 million at December 31, 2015, due primarily to increased time deposits and noninterest-bearing demand deposits. |
| · | | Borrowed funds decreased $33.0 million to $92.0 million at December 31, 2015, due to reduced overnight borrowings of $7.0 million compared to $50.0 million at year-end 2014. In addition, during the quarter, $20.0 million in Federal Home Loan Bank borrowings at an average cost of 4.11% were extended to 2020 at an average rate of 2.08%. |
| · | | Shareholders’ equity was $78.5 million at December 31, 2015, an increase of $8.3 million from year-end 2014, due to year-to-date net income less the dividends paid to shareholders. |
| · | | Book value per common share was $9.30 as of December 31, 2015. |
| · | | At December 31, 2015, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 8.82%, 9.37%, 11.18% and 12.43% respectively, all in excess of the ratios required to be deemed “well-capitalized”. |
Credit Quality
| · | | Nonperforming assets totaled $8.9 million at December 31, 2015, or 0.99% 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 36.1% to $7.3 million at December 31, 2015 from year-end. |
| · | | OREO increased $429 thousand to $1.6 million at December 31, 2015 from year-end. |
| · | | The allowance for loan losses totaled $12.8 million at December 31, 2015, or 1.44% of total loans compared to $12.6 million and 1.65% at December 31, 2014. |
| · | | Net recoveries were $238 thousand for the three months ended December 31, 2015, compared to net charge-offs of $1.2 million for the same period a year ago. For the year ended December 31, 2015, net charge-offs were $292 thousand, a decrease of $2.8 million compared to the prior year’s period. |
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.1 billion in assets and $894 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
December 31, 2015
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| | | | | | | | | | | | | | | |
| | | | | | | | | Dec. 31, 2015 vs. | |
| | | | | | | | | Sept. 30, 2015 | | Dec. 31, 2014 | |
(In thousands, except percentages and per share amounts) | | Dec. 31, 2015 | | Sept. 30, 2015 | | Dec. 31, 2014 | | | % | | % | |
BALANCE SHEET DATA: | | | | | | | | | | | | | | | |
Total assets | | $ | 1,084,866 | | $ | 1,052,711 | | $ | 1,008,788 | | | 3.1 | % | 7.5 | % |
Total deposits | | | 894,493 | | | 866,247 | | | 794,341 | | | 3.3 | | 12.6 | |
Total loans | | | 888,958 | | | 855,560 | | | 761,825 | | | 3.9 | | 16.7 | |
Total securities | | | 71,336 | | | 71,492 | | | 80,082 | | | (0.2) | | (10.9) | |
Total shareholders' equity | | | 78,470 | | | 76,065 | | | 70,123 | | | 3.2 | | 11.9 | |
Allowance for loan losses | | | (12,759) | | | (12,421) | | | (12,551) | | | 2.7 | | 1.7 | |
| | | | | | | | | | | | | | | |
FINANCIAL DATA - QUARTER TO DATE: | | | | | | | | | | | | | | | |
Income before provision for income taxes | | $ | 3,954 | | $ | 3,845 | | $ | 2,653 | | | 2.8 | | 49.0 | |
Provision for income taxes | | | 1,315 | | | 1,294 | | | 952 | | | 1.6 | | 38.1 | |
Net income | | $ | 2,639 | | $ | 2,551 | | $ | 1,701 | | | 3.4 | | 55.1 | |
| | | | | | | | | | | | | | | |
Net income per common share - Basic | | $ | 0.31 | | $ | 0.30 | | $ | 0.21 | | | 3.3 | | 47.6 | |
Net income per common share - Diluted | | $ | 0.31 | | $ | 0.30 | | $ | 0.20 | | | 3.3 | | 55.0 | |
| | | | | | | | | | | | | | | |
Return on average assets | | | 1.00 | % | | 1.00 | % | | 0.70 | % | | - | | 42.9 | |
Return on average equity | | | 13.59 | % | | 13.54 | % | | 9.78 | % | | 0.4 | | 39.0 | |
Efficiency ratio | | | 62.81 | % | | 62.88 | % | | 63.68 | % | | (0.1) | | (1.4) | |
Net interest margin | | | 3.60 | % | | 3.60 | % | | 3.49 | % | | - | | 3.2 | |
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FINANCIAL DATA - YEAR TO DATE: | | | | | | | | | | | | | | | |
Income before provision for income taxes | | $ | 14,368 | | | | | $ | 9,553 | | | | | 50.4 | |
Provision for income taxes | | | 4,811 | | | | | | 3,145 | | | | | 53.0 | |
Net income | | $ | 9,557 | | | | | $ | 6,408 | | | | | 49.1 | |
| | | | | | | | | | | | | | | |
Net income per common share - Basic | | $ | 1.13 | | | | | $ | 0.82 | | | | | 37.8 | |
Net income per common share - Diluted | | $ | 1.12 | | | | | $ | 0.81 | | | | | 38.3 | |
| | | | | | | | | | | | | | | |
Return on average assets | | | 0.96 | % | | | | | 0.70 | % | | | | 37.1 | |
Return on average equity | | | 12.92 | % | | | | | 10.28 | % | | | | 25.7 | |
Efficiency ratio | | | 64.41 | % | | | | | 67.90 | % | | | | (5.1) | |
Net interest margin | | | 3.63 | % | | | | | 3.53 | % | | | | 2.8 | |
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SHARE INFORMATION: | | | | | | | | | | | | | | | |
Market price per share | | $ | 12.47 | | $ | 9.77 | | $ | 9.43 | | | 27.6 | | 32.2 | |
Dividends paid | | $ | 0.04 | | $ | 0.04 | | $ | 0.03 | | | - | | 0.3 | |
Book value per common share | | $ | 9.30 | | $ | 9.02 | | $ | 8.36 | | | 3.1 | | 11.2 | |
Average diluted shares outstanding (QTD) | | | 8,547 | | | 8,536 | | | 8,478 | | | 0.1 | | 0.8 | |
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CAPITAL RATIOS: | | | | | | | | | | | | | | | |
Total equity to total assets | | | 7.23 | % | | 7.23 | % | | 6.95 | % | | - | | 4.0 | |
Leverage ratio | | | 8.82 | % | | 8.92 | % | | 8.71 | % | | (1.1) | | 1.3 | |
Common equity tier 1 risk-based capital ratio | | | 9.37 | % | | 9.37 | % | | n/a | | | n/a | | n/a | |
Tier 1 risk-based capital ratio | | | 11.18 | % | | 11.25 | % | | 11.57 | % | | (0.6) | | (3.4) | |
Total risk-based capital ratio | | | 12.43 | % | | 12.50 | % | | 12.83 | % | | (0.6) | | (3.1) | |
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CREDIT QUALITY AND RATIOS: | | | | | | | | | | | | | | | |
Nonperforming assets | | $ | 8,851 | | $ | 12,501 | | $ | 12,530 | | | (29.2) | | (29.4) | |
QTD net chargeoffs (annualized) to QTD average loans | | | (0.11) | % | | 0.09 | % | | 0.63 | % | | (222.2) | | (117.5) | |
Allowance for loan losses to total loans | | | 1.44 | % | | 1.45 | % | | 1.65 | % | | (0.7) | | (12.7) | |
Nonperforming assets to total loans
and OREO | | | 0.99 | % | | 1.46 | % | | 1.64 | % | | (32.2) | | (39.6) | |
Nonperforming assets to total assets | | | 0.82 | % | | 1.19 | % | | 1.24 | % | | (31.1) | % | (33.9) | % |
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UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2015
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| | | | | | | | | | | | | | | |
| | | | | | | | | | | | Dec. 31, 2015 vs. | |
| | | | | | | | | | | | Sept. 30, 2015 | | Dec. 31, 2014 | |
(In thousands, except percentages) | | Dec. 31, 2015 | | Sept. 30, 2015 | | Dec. 31, 2014 | | | % | | % | |
ASSETS | | | | | | | | | | | | | | | |
Cash and due from banks | | $ | 22,681 | | $ | 21,863 | | $ | 29,351 | | | 3.7 | % | (22.7) | % |
Federal funds sold and interest-bearing deposits | | | 65,476 | | | 66,994 | | | 100,470 | | | (2.3) | | (34.8) | |
Cash and cash equivalents | | | 88,157 | | | 88,857 | | | 129,821 | | | (0.8) | | (32.1) | |
Securities: | | | | | | | | | | | | | | | |
Securities available for sale | | | 52,865 | | | 53,470 | | | 60,073 | | | (1.1) | | (12.0) | |
Securities held to maturity | | | 18,471 | | | 18,022 | | | 20,009 | | | 2.5 | | (7.7) | |
Total securities | | | 71,336 | | | 71,492 | | | 80,082 | | | (0.2) | | (10.9) | |
Loans: | | | | | | | | | | | | | | | |
SBA loans held for sale | | | 13,114 | | | 13,937 | | | 5,179 | | | (5.9) | | 153.2 | |
SBA loans held for investment | | | 39,393 | | | 39,728 | | | 40,401 | | | (0.8) | | (2.5) | |
SBA 504 loans | | | 29,353 | | | 29,221 | | | 34,322 | | | 0.5 | | (14.5) | |
Commercial loans | | | 465,518 | | | 442,970 | | | 401,949 | | | 5.1 | | 15.8 | |
Residential mortgage loans | | | 264,523 | | | 255,447 | | | 220,878 | | | 3.6 | | 19.8 | |
Consumer loans | | | 77,057 | | | 74,257 | | | 59,096 | | | 3.8 | | 30.4 | |
Total loans | | | 888,958 | | | 855,560 | | | 761,825 | | | 3.9 | | 16.7 | |
Allowance for loan losses | | | (12,759) | | | (12,421) | | | (12,551) | | | (2.7) | | 1.7 | |
Net loans | | | 876,199 | | | 843,139 | | | 749,274 | | | 3.9 | | 16.9 | |
Premises and equipment, net | | | 15,171 | | | 15,297 | | | 15,231 | | | (0.8) | | (0.4) | |
Bank owned life insurance ("BOLI") | | | 13,381 | | | 13,285 | | | 13,001 | | | 0.7 | | 2.9 | |
Deferred tax assets | | | 5,968 | | | 6,107 | | | 5,860 | | | (2.3) | | 1.8 | |
Federal Home Loan Bank ("FHLB") stock | | | 4,600 | | | 4,510 | | | 6,032 | | | 2.0 | | (23.7) | |
Accrued interest receivable | | | 3,884 | | | 3,704 | | | 3,518 | | | 4.9 | | 10.4 | |
Other real estate owned ("OREO") | | | 1,591 | | | 1,759 | | | 1,162 | | | (9.6) | | 36.9 | |
Goodwill and other intangibles | | | 1,516 | | | 1,516 | | | 1,516 | | | - | | - | |
Other assets | | | 3,063 | | | 3,045 | | | 3,291 | | | 0.6 | | (6.9) | |
Total assets | | $ | 1,084,866 | | $ | 1,052,711 | | $ | 1,008,788 | | | 3.1 | % | 7.5 | % |
| | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | |
Noninterest-bearing demand | | $ | 185,267 | | $ | 175,298 | | $ | 152,785 | | | 5.7 | % | 21.3 | % |
Interest-bearing demand | | | 130,605 | | | 123,984 | | | 128,875 | | | 5.3 | | 1.3 | |
Savings | | | 301,447 | | | 299,017 | | | 300,348 | | | 0.8 | | 0.4 | |
Time, under $100,000 | | | 134,468 | | | 124,348 | | | 113,119 | | | 8.1 | | 18.9 | |
Time, $100,000 and over, under $250,000 | | | 104,106 | | | 115,912 | | | 81,532 | | | (10.2) | | 27.7 | |
Time, $250,000 and over | | | 38,600 | | | 27,688 | | | 17,682 | | | 39.4 | | 118.3 | |
Total deposits | | | 894,493 | | | 866,247 | | | 794,341 | | | 3.3 | | 12.6 | |
Borrowed funds | | | 92,000 | | | 90,000 | | | 125,000 | | | 2.2 | | (26.4) | |
Subordinated debentures | | | 15,465 | | | 15,465 | | | 15,465 | | | - | | - | |
Accrued interest payable | | | 461 | | | 460 | | | 474 | | | 0.2 | | (2.7) | |
Accrued expenses and other liabilities | | | 3,977 | | | 4,474 | | | 3,385 | | | (11.1) | | 17.5 | |
Total liabilities | | | 1,006,396 | | | 976,646 | | | 938,665 | | | 3.0 | | 7.2 | |
Shareholders' equity: | | | | | | | | | | | | | | | |
Common stock | | | 59,371 | | | 59,205 | | | 58,785 | | | 0.3 | | 1.0 | |
Retained earnings | | | 19,566 | | | 17,270 | | | 11,195 | | | 13.3 | | 74.8 | |
Accumulated other comprehensive (loss) income | | | (467) | | | (410) | | | 143 | | | NM | | NM | |
Total shareholders' equity | | | 78,470 | | | 76,065 | | | 70,123 | | | 3.2 | | 11.9 | |
Total liabilities and shareholders' equity | | $ | 1,084,866 | | $ | 1,052,711 | | $ | 1,008,788 | | | 3.1 | % | 7.5 | % |
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Issued and outstanding common shares | | | 8,436 | | | 8,429 | | | 8,388 | | | | | | |
UNITY BANCORP, INC.
QTD CONSOLIDATED STATEMENTS OF INCOME
December 31, 2015
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| | | | | | | | | | | | Dec. 31, 2015 vs. | |
| | For the three months ended | | | Sept. 30, 2015 | | Dec. 31, 2014 | |
(In thousands, except percentages and per share amounts) | | Dec. 31, 2015 | | Sept. 30, 2015 | | Dec. 31, 2014 | | | $ | | % | | $ | | % | |
INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | |
Federal funds sold and interest-bearing deposits | | $ | 13 | | $ | 11 | | $ | 13 | | | $ | 2 | | | 18.2 | % | $ | - | | | - | % |
FHLB stock | | | 37 | | | 36 | | | 38 | | | | 1 | | | 2.8 | | | (1) | | | (2.6) | |
Securities: | | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 360 | | | 349 | | | 444 | | | | 11 | | | 3.2 | | | (84) | | | (18.9) | |
Tax-exempt | | | 70 | | | 71 | | | 79 | | | | (1) | | | (1.4) | | | (9) | | | (11.4) | |
Total securities | | | 430 | | | 420 | | | 523 | | | | 10 | | | 2.4 | | | (93) | | | (17.8) | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | |
SBA loans | | | 713 | | | 696 | | | 605 | | | | 17 | | | 2.4 | | | 108 | | | 17.9 | |
SBA 504 loans | | | 346 | | | 353 | | | 425 | | | | (7) | | | (2.0) | | | (79) | | | (18.6) | |
Commercial loans | | | 5,637 | | | 5,378 | | | 5,064 | | | | 259 | | | 4.8 | | | 573 | | | 11.3 | |
Residential mortgage loans | | | 2,939 | | | 2,811 | | | 2,461 | | | | 128 | | | 4.6 | | | 478 | | | 19.4 | |
Consumer loans | | | 880 | | | 849 | | | 673 | | | | 31 | | | 3.7 | | | 207 | | | 30.8 | |
Total loans | | | 10,515 | | | 10,087 | | | 9,228 | | | | 428 | | | 4.2 | | | 1,287 | | | 13.9 | |
Total interest income | | | 10,995 | | | 10,554 | | | 9,802 | | | | 441 | | | 4.2 | | | 1,193 | | | 12.2 | |
INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | | 121 | | | 108 | | | 112 | | | | 13 | | | 12.0 | | | 9 | | | 8.0 | |
Savings deposits | | | 298 | | | 255 | | | 270 | | | | 43 | | | 16.9 | | | 28 | | | 10.4 | |
Time deposits | | | 910 | | | 839 | | | 715 | | | | 71 | | | 8.5 | | | 195 | | | 27.3 | |
Borrowed funds and subordinated debentures | | | 686 | | | 730 | | | 817 | | | | (44) | | | (6.0) | | | (131) | | | (16.0) | |
Total interest expense | | | 2,015 | | | 1,932 | | | 1,914 | | | | 83 | | | 4.3 | | | 101 | | | 5.3 | |
Net interest income | | | 8,980 | | | 8,622 | | | 7,888 | | | | 358 | | | 4.2 | | | 1,092 | | | 13.8 | |
Provision for loan losses | | | 100 | | | 200 | | | 850 | | | | (100) | | | 100.0 | | | (750) | | | (88.2) | |
Net interest income after provision for loan losses | | | 8,880 | | | 8,422 | | | 7,038 | | | | 458 | | | 5.4 | | | 1,842 | | | 26.2 | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | |
Branch fee income | | | 402 | | | 399 | | | 362 | | | | 3 | | | 0.8 | | | 40 | | | 11.0 | |
Service and loan fee income | | | 266 | | | 306 | | | 388 | | | | (40) | | | (13.1) | | | (122) | | | (31.4) | |
Gain on sale of SBA loans held for sale, net | | | 533 | | | 308 | | | 342 | | | | 225 | | | 100.0 | | | 191 | | | 55.8 | |
Gain on sale of mortgage loans, net | | | 379 | | | 926 | | | 323 | | | | (547) | | | (59.1) | | | 56 | | | 17.3 | |
Net security gains | | | - | | | - | | | 55 | | | | - | | | - | | | (55) | | | (100.0) | |
Other income | | | 340 | | | 336 | | | 190 | | | | 4 | | | 1.2 | | | 150 | | | 78.9 | |
Total noninterest income | | | 1,920 | | | 2,275 | | | 1,660 | | | | (355) | | | (15.6) | | | 260 | | | 15.7 | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | |
Compensation and benefits | | | 3,528 | | | 3,814 | | | 3,197 | | | | (286) | | | (7.5) | | | 331 | | | 10.4 | |
Occupancy | | | 644 | | | 598 | | | 596 | | | | 46 | | | 7.7 | | | 48 | | | 8.1 | |
Processing and communications | | | 620 | | | 631 | | | 615 | | | | (11) | | | (1.7) | | | 5 | | | 0.8 | |
Furniture and equipment | | | 455 | | | 393 | | | 397 | | | | 62 | | | 15.8 | | | 58 | | | 14.6 | |
Professional services | | | 213 | | | 251 | | | 131 | | | | (38) | | | (15.1) | | | 82 | | | 62.6 | |
Loan costs | | | 113 | | | 265 | | | 211 | | | | (152) | | | (57.4) | | | (98) | | | (46.4) | |
OREO expenses | | | 265 | | | 15 | | | 72 | | | | 250 | | | 1,666.7 | | | 193 | | | 268.1 | |
Deposit insurance | | | 173 | | | 163 | | | 162 | | | | 10 | | | 6.1 | | | 11 | | | 6.8 | |
Advertising | | | 302 | | | 203 | | | 269 | | | | 99 | | | 48.8 | | | 33 | | | 12.3 | |
Other expenses | | | 533 | | | 519 | | | 395 | | | | 14 | | | 2.7 | | | 138 | | | 34.9 | |
Total noninterest expense | | | 6,846 | | | 6,852 | | | 6,045 | | | | (6) | | | (0.1) | | | 801 | | | 13.3 | |
Income before provision for income taxes | | | 3,954 | | | 3,845 | | | 2,653 | | | | 109 | | | 2.8 | | | 1,301 | | | 49.0 | |
Provision for income taxes | | | 1,315 | | | 1,294 | | | 952 | | | | 21 | | | 1.6 | | | 363 | | | 38.1 | |
Net income | | $ | 2,639 | | $ | 2,551 | | $ | 1,701 | | | $ | 88 | | | 3.4 | % | $ | 938 | | | 55.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Effective tax rate | | | 33.3 | % | | 33.7 | % | | 35.9 | % | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net income per common share - Basic | | $ | 0.31 | | $ | 0.30 | | $ | 0.21 | | | | | | | | | | | | | | |
Net income per common share - Diluted | | $ | 0.31 | | $ | 0.30 | | $ | 0.20 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding - Basic | | | 8,430 | | | 8,427 | | | 8,378 | | | | | | | | | | | | | | |
Weighted average common shares outstanding - Diluted | | | 8,547 | | | 8,536 | | | 8,478 | | | | | | | | | | | | | | |
UNITY BANCORP, INC.
YTD CONSOLIDATED STATEMENTS OF INCOME
December 31, 2015
| | | | | | | | | | | | | | |
| | | | | | |
| | For the twelve months ended December 31, | | | Current YTD vs. Prior YTD | |
(In thousands, except percentages and per share amounts) | | 2015 | | 2014 | | | $ | | % | |
INTEREST INCOME | | | | | | | | | | | | | | |
Federal funds sold and interest-bearing deposits | | $ | 39 | | $ | 44 | | | $ | (5) | | | (11.4) | % |
FHLB stock | | | 155 | | | 165 | | | | (10) | | | (6.1) | |
Securities: | | | | | | | | | | | | | | |
Taxable | | | 1,459 | | | 2,183 | | | | (724) | | | (33.2) | |
Tax-exempt | | | 284 | | | 355 | | | | (71) | | | (20.0) | |
Total securities | | | 1,743 | | | 2,538 | | | | (795) | | | (31.3) | |
Loans: | | | | | | | | | | | | | | |
SBA loans | | | 2,693 | | | 2,467 | | | | 226 | | | 9.2 | |
SBA 504 loans | | | 1,414 | | | 1,676 | | | | (262) | | | (15.6) | |
Commercial loans | | | 21,357 | | | 19,329 | | | | 2,028 | | | 10.5 | |
Residential mortgage loans | | | 11,048 | | | 8,898 | | | | 2,150 | | | 24.2 | |
Consumer loans | | | 3,202 | | | 2,301 | | | | 901 | | | 39.2 | |
Total loans | | | 39,714 | | | 34,671 | | | | 5,043 | | | 14.5 | |
Total interest income | | | 41,651 | | | 37,418 | | | | 4,233 | | | 11.3 | |
INTEREST EXPENSE | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | | 438 | | | 430 | | | | 8 | | | 1.9 | |
Savings deposits | | | 1,088 | | | 856 | | | | 232 | | | 27.1 | |
Time deposits | | | 3,160 | | | 2,777 | | | | 383 | | | 13.8 | |
Borrowed funds and subordinated debentures | | | 2,974 | | | 3,243 | | | | (269) | | | (8.3) | |
Total interest expense | | | 7,660 | | | 7,306 | | | | 354 | | | 4.8 | |
Net interest income | | | 33,991 | | | 30,112 | | | | 3,879 | | | 12.9 | |
Provision for loan losses | | | 500 | | | 2,550 | | | | (2,050) | | | (80.4) | |
Net interest income after provision for loan losses | | | 33,491 | | | 27,562 | | | | 5,929 | | | 21.5 | |
NONINTEREST INCOME | | | | | | | | | | | | | | |
Branch fee income | | | 1,520 | | | 1,469 | | | | 51 | | | 3.5 | |
Service and loan fee income | | | 1,334 | | | 1,260 | | | | 74 | | | 5.9 | |
Gain on sale of SBA loans held for sale, net | | | 1,204 | | | 975 | | | | 229 | | | 23.5 | |
Gain on sale of mortgage loans, net | | | 2,336 | | | 1,139 | | | | 1,197 | | | 105.1 | |
BOLI income | | | 380 | | | 559 | | | | (179) | | | (32.0) | |
Net security gains | | | 28 | | | 433 | | | | (405) | | | (93.5) | |
Other income | | | 927 | | | 844 | | | | 83 | | | 9.8 | |
Total noninterest income | | | 7,729 | | | 6,679 | | | | 1,050 | | | 15.7 | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | |
Compensation and benefits | | | 14,295 | | | 12,750 | | | | 1,545 | | | 12.1 | |
Occupancy | | | 2,515 | | | 2,478 | | | | 37 | | | 1.5 | |
Processing and communications | | | 2,461 | | | 2,461 | | | | - | | | - | |
Furniture and equipment | | | 1,643 | | | 1,510 | | | | 133 | | | 8.8 | |
Professional services | | | 942 | | | 748 | | | | 194 | | | 25.9 | |
Loan costs | | | 759 | | | 780 | | | | (21) | | | (2.7) | |
OREO expenses | | | 382 | | | 485 | | | | (103) | | | (21.2) | |
Deposit insurance | | | 669 | | | 677 | | | | (8) | | | (1.2) | |
Advertising | | | 1,030 | | | 998 | | | | 32 | | | 3.2 | |
Other expenses | | | 2,156 | | | 1,801 | | | | 355 | | | 19.7 | |
Total noninterest expense | | | 26,852 | | | 24,688 | | | | 2,164 | | | 8.8 | |
Income before provision for income taxes | | | 14,368 | | | 9,553 | | | | 4,815 | | | 50.4 | |
Provision for income taxes | | | 4,811 | | | 3,145 | | | | 1,666 | | | 53.0 | |
Net income | | $ | 9,557 | | $ | 6,408 | | | $ | 3,149 | | | 49.1 | % |
| | | | | | | | | | | | | | |
Effective tax rate | | | 33.5 | % | | 32.9 | % | | | | | | | |
| | | | | | | | | | | | | | |
Net income per common share - Basic | | $ | 1.13 | | $ | 0.82 | | | | | | | | |
Net income per common share - Diluted | | $ | 1.12 | | $ | 0.81 | | | | | | | | |
| | | | | | | | | | | | | | |
Weighted average common shares outstanding - Basic | | | 8,425 | | | 7,856 | | | | | | | | |
Weighted average common shares outstanding - Diluted | | | 8,529 | | | 7,945 | | | | | | | | |
UNITY BANCORP, INC.
QTD NET INTEREST MARGIN
December 31, 2015
| | | | | | | | | | | | | | | | | | |
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis) | |
| | For the three months ended | |
| | December 31, 2015 | | September 30, 2015 | |
| | Average Balance | | Interest | | Rate/Yield | | Average Balance | | Interest | Rate/Yield | |
ASSETS | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | |
Federal funds sold and interest-bearing deposits | | $ | 47,421 | | $ | 13 | | | 0.11 | % | $ | 34,465 | | $ | 11 | | 0.13 | % |
FHLB stock | | | 3,700 | | | 37 | | | 3.97 | | | 3,517 | | | 36 | | 4.06 | |
Securities: | | | | | | | | | | | | | | | | | | |
Taxable | | | 59,425 | | | 360 | | | 2.40 | | | 61,542 | | | 349 | | 2.25 | |
Tax-exempt | | | 11,564 | | | 104 | | | 3.57 | | | 11,612 | | | 105 | | 3.59 | |
Total securities (A) | | | 70,989 | | | 464 | | | 2.59 | | | 73,154 | | | 454 | | 2.46 | |
Loans: | | | | | | | | | | | | | | | | | | |
SBA loans | | | 54,912 | | | 713 | | | 5.15 | | | 53,325 | | | 696 | | 5.18 | |
SBA 504 loans | | | 29,319 | | | 346 | | | 4.68 | | | 29,268 | | | 353 | | 4.79 | |
Commercial loans | | | 452,494 | | | 5,637 | | | 4.94 | | | 433,285 | | | 5,378 | | 4.92 | |
Residential mortgage loans | | | 259,938 | | | 2,939 | | | 4.49 | | | 254,765 | | | 2,811 | | 4.38 | |
Consumer loans | | | 75,789 | | | 880 | | | 4.61 | | | 72,641 | | | 849 | | 4.64 | |
Total loans (B) | | | 872,452 | | | 10,515 | | | 4.78 | | | 843,284 | | | 10,087 | | 4.75 | |
Total interest-earning assets | | $ | 994,562 | | $ | 11,029 | | | 4.40 | % | $ | 954,420 | | $ | 10,588 | | 4.41 | % |
| | | | | | | | | | | | | | | | | | |
Noninterest-earning assets: | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 24,214 | | | | | | | | | 24,990 | | | | | | |
Allowance for loan losses | | | (12,801) | | | | | | | | | (12,619) | | | | | | |
Other assets | | | 44,055 | | | | | | | | | 44,098 | | | | | | |
Total noninterest-earning assets | | | 55,468 | | | | | | | | | 56,469 | | | | | | |
Total assets | | $ | 1,050,030 | | | | | | | | $ | 1,010,889 | | | | | | |
| | | | | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Total interest-bearing demand deposits | | $ | 131,800 | | $ | 121 | | | 0.36 | % | $ | 125,405 | | $ | 108 | | 0.34 | % |
Total savings deposits | | | 295,013 | | | 298 | | | 0.40 | | | 290,413 | | | 255 | | 0.35 | |
Total time deposits | | | 271,647 | | | 910 | | | 1.33 | | | 256,216 | | | 839 | | 1.30 | |
Total interest-bearing deposits | | | 698,460 | | | 1,329 | | | 0.75 | | | 672,034 | | | 1,202 | | 0.71 | |
Borrowed funds and subordinated debentures | | | 87,465 | | | 686 | | | 3.11 | | | 83,383 | | | 730 | | 3.47 | |
Total interest-bearing liabilities | | $ | 785,925 | | $ | 2,015 | | | 1.02 | % | $ | 755,417 | | $ | 1,932 | | 1.01 | % |
| | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 182,024 | | | | | | | | | 176,085 | | | | | | |
Other liabilities | | | 5,056 | | | | | | | | | 4,663 | | | | | | |
Total noninterest-bearing liabilities | | | 187,080 | | | | | | | | | 180,748 | | | | | | |
Total shareholders' equity | | | 77,025 | | | | | | | | | 74,724 | | | | | | |
Total liabilities and shareholders' equity | | $ | 1,050,030 | | | | | | | | $ | 1,010,889 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Net interest spread | | | | | $ | 9,014 | | | 3.38 | % | | | | $ | 8,656 | | 3.40 | % |
Tax-equivalent basis adjustment | | | | | | (34) | | | | | | | | | (34) | | | |
Net interest income | | | | | $ | 8,980 | | | | | | | | $ | 8,622 | | | |
Net interest margin | | | | | | | | | 3.60 | % | | | | | | | 3.60 | % |
| (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.
QTD NET INTEREST MARGIN
December 31, 2015
| | | | | | | | | | | | | | | | | | |
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis) | |
| | For the three months ended | |
| | December 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 | | $ | 47,421 | | $ | 13 | | | 0.11 | % | $ | 50,929 | | $ | 13 | | 0.10 | % |
FHLB stock | | | 3,700 | | | 37 | | | 3.97 | | | 3,807 | | | 38 | | 3.96 | |
Securities: | | | | | | | | | | | | | | | | | | |
Taxable | | | 59,425 | | | 360 | | | 2.40 | | | 71,542 | | | 444 | | 2.48 | |
Tax-exempt | | | 11,564 | | | 104 | | | 3.57 | | | 13,226 | | | 117 | | 3.54 | |
Total securities (A) | | | 70,989 | | | 464 | | | 2.59 | | | 84,768 | | | 561 | | 2.65 | |
Loans: | | | | | | | | | | | | | | | | | | |
SBA loans | | | 54,912 | | | 713 | | | 5.15 | | | 50,816 | | | 605 | | 4.76 | |
SBA 504 loans | | | 29,319 | | | 346 | | | 4.68 | | | 34,533 | | | 425 | | 4.88 | |
Commercial loans | | | 452,494 | | | 5,637 | | | 4.94 | | | 401,215 | | | 5,064 | | 5.01 | |
Residential mortgage loans | | | 259,938 | | | 2,939 | | | 4.49 | | | 217,008 | | | 2,461 | | 4.54 | |
Consumer loans | | | 75,789 | | | 880 | | | 4.61 | | | 57,923 | | | 673 | | 4.61 | |
Total loans (B) | | | 872,452 | | | 10,515 | | | 4.78 | | | 761,495 | | | 9,228 | | 4.82 | |
Total interest-earning assets | | $ | 994,562 | | $ | 11,029 | | | 4.40 | % | $ | 900,999 | | $ | 9,840 | | 4.35 | % |
| | | | | | | | | | | | | | | | | | |
Noninterest-earning assets: | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 24,214 | | | | | | | | | 30,346 | | | | | | |
Allowance for loan losses | | | (12,801) | | | | | | | | | (13,074) | | | | | | |
Other assets | | | 44,055 | | | | | | | | | 43,577 | | | | | | |
Total noninterest-earning assets | | | 55,468 | | | | | | | | | 60,849 | | | | | | |
Total assets | | $ | 1,050,030 | | | | | | | | $ | 961,848 | | | | | | |
| | | | | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Total interest-bearing demand deposits | | $ | 131,800 | | $ | 121 | | | 0.36 | % | $ | 126,788 | | $ | 112 | | 0.35 | % |
Total savings deposits | | | 295,013 | | | 298 | | | 0.40 | | | 298,166 | | | 270 | | 0.36 | |
Total time deposits | | | 271,647 | | | 910 | | | 1.33 | | | 219,866 | | | 715 | | 1.29 | |
Total interest-bearing deposits | | | 698,460 | | | 1,329 | | | 0.75 | | | 644,820 | | | 1,097 | | 0.68 | |
Borrowed funds and subordinated debentures | | | 87,465 | | | 686 | | | 3.11 | | | 91,009 | | | 817 | | 3.51 | |
Total interest-bearing liabilities | | $ | 785,925 | | $ | 2,015 | | | 1.02 | % | $ | 735,829 | | $ | 1,914 | | 1.03 | % |
| | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 182,024 | | | | | | | | | 152,359 | | | | | | |
Other liabilities | | | 5,056 | | | | | | | | | 4,616 | | | | | | |
Total noninterest-bearing liabilities | | | 187,080 | | | | | | | | | 156,975 | | | | | | |
Total shareholders' equity | | | 77,025 | | | | | | | | | 69,044 | | | | | | |
Total liabilities and shareholders' equity | | $ | 1,050,030 | | | | | | | | $ | 961,848 | | | | | | |
| | | | | | | | | | | | | | | | | | |
Net interest spread | | | | | $ | 9,014 | | | 3.38 | % | | | | $ | 7,926 | | 3.32 | % |
Tax-equivalent basis adjustment | | | | | | (34) | | | | | | | | | (38) | | | |
Net interest income | | | | | $ | 8,980 | | | | | | | | $ | 7,888 | | | |
Net interest margin | | | | | | | | | 3.60 | % | | | | | | | 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.
YEAR TO DATE NET INTEREST MARGIN
December 31, 2015
| | | | | | | | | | | | | | | | | | | |
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis) | |
| | For the twelve months ended | |
| | December 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 | | $ | 34,883 | | $ | 39 | | | 0.11 | % | $ | 44,900 | | $ | 44 | | | 0.10 | % |
FHLB stock | | | 3,695 | | | 155 | | | 4.19 | | | 3,972 | | | 165 | | | 4.15 | |
Securities: | | | | | | | | | | | | | | | | | | | |
Taxable | | | 62,937 | | | 1,459 | | | 2.32 | | | 81,334 | | | 2,183 | | | 2.68 | |
Tax-exempt | | | 11,739 | | | 421 | | | 3.59 | | | 14,493 | | | 526 | | | 3.63 | |
Total securities (A) | | | 74,676 | | | 1,880 | | | 2.52 | | | 95,827 | | | 2,709 | | | 2.83 | |
Loans: | | | | | | | | | | | | | | | | | | | |
SBA loans | | | 50,997 | | | 2,693 | | | 5.28 | | | 53,232 | | | 2,467 | | | 4.63 | |
SBA 504 loans | | | 30,366 | | | 1,414 | | | 4.66 | | | 33,754 | | | 1,676 | | | 4.97 | |
Commercial loans | | | 428,702 | | | 21,357 | | | 4.98 | | | 379,327 | | | 19,329 | | | 5.10 | |
Residential mortgage loans | | | 246,278 | | | 11,048 | | | 4.49 | | | 196,333 | | | 8,898 | | | 4.53 | |
Consumer loans | | | 69,580 | | | 3,202 | | | 4.60 | | | 51,188 | | | 2,301 | | | 4.50 | |
Total loans (B) | | | 825,923 | | | 39,714 | | | 4.81 | | | 713,834 | | | 34,671 | | | 4.86 | |
Total interest-earning assets | | $ | 939,177 | | $ | 41,788 | | | 4.45 | % | $ | 858,533 | | $ | 37,589 | | | 4.38 | % |
| | | | | | | | | | | | | | | | | | | |
Noninterest-earning assets: | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 25,952 | | | | | | | | | 27,021 | | | | | | | |
Allowance for loan losses | | | (12,638) | | | | | | | | | (13,124) | | | | | | | |
Other assets | | | 43,742 | | | | | | | | | 44,312 | | | | | | | |
Total noninterest-earning assets | | | 57,056 | | | | | | | | | 58,209 | | | | | | | |
Total assets | | $ | 996,233 | | | | | | | | $ | 916,742 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
Total interest-bearing demand deposits | | $ | 126,876 | | $ | 438 | | | 0.35 | % | $ | 125,706 | | $ | 430 | | | 0.34 | % |
Total savings deposits | | | 290,848 | | | 1,088 | | | 0.37 | | | 274,395 | | | 856 | | | 0.31 | |
Total time deposits | | | 240,132 | | | 3,160 | | | 1.32 | | | 214,984 | | | 2,777 | | | 1.29 | |
Total interest-bearing deposits | | | 657,856 | | | 4,686 | | | 0.71 | | | 615,085 | | | 4,063 | | | 0.66 | |
Borrowed funds and subordinated debentures | | | 87,652 | | | 2,974 | | | 3.39 | | | 91,230 | | | 3,243 | | | 3.55 | |
Total interest-bearing liabilities | | $ | 745,508 | | $ | 7,660 | | | 1.03 | % | $ | 706,315 | | $ | 7,306 | | | 1.03 | % |
| | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 172,172 | | | | | | | | | 144,310 | | | | | | | |
Other liabilities | | | 4,611 | | | | | | | | | 3,764 | | | | | | | |
Total noninterest-bearing liabilities | | | 176,783 | | | | | | | | | 148,074 | | | | | | | |
Total shareholders' equity | | | 73,942 | | | | | | | | | 62,353 | | | | | | | |
Total liabilities and shareholders' equity | | $ | 996,233 | | | | | | | | $ | 916,742 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest spread | | | | | $ | 34,128 | | | 3.42 | % | | | | $ | 30,283 | | | 3.35 | % |
Tax-equivalent basis adjustment | | | | | | (137) | | | | | | | | | (171) | | | | |
Net interest income | | | | | $ | 33,991 | | | | | | | | $ | 30,112 | | | | |
Net interest margin | | | | | | | | | 3.63 | % | | | | | | | | 3.53 | % |
| (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
December 31, 2015
| | | | | | | | | | | | | | | | |
Amounts in thousands, except percentages | | Dec. 31, 2015 | | Sept. 30, 2015 | | Jun. 30, 2015 | | Mar. 31, 2015 | | Dec. 31, 2014 | |
ALLOWANCE FOR LOAN LOSSES: | | | | | | | | | | | | | | | | |
Balance, beginning of period | | $ | 12,421 | | $ | 12,404 | | $ | 12,181 | | $ | 12,551 | | $ | 12,918 | |
Provision for loan losses charged to expense | | | 100 | | | 200 | | | - | | | 200 | | | 850 | |
| | | 12,521 | | | 12,604 | | | 12,181 | | | 12,751 | | | 13,768 | |
Less: Chargeoffs | | | | | | | | | | | | | | | | |
SBA loans | | | 151 | | | 86 | | | 6 | | | 128 | | | 569 | |
SBA 504 loans | | | - | | | - | | | - | | | 589 | | | - | |
Commercial loans | | | 52 | | | 10 | | | 147 | | | 100 | | | 377 | |
Residential mortgage loans | | | - | | | 50 | | | - | | | - | | | 362 | |
Consumer loans | | | 41 | | | 52 | | | 7 | | | 30 | | | - | |
Total chargeoffs | | | 244 | | | 198 | | | 160 | | | 847 | | | 1,308 | |
Add: Recoveries | | | | | | | | | | | | | | | | |
SBA loans | | | 6 | | | 10 | | | 2 | | | 37 | | | 12 | |
SBA 504 loans | | | - | | | - | | | - | | | - | | | - | |
Commercial loans | | | 476 | | | 5 | | | 370 | | | 201 | | | 31 | |
Residential mortgage loans | | | - | | | - | | | 10 | | | 39 | | | 40 | |
Consumer loans | | | - | | | - | | | 1 | | | - | | | 8 | |
Total recoveries | | | 482 | | | 15 | | | 383 | | | 277 | | | 91 | |
Net chargeoffs (recoveries) | | | (238) | | | 183 | | | (223) | | | 570 | | | 1,217 | |
Balance, end of period | | $ | 12,759 | | $ | 12,421 | | $ | 12,404 | | $ | 12,181 | | $ | 12,551 | |
| | | | | | | | | | | | | | | | |
LOAN QUALITY INFORMATION: | | | | | | | | | | | | | | | | |
Nonperforming loans (1) | | $ | 7,260 | | $ | 10,742 | | $ | 8,837 | | $ | 9,141 | | $ | 11,368 | |
Other real estate owned ("OREO") | | | 1,591 | | | 1,759 | | | 2,265 | | | 1,975 | | | 1,162 | |
Nonperforming assets | | | 8,851 | | | 12,501 | | | 11,102 | | | 11,116 | | | 12,530 | |
Less: Amount guaranteed by SBA | | | 288 | | | 225 | | | 267 | | | 270 | | | 1,569 | |
Net nonperforming assets | | $ | 8,563 | | $ | 12,276 | | $ | 10,835 | | $ | 10,846 | | $ | 10,961 | |
| | | | | | | | | | | | | | | | |
Loans 90 days past due & still accruing | | $ | - | | $ | 272 | | $ | 273 | | $ | 5 | | | 890 | |
| | | | | | | | | | | | | | | | |
Performing Troubled Debt Restructurings (TDRs) | | $ | 2,995 | | $ | 3,268 | | $ | 3,360 | | $ | 3,458 | | $ | 3,548 | |
(1) Nonperforming TDRs included in nonperforming loans | | | 162 | | | 2,808 | | | 2,843 | | | 2,911 | | | 2,960 | |
Total TDRs | | $ | 3,157 | | $ | 6,076 | | $ | 6,203 | | $ | 6,369 | | $ | 6,508 | |
| | | | | | | | | | | | | | | | |
Allowance for loan losses to: | | | | | | | | | | | | | | | | |
Total loans at quarter end | | | 1.44 | % | | 1.45 | % | | 1.51 | % | | 1.55 | % | | 1.65 | % |
Nonperforming loans (1) | | | 175.74 | | | 115.63 | | | 140.36 | | | 133.26 | | | 110.41 | |
Nonperforming assets | | | 144.15 | | | 99.36 | | | 111.73 | | | 109.58 | | | 100.17 | |
Net nonperforming assets | | | 149.00 | | | 101.18 | | | 114.48 | | | 112.31 | | | 114.51 | |
| | | | | | | | | | | | | | | | |
QTD net chargeoffs (annualized) to QTD average loans: | | | | | | | | | | | | | | | | |
SBA loans | | | 1.05 | % | | 0.57 | % | | 0.03 | % | | 0.76 | % | | 4.35 | % |
SBA 504 loans | | | - | | | - | | | - | | | 7.15 | | | - | |
Commercial loans | | | (0.37) | | | - | | | (0.21) | | | (0.10) | | | 0.34 | |
Residential mortgage loans | | | - | | | 0.08 | | | (0.02) | | | (0.07) | | | 0.59 | |
Consumer loans | | | 0.21 | | | 0.28 | | | 0.04 | | | 0.20 | | | (0.05) | |
Total loans | | | (0.11) | % | | 0.09 | % | | (0.11) | % | | 0.30 | % | | 0.63 | % |
| | | | | | | | | | | | | | | | |
Nonperforming loans to total loans | | | 0.82 | % | | 1.26 | % | | 1.08 | % | | 1.16 | % | | 1.49 | % |
Nonperforming loans and TDRs to total loans | | | 1.15 | | | 1.64 | | | 1.48 | | | 1.61 | | | 1.96 | |
Nonperforming assets to total loans and OREO | | | 0.99 | | | 1.46 | | | 1.35 | | | 1.41 | | | 1.64 | |
Nonperforming assets to total assets | | | 0.82 | | | 1.19 | | | 1.08 | | | 1.07 | | | 1.24 | |
UNITY BANCORP, INC.
QUARTERLY FINANCIAL DATA
December 31, 2015
| | | | | | | | | | | | | | | | |
(In thousands, except percentages and per share amounts) | | Dec. 31, 2015 | | Sept. 30, 2015 | | Jun. 30, 2015 | | Mar. 31, 2015 | | Dec. 31, 2014 | |
SUMMARY OF INCOME: | | | | | | | | | | | | | | | | |
Total interest income | | $ | 10,995 | | $ | 10,554 | | $ | 10,218 | | $ | 9,884 | | $ | 9,802 | |
Total interest expense | | | 2,015 | | | 1,932 | | | 1,849 | | | 1,864 | | | 1,914 | |
Net interest income | | | 8,980 | | | 8,622 | | | 8,369 | | | 8,020 | | | 7,888 | |
Provision for loan losses | | | 100 | | | 200 | | | - | | | 200 | | | 850 | |
Net interest income after provision for loan losses | | | 8,880 | | | 8,422 | | | 8,369 | | | 7,820 | | | 7,038 | |
Total noninterest income | | | 1,920 | | | 2,275 | | | 1,893 | | | 1,641 | | | 1,660 | |
Total noninterest expense | | | 6,846 | | | 6,852 | | | 6,652 | | | 6,502 | | | 6,045 | |
Income before provision for income taxes | | | 3,954 | | | 3,845 | | | 3,610 | | | 2,959 | | | 2,653 | |
Provision for income taxes | | | 1,315 | | | 1,294 | | | 1,182 | | | 1,020 | | | 952 | |
Net income | | $ | 2,639 | | $ | 2,551 | | $ | 2,428 | | $ | 1,939 | | $ | 1,701 | |
| | | | | | | | | | | | | | | | |
Net income per common share - Basic | | $ | 0.31 | | $ | 0.30 | | $ | 0.29 | | $ | 0.23 | | $ | 0.21 | |
Net income per common share - Diluted | | $ | 0.31 | | $ | 0.30 | | $ | 0.28 | | $ | 0.23 | | $ | 0.20 | |
| | | | | | | | | | | | | | | | |
COMMON SHARE DATA: | | | | | | | | | | | | | | | | |
Market price per share | | $ | 12.47 | | $ | 9.77 | | $ | 9.79 | | $ | 9.08 | | $ | 9.43 | |
Dividends paid | | $ | 0.04 | | $ | 0.04 | | $ | 0.03 | | $ | 0.03 | | $ | 0.03 | |
Book value per common share | | $ | 9.30 | | $ | 9.02 | | $ | 8.75 | | $ | 8.55 | | $ | 8.36 | |
Weighted average common shares outstanding - Basic | | | 8,430 | | | 8,427 | | | 8,425 | | | 8,417 | | | 8,378 | |
Weighted average common shares outstanding - Diluted | | | 8,547 | ` | | 8,536 | | | 8,524 | | | 8,514 | | | 8,478 | |
Issued and outstanding common shares | | | 8,436 | | | 8,429 | | | 8,425 | | | 8,423 | | | 8,388 | |
| | | | | | | | | | | | | | | | |
OPERATING RATIOS (Annualized): | | | | | | | | | | | | | | | | |
Return on average assets | | | 1.00 | % | | 1.00 | % | | 1.01 | % | | 0.82 | % | | 0.70 | % |
Return on average equity | | | 13.59 | | | 13.54 | | | 13.35 | | | 11.08 | | | 9.78 | |
Efficiency ratio | | | 62.81 | | | 62.88 | | | 64.99 | | | 67.30 | | | 63.68 | |
| | | | | | | | | | | | | | | | |
BALANCE SHEET DATA: | | | | | | | | | | | | | | | | |
Total assets | | $ | 1,084,866 | | $ | 1,052,711 | | $ | 1,024,303 | | $ | 1,035,404 | | $ | 1,008,788 | |
Total deposits | | | 894,493 | | | 866,247 | | | 815,427 | | | 789,441 | | | 794,341 | |
Total loans | | | 888,958 | | | 855,560 | | | 821,696 | | | 784,642 | | | 761,825 | |
Total securities | | | 71,336 | | | 71,492 | | | 74,375 | | | 77,308 | | | 80,082 | |
Total shareholders' equity | | | 78,470 | | | 76,065 | | | 73,690 | | | 71,987 | | | 70,123 | |
Allowance for loan losses | | | (12,759) | | | (12,421) | | | (12,404) | | | (12,181) | | | (12,551) | |
| | | | | | | | | | | | | | | | |
TAX EQUIVALENT YIELDS AND RATES: | | | | | | | | | | | | | | | | |
Interest-earning assets | | | 4.40 | % | | 4.41 | % | | 4.52 | % | | 4.49 | % | | 4.35 | % |
Interest-bearing liabilities | | | 1.02 | | | 1.01 | | | 1.03 | | | 1.05 | | | 1.03 | |
Net interest spread | | | 3.38 | | | 3.40 | | | 3.49 | | | 3.44 | | | 3.32 | |
Net interest margin | | | 3.60 | | | 3.60 | | | 3.70 | | | 3.64 | | | 3.49 | |
| | | | | | | | | | | | | | | | |
CREDIT QUALITY: | | | | | | | | | | | | | | | | |
Nonperforming assets | | | 8,851 | | | 12,501 | | | 11,102 | | | 11,116 | | | 12,530 | |
QTD net chargeoffs (annualized) to QTD average loans | | | (0.11) | % | | 0.09 | % | | (0.11) | % | | 0.30 | % | | 0.63 | % |
Allowance for loan losses to total loans | | | 1.44 | | | 1.45 | | | 1.51 | | | 1.55 | | | 1.65 | |
Nonperforming assets to total loans and OREO | | | 0.99 | | | 1.46 | | | 1.35 | | | 1.41 | | | 1.64 | |
Nonperforming assets to total assets | | | 0.82 | | | 1.19 | | | 1.08 | | | 1.07 | | | 1.24 | |
| | | | | | | | | | | | | | | | |
CAPITAL RATIOS AND OTHER: | | | | | | | | | | | | | | | | |
Total equity to total assets | | | 7.23 | % | | 7.23 | % | | 7.19 | % | | 6.95 | % | | 6.95 | % |
Leverage ratio | | | 8.82 | | | 8.92 | | | 9.09 | | | 8.94 | | | 8.71 | |
Common equity tier 1 risk-based capital ratio | | | 9.37 | | | 9.37 | | | 9.39 | | | 9.25 | | | n/a | |
Tier 1 risk-based capital ratio | | | 11.18 | | | 11.25 | | | 11.33 | | | 11.22 | | | 11.57 | |
Total risk-based capital ratio | | | 12.43 | | | 12.50 | | | 12.59 | | | 12.48 | | | 12.83 | |
Number of banking offices | | | 15 | | | 15 | | | 15 | | | 15 | | | 15 | |
Number of ATMs | | | 16 | | | 16 | | | 16 | | | 16 | | | 16 | |
Number of employees | | | 162 | | | 163 | | | 177 | | | 166 | | | 169 | |
