| For Immediate Release | News Media & Financial Analyst Contact: |
| Unity Bancorp, Inc. (NSDQ: UNTY) | Alan J. Bedner, EVP and CFO |
| April 24, 2018 | (908) 713-4308 |
Unity Bancorp Reports 
Record Earnings up 64% over Prior Year Quarter
Clinton, NJ, April 24, 2018 - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $5.2 million, or $0.48 per diluted share, for the quarter ended March 31, 2018, compared to $3.2 million, or $0.30 per diluted share, for the prior year’s first quarter. Approximately, $590 thousand or $0.05 per diluted share, of this increase was due to the lower effective tax rate due to the tax reform bill.
Earnings Highlights
| • | Net interest income, our primary driver of earnings, increased $2.5 million to $12.9 million for the quarter ended March 31, 2018 compared to the prior year’s first quarter due to strong loan growth and an increased net interest margin. |
| • | Net interest margin expanded 29 basis points to 3.99%, compared to 3.70% for the prior year’s first quarter. Higher yields on our earning assets exceeded the rising costs of deposits. |
| • | The provision for loan losses increased to $500 thousand during the quarter ended March 31, 2018 compared to $250 thousand in the prior year’s quarter due to the growth in the loan portfolio. |
| • | Noninterest expense increased $754 thousand compared to the prior year’s quarter. During 2017, we added two branches and increased headcount which resulted in higher compensation, benefits and occupancy expenses. |
| • | The effective tax rate declined to 19.1% as a result of the “Tax Cuts and Jobs Act”, which was enacted December 22, 2017 and lowered the corporate tax rate. The Company expects an effective tax rate of 22% going forward. The effective tax rate in the first quarter benefited from the exercise of stock options. |
Balance Sheet Highlights
| • | Total loans increased $24.4 million or 2.1%, from year-end 2017 to $1.2 billion at March 31, 2018. Residential mortgage, commercial and consumer loan portfolios increased $15.7 million, $8.1 million, and $3.4 million, respectively. Our pipeline in all categories remains strong. |
| • | Total deposits increased $74.4 million, or 7.1%, to $1.1 billion at March 31, 2018. Time deposits, savings deposits and noninterest-bearing demand deposits have increased $55.6 million, $11.7 million and $9.2 million, respectively. |
| • | Borrowed funds decreased $94.0 million to $181.0 million at March 31, 2018, due to decreased overnight borrowings and the maturity of a repo. |
| • | Shareholders’ equity was $123.1 million at March 31, 2018, an increase of $5.0 million from year-end 2017, due to retained net income. |
| • | Book value per common share was $11.50 as of March 31, 2018. |
| • | At March 31, 2018, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 9.46%, 11.14%, 12.07% and 13.24% respectively, all in excess of the ratios required to be deemed “well-capitalized”. |
| • | Credit quality remains strong with nonperforming assets to total assets of 0.30% at March 31, 2018. |
Other Highlights
| • | Named one of the Best Places to work in NJ from NJ BIZ for the second year in a row. |
| • | Opened our 18th branch in Ramsey, NJ. |
| • | Ranked 43rd by S&P Global of all community banks with assets between $1 billion and $10 billion, achieving Top 10%. |
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.4 billion in assets and $1.1 billion in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 18 retail service centers located in Bergen, Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County in Pennsylvania. For additional information about Unity, visit our website at www.unitybank.com, or call 800-618-BANK.
This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements may be identified by use of the words “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company’s control and could impede its ability to achieve these goals. These factors include those items included in our Annual Report on Form 10-K under the heading “Item IA-Risk Factors” as well as general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, our ability to manage and reduce the level of our nonperforming assets, and results of regulatory exams, among other factors.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
UNITY BANCORP, INC.
SUMMARY FINANCIAL HIGHLIGHTS
March 31, 2018
| Mar 31, 2018 vs. | ||||||||||||||||||||
| Dec 31, 2017 | Mar 31, 2017 | |||||||||||||||||||
| (In thousands, except percentages and per share amounts) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | % | % | |||||||||||||||
| BALANCE SHEET DATA: | ||||||||||||||||||||
| Total assets | $ | 1,439,902 | $ | 1,455,496 | $ | 1,226,168 | (1.1 | ) % | 17.4 | % | ||||||||||
| Total deposits | 1,117,514 | 1,043,137 | 980,703 | 7.1 | 14.0 | |||||||||||||||
| Total loans | 1,195,110 | 1,170,674 | 1,000,677 | 2.1 | 19.4 | |||||||||||||||
| Total securities | 67,521 | 69,800 | 73,022 | (3.3 | ) | (7.5 | ) | |||||||||||||
| Total shareholders' equity | 123,104 | 118,105 | 109,305 | 4.2 | 12.6 | |||||||||||||||
| Allowance for loan losses | (14,196 | ) | (13,556 | ) | (12,681 | ) | 4.7 | 11.9 | ||||||||||||
| FINANCIAL DATA - QUARTER TO DATE: | ||||||||||||||||||||
| Income before provision for income taxes | $ | 6,464 | $ | 6,408 | $ | 4,904 | 0.9 | 31.8 | ||||||||||||
| Provision for income taxes | 1,235 | 2,175 | 1,712 | (43.2 | ) | (27.9 | ) | |||||||||||||
| Impact of Tax Reform Bill | — | 1,733 | — | (100.0 | ) | — | ||||||||||||||
| Net income | $ | 5,229 | $ | 2,500 | $ | 3,192 | 109.2 | 63.8 | ||||||||||||
| Net income per common share - basic | $ | 0.49 | $ | 0.24 | $ | 0.30 | 104.2 | 63.3 | ||||||||||||
| Net income per common share - diluted | $ | 0.48 | $ | 0.23 | $ | 0.30 | 108.7 | 60.0 | ||||||||||||
| Performance ratios: | ||||||||||||||||||||
| Return on average assets | 1.53 | % | 0.74 | % | 1.07 | % | 106.8 | 43.0 | ||||||||||||
| Return on average equity | 17.69 | % | 8.54 | % | 12.02 | % | 107.1 | 47.2 | ||||||||||||
| Efficiency ratio | 54.00 | % | 52.45 | % | 59.08 | % | 3.0 | (8.6 | ) | |||||||||||
| Net interest margin | 3.99 | % | 3.91 | % | 3.70 | % | 2.0 | 7.8 | ||||||||||||
| Noninterest expense to average assets | 2.40 | % | 2.25 | % | 2.50 | % | 6.7 | (4.0 | ) | |||||||||||
| SHARE INFORMATION: | ||||||||||||||||||||
| Market price per share | $ | 22.00 | $ | 19.75 | $ | 16.95 | 11.4 | 29.8 | ||||||||||||
| Dividends paid | $ | 0.06 | $ | 0.06 | $ | 0.05 | — | 20.0 | ||||||||||||
| Book value per common share | $ | 11.50 | $ | 11.13 | $ | 10.38 | 3.3 | 10.8 | ||||||||||||
| Average diluted shares outstanding (QTD) | 10,853 | 10,794 | 10,705 | 0.5 | 1.4 | |||||||||||||||
| CAPITAL RATIOS: | ||||||||||||||||||||
| Total equity to total assets | 8.55 | % | 8.11 | % | 8.91 | % | 5.4 | (4.0 | ) | |||||||||||
| Leverage ratio | 9.46 | % | 9.37 | % | 9.72 | % | 1.0 | (2.7 | ) | |||||||||||
| Common equity tier 1 risk-based capital ratio | 11.14 | % | 10.81 | % | 11.46 | % | 3.1 | (2.8) | ||||||||||||
| Tier 1 risk-based capital ratio | 12.07 | % | 11.75 | % | 12.53 | % | 2.7 | (3.7 | ) | |||||||||||
| Total risk-based capital ratio | 13.24 | % | 12.87 | % | 13.78 | % | 2.9 | (3.9 | ) | |||||||||||
| CREDIT QUALITY AND RATIOS: | ||||||||||||||||||||
| Nonperforming assets | $ | 4,333 | $ | 3,420 | $ | 8,930 | 26.7 | (51.5 | ) | |||||||||||
| QTD net (recoveries) chargeoffs (annualized) to QTD average loans | (0.05 | ) | % | 0.02 | % | 0.06 | % | (350.0 | ) | (183.3 | ) | |||||||||
| Allowance for loan losses to total loans | 1.19 | % | 1.16 | % | 1.27 | % | 2.6 | (6.3 | ) | |||||||||||
| Nonperforming assets to total loans and OREO | 0.36 | % | 0.29 | % | 0.89 | % | 24.1 | (59.6 | ) | |||||||||||
| Nonperforming assets to total assets | 0.30 | % | 0.23 | % | 0.73 | % | 30.4 | % | (58.9 | ) % | ||||||||||
UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2018
| Mar 31, 2018 vs. | ||||||||||||||||||||
| Dec 31, 2017 | Mar 31, 2017 | |||||||||||||||||||
| (In thousands, except percentages) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | % | % | |||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 17,044 | $ | 23,701 | $ | 18,345 | (28.1 | ) % | (7.1 | ) % | ||||||||||
| Federal funds sold and interest-bearing deposits | 99,243 | 126,553 | 84,859 | (21.6 | ) | 17.0 | ||||||||||||||
| Cash and cash equivalents | 116,287 | 150,254 | 103,204 | (22.6 | ) | 12.7 | ||||||||||||||
| Securities: | ||||||||||||||||||||
| Securities available for sale | 51,353 | 53,493 | 52,246 | (4 | ) | (1.7 | ) | |||||||||||||
| Securities held to maturity | 16,168 | 16,307 | 20,776 | (0.9 | ) | (22.2 | ) | |||||||||||||
| Total securities | 67,521 | 69,800 | 73,022 | (3.3 | ) | (7.5 | ) | |||||||||||||
| Loans: | ||||||||||||||||||||
| SBA loans held for sale | 21,579 | 22,810 | 12,163 | (5.4 | ) | 77.4 | ||||||||||||||
| SBA loans held for investment | 42,734 | 43,999 | 42,403 | (2.9 | ) | 0.8 | ||||||||||||||
| Commercial loans | 636,684 | 628,865 | 544,449 | 1.2 | 16.9 | |||||||||||||||
| Residential mortgage loans | 380,857 | 365,145 | 305,578 | 4.3 | 24.6 | |||||||||||||||
| Consumer loans | 113,256 | 109,855 | 96,084 | 3.1 | 17.9 | |||||||||||||||
| Total loans | 1,195,110 | 1,170,674 | 1,000,677 | 2.1 | 19.4 | |||||||||||||||
| Allowance for loan losses | (14,196 | ) | (13,556 | ) | (12,681 | ) | 4.7 | 11.9 | ||||||||||||
| Net loans | 1,180,914 | 1,157,118 | 987,996 | 2.1 | 19.5 | |||||||||||||||
| Premises and equipment, net | 23,405 | 23,470 | 23,261 | (0.3 | ) | 0.6 | ||||||||||||||
| Bank owned life insurance ("BOLI") | 24,398 | 24,227 | 13,847 | 0.7 | 76.2 | |||||||||||||||
| Deferred tax assets | 4,059 | 4,017 | 5,552 | 1.0 | (26.9 | ) | ||||||||||||||
| Federal Home Loan Bank ("FHLB") stock | 9,308 | 12,863 | 5,992 | (27.6 | ) | 55.3 | ||||||||||||||
| Accrued interest receivable | 5,898 | 5,447 | 4,483 | 8.3 | 31.6 | |||||||||||||||
| Other real estate owned ("OREO") | 56 | 426 | 1,172 | (86.9 | ) | (95.2 | ) | |||||||||||||
| Goodwill and other intangibles | 1,516 | 1,516 | 1,516 | — | — | |||||||||||||||
| Other assets | 6,540 | 6,358 | 6,123 | 2.9 | 6.8 | |||||||||||||||
| Total assets | $ | 1,439,902 | $ | 1,455,496 | $ | 1,226,168 | (1.1 | ) % | 17.4 | % | ||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 265,346 | $ | 256,119 | $ | 220,750 | 3.6 | % | 20.2 | % | ||||||||||
| Interest-bearing demand | 162,848 | 164,997 | 146,091 | (1.3 | ) | 11.5 | ||||||||||||||
| Savings | 408,255 | 396,557 | 389,802 | 2.9 | 4.7 | |||||||||||||||
| Time deposits | 281,065 | 225,464 | 224,060 | 24.7 | 25.4 | |||||||||||||||
| Total deposits | 1,117,514 | 1,043,137 | 980,703 | 7.1 | 14.0 | |||||||||||||||
| Borrowed funds | 181,000 | 275,000 | 120,000 | (34.2 | ) | 50.8 | ||||||||||||||
| Subordinated debentures | 10,310 | 10,310 | 10,310 | — | — | |||||||||||||||
| Accrued interest payable | 410 | 436 | 405 | (6.0 | ) | 1.2 | ||||||||||||||
| Accrued expenses and other liabilities | 7,564 | 8,508 | 5,445 | (11.1 | ) | 38.9 | ||||||||||||||
| Total liabilities | 1,316,798 | 1,337,391 | 1,116,863 | (1.5 | ) | 17.9 | ||||||||||||||
| Shareholders' equity: | ||||||||||||||||||||
| Common stock | 87,361 | 86,782 | 85,757 | 0.7 | 1.9 | |||||||||||||||
| Retained earnings | 35,713 | 31,117 | 23,414 | 14.8 | 52.5 | |||||||||||||||
| Accumulated other comprehensive (loss) | 30 | 206 | 134 | NM | NM | |||||||||||||||
| Total shareholders' equity | 123,104 | 118,105 | 109,305 | 4.2 | 12.6 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,439,902 | $ | 1,455,496 | $ | 1,226,168 | (1.1 | ) % | 17.4 | % | ||||||||||
| Issued and outstanding common shares | 10,709 | 10,615 | 10,535 | |||||||||||||||||
UNITY BANCORP, INC.
QTD CONSOLIDATED STATEMENTS OF INCOME
March 31, 2018
| Mar 31, 2018 vs. | ||||||||||||||||||||||||||||
| For the three months ended | Dec 31, 2017 | Mar 31, 2017 | ||||||||||||||||||||||||||
| (In thousands, except percentages and per share amounts) | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | $ | % | $ | % | |||||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||||||
| Federal funds sold, interest-bearing deposits and repos | $ | 205 | $ | 257 | $ | 129 | $ | (52 | ) | (20.2 | )% | $ | 76 | 58.9 | % | |||||||||||||
| FHLB stock | 134 | 119 | 93 | 15 | 12.6 | 41 | 44.1 | |||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||||||
| Taxable | 492 | 488 | 491 | 4 | 0.8 | 1 | 0.2 | |||||||||||||||||||||
| Tax-exempt | 31 | 31 | 44 | — | — | (13 | ) | (29.5 | ) | |||||||||||||||||||
| Total securities | 523 | 519 | 535 | 4 | 0.8 | (12 | ) | (2.2 | ) | |||||||||||||||||||
| Loans: | ||||||||||||||||||||||||||||
| SBA loans | 1,183 | 1,023 | 854 | 160 | 15.6 | 329 | 38.5 | |||||||||||||||||||||
| Commercial loans | 7,726 | 7,590 | 6,467 | 136 | 1.8 | 1,259 | 19.5 | |||||||||||||||||||||
| Residential mortgage loans | 4,340 | 4,046 | 3,384 | 294 | 7.3 | 956 | 28.3 | |||||||||||||||||||||
| Consumer loans | 1,529 | 1,490 | 1,132 | 39 | 2.6 | 397 | 35.1 | |||||||||||||||||||||
| Total loans | 14,778 | 14,149 | 11,837 | 629 | 4.4 | 2,941 | 24.8 | |||||||||||||||||||||
| Total interest income | 15,640 | 15,044 | 12,594 | 596 | 4.0 | 3,046 | 24.2 | |||||||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||||||||||
| Interest-bearing demand deposits | 224 | 183 | 153 | 41 | 22.4 | 71 | 46.4 | |||||||||||||||||||||
| Savings deposits | 776 | 744 | 583 | 32 | 4.3 | 193 | 33.1 | |||||||||||||||||||||
| Time deposits | 1,000 | 837 | 804 | 163 | 19.5 | 196 | 24.4 | |||||||||||||||||||||
| Borrowed funds and subordinated debentures | 768 | 780 | 664 | (12 | ) | (1.5 | ) | 104 | 15.7 | |||||||||||||||||||
| Total interest expense | 2,768 | 2,544 | 2,204 | 224 | 8.8 | 564 | 25.6 | |||||||||||||||||||||
| Net interest income | 12,872 | 12,500 | 10,390 | 372 | 3.0 | 2,482 | 23.9 | |||||||||||||||||||||
| Provision for loan losses | 500 | 500 | 250 | — | — | 250 | 100.0 | |||||||||||||||||||||
| Net interest income after provision for loan losses | 12,372 | 12,000 | 10,140 | 372 | 3.1 | 2,232 | 22.0 | |||||||||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||||||||||
| Branch fee income | 330 | 354 | 331 | (24 | ) | (6.8 | ) | (1 | ) | (0.3 | ) | |||||||||||||||||
| Service and loan fee income | 564 | 628 | 512 | (64 | ) | (10.2 | ) | 52 | 10.2 | |||||||||||||||||||
| Gain on sale of SBA loans held for sale, net | 547 | 268 | 485 | 279 | 104.1 | 62 | 12.8 | |||||||||||||||||||||
| Gain on sale of mortgage loans, net | 424 | 343 | 532 | 81 | 23.6 | (108 | ) | (20.3 | ) | |||||||||||||||||||
| BOLI income | 171 | 181 | 88 | (10 | ) | (5.5 | ) | 83 | 94.3 | |||||||||||||||||||
| Net security losses | (15 | ) | (7 | ) | — | (8 | ) | (114.3 | ) | (15 | ) | (100.0 | ) | |||||||||||||||
| Other income | 265 | 270 | 256 | (5 | ) | (1.9 | ) | 9 | 3.5 | |||||||||||||||||||
| Total noninterest income | 2,286 | 2,037 | 2,204 | 249 | 12.2 | 82 | 3.7 | |||||||||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
| Compensation and benefits | 4,834 | 4,455 | 4,095 | 379 | 8.5 | 739 | 18.0 | |||||||||||||||||||||
| Occupancy | 690 | 591 | 600 | 99 | 16.8 | 90 | 15.0 | |||||||||||||||||||||
| Processing and communications | 689 | 659 | 604 | 30 | 4.6 | 85 | 14.1 | |||||||||||||||||||||
| Furniture and equipment | 536 | 542 | 511 | (6 | ) | (1.1 | ) | 25 | 4.9 | |||||||||||||||||||
| Professional services | 251 | 298 | 226 | (47 | ) | (15.8 | ) | 25 | 11.1 | |||||||||||||||||||
| Loan collection & OREO expenses | 6 | (30 | ) | 341 | 36 | 120.0 | (335 | ) | (98.2 | ) | ||||||||||||||||||
| Other loan expenses | 33 | 38 | 83 | (5 | ) | (13.2 | ) | (50 | ) | (60.2 | ) | |||||||||||||||||
| Deposit insurance | 186 | 170 | 76 | 16 | 9.4 | 110 | 144.7 | |||||||||||||||||||||
| Advertising | 319 | 321 | 236 | (2 | ) | (0.6 | ) | 83 | 35.2 | |||||||||||||||||||
| Director fees | 162 | 141 | 197 | 21 | 14.9 | (35 | ) | (17.8 | ) | |||||||||||||||||||
| Other expenses | 488 | 444 | 471 | 44 | 9.9 | 17 | 3.6 | |||||||||||||||||||||
| Total noninterest expense | 8,194 | 7,629 | 7,440 | 565 | 7.4 | 754 | 10.1 | |||||||||||||||||||||
| Income before provision for income taxes | 6,464 | 6,408 | 4,904 | 56 | 0.9 | 1,560 | 31.8 | |||||||||||||||||||||
| Provision for income taxes | 1,235 | 2,175 | 1,712 | (940 | ) | (43.2 | ) | (477 | ) | (27.9 | ) | |||||||||||||||||
| Impact of Tax Reform Bill | — | 1,733 | — | (1,733 | ) | (100.0 | ) | — | — | |||||||||||||||||||
| Net income | $ | 5,229 | $ | 2,500 | $ | 3,192 | $ | 2,729 | 109.2 | % | $ | 2,037 | 63.8 | % | ||||||||||||||
| Effective tax rate | 19.1 | % | 61.0 | % | 34.9 | % | ||||||||||||||||||||||
| Net income per common share - basic | $ | 0.49 | $ | 0.24 | $ | 0.30 | ||||||||||||||||||||||
| Net income per common share - diluted | $ | 0.48 | $ | 0.23 | $ | 0.30 | ||||||||||||||||||||||
| Weighted average common shares outstanding - Basic | 10,678 | 10,604 | 10,509 | |||||||||||||||||||||||||
| Weighted average common shares outstanding - Diluted | 10,853 | 10,794 | 10,705 | |||||||||||||||||||||||||
UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
March 31, 2018
| (Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis) | ||||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||||
| March 31, 2018 | December 31, 2017 | |||||||||||||||||||||
| Average Balance | Interest | Rate/Yield | Average Balance | Interest | Rate/Yield | |||||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||
| Federal funds sold, interest-bearing deposits and repos | $ | 48,936 | $ | 205 | 1.70 | % | $ | 61,621 | $ | 257 | 1.65 | % | ||||||||||
| FHLB stock | 7,799 | 134 | 6.97 | 7,523 | 119 | 6.28 | ||||||||||||||||
| Securities: | ||||||||||||||||||||||
| Taxable | 63,393 | 492 | 3.15 | 65,967 | 488 | 2.93 | ||||||||||||||||
| Tax-exempt | 5,349 | 38 | 2.88 | 5,469 | 47 | 3.41 | ||||||||||||||||
| Total securities (A) | 68,742 | 530 | 3.13 | 71,436 | 535 | 2.97 | ||||||||||||||||
| Loans: | ||||||||||||||||||||||
| SBA loans | 68,376 | 1,183 | 7.02 | 63,275 | 1,023 | 6.41 | ||||||||||||||||
| Commercial loans | 632,409 | 7,726 | 4.95 | 611,863 | 7,590 | 4.92 | ||||||||||||||||
| Residential mortgage loans | 371,061 | 4,340 | 4.74 | 344,636 | 4,046 | 4.66 | ||||||||||||||||
| Consumer loans | 110,947 | 1,529 | 5.59 | 109,300 | 1,490 | 5.41 | ||||||||||||||||
| Total loans (B) | 1,182,793 | 14,778 | 5.07 | 1,129,074 | 14,149 | 4.97 | ||||||||||||||||
| Total interest-earning assets | $ | 1,308,270 | $ | 15,647 | 4.85 | % | $ | 1,269,654 | $ | 15,060 | 4.71 | % | ||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||||
| Cash and due from banks | 23,244 | 23,248 | ||||||||||||||||||||
| Allowance for loan losses | (13,949 | ) | (13,373 | ) | ||||||||||||||||||
| Other assets | 65,686 | 65,785 | ||||||||||||||||||||
| Total noninterest-earning assets | 74,981 | 75,660 | ||||||||||||||||||||
| Total assets | $ | 1,383,251 | $ | 1,345,314 | ||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||
| Total interest-bearing demand deposits | $ | 178,385 | $ | 224 | 0.51 | % | $ | 167,918 | $ | 183 | 0.43 | % | ||||||||||
| Total savings deposits | 403,222 | 776 | 0.78 | 406,281 | 744 | 0.73 | ||||||||||||||||
| Total time deposits | 252,000 | 1,000 | 1.61 | 220,062 | 837 | 1.51 | ||||||||||||||||
| Total interest-bearing deposits | 833,607 | 2,000 | 0.97 | 794,261 | 1,764 | 0.88 | ||||||||||||||||
| Borrowed funds and subordinated debentures | 167,458 | 768 | 1.86 | 166,669 | 780 | 1.86 | ||||||||||||||||
| Total interest-bearing liabilities | $ | 1,001,065 | $ | 2,768 | 1.12 | % | $ | 960,930 | $ | 2,544 | 1.05 | % | ||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||
| Noninterest-bearing demand deposits | 252,128 | 258,616 | ||||||||||||||||||||
| Other liabilities | 10,165 | 9,615 | ||||||||||||||||||||
| Total noninterest-bearing liabilities | 262,293 | 268,231 | ||||||||||||||||||||
| Total shareholders' equity | 119,893 | 116,153 | ||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,383,251 | $ | 1,345,314 | ||||||||||||||||||
| Net interest spread | $ | 12,879 | 3.73 | % | $ | 12,516 | 3.66 | % | ||||||||||||||
| Tax-equivalent basis adjustment | (7 | ) | (16 | ) | ||||||||||||||||||
| Net interest income | $ | 12,872 | $ | 12,500 | ||||||||||||||||||
| Net interest margin | 3.99 | % | 3.91 | % | ||||||||||||||||||
| (A) | Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 21 percent in 2018 35 percent in 2017 and applicable state rates. |
| (B) | The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued. |
UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
March 31, 2018
| (Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis) | ||||||||||||||||||||||
| For the three months ended | ||||||||||||||||||||||
| March 31, 2018 | March 31, 2017 | |||||||||||||||||||||
| Average Balance | Interest | Rate/Yield | Average Balance | Interest | Rate/Yield | |||||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||
| Federal funds sold, interest-bearing deposits and repos | $ | 48,936 | $ | 205 | 1.70 | % | $ | 77,943 | $ | 129 | 0.67 | % | ||||||||||
| FHLB stock | 7,799 | 134 | 6.97 | 5,776 | 93 | 6.53 | ||||||||||||||||
| Securities: | ||||||||||||||||||||||
| Taxable | 63,393 | 492 | 3.15 | 64,148 | 491 | 3.10 | ||||||||||||||||
| Tax-exempt | 5,349 | 38 | 2.88 | 6,443 | 67 | 4.22 | ||||||||||||||||
| Total securities (A) | 68,742 | 530 | 3.13 | 70,591 | 558 | 3.22 | ||||||||||||||||
| Loans: | ||||||||||||||||||||||
| SBA loans | 68,376 | 1,183 | 7.02 | 57,960 | 854 | 5.98 | ||||||||||||||||
| Commercial loans | 632,409 | 7,726 | 4.95 | 538,593 | 6,467 | 4.87 | ||||||||||||||||
| Residential mortgage loans | 371,061 | 4,340 | 4.74 | 297,203 | 3,384 | 4.62 | ||||||||||||||||
| Consumer loans | 110,947 | 1,529 | 5.59 | 94,217 | 1,132 | 4.87 | ||||||||||||||||
| Total loans (B) | 1,182,793 | 14,778 | 5.07 | 987,973 | 11,837 | 4.86 | ||||||||||||||||
| Total interest-earning assets | $ | 1,308,270 | $ | 15,647 | 4.85 | % | $ | 1,142,283 | $ | 12,617 | 4.48 | % | ||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||||
| Cash and due from banks | 23,244 | 23,578 | ||||||||||||||||||||
| Allowance for loan losses | (13,949 | ) | (12,785 | ) | ||||||||||||||||||
| Other assets | 65,686 | 55,493 | ||||||||||||||||||||
| Total noninterest-earning assets | 74,981 | 66,286 | ||||||||||||||||||||
| Total assets | $ | 1,383,251 | $ | 1,208,569 | ||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||
| Total interest-bearing demand deposits | $ | 178,385 | $ | 224 | 0.51 | % | $ | 152,392 | $ | 153 | 0.41 | % | ||||||||||
| Total savings deposits | 403,222 | 776 | 0.78 | 378,439 | 583 | 0.62 | ||||||||||||||||
| Total time deposits | 252,000 | 1,000 | 1.61 | 222,307 | 804 | 1.47 | ||||||||||||||||
| Total interest-bearing deposits | 833,607 | 2,000 | 0.97 | 753,138 | 1,540 | 0.83 | ||||||||||||||||
| Borrowed funds and subordinated debentures | 167,458 | 768 | 1.86 | 125,499 | 664 | 2.15 | ||||||||||||||||
| Total interest-bearing liabilities | $ | 1,001,065 | $ | 2,768 | 1.12 | % | $ | 878,637 | $ | 2,204 | 1.02 | % | ||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||
| Noninterest-bearing demand deposits | 252,128 | 215,405 | ||||||||||||||||||||
| Other liabilities | 10,165 | 6,792 | ||||||||||||||||||||
| Total noninterest-bearing liabilities | 262,293 | 222,197 | ||||||||||||||||||||
| Total shareholders' equity | 119,893 | 107,735 | ||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,383,251 | $ | 1,208,569 | ||||||||||||||||||
| Net interest spread | $ | 12,879 | 3.73 | % | $ | 10,413 | 3.46 | % | ||||||||||||||
| Tax-equivalent basis adjustment | (7 | ) | (23 | ) | ||||||||||||||||||
| Net interest income | $ | 12,872 | $ | 10,390 | ||||||||||||||||||
| Net interest margin | 3.99 | % | 3.70 | % | ||||||||||||||||||
| (A) | Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 21 percent in 2018 and 35 percent in 2017 and applicable state rates. |
| (B) | The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued. |
UNITY BANCORP, INC.
QUARTERLY ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY SCHEDULES
March 31, 2018
| Amounts in thousands, except percentages | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||||||
| ALLOWANCE FOR LOAN LOSSES: | ||||||||||||||||||||
| Balance, beginning of period | $ | 13,556 | $ | 13,113 | $ | 12,800 | $ | 12,681 | $ | 12,579 | ||||||||||
| Provision for loan losses charged to expense | 500 | 500 | 500 | 400 | 250 | |||||||||||||||
| 14,056 | 13,613 | 13,300 | 13,081 | 12,829 | ||||||||||||||||
| Less: Chargeoffs | ||||||||||||||||||||
| SBA loans | 81 | — | 34 | 150 | 109 | |||||||||||||||
| Commercial loans | — | — | 31 | 120 | 76 | |||||||||||||||
| Residential mortgage loans | — | 50 | 5 | — | — | |||||||||||||||
| Consumer loans | 6 | 83 | 170 | 17 | 66 | |||||||||||||||
| Total chargeoffs | 87 | 133 | 240 | 287 | 251 | |||||||||||||||
| Add: Recoveries | ||||||||||||||||||||
| SBA loans | 64 | 45 | 36 | 3 | 37 | |||||||||||||||
| Commercial loans | 16 | 31 | 15 | 3 | 53 | |||||||||||||||
| Residential mortgage loans | 13 | — | — | — | 12 | |||||||||||||||
| Consumer loans | 134 | — | 2 | — | 1 | |||||||||||||||
| Total recoveries | 227 | 76 | 53 | 6 | 103 | |||||||||||||||
| Net chargeoffs | (140 | ) | 57 | 187 | 281 | 148 | ||||||||||||||
| Balance, end of period | $ | 14,196 | $ | 13,556 | $ | 13,113 | $ | 12,800 | $ | 12,681 | ||||||||||
| LOAN QUALITY INFORMATION: | ||||||||||||||||||||
| Nonperforming loans (1) | $ | 4,277 | $ | 2,994 | $ | 3,742 | $ | 5,681 | $ | 7,758 | ||||||||||
| Other real estate owned ("OREO") | 56 | 426 | 707 | 581 | 1,172 | |||||||||||||||
| Nonperforming assets | 4,333 | 3,420 | 4,449 | 6,262 | 8,930 | |||||||||||||||
| Less: Amount guaranteed by SBA | 27 | 27 | 27 | 41 | 60 | |||||||||||||||
| Net nonperforming assets | $ | 4,306 | $ | 3,393 | $ | 4,422 | $ | 6,221 | $ | 8,870 | ||||||||||
| Loans 90 days past due & still accruing | $ | — | $ | 60 | $ | 2,216 | $ | 230 | $ | — | ||||||||||
| Performing Troubled Debt Restructurings (TDRs) | $ | 774 | $ | 786 | $ | — | $ | — | $ | — | ||||||||||
| (1) Nonperforming TDRs included in nonperforming loans | — | — | — | — | — | |||||||||||||||
| Total TDRs | $ | 774 | $ | 786 | $ | — | $ | — | $ | — | ||||||||||
| Allowance for loan losses to: | ||||||||||||||||||||
| Total loans at quarter end | 1.19 | % | 1.16 | % | 1.20 | % | 1.22 | % | 1.27 | % | ||||||||||
| Nonperforming loans (1) | 331.91 | 452.77 | 350.43 | 225.31 | 163.46 | |||||||||||||||
| Nonperforming assets | 327.63 | 396.37 | 294.74 | 204.41 | 142.00 | |||||||||||||||
| Net nonperforming assets | 329.68 | 399.53 | 296.54 | 205.75 | 142.97 | |||||||||||||||
| QTD net chargeoffs (annualized) to QTD average loans: | ||||||||||||||||||||
| SBA loans | 0.10 | % | (0.28 | )% | (0.01 | )% | 1.06 | % | 0.50 | % | ||||||||||
| Commercial loans | (0.01 | ) | (0.02 | ) | 0.01 | 0.08 | 0.02 | |||||||||||||
| Residential mortgage loans | (0.01 | ) | 0.06 | 0.01 | — | (0.02 | ) | |||||||||||||
| Consumer loans | (0.47 | ) | 0.30 | 0.62 | 0.07 | 0.28 | ||||||||||||||
| Total loans | (0.05 | )% | 0.02 | % | 0.07 | % | 0.11 | % | 0.06 | % | ||||||||||
| Nonperforming loans to total loans | 0.36 | % | 0.26 | % | 0.34 | % | 0.54 | % | 0.78 | % | ||||||||||
| Nonperforming loans and TDRs to total loans | 0.42 | 0.32 | 0.34 | 0.54 | 0.78 | |||||||||||||||
| Nonperforming assets to total loans and OREO | 0.36 | 0.29 | 0.41 | 0.60 | 0.89 | |||||||||||||||
| Nonperforming assets to total assets | 0.30 | 0.23 | 0.33 | 0.49 | 0.73 | |||||||||||||||
UNITY BANCORP, INC.
QUARTERLY FINANCIAL DATA
March 31, 2018
| (In thousands, except percentages and per share amounts) | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||||||
| SUMMARY OF INCOME: | ||||||||||||||||||||
| Total interest income | $ | 15,640 | $ | 14,195 | $ | 13,477 | $ | 12,594 | $ | 12,280 | ||||||||||
| Total interest expense | 2,768 | 2,378 | 2,327 | 2,204 | 2,225 | |||||||||||||||
| Net interest income | 12,872 | 11,817 | 11,150 | 10,390 | 10,055 | |||||||||||||||
| Provision for loan losses | 500 | 500 | 400 | 250 | 200 | |||||||||||||||
| Net interest income after provision for loan losses | 12,372 | 11,317 | 10,750 | 10,140 | 9,855 | |||||||||||||||
| Total noninterest income | 2,286 | 2,008 | 2,021 | 2,204 | 2,373 | |||||||||||||||
| Total noninterest expense | 8,194 | 7,554 | 7,421 | 7,440 | 7,303 | |||||||||||||||
| Income before provision for income taxes | 6,464 | 5,771 | 5,350 | 4,904 | 4,925 | |||||||||||||||
| Provision for income taxes | 1,235 | 2,014 | 1,906 | 1,712 | 1,765 | |||||||||||||||
| DTA Tax Rate Adjustment | — | — | — | — | — | |||||||||||||||
| Net income | $ | 5,229 | $ | 3,757 | $ | 3,444 | $ | 3,192 | $ | 3,160 | ||||||||||
| Net income per common share - Basic | $ | 0.49 | $ | 0.36 | $ | 0.33 | $ | 0.30 | $ | 0.33 | ||||||||||
| Net income per common share - Diluted | $ | 0.48 | $ | 0.35 | $ | 0.32 | $ | 0.30 | $ | 0.32 | ||||||||||
| COMMON SHARE DATA: | ||||||||||||||||||||
| Market price per share | $ | 22.00 | $ | 19.75 | $ | 19.80 | $ | 17.20 | $ | 16.95 | ||||||||||
| Dividends paid | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.05 | ||||||||||
| Book value per common share | $ | 11.50 | $ | 11.13 | $ | 10.94 | $ | 10.64 | $ | 10.38 | ||||||||||
| Weighted average common shares outstanding - Basic | 10,678 | 10,604 | 10,572 | 10,546 | 10,509 | |||||||||||||||
| Weighted average common shares outstanding - Diluted | 10,853 | 10,794 | 10,761 | 10,735 | 10,705 | |||||||||||||||
| Issued and outstanding common shares | 10,709 | 10,615 | 10,586 | 10,567 | 10,535 | |||||||||||||||
| OPERATING RATIOS (Annualized): | ||||||||||||||||||||
| Return on average assets | 1.53 | % | 0.74 | % | 1.17 | % | 1.11 | % | 1.07 | % | ||||||||||
| Return on average equity | 17.69 | 8.54 | 13.00 | 12.47 | 12.02 | |||||||||||||||
| Efficiency ratio | 54.00 | 52.45 | 54.86 | 56.41 | 59.08 | |||||||||||||||
| Noninterest expense to average assets | 2.40 | 2.25 | 2.35 | 2.39 | 2.50 | |||||||||||||||
| BALANCE SHEET DATA: | ||||||||||||||||||||
| Total assets | 1,439,902 | 1,455,496 | 1,329,834 | 1,275,517 | 1,226,168 | |||||||||||||||
| Total deposits | 1,117,514 | 1,043,137 | 1,043,632 | 1,003,967 | 980,703 | |||||||||||||||
| Total loans | 1,195,110 | 1,170,674 | 1,092,873 | 1,046,804 | 1,000,677 | |||||||||||||||
| Total securities | 67,521 | 69,800 | 72,105 | 75,066 | 73,022 | |||||||||||||||
| Total shareholders' equity | 123,104 | 118,105 | 115,814 | 112,447 | 109,305 | |||||||||||||||
| Allowance for loan losses | (14,196 | ) | (13,556 | ) | (13,113 | ) | (12,800 | ) | (12,681 | ) | ||||||||||
| TAX EQUIVALENT YIELDS AND RATES: | ||||||||||||||||||||
| Interest-earning assets | 4.85 | % | 4.71 | % | 4.66 | % | 4.58 | % | 4.48 | % | ||||||||||
| Interest-bearing liabilities | 1.12 | 1.05 | 1.04 | 1.03 | 1.02 | |||||||||||||||
| Net interest spread | 3.73 | 3.66 | 3.62 | 3.55 | 3.46 | |||||||||||||||
| Net interest margin | 3.99 | 3.91 | 3.88 | 3.79 | 3.70 | |||||||||||||||
| CREDIT QUALITY: | ||||||||||||||||||||
| Nonperforming assets | 4,333 | 3,420 | 4,449 | 6,262 | 8,930 | |||||||||||||||
| QTD net chargeoffs (annualized) to QTD average loans | (0.05 | )% | 0.02 | % | 0.07 | % | 0.11 | % | 0.06 | % | ||||||||||
| Allowance for loan losses to total loans | 1.19 | 1.16 | 1.20 | 1.22 | 1.27 | |||||||||||||||
| Nonperforming assets to total loans and OREO | 0.36 | 0.29 | 0.41 | 0.60 | 0.89 | |||||||||||||||
| Nonperforming assets to total assets | 0.30 | 0.23 | 0.33 | 0.49 | 0.73 | |||||||||||||||
| (In thousands, except percentages and per share amounts) | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||||||
| CAPITAL RATIOS AND OTHER: | ||||||||||||||||||||
| Total equity to total assets | 8.55 | 8.11 | 8.71 | 8.82 | 8.91 | |||||||||||||||
| Leverage ratio | 9.46 | 9.37 | 9.70 | 9.66 | 9.72 | |||||||||||||||
| Common equity tier 1 risk-based capital ratio | 11.14 | 10.81 | 11.27 | 11.32 | 11.46 | |||||||||||||||
| Tier 1 risk-based capital ratio | 12.07 | 11.75 | 12.26 | 12.34 | 12.53 | |||||||||||||||
| Total risk-based capital ratio | 13.24 | 12.87 | 13.30 | 13.59 | 13.78 | |||||||||||||||
| Number of banking offices | 18 | 18 | 17 | 17 | 17 | |||||||||||||||
| Number of ATMs | 19 | 19 | 18 | 18 | 18 | |||||||||||||||
| Number of employees | 199 | 199 | 166 | 186 | 181 | |||||||||||||||
UNITY BANCORP, INC.
Reconciliation of GAAP vs. Non-GAAP Financials
March 31, 2018
| QTD | QTD | QTD | QTD | QTD | ||||||||||||||||
| (In thousands, except percentages and per share amounts) | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||||||
| GAAP | ||||||||||||||||||||
| Income before provision for income taxes | $ | 6,464 | $ | 6,408 | $ | 5,771 | $ | 5,350 | $ | 4.904 | ||||||||||
| Provision for income taxes | 1,235 | 3,908 | 2,014 | 1,906 | 1,712 | |||||||||||||||
| Net income | $ | 5,229 | $ | 2,500 | $ | 3,757 | $ | 3,444 | $ | 3,192 | ||||||||||
| Effective tax rate | 19.1 | % | 61.0 | % | 34.9 | % | 35.6 | % | 34.9 | % | ||||||||||
| Net income per: | ||||||||||||||||||||
| Common share - basic | $ | 0.49 | $ | 0.24 | $ | 0.36 | $ | 0.33 | $ | 0.30 | ||||||||||
| Common share - diluted | $ | 0.48 | $ | 0.23 | $ | 0.35 | $ | 0.32 | $ | 0.3 | ||||||||||
| Performance ratios: | ||||||||||||||||||||
| Return on average assets | 1.53 | % | 0.74 | % | 1.17 | % | 1.11 | % | 1.07 | % | ||||||||||
| Return on average equity | 17.69 | % | 8.54 | % | 13.00 | % | 12.47 | % | 12.02 | % | ||||||||||
| NON-GAAP | ||||||||||||||||||||
| Income before provision for income taxes | $ | 6,464 | $ | 6,408 | $ | 5,771 | $ | 5,350 | $ | 4,904 | ||||||||||
| Provision for income taxes | 1,235 | 3,908 | 2,014 | 1,906 | 1,712 | |||||||||||||||
| Net income before nonrecurring adjustments (GAAP) | 5,229 | 2,500 | 3,757 | 3,444 | 3,192 | |||||||||||||||
| Nonrecurring adjustments: | ||||||||||||||||||||
| Impact of Tax Reform Bill | — | 1,733 | — | — | — | |||||||||||||||
| Core net income (Non-GAAP) | $ | 5,229 | $ | 4,233 | $ | 3,757 | $ | 3,444 | $ | 3,192 | ||||||||||
| Effective tax rate | 19.1 | % | 33.9 | % | 34.9 | % | 35.6 | % | 34.9 | % | ||||||||||
| Core net income per: | ||||||||||||||||||||
| Common share - basic | $ | 0.49 | $ | 0.40 | $ | 0.36 | $ | 0.33 | $ | 0.30 | ||||||||||
| Common share - diluted | $ | 0.48 | $ | 0.39 | $ | 0.35 | $ | 0.32 | $ | 0.30 | ||||||||||
| Core performance ratios: | ||||||||||||||||||||
| Return on average assets | 1.53 | % | 1.25 | % | 1.17 | % | 1.11 | % | 1.07 | % | ||||||||||
| Return on average equity | 17.69 | % | 14.46 | % | 13.00 | % | 12.47 | % | 12.02 | % | ||||||||||