 | Unity Bancorp, Inc. 64 Old Highway 22 Clinton, NJ 08809 800 618-BANK www.unitybank.com |
NewsNewsNewsNewsNews
For Immediate Release:
January 30, 2008
News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308
Unity Bancorp Reports Year End Results
Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $680 thousand, or $0.10 per diluted share, for the quarter ended December 31, 2007, compared to net income of $924 thousand, or $0.13 per diluted share, for the quarter ended December 31, 2006. Return on average assets and average common equity for the fourth quarter of 2007 were 0.36% and 5.78%, respectively, as compared to 0.55% and 8.05%, respectively, for the fourth quarter of 2006. Excluding the non-recurring impairment charges described below, earnings would have been $1.1 million for the quarter ended December 31, 2007, with resulting return on average assets and equity of 0.58% and 9.22%, respectively.
For the twelve months ended December 31, 2007, net income was $4.7 million, or $0.66 per diluted share, compared to $5.8 million, or $0.81 per diluted share for the same period a year ago. Return on average assets and average common equity for the year ended December 31, 2007, were 0.66% and 10.11%, respectively, as compared to 0.90% and 13.56%, respectively, for the prior year’s comparable period. Excluding the non-recurring impairment charges described below, earnings would have been $5.1 million for the year ended December 31, 2007, with resulting return on average assets and equity of 0.72% and 10.98%, respectively.
Earnings for the quarter and year were impacted by a charge of $404 thousand after tax, or $0.06 per diluted share, related to Federal Home Loan Mortgage Corporation (“FHLMC or Freddie Mac”) investment grade, perpetual callable preferred securities. The other-than-temporary impairment charge was recorded on three perpetual preferred stock issues classified as available for sale investment securities. Unity decided to reclassify the securities to an other-than-temporary impairment due to the recent decline in market value, and the uncertainty that they will recover their $3.9 million book value within a reasonable twelve-month period. The FHLMC securities were investment grade at the time of purchase and remain investment grade with ratings of AA- by S&P and Aa3 by Moody’s. The securities continue to perform according to their contractual terms and all dividend payments are current.
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“In addition to the impairment charge, earnings for the quarter and year were impacted by the Company’s previously announced strategic decision to retain a significant portion of the Company’s currently originated SBA 7(a) loans in the portfolio, rather than selling them to the secondary market. While this change in strategy has resulted in reduced short-term earnings, we are confident that this strategy will increase long-term earnings and enhance shareholder value through increased interest income,” said Unity President and Chief Executive Officer, James A. Hughes.
Total assets at December 31, 2007, were $752.2 million, an 8.4% increase from December 31, 2006. The increase in assets from the prior year was due to growth in the Company’s loan portfolio. Total loans at December 31, 2007, were $590.1 million, a 16.2% increase from December 31, 2006. The growth in the loan portfolio occurred in all product lines.
At December 31, 2007, the allowance for loan losses was $8.4 million, or 1.42% of total loans, compared to 1.50% of total loans at December 31, 2006. Non-performing assets at December 31, 2007, were $5.6 million, or 0.94% of total loans and other real estate owned (OREO), a decline of $3.6 million in non-performing assets, compared to $9.1 million or 1.80% of total loans and OREO at December 31, 2006. Included in non-performing assets at December 31, 2007, are approximately $714 thousand of loans guaranteed by the SBA. The Company has reviewed its portfolio and determined that is does not have significant exposure to the residential sub-prime credit market.
Total deposits at December 31, 2007, were $601.3 million, a 6.1% increase from December 31, 2006. This increase was primarily the result of growth in time deposit accounts, partially offset by the decline in other deposit categories. Time deposits increased $80.9 million, or 46.1% from December 31, 2006, due to deposit promotions to fund loan growth.
“During the fourth quarter of 2007, the Company opened its seventeenth branch in Middlesex, New Jersey,” said Mr. Hughes. “Although the Company is committed to expanding its branch network, we are reviewing our branches and will divest locations that do not add value to the franchise.”
Total shareholders’ equity was $47.3 million at December 31, 2007, a 2.2% increase from December 31, 2006. The increase in shareholders’ equity was due to retained profits, partially offset by the payment of cash dividends and the purchase of stock. During the quarter, the Company repurchased 94 thousand shares of stock at an average cost of $10.09 per share.
Net interest income was $6.3 million for the fourth quarter of 2007, an increase of 11.1% compared to the same period a year ago. Net interest income was primarily benefited by an increase in interest-earning assets and to a lesser extent our strategy of holding higher-rate SBA loans. Net interest margin was 3.62% for the fourth quarter of 2007, compared to 3.60% for the fourth quarter of 2006. Due to the recent decline in short-term interest rates, Unity Bank expects that the net interest margin will expand in 2008.
Net interest income was $24.4 million for the year ended December 31, 2007, compared to $23.7 million a year ago. Net interest income was benefited by an increase in interest-earning assets, partially offset by a decrease in net interest margin. Net interest margin was 3.62% for the year ended 2007, compared to 3.87% for the same period a year ago. The contraction in net interest margin over the year reflects the reliance on higher costing time deposits to fund loan growth.
The provision for loan losses for the fourth quarter of 2007 was $550 thousand, compared to $600 thousand for the fourth quarter of 2006. Net loan charge-offs for the quarter ended December 31, 2007, were $350 thousand, compared to net loan charge-offs of $456 thousand for the quarter ended December 31, 2006. The provision for loan losses was $1.55 million for each of the years ended December 31, 2007 and 2006. Net loan charge-offs for the year ended December 31, 2007 were $791 thousand, compared to $818 thousand for the same period a year ago.
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Total noninterest income for the fourth quarter of 2007 was $1.1 million, down 39.7%, from the same period a year ago. Gains on sales of SBA loans amounted to $580 thousand for the fourth quarter of 2007, compared to $787 thousand for the quarter ended December 31, 2006, reflecting the change in strategy to sell fewer SBA loans, which was announced during the third quarter. Service charges on deposits for the fourth quarter were $357 thousand, a decrease of $17 thousand compared to the fourth quarter of 2006, primarily due to the acceleration of the electronic clearing of checks under “Check 21.” Service and loan fees were $433 thousand for the fourth quarter of 2007, an increase of $88 thousand from a year ago.
Total noninterest income for the year ended December 31, 2007, was $5.9 million, down 22.2% from the same period a year ago. Gains on sales of SBA loans amounted to $2.4 million for the year ended December 31, 2007, compared to $3.0 million for the same period a year ago, primarily due to reduced premiums. Service charges on deposits for the year ended were $1.4 million, a decrease of $219 thousand, compared to the same period a year ago, primarily due to the acceleration of “Check 21.” Service and loan fees were $1.6 million for the twelve months ended December 31, 2007 and 2006.
Total noninterest expenses for the fourth quarter of 2007 were $5.9 million, an increase of 8.3% from the prior year’s comparable quarter. Compensation and benefits expense increased 4.3% due to the increased staffing associated with branch expansion and the rollout of the Bank’s national SBA program. Occupancy and furniture and equipment expenses increased 16.2% and 17.9% for the fourth quarter of 2007, compared to the same period a year ago due to the aforementioned expansion.
Total noninterest expenses for the year ended December 31, 2007, were $22.1 million, an increase of 5.1% from the same period a year ago. Compensation and benefits increased 3.8% due to increased staffing associated with branch expansion and the rollout of the Bank’s national SBA program. Processing and communications increased 9.6% due to increased transactional volume due to a larger customer base. Occupancy and furniture and equipment expenses increased 7.6% and 8.9% for 2007, compared to the same period a year ago due to branch expansion. Loan servicing costs increased 11.4% due to collection expenses associated with past due loans.
As of December 31, 2007, the Company’s Tier I leverage capital ratio was 8.25%, Tier I risk-based capital ratio was 9.81%, and total risk-based capital ratio was 11.06%. All regulatory capital ratios exceeded the well-capitalized, federal capital adequacy requirements as of December 31, 2007.
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $752 million in assets and $601 million in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 17 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.
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Unity Bancorp, Inc.
Consolidated Financial Highlights
(Dollars in thousands, except per share data)
Dec. 07 vs. | ||||||||||||||||
Dec. 31, 2007 | Sep. 30, 2007 | Dec. 31, 2006 | Sep. 07 | Dec. 06 | ||||||||||||
BALANCE SHEET DATA: | ||||||||||||||||
| Assets | $ | 752,196 | $ | 746,821 | $ | 694,106 | 0.7 | % | 8.4 | % | ||||||
| Deposits | 601,268 | 612,215 | 566,465 | (1.8 | ) | 6.1 | ||||||||||
| Loans | 590,132 | 567,597 | 507,690 | 4.0 | 16.2 | |||||||||||
| Securities | 102,986 | 112,196 | 108,410 | (8.2 | ) | (5.0 | ) | |||||||||
| Shareholders' equity | 47,260 | 47,261 | 46,228 | - | 2.2 | |||||||||||
| Allowance for loan losses | 8,383 | 8,183 | 7,624 | 2.4 | 10.0 | |||||||||||
FINANCIAL DATA - QUARTER TO DATE: | ||||||||||||||||
| Net income before taxes | $ | 922 | $ | 1,482 | $ | 1,389 | (37.8 | )% | (33.6 | )% | ||||||
| Federal and state income tax provision | 242 | 430 | 465 | (43.7 | ) | (48.0 | ) | |||||||||
| Net income | 680 | 1,052 | 924 | (35.4 | ) | (26.4 | ) | |||||||||
| Per share-basic | 0.10 | 0.15 | 0.13 | (33.3 | ) | (23.1 | ) | |||||||||
| Per share-diluted | 0.10 | 0.15 | 0.13 | (33.3 | ) | (23.1 | ) | |||||||||
| Return on average assets | 0.36 | % | 0.57 | % | 0.55 | % | (36.8 | ) | (34.5 | ) | ||||||
| Return on average common equity | 5.78 | 8.89 | 8.05 | (35.0 | ) | (28.2 | ) | |||||||||
| Efficiency ratio | 74.07 | 74.23 | 73.34 | (0.2 | ) | 1.0 | ||||||||||
FINANCIAL DATA - YEAR TO DATE: | ||||||||||||||||
| Net income before taxes | $ | 6,703 | - | $ | 8,788 | - | (23.7 | )% | ||||||||
| Federal and state income tax provision | 1,978 | - | 2,943 | - | (32.8 | ) | ||||||||||
| Net income | 4,725 | - | 5,845 | - | (19.2 | ) | ||||||||||
| Per share-basic | 0.68 | - | 0.85 | - | (20.0 | ) | ||||||||||
| Per share-diluted | 0.66 | - | 0.81 | - | (18.5 | ) | ||||||||||
| Return on average assets | 0.66 | % | - | 0.90 | % | - | (26.7 | ) | ||||||||
| Return on average common equity | 10.11 | - | 13.56 | - | (25.4 | ) | ||||||||||
| Efficiency ratio | 71.48 | - | 67.21 | - | 6.4 | |||||||||||
SHARE INFORMATION: | ||||||||||||||||
| Closing price per share | $ | 8.50 | $ | 11.08 | $ | 14.01 | (23.3 | )% | (39.3 | )% | ||||||
| Cash dividends declared | 0.05 | 0.05 | 0.05 | - | - | |||||||||||
| Book value per share | 7.03 | 6.94 | 6.65 | 1.3 | 5.7 | |||||||||||
| Average diluted shares outstanding (QTD) | 6,979 | 7,107 | 7,263 | (1.8 | ) | (3.9 | ) | |||||||||
CAPITAL RATIOS: | ||||||||||||||||
| Total equity to total assets | 6.28 | % | 6.33 | % | 6.66 | % | (0.8 | )% | (5.7 | )% | ||||||
| Tier I capital to average assets (leverage) | 8.25 | 8.37 | 9.13 | (1.4 | ) | (9.6 | ) | |||||||||
| Tier I capital to risk-adjusted assets | 9.81 | 10.51 | 10.92 | (6.7 | ) | (10.2 | ) | |||||||||
| Total risk-based capital | 11.06 | 11.76 | 13.72 | (6.0 | ) | (19.4 | ) | |||||||||
CREDIT QUALITY AND RATIOS: | ||||||||||||||||
| Nonperforming assets | $ | 5,567 | $ | 4,319 | $ | 9,120 | 28.9 | % | (39.0 | )% | ||||||
| Net charge offs to average loans (QTD) | 0.24 | % | 0.19 | % | 0.35 | % | 26.3 | (31.4 | ) | |||||||
| Allowance for loan losses to total loans | 1.42 | 1.44 | 1.50 | (1.4 | ) | (5.3 | ) | |||||||||
| Nonperforming assets to total loans and OREO | 0.94 | 0.76 | 1.80 | 23.7 | (47.8 | ) | ||||||||||
Unity Bancorp, Inc.
Consolidated Balance Sheets
(In thousands)
Dec. 07 vs. | ||||||||||||||||
Dec. 31, 2007 | Sep. 30, 2007 | Dec. 31, 2006 | Sep. 07 | Dec. 06 | ||||||||||||
ASSETS | ||||||||||||||||
| Cash and due from banks | $ | 14,336 | $ | 12,826 | $ | 14,727 | 11.8 | % | (2.7 | )% | ||||||
| Federal funds sold and interest bearing deposits | 21,976 | 32,495 | 40,709 | (32.4 | ) | (46.0 | ) | |||||||||
| Securities: | ||||||||||||||||
| Available for sale | 69,250 | 76,700 | 65,595 | (9.7 | ) | 5.6 | ||||||||||
| Held to maturity | 33,736 | 35,496 | 42,815 | (5.0 | ) | (21.2 | ) | |||||||||
| Total securities | 102,986 | 112,196 | 108,410 | (8.2 | ) | (5.0 | ) | |||||||||
| Loans: | ||||||||||||||||
| SBA - Held for sale | 24,640 | 17,014 | 12,273 | 44.8 | 100.8 | |||||||||||
| SBA - Held to Maturity | 68,875 | 66,255 | 66,802 | 4.0 | 3.1 | |||||||||||
| Commercial | 365,786 | 356,964 | 312,195 | 2.5 | 17.2 | |||||||||||
| Residential mortgage | 73,697 | 72,177 | 63,493 | 2.1 | 16.1 | |||||||||||
| Consumer | 57,134 | 55,187 | 52,927 | 3.5 | 7.9 | |||||||||||
| Total loans | 590,132 | 567,597 | 507,690 | 4.0 | 16.2 | |||||||||||
| Less: Allowance for loan losses | 8,383 | 8,183 | 7,624 | 2.4 | 10.0 | |||||||||||
| Net loans | 581,749 | 559,414 | 500,066 | 4.0 | 16.3 | |||||||||||
| Goodwill and other intangibles | 1,588 | 1,592 | 1,603 | (0.3 | ) | (0.9 | ) | |||||||||
| Premises and equipment, net | 12,102 | 11,729 | 11,610 | 3.2 | 4.2 | |||||||||||
| Accrued interest receivable | 3,994 | 4,073 | 3,926 | (1.9 | ) | 1.7 | ||||||||||
| Loan servicing asset | 2,056 | 2,139 | 2,294 | (3.9 | ) | (10.4 | ) | |||||||||
| Bank Owned Life Insurance | 5,570 | 5,520 | 5,372 | 0.9 | 3.7 | |||||||||||
| Other assets | 5,839 | 4,837 | 5,389 | 20.7 | 8.4 | |||||||||||
Total Assets | $ | 752,196 | $ | 746,821 | $ | 694,106 | 0.7 | % | 8.4 | % | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Noninterest-bearing demand deposits | $ | 70,601 | $ | 73,355 | $ | 79,772 | (3.8 | )% | (11.5 | )% | ||||||
| Interest-bearing deposits: | ||||||||||||||||
| Interest bearing checking | 78,020 | 81,985 | 105,382 | (4.8 | ) | (26.0 | ) | |||||||||
| Savings | 196,388 | 193,387 | 205,919 | 1.6 | (4.6 | ) | ||||||||||
| Time, under $100,000 | 172,006 | 181,776 | 111,070 | (5.4 | ) | 54.9 | ||||||||||
| Time, $100,000 and over | 84,253 | 81,712 | 64,322 | 3.1 | 31.0 | |||||||||||
| Total deposits | 601,268 | 612,215 | 566,465 | (1.8 | ) | 6.1 | ||||||||||
| Borrowed funds and subordinated debentures | 100,465 | 85,465 | 79,744 | 17.6 | 26.0 | |||||||||||
| Accrued interest payable | 635 | 757 | 475 | (16.1 | ) | 33.7 | ||||||||||
| Accrued expenses and other liabilities | 2,568 | 1,123 | 1,194 | 128.7 | 115.1 | |||||||||||
| Total liabilities | 704,936 | 699,560 | 647,878 | 0.8 | 8.8 | |||||||||||
| Commitments and Contingencies | - | - | - | |||||||||||||
| Shareholders' equity: | ||||||||||||||||
| Common stock, no par value, 12,500 shares authorized | 49,447 | 49,282 | 44,343 | 0.3 | 11.5 | |||||||||||
| Retained earnings | 2,472 | 2,128 | 2,951 | 16.2 | (16.2 | ) | ||||||||||
| Treasury stock at cost | (4,169 | ) | (3,218 | ) | (242 | ) | 29.6 | 1,622.7 | ||||||||
| Accumulated other comprehensive loss, net of tax | (490 | ) | (931 | ) | (824 | ) | (47.4 | ) | (40.5 | ) | ||||||
| Total shareholders' equity | 47,260 | 47,261 | 46,228 | - | 2.2 | |||||||||||
Total Liabilities and Shareholders' Equity | $ | 752,196 | $ | 746,821 | $ | 694,106 | 0.7 | % | 8.4 | % | ||||||
COMMON SHARES AT PERIOD END: | ||||||||||||||||
| Issued | 7,131 | 7,122 | 6,973 | |||||||||||||
| Outstanding | 6,727 | 6,813 | 6,949 | |||||||||||||
| Treasury | 404 | 309 | 24 | |||||||||||||
| N/M= Not meaningful | ||||||||||||||||
Unity Bancorp, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
| Dec. 07 vs. | ||||||||||||||||
Dec. 31, 2007 | Sep. 30, 2007 | Dec. 31, 2006 | Sep. 07 | Dec. 06 | ||||||||||||
FOR THE THREE MONTHS ENDED: | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||
| Fed funds sold and interest on deposits | $ | 195 | $ | 390 | $ | 211 | (50.0 | )% | (7.6 | )% | ||||||
| Securities: | ||||||||||||||||
| Available for sale | 913 | 954 | 788 | (4.3 | ) | 15.9 | ||||||||||
| Held to maturity | 443 | 452 | 551 | (2.0 | ) | (19.6 | ) | |||||||||
| Total securities | 1,356 | 1,406 | 1,339 | (3.6 | ) | 1.3 | ||||||||||
| Loans: | ||||||||||||||||
| SBA | 2,307 | 2,190 | 2,108 | 5.3 | 9.4 | |||||||||||
| Commercial | 6,772 | 6,600 | 5,875 | 2.6 | 15.3 | |||||||||||
| Residential mortgage | 1,093 | 1,047 | 887 | 4.4 | 23.2 | |||||||||||
| Consumer | 934 | 933 | 855 | 0.1 | 9.2 | |||||||||||
| Total loan interest income | 11,106 | 10,770 | 9,725 | 3.1 | 14.2 | |||||||||||
| Total interest income | 12,657 | 12,566 | 11,275 | 0.7 | 12.3 | |||||||||||
INTEREST EXPENSE | ||||||||||||||||
| Interest bearing demand deposits | 448 | 451 | 664 | (0.7 | ) | (32.5 | ) | |||||||||
| Savings deposits | 1,776 | 1,995 | 2,081 | (11.0 | ) | (14.7 | ) | |||||||||
| Time deposits | 3,089 | 2,994 | 1,963 | 3.2 | 57.4 | |||||||||||
| Borrowed funds and subordinated debentures | 997 | 1,153 | 852 | (13.5 | ) | 17.0 | ||||||||||
| Total interest expense | 6,310 | 6,593 | 5,560 | (4.3 | ) | 13.5 | ||||||||||
| Net interest income | 6,347 | 5,973 | 5,715 | 6.3 | 11.1 | |||||||||||
| Provision for loan losses | 550 | 450 | 600 | 22.2 | (8.3 | ) | ||||||||||
| Net interest income after provision for loan losses | 5,797 | 5,523 | 5,115 | 5.0 | 13.3 | |||||||||||
NONINTEREST INCOME | ||||||||||||||||
| Service charges on deposit accounts | 357 | 338 | 374 | 5.6 | (4.5 | ) | ||||||||||
| Service and loan fee income | 433 | 428 | 345 | 1.2 | 25.5 | |||||||||||
| Gain on SBA loan sales | 580 | 316 | 787 | 83.5 | (26.3 | ) | ||||||||||
| Gain on sales of other loans | - | - | - | - | (100.0 | ) | ||||||||||
| Bank owned life insurance | 50 | 53 | 47 | (5.7 | ) | 6.4 | ||||||||||
| Net securities (loss) gains | (603 | ) | 22 | - | 100.0 | 100.0 | ||||||||||
| Other income | 236 | 303 | 193 | (22.1 | ) | 22.3 | ||||||||||
| Total noninterest income | 1,053 | 1,460 | 1,746 | (27.9 | ) | (39.7 | ) | |||||||||
NONINTEREST EXPENSES | ||||||||||||||||
| Compensation and benefits | 2,952 | 2,816 | 2,830 | 4.8 | 4.3 | |||||||||||
| Processing and communications | 675 | 645 | 585 | 4.7 | 15.4 | |||||||||||
| Occupancy, net | 761 | 699 | 655 | 8.9 | 16.2 | |||||||||||
| Furniture and equipment | 462 | 419 | 392 | 10.3 | 17.9 | |||||||||||
| Professional fees | 184 | 116 | 131 | 58.6 | 40.5 | |||||||||||
| Loan servicing costs | 161 | 184 | 211 | (12.5 | ) | (23.7 | ) | |||||||||
| Advertising | 145 | 113 | 156 | 28.3 | (7.1 | ) | ||||||||||
| Other | 588 | 509 | 512 | 15.5 | 14.8 | |||||||||||
| Total noninterest expenses | 5,928 | 5,501 | 5,472 | 7.8 | 8.3 | |||||||||||
| Income before taxes | 922 | 1,482 | 1,389 | (37.8 | ) | (33.6 | ) | |||||||||
| Federal and state income tax provision | 242 | 430 | 465 | (43.7 | ) | (48.0 | ) | |||||||||
Net Income | $ | 680 | $ | 1,052 | $ | 924 | (35.4 | )% | (26.4 | )% | ||||||
Net Income Per Common Share-Basic | $ | 0.10 | $ | 0.15 | $ | 0.13 | (33.3 | )% | (23.1 | )% | ||||||
Net Income Per Common Share-Diluted | $ | 0.10 | $ | 0.15 | $ | 0.13 | (33.3 | )% | (23.1 | )% | ||||||
AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
| Basic | 6,769 | 6,871 | 6,941 | |||||||||||||
| Diluted | 6,979 | 7,107 | 7,263 | |||||||||||||
Unity Bancorp, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Dec. 07 vs. | ||||||||||
Dec. 31, 2007 | Dec. 31, 2006 | Dec. 06 | ||||||||
YEAR TO DATE | ||||||||||
INTEREST INCOME | ||||||||||
| Fed funds sold and interest on deposits | $ | 1,068 | $ | 1,042 | 2.5 | % | ||||
| Securities: | ||||||||||
| Available for sale | 3,425 | 3,051 | 12.3 | |||||||
| Held to maturity | 1,913 | 2,042 | (6.3 | ) | ||||||
| Total securities | 5,338 | 5,093 | 4.8 | |||||||
| Loans: | ||||||||||
| SBA | 9,039 | 8,615 | 4.9 | |||||||
| Commercial | 25,738 | 21,914 | 17.5 | |||||||
| Residential mortgage | 3,995 | 3,305 | 20.9 | |||||||
| Consumer | 3,722 | 3,208 | 16.0 | |||||||
| Total loan interest income | 42,494 | 37,042 | 14.7 | |||||||
| Total interest income | 48,900 | 43,177 | 13.3 | |||||||
INTEREST EXPENSE | ||||||||||
| Interest bearing demand deposits | 1,928 | 2,648 | (27.2 | ) | ||||||
| Savings deposits | 8,064 | 6,948 | 16.1 | |||||||
| Time deposits | 10,206 | 7,101 | 43.7 | |||||||
| Borrowed funds and subordinated debentures | 4,276 | 2,735 | 56.3 | |||||||
| Total interest expense | 24,474 | 19,432 | 25.9 | |||||||
| Net interest income | 24,426 | 23,745 | 2.9 | |||||||
| Provision for loan losses | 1,550 | 1,550 | 0.0 | |||||||
| Net interest income after provision for loan losses | 22,876 | 22,195 | 3.1 | |||||||
NONINTEREST INCOME | ||||||||||
| Service charges on deposit accounts | 1,383 | 1,602 | (13.7 | ) | ||||||
| Service and loan fee income | 1,607 | 1,637 | (1.8 | ) | ||||||
| Gain on SBA loan sales | 2,399 | 2,972 | (19.3 | ) | ||||||
| Gains on sales of other loans | 0 | 82 | (100.0 | ) | ||||||
| Bank owned life insurance | 198 | 187 | 5.9 | |||||||
| Net securities (loss) gains | (571 | ) | 69 | 100.0 | ||||||
| Other income | 924 | 1,089 | (15.2 | ) | ||||||
| Total noninterest income | 5,940 | 7,638 | (22.2 | ) | ||||||
NONINTEREST EXPENSES | ||||||||||
| Compensation and benefits | 11,446 | 11,028 | 3.8 | |||||||
| Processing and communications | 2,433 | 2,220 | 9.6 | |||||||
| Occupancy, net | 2,777 | 2,580 | 7.6 | |||||||
| Furniture and equipment | 1,675 | 1,538 | 8.9 | |||||||
| Professional fees | 598 | 636 | (6.0 | ) | ||||||
| Loan servicing costs | 604 | 542 | 11.4 | |||||||
| Advertising | 457 | 575 | (20.5 | ) | ||||||
| Other | 2,123 | 1,926 | 10.2 | |||||||
| Total noninterest expenses | 22,113 | 21,045 | 5.1 | |||||||
| Income before taxes | 6,703 | 8,788 | (23.7 | ) | ||||||
| Federal and state income tax provision | 1,978 | 2,943 | (32.8 | ) | ||||||
Net Income | $ | 4,725 | $ | 5,845 | (19.2 | )% | ||||
Net Income Per Common Share-Basic | $ | 0.68 | $ | 0.85 | (20.0 | )% | ||||
Net Income Per Common Share-Diluted | $ | 0.66 | $ | 0.81 | (18.5 | )% | ||||
| Average common shares outstanding: | ||||||||||
| Basic | 6,900 | 6,912 | ||||||||
| Diluted | 7,169 | 7,256 | ||||||||
Unity Bancorp, Inc.
Consolidated Average Balance Sheets with Resultant Interest and Rates
(Tax-equivalent basis, dollars in thousands)
Three Months Ended | |||||||||||||||||||
December 31, 2007 | September 30, 2007 | ||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
ASSETS | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Federal funds sold and interest-bearing deposits with banks | $ | 17,961 | $ | 195 | 4.31 | % | $ | 31,449 | $ | 390 | 4.92 | % | |||||||
| Securities: | |||||||||||||||||||
| Available for sale | 71,551 | 953 | 5.33 | 75,031 | 976 | 5.20 | |||||||||||||
| Held to maturity | 35,157 | 461 | 5.25 | 36,047 | 471 | 5.23 | |||||||||||||
| Total securities | 106,708 | 1,414 | 5.30 | 111,078 | 1,447 | 5.21 | |||||||||||||
| Loans, net of unearned discount: | |||||||||||||||||||
| SBA | 90,120 | 2,307 | 10.24 | 81,693 | 2,190 | 10.72 | |||||||||||||
| Commercial | 362,512 | 6,772 | 7.41 | 350,555 | 6,600 | 7.47 | |||||||||||||
| Residential mortgage | 74,057 | 1,093 | 5.90 | 71,401 | 1,047 | 5.87 | |||||||||||||
| Consumer | 56,421 | 934 | 6.57 | 54,064 | 933 | 6.85 | |||||||||||||
| Total loans | 583,110 | 11,106 | 7.57 | 557,713 | 10,770 | 7.68 | |||||||||||||
| Total interest-earning assets | 707,779 | 12,715 | 7.15 | 700,240 | 12,607 | 7.16 | |||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||
| Cash and due from banks | 14,518 | 14,911 | |||||||||||||||||
| Allowance for loan losses | (8,499 | ) | (8,330 | ) | |||||||||||||||
| Other assets | 29,130 | 29,503 | |||||||||||||||||
| Total noninterest-earning assets | 35,149 | 36,084 | |||||||||||||||||
| Total Assets | $ | 742,928 | $ | 736,324 | |||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Interest-bearing demand deposits | $ | 81,759 | 448 | 2.17 | $ | 79,188 | 451 | 2.26 | |||||||||||
| Savings deposits | 195,241 | 1,776 | 3.61 | 199,483 | 1,995 | 3.97 | |||||||||||||
| Time deposits | 253,790 | 3,089 | 4.83 | 243,358 | 2,994 | 4.88 | |||||||||||||
| Total interest-bearing deposits | 530,790 | 5,313 | 3.97 | 522,029 | 5,440 | 4.13 | |||||||||||||
| Borrowed funds and subordinated debentures | 86,826 | 997 | 4.56 | 89,892 | 1,153 | 5.09 | |||||||||||||
| Total interest-bearing liabilities | 617,616 | 6,310 | 4.05 | 611,921 | 6,593 | 4.27 | |||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | 76,406 | 75,218 | |||||||||||||||||
| Other liabilities | 2,267 | 2,216 | |||||||||||||||||
| Total noninterest-bearing liabilities | 78,673 | 77,434 | |||||||||||||||||
| Shareholders' equity | 46,639 | 46,969 | |||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 742,928 | $ | 736,324 | |||||||||||||||
| Net interest spread | 6,405 | 3.10 | % | 6,014 | 2.89 | % | |||||||||||||
| Tax-equivalent basis adjustment | (58 | ) | (41 | ) | |||||||||||||||
| Net interest income | $ | 6,347 | $ | 5,973 | |||||||||||||||
| Net interest margin | 3.62 | % | 3.44 | % | |||||||||||||||
Unity Bancorp, Inc.
Consolidated Average Balance Sheets with Resultant Interest and Rates
(Tax-equivalent basis, dollars in thousands)
Three Months Ended | |||||||||||||||||||
December 31, 2007 | December 31, 2006 | ||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
ASSETS | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Federal funds sold and interest-bearing deposits with banks | $ | 17,961 | $ | 195 | 4.31 | % | $ | 16,274 | $ | 211 | 5.14 | % | |||||||
| Securities: | |||||||||||||||||||
| Available for sale | 71,551 | 953 | 5.33 | 67,266 | 801 | 4.76 | |||||||||||||
| Held to maturity | 35,157 | 461 | 5.25 | 43,465 | 568 | 5.23 | |||||||||||||
| Total securities | 106,708 | 1,414 | 5.30 | 110,731 | 1,369 | 4.95 | |||||||||||||
| Loans, net of unearned discount: | |||||||||||||||||||
| SBA | 90,120 | 2,307 | 10.24 | 83,828 | 2,108 | 10.06 | |||||||||||||
| Commercial | 362,512 | 6,772 | 7.41 | 314,370 | 5,875 | 7.41 | |||||||||||||
| Residential mortgage | 74,057 | 1,093 | 5.90 | 62,909 | 887 | 5.64 | |||||||||||||
| Consumer | 56,421 | 934 | 6.57 | 49,590 | 855 | 6.84 | |||||||||||||
| Total loans | 583,110 | 11,106 | 7.57 | 510,697 | 9,725 | 7.57 | |||||||||||||
| Total interest-earning assets | 707,779 | 12,715 | 7.15 | 637,702 | 11,305 | 7.05 | |||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||
| Cash and due from banks | 14,518 | 12,495 | |||||||||||||||||
| Allowance for loan losses | (8,499 | ) | (7,763 | ) | |||||||||||||||
| Other assets | 29,130 | 28,780 | |||||||||||||||||
| Total noninterest-earning assets | 35,149 | 33,512 | |||||||||||||||||
| Total Assets | $ | 742,928 | $ | 671,214 | |||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Interest-bearing demand deposits | $ | 81,759 | 448 | 2.17 | $ | 110,635 | 664 | 2.38 | |||||||||||
| Savings deposits | 195,241 | 1,776 | 3.61 | 199,643 | 2,081 | 4.14 | |||||||||||||
| Time deposits | 253,790 | 3,089 | 4.83 | 169,889 | 1,963 | 4.58 | |||||||||||||
| Total interest-bearing deposits | 530,790 | 5,313 | 3.97 | 480,167 | 4,708 | 3.89 | |||||||||||||
| Borrowed funds and subordinated debentures | 86,826 | 997 | 4.56 | 67,083 | 852 | 5.04 | |||||||||||||
| Total interest-bearing liabilities | 617,616 | 6,310 | 4.05 | 547,250 | 5,560 | 4.03 | |||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | 76,406 | 76,168 | |||||||||||||||||
| Other liabilities | 2,267 | 2,244 | |||||||||||||||||
| Total noninterest-bearing liabilities | 78,673 | 78,412 | |||||||||||||||||
| Shareholders' equity | 46,639 | 45,552 | |||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 742,928 | $ | 671,214 | |||||||||||||||
| Net interest spread | 6,405 | 3.10 | % | 5,745 | 3.02 | % | |||||||||||||
| Tax-equivalent basis adjustment | (58 | ) | (30 | ) | |||||||||||||||
| Net interest income | $ | 6,347 | $ | 5,715 | |||||||||||||||
| Net interest margin | 3.62 | % | 3.60 | % | |||||||||||||||
Unity Bancorp, Inc.
Consolidated Average Balance Sheets with Resultant Interest and Rates
(Tax-equivalent basis, dollars in thousands)
Year to Date | |||||||||||||||||||
December 31, 2007 | December 31, 2006 | ||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
ASSETS | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Federal funds sold and interest-bearing deposits with banks | $ | 22,290 | $ | 1,068 | 4.79 | % | $ | 21,606 | $ | 1,042 | 4.82 | % | |||||||
| Securities: | |||||||||||||||||||
| Available for sale | 69,189 | 3,511 | 5.07 | 66,474 | 3,103 | 4.67 | |||||||||||||
| Held to maturity | 37,724 | 1,986 | 5.26 | 41,156 | 2,069 | 5.03 | |||||||||||||
| Total securities | 106,913 | 5,497 | 5.14 | 107,630 | 5,172 | 4.81 | |||||||||||||
| Loans, net of unearned discount: | |||||||||||||||||||
| SBA | 84,185 | 9,039 | 10.74 | 84,113 | 8,615 | 10.24 | |||||||||||||
| Commercial | 341,841 | 25,738 | 7.53 | 294,773 | 21,914 | 7.43 | |||||||||||||
| Residential mortgage | 68,443 | 3,995 | 5.84 | 59,933 | 3,305 | 5.51 | |||||||||||||
| Consumer | 54,789 | 3,722 | 6.79 | 47,652 | 3,208 | 6.73 | |||||||||||||
| Total loans | 549,258 | 42,494 | 7.74 | 486,471 | 37,042 | 7.61 | |||||||||||||
| Total interest-earning assets | 678,461 | 49,059 | 7.23 | 615,707 | 43,256 | 7.02 | |||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||
| Cash and due from banks | 13,467 | 12,439 | |||||||||||||||||
| Allowance for loan losses | (8,184 | ) | (7,493 | ) | |||||||||||||||
| Other assets | 29,304 | 29,302 | |||||||||||||||||
| Total noninterest-earning assets | 34,587 | 34,248 | |||||||||||||||||
| Total Assets | $ | 713,048 | $ | 649,955 | |||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Interest-bearing demand deposits | $ | 85,750 | 1,928 | 2.25 | $ | 117,730 | 2,648 | 2.25 | |||||||||||
| Savings deposits | 204,214 | 8,064 | 3.95 | 183,815 | 6,948 | 3.78 | |||||||||||||
| Time deposits | 213,407 | 10,206 | 4.78 | 169,572 | 7,101 | 4.19 | |||||||||||||
| Total interest-bearing deposits | 503,371 | 20,198 | 4.01 | 471,117 | 16,697 | 3.54 | |||||||||||||
| Borrowed funds and subordinated debentures | 84,962 | 4,276 | 5.03 | 55,756 | 2,735 | 4.91 | |||||||||||||
| Total interest-bearing liabilities | 588,333 | 24,474 | 4.16 | 526,873 | 19,432 | 3.69 | |||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | 75,581 | 77,747 | |||||||||||||||||
| Other liabilities | 2,416 | 2,218 | |||||||||||||||||
| Total noninterest-bearing liabilities | 77,997 | 79,965 | |||||||||||||||||
| Shareholders' equity | 46,718 | 43,117 | |||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 713,048 | $ | 649,955 | |||||||||||||||
| Net interest spread | 24,585 | 3.07 | % | 23,824 | 3.33 | % | |||||||||||||
| Tax-equivalent basis adjustment | (159 | ) | (79 | ) | |||||||||||||||
| Net interest income | $ | 24,426 | $ | 23,745 | |||||||||||||||
| Net interest margin | 3.62 | % | 3.87 | % | |||||||||||||||
Unity Bancorp, Inc.
Allowance for Loan Losses and Loan Quality Schedules
(Dollars in thousands)
12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 | ||||||||||||
ALLOWANCE FOR LOAN LOSSES: | ||||||||||||||||
| Balance, beginning of quarter | $ | 8,183 | $ | 7,997 | $ | 7,757 | $ | 7,624 | $ | 7,480 | ||||||
| Provision charged to expense | 550 | 450 | 350 | 200 | 600 | |||||||||||
8,733 | 8,447 | 8,107 | 7,824 | 8,080 | ||||||||||||
| Less: Charge offs | ||||||||||||||||
| SBA | 260 | 270 | 124 | 116 | 320 | |||||||||||
| Commercial | 126 | 24 | 5 | - | 196 | |||||||||||
| Residential mortgage | - | - | - | - | - | |||||||||||
| Consumer | 20 | 28 | - | 2 | 10 | |||||||||||
| Total Charge Offs | 406 | 322 | 129 | 118 | 526 | |||||||||||
| Add: Recoveries | ||||||||||||||||
| SBA | 53 | 41 | 12 | 41 | 20 | |||||||||||
| Commercial | 3 | 7 | 2 | 6 | 50 | |||||||||||
| Residential mortgage | - | - | - | - | - | |||||||||||
| Consumer | - | 10 | 5 | 4 | - | |||||||||||
| Total Recoveries | 56 | 58 | 19 | 51 | 70 | |||||||||||
| Net Charge Offs | 350 | 264 | 110 | 67 | 456 | |||||||||||
| Balance, end of quarter | $ | 8,383 | $ | 8,183 | $ | 7,997 | $ | 7,757 | $ | 7,624 | ||||||
LOAN QUALITY INFORMATION: | ||||||||||||||||
| Nonperforming loans | $ | 5,461 | $ | 4,185 | $ | 4,611 | $ | 6,515 | $ | 8,909 | ||||||
| Other real estate owned, net | 106 | 134 | 366 | 256 | 211 | |||||||||||
| Nonperforming assets | $ | 5,567 | $ | 4,319 | $ | 4,977 | $ | 6,771 | $ | 9,120 | ||||||
| Loans 90 days past due and still accruing | $ | 155 | $ | 340 | $ | 167 | $ | 145 | $ | 78 | ||||||
| Allowance for loan losses to: | ||||||||||||||||
| Total loans at period end | 1.42 | % | 1.44 | % | 1.48 | % | 1.50 | % | 1.50 | % | ||||||
| Nonperforming loans | 153.49 | 195.53 | 173.43 | 119.06 | 85.58 | |||||||||||
| Nonperforming assets | 150.58 | 189.47 | 160.68 | 114.56 | 83.60 | |||||||||||
| Net charge offs to average loans (QTD) | 0.24 | 0.19 | 0.08 | 0.05 | 0.35 | |||||||||||
| Net charge offs to average loans (YTD) | 0.14 | 0.11 | 0.07 | 0.05 | 0.17 | |||||||||||
| Nonperforming loans to total loans | 0.93 | 0.74 | 0.85 | 1.26 | 1.75 | |||||||||||
| Nonperforming assets to total loans and OREO | 0.94 | 0.76 | 0.92 | 1.31 | 1.80 | |||||||||||
Unity Bancorp, Inc.
Quarterly Financial Data
12/31/07 | 09/30/07 | 06/30/07 | 03/31/07 | 12/31/06 | ||||||||||||
SUMMARY OF INCOME (in thousands) : | ||||||||||||||||
| Interest income | $ | 12,657 | $ | 12,566 | $ | 11,975 | $ | 11,702 | $ | 11,275 | ||||||
| Interest expense | 6,310 | 6,593 | 5,888 | 5,683 | 5,560 | |||||||||||
| Net interest income | 6,347 | 5,973 | 6,087 | 6,019 | 5,715 | |||||||||||
| Provision for loan losses | 550 | 450 | 350 | 200 | 600 | |||||||||||
| Net interest income after provision | 5,797 | 5,523 | 5,737 | 5,819 | 5,115 | |||||||||||
| Noninterest income | 1,053 | 1,460 | 1,748 | 1,679 | 1,746 | |||||||||||
| Noninterest expense | 5,928 | 5,501 | 5,267 | 5,417 | 5,472 | |||||||||||
| Income before income taxes | 922 | 1,482 | 2,218 | 2,081 | 1,389 | |||||||||||
| Federal and state income tax provision | 242 | 430 | 676 | 630 | 465 | |||||||||||
| Net Income | 680 | 1,052 | 1,542 | 1,451 | 924 | |||||||||||
| Net Income per Common Share: | ||||||||||||||||
| Basic | $ | 0.10 | $ | 0.15 | $ | 0.22 | $ | 0.21 | $ | 0.13 | ||||||
| Diluted | 0.10 | 0.15 | 0.21 | 0.20 | 0.13 | |||||||||||
COMMON SHARE DATA: | ||||||||||||||||
| Cash dividends declared | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||
| Book value at quarter end | 7.03 | 6.94 | 6.87 | 6.84 | 6.65 | |||||||||||
| Market value at quarter end | 8.50 | 11.08 | 11.45 | 11.30 | 14.01 | |||||||||||
| Average common shares outstanding: (000's) | ||||||||||||||||
| Basic | 6,769 | 6,871 | 6,985 | 6,976 | 6,941 | |||||||||||
| Diluted | 6,979 | 7,107 | 7,295 | 7,301 | 7,263 | |||||||||||
| Common shares outstanding at period end (000's) | 6,727 | 6,813 | 7,002 | 6,995 | 6,949 | |||||||||||
OPERATING RATIOS: | ||||||||||||||||
| Return on average assets | 0.36 | % | 0.57 | % | 0.89 | % | 0.87 | % | 0.55 | % | ||||||
| Return on average common equity | 5.78 | 8.89 | 13.14 | 12.74 | 8.05 | |||||||||||
| Efficiency ratio | 74.07 | 74.23 | 67.22 | 70.46 | 73.34 | |||||||||||
BALANCE SHEET DATA (in thousands): | ||||||||||||||||
| Assets | $ | 752,196 | $ | 746,821 | $ | 732,403 | $ | 681,302 | $ | 694,106 | ||||||
| Deposits | 601,268 | 612,215 | 596,093 | 541,399 | 566,465 | |||||||||||
| Loans | 590,132 | 567,597 | 541,385 | 515,562 | 507,690 | |||||||||||
| Shareholders' equity | 47,260 | 47,261 | 48,242 | 47,825 | 46,228 | |||||||||||
| Allowance for loan losses | 8,383 | 8,183 | 7,997 | 7,757 | 7,624 | |||||||||||
TAX-EQUIVALENT YIELDS AND RATES: | ||||||||||||||||
| Interest-earning assets | 7.15 | % | 7.16 | % | 7.28 | % | 7.34 | % | 7.05 | % | ||||||
| Interest-bearing liabilities | 4.05 | 4.27 | 4.15 | 4.16 | 4.03 | |||||||||||
| Net interest spread | 3.10 | 2.89 | 3.13 | 3.18 | 3.02 | |||||||||||
| Net interest margin | 3.62 | 3.44 | 3.71 | 3.75 | 3.60 | |||||||||||
CREDIT QUALITY: | ||||||||||||||||
| Nonperforming assets (in thousands) | $ | 5,567 | $ | 4,319 | $ | 4,977 | $ | 6,771 | $ | 9,120 | ||||||
| Allowance for loan losses to period-end loans | 1.42 | % | 1.44 | % | 1.48 | % | 1.50 | % | 1.50 | % | ||||||
| Net charge offs to average loans | 0.24 | 0.19 | 0.08 | 0.05 | 0.35 | |||||||||||
| Nonperforming assets to loans and OREO | 0.94 | 0.76 | 0.92 | 1.31 | 1.80 | |||||||||||
CAPITAL AND OTHER: | ||||||||||||||||
| Total equity to assets | 6.28 | % | 6.33 | % | 6.59 | % | 7.02 | % | 6.66 | % | ||||||
| Tier I capital to average assets (leverage) | 8.25 | 8.37 | 9.21 | 9.24 | 9.13 | |||||||||||
| Tier I capital to risk-adjusted assets | 9.81 | 10.51 | 11.07 | 11.43 | 10.92 | |||||||||||
| Total capital to risk-adjusted assets | 11.06 | 11.76 | 13.72 | 14.21 | 13.72 | |||||||||||
| Number of banking offices | 17 | 16 | 15 | 15 | 15 | |||||||||||
| Number of ATMs | 20 | 19 | 18 | 18 | 18 | |||||||||||
| Number of employees | 201 | 197 | 195 | 179 | 185 | |||||||||||