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Unity Bancorp Reports 56.6% Increase in Earnings

               Unity Bancorp Reports 56.6% Increase in Earnings

PR Newswire

CLINTON, N.J., April 25, 2013

CLINTON, N.J., April 25, 2013 /PRNewswire/ -- Unity Bancorp, Inc. (NASDAQ:
UNTY), parent company of Unity Bank, reported net income available to common
shareholders of $797 thousand, or $0.10 per diluted share, for the three
months ended March 31, 2013, a 56.6% increase compared to $509 thousand, or
$0.07 per diluted share, for the same period a year ago. Return on average
assets and average common equity for the quarter were 0.59% and 5.65%,
respectively, compared to 0.45% and 3.81% for the same period a year ago.

First quarter highlights include:

  oA 9.1% increase in commercial loans from a year ago.
  oA 33.1% decrease in nonperforming assets from a year ago.
  oA 45.8 % decrease in the loan loss provision compared to prior period's
    quarter.
  oNoninterest-bearing deposits reached record high of $118.2 million.
  oNegotiated the purchase contract for three of our currently leased branch
    locations, which closed April 17, 2013, that will result in estimated
    future cost savings in excess of $200 thousand.
  oEntered into a marketing agreement with Venture VR LLC, a real estate
    agency in Elmwood Park, New Jersey to increase loan referrals.

"This was our strongest quarter in over five years and we are headed in the
right direction," reported James A. Hughes, President and CEO. "Loan demand
is gaining momentum, core deposits are growing and there was significant
improvement in asset quality. We are no longer looking in the rear view
mirror; we are looking forward to further earnings increases and balance sheet
growth."

Net Interest Income

Net interest income decreased $119 thousand to $6.7 million for the three
months ended March 31, 2013, compared to the prior year's quarter and the net
interest margin narrowed 4 basis points to 3.52%. This decrease was the
result of lower yields on our securities and loan portfolios. Our net
interest income continues to be influenced by the sustained low interest rate
environment, which the Federal Open Market Committee ("FOMC") of the Federal
Reserve Board believes is appropriate based on its unemployment and
inflationary targets. This rate environment has resulted in a tighter net
interest margin as our earning assets re-price at lower rates. The yield on
earning assets fell 38 basis points to 4.33% for the quarter ending March 31,
2013 when compared to the same period in 2012. Partially offsetting these
declines are lower funding costs from reduced deposit rates, a significantly
lower volume of time deposits and the expiration of a higher rate interest
rate swap agreement. The cost of interest-bearing liabilities decreased 37
basis points to 1.04% for the three month period.

Noninterest Income

Noninterest income increased $110 thousand to $1.8 million for the three
months ended March 31, 2013, compared to the same period last year. The
increase was driven by higher gains on the sale of residential mortgage and
SBA loans, partially offset by lower levels of branch fee income. Factors
affecting noninterest income were:

  oBranch fee income, which consists of deposit service charges and overdraft
    fees, decreased $39 thousand for the quarterly period due to lower
    overdraft fees.
  oGains on sales of SBA loans increased $84 thousand for the quarter due to
    higher premiums on the sale of $2.3 million in loans during the period.
  oGains on sales of residential mortgage loans increased $66 thousand on a
    higher volume of loan sales. For the three month period, $22.6 million in
    residential mortgage loans were sold compared to $21.2 million in the
    first quarter of 2012.

Noninterest Expense

Noninterest expense increased $167 thousand to $6.1 million for the three
months ended March 31, 2013, compared to the first quarter of 2012. Other
noteworthy expenses include:

  oOccupancy expense increased $85 thousand due to higher seasonal snow
    removal expenses, increased building depreciation expenses related to the
    Washington branch opened in late March 2012, and additional rental expense
    due to the termination of a sublease during 2012.
  oProcessing and communication expenses increased $27 thousand due to
    expenses related to our check cashing, merchant services and mortgage
    businesses.
  oDeposit insurance expense decreased $22 thousand for the quarter ended
    March 31, 2013 due to a lower assessment basis.
  oAdvertising expenses decreased $26 thousand for the quarter ended March
    31, 2013 due to a reduction in promotional gift expenses, the expiration
    of a third party marketing agreement and reduced promotional marketing.
  oOther expenses increased $106 thousand for the quarter due to higher
    employee recruiting, increased director fees and an increase to the
    reserve for unfunded loan commitments. 

Financial Condition

At March 31, 2013, total assets were $827.2 million, an increase of $7.5
million from the prior year end.

  oTotal securities increased $8.3 million since December 31, 2012, due to
    $21.3 million in security purchases, partially offset by sales and
    prepayments.
  oTotal loans increased $9.5 million or 1.6%, to $596.6 million at March 31,
    2013. The Company plans to continue shrinking its out of market SBA
    portfolio. Future loan growth is expected in both the commercial and
    residential portfolios. The net increase was the result of the following:

       oCommercial loans increased $9.1 million or 3.0%,
       oResidential mortgage loans increased $4.3 million or 3.2%,
       oSBA 504 loans decreased $1.7 million or 4.0%,
       oSBA 7(a) loans decreased $2.1 million or 3.2%, and
       oConsumer loans remained stable at $46.4 million. 

  oCore deposits, which exclude time deposits, increased $5.1 million during
    the quarter to $528.9 million, due to growth in retail deposits. The net
    changes by product type include:

       oA $3.7 million increase in noninterest-bearing demand deposits,
       oAn $802 thousand increase in savings deposits, and
       oA $536 thousand increase in interest-bearing demand deposits.

  oTime deposits decreased $1.7 million from year-end.
  oShareholders' equity was $78.2 million at March 31, 2013, an increase of
    $647 thousand from year-end 2012, primarily due to the increase in net
    income.
  oBook value per common share was $7.67 as of March 31, 2013.
  oAt March 31, 2013 the leverage, Tier I and Total Risk Based Capital ratios
    were 11.12%, 14.54% and 15.80% respectively, all in excess of the ratios
    required to be deemed "well-capitalized".

Credit Quality

"Nonperforming assets have declined $3.3 million or 17.3% to $16.0 million
since year-end 2012 and they have declined $7.9 million or 33.1% since March
31, 2012. We expect to have continued success in resolving problem credits in
2013," said James A. Hughes. "Many of our problem commercial and SBA
relationships have been resolved and the majority of our larger problem
relationships are behind us. We anticipate declines in charge-offs and
provisions for loan losses in future periods."

  oNonperforming assets totaled $16.0 million at March 31, 2013 or 2.67% of
    total loans and OREO, compared to $19.3 million or 3.28% of total loans
    and OREO at year-end 2012.
  oThe allowance for loan losses totaled $14.3 million at March 31, 2013 or
    2.40% of total loans. The provision for loan losses for the quarter ended
    March 31, 2013 was $650 thousand compared to $1.2 million for the prior
    year's quarter.
  oNet charge-offs were $1.1 million for the three months ended March 31,
    2013, compared to $1.2 million for the same period a year ago.
  oTroubled debt restructurings ("TDRs") increased $1.5 million from year-end
    to $16.2 million. At March 31, 2013, 93.3% of our TDRs were performing. 

Unity Bancorp, Inc. is a financial service organization headquartered in
Clinton, New Jersey, with approximately $827 million in assets and $652
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.



UNITY BANCORP, INC.
SUMMARY FINANCIAL HIGHLIGHTS
March 31, 2013
                                                           March 31, 2013
                                                           vs.
                                                           December   March
                                                           31, 2012   31,
                                                                      2012
(In thousands,
except             March 31,    December     March 31,
percentages and    2013         31, 2012     2012          %          %
per share
amounts)
BALANCE SHEET
DATA:
Total assets       $ 827,182    $ 819,730    $ 810,198     0.9      % 2.1    %
Total deposits       652,117      648,760      643,101     0.5        1.4
Total loans          596,571      587,036      582,752     1.6        2.4
Total securities     119,334      111,053      128,061     7.5        (6.8)
Total
shareholders'        78,157       77,510       74,002      0.8        5.6
equity
Allowance for        (14,345)     (14,758)     (16,339)    2.8        12.2
loan losses
FINANCIAL DATA -
QUARTER TO DATE:
Income before
provision for      $ 1,738      $ 1,810      $ 1,364       (4.0)      27.4
income taxes
Provision for        538          643          459         (16.3)     17.2
income taxes
Net income          1,200        1,167        905         2.8        32.6
Preferred stock
dividends and        403          408          396         (1.2)      1.8
discount
accretion
Income available
to common          $ 797        $ 759        $ 509         5.0        56.6
shareholders
Net income per
common share -     $ 0.11       $ 0.10       $ 0.07        10.0       57.1
Basic (1)
Net income per
common share -     $ 0.10       $ 0.10       $ 0.07        -          42.9
Diluted (1)
Return on average    0.59     %   0.57     %   0.45     %  3.5        31.1
assets
Return on average    5.65     %   5.34     %   3.81     %  5.8        48.3
equity (2)
Efficiency ratio     73.91    %   70.66    %   71.80    %  4.6        2.9
FINANCIAL DATA -
YEAR TO DATE:
Income before
provision for      $ 1,738                   $ 1,364                  27.4
income taxes
Provision for        538                       459                    17.2
income taxes
Net income          1,200                     905                    32.6
Preferred stock
dividends and        403                       396                    1.8
discount
accretion
Income available
to common          $ 797                     $ 509                    56.6
shareholders
Net income per
common share -     $ 0.11                    $ 0.07                   57.1
Basic (1)
Net income per
common share -     $ 0.10                    $ 0.07                   42.9
Diluted (1)
Return on average    0.59     %                0.45     %             31.1
assets
Return on average    5.65     %                3.81     %             48.3
equity (2)
Efficiency ratio     73.91    %                71.80    %             2.9
SHARE
INFORMATION:
Market price per   $ 6.51       $ 6.24       $ 6.24        4.3        4.3
share
Dividends paid     $ -          $ -          $ -           -          -
Book value per     $ 7.67       $ 7.62       $ 7.28        0.7        5.4
common share
Average diluted
shares               7,845        7,818        7,792       0.3        0.7
outstanding (QTD)
CAPITAL RATIOS:
Total equity to      9.45     %   9.46     %   9.13     %  (0.1)      3.5
total assets
Leverage ratio       11.12    %   11.14    %   10.67    %  (0.2)      4.2
Tier 1 risk-based    14.54    %   14.85    %   14.44    %  (2.1)      0.7
capital ratio
Total risk-based     15.80    %   16.12    %   15.71    %  (2.0)      0.6
capital ratio
CREDIT QUALITY
AND RATIOS:
Nonperforming      $ 15,956     $ 19,294     $ 23,831      (17.3)     (33.0)
assets
QTD net
chargeoffs           0.73     %   0.90     %   0.83     %  (18.9)     (12.0)
(annualized) to
QTD average loans
Allowance for
loan losses to       2.40     %   2.51     %   2.80     %  (4.4)      (14.3)
total loans
Nonperforming
assets to total      2.67     %   3.28     %   4.08     %  (18.6)     (34.6)
loans and OREO
Nonperforming
assets to total      1.93     %   2.35     %   2.94     %  (17.9)   % (34.4) %
assets
(1) Defined as net income adjusted for dividends accrued and
accretion of discount on perpetual preferred stock divided by
weighted average shares outstanding.
(2) Defined as net income adjusted for dividends accrued and accretion of
discount on perpetual preferred stock divided by average shareholders'
equity (excluding preferred stock).



UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2013
                                                           March 31, 2013
                                                           vs.
                                                           December   March
                                                           31, 2012   31,
                                                                      2012
(In thousands,        March 31,   December    March 31,    %          %
except percentages)   2013        31, 2012    2012
ASSETS
Cash and due from     $ 18,392    $ 23,705    $ 17,986     (22.4)   % 2.3    %
banks
Federal funds sold
and interest-bearing    61,584      70,487      53,831     (12.6)     14.4
deposits
Cash and cash           79,976      94,192      71,817     (15.1)     11.4
equivalents
Securities:
Securities available    91,067      89,538      110,181    1.7        (17.3)
for sale
Securities held to      28,267      21,515      17,880     31.4       58.1
maturity
Total securities        119,334     111,053     128,061    7.5        (6.8)
Loans:
SBA loans held for      6,556       6,937       8,015      (5.5)      (18.2)
sale
SBA loans held to       56,868      58,593      62,251     (2.9)      (8.6)
maturity
SBA 504 loans           39,784      41,438      47,651     (4.0)      (16.5)
Commercial loans        310,649     301,564     284,861    3.0        9.1
Residential mortgage    136,345     132,094     132,192    3.2        3.1
loans
Consumer loans          46,369      46,410      47,782     (0.1)      (3.0)
Total loans             596,571     587,036     582,752    1.6        2.4
Allowance for loan      (14,345)    (14,758)    (16,339)   2.8        12.2
losses
Net loans               582,226     572,278     566,413    1.7        2.8
Premises and            15,747      12,062      12,321     30.6       27.8
equipment, net
Bank owned life         9,472       9,402       9,179      0.7        3.2
insurance ("BOLI")
Deferred tax assets     6,241       5,954       7,115      4.8        (12.3)
Federal Home Loan       3,989       3,989       4,088      -          (2.4)
Bank stock
Accrued interest        3,362       3,298       3,672      1.9        (8.4)
receivable
Other real estate       1,052       1,826       1,625      (42.4)     (35.3)
owned ("OREO")
Prepaid FDIC            1,788       1,929       2,386      (7.3)      (25.1)
insurance
Goodwill and other      1,516       1,516       1,526      -          (0.7)
intangibles
Other assets            2,479       2,231       1,995      11.1       24.3
Total assets          $ 827,182   $ 819,730   $ 810,198    0.9      % 2.1    %
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing   $ 118,166   $ 114,424   $ 108,618    3.3      % 8.8    %
demand deposits
Interest-bearing        115,374     114,838     103,018    0.5        12.0
demand deposits
Savings deposits        295,335     294,533     281,535    0.3        4.9
Time deposits, under    75,374      76,994      94,513     (2.1)      (20.3)
$100,000
Time deposits,          47,868      47,971      55,417     (0.2)      (13.6)
$100,000 and over
Total deposits          652,117     648,760     643,101    0.5        1.4
Borrowed funds          75,000      75,000      75,000     -          -
Subordinated            15,465      15,465      15,465     -          -
debentures
Accrued interest        438         434         498        0.9        (12.0)
payable
Accrued expenses and    6,005       2,561       2,132      134.5      181.7
other liabilities
Total liabilities       749,025     742,220     736,196    0.9        1.7
Shareholders'
equity:
Cumulative perpetual    20,263      20,115      19,683     0.7        2.9
preferred stock
Common stock            54,357      54,274      53,846     0.2        0.9
Retained earnings       2,584       1,788       (345)      44.5       849.0
(deficit)
Accumulated other
comprehensive           953         1,333       818        (28.5)     16.5
income
Total shareholders'     78,157      77,510      74,002     0.8        5.6
equity
Total liabilities
and shareholders'     $ 827,182   $ 819,730   $ 810,198    0.9      % 2.1    %
equity
Preferred shares        21          21          21
Issued and
outstanding common      7,548       7,534       7,463
shares



                    UNITY BANCORP, INC.
                    QTD CONSOLIDATED STATEMENTS OF INCOME
                    March 31, 2013
                                                 March 31, 2013 vs.
                  For the three months          December 31,       March 31, 2012
                  ended                         2012
(In thousands,
except            March    December   March
percentages and   31,      31, 2012   31,        $        %         $        %
per share         2013                2012
amounts)
INTEREST INCOME
Federal funds
sold and          $ 14     $  16      $ 32       $ (2)     (12.5) % $ (18)    (56.3) %
interest-bearing
deposits
Federal Home        44        44        51         -       -          (7)     (13.7)
Loan Bank stock
Securities:
Taxable             647       644       752        3       0.5        (105)   (14.0)
Tax-exempt          120       103       142        17      16.5       (22)    (15.5)
Total securities    767       747       894        20      2.7        (127)   (14.2)
Loans:
SBA loans           777       779       924        (2)     (0.3)      (147)   (15.9)
SBA 504 loans       651       548       759        103     18.8       (108)   (14.2)
Commercial loans    4,001     4,270     4,183      (269)   (6.3)      (182)   (4.4)
Residential         1,550     1,577     1,655      (27)    (1.7)      (105)   (6.3)
mortgage loans
Consumer loans      509       521       560        (12)    (2.3)      (51)    (9.1)
Total loans         7,488     7,695     8,081      (207)   (2.7)      (593)   (7.3)
Total interest      8,313     8,502     9,058      (189)   (2.2)      (745)   (8.2)
income
INTEREST EXPENSE
Interest-bearing    101       119       136        (18)    (15.1)     (35)    (25.7)
demand deposits
Savings deposits    177       251       354        (74)    (29.5)     (177)   (50.0)
Time deposits       546       575       913        (29)    (5.0)      (367)   (40.2)
Borrowed funds
and subordinated    800       820       847        (20)    (2.4)      (47)    (5.5)
debentures
Total interest      1,624     1,765     2,250      (141)   (8.0)      (626)   (27.8)
expense
Net interest        6,689     6,737     6,808      (48)    (0.7)      (119)   (1.7)
income
Provision for       650       800       1,200      (150)   (18.8)     (550)   (45.8)
loan losses
Net interest
income after        6,039     5,937     5,608      102     1.7        431     7.7
provision for
loan losses
NONINTEREST
INCOME
Branch fee          347       397       386        (50)    (12.6)     (39)    (10.1)
income
Service and loan    304       297       302        7       2.4        2       0.7
fee income
Gain on sale of
SBA loans held      241       262       157        (21)    (8.0)      84      53.5
for sale, net
Gain on sale of
mortgage loans,     477       748       411        (271)   (36.2)     66      16.1
net
BOLI income         70        76        73         (6)     (7.9)      (3)     (4.1)
Net security        226       59        224        167     283.1      2       0.9
gains
Other income        160       169       162        (9)     (5.3)      (2)     (1.2)
Total
noninterest         1,825     2,008     1,715      (183)   (9.1)      110     6.4
income
NONINTEREST
EXPENSE
Compensation and    3,176     3,054     3,182      122     4.0        (6)     (0.2)
benefits
Occupancy           694       683       609        11      1.6        85      14.0
Processing and      561       549       534        12      2.2        27      5.1
communications
Furniture and       365       395       362        (30)    (7.6)      3       0.8
equipment
Professional        190       192       190        (2)     (1.0)      -       -
services
Loan collection     177       229       180        (52)    (22.7)     (3)     (1.7)
costs
OREO expenses       127       86        124        41      47.7       3       2.4
Deposit             149       163       171        (14)    (8.6)      (22)    (12.9)
insurance
Advertising         120       210       146        (90)    (42.9)     (26)    (17.8)
Other expenses      567       574       461        (7)     (1.2)      106     23.0
Total
noninterest         6,126     6,135     5,959      (9)     (0.1)      167     2.8
expense
Income before
provision for       1,738     1,810     1,364      (72)    (4.0)      374     27.4
income taxes
Provision for       538       643       459        (105)   (16.3)     79      17.2
income taxes
Net income         1,200     1,167     905        33      2.8        295     32.6
Preferred stock
dividends and       403       408       396        (5)     (1.2)      7       1.8
discount
accretion
Income available
to common         $ 797    $  759     $ 509      $ 38      5.0    % $ 288     56.6   %
shareholders
Effective tax       31.0  %   35.5  %   33.7  %
rate
Net income per
common share -    $ 0.11   $  0.10    $ 0.07
Basic (1)
Net income per
common share -    $ 0.10   $  0.10    $ 0.07
Diluted (1)
Weighted average
common shares       7,538     7,514     7,460
outstanding -
Basic
Weighted average
common shares       7,845     7,818     7,792
outstanding -
Diluted
(1) Defined as net income adjusted for dividends accrued
and accretion of discount on perpetual preferred stock
divided by weighted average shares outstanding.



                       UNITY BANCORP, INC.
                       QUARTER TO DATE NET INTEREST MARGIN
                       March 31, 2013
(Dollar amounts in thousands, interest amounts and interest
rates/yields on a fully tax-equivalent basis)
                     For the three months ended
                     March 31, 2013                       December 31, 2012
                     Average     Interest  Rate/Yield   Average     Interest  Rate/Yield
                     Balance                              Balance
ASSETS
Interest-earning
assets:
Federal funds sold
and                  $ 62,530    $  14          0.09    % $ 61,710    $  16          0.10    %
interest-bearing
deposits
Federal Home Loan      3,989        44          4.47        3,990        44          4.39
Bank stock
Securities:
Taxable                100,062      647         2.59        95,626       644         2.69
Tax-exempt             18,475       178         3.85        14,172       153         4.32
Total securities       118,537      825         2.79        109,798      797         2.91    %
(A)
Loans:
SBA loans              65,386       777         4.75        66,669       779         4.67
SBA 504 loans          41,135       651         6.42        41,584       548         5.24
Commercial loans       304,790      4,001       5.32        304,413      4,270       5.58
Residential            135,886      1,550       4.56        133,799      1,577       4.71
mortgage loans
Consumer loans         46,111       509         4.48        46,571       521         4.45
Total loans (B)        593,308      7,488       5.09        593,036      7,695       5.17
Total
interest-earning     $ 778,364   $  8,371       4.33    % $ 768,534   $  8,552       4.44    %
assets
Noninterest-earning
assets:
Cash and due from      19,737                               18,386
banks
Allowance for loan     (14,998)                             (15,566)
losses
Other assets           37,905                               38,312
Total
noninterest-earning    42,644                               41,132
assets
Total assets         $ 821,008                            $ 809,666
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing     $ 118,668   $  101         0.35    % $ 112,958   $  119         0.42    %
demand deposits
Savings deposits       295,520      177         0.24        287,047      251         0.35
Time deposits          122,695      546         1.80        126,233      575         1.81
Total
interest-bearing       536,883      824         0.62        526,238      945         0.72
deposits
Borrowed funds and
subordinated           90,465       800         3.54        90,498       820         3.55
debentures
Total
interest-bearing     $ 627,348   $  1,624       1.04    % $ 616,736   $  1,765       1.14    %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing    113,000                              113,164
demand deposits
Other liabilities      3,242                                3,181
Total
noninterest-bearing    116,242                              116,345
liabilities
Total shareholders'    77,418                               76,585
equity
Total liabilities
and shareholders'    $ 821,008                            $ 809,666
equity
Net interest spread              $  6,747       3.29    %             $  6,787       3.30    %
Tax-equivalent                      (58)                                 (50)
basis adjustment
Net interest income              $  6,689                             $  6,737
Net interest margin                             3.52    %                            3.51    %
(A) Yields related to securities exempt from federal and state income taxes are
stated on a fully tax-equivalent basis. They are reduced by the nondeductible
portion of interest expense,assuming a federal tax rate of 34 percent and
applicable state rates.
(B) The loan averages are stated net of unearned income, and the averages
include loans on which the accrual of interest has been discontinued.



                       UNITY BANCORP, INC.
                       QUARTER TO DATE NET INTEREST MARGIN
                       March 31, 2013
(Dollar amounts in thousands, interest amounts and interest
rates/yields on a fully tax-equivalent basis)
                     For the three months ended
                     March 31, 2013                       March 31, 2012
                     Average     Interest  Rate/Yield   Average     Interest  Rate/Yield
                     Balance                              Balance
ASSETS
Interest-earning
assets:
Federal funds sold
and                  $ 62,530    $  14          0.09    % $ 64,660    $  32          0.20    %
interest-bearing
deposits
Federal Home Loan      3,989        44          4.47        4,088        51          5.02
Bank stock
Securities:
Taxable                100,062      647         2.59        102,624      752         2.93
Tax-exempt             18,475       178         3.85        17,851       210         4.71
Total securities       118,537      825         2.79        120,475      962         3.19
(A)
Loans:
SBA loans              65,386       777         4.75        71,760       924         5.15
SBA 504 loans          41,135       651         6.42        51,710       759         5.90
Commercial loans       304,790      4,001       5.32        284,237      4,183       5.92
Residential            135,886      1,550       4.56        132,824      1,655       4.98
mortgage loans
Consumer loans         46,111       509         4.48        47,608       560         4.73
Total loans (B)        593,308      7,488       5.09        588,139      8,081       5.52
Total
interest-earning     $ 778,364   $  8,371       4.33    % $ 777,362   $  9,126       4.71    %
assets
Noninterest-earning
assets:
Cash and due from      19,737                               15,949
banks
Allowance for loan     (14,998)                             (16,788)
losses
Other assets           37,905                               40,287
Total
noninterest-earning    42,644                               39,448
assets
Total assets         $ 821,008                            $ 816,810
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing     $ 118,668   $  101         0.35    % $ 108,988   $  136         0.50    %
demand deposits
Savings deposits       295,520      177         0.24        283,261      354         0.50
Time deposits          122,695      546         1.80        156,999      913         2.34
Total
interest-bearing       536,883      824         0.62        549,248      1,403       1.03
deposits
Borrowed funds and
subordinated           90,465       800         3.54        90,465       847         3.70
debentures
Total
interest-bearing     $ 627,348   $  1,624       1.04    % $ 639,713   $  2,250       1.41    %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing    113,000                              100,496
demand deposits
Other liabilities      3,242                                3,249
Total
noninterest-bearing    116,242                              103,745
liabilities
Total shareholders'    77,418                               73,352
equity
Total liabilities
and shareholders'    $ 821,008                            $ 816,810
equity
Net interest spread              $  6,747       3.29    %             $  6,876       3.30    %
Tax-equivalent                      (58)                                 (68)
basis adjustment
Net interest income              $  6,689                             $  6,808
Net interest margin                             3.52    %                            3.56    %
(A) Yields related to securities exempt from federal and state income taxes are stated on a
fully tax-equivalent basis. They are reduced by the nondeductible portion of interest
expense,assuming a federal tax rate of 34 percent and applicable state rates.
(B) The loan averages are stated net of unearned income, and the averages
include loans on which the accrual of interest has been discontinued.



                       UNITY BANCORP, INC.
                       QUARTERLY ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY
                       SCHEDULES
                       March 31, 2013
Amounts in          March 31,    December   September   June 30,   March
thousands, except   2013         31, 2012   30, 2012    2012       31, 2012
percentages
ALLOWANCE FOR LOAN
LOSSES:
Balance, beginning  $  14,758    $ 15,294   $  16,284   $ 16,339   $ 16,348
of period
Provision for loan
losses charged to      650         800         1,000      1,000      1,200
expense
                       15,408      16,094      17,284     17,339     17,548
Less: Chargeoffs
SBA loans              570         251         254        213        615
SBA 504 loans          200         -           481        100        227
Commercial loans       375         1,190       1,428      540        346
Residential            125         152         65         494        113
mortgage loans
Consumer loans         59          -           31         25         -
Total chargeoffs       1,329       1,593       2,259      1,372      1,301
Add: Recoveries
SBA loans              137         22          195        249        53
SBA 504 loans          25          50          15         15         28
Commercial loans       101         184         58         53         11
Residential            2           -           -          -          -
mortgage loans
Consumer loans         1           1           1          -          -
Total recoveries       266         257         269        317        92
Net chargeoffs         1,063       1,336       1,990      1,055      1,209
Balance, end of     $  14,345    $ 14,758   $  15,294   $ 16,284   $ 16,339
period
LOAN QUALITY
INFORMATION:
Nonperforming       $  14,904    $ 17,468   $  17,334   $ 19,831   $ 22,206
loans (1)
Other real estate      1,052       1,826       1,456      2,355      1,625
owned ("OREO")
Nonperforming          15,956      19,294      18,790     22,186     23,831
assets
Less: Amount          1,863       1,849       566        526        555
guaranteed by SBA
Net nonperforming   $  14,093    $ 17,445   $  18,224   $ 21,660   $ 23,276
assets
Loans 90 days past
due & still         $  632       $ 109      $  1,630    $ 2,443    $ 3,165
accruing
Performing
Troubled Debt       $  15,068    $ 13,576   $  17,250   $ 20,541   $ 20,985
Restructurings
(TDRs)
(1) Nonperforming
TDRs included          1,084       1,087       1,628      871        2,287
above
Total TDRs          $  16,152    $ 14,663   $  18,878   $ 21,412   $ 23,272
Allowance for loan
losses to:
Total loans at         2.40    %   2.51   %    2.56   %   2.69   %   2.80   %
quarter end
Nonperforming          96.25       84.49       88.23      82.11      73.58
loans (1)
Nonperforming          89.90       76.49       81.39      73.40      68.56
assets
Net nonperforming      101.79      84.60       83.92      75.18      70.20
assets
QTD net chargeoffs
(annualized) to
QTD average loans:
SBA loans              2.69    %   1.37   %    0.35   %   (0.21) %   3.15   %
SBA 504 loans          1.73        (0.48)      4.16       0.73       1.55
Commercial loans       0.36        1.31        1.77       0.65       0.47
Residential            0.37        0.45        0.19       1.49       0.34
mortgage loans
Consumer loans         0.51        (0.01)      0.26       0.22       -
Total loans            0.73    %   0.90   %    1.32   %   0.71   %   0.83   %
Nonperforming
loans to total         2.50    %   2.98   %    2.90   %   3.28   %   3.81   %
loans
Nonperforming
loans and TDRs to      5.02        5.29        5.79       6.67       7.41
total loans
Nonperforming
assets to total        2.67        3.28        3.14       3.65       4.08
loans and OREO
Nonperforming
assets to total        1.93        2.35        2.34       2.83       2.94
assets



                    UNITY BANCORP, INC.
                    QUARTERLY FINANCIAL DATA
                    March 31, 2013
(In thousands,
except            March 31,   December     September    June 30,     March 31,
percentages and   2013        31, 2012     30, 2012     2012         2012
per share
amounts)
SUMMARY OF
INCOME:
Total interest    $ 8,313     $ 8,502      $ 8,871      $ 8,772      $ 9,058
income
Total interest      1,624       1,765        1,844        1,915        2,250
expense
Net interest        6,689       6,737        7,027        6,857        6,808
income
Provision for       650         800          1,000        1,000        1,200
loan losses
Net interest
income after        6,039       5,937        6,027        5,857        5,608
provision for
loan losses
Total
noninterest         1,825       2,008        1,774        1,841        1,715
income
Total
noninterest         6,126       6,135        5,999        6,204        5,959
expense
Income before
provision for       1,738       1,810        1,802        1,494        1,364
income taxes
Provision for       538         643          606          518          459
income taxes
Net income         1,200       1,167        1,196        976          905
Preferred stock
dividends and       403         408          397          401          396
discount
accretion
Income available
to common         $ 797       $ 759        $ 799        $ 575        $ 509
shareholders
Net income per
common share -    $ 0.11      $ 0.10       $ 0.11       $ 0.08       $ 0.07
Basic (1)
Net income per
common share -    $ 0.10      $ 0.10       $ 0.10       $ 0.07       $ 0.07
Diluted (1)
COMMON SHARE
DATA:
Market price per  $ 6.51      $ 6.24       $ 6.13       $ 6.00       $ 6.24
share
Dividends paid    $ -         $ -          $ -          $ -          $ -
Book value per    $ 7.67      $ 7.62       $ 7.52       $ 7.38       $ 7.28
common share
Weighted average
common shares       7,538       7,514        7,473        7,462        7,460
outstanding -
Basic
Weighted average
common shares       7,845       7,818        7,782        7,784        7,792
outstanding -
Diluted
Issued and
outstanding         7,548       7,534        7,503        7,461        7,463
common shares
OPERATING RATIOS
(Annualized):
Return on           0.59     %  0.57     %   0.60     %   0.49     %   0.45     %
average assets
Return on
average equity      5.65        5.34         5.74         4.25         3.81
(2)
Efficiency ratio    73.91       70.66        68.22        73.72        71.80
BALANCE SHEET
DATA:
Total assets      $ 827,182   $ 819,730    $ 802,675    $ 785,111    $ 810,198
Total deposits      652,117     648,760      633,126      616,443      643,101
Total loans         596,571     587,036      596,910      604,901      582,752
Total securities    119,334     111,053      106,437      114,846      128,061
Total
shareholders'       78,157      77,510       76,387       74,901       74,002
equity
Allowance for       (14,345)    (14,758)     (15,294)     (16,284)     (16,339)
loan losses
TAX EQUIVALENT
YIELDS AND
RATES:
Interest-earning    4.33     %  4.44     %   4.70     %   4.70     %   4.71     %
assets
Interest-bearing    1.04        1.14         1.19         1.25         1.41
liabilities
Net interest        3.29        3.30         3.51         3.45         3.30
spread
Net interest        3.52        3.51         3.72         3.68         3.56
margin
CREDIT QUALITY:
Nonperforming       15,956      19,294       18,790       22,186       23,831
assets
QTD net
chargeoffs
(annualized) to     0.73     %  0.90     %   1.32     %   0.71     %   0.83     %
QTD average
loans
Allowance for
loan losses to      2.40        2.51         2.56         2.69         2.80
total loans
Nonperforming
assets to total     2.67        3.28         3.14         3.65         4.08
loans and OREO
Nonperforming
assets to total     1.93        2.35         2.34         2.83         2.94
assets
CAPITAL RATIOS
AND OTHER:
Total equity to     9.45     %  9.46     %   9.52     %   9.54     %   9.13     %
total assets
Leverage ratio      11.12       11.14        11.20        11.08        10.67
Tier 1
risk-based          14.54       14.85        14.52        14.22        14.44
capital ratio
Total risk-based    15.80       16.12        15.78        15.49        15.71
capital ratio
Number of           15          15           15           15           15
banking offices
Number of ATMs      16          16           16           16           16
Number of           166         165          161          169          171
employees
(1) Defined as net income adjusted for dividends accrued and
accretion of discount on perpetual preferred stock divided by
weighted average shares outstanding.
(2) Defined as net income adjusted for dividends accrued and accretion of
discount on perpetual preferred stock divided by average shareholders' equity
(excluding preferred stock).



SOURCE Unity Bancorp, Inc.

Website: http://www.unitybank.com
Contact: News Media & Financial Analyst Contact: Alan J. Bedner, EVP, Chief
Financial Officer, (908) 713-4308
 
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