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Unity Bancorp Reports 48.1% Increase in Quarterly Earnings and 52.0% Increase in Year to Date Earnings



Unity Bancorp Reports 48.1% Increase in Quarterly Earnings and 52.0% Increase
                           in Year to Date Earnings

PR Newswire

CLINTON, N.J., Oct. 24, 2013

CLINTON, N.J., Oct. 24, 2013 /PRNewswire/ -- Unity Bancorp, Inc. (NASDAQ:
UNTY), parent company of Unity Bank, reported net income available to common
shareholders of $1.2 million, or $0.15 per diluted share, for the three months
ended September 30, 2013, a 48.1% increase compared to $799 thousand, or $0.10
per diluted share, for the same period a year ago.  Return on average assets
and average common equity for the quarter were 0.62% and 8.25%, respectively,
compared to 0.60% and 5.74% for the same period a year ago. 

During the third quarter, Unity:

  o Redeemed the remaining $10.3 million of preferred stock issued in
    connection with participation in the Treasury's Capital Purchase Program
    ("CPP") on July 3, 2013.
  o Repurchased the warrants issued in connection with the CPP for $2.7
    million.
  o Realized record growth in commercial loans with a 15.6% increase since
    year-end 2012.
  o Closed $37.5 million in residential mortgage loans for the third quarter
    and $122.9 million year-to-date. 
  o Expanded the Small Business Administration ("SBA") lending division with
    the addition of two new loan officers.
  o Continued to reduce noninterest expense compared to the prior year and
    prior quarter periods.
  o Although nonperforming loans increased, we reduced the number of
    delinquent loan accounts compared to the prior quarter and year-end
    periods. 
  o Rang the closing bell at NASDAQ on August 22, 2013, commemorating Unity
    Bancorp's 15^th anniversary of listing on the exchange.

"This was a pivotal quarter for Unity," reported James A. Hughes, President
and CEO.  "We repaid the TARP, realized record loan and deposit growth,
expanded net revenue and our earnings have increased substantially over prior
periods.  I anticipate that these positive trends will continue for the
foreseeable future."

For the nine months ended September 30, 2013, net income available to common
shareholders totaled $2.9 million, or $0.36 per diluted share, a 52.0%
increase compared to $1.9 million or $0.24 per diluted share for the
comparable period of 2012.  Return on average assets and average common equity
for the nine month periods were 0.63% and 6.67%, respectively, compared to
0.51% and 4.61% for the same period a year ago. 

Net Interest Income

Compared to a year ago, net interest income decreased $156 thousand and $327
thousand for the three and nine month periods, respectively.  The net interest
margin was 3.53% and 3.57% for the quarter and year-to-date periods,
respectively.  While net interest income is lower than the prior year, on a
linked quarter basis it has increased as lower deposit rates and increased
commercial and residential mortgage loan volume have helped to offset lower
yields on our securities and loan portfolios.  We expect net interest income
to continue to expand in future quarters due to strong loan growth.    

Provision for Loan Losses

The provision for loan losses for the quarter ended September 30, 2013, was
$600 thousand compared to $1.0 million for the prior year's quarter, and for
the nine month period ended September 30, 2013, the provision declined to $1.6
million from $3.2 million in the first nine months of 2012.  The reduced
provision reflects a lower level of net charge-offs for the quarter and
year-to-date periods. 

Noninterest Income

Noninterest income decreased $124 thousand to $1.7 million for the three
months and $198 thousand to $5.1 million for the nine months ended September
30, 2013, compared to the same periods last year. The decreases during both
periods were driven by lower sales volume and subsequent gains on residential
mortgage loan sales, as we held a larger number of these loans in our
portfolio.  These decreases were partially offset by increased gains on the
sale of SBA loans due to a higher volume of loans sold.

During the quarter, $14.1 million in residential mortgage loans were sold at a
gain of $314 thousand, compared to $30.1 million sold at a gain of $662
thousand during the prior year's quarter.  For the nine month period, $62.6
million in residential mortgage loans were sold at a gain of $1.3 million,
compared to $71.6 million sold at a gain of $1.5 million during the prior
year's period.  We do not anticipate the rise in interest rates to have a
material impact on our residential mortgage origination volume.

SBA loan sales totaled $3.1 million with gains on sale of $280 thousand for
the quarter compared to sales of $442 thousand and $46 thousand in gains
during the prior year's quarter.  For the nine month period, SBA loan sales
totaled $6.3 million with gains on sale of $607 thousand compared to sales of
$4.7 million and $427 thousand in gains during the prior year's quarter.  With
the addition of SBA loan officers this quarter we expect to see an increase in
the volume of local SBA loan originations.

Noninterest Expense

Noninterest expense decreased $64 thousand to $5.9 million for the three
months ended September 30, 2013, while year-to-date expense decreased $25
thousand to $18.1 million.  The decreases in each of these periods were the
result of lower mortgage commissions as we held a larger portion of originated
mortgages in our portfolio, reduced salary compensation from position
vacancies and lower occupancy expense as a result of cost savings realized
from the purchase of three of our previously leased locations.   Other notable
expense fluctuations included an increase in other real estate owned ("OREO")
expenses during the quarter due to a property valuation adjustment, net loss
on sales and property management expenses.   On a year-to-date basis,
advertising expenses declined based on the timing of retail branch related
promotions, loan collection costs remain elevated due to higher appraisal,
insurance and other collection costs, and recruiting and director expenses
increased.

Financial Condition

At September 30, 2013, total assets were $876.1 million, an increase of $56.4
million from the prior year end:

  o Total loans increased $73.6 million or 12.5%, to $660.6 million at
    September 30, 2013. This growth came from our commercial and residential
    mortgage loan portfolios which increased $47.1 million and $41.0 million,
    respectively.  Future loan growth is expected in both of these portfolios,
    while the Company plans to continue shrinking it's out of market SBA
    portfolio.
  o Total deposits increased $78.4 million or 12.1%, to $727.1 million at
    September 30, 2013, due to growth in noninterest-bearing deposits, time
    deposits and interest-bearing demand deposits.  This increase included a
    $36 million short-term noninterest-bearing demand deposit account which is
    expected to decline by year-end.  Excluding this account, total deposits
    increased $42.4 million or 6.5 %.  Time deposits have increased $38.1
    million from year-end, with the majority of this coming in the third
    quarter in response to a certificate of deposit ("CD") promotion and the
    addition of brokered CDs.
  o Shareholders' equity was $55.9 million at September 30, 2013, a decrease
    of $21.6 million from year-end 2012, due primarily to the redemption of
    $20.6 million in preferred stock issued in connection with the CPP and
    repurchase of the related warrants for $2.7 million. 
  o Book value per common share was $7.41 as of September 30, 2013.
  o At September 30, 2013, the leverage, Tier I and Total Risk Based Capital
    ratios were 8.33%, 10.81% and 12.07% respectively, all in excess of the
    ratios required to be deemed "well-capitalized". 

Credit Quality

  o Nonperforming assets totaled $17.9 million at September 30, 2013, or 2.70%
    of total loans and OREO, compared to $19.3 million or 3.28% of total loans
    and OREO at year-end 2012. Nonperforming assets increased $3.8 million
    compared to the quarter-ended June 30, 2013, primarily due to the addition
    of a $3.0 million commercial real estate loan. Although nonperforming
    assets have increased, credit quality has improved as the number of
    delinquent loans has fallen. We are optimistic that we will continue to
    have further improvement in credit quality.
  o OREO decreased $577 thousand to $1.2 million at September 30, 2013, due to
    the sale of 10 properties.
  o The allowance for loan losses totaled $13.6 million at September 30, 2013,
    or 2.05% of total loans.
  o Net charge-offs were $1.4 million for the three months ended September 30,
    2013, compared to $2.0 million for the same period a year ago.  For the
    nine months ended September 30, 2013, net charge-offs were $2.8 million
    compared to $4.3 million for the prior year period.
  o Troubled debt restructurings ("TDRs") decreased $5.2 million from year-end
    to $9.5 million due to principal pay downs, a refinanced transaction and
    the addition of one loan.  At September 30, 2013, 81.0% of our TDRs were
    performing.  

Unity Bancorp, Inc. is a financial service organization headquartered in
Clinton, New Jersey, with approximately $876 million in assets and $727
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 
September 30, 2013
                                                          September 30, 2013
                                                          vs.
                                                          June     September
                                                          30,      30, 2012
                                                          2013
(In thousands,
except            September    June 30,     September
percentages and   30, 2013     2013         30, 2012      %        %
per share
amounts)
BALANCE SHEET
DATA:
Total assets      $ 876,101    $ 824,575    $ 802,675     6.2    % 9.1       %
Total deposits      727,112      628,369      633,126     15.7     14.8
Total loans         660,617      622,316      596,910     6.2      10.7
Total securities    106,906      111,269      106,437     (3.9)    0.4
Total
shareholders'       55,939       68,287       76,387      (18.1)   (26.8)
equity
Allowance for       (13,550)     (14,309)     (15,294)    5.3      11.4
loan losses
FINANCIAL DATA -
QUARTER TO DATE:
Income before
provision for     $ 1,986      $ 2,086      $ 1,802       (4.8)    10.2
income taxes
Provision for       684          739          606         (7.4)    12.9
income taxes
Net income          1,302        1,347        1,196       (3.3)    8.9
Preferred stock
dividends and       119          465          397         (74.4)   (70.0)
discount
accretion
Income available
to common         $ 1,183      $ 882        $ 799         34.1     48.1
shareholders
Net income per
common share -    $ 0.16       $ 0.12       $ 0.11        33.3     45.5
Basic (1)
Net income per
common share -    $ 0.15       $ 0.11       $ 0.10        36.4     50.0
Diluted (1)
Return on           0.62     %   0.67     %   0.60     %  (7.5)    3.3
average assets
Return on
average equity      8.25     %   6.11     %   5.74     %  35.0     43.7
(2)
Efficiency ratio    69.93    %   72.72    %   68.22    %  (3.8)    2.5
FINANCIAL DATA -
YEAR TO DATE:
Income before
provision for     $ 5,810                   $ 4,660                24.7
income taxes
Provision for       1,962                     1,583                23.9
income taxes
Net income          3,848                     3,077                25.1
Preferred stock
dividends and       988                       1,195                (17.3)
discount
accretion
Income available
to common         $ 2,860                   $ 1,882                52.0
shareholders
Net income per
common share -    $ 0.38                    $ 0.25                 52.0
Basic (1)
Net income per
common share -    $ 0.36                    $ 0.24                 50.0
Diluted (1)
Return on           0.63     %                0.51     %           23.5
average assets
Return on
average equity      6.67     %                4.61     %           44.7
(2)
Efficiency ratio    72.17    %                71.20    %           1.4
SHARE
INFORMATION:
Market price per  $ 7.46       $ 7.10       $ 6.13        5.1      21.7
share
Dividends paid    $ 0.01       $ 0.01       $ -           -        100.0
Book value per    $ 7.41       $ 7.70       $ 7.52        (3.8)    (1.5)
common share
Average diluted
shares              7,822        7,911        7,782       (1.1)    0.5
outstanding
(QTD)
CAPITAL RATIOS:
Total equity to     6.38     %   8.28     %   9.52     %  (22.9)   (33.0)
total assets
Leverage ratio      8.33     %   10.23    %   11.20    %  (18.6)   (25.6)
Tier 1
risk-based          10.81    %   13.36    %   14.52    %  (19.1)   (25.6)
capital ratio
Total risk-based    12.07    %   14.63    %   15.78    %  (17.5)   (23.5)
capital ratio
CREDIT QUALITY
AND RATIOS:
Nonperforming     $ 17,903     $ 14,109     $ 18,790      26.9     (4.7)
assets
QTD net
chargeoffs
(annualized) to     0.84     %   0.22     %   1.32     %  281.8    (36.4)
QTD average
loans
Allowance for
loan losses to      2.05     %   2.30     %   2.56     %  (10.9)   (19.9)
total loans
Nonperforming
assets to total     2.70     %   2.26     %   3.14     %  19.5     (14.0)
loans and OREO
Nonperforming
assets to total     2.04     %   1.71     %   2.34     %  19.3   % (12.8)    %
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 
September 30, 2013
                                                           September 30, 2013
                                                          vs. 
                                                          December   September
                                                          31, 2012   30, 2012
(In thousands,       September   December    September    %          %
except percentages)  30, 2013    31, 2012    30, 2012
ASSETS
Cash and due from    $ 27,602    $ 23,705    $ 17,027     16.4     % 62.1      %
banks
Federal funds sold
and                    47,124      70,487      55,536     (33.1)     (15.1)
interest-bearing
deposits
Cash and cash          74,726      94,192      72,563     (20.7)     3.0
equivalents
Securities:
Securities             80,926      89,538      90,852     (9.6)      (10.9)
available for sale
Securities held to     25,980      21,515      15,585     20.8       66.7
maturity
Total securities       106,906     111,053     106,437    (3.7)      0.4
Loans:
SBA loans held for     5,893       6,937       7,708      (15.0)     (23.5)
sale
SBA loans held to      50,445      58,593      59,299     (13.9)     (14.9)
maturity
SBA 504 loans          37,041      41,438      41,771     (10.6)     (11.3)
Commercial loans       348,625     301,564     306,569    15.6       13.7
Residential            173,129     132,094     137,192    31.1       26.2
mortgage loans
Consumer loans         45,484      46,410      44,371     (2.0)      2.5
Total loans            660,617     587,036     596,910    12.5       10.7
Allowance for loan     (13,550)    (14,758)    (15,294)   8.2        11.4
losses
Net loans              647,067     572,278     581,616    13.1       11.3
Premises and           15,671      12,062      12,016     29.9       30.4
equipment, net
Bank owned life        12,648      9,402       9,327      34.5       35.6
insurance ("BOLI")
Deferred tax assets    6,880       5,954       6,221      15.6       10.6
Federal Home Loan      3,952       3,989       3,989      (0.9)      (0.9)
Bank stock
Accrued interest       3,131       3,298       3,478      (5.1)      (10.0)
receivable
Other real estate      1,249       1,826       1,456      (31.6)     (14.2)
owned ("OREO")
Prepaid FDIC           -           1,929       2,079      (100.0)    (100.0)
insurance
Goodwill and other     1,516       1,516       1,518      -          (0.1)
intangibles
Other assets           2,355       2,231       1,975      5.6        19.2
Total assets         $ 876,101   $ 819,730   $ 802,675    6.9      % 9.1       %
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Liabilities:
Deposits:
Noninterest-bearing  $ 163,617   $ 114,424   $ 105,529    43.0     % 55.0      %
demand deposits
Interest-bearing       119,579     114,838     104,469    4.1        14.5
demand deposits
Savings deposits       280,892     294,533     295,567    (4.6)      (5.0)
Time deposits,         95,990      76,994      78,104     24.7       22.9
under $100,000
Time deposits,         67,034      47,971      49,457     39.7       35.5
$100,000 and over
Total deposits         727,112     648,760     633,126    12.1       14.8
Borrowed funds         75,000      75,000      75,000     -          -
Subordinated           15,465      15,465      15,465     -          -
debentures
Accrued interest       430         434         464        (0.9)      (7.3)
payable
Accrued expenses
and other              2,155       2,561       2,233      (15.9)     (3.5)
liabilities
Total liabilities      820,162     742,220     726,288    10.5       12.9
Shareholders'
equity:
Cumulative
perpetual preferred    -           20,115      19,968     (100.0)    (100.0)
stock
Common stock           51,944      54,274      54,176     (4.3)      (4.1)
Retained earnings      4,408       1,788       1,028      146.5      328.8
Accumulated other
comprehensive          (413)       1,333       1,215      (131.0)    (134.0)
income (loss)
Total shareholders'    55,939      77,510      76,387     (27.8)     (26.8)
equity
Total liabilities
and shareholders'    $ 876,101   $ 819,730   $ 802,675    6.9      % 9.1       %
equity
Preferred shares       -           21          21
Issued and
outstanding common     7,546       7,534       7,503
shares

 

 

                     UNITY BANCORP, INC.
                     QTD CONSOLIDATED STATEMENTS OF INCOME 
                     September 30, 2013
                                                     September 30, 2013 vs. 
                   For the three months ended       June 30, 2013      September 30,
                                                                       2012
(In thousands,
except            September  June      September
percentages and   30, 2013   30,       30, 2012     $        %         $        %
per share                    2013
amounts)
INTEREST INCOME
Federal funds
sold and          $  9       $ 7       $  13        $ 2       28.6   % $ (4)     (30.8) %
interest-bearing
deposits
Federal Home         40        35         50          5       14.3       (10)    (20.0)
Loan Bank stock
Securities:
Taxable              591       620        694         (29)    (4.7)      (103)   (14.8)
Tax-exempt           109       125        108         (16)    (12.8)     1       0.9
Total securities     700       745        802         (45)    (6.0)      (102)   (12.7)
Loans:
SBA loans            586       778        881         (192)   (24.7)     (295)   (33.5)
SBA 504 loans        411       441        647         (30)    (6.8)      (236)   (36.5)
Commercial loans     4,387     4,250      4,313       137     3.2        74      1.7
Residential          1,861     1,649      1,631       212     12.9       230     14.1
mortgage loans
Consumer loans       480       496        534         (16)    (3.2)      (54)    (10.1)
Total loans          7,725     7,614      8,006       111     1.5        (281)   (3.5)
Total interest       8,474     8,401      8,871       73      0.9        (397)   (4.5)
income
INTEREST EXPENSE
Interest-bearing     90        90         108         -       -          (18)    (16.7)
demand deposits
Savings deposits     183       164        293         19      11.6       (110)   (37.5)
Time deposits        510       537        619         (27)    (5.0)      (109)   (17.6)
Borrowed funds
and subordinated     820       808        824         12      1.5        (4)     (0.5)
debentures
Total interest       1,603     1,599      1,844       4       0.3        (241)   (13.1)
expense
Net interest         6,871     6,802      7,027       69      1.0        (156)   (2.2)
income
Provision for        600       300        1,000       300     100.0      (400)   (40.0)
loan losses
Net interest
income after         6,271     6,502      6,027       (231)   (3.6)      244     4.0
provision for
loan losses
NONINTEREST
INCOME
Branch fee           398       348        383         50      14.4       15      3.9
income
Service and loan     351       319        366         32      10.0       (15)    (4.1)
fee income
Gain on sale of
SBA loans held       280       86         46          194     225.6      234     508.7
for sale, net
Gain on sale of
mortgage loans,      314       547        662         (233)   (42.6)     (348)   (52.6)
net
BOLI income          100       75         74          25      33.3       26      35.1
Net security         34        108        7           (74)    (68.5)     27      385.7
gains 
Other income         173       175        236         (2)     (1.1)      (63)    (26.7)
Total
noninterest          1,650     1,658      1,774       (8)     (0.5)      (124)   (7.0)
income
NONINTEREST
EXPENSE
Compensation and     2,984     3,166      3,191       (182)   (5.7)      (207)   (6.5)
benefits
Occupancy            598       627        690         (29)    (4.6)      (92)    (13.3)
Processing and       598       562        544         36      6.4        54      9.9
communications
Furniture and        374       371        368         3       0.8        6       1.6
equipment
Professional         210       234        196         (24)    (10.3)     14      7.1
services
Loan collection      188       228        182         (40)    (17.5)     6       3.3
costs
OREO expenses        174       63         36          111     176.2      138     383.3
Deposit              165       179        162         (14)    (7.8)      3       1.9
insurance
Advertising          218       181        181         37      20.4       37      20.4
Other expenses       426       463        449         (37)    (8.0)      (23)    (5.1)
Total
noninterest          5,935     6,074      5,999       (139)   (2.3)      (64)    (1.1)
expense
Income before
provision for        1,986     2,086      1,802       (100)   (4.8)      184     10.2
income taxes
Provision for        684       739        606         (55)    (7.4)      78      12.9
income taxes
Net income           1,302     1,347      1,196       (45)    (3.3)      106     8.9
Preferred stock
dividends and        119       465        397         (346)   (74.4)     (278)   (70.0)
discount
accretion
Income available
to common         $  1,183   $ 882     $  799       $ 301     34.1   % $ 384     48.1   %
shareholders
Effective tax        34.4   %  35.4  %    33.6   %
rate
Net income per
common share -    $  0.16    $ 0.12    $  0.11
Basic (1)
Net income per
common share -    $  0.15    $ 0.11    $  0.10
Diluted (1)
Weighted average
common shares        7,545     7,544      7,473
outstanding -
Basic
Weighted average
common shares        7,822     7,911      7,782
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.
YTD CONSOLIDATED STATEMENTS OF INCOME
September 30, 2013
                          For the nine months    Current YTD vs.
                         ended September 30,     Prior YTD
(In thousands, except
percentages and per      2013         2012       $          %
share amounts)
INTEREST INCOME
Federal funds sold and
interest-bearing         $  31        $ 56       $ (25)      (44.6) %
deposits
Federal Home Loan Bank      118         144        (26)      (18.1)
stock
Securities:
Taxable                     1,858       2,177      (319)     (14.7)
Tax-exempt                  354         371        (17)      (4.6)
Total securities            2,212       2,548      (336)     (13.2)
Loans:
SBA loans                   2,141       2,652      (511)     (19.3)
SBA 504 loans               1,503       2,098      (595)     (28.4)
Commercial loans            12,638      12,707     (69)      (0.5)
Residential mortgage        5,060       4,869      191       3.9
loans
Consumer loans              1,485       1,624      (139)     (8.6)
Total loans                 22,827      23,950     (1,123)   (4.7)
Total interest income       25,188      26,698     (1,510)   (5.7)
INTEREST EXPENSE
Interest-bearing            281         368        (87)      (23.6)
demand deposits
Savings deposits            524         933        (409)     (43.8)
Time deposits               1,593       2,222      (629)     (28.3)
Borrowed funds and
subordinated                2,428       2,486      (58)      (2.3)
debentures
Total interest expense      4,826       6,009      (1,183)   (19.7)
Net interest income         20,362      20,689     (327)     (1.6)
Provision for loan          1,550       3,200      (1,650)   (51.6)
losses
Net interest income
after provision for         18,812      17,489     1,323     7.6
loan losses
NONINTEREST INCOME
Branch fee income           1,093       1,131      (38)      (3.4)
Service and loan fee        975         954        21        2.2
income
Gain on sale of SBA
loans held for sale,        607         427        180       42.2
net
Gain on sale of             1,339       1,526      (187)     (12.3)
mortgage loans, net
BOLI income                 246         220        26        11.8
Net security gains          367         514        (147)     (28.6)
Other income                505         558        (53)      (9.5)
Total noninterest           5,132       5,330      (198)     (3.7)
income
NONINTEREST EXPENSE
Compensation and            9,325       9,505      (180)     (1.9)
benefits
Occupancy                   1,918       2,038      (120)     (5.9)
Processing and              1,720       1,631      89        5.5
communications
Furniture and               1,110       1,085      25        2.3
equipment
Professional services       634         598        36        6.0
Loan collection costs       594         453        141       31.1
OREO expenses               364         398        (34)      (8.5)
Deposit insurance           493         502        (9)       (1.8)
Advertising                 519         630        (111)     (17.6)
Other expenses              1,457       1,319      138       10.5
Total noninterest           18,134      18,159     (25)      (0.1)
expense
Income before
provision for income        5,810       4,660      1,150     24.7
taxes
Provision for income        1,962       1,583      379       23.9
taxes
Net income                  3,848       3,077      771       25.1
Preferred stock
dividends and discount      988         1,195      (207)     (17.3)
accretion
Income available to      $  2,860     $ 1,882    $ 978       52.0   %
common shareholders
Effective tax rate          33.8        34.0
Net income per common    $  0.38        0.25
share - Basic (1)
Net income per common    $  0.36        0.24
share - Diluted (1)
Weighted average
common shares               7,542       7,465
outstanding - Basic
Weighted average
common shares               7,867       7,786
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 
                       September 30, 2013
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully
tax-equivalent basis)
                     For the three months ended
                     September 30, 2013                   June 30, 2013
                     Average     Interest   Rate/Yield    Average     Interest   Rate/Yield 
                     Balance                              Balance
ASSETS
Interest-earning
assets:
Federal funds sold
and                  $ 25,841    $  9           0.14    % $ 25,312    $  7           0.11    %
interest-bearing
deposits
Federal Home Loan      4,022        40          3.95        4,007        35          3.50
Bank stock
Securities:
Taxable                87,694       591         2.70        95,675       620         2.59
Tax-exempt             18,474       162         3.51        20,440       186         3.64
Total securities       106,168      753         2.84        116,115      806         2.77
(A)
Loans:
SBA loans              59,755       586         3.92        63,007       778         4.94
SBA 504 loans          37,971       411         4.29        39,408       441         4.49
Commercial loans       335,404      4,387       5.19        315,128      4,250       5.41
Residential            163,805      1,861       4.54        143,835      1,649       4.59
mortgage loans
Consumer loans         45,709       480         4.17        45,295       496         4.39
Total loans (B)        642,644      7,725       4.78        606,673      7,614       5.03
Total
interest-earning     $ 778,675   $  8,527       4.36    % $ 752,107   $  8,462       4.51    %
assets
Noninterest-earning
assets:
Cash and due from      24,367                               22,866
banks
Allowance for loan     (14,310)                             (14,747)
losses
Other assets           44,184                               41,435
Total
noninterest-earning    54,241                               49,554
assets
Total assets         $ 832,916                            $ 801,661
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing     $ 115,085   $  90          0.31    % $ 116,414   $  90          0.31    %
demand deposits
Savings deposits       277,501      183         0.26        270,097      164         0.24
Time deposits          150,533      510         1.34        124,285      537         1.73
Total
interest-bearing       543,119      783         0.57        510,796      791         0.62
deposits
Borrowed funds and
subordinated           92,025       820         3.49        91,653       808         3.49
debentures
Total
interest-bearing     $ 635,144   $  1,603       0.99    % $ 602,449   $  1,599       1.06    %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing    137,711                              122,635
demand deposits
Other liabilities      2,918                                3,554
Total
noninterest-bearing    140,629                              126,189
liabilities
Total shareholders'    57,143                               73,023
equity
Total liabilities
and shareholders'    $ 832,916                            $ 801,661
equity
Net interest spread              $  6,924       3.37    %             $  6,863       3.45    %
Tax-equivalent                      (53)                                 (61)
basis adjustment
Net interest income              $  6,871                             $  6,802
Net interest margin                             3.53    %                            3.66    %
(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 
                       September 30, 2013
(Dollar amounts in thousands, interest amounts and interest
rates/yields on a fully tax-equivalent basis)
                     For the three months ended
                     September 30, 2013                   September 30, 2012
                     Average     Interest   Rate/Yield    Average     Interest   Rate/Yield 
                     Balance                              Balance
ASSETS
Interest-earning
assets:
Federal funds sold
and                  $ 25,841    $  9           0.14    % $ 40,183    $  13          0.13    %
interest-bearing
deposits
Federal Home Loan      4,022        40          3.95        3,989        50          4.99
Bank stock
Securities:
Taxable                87,694       591         2.70        97,389       694         2.85
Tax-exempt             18,474       162         3.51        14,271       161         4.51
Total securities       106,168      753         2.84        111,660      855         3.06
(A)
Loans:
SBA loans              59,755       586         3.92        66,484       881         5.30
SBA 504 loans          37,971       411         4.29        44,583       647         5.77
Commercial loans       335,404      4,387       5.19        307,090      4,313       5.59
Residential            163,805      1,861       4.54        136,568      1,631       4.78
mortgage loans
Consumer loans         45,709       480         4.17        46,116       534         4.61
Total loans (B)        642,644      7,725       4.78        600,841      8,006       5.31
Total
interest-earning     $ 778,675   $  8,527       4.36    % $ 756,673   $  8,924       4.70    %
assets
Noninterest-earning
assets:
Cash and due from      24,367                               16,211
banks
Allowance for loan     (14,310)                             (16,508)
losses
Other assets           44,184                               40,138
Total
noninterest-earning    54,241                               39,841
assets
Total assets         $ 832,916                            $ 796,514
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing     $ 115,085   $  90          0.31    % $ 103,029   $  108         0.42    %
demand deposits
Savings deposits       277,501      183         0.26        287,054      293         0.41
Time deposits          150,533      510         1.34        131,356      619         1.87
Total
interest-bearing       543,119      783         0.57        521,439      1,020       0.78
deposits
Borrowed funds and
subordinated           92,025       820         3.49        90,465       824         3.56
debentures
Total
interest-bearing     $ 635,144   $  1,603       0.99    % $ 611,904   $  1,844       1.19    %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing    137,711                              105,876
demand deposits
Other liabilities      2,918                                3,469
Total
noninterest-bearing    140,629                              109,345
liabilities
Total shareholders'    57,143                               75,265
equity
Total liabilities
and shareholders'    $ 832,916                            $ 796,514
equity
Net interest spread              $  6,924       3.37    %             $  7,080       3.51    %
Tax-equivalent                      (53)                                 (53)
basis adjustment
Net interest income              $  6,871                             $  7,027
Net interest margin                             3.53    %                            3.72    %
(A) Yields related to securities exempt from federal and state income taxes are stated on a
fully tax-equivalent basis.  They are reduced by the nondeductible portion of interest  
expense, assuming a federal tax rate of 34 percent and applicable state rates.
(B) The loan averages are stated net of unearned income, and the averages include loans on
which the accrual of interest has been discontinued.

 

 

                     UNITY BANCORP, INC.
                     YEAR TO DATE NET INTEREST MARGIN 
                     September 30, 2013
(Dollar amounts in thousands, interest amounts and
interest rates/yields on a fully tax-equivalent basis)
                     For the nine months ended
                     September 30, 2013                   September 30, 2012
                     Average     Interest   Rate/Yield    Average     Interest   Rate/Yield 
                     Balance                              Balance
ASSETS
Interest-earning
assets:
Federal funds sold
and                  $ 37,760    $ 31           0.11    % $ 45,206    $ 56           0.17    %
interest-bearing
deposits
Federal Home Loan      4,006       118          3.94        4,023       144          4.78
Bank stock
Securities:
Taxable                94,431      1,858        2.62        101,955     2,177        2.85
Tax-exempt             19,130      525          3.66        15,886      550          4.62
Total securities       113,561     2,383        2.80        117,841     2,727        3.08
(A)
Loans:
SBA loans              62,695      2,141        4.55        69,162      2,652        5.11
SBA 504 loans          39,493      1,503        5.09        47,687      2,098        5.88
Commercial loans       318,554     12,638       5.30        298,279     12,707       5.69
Residential            147,944     5,060        4.56        134,353     4,869        4.83
mortgage loans
Consumer loans         45,703      1,485        4.34        46,459      1,624        4.67
Total loans (B)        614,389     22,827       4.96        595,940     23,950       5.36
Total
interest-earning     $ 769,716   $ 25,359       4.40    % $ 763,010   $ 26,877       4.70    %
assets
Noninterest-earning
assets:
Cash and due from      22,340                               16,088
banks
Allowance for loan     (14,682)                             (16,758)
losses
Other assets           41,198                               40,068
Total
noninterest-earning    48,856                               39,398
assets
Total assets         $ 818,572                            $ 802,408
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing     $ 116,709   $ 281          0.32    % $ 107,437   $ 368          0.46    %
demand deposits
Savings deposits       280,973     524          0.25        280,459     933          0.44
Time deposits          132,607     1,593        1.61        142,263     2,222        2.09
Total
interest-bearing       530,289     2,398        0.61        530,159     3,523        0.89
deposits
Borrowed funds and
subordinated           91,387      2,428        3.50        90,465      2,486        3.61
debentures
Total
interest-bearing     $ 621,676   $ 4,826        1.03    % $ 620,624   $ 6,009        1.29    %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing    124,539                              104,145
demand deposits
Other liabilities      3,237                                3,386
Total
noninterest-bearing    127,776                              107,531
liabilities
Total shareholders'    69,120                               74,253
equity
Total liabilities
and shareholders'    $ 818,572                            $ 802,408
equity
Net interest spread              $ 20,533       3.37    %             $ 20,868       3.41    %
Tax-equivalent                     (171)                                (179)
basis adjustment
Net interest income              $ 20,362                             $ 20,689
Net interest margin                             3.57    %                            3.65    %
(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 
                        September 30, 2013
Amounts in           September   June 30,   March 31,   December   September
thousands, except    30, 2013    2013       2013        31, 2012   30, 2012
percentages 
ALLOWANCE FOR LOAN
LOSSES:
Balance, beginning   $  14,309   $ 14,345   $  14,758   $ 15,294   $  16,284
of period
Provision for loan
losses charged to       600        300         650        800         1,000
expense
                        14,909     14,645      15,408     16,094      17,284
Less: Chargeoffs
SBA loans               211        167         570        251         254
SBA 504 loans           590        200         200        -           481
Commercial loans        253        200         375        1,190       1,428
Residential             125        -           125        152         65
mortgage loans
Consumer loans          229        -           59         -           31
Total chargeoffs        1,408      567         1,329      1,593       2,259
Add: Recoveries
SBA loans               12         8           137        22          195
SBA 504 loans           -          154         25         50          15
Commercial loans        24         65          101        184         58
Residential             13         2           2          -           -
mortgage loans
Consumer loans          -          2           1          1           1
Total recoveries        49         231         266        257         269
Net chargeoffs          1,359      336         1,063      1,336       1,990
Balance, end of      $  13,550   $ 14,309   $  14,345   $ 14,758   $  15,294
period
LOAN QUALITY
INFORMATION:
Nonperforming loans  $  16,654   $ 13,357   $  14,904   $ 17,468   $  17,334
(1)
Other real estate       1,249      752         1,052      1,826       1,456
owned ("OREO")
Nonperforming           17,903     14,109      15,956     19,294      18,790
assets
Less:  Amount           592        736         1,863      1,849       566
guaranteed by SBA
Net nonperforming    $  17,311   $ 13,373   $  14,093   $ 17,445   $  18,224
assets
Loans 90 days past
due & still          $  861      $ 429      $  632      $ 109      $  1,630
accruing
Performing Troubled
Debt Restructurings  $  7,705    $ 10,649   $  15,068   $ 13,576   $  17,250
(TDRs)
(1) Nonperforming
TDRs included in        1,765      1,658       1,084      1,087       1,628
nonperforming loans
Total TDRs           $  9,470    $ 12,307   $  16,152   $ 14,663   $  18,878
Allowance for loan
losses to:
Total loans at          2.05   %   2.30   %    2.40   %   2.51   %    2.56   %
quarter end
Nonperforming loans     81.36      107.13      96.25      84.49       88.23
(1)
Nonperforming           75.69      101.42      89.90      76.49       81.39
assets
Net nonperforming       78.27      107.00      101.79     84.60       83.92
assets
QTD net chargeoffs
(annualized) to QTD
average loans:
SBA loans               1.32   %   1.01   %    2.69   %   1.37   %    0.35   %
SBA 504 loans           6.16       0.47        1.73       (0.48)      4.16
Commercial loans        0.27       0.17        0.36       1.31        1.77
Residential             0.27       (0.01)      0.37       0.45        0.19
mortgage loans
Consumer loans          1.99       (0.02)      0.51       (0.01)      0.26
Total loans             0.84   %   0.22   %    0.73   %   0.90   %    1.32   %
Nonperforming loans     2.52   %   2.15   %    2.50   %   2.98   %    2.90   %
to total loans
Nonperforming loans
and TDRs to total       3.69       3.86        5.02       5.29        5.79
loans
Nonperforming
assets to total         2.70       2.26        2.67       3.28        3.14
loans and OREO
Nonperforming
assets to total         2.04       1.71        1.93       2.35        2.34
assets

 

 

                    UNITY BANCORP, INC.
                    QUARTERLY FINANCIAL DATA 
                    September 30, 2013
(In thousands,
except            September   June 30,     March 31,    December     September
percentages and   30, 2013    2013         2013         31, 2012     30, 2012
per share
amounts)
SUMMARY OF
INCOME:
Total interest    $ 8,474     $ 8,401      $ 8,313      $ 8,502      $ 8,871
income
Total interest      1,603       1,599        1,624        1,765        1,844
expense
Net interest        6,871       6,802        6,689        6,737        7,027
income
Provision for       600         300          650          800          1,000
loan losses
Net interest
income after        6,271       6,502        6,039        5,937        6,027
provision for
loan losses
Total
noninterest         1,650       1,658        1,825        2,008        1,774
income
Total
noninterest         5,935       6,074        6,126        6,135        5,999
expense
Income before
provision for       1,986       2,086        1,738        1,810        1,802
income taxes
Provision for       684         739          538          643          606
income taxes
Net income          1,302       1,347        1,200        1,167        1,196
Preferred stock
dividends and       119         465          404          408          397
discount
accretion
Income available
to common         $ 1,183     $ 882        $ 796        $ 759        $ 799
shareholders
Net income per
common share -    $ 0.16      $ 0.12       $ 0.11       $ 0.10       $ 0.11
Basic (1)
Net income per
common share -    $ 0.15      $ 0.11       $ 0.10       $ 0.10       $ 0.10
Diluted (1)
COMMON SHARE
DATA:
Market price per  $ 7.46      $ 7.10       $ 6.51       $ 6.24       $ 6.13
share
Dividends paid    $ 0.01      $ 0.01       $ -          $ -          $ -
Book value per    $ 7.41      $ 7.70       $ 7.67       $ 7.62       $ 7.52
common share
Weighted average
common shares       7,545       7,544        7,538        7,514        7,473
outstanding -
Basic
Weighted average
common shares       7,822       7,911        7,845        7,818        7,782
outstanding -
Diluted
Issued and
outstanding         7,546       7,544        7,548        7,534        7,503
common shares
OPERATING RATIOS
(Annualized):
Return on           0.62     %  0.67     %   0.59     %   0.57     %   0.60     %
average assets
Return on
average equity      8.25        6.11         5.65         5.34         5.74
(2)
Efficiency ratio    69.93       72.72        73.91        70.66        68.22
BALANCE SHEET
DATA:
Total assets      $ 876,101   $ 824,575    $ 827,182    $ 819,730    $ 802,675
Total deposits      727,112     628,369      652,117      648,760      633,126
Total loans         660,617     622,316      596,571      587,036      596,910
Total securities    106,906     111,269      119,334      111,053      106,437
Total
shareholders'       55,939      68,287       78,157       77,510       76,387
equity
Allowance for       (13,550)    (14,309)     (14,345)     (14,758)     (15,294)
loan losses
TAX EQUIVALENT
YIELDS AND
RATES:
Interest-earning    4.36     %  4.51     %   4.33     %   4.44     %   4.70     %
assets
Interest-bearing    0.99        1.06         1.04         1.14         1.19
liabilities
Net interest        3.37        3.45         3.29         3.30         3.51
spread
Net interest        3.53        3.66         3.52         3.51         3.72
margin
CREDIT QUALITY:
Nonperforming       17,903      14,109       15,956       19,294       18,790
assets
QTD net
chargeoffs
(annualized) to     0.84     %  0.22     %   0.73     %   0.90     %   1.32     %
QTD average
loans
Allowance for
loan losses to      2.05        2.30         2.40         2.51         2.56
total loans
Nonperforming
assets to total     2.70        2.26         2.67         3.28         3.14
loans and OREO
Nonperforming
assets to total     2.04        1.71         1.93         2.35         2.34
assets
CAPITAL RATIOS
AND OTHER:
Total equity to     6.38     %  8.28     %   9.45     %   9.46     %   9.52     %
total assets
Leverage ratio      8.33        10.23        11.12        11.14        11.20
Tier 1
risk-based          10.81       13.36        14.54        14.85        14.52
capital ratio
Total risk-based    12.07       14.63        15.80        16.12        15.78
capital ratio
Number of           15          15           15           15           15
banking offices
Number of ATMs      16          16           16           16           16
Number of           160         153          166          165          161
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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