0000920427-18-000107.txt : 20181018 0000920427-18-000107.hdr.sgml : 20181018 20181018165235 ACCESSION NUMBER: 0000920427-18-000107 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20181018 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20181018 DATE AS OF CHANGE: 20181018 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITY BANCORP INC /NJ/ CENTRAL INDEX KEY: 0000920427 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 223282551 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12431 FILM NUMBER: 181128744 BUSINESS ADDRESS: STREET 1: 64 OLD HIGHWAY 22 CITY: CLINTON STATE: NJ ZIP: 08809 BUSINESS PHONE: 9087307630 MAIL ADDRESS: STREET 1: 64 OLD HIGHWAY 22 CITY: CLINTON STATE: NJ ZIP: 08809 FORMER COMPANY: FORMER CONFORMED NAME: UNITY BANCORP INC /DE/ DATE OF NAME CHANGE: 19940316 8-K 1 unty-8k3q18earnings.htm 8-K Document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

October 18, 2018
Date of Report (Date of earliest event reported)
__________________________________unitylogoa11.jpg
UNITY BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)

New Jersey
(State or Other Jurisdiction of Incorporation)

1-12431
(Commission File Number)

22-3282551
(IRS Employer Identification No.)

64 Old Highway 22
Clinton, NJ 08809
(Address of Principal Executive Office)

(908) 730-7630
(Registrant's Telephone Number, Including Area Code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02     Results of Operation and Financial Condition

The Registrant issued a press release on October 18, 2018 announcing results for the three and nine months ended September 30, 2018, the full text of which is incorporated by reference to this Item.

Item 9.01    Financial Statements and Exhibits

(d) Exhibits

Exhibit 99.1Press release issued by the Registrant on October 18, 2018.



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.



UNITY BANCORP, INC.
(Registrant)


Date: October 18, 2018
By: /s/ Alan J. Bedner
Alan J. Bedner
EVP and Chief Financial Officer






EXHIBIT INDEX
 

EXHIBIT #    DESCRIPTION

99.1        Press release issued by the Registrant on October 18, 2018




EX-99.1 2 a3q18earningsexhibit991.htm EXHIBIT 99.1 Exhibit


For Immediate Release
News Media & Financial Analyst Contact:
Unity Bancorp, Inc. (NSDQ: UNTY)
Alan J. Bedner, EVP and CFO
October 18, 2018
(908) 713-4308

ulogoa02.jpg Unity Bancorp Reports ulogoa03.jpg
Quarterly Earnings up 46% over Prior Year

capture1.jpg

Clinton, NJ, October 18, 2018 - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $5.5 million, or $0.50 per diluted share, for the quarter ended September 30, 2018, compared to $3.8 million, or $0.35 per diluted share, for the prior year’s third quarter.  Approximately $775 thousand, or $0.07 per diluted share, of this increase is attributed to the lower effective tax rate due to the tax reform bill.





For the nine months ended September 30, 2018, Unity reported net income of $16.1 million, or $1.48 per diluted share, compared to $10.4 million, or $0.97 per diluted share for the prior year’s period. Approximately $2.3 million, or $0.21 per diluted share, of this increase is attributed to the lower effective tax rate due to the tax reform bill.
Third Quarter Earnings Highlights

Net interest income, our primary driver of earnings, increased $1.8 million to $13.6 million for the quarter ended September 30, 2018, compared to the prior year’s quarter, due to strong loan growth and an increased net interest margin.
Net interest margin expanded 4 basis points to 3.92%, compared to 3.88% for the prior year’s quarter. The net interest margin declined slightly from 3.95% in the prior sequential quarter ended June 30, 2018, due to the rising cost of deposits. The net interest margin is expected to remain stable as we actively manage the spread between our loan pricing and cost of funding in this rising interest rate environment.
The provision for loan losses was stable at $500 thousand during the quarters ended September 30, 2018 and 2017. Asset quality remains strong.
Noninterest income increased $471 thousand to $2.5 million compared to the prior year’s quarter and $167 thousand compared to the prior sequential quarter. The quarter included a $291 thousand death benefit on bank-owned life insurance.
Noninterest expense increased $1.2 million to $8.8 million compared to the prior year’s quarter and $643 thousand compared to the prior sequential quarter. The year-over-year increase was the result of expansion costs from two additional branches and increased headcount which resulted in higher compensation, benefits, occupancy and equipment expenses. Noninterest expense included two nonrecurring transactions this quarter: an $850 thousand supplemental executive retirement (“SERP”) benefit expense, partially offset by a $317 thousand legal settlement related to an OREO property. The SERP expense represents the time of service cost due to modifying the SERP benefit for our President and CEO to equal 60 percent of the average of his base salary for the thirty-six months prior to separation, as compared to the previous 40 percent.
The effective tax rate declined to 18.6% for the quarter compared to 34.9% in the prior year’s quarter, as a result of the “Tax Cuts and Jobs Act,” which was enacted December 22, 2017, and lowered the corporate tax rate. The effective tax rate in the quarter also benefited from the exercise of stock options. The effective tax rate is expected to range between 25% and 27% in January 2019 as a result of the recent NJ tax legislation.

Balance Sheet Highlights

Total loans increased $112.6 million, or 9.6%, from year-end 2017 to $1.3 billion at September 30, 2018. Commercial, residential mortgage and consumer loan portfolios increased $68.2 million, $48.5 million, and $8.6 million, respectively, partially offset by a decline of $12.7 million in SBA loans. Our pipeline in all categories remains strong. Mortgage originations year-to-date totaled $170.5 million through September 30, 2018 and are at a record level.
Total deposits increased $176.3 million, or 16.9%, from year-end 2017 to $1.2 billion at September 30, 2018. Growth in noninterest-bearing demand deposits was 5.9% from year-end 2017.
Borrowed funds decreased $95.0 million to $180.0 million at September 30, 2018, due to decreased overnight borrowings, the maturity of a repo and FHLB advances being called.
Shareholders’ equity was $133.1 million at September 30, 2018, an increase of $15.0 million from year-end 2017, due to retained net income offset in part by declines in other comprehensive income resulting from unrealized losses on securities.
Book value per common share was $12.37 as of September 30, 2018.
At September 30, 2018, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 9.74%, 11.15%, 12.00% and 13.25% respectively, all in excess of the ratios required to be deemed “well-capitalized.”
Credit quality remains strong with nonperforming assets to total assets of 0.39% at September 30, 2018.

Other Highlights
Unity Bancorp has been named to the Sandler O’Neill Sm-All Stars Class of 2018. This prestigious award recognizes financial institutions, with a market capitalization below $2.5 billion, based on criteria such as growth, profitability, credit quality and capital strength. Unity was one of only thirty publicly traded banks and thrifts recognized and one of two banks headquartered in New Jersey, which were recognized.








Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.6 billion in assets and $1.2 billion in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 19 retail service centers located in Bergen, Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County in Pennsylvania. For additional information about Unity, visit our website at www.unitybank.com , or call 800-618-BANK.
This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements may be identified by use of the words “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company’s control and could impede its ability to achieve these goals. These factors include those items included in our Annual Report on Form 10-K under the heading “Item IA-Risk Factors” as well as general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, our ability to manage and reduce the level of our nonperforming assets, and results of regulatory exams, among other factors.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.








UNITY BANCORP, INC.
SUMMARY FINANCIAL HIGHLIGHTS
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2018 vs.
 
 
 
 
 
 
 
 
 
 
Jun 30, 2018
 
Sep 30, 2017
 
(In thousands, except percentages and per share amounts)
 
Sep 30, 2018
 
Jun 30, 2018
 
Sep 30, 2017
 
 
 %
 
 %
 
BALANCE SHEET DATA:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
1,553,152

 
$
1,514,120

 
$
1,329,834

 
 
2.6
 %
 
16.8
 %
 
Total deposits
 
1,219,473

 
1,146,399

 
1,043,632

 
 
6.4

 
16.8

 
Total loans
 
1,283,304

 
1,246,511

 
1,092,873

 
 
3.0

 
17.4

 
Total securities
 
63,399

 
65,682

 
72,105

 
 
(3.5
)
 
(12.1
)
 
Total shareholders' equity
 
133,067

 
128,141

 
115,814

 
 
3.8

 
14.9

 
Allowance for loan losses
 
(14,988
)
 
(14,634
)
 
(13,113
)
 
 
2.4

 
14.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL DATA - QUARTER TO DATE:
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
$
6,745

 
$
6,748

 
$
5,771

 
 

 
16.9

 
Provision for income taxes
 
1,255

 
1,351

 
2,014

 
 
(7.1
)
 
(37.7
)
 
Net income
 
$
5,490

 
$
5,397

 
$
3,757

 
 
1.7

 
46.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.51

 
$
0.50

 
$
0.36

 
 
2.0

 
41.7

 
Net income per common share - Diluted
 
$
0.50

 
$
0.49

 
$
0.35

 
 
2.0

 
42.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.50

%
1.53

%
1.17

%
 
(2.0
)
 
28.2

 
Return on average equity
 
16.64

%
17.32

%
13.00

%
 
(3.9
)
 
28.0

 
Efficiency ratio
 
54.86

%
52.80

%
54.86

%
 
3.9

 

 
Net interest margin
 
3.92

%
3.95

%
3.88

%
 
(0.8
)
 
1.0

 
Noninterest expense to average assets
 
2.41

%
2.32

%
2.35

%
 
3.9

 
2.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL DATA - YEAR TO DATE:
 
 
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
$
19,958

 
 
 
$
16,025

 
 
 
 
24.5

 
Provision for income taxes
 
3,841

 
 
 
5,632

 
 
 
 
(31.8
)
 
Net income
 
$
16,117

 
 
 
$
10,393

 
 
 
 
55.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
1.50

 
 
 
$
0.99

 
 
 
 
51.5

 
Net income per common share - Diluted
 
$
1.48

 
 
 
$
0.97

 
 
 
 
52.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.52

%
 
 
1.12

%
 
 
 
35.7

 
Return on average equity
 
17.14

%
 
 
12.51

%
 
 
 
37.0

 
Efficiency ratio
 
53.90

%
 
 
56.72

%
 
 
 
(5.0
)
 
Net interest margin
 
3.95

%
 
 
3.79

%
 
 
 
4.2

 
Noninterest expense to average assets
 
2.38

%
 
 
2.41

%
 
 
 
(1.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SHARE INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
 
Market price per share
 
$
22.90

 
$
22.75

 
$
19.80

 
 
0.7

 
15.7

 
Dividends paid
 
$
0.07

 
$
0.07

 
$
0.06

 
 

 
16.7

 
Book value per common share
 
$
12.37

 
$
11.94

 
$
10.94

 
 
3.6

 
13.1

 
Average diluted shares outstanding (QTD)
 
10,936

 
10,915

 
10,761

 
 
0.2

 
1.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
Total equity to total assets
 
8.57

%
8.46

%
8.71

%
 
1.3

 
(1.6
)
 
Leverage ratio
 
9.74

%
9.63

%
9.70

%
 
1.1

 
0.4

 
Common equity tier 1 risk-based capital ratio
 
11.15

%
11.05

%
11.27

%
 
0.9

 
(1.1
)
 
Tier 1 risk-based capital ratio
 
12.00

%
11.92

%
12.26

%
 
0.7

 
(2.1
)
 
Total risk-based capital ratio
 
13.25

%
13.14

%
13.30

%
 
0.8

 
(0.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





CREDIT QUALITY AND RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
$
6,043

 
$
5,265

 
$
4,449

 
 
14.8

 
35.8

 
QTD net chargeoffs (annualized) to QTD average loans
 
0.05

%
0.04

%
0.07

%
 
25.0

 
(28.6
)
 
Allowance for loan losses to total loans
 
1.17

%
1.17

%
1.20

%
 

 
(2.5
)
 
Nonperforming assets to total loans
and OREO
 
0.47

%
0.42

%
0.41

%
 
11.9

 
14.6

 
Nonperforming assets to total assets
 
0.39

%
0.35

%
0.33

%
 
11.4
 %
 
18.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 






UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2018 vs.
 
 
 
 
 
 
 
 
 
 
Dec 31, 2017
 
Sep 30, 2017
 
(In thousands, except percentages)
 
Sep 30, 2018
 
Dec 31, 2017
 
Sep 30, 2017
 
 
 %
 
 %
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
23,217

 
$
23,701

 
$
20,318

 
 
(2.0
) %
 
14.3
 %
 
Federal funds sold, interest-bearing deposits and repos
 
121,339

 
126,553

 
84,512

 
 
(4.1
)
 
43.6

 
Cash and cash equivalents
 
144,556

 
150,254

 
104,830

 
 
(3.8
)
 
37.9

 
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Securities available for sale
 
46,874

 
52,287

 
51,538

 
 
(10.4
)
 
(9.0
)
 
Securities held to maturity
 
15,325

 
16,307

 
19,355

 
 
(6.0
)
 
(20.8
)
 
Equity securities
 
1,200

 
1,206

 
1,212

 
 
(0.5
)
 
(1.0
)
 
Total securities
 
63,399

 
69,800

 
72,105

 
 
(9.2
)
 
(12.1
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans held for sale
 
13,029

 
22,810

 
17,724

 
 
(42.9
)
 
(26.5
)
 
SBA loans held for investment
 
41,051

 
43,999

 
44,001

 
 
(6.7
)
 
(6.7
)
 
Commercial loans
 
697,075

 
628,865

 
591,005

 
 
10.8

 
17.9

 
Residential mortgage loans
 
413,652

 
365,145

 
330,787

 
 
13.3

 
25.1

 
Consumer loans
 
118,497

 
109,855

 
109,356

 
 
7.9

 
8.4

 
Total loans
 
1,283,304

 
1,170,674

 
1,092,873

 
 
9.6

 
17.4

 
Allowance for loan losses
 
(14,988
)
 
(13,556
)
 
(13,113
)
 
 
10.6

 
14.3

 
Net loans
 
1,268,316

 
1,157,118

 
1,079,760

 
 
9.6

 
17.5

 
Premises and equipment, net
 
23,416

 
23,470

 
23,080

 
 
(0.2
)
 
1.5

 
Bank owned life insurance ("BOLI")
 
24,544

 
24,227

 
24,047

 
 
1.3

 
2.1

 
Deferred tax assets
 
5,310

 
4,017

 
5,842

 
 
32.2

 
(9.1
)
 
Federal Home Loan Bank ("FHLB") stock
 
9,445

 
12,863

 
7,328

 
 
(26.6
)
 
28.9

 
Accrued interest receivable
 
6,412

 
5,447

 
5,222

 
 
17.7

 
22.8

 
Other real estate owned ("OREO")
 
56

 
426

 
707

 
 
(86.9
)
 
(92.1
)
 
Goodwill
 
1,516

 
1,516

 
1,516

 
 

 

 
Other assets
 
6,182

 
6,358

 
5,397

 
 
(2.8
)
 
14.5

 
Total assets
 
$
1,553,152

 
$
1,455,496

 
$
1,329,834

 
 
6.7
 %
 
16.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
 
$
271,321

 
$
256,119

 
$
258,519

 
 
5.9
 %
 
5.0
 %
 
Interest-bearing demand
 
180,189

 
164,997

 
166,529

 
 
9.2

 
8.2

 
Savings
 
408,927

 
396,557

 
403,871

 
 
3.1

 
1.3

 
Time Deposits
 
359,036

 
225,464

 
214,713

 
 
59.2

 
67.2

 
Total deposits
 
1,219,473

 
1,043,137

 
1,043,632

 
 
16.9

 
16.8

 
Borrowed funds
 
180,000

 
275,000

 
152,000

 
 
(34.5
)
 
18.4

 
Subordinated debentures
 
10,310

 
10,310

 
10,310

 
 

 

 
Accrued interest payable
 
506

 
436

 
400

 
 
16.1

 
26.5

 
Accrued expenses and other liabilities
 
9,796

 
8,508

 
7,678

 
 
15.1

 
27.6

 
Total liabilities
 
1,420,085

 
1,337,391

 
1,214,020

 
 
6.2

 
17.0

 
Shareholders' equity:
 
 
 
 
 
 
 
 
 
 
 
 
Common stock
 
88,149

 
86,782

 
86,423

 
 
1.6

 
2.0

 
Retained earnings
 
45,121

 
31,117

 
29,260

 
 
45.0

 
54.2

 
Accumulated other comprehensive (loss)
 
(203
)
 
206

 
131

 
 
  NM
 
    NM
 
Total shareholders' equity
 
133,067

 
118,105

 
115,814

 
 
12.7

 
14.9

 
Total liabilities and shareholders' equity
 
$
1,553,152

 
$
1,455,496

 
$
1,329,834

 
 
6.7
 %
 
16.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issued and outstanding common shares
 
10,756

 
10,615

 
10,586

 
 
 
 
 
 
NM=Not meaningful





UNITY BANCORP, INC.
QTD CONSOLIDATED STATEMENTS OF INCOME
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2018 vs.
 
 
 
 For the three months ended
 
 
Jun 30, 2018
 
Sep 30, 2017
 
(In thousands, except percentages and per share amounts)
 
Sep 30, 2018
 
Jun 30, 2018
 
Sep 30, 2017
 
 
$
 
%
 
$
 
%
 
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
187

 
$
171

 
$
262

 
 
$
16

 
9.4
%
 
$
(75
)
 
(28.6
)%
 
FHLB stock
 
101

 
123

 
85

 
 
(22
)
 
(17.9
)
 
16

 
18.8

 
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
465

 
484

 
512

 
 
(19
)
 
(3.9
)
 
(47
)
 
(9.2
)
 
Tax-exempt
 
28

 
30

 
40

 
 
(2
)
 
(6.7
)
 
(12
)
 
(30.0
)
 
Total securities
 
493

 
514

 
552

 
 
(21
)
 
(4.1
)
 
(59
)
 
(10.7
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
1,050

 
1,131

 
1,042

 
 
(81
)
 
(7.2
)
 
8

 
0.8

 
Commercial loans
 
8,784

 
8,209

 
7,211

 
 
575

 
7.0

 
1,573

 
21.8

 
Residential mortgage loans
 
4,803

 
4,522

 
3,636

 
 
281

 
6.2

 
1,167

 
32.1

 
Consumer loans
 
1,776

 
1,699

 
1,407

 
 
77

 
4.5

 
369

 
26.2

 
Total loans
 
16,413

 
15,561

 
13,296

 
 
852

 
5.5

 
3,117

 
23.4

 
Total interest income
 
17,194

 
16,369

 
14,195

 
 
825

 
5.0

 
2,999

 
21.1

 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
330

 
259

 
168

 
 
71

 
27.4

 
162

 
96.4

 
Savings deposits
 
1,049

 
943

 
733

 
 
106

 
11.2

 
316

 
43.1

 
Time deposits
 
1,739

 
1,303

 
823

 
 
436

 
33.5

 
916

 
111.3

 
Borrowed funds and subordinated debentures
 
509

 
720

 
654

 
 
(211
)
 
(29.3
)
 
(145
)
 
(22.2
)
 
Total interest expense
 
3,627

 
3,225

 
2,378

 
 
402

 
12.5

 
1,249

 
52.5

 
Net interest income
 
13,567

 
13,144

 
11,817

 
 
423

 
3.2

 
1,750

 
14.8

 
Provision for loan losses
 
500

 
550

 
500

 
 
(50
)
 
(9.1
)
 

 

 
Net interest income after provision for loan losses
 
13,067

 
12,594

 
11,317

 
 
473

 
3.8

 
1,750

 
15.5

 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branch fee income
 
357

 
419

 
355

 
 
(62
)
 
(14.8
)
 
2

 
0.6

 
Service and loan fee income
 
465

 
411

 
448

 
 
54

 
13.1

 
17

 
3.8

 
Gain on sale of SBA loans held for sale, net
 
253

 
582

 
385

 
 
(329
)
 
(56.5
)
 
(132
)
 
(34.3
)
 
Gain on sale of mortgage loans, net
 
597

 
421

 
392

 
 
176

 
41.8

 
205

 
52.3

 
BOLI income
 
464

 
175

 
111

 
 
289

 
165.1

 
353

 
318.0

 
Net security gains
 
2

 
7

 
53

 
 
(5
)
 
(71.4
)
 
(51
)
 
(96.2
)
 
Other income
 
341

 
297

 
264

 
 
44

 
14.8

 
77

 
29.2

 
Total noninterest income
 
2,479

 
2,312

 
2,008

 
 
167

 
7.2

 
471

 
23.5

 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
5,704

 
4,736

 
4,268

 
 
968

 
20.4

 
1,436

 
33.6

 
Occupancy
 
675

 
693

 
600

 
 
(18
)
 
(2.6
)
 
75

 
12.5

 
Processing and communications
 
709

 
674

 
656

 
 
35

 
5.2

 
53

 
8.1

 
Furniture and equipment
 
586

 
610

 
513

 
 
(24
)
 
(3.9
)
 
73

 
14.2

 
Professional services
 
270

 
161

 
247

 
 
109

 
67.7

 
23

 
9.3

 
Loan collection & OREO expenses
 
(331
)
 
6

 
114

 
 
(337
)
 
(5,616.7
)
 
(445
)
 
(390.4
)
 
Other loan expenses
 
51

 
53

 
47

 
 
(2
)
 
(3.8
)
 
4

 
8.5

 
Deposit insurance
 
191

 
216

 
156

 
 
(25
)
 
(11.6
)
 
35

 
22.4

 
Advertising
 
370

 
362

 
299

 
 
8

 
2.2

 
71

 
23.7

 
Director fees
 
175

 
165

 
150

 
 
10

 
6.1

 
25

 
16.7

 
Other expenses
 
401

 
482

 
504

 
 
(81
)
 
(16.8
)
 
(103
)
 
(20.4
)
 
Total noninterest expense
 
8,801

 
8,158

 
7,554

 
 
643

 
7.9

 
1,247

 
16.5

 
Income before provision for income taxes
 
6,745

 
6,748

 
5,771

 
 
(3
)
 

 
974

 
16.9

 
Provision for income taxes
 
1,255

 
1,351

 
2,014

 
 
(96
)
 
(7.1
)
 
(759
)
 
(37.7
)
 
Net income
 
$
5,490

 
$
5,397

 
$
3,757

 
 
$
93

 
1.7
%
 
$
1,733

 
46.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





Effective tax rate
 
18.6
%
 
20.0
%
 
34.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.51

 
$
0.50

 
$
0.36

 
 
 
 
 
 
 
 
 
 
Net income per common share - Diluted
 
$
0.50

 
$
0.49

 
$
0.35

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,743

 
10,717

 
10,572

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Diluted
 
10,936

 
10,915

 
10,761

 
 
 
 
 
 
 
 
 
 






UNITY BANCORP, INC.
YTD CONSOLIDATED STATEMENTS OF INCOME
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
For the nine months ended September 30,
 
 
Current YTD vs. Prior YTD
 
(In thousands, except percentages and per share amounts)
 
2018
 
2017
 
 
$
 
%
 
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
563

 
$
595

 
 
$
(32
)
 
(5.4
)%
 
FHLB stock
 
359

 
252

 
 
107

 
42.5

 
Securities:
 
 
 
 
 
 
 
 
 
 
Taxable
 
1,442

 
1,543

 
 
(101
)
 
(6.5
)
 
Tax-exempt
 
88

 
127

 
 
(39
)
 
(30.7
)
 
Total securities
 
1,530

 
1,670

 
 
(140
)
 
(8.4
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
SBA loans
 
3,365

 
2,781

 
 
584

 
21.0

 
Commercial loans
 
24,718

 
20,562

 
 
4,156

 
20.2

 
Residential mortgage loans
 
13,666

 
10,603

 
 
3,063

 
28.9

 
Consumer loans
 
5,003

 
3,806

 
 
1,197

 
31.5

 
Total loans
 
46,752

 
37,752

 
 
9,000

 
23.8

 
Total interest income
 
49,204

 
40,269

 
 
8,935

 
22.2

 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
813

 
482

 
 
331

 
68.7

 
Savings deposits
 
2,768

 
1,994

 
 
774

 
38.8

 
Time deposits
 
4,042

 
2,441

 
 
1,601

 
65.6

 
Borrowed funds and subordinated debentures
 
1,997

 
1,992

 
 
5

 
0.3

 
Total interest expense
 
9,620

 
6,909

 
 
2,711

 
39.2

 
Net interest income
 
39,584

 
33,360

 
 
6,224

 
18.7

 
Provision for loan losses
 
1,550

 
1,150

 
 
400

 
34.8

 
Net interest income after provision for loan losses
 
38,034

 
32,210

 
 
5,824

 
18.1

 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
Branch fee income
 
1,107

 
1,029

 
 
78

 
7.6

 
Service and loan fee income
 
1,441

 
1,472

 
 
(31
)
 
(2.1
)
 
Gain on sale of SBA loans held for sale, net
 
1,383

 
1,348

 
 
35

 
2.6

 
Gain on sale of mortgage loans, net
 
1,442

 
1,188

 
 
254

 
21.4

 
BOLI income
 
810

 
289

 
 
521

 
180.3

 
Net security gains (losses)
 
(6
)
 
69

 
 
(75
)
 
(108.7
)
 
Other income
 
900

 
838

 
 
62

 
7.4

 
Total noninterest income
 
7,077

 
6,233

 
 
844

 
13.5

 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
15,274

 
12,662

 
 
2,612

 
20.6

 
Occupancy
 
2,057

 
1,791

 
 
266

 
14.9

 
Processing and communications
 
2,072

 
1,892

 
 
180

 
9.5

 
Furniture and equipment
 
1,732

 
1,537

 
 
195

 
12.7

 
Professional services
 
682

 
724

 
 
(42
)
 
(5.8
)
 
Loan collection & OREO expenses
 
(320
)
 
493

 
 
(813
)
 
(164.9
)
 
Other loan expenses
 
137

 
149

 
 
(12
)
 
(8.1
)
 
Deposit insurance
 
593

 
376

 
 
217

 
57.7

 
Advertising
 
1,051

 
859

 
 
192

 
22.4

 
Director fees
 
502

 
496

 
 
6

 
1.2

 
Other expenses
 
1,373

 
1,439

 
 
(66
)
 
(4.6
)
 
Total noninterest expense
 
25,153

 
22,418

 
 
2,735

 
12.2

 
Income before provision for income taxes
 
19,958

 
16,025

 
 
3,933

 
24.5

 
Provision for income taxes
 
3,841

 
5,632

 
 
(1,791
)
 
(31.8
)
 
Net income
 
$
16,117

 
$
10,393

 
5,724

$
5,724

 
55.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





 
 
 
 
 
 
 
 
 
 
 
 
 
For the nine months ended September 30,
 
 
 
 
 
 
(In thousands, except percentages and per share amounts)
 
2018
 
2017
 
 
 
 
 
 
Effective tax rate
 
19.2
%
 
35.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
1.50

 
0.99

 
 
 
 
 
 
Net income per common share - Diluted
 
1.48

 
0.97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,713

 
10,543

 
 
 
 
 
 
Weighted average common shares outstanding - Diluted
 
10,910

 
10,734

 
 
 
 
 
 






UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
September 30, 2018
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
For the three months ended
 
 
September 30, 2018
 
June 30, 2018
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
40,060

 
$
187

 
1.85
%
 
$
39,418

 
$
171

 
1.74
%
FHLB stock
 
5,805

 
101

 
6.90

 
7,811

 
123

 
6.32

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
59,916

 
465

 
3.08

 
61,342

 
484

 
3.16

Tax-exempt
 
5,095

 
35

 
2.73

 
5,202

 
37

 
2.85

Total securities (A)
 
65,011

 
500

 
3.05

 
66,544

 
521

 
3.14

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
56,837

 
1,050

 
7.33

 
62,467

 
1,131

 
7.26

Commercial loans
 
683,632

 
8,784

 
5.10

 
657,031

 
8,209

 
5.01

Residential mortgage loans
 
404,439

 
4,803

 
4.71

 
387,086

 
4,522

 
4.69

Consumer loans
 
116,421

 
1,776

 
6.05

 
116,547

 
1,699

 
5.85

Total loans (B)
 
1,261,329

 
16,413

 
5.16

 
1,223,131

 
15,561

 
5.10

Total interest-earning assets
 
$
1,372,205

 
$
17,201

 
4.97
%
 
$
1,336,904

 
$
16,376

 
4.91
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
25,560

 
 
 
 
 
24,145

 
 
 
 
Allowance for loan losses
 
(14,909
)
 
 
 
 
 
(14,419
)
 
 
 
 
Other assets
 
65,645

 
 
 
 
 
64,811

 
 
 
 
Total noninterest-earning assets
 
76,296

 
 
 
 
 
74,537

 
 
 
 
Total assets
 
$
1,448,501

 
 
 
 
 
$
1,411,441

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
173,515

 
$
330

 
0.75
%
 
$
168,298

 
$
259

 
0.62
%
Total savings deposits
 
407,287

 
1,049

 
1.02

 
401,195

 
943

 
0.94

Total time deposits
 
350,747

 
1,739

 
1.97

 
296,078

 
1,303

 
1.77

Total interest-bearing deposits
 
931,549

 
3,118

 
1.33

 
865,571

 
2,505

 
1.16

Borrowed funds and subordinated debentures
 
109,408

 
509

 
1.85

 
154,250

 
720

 
1.87

Total interest-bearing liabilities
 
$
1,040,957

 
$
3,627

 
1.38
%
 
$
1,019,821

 
$
3,225

 
1.27
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
266,833

 
 
 
 
 
257,238

 
 
 
 
Other liabilities
 
9,805

 
 
 
 
 
9,418

 
 
 
 
Total noninterest-bearing liabilities
 
276,638

 
 
 
 
 
266,656

 
 
 
 
Total shareholders' equity
 
130,906

 
 
 
 
 
124,964

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,448,501

 
 
 
 
 
$
1,411,441

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
13,574

 
3.59
%
 
 
 
$
13,151

 
3.64
%
Tax-equivalent basis adjustment
 
 
 
(7
)
 
 
 
 
 
(7
)
 
 
Net interest income
 
 
 
$
13,567

 
 
 
 
 
$
13,144

 
 
Net interest margin
 
 
 
 
 
3.92
%
 
 
 
 
 
3.95
%
(A)
Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 21 percent in 2018 and 35 percent in 2017 and applicable state rates.
(B)
The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.





UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
September 30, 2018
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
For the three months ended
 
 
September 30, 2018
 
September 30, 2017
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
40,060

 
$
187

 
1.85
%
 
$
64,579

 
$
262

 
1.61
%
FHLB stock
 
5,805

 
101

 
6.90

 
5,697

 
85

 
5.92

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
59,916

 
465

 
3.08

 
67,178

 
512

 
3.02

Tax-exempt
 
5,095

 
35

 
2.73

 
6,234

 
60

 
3.82

Total securities (A)
 
65,011

 
500

 
3.05

 
73,412

 
572

 
3.09

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
56,837

 
1,050

 
7.33

 
60,221

 
1,042

 
6.86

Commercial loans
 
683,632

 
8,784

 
5.10

 
576,039

 
7,211

 
4.97

Residential mortgage loans
 
404,439

 
4,803

 
4.71

 
322,172

 
3,636

 
4.48

Consumer loans
 
116,421

 
1,776

 
6.05

 
106,976

 
1,407

 
5.22

Total loans (B)
 
1,261,329

 
16,413

 
5.16

 
1,065,408

 
13,296

 
4.95

Total interest-earning assets
 
$
1,372,205

 
$
17,201

 
4.97
%
 
$
1,209,096

 
$
14,215

 
4.66
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
25,560

 
 
 
 
 
23,407

 
 
 
 
Allowance for loan losses
 
(14,909
)
 
 
 
 
 
(13,053
)
 
 
 
 
Other assets
 
65,645

 
 
 
 
 
57,179

 
 
 
 
Total noninterest-earning assets
 
76,296

 
 
 
 
 
67,533

 
 
 
 
Total assets
 
$
1,448,501

 
 
 
 
 
$
1,276,629

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
173,515

 
$
330

 
0.75
%
 
$
160,184

 
$
168

 
0.42
%
Total savings deposits
 
407,287

 
1,049

 
1.02

 
406,064

 
733

 
0.72

Total time deposits
 
350,747

 
1,739

 
1.97

 
215,501

 
823

 
1.52

Total interest-bearing deposits
 
931,549

 
3,118

 
1.33

 
781,749

 
1,724

 
0.87

Borrowed funds and subordinated debentures
 
109,408

 
509

 
1.85

 
124,369

 
654

 
2.09

Total interest-bearing liabilities
 
$
1,040,957

 
$
3,627

 
1.38
%
 
$
906,118

 
$
2,378

 
1.04
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
266,833

 
 
 
 
 
248,259

 
 
 
 
Other liabilities
 
9,805

 
 
 
 
 
7,598

 
 
 
 
Total noninterest-bearing liabilities
 
276,638

 
 
 
 
 
255,857

 
 
 
 
Total shareholders' equity
 
130,906

 
 
 
 
 
114,654

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,448,501

 
 
 
 
 
$
1,276,629

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
13,574

 
3.59
%
 
 
 
$
11,837

 
3.62
%
Tax-equivalent basis adjustment
 
 
 
(7
)
 
 
 
 
 
(20
)
 
 
Net interest income
 
 
 
$
13,567

 
 
 
 
 
$
11,817

 
 
Net interest margin
 
 
 
 
 
3.92
%
 
 
 
 
 
3.88
%
(A)
Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 21 percent in 2018 and 35 percent in 2017 and applicable state rates.
(B)
The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.






UNITY BANCORP, INC.
YEAR TO DATE NET INTEREST MARGIN
September 30, 2018
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
 
 
For the nine months ended
 
 
September 30, 2018
 
September 30, 2017
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
42,772

 
$
563

 
1.76
%
 
$
73,011

 
$
595

 
1.09
%
FHLB stock
 
7,131

 
359

 
6.73

 
5,795

 
252

 
5.81

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
61,538

 
1,442

 
3.13

 
66,155

 
1,543

 
3.12

Tax-exempt
 
5,214

 
109

 
2.80

 
6,479

 
192

 
3.96

Total securities (A)
 
66,752

 
1,551

 
3.11

 
72,634

 
1,735

 
3.19

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
62,517

 
3,365

 
7.20

 
57,951

 
2,781

 
6.42

Commercial loans
 
657,879

 
24,718

 
5.02

 
557,231

 
20,562

 
4.93

Residential mortgage loans
 
387,651

 
13,666

 
4.71

 
310,460

 
10,603

 
4.57

Consumer loans
 
114,658

 
5,003

 
5.83

 
100,740

 
3,806

 
5.05

Total loans (B)
 
1,222,705

 
46,752

 
5.11

 
1,026,382

 
37,752

 
4.92

Total interest-earning assets
 
$
1,339,360

 
$
49,225

 
4.91
%
 
$
1,177,822

 
$
40,334

 
4.58
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
24,325

 
 
 
 
 
23,346

 
 
 
 
Allowance for loan losses
 
(14,429
)
 
 
 
 
 
(12,919
)
 
 
 
 
Other assets
 
65,380

 
 
 
 
 
56,018

 
 
 
 
Total noninterest-earning assets
 
75,276

 
 
 
 
 
66,445

 
 
 
 
Total assets
 
$
1,414,636

 
 
 
 
 
$
1,244,267

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
173,381

 
$
813

 
0.63
%
 
$
156,853

 
$
482

 
0.41
%
Total savings deposits
 
403,916

 
2,768

 
0.92

 
394,206

 
1,994

 
0.68

Total time deposits
 
299,970

 
4,042

 
1.80

 
219,790

 
2,441

 
1.48

Total interest-bearing deposits
 
877,267

 
7,623

 
1.16

 
770,849

 
4,917

 
0.85

Borrowed funds and subordinated debentures
 
143,492

 
1,997

 
1.86

 
125,304

 
1,992

 
2.13

Total interest-bearing liabilities
 
$
1,020,759

 
$
9,620

 
1.26
%
 
$
896,153

 
$
6,909

 
1.03
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
258,787

 
 
 
 
 
229,978

 
 
 
 
Other liabilities
 
9,382

 
 
 
 
 
7,050

 
 
 
 
Total noninterest-bearing liabilities
 
268,169

 
 
 
 
 
237,028

 
 
 
 
Total shareholders' equity
 
125,708

 
 
 
 
 
111,086

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,414,636

 
 
 
 
 
$
1,244,267

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
39,605

 
3.65
%
 
 
 
$
33,425

 
3.55
%
Tax-equivalent basis adjustment
 
 
 
(21
)
 
 
 
 
 
(65
)
 
 
Net interest income
 
 
 
$
39,584

 
 
 
 
 
$
33,360

 
 
Net interest margin
 
 
 
 
 
3.95
%
 
 
 
 
 
3.79
%
(A)
Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 21 percent in 2018 and 35 percent in 2017 and applicable state rates.
(B)
The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.






UNITY BANCORP, INC.
QUARTERLY ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY SCHEDULES
September 30, 2018
Amounts in thousands, except percentages
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
ALLOWANCE FOR LOAN LOSSES:
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
14,634

 
$
14,196

 
$
13,556

 
$
13,113

 
$
12,800

Provision for loan losses charged to expense
 
500

 
550

 
500

 
500

 
500

 
 
15,134

 
14,746

 
14,056

 
13,613

 
13,300

Less: Chargeoffs
 
 
 
 
 
 
 
 
 
 
SBA loans
 
169

 
104

 
81

 

 
34

Commercial loans
 

 

 

 

 
31

Residential mortgage loans
 

 

 

 
50

 
5

Consumer loans
 

 
16

 
6

 
83

 
170

Total chargeoffs
 
169

 
120

 
87

 
133

 
240

Add: Recoveries
 
 
 
 
 
 
 
 
 
 
SBA loans
 
1

 
3

 
64

 
45

 
36

Commercial loans
 
5

 
4

 
16

 
31

 
15

Residential mortgage loans
 

 

 
13

 

 

Consumer loans
 
17

 
1

 
134

 

 
2

Total recoveries
 
23

 
8

 
227

 
76

 
53

Net chargeoffs (recoveries)
 
146

 
112

 
(140
)
 
57

 
187

Balance, end of period
 
$
14,988

 
$
14,634

 
$
14,196

 
$
13,556

 
$
13,113

 
 
 
 
 
 
 
 
 
 
 
LOAN QUALITY INFORMATION:
 
 
 
 
 
 
 
 
 
 
Nonperforming loans (1)
 
$
5,987

 
$
5,209

 
$
4,277

 
$
2,994

 
$
3,742

Other real estate owned ("OREO")
 
56

 
56

 
56

 
426

 
707

Nonperforming assets
 
6,043

 
5,265

 
4,333

 
3,420

 
4,449

Less: Amount guaranteed by SBA
 
104

 
129

 
27

 
27

 
27

Net nonperforming assets
 
$
5,939

 
$
5,136

 
$
4,306

 
$
3,393

 
$
4,422

 
 
 
 
 
 
 
 
 
 
 
 Loans 90 days past due & still accruing
 
$
754

 
$

 
$

 
$
60

 
$
2,216

 
 
 
 
 
 
 
 
 
 
 
Performing Troubled Debt Restructurings (TDRs)
 
$
755

 
$
767

 
$
774

 
$
786

 
$

(1) Nonperforming TDRs included in nonperforming loans
 

 

 

 

 

Total TDRs
 
$
755

 
$
767

 
$
774

 
$
786

 
$

 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses to:
 
 
 
 
 
 
 
 
 
 
Total loans at quarter end
 
1.17
%
 
1.17
%
 
1.19
%
 
1.16
%
 
1.20
%
Nonperforming loans (1)
 
250.34

 
280.94

 
331.91

 
452.77

 
350.43

Nonperforming assets
 
248.02

 
277.95

 
327.63

 
396.37

 
294.74

Net nonperforming assets
 
252.37

 
284.93

 
329.68

 
399.53

 
296.54

 
 
 
 
 
 
 
 
 
 
 
QTD net chargeoffs (annualized) to QTD average loans:
 
 
 
 
 
 
 
 
 
 
SBA loans
 
1.17
%
 
0.65
%
 
0.10
%
 
(0.28
)%
 
(0.01
)%
Commercial loans
 

 

 
(0.01
)
 
(0.02
)
 
0.01

Residential mortgage loans
 

 

 
(0.01
)
 
0.06

 
0.01

Consumer loans
 
(0.06
)
 
0.05

 
(0.47
)
 
0.30

 
0.62

Total loans
 
0.05
%
 
0.04
%
 
(0.05
)%
 
0.02
%
 
0.07
%
 
 
 
 
 
 
 
 
 
 
 
Nonperforming loans to total loans
 
0.47
%
 
0.42
%
 
0.36
%
 
0.26
%
 
0.34
%
Nonperforming loans and TDRs to total loans
 
0.53

 
0.48

 
0.42

 
0.32

 
0.34

Nonperforming assets to total loans and OREO
 
0.47

 
0.42

 
0.36

 
0.29

 
0.41

Nonperforming assets to total assets
 
0.39

 
0.35

 
0.30

 
0.23

 
0.33






UNITY BANCORP, INC.
QUARTERLY FINANCIAL DATA
September 30, 2018
(In thousands, except percentages and per share amounts)
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
SUMMARY OF INCOME:
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
17,194

 
$
16,369

 
$
15,640

 
$
15,044

 
$
14,195

Total interest expense
 
3,627

 
3,225

 
2,768

 
2,544

 
2,378

Net interest income
 
13,567

 
13,144

 
12,872

 
12,500

 
11,817

Provision for loan losses
 
500

 
550

 
500

 
500

 
500

Net interest income after provision for loan losses
 
13,067

 
12,594

 
12,372

 
12,000

 
11,317

Total noninterest income
 
2,479

 
2,312

 
2,286

 
2,037

 
2,008

Total noninterest expense
 
8,801

 
8,158

 
8,194

 
7,629

 
7,554

Income before provision for income taxes
 
6,745

 
6,748

 
6,464

 
6,408

 
5,771

Provision for income taxes
 
1,255

 
1,351

 
1,235

 
2,175

 
2,014

Impact of Tax Reform Bill
 

 

 

 
1,733

 

Net income
 
$
5,490

 
$
5,397

 
$
5,229

 
$
2,500

 
$
3,757

 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.51

 
$
0.50

 
$
0.49

 
$
0.24

 
$
0.36

Net income per common share - Diluted
 
$
0.50

 
$
0.49

 
$
0.48

 
$
0.23

 
$
0.35

 
 
 
 
 
 
 
 
 
 
 
COMMON SHARE DATA:
 
 
 
 
 
 
 
 
 
 
Market price per share
 
$
22.90

 
$
22.75

 
$
22.00

 
$
19.75

 
$
19.80

Dividends paid
 
$
0.07

 
$
0.07

 
$
0.06

 
$
0.06

 
$
0.06

Book value per common share
 
$
12.37

 
$
11.94

 
$
11.50

 
$
11.13

 
$
10.94

 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,743

 
10,717

 
10,678

 
10,604

 
10,572

Weighted average common shares outstanding - Diluted
 
10,936

 
10,915

 
10,853

 
10,794

 
10,761

Issued and outstanding common shares
 
10,756

 
10,731

 
10,709

 
10,615

 
10,586

 
 
 
 
 
 
 
 
 
 
 
PERFORMANCE RATIOS (Annualized):
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.50
%
 
1.53
%
 
1.53
%
 
0.74
%
 
1.17
%
Return on average equity
 
16.64

 
17.32

 
17.69

 
8.54

 
13.00

Efficiency ratio
 
54.86

 
52.80

 
54.00

 
52.45

 
54.86

Noninterest expense to average assets
 
2.41

 
2.32

 
2.40

 
2.25

 
2.35

 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET DATA:
 
 
 
 
 
 
 
 
 
 
Total assets
 
1,553,152

 
1,514,120

 
1,439,902

 
1,455,496

 
1,329,834

Total deposits
 
1,219,473

 
1,146,399

 
1,117,514

 
1,043,137

 
1,043,632

Total loans
 
1,283,304

 
1,246,511

 
1,195,110

 
1,170,674

 
1,092,873

Total securities
 
63,399

 
65,682

 
67,521

 
69,800

 
72,105

Total shareholders' equity
 
133,067

 
128,141

 
123,104

 
118,105

 
115,814

Allowance for loan losses
 
(14,988
)
 
(14,634
)
 
(14,196
)
 
(13,556
)
 
(13,113
)
 
 
 
 
 
 
 
 
 
 
 
TAX EQUIVALENT YIELDS AND RATES:
 
 
 
 
 
 
 
 
 
 
Interest-earning assets
 
4.97
%
 
4.91
%
 
4.85
%
 
4.71
%
 
4.66
%
Interest-bearing liabilities
 
1.38

 
1.27

 
1.12

 
1.05

 
1.04

Net interest spread
 
3.59

 
3.64

 
3.73

 
3.66

 
3.62

Net interest margin
 
3.92

 
3.95

 
3.99

 
3.91

 
3.88

 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY:
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
6,043

 
5,265

 
4,333

 
3,420

 
4,449

QTD net chargeoffs (annualized) to QTD average loans
 
0.05
%
 
0.04
%
 
(0.05
)%
 
0.02
%
 
0.07
%
Allowance for loan losses to total loans
 
1.17

 
1.17

 
1.19

 
1.16

 
1.20

Nonperforming assets to total loans and OREO
 
0.47

 
0.42

 
0.36

 
0.29

 
0.41

Nonperforming assets to total assets
 
0.39

 
0.35

 
0.30

 
0.23

 
0.33

 
 
 
 
 
 
 
 
 
 
 





(In thousands, except percentages and per share amounts)
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Dec 31, 2017
 
Sep 30, 2017
CAPITAL RATIOS AND OTHER:
 
 
 
 
 
 
 
 
 
 
Total equity to total assets
 
8.57
%
 
8.46
%
 
8.55
%
 
8.11
%
 
8.71
%
Leverage ratio
 
9.74

 
9.63

 
9.46

 
9.37

 
9.70

Common equity tier 1 risk-based capital ratio
 
11.15

 
11.05

 
11.14

 
10.81

 
11.27

Tier 1 risk-based capital ratio
 
12.00

 
11.92

 
12.07

 
11.75

 
12.26

Total risk-based capital ratio
 
13.25

 
13.14

 
13.24

 
12.87

 
13.30

Number of banking offices
 
19

 
19

 
18

 
18

 
17

Number of ATMs
 
20

 
20

 
19

 
19

 
18

Number of employees
 
205

 
197

 
199

 
199

 
166




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