EX-99.1 2 exh99-1.htm FIRST QUARTER PRESS RELEASE exh99-1.htm
                                      
Unity Bancorp, Inc.
64 Old Highway 22
Clinton, NJ 08809
800 618-BANK
www.unitybank.com
 
 

NewsNewsNewsNewsNews

For Immediate Release:  April 22, 2010

News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308
 
 
Unity Bancorp Reports First Quarter Earnings

Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income available to common shareholders of $374 thousand or $0.05 per diluted share for the quarter ended March 31, 2010, compared to net income available to common shareholders of $352 thousand or $0.05 per diluted share for the first quarter of 2009.  Return on average assets and average common equity for the first quarter of 2010 were 0.34% and 3.09%, respectively, compared to 0.33% and 2.90%, respectively, for the first quarter of 2009.

James A. Hughes, Unity Bancorp’s President and CEO, said, “Our earnings have been impacted by the most difficult economic environment in decades.  While New Jersey has fared much better than other States, our portfolio of National SBA loans continues to be a challenge.  Although there have been recent signs of improvement, the recovery is expected to be slow and measured.  We remain positive and have continued to grow our customer relationships as we prepare for the future.”
 
Net Interest Income
 
For the quarter ended March 31, 2010, net interest income was $7.5 million, an increase of $690 thousand or 10.2% from the quarter ended March 31, 2009.  Factors affecting first quarter net interest income include:
 
·  
The yield on interest-earning assets decreased 40 basis points to 5.47% from 5.87% for the same period last year. This was a result of interest-earning assets re-pricing in a low rate environment.
 
·  
The cost of interest-bearing liabilities decreased 89 basis points to 2.20% from 3.09% for the same period last year.  All interest-bearing deposit costs declined with the largest decline in time deposits.
 
·  
Net interest margin was 3.57%, a 39 basis point increase from 3.18% in the first quarter of 2009.  The increase was primarily due to the reduction in the cost of funds.
 
Noninterest Income
 
For the quarter ended March 31, 2010, noninterest income decreased $438 thousand from the quarter ended March 31, 2009.   Excluding the effect of net security gains recognized during the first quarter of 2009, noninterest income increased $73 thousand or 8.8%.   Noninterest income was affected by the following factors:
 
·  
Branch fee income increased $32 thousand, or 9.7% compared to the prior year period, primarily due to increased analysis fees, partially offset by lower levels of overdraft fees.
 
·  
Loan fee income declined $43 thousand, or 17.1%, due to a decrease in origination volume related fees, servicing fee income and loan prepayment fees.
 
·  
During the quarter, the cash surrender value of bank owned life insurance (“BOLI”) increased $18 thousand to $73 thousand.  This was the result of the Company purchasing $2.5 million in BOLI to help offset the rising cost of employee benefits.
 
·  
Gains on the sale of residential mortgage loans amounted to $145 thousand, compared to $64 thousand in the prior year period.
 
·  
There were no gains on the sale of SBA loans, compared to $29 thousand a year ago.
 
·  
Gains on the sale of investment securities amounted to $4 thousand, compared to $515 thousand in the prior year period.
 
 
 
 
 
Noninterest Expense
 
For the quarter ended March 31, 2010, noninterest expenses were $5.9 million, an increase of $386 thousand or 6.9% from the quarter ended March 31, 2009. The following factors affected our noninterest expenses:
 
·  
Compensation and benefits expense amounted to $3.0 million, an increase of $375 thousand from the prior year period.   This increase is due to increased salary expense, as our full-time equivalent employee number increased from 162 in March 2009 to 171 in March 2010, and higher retail commissions.
 
·  
Occupancy expense declined $10 thousand or 1.5%, due primarily to a reduction in rental expense from a renegotiated lease, offset in part by an increase in seasonal snow removal fees.
 
·  
Communications and delivery expense declined $17 thousand or 3.1%, due to renegotiated communications and ATM processing contracts and bringing items processing in-house, partially offset by increased account volume driven postage.
 
·  
Furniture, fixtures and equipment expense declined $72 thousand from the prior year period, due to decreased network, software and ATM maintenance costs and reduced depreciation expense as capital expenditures declined.
 
·  
Professional services expense declined $17 thousand or 6.9%.
 
·  
Loan collection costs amounted to $184 thousand, a decrease of $14 thousand or 7.1%, due to decreased collection costs on delinquent loans.
 
·  
FDIC insurance premiums amounted to $330 thousand, an increase of $29 thousand or 9.6%, due to the increase in FDIC insurance rates and a higher deposit base at March 31, 2010.
 
·  
Advertising expenses increased $31 thousand or 41.3%, due to increased marketing efforts.
 
·  
Other expenses amounted to $469 thousand, an increase of $81 thousand or 20.9%, due primarily to increases in expenses related to other real estate owned (“OREO”) and employee recruitment fees.
 
Financial Condition
 
At March 31, 2010, total assets were $889.9 million, a 4.3% decrease from year-end.
 
·  
Total loans decreased $5.8 million or 0.9%, from $657.0 million at December 31, 2009. SBA 7(a), SBA 504, commercial and consumer loans decreased 1.5%, 5.2%, 0.4%, and 3.4%, respectively.  Residential mortgage loans increased 1.9%. Loan balances for the remainder of 2010 are expected to remain flat as the Company is no longer generating loans outside of its market place and has decided to portfolio a limited number of fixed rate residential mortgages due to interest rate risk.  The Company continues to focus on stabilizing credit quality and preserving capital until economic conditions improve.
 
·  
Total securities decreased $30.6 million as Unity received $12.5 million in principal payments, sold $10.7 million and had $7.5 million in bonds called during the quarter.  There were no purchases during the quarter.
 
·  
Core deposits, excluding time deposits, increased $13.1 million during the first quarter to $479.6 million.  The increase was due to a $4.8 million increase in demand deposits, a $2.8 million increase in interest-bearing checking accounts and a $5.5 million increase in savings deposits.  Time deposits decreased $56.5 million for the quarter ended March 31, 2010 due to planned run off of a maturing high rate promotion that was done late in 2008 to bolster liquidity.
 
·  
Shareholders’ equity was $68.7 million at March 31, 2010, an increase of 1.2% from December 31, 2009.
 
·  
Book value per common share was $7.00, compared to $6.91 at December 31, 2009.
 
·  
At March 31, 2010, the Leverage, Tier I and Total Risk-Based Capital ratios were 9.18%, 12.02% and 13.28%, respectively, all in excess of the ratios required to be deemed “well- capitalized".
 
Credit Quality
 
·  
Nonperforming assets totaled $29.1 million at March 31, 2010, or 4.45% of total loans and other real estate owned (“OREO”) compared to $27.0 million, or 4.10% of total loans and OREO at December 31, 2009.
 
·  
The SBA 7(a), SBA 504, commercial, residential and consumer nonaccrual loans were $6.8 million, $2.7 million, $10.0 million, $5.8 million and $385 thousand, respectively.  OREO amounted to $3.3 million.  The increase in nonperforming assets was primarily related to an increase in commercial, SBA and residential mortgage accounts.  Almost all nonperforming assets are secured by real estate.
 
·  
The allowance for loan losses totaled $14.1 million at March 31, 2010, or 2.16% of total loans. The provision for loan losses for the first quarter of 2010 amounted to $1.5 million, flat from the same period a year ago.
 
·  
Net charge-offs were $1.3 million for the three months ended March 31, 2010, compared to $1.5 million for the same period a year ago.
 
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $890 million in assets and $715 million in deposits.  Unity Bank provides financial services to retail, corporate and small business customers through its 16 retail service centers located in Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County, Pennsylvania.  For additional information about Unity, visit our website at www.unitybank.com, or call 800- 618-BANK.
 
This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance.  These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company’s control and could impede its ability to achieve these goals.  These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.
 
 
 
 
 
                               
UNITY BANCORP, INC.
  
SUMMARY FINANCIAL HIGHLIGHTS
  
March 31, 2010
  
                         
                         
                         
                     
2010.Q1 VS.
  
                        2009.Q4       2009.Q1  
Amounts in thousands, except percentages and per share amounts
  
3/31/2010
    
12/31/2009
    
3/31/2009
    
%
    
%
  
                                   
BALANCE SHEET DATA:
                                  
Total Assets
   $ 889,927     $ 930,357     $ 886,677       -4.3 %     0.4 %
Total Deposits
     714,802       758,239       703,266       -5.7 %     1.6 %
Total Loans
     651,200       657,016       669,902       -0.9 %     -2.8 %
Total Securities
     138,442       169,022       158,022       -18.1 %     -12.4 %
Total Shareholders' Equity
     68,712       67,865       67,525       1.2 %     1.8 %
Allowance for Loan Losses
     (14,055 )     (13,842 )     (10,307 )     1.5 %     36.4 %
                                         
FINANCIAL DATA - QUARTER TO DATE:
                                        
Net Income (Loss) Before Taxes
     933       (206 )     1,067       552.9 %     -12.6 %
Income Taxes (Benefit)
     185       (340 )     336       154.4 %     -44.9 %
Net Income (Loss)
     748       134       731       458.2 %     2.3 %
Preferred Dividends & Discount Accretion
     374       373       379       0.3 %     -1.3 %
Income Available (Loss Attributable) to Common Shareholders
     374       (239 )     352       256.5 %     6.3 %
                                         
Net Income (Loss) Per Share - Basic
     0.05       (0.03 )     0.05       256.0 %     5.8 %
Net Income (Loss) Per Share - Diluted
     0.05       (0.03 )     0.05       252.9 %     4.1 %
                                         
Return on Average Assets
     0.34 %     0.06 %     0.33 %     488.9 %     3.4 %
Return on Average Common Equity
     3.09 %     -1.95 %     2.90 %     258.6 %     6.2 %
Efficiency Ratio
     70.98 %     71.04 %     73.02 %     -0.1 %     -2.8 %
                                         
SHARE INFORMATION:
                                        
Market Price Per Share
     5.29       4.02       3.19       31.6 %     65.8 %
Dividends Paid Per Share
     -       -       -       0.0 %     0.0 %
Book Value Per Common Share
     7.00       6.91       6.96       1.3 %     0.4 %
Average Diluted Shares Outstanding (QTD)
     7,294       7,126       7,148       2.4 %     2.0 %
                                         
CAPITAL RATIOS:
                                        
Total Equity to Total Assets
     7.72 %     7.29 %     7.62 %     5.8 %     1.4 %
Leverage Ratio
     9.18 %     8.83 %     9.28 %     3.9 %     -1.1 %
Tier 1 Risk-Based Capital Ratio
     12.02 %     11.75 %     12.32 %     2.3 %     -2.4 %
Total Risk-Based Capital Ratio
     13.28 %     13.01 %     13.57 %     2.1 %     -2.1 %
                                         
CREDIT QUALITY AND RATIOS:
                                        
Nonperforming Assets
     29,104       27,026       20,649       7.7 %     40.9 %
QTD Net Chargeoffs (Annualized) to QTD Average Loans
     0.80 %     0.36 %     0.91 %     119.9 %     -12.3 %
Allowance for Loan Losses to Total Loans
     2.16 %     2.11 %     1.54 %     2.4 %     40.3 %
Nonperforming Assets to Total Loans and OREO
     4.45 %     4.10 %     3.08 %     8.4 %     44.4 %
Nonperforming Assets to Total Assets
     3.27 %     2.90 %     2.33 %     12.6 %     40.4 %
 
 
 
 
 
                               
UNITY BANCORP, INC.
  
CONSOLIDATED BALANCE SHEETS
  
March 31, 2010
  
                               
                               
                               
                     
2010.Q1 VS.
  
                        2009.Q4       2009.Q1  
Amounts in thousands, except percentages
  
3/31/2010
    
12/31/2009
    
3/31/2009
    
%
    
%
  
                                   
ASSETS
                                  
Cash and due from banks
   $ 22,654     $ 23,517     $ 17,896       -3.7 %     26.6 %
Federal funds sold and interest-bearing deposits
     43,734       50,118       12,329       -12.7 %     254.7 %
Cash and cash equivalents
     66,388       73,635       30,225       -9.8 %     119.6 %
                                         
Securities available for sale
     113,465       140,770       122,873       -19.4 %     -7.7 %
Securities held to maturity
     24,977       28,252       35,149       -11.6 %     -28.9 %
Total securities
     138,442       169,022       158,022       -18.1 %     -12.4 %
                                         
SBA loans held for sale
     22,617       21,406       22,559       5.7 %     0.3 %
SBA loans held to maturity
     75,191       77,844       80,008       -3.4 %     -6.0 %
SBA 504 loans
     67,000       70,683       75,556       -5.2 %     -11.3 %
Commercial loans
     292,557       293,739       303,991       -0.4 %     -3.8 %
Residential mortgage loans
     135,596       133,059       125,007       1.9 %     8.5 %
Consumer loans
     58,239       60,285       62,781       -3.4 %     -7.2 %
Total loans
     651,200       657,016       669,902       -0.9 %     -2.8 %
Allowance for loan losses
     (14,055 )     (13,842 )     (10,307 )     1.5 %     36.4 %
Net loans
     637,145       643,174       659,595       -0.9 %     -3.4 %
                                         
Premises and equipment, net
     11,525       11,773       12,329       -2.1 %     -6.5 %
Deferred tax assets
     7,856       7,308       6,360       7.5 %     23.5 %
Bank owned life insurance (BOLI)
     8,574       6,002       5,835       42.9 %     46.9 %
Prepaid FDIC insurance
     4,136       4,739       -       -12.7 %     100.0 %
Federal Home Loan Bank stock
     4,677       4,677       4,947       0.0 %     -5.5 %
Accrued interest receivable
     4,009       4,225       4,328       -5.1 %     -7.4 %
Goodwill and other intangibles
     1,555       1,559       1,570       -0.3 %     -1.0 %
SBA servicing assets
     758       897       1,320       -15.5 %     -42.6 %
Other assets
     4,862       3,346       2,146       45.3 %     126.6 %
                                         
Total Assets
   $ 889,927     $ 930,357     $ 886,677       -4.3 %     0.4 %
                                         
LIABILITIES AND SHAREHOLDERS' EQUITY
                                        
Noninterest-bearing checking
   $ 84,858     $ 80,100     $ 75,857       5.9 %     11.9 %
Interest-bearing checking
     102,846       100,046       85,390       2.8 %     20.4 %
Savings deposits
     291,870       286,334       163,606       1.9 %     78.4 %
Time deposits, under $100,000
     149,934       183,377       258,890       -18.2 %     -42.1 %
Time deposits, $100,000 and over
     85,294       108,382       119,523       -21.3 %     -28.6 %
Total deposits
     714,802       758,239       703,266       -5.7 %     1.6 %
                                         
Borrowed funds
     86,554       85,000       97,000       1.8 %     -10.8 %
Subordinated debentures
     15,465       15,465       15,465       0.0 %     0.0 %
Accrued interest payable
     706       710       841       -0.6 %     -16.1 %
Accrued expenses and other liabilities
     3,688       3,078       2,580       19.8 %     42.9 %
Total Liabilities
     821,215       862,492       819,152       -4.8 %     0.3 %
                                         
Cumulative perpetual preferred stock
     18,650       18,533       18,194       0.6 %     2.5 %
Common stock
     55,536       55,454       55,179       0.1 %     0.6 %
Retained earnings (deficit)
     (1,117 )     (1,492 )     1,437       25.1 %     -177.7 %
Treasury stock at cost
     (4,169 )     (4,169 )     (4,169 )     0.0 %     0.0 %
Accumulated other comprehensive loss
     (188 )     (461 )     (3,116 )     59.2 %     94.0 %
Total Shareholders' Equity
     68,712       67,865       67,525       1.2 %     1.8 %
                                         
Total Liabilities and Shareholders' Equity
   $ 889,927     $ 930,357     $ 886,677       -4.3 %     0.4 %
                                         
Common Shares at Period End:
                                        
Shares Issued
     7,581       7,569       7,544                  
Shares Outstanding
     7,156       7,144       7,119                  
Treasury Shares
     425       425       425                  
 
 
 
 
 
   
UNITY BANCORP, INC.
  
QTD CONSOLIDATED STATEMENTS OF INCOME
  
March 31, 2010
  
                                           
                                           
                                           
                     
2010.Q1 VS.
  
    For the Three Months Ended     2009.Q4     2009.Q1  
Amounts in thousands, except percentages and per share amounts
  
3/31/2010
    
12/31/2009
    
3/31/2009
     $       %     $       %  
                                                   
Interest Income - Cash Equivalents
   $ 26     $ 41     $ 13     $ (15 )     -36.6 %   $ 13       100.0 %
Interest Income - FHLB/ACBB Stock
     34       54       -       (20 )     -37.0 %     34       100.0 %
                                                         
Interest Income - AFS Investments
     1,280       1,466       1,679       (186 )     -12.7 %     (399 )     -23.8 %
Interest Income - HTM Investments
     338       353       386       (15 )     -4.2 %     (48 )     -12.4 %
Interest Income - Total Investments
     1,618       1,819       2,065       (201 )     -11.1 %     (447 )     -21.6 %
                                                         
Interest Income - SBA Loans
     1,452       1,578       1,607       (126 )     -8.0 %     (155 )     -9.6 %
Interest Income - SBA 504 Loans
     1,087       1,158       1,231       (71 )     -6.1 %     (144 )     -11.7 %
Interest Income - Commercial Loans
     4,604       4,840       5,016       (236 )     -4.9 %     (412 )     -8.2 %
Interest Income - Mortgage Loans
     1,961       1,834       1,864       127       6.9 %     97       5.2 %
Interest Income - Consumer Loans
     731       777       794       (46 )     -5.9 %     (63 )     -7.9 %
Interest Income - Total Loans
     9,835       10,187       10,512       (352 )     -3.5 %     (677 )     -6.4 %
                                                         
Total Interest Income
     11,513       12,101       12,590       (588 )     -4.9 %     (1,077 )     -8.6 %
                                                         
Interest Expense - Total Checking
     258       261       270       (3 )     -1.1 %     (12 )     -4.4 %
Interest Expense - Total Savings
     901       985       644       (84 )     -8.5 %     257       39.9 %
Interest Expense - Total CDs
     1,813       2,442       3,723       (629 )     -25.8 %     (1,910 )     -51.3 %
Interest Expense - Borrowings
     1,077       1,078       1,179       (1 )     -0.1 %     (102 )     -8.7 %
Total Interest Expense
     4,049       4,766       5,816       (717 )     -15.0 %     (1,767 )     -30.4 %
                                                         
Net Interest Income Before Provision
     7,464       7,335       6,774       129       1.8 %     690       10.2 %
Provision for Loan Losses
     1,500       2,000       1,500       (500 )     -25.0 %     -       0.0 %
Net Interest Income After Provision
     5,964       5,335       5,274       629       11.8 %     690       13.1 %
                                                         
Branch Fee Income
     362       379       330       (17 )     -4.5 %     32       9.7 %
Loan Fee Income
     209       269       252       (60 )     -22.3 %     (43 )     -17.1 %
Gain on Sale of SBA Loans
     -       364       29       (364 )     -100.0 %     (29 )     -100.0 %
Gain on Sale of Mortgage Loans
     145       33       64       112       339.4 %     81       126.6 %
Bank Owned Life Insurance (BOLI)
     73       56       55       17       30.4 %     18       32.7 %
Other-than-temporary Impairment Charges
     -       (862 )     -       862       100.0 %     -       0.00 %
Net Security Gains
     4       180       515       (176 )     -97.8 %     (511 )     -99.2 %
Other Income
     117       116       103       1       0.9 %     14       13.6 %
Total Noninterest Income
     910       535       1,348     $ 375       70.1 %   $ (438 )     -32.5 %
                                                         
Total Compensation and Benefits
     2,999       2,857       2,624       142       5.0 %     375       14.3 %
Occupancy Expense
     677       623       687       54       8.7 %     (10 )     -1.5 %
Communications and Delivery Expense
     524       523       541       1       0.2 %     (17 )     -3.1 %
Furniture, Fixtures and Equipment Expense
     423       448       495       (25 )     -5.6 %     (72 )     -14.5 %
Professional Services Expense
     229       262       246       (33 )     -12.6 %     (17 )     -6.9 %
Loan Collection Costs
     184       330       198       (146 )     -44.2 %     (14 )     -7.1 %
FDIC Insurance Expense
     330       346       301       (16 )     -4.6 %     29       9.6 %
Advertising Expense
     106       156       75       (50 )     -32.1 %     31       41.3 %
Other Expense
     469       531       388       (62 )     -11.7 %     81       20.9 %
Total Noninterest Expense
     5,941       6,076       5,555       (135 )     -2.2 %     386       6.9 %
                                                         
Net Income (Loss) Before Taxes
     933       (206 )     1,067       1,139       552.9 %     (134 )     -12.6 %
Income Taxes (Benefit)
     185       (340 )     336       525       154.4 %     (151 )     -44.9 %
Net Income
     748       134       731       614       458.2 %     17       2.3 %
Preferred Dividends & Discount Accretion
     374       373       379       1       0.3 %     (5 )     -1.3 %
Income Available (Loss Attributable) to Common Shareholders
   $ 374     $ (239 )   $ 352     $ 613       256.5 %   $ 22       6.3 %
                                                         
Net Income (Loss) Per Share - Basic
   $ 0.05     $ (0.03 )   $ 0.05                                  
Net Income (Loss) Per Share - Diluted
   $ 0.05     $ (0.03 )   $ 0.05                                  
                                                         
Average Shares Outstanding - Basic
     7,150       7,126       7,119                                  
Average Shares Outstanding - Diluted
     7,294       7,126       7,148                                  
 

 
 
 

                                     
UNITY BANCORP, INC.
  
QUARTER TO DATE NET INTEREST MARGIN
  
March 31, 2010
  
                                     
                                     
   
For the Three Months Ended
  
   
March 31, 2010
    
December 31, 2009
  
Amounts in thousands, except percentages
  
Average Balance
    
Interest
    
Rate/Yield
    
Average Balance
    
Interest
    
Rate/Yield
  
                                     
Interest-earning Assets:
                                    
Federal funds sold and interest-bearing deposits
   $ 32,493     $ 26       0.32 %   $ 50,730     $ 41       0.32 %
Federal Home Loan Bank stock
     4,677       34       2.95 %     4,677       54       4.58 %
                                                 
Securities available for sale (A)
     131,295       1,294       3.94 %     141,742       1,479       4.17 %
Securities held to maturity (A)
     27,323       354       5.18 %     29,369       371       5.05 %
Total securities
     158,618       1,648       4.16 %     171,111       1,850       4.32 %
                                                 
SBA loans
     98,140       1,452       5.92 %     102,170       1,578       6.18 %
SBA 504 loans
     70,444       1,087       6.26 %     71,295       1,158       6.44 %
Commercial loans
     292,055       4,604       6.39 %     295,718       4,840       6.49 %
Residential mortgage loans
     134,611       1,961       5.83 %     128,871       1,834       5.69 %
Consumer loans
     59,779       731       4.96 %     62,038       777       4.97 %
Total loans
     655,029       9,835       6.06 %     660,092       10,187       6.14 %
                                                 
Total Interest-earning Assets
   $  850,817     $ 11,543       5.47 %   $  886,610     $ 12,132       5.45 %
                                                 
Noninterest-earning assets:
                                                
Cash and due from banks
     21,962                       19,273                  
Allowance for loan losses
     (14,581 )                     (13,347 )                
Other assets
     40,896                       35,406                  
Total Noninterest-earning Assets
     48,277                       41,332                  
                                                 
Total Assets
   $ 899,094                     $ 927,942                  
                                                 
                                                 
Interest-bearing Liabilities:
                                                
Total interest-bearing checking
   $ 102,593     $ 258       1.02 %   $ 99,196     $ 261       1.04 %
Total savings
     289,251       901       1.26 %     278,710       985       1.40 %
Total time deposits
     251,774       1,813       2.92 %     294,229       2,442       3.29 %
Total Interest-bearing Deposits
     643,618       2,972       1.87 %     672,135       3,688       2.18 %
Total borrowings
     100,465       1,077       4.29 %     100,465       1,078       4.20 %
                                                 
Total Interest-bearing Liabilities
   $  744,083     $ 4,049       2.20 %   $  772,600     $ 4,766       2.44 %
                                                 
Noninterest-bearing Liabilities:
                                                
Noninterest-bearing checking
     83,164                       83,770                  
Other liabilities
     4,104                       4,358                  
Total Noninterest-bearing Liabilities
     87,268                       88,128                  
                                                 
Total Shareholders' Equity
     67,743                       67,214                  
                                                 
Total Liabilities and Shareholders' Equity
   $ 899,094                     $ 927,942                  
                                                 
Net Interest Spread
           $  7,494       3.27 %           $  7,366       3.01 %
Tax-equivalent Basis Adjustment
             (30 )                     (31 )        
Net Interest Income
           $ 7,464                     $ 7,335          
Net Interest Margin
                     3.57 %                     3.30 %
                                                 
(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.
                  
 

 
 
 

                                     
UNITY BANCORP, INC.
  
QUARTER TO DATE NET INTEREST MARGIN
  
March 31, 2010
  
                                     
                                     
   
For the Three Months Ended
  
   
March 31, 2010
    
March 31, 2009
  
Amounts in thousands, except percentages
  
Average Balance
    
Interest
    
Rate/Yield
    
Average Balance
    
Interest
    
Rate/Yield
  
                                     
Interest-earning Assets:
                                    
Federal funds sold and interest-bearing deposits
   $ 32,493     $ 26       0.32 %   $ 10,324     $ 13       0.51 %
Federal Home Loan Bank stock
     4,677       34       2.95 %     5,936       -       0.00 %
                                                 
Securities available for sale (A)
     131,295       1,294       3.94 %     138,302       1,692       4.89 %
Securities held to maturity (A)
     27,323       354       5.18 %     33,984       404       4.76 %
Total securities
     158,618       1,648       4.16 %     172,286       2,096       4.87 %
                                                 
SBA loans
     98,140       1,452       5.92 %     105,044       1,607       6.12 %
SBA 504 loans
     70,444       1,087       6.26 %     76,882       1,231       6.49 %
Commercial loans
     292,055       4,604       6.39 %     305,148       5,016       6.67 %
Residential mortgage loans
     134,611       1,961       5.83 %     129,045       1,864       5.78 %
Consumer loans
     59,779       731       4.96 %     62,148       794       5.18 %
Total loans
     655,029       9,835       6.06 %     678,267       10,512       6.26 %
                                                 
Total Interest-earning Assets
   $  850,817     $ 11,543       5.47 %   $  866,813     $ 12,621       5.87 %
                                                 
Noninterest-earning assets:
                                                
Cash and due from banks
     21,962                       19,627                  
Allowance for loan losses
     (14,581 )                     (10,939 )                
Other assets
     40,896                       33,179                  
Total Noninterest-earning Assets
     48,277                       41,867                  
                                                 
Total Assets
   $ 899,094                     $ 908,680                  
                                                 
                                                 
Interest-bearing Liabilities:
                                                
Total interest-bearing checking
   $ 102,593     $ 258       1.02 %   $ 85,064     $ 270       1.29 %
Total savings
     289,251       901       1.26 %     147,260       644       1.77 %
Total time deposits
     251,774       1,813       2.92 %     387,554       3,723       3.90 %
Total Interest-bearing Deposits
     643,618       2,972       1.87 %     619,878       4,637       3.03 %
Total borrowings
     100,465       1,077       4.29 %     142,109       1,179       3.32 %
                                                 
Total Interest-bearing Liabilities
   $  744,083     $ 4,049       2.20 %   $  761,987     $ 5,816       3.09 %
                                                 
Noninterest-bearing Liabilities:
                                                
Noninterest-bearing checking
     83,164                       75,546                  
Other Liabilities
     4,104                       3,879                  
Total Noninterest-bearing Liabilities
     87,268                       79,425                  
                                                 
Total Shareholders' Equity
     67,743                       67,268                  
                                                 
Total Liabilities and Shareholders' Equity
   $ 899,094                     $ 908,680                  
                                                 
Net Interest Spread
           $  7,494       3.27 %           $  6,805       2.78 %
Tax-equivalent Basis Adjustment
             (30 )                     (31 )        
Net Interest Income
           $  7,464                     $  6,774          
Net Interest Margin
                     3.57 %                     3.18 %
                                                 
(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.
                  
 

 
 
 

                               
UNITY BANCORP, INC.
  
ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY SCHEDULES
  
March 31, 2010
  
                               
                               
                               
Amounts in thousands, except percentages
  
3/31/2010
    
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
  
                               
ALLOWANCE FOR LOAN LOSSES:
                              
Balance, Beginning of Quarter
   $ 13,842     $ 12,445     $ 10,665     $ 10,307     $ 10,326  
Provision for Loan Losses Charged to Expense
     1,500       2,000       3,000       1,500       1,500  
      15,342       14,445       13,665       11,807       11,826  
Less: Chargeoffs
                                        
SBA loans
     -       -       448       323       1,106  
SBA 504 loans
     750       500       -       112       200  
Commercial loans
     485       125       674       798       249  
Residential mortgage loans
     100       -       125       33       58  
Consumer loans
     -       5       11       11       -  
Total Chargeoffs
     1,335       630       1,258       1,277       1,613  
Add: Recoveries
                                        
SBA loans
     45       23       14       56       33  
SBA 504 loans
     -       -       22       -       5  
Commercial loans
     3       3       -       79       53  
Residential mortgage loans
     -       -       -       -       -  
Consumer loans
     -       1       2       -       3  
Total Recoveries
     48       27       38       135       94  
Net Chargeoffs
     1,287       603       1,220       1,142       1,519  
Balance, End of Quarter
   $  14,055     $  13,842     $  12,445     $  10,665     $  10,307  
                                         
LOAN QUALITY INFORMATION:
                                        
Nonperforming loans
   $ 25,786     $ 25,496     $ 24,687     $ 22,774     $ 19,886  
Other real estate owned (OREO)
     3,318       1,530       2,774       466       763  
Total nonperforming assets
     29,104       27,026       27,461       23,240       20,649  
Less:  Amount guaranteed by Small Business Administration
     2,205       1,931       1,759       3,214       2,426  
Net nonperforming assets
   $  26,899     $  25,095     $  25,702     $  20,026     $  18,223  
                                         
Loans 90 Days Past Due & Still Accruing
   $ 2,425     $ 2,286     $ 1,609     $ 781     $ 853  
                                         
Allowance for Loan Losses to:
                                        
Total Loans at Quarter End
     2.16 %     2.11 %     1.90 %     1.60 %     1.54 %
Nonperforming loans
     54.51 %     54.29 %     50.41 %     46.83 %     51.83 %
Total nonperforming assets
     48.29 %     51.22 %     45.32 %     45.89 %     49.92 %
Net nonperforming assets
     52.25 %     55.16 %     48.42 %     53.26 %     56.56 %
                                         
QTD net chargeoffs (annualized) to QTD average loans:
                                        
SBA loans
     -0.19 %     -0.09 %     1.68 %     1.05 %     4.14 %
SBA 504 loans
     4.32 %     2.78 %     -0.12 %     0.61 %     1.03 %
Commercial loans
     0.67 %     0.16 %     0.89 %     0.95 %     0.26 %
Residential mortgage loans
     0.30 %     0.00 %     0.40 %     0.11 %     0.18 %
Consumer loans
     0.00 %     0.03 %     0.06 %     0.07 %     -0.02 %
Total Loans
     0.80 %     0.36 %     0.73 %     0.69 %     0.91 %
                                         
Nonperforming Loans to Total Loans
     3.96 %     3.88 %     3.76 %     3.42 %     2.97 %
Nonperforming Assets to Total Loans & OREO
     4.45 %     4.10 %     4.17 %     3.49 %     3.08 %
Nonperforming Assets to Total Assets
     3.27 %     2.90 %     2.98 %     2.54 %     2.33 %
 

 
 
 

                               
UNITY BANCORP, INC.
  
QUARTERLY FINANCIAL DATA
  
March 31, 2010
  
                               
                               
                               
                               
                               
Amounts in thousands, except percentages and per share amounts
  
3/31/2010
    
12/31/2009
    
9/30/2009
    
6/30/2009
    
3/31/2009
  
                               
SUMMARY OF INCOME:
                              
Total Interest Income
   $ 11,513     $ 12,101     $ 12,186     $ 12,529     $ 12,590  
Total Interest Expense
     4,049       4,766       5,327       5,673       5,816  
Net Interest Income Before Provision
     7,464       7,335       6,859       6,856       6,774  
Provision for Loan Losses
     1,500       2,000       3,000       1,500       1,500  
Net Interest Income After Provision
     5,964       5,335       3,859       5,356       5,274  
Total Noninterest Income (Loss)
     910       535       1,164       (907 )     1,348  
Total Noninterest Expense
     5,941       6,076       6,113       6,201       5,555  
Net Income (Loss) Before Taxes
     933       (206 )     (1,090 )     (1,752 )     1,067  
Income Taxes (Benefit)
     185       (340 )     (343 )     (552 )     336  
Net Income (Loss)
     748       134       (747 )     (1,200 )     731  
Preferred Dividends & Discount Accretion
     374       373       372       372       379  
Income Available (Loss Attributable) to Common Shareholders
   $ 374     $ (239 )   $ (1,119 )   $ (1,572 )   $ 352  
                                         
Net Income (Loss) Per Share - Basic
   $  0.05     $  (0.03 )   $  (0.16 )   $  (0.22 )   $  0.05  
Net Income (Loss) Per Share - Diluted
   $  0.05     $  (0.03 )   $  (0.16 )   $  (0.22 )   $  0.05  
                                         
COMMON SHARE DATA:
                                        
Market Price Per Share
   $  5.29     $  4.02     $  4.20     $  3.55     $  3.19  
Dividends Paid
   $  -     $  -     $  -     $  -     $ -  
Book Value Per Common Share
   $  7.00     $  6.91     $  6.88     $  6.85     $  6.96  
Average Shares Outstanding - Basic
     7,150       7,126       7,119       7,119       7,119  
Average Shares Outstanding - Diluted
     7,294       7,126       7,119       7,119       7,148  
Shares Outstanding
     7,156       7,144       7,119       7,119       7,119  
                                         
OPERATING RATIOS (Annualized):
                                        
Return on Average Assets
     0.34 %     0.06 %     -0.33 %     -0.54 %     0.33 %
Return on Average Common Equity
     3.09 %     -1.95 %     -9.14 %     -12.97 %     2.90 %
Efficiency Ratio
     70.98 %     71.04 %     77.72 %     80.57 %     73.02 %
                                         
BALANCE SHEET DATA:
                                        
Total Assets
   $ 889,927     $ 930,357     $ 922,689     $ 913,446     $ 886,677  
Total Deposits
     714,802       758,239       750,665       731,763       703,266  
Total Loans
     651,200       657,016       656,520       665,332       669,902  
Total Securities
     138,442       169,022       171,501       164,794       158,022  
Total Shareholders' Equity
     68,712       67,865       67,385       67,064       67,525  
Allowance for Loan Losses
     (14,055 )     (13,842 )     (12,445 )     (10,665 )     (10,307 )
                                         
TAX EQUIVALENT YIELDS AND RATES:
                                        
Interest-earning Assets
     5.47 %     5.45 %     5.64 %     5.91 %     5.87 %
Interest-bearing Liabilities
     2.20 %     2.44 %     2.80 %     3.05 %     3.09 %
Net Interest Spread
     3.27 %     3.01 %     2.84 %     2.86 %     2.78 %
Net Interest Margin
     3.57 %     3.30 %     3.17 %     3.24 %     3.18 %
                                         
CREDIT QUALITY:
                                        
Nonperforming Assets
   $  29,104     $  27,026     $  27,461     $  23,240     $  20,649  
QTD Net Chargeoffs (annualized) to QTD Average Loans
     0.80 %     0.36 %     0.73 %     0.69 %     0.91 %
Allowance for Loan Losses to Total Loans
     2.16 %     2.11 %     1.90 %     1.60 %     1.54 %
Nonperforming Assets to Total Loans and OREO
     4.45 %     4.10 %     4.17 %     3.49 %     3.08 %
Nonperforming Assets to Total Assets
     3.27 %     2.90 %     2.98 %     2.54 %     2.33 %
                                         
CAPITAL RATIOS AND OTHER:
                                        
Total Equity to Total Assets
     7.72 %     7.29 %     7.30 %     7.34 %     7.62 %
Leverage Ratio
     9.18 %     8.83 %     9.08 %     9.30 %     9.28 %
Tier 1 Risk-Based Capital Ratio
     12.02 %     11.75 %     11.83 %     11.88 %     12.32 %
Total Risk-Based Capital Ratio
     13.28 %     13.01 %     13.09 %     13.13 %     13.57 %
Number of Banking Offices
     16       16       16       16       16  
Number of ATMs
     19       19       19       19       19  
Number of Employees
     171       174       175       168       162