EX-99.1 2 exh99-1.htm THIRD 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:  October 21, 2010

News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308


 
Unity Bancorp Reports Third Quarter and Nine Month Earnings
 
Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income  available to common shareholders of $341 thousand or $0.05 per diluted share for the quarter ended September 30, 2010, compared to a net loss of $1.1 million or $0.16 per diluted share for the third quarter of 2009.  Return on average assets and average common equity for the third quarter of 2010 were 0.34% and 2.66%, respectively.
 
For the nine months ended September 30, 2010, the Company reported net income available to common shareholders of $1.0 million or $0.14 per diluted share, compared to a net loss of $2.3 million or $0.33 per diluted share for the same period a year ago.  Return on average assets and average common equity for the nine month period were 0.33% and 2.72%, respectively.
 
Nine month results in 2009 were substantially impacted by the following items, which were not present during the first nine months of 2010:

·  
The Company recognized a pre-tax other-than-temporary impairment (“OTTI”) charge during the second quarter of 2009 of $1.7 million, or $0.17 per diluted share, due to the deterioration of the underlying collateral of two pooled trust preferred securities.
·  
The FDIC imposed a special assessment equal to 5 basis points of an insured depository institution's assets minus Tier 1 capital as of June 30, 2009. The Company recognized a charge of approximately $408 thousand, or $0.04 per diluted share, in the second quarter for this special assessment.
·  
The Company recorded an additional provision for loan losses of $1.5 million in the third quarter of 2009.
 
James A. Hughes, President and CEO, stated, “We are pleased to report positive financial developments despite the impact the recession has had on many of our borrowers.”  Mr. Hughes continued, “Net income growth was driven by improving margins and the lower cost of interest-bearing deposits. We continue to remain optimistic about the opportunities ahead.  Despite the increase in nonperforming assets, resolution of many of our problem credits appears certain.”
 
 
Net Interest Income
 
For the quarter ended September 30, 2010, net interest income was $7.4 million, an increase of $554 thousand or 8.1% from the quarter ended September 30, 2009.  Factors affecting third quarter net interest income include:
 
·  
The yield on interest-earning assets decreased 34 basis points to 5.30% from 5.64% 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 91 basis points to 1.89% from 2.80% a year ago. All interest-bearing deposit costs declined with the largest decline in savings deposits.
·  
Net interest margin was 3.66%, a 49 basis point increase from 3.17% in the third quarter of 2009. This increase was driven by the reduced cost of funds.
 
Year-to-date, net interest income was $22.1 million, or 8.0% higher than the $20.5 million reported for the first nine months of 2009.  Factors affecting the nine month net interest income include:
 
·  
The yield on earning assets decreased from 5.81% for the first nine months of 2009 to 5.35% for the first nine months of 2010. This was a result of interest-earning assets re-pricing in a low rate environment.
·  
The cost of interest-bearing liabilities decreased from 2.98% for the first nine months of 2009 to 2.04% for the first nine months of 2010.  All interest-bearing deposit costs declined with the largest decline in time deposits.
·  
Net interest margin for the nine months ended September 30, 2010 was 3.58%, an increase of 38 basis points from the same period last year.
 
 
 
Page 1 of 12
 
 
 
Noninterest Income
 
For the quarter ended September 30, 2010, noninterest income totaled $1.5 million, an increase of $298 thousand from the quarter ended September 30, 2009.  The following factors impacted the quarter’s noninterest income:
 
·  
Branch fee income remained relatively flat compared to the prior year period.
·  
Service and loan fee income declined $147 thousand due to a lower level of loan prepayment fees.
·  
There were $269 thousand in gains on the sales of SBA loans, compared to no gains in the prior year’s quarter.
·  
Gains on the sales of residential mortgage loans totaled $247 thousand, compared to $71 thousand the prior year.
·  
The quarterly increase in the cash surrender value of bank owned life insurance (“BOLI”) increased $23 thousand to $79 thousand.  This was the result of the Company purchasing $2.5 million in BOLI to help offset the rising cost of employee benefits during the first quarter of 2010.
·  
Gains on the sales of investment securities amounted to $35 thousand, compared to $158 thousand in the prior year period.
 
For the nine months ended September 30, 2010, noninterest income amounted to $3.5 million, an increase of $1.9 million from the nine months ended September 30, 2009.  Excluding the effect of the OTTI charge noted above, noninterest income increased $186 thousand.  Noninterest income was affected by the following factors:
 
·  
Branch fee income remained relatively flat compared to the prior year period.
·  
Service and loan fee income decreased $241 thousand compared to the prior year period due to lower levels of prepayment fees.
·  
Gains on sales on SBA loans amounted to $416 thousand, compared to $29 thousand a year ago.
·  
Gains on the sales of residential mortgage loans amounted to $504 thousand, compared to $184 thousand from the prior year period.
·  
The nine month increase in the cash surrender value of bank owned life insurance (“BOLI”) increased $64 thousand to $230 thousand.  This was the result of the Company purchasing $2.5 million in BOLI to help offset the rising cost of employee benefits during the first quarter of 2010.
·  
Gains on the sales of investment securities amounted to $42 thousand, compared to $675 thousand in the prior year period.
 
 
Noninterest Expense
 
For the quarter ended September 30, 2010, noninterest expenses were $6.4 million, an increase of $294 thousand or 4.8% from the quarter ended September 30, 2009. The following factors affected our noninterest expense:
 
·  
Compensation and benefits expense amounted to $3.0 million, an increase of $51 thousand or 1.8%.   This was the result of an increase in compensation, employee medical benefits costs and mortgage loan commissions, partially offset by lower incentive bonus payments.
·  
Occupancy expense increased by $29 thousand or 4.9%, due to an increase in rental expense.
·  
Furniture and equipment expense increased $26 thousand or 6.3%, primarily due to increased software and equipment lease expense, partially offset by a decrease in equipment depreciation expense.
·  
Professional fees decreased $45 thousand, due to decreased consulting, loan review and audit costs.
·  
Loan collection costs decreased $43 thousand, due to decreased collection costs on delinquent loans.
·  
Other real estate owned (“OREO”) expense increased $306 thousand, due to increased maintenance and valuation related expenses on OREO properties.
 
For the nine months ended September 30, 2010, noninterest expenses were $18.4 million, an increase of $515 thousand or 2.9% from the same period a year ago. The following factors affected our noninterest expense:
 
·  
Compensation and benefits expense amounted to $8.8 million, an increase of $395 thousand or 4.7%, due to increased compensation, higher employee medical benefits costs and increased residential mortgage commissions due to a larger sales volume, partially offset by lower incentive bonus payments.
·  
Occupancy expense declined by $19 thousand or 1.0%, due primarily to a reduction in rental expense from a renegotiated lease.
·  
Processing and communications increased $55 thousand or 3.5%, due primarily to increased data processing line costs.
·  
Furniture and equipment expense decreased $70 thousand or 5.1%, primarily due to decreased depreciation expense as capital expenditures declined and decreased equipment maintenance charges.
·  
Professional fees decreased $123 thousand, due to decreased consulting, loan review and audit costs.
·  
OREO expense increased $476 thousand, due to increased maintenance and valuation related expenses on OREO properties.
·  
FDIC insurance premiums decreased $378 thousand, due primarily to the $408 thousand second quarter 2009 special assessment.
·  
Advertising expenses increased $105 thousand or 28.2%, due to increased marketing efforts.
 
 
 
Page 2 of 12
 
 
 
Financial Condition
 
At September 30, 2010, total assets were $846.4 million, a 9.0% decrease from year-end.
 
·  
Total loans decreased $27.5 million or 4.2%, from $657.0 million at December 31, 2009. SBA 7(a), SBA 504, commercial, residential and consumer loans decreased 8.1%, 7.9%, 3.0%, 1.2% and 5.7%, respectively.  Loan balances for the remainder of 2010 are expected to remain flat to down as the Company is no longer generating loans outside of its trade area 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 $34.2 million since year-end as Unity received $37.2 million in principal payments, sold $13.4 million and had $14.8 million in bonds called during the nine month period, partially offset by $30.0 million in purchases.
·  
Core deposits, excluding time deposits, increased $14.1 million during the nine month period to $480.6 million.  The increase was due primarily to a $7.7 million increase in demand deposits and a $6.0 million increase in savings deposits.  Time deposits decreased $102.2 million for the nine months ended September 30, 2010 due to planned run off of a maturing high rate promotion that was done late in 2008 to bolster liquidity.
·  
Shareholders’ equity was $70.7 million at September 30, 2010, an increase of $2.9 million from year-end.
·  
Book value per common share was $7.19, compared to $6.91 at year-end.
·  
At September 30, 2010 the leverage, Tier I and Total Risk Based Capital ratios were 9.83%, 12.67% and 13.93%, respectively, all in excess of the ratios required to be deemed “well-capitalized”.
 
 
Credit Quality
 
·  
Nonperforming assets totaled $33.1 million at September 30, 2010, or 5.21% of total loans and OREO, compared to $27.5 million or 4.17% of total loans and OREO a year ago.
·  
The commercial, residential, SBA, SBA 504 and consumer nonaccrual loans were $9.5 million, $6.1 million, $6.3 million, $5.2 million and $235 thousand, respectively.  The majority of nonaccrual loans are secured by real estate.
·  
OREO assets totaled $5.8 million at September 30, 2010, an increase of $3.0 million, compared to $2.8 million a year ago.  The increase is related to the acquisition of titles through foreclosure proceedings.
·  
The allowance for loan losses totaled $14.2 million at September 30, 2010, or 2.25% of total loans. The provision for loan losses for the quarter and nine months ended September 30, 2010 was $1.5 million and $4.5 million, respectively, compared to $3.0 million and $6.0 million for the quarter and nine month periods of 2009.
·  
Net charge-offs were $1.3 million for the three months ended September 30, 2010, compared to $1.2 million for the same period a year ago.  Net charge-offs were $4.2 million for the nine months ended September 30, 2010, compared to $3.9 million for the same period a year ago.
 
Mr. Hughes added, “Unity continues to work diligently to assertively address problem loans, however, the backlog in the courts has significantly slowed the collection process.  The increase in nonperforming assets was due to the delay in the sale of many problem assets and further deterioration of substantial credits.   For the near term, the size of our loan loss provision will remain the most important single factor in our earnings.  However, we believe that with stabilization of our credit quality and a rebound in overall economic activity, we are well positioned for future growth.”
 
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $846 million in assets and $670 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 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 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.

 
 
Page 3 of 12
 
 

UNITY BANCORP, INC.  
SUMMARY FINANCIAL HIGHLIGHTS  
September 30, 2010  
                               
                               
                               
                     
2010.Q3 VS.
  
                        2010.Q2       2009.Q3  
Amounts in thousands, except percentages and per share amounts
  
9/30/2010
    
6/30/2010
    
9/30/2009
    
%
    
%
  
                                   
BALANCE SHEET DATA:
                                  
Total assets
   $ 846,385     $ 869,735     $ 922,689       -2.7 %     -8.3 %
Total deposits
     670,158       693,232       750,665       -3.3 %     -10.7 %
Total loans
     629,516       637,180       656,520       -1.2 %     -4.1 %
Total securities
     134,820       143,662       171,501       -6.2 %     -21.4 %
Total shareholders' equity
     70,730       69,633       67,385       1.6 %     5.0 %
Allowance for loan losses
     (14,163 )     (13,946 )     (12,445 )     1.6 %     13.8 %
                                         
FINANCIAL DATA - QUARTER TO DATE:
                                        
Income (loss) before provision (benefit) for income taxes
   $ 968     $ 893     $ (1,090 )     8.4 %     188.8 %
Provision (benefit) for income taxes
     242       212       (343 )     14.2 %     170.6 %
Net income (loss)
     726       681       (747 )     6.6 %     197.2 %
Preferred stock dividends & discount accretion
     385       379       372       1.6 %     3.5 %
Income available (loss attributable) to common shareholders
   $ 341     $ 302     $ (1,119 )     12.9 %     130.5 %
                                         
Net income (loss) per common share - Basic
   $ 0.05     $ 0.04     $ (0.16 )     25.0 %     131.3 %
Net income (loss) per common share - Diluted
   $ 0.05     $ 0.04     $ (0.16 )     25.0 %     131.3 %
                                         
Return (loss) on average assets
     0.34 %     0.31 %     -0.33 %     9.7 %     203.0 %
Return (loss) on average equity
     2.66 %     2.43 %     -9.14 %     9.5 %     129.1 %
Effficiency ratio
     72.47 %     71.66 %     77.72 %     1.1 %     -6.8 %
                                         
FINANCIAL DATA - YEAR TO DATE:
                                        
Income (loss) before provision (benefit) for income taxes
   $ 2,794     $ 1,826     $ (1,774 )     53.0 %     257.5 %
Provision (benefit) for income taxes
     639       397       (559 )     61.0 %     214.3 %
Net income (loss)
     2,155       1,429       (1,215 )     50.8 %     277.4 %
Preferred stock dividends & discount accretion
     1,136       752       1,123       51.1 %     1.2 %
Income available (loss attributable) to common shareholders
   $ 1,019     $ 677     $ (2,338 )     50.5 %     143.6 %
                                         
Net income (loss) per common share - Basic
   $ 0.14     $ 0.09     $ (0.33 )     50.2 %     143.3 %
Net income (loss) per common share - Diluted
   $ 0.14     $ 0.09     $ (0.33 )     49.9 %     141.8 %
                                         
Return (loss) on average assets
     0.33 %     0.32 %     -0.18 %     3.1 %     283.3 %
Return (loss) on average equity
     2.72 %     2.76 %     -6.38 %     -1.4 %     142.6 %
Effficiency ratio
     71.72 %     71.32 %     77.12 %     0.6 %     -7.0 %
                                         
SHARE INFORMATION:
                                        
Market price per share
     5.25       5.35       4.20       -1.9 %     25.0 %
Dividends paid
     -       -       -       0.0 %     0.0 %
Book value per common share
     7.19       7.11       6.88       1.2 %     4.6 %
Average diluted shares outstanding (QTD)
     7,467       7,475       7,119       -0.1 %     4.9 %
                                         
CAPITAL RATIOS:
                                        
Total equity to total assets
     8.36 %     8.01 %     7.30 %     4.4 %     14.4 %
Leverage ratio
     9.83 %     9.43 %     9.08 %     4.2 %     8.2 %
Tier 1 risk-based capital ratio
     12.67 %     12.39 %     11.83 %     2.2 %     7.1 %
Total risk-based capital ratio
     13.93 %     13.65 %     13.09 %     2.0 %     6.4 %
                                         
CREDIT QUALITY AND RATIOS:
                                        
Nonperforming assets
   $ 33,077     $ 29,799     $ 27,461       11.0 %     20.5 %
QTD net chargeoffs (annualized) to QTD average loans
     0.80 %     1.00 %     0.73 %     -19.9 %     10.0 %
Allowance for loan losses to total loans
     2.25 %     2.19 %     1.90 %     2.8 %     18.7 %
Nonperforming assets to total loans and OREO
     5.21 %     4.65 %     4.17 %     12.0 %     25.0 %
Nonperforming assets to total assets
     3.91 %     3.43 %     2.98 %     14.1 %     31.3 %

 
Page 4 of 12
 
 
 
UNITY BANCORP, INC.  
CONSOLIDATED BALANCE SHEETS  
September 30, 2010  
                               
                               
                               
                     
2010.Q3 VS.
  
                        2010.Q2       2009.Q3  
Amounts in thousands, except percentages
  
9/30/2010
    
6/30/2010
    
9/30/2009
    
%
    
%
  
                                   
ASSETS
                                  
Cash and due from banks
   $ 16,928     $ 18,016     $ 17,035       -6.0 %     -0.6 %
Federal funds sold and interest-bearing deposits
     30,379       37,478       48,853       -18.9 %     -37.8 %
Cash and cash equivalents
     47,307       55,494       65,888       -14.8 %     -28.2 %
                                         
Securities available for sale
     111,777       121,628       140,906       -8.1 %     -20.7 %
Securities held to maturity
     23,043       22,034       30,595       4.6 %     -24.7 %
Total securities
     134,820       143,662       171,501       -6.2 %     -21.4 %
                                         
SBA loans held for sale
     19,021       22,093       21,364       -13.9 %     -11.0 %
SBA loans held to maturity
     72,197       73,298       79,342       -1.5 %     -9.0 %
SBA 504 loans
     65,075       65,343       71,432       -0.4 %     -8.9 %
Commercial loans
     284,875       285,173       298,019       -0.1 %     -4.4 %
Residential mortgage loans
     131,479       132,993       124,313       -1.1 %     5.8 %
Consumer loans
     56,869       58,280       62,050       -2.4 %     -8.3 %
Total loans
     629,516       637,180       656,520       -1.2 %     -4.1 %
Allowance for loan losses
     (14,163 )     (13,946 )     (12,445 )     1.6 %     13.8 %
Net loans
     615,353       623,234       644,075       -1.3 %     -4.5 %
                                         
Premises and equipment, net
     11,137       11,348       11,911       -1.9 %     -6.5 %
Deferred tax assets
     7,168       7,485       7,256       -4.2 %     -1.2 %
Bank owned life insurance (BOLI)
     8,732       8,653       5,946       0.9 %     46.9 %
Prepaid FDIC insurance
     3,545       3,836       -       -7.6 %     100.0 %
Federal Home Loan Bank stock
     4,656       4,656       4,677       0.0 %     -0.4 %
Accrued interest receivable
     3,750       3,972       4,230       -5.6 %     -11.3 %
Other real estate owned (OREO)
     5,773       3,728       2,774       54.9 %     108.1 %
Goodwill and other intangibles
     1,548       1,552       1,563       -0.3 %     -1.0 %
SBA servicing assets
     614       660       977       -7.0 %     -37.2 %
Other assets
     1,982       1,455       1,891       36.2 %     4.8 %
                                         
Total assets
   $ 846,385     $ 869,735     $ 922,689       -2.7 %     -8.3 %
                                         
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Noninterest-bearing demand deposits
   $ 87,837     $ 87,908     $ 83,534       -0.1 %     5.2 %
Interest-bearing demand deposits
     100,350       98,316       92,401       2.1 %     8.6 %
Savings deposits
     292,372       291,355       263,758       0.3 %     10.8 %
Time deposits, under $100,000
     124,851       143,617       209,050       -13.1 %     -40.3 %
Time deposits, $100,000 and over
     64,748       72,036       101,922       -10.1 %     -36.5 %
Total deposits
     670,158       693,232       750,665       -3.3 %     -10.7 %
                                         
Borrowed funds
     86,044       87,672       85,000       -1.9 %     1.2 %
Subordinated debentures
     15,465       15,465       15,465       0.0 %     0.0 %
Accrued interest payable
     618       661       797       -6.5 %     -22.5 %
Accrued expenses and other liabilities
     3,370       3,072       3,377       9.7 %     -0.2 %
Total liabilities
     775,655       800,102       855,304       -3.1 %     -9.3 %
                                         
Cumulative perpetual preferred stock
     18,894       18,770       18,418       0.7 %     2.6 %
Common stock
     55,798       55,592       55,351       0.4 %     0.8 %
Retained earnings (deficit)
     (473 )     (815 )     (1,253 )     42.0 %     62.3 %
Treasury stock at cost
     (4,169 )     (4,169 )     (4,169 )     0.0 %     0.0 %
Accumulated other comprehensive income (loss)
     680       255       (962 )     166.7 %     170.7 %
Total shareholders' equity
     70,730       69,633       67,385       1.6 %     5.0 %
                                         
Total liabilities and shareholders' equity
   $ 846,385     $ 869,735     $ 922,689       -2.7 %     -8.3 %
                                         
Issued common shares
     7,632       7,579       7,544                  
Outstanding common shares
     7,207       7,154       7,119                  
Treasury shares
     425       425       425                  
 

 
Page 5 of 12
 
 

UNITY BANCORP, INC.  
QTD CONSOLIDATED STATEMENTS OF INCOME  
September 30, 2010  
                                           
                                           
                                           
                     
2010.Q3 VS.
  
    For the Three Months Ended       2010.Q2     2009.Q3  
Amounts in thousands, except percentages and per share amounts
  
9/30/2010
    
6/30/2010
    
9/30/2009
               %      $       %  
                                                 
INTEREST INCOME
                                                
Federal funds sold and interest-bearing deposits
   $ 21     $ 29     $ 32     $ (8 )     -27.6 %   $ (11 )     -34.4 %
Federal Home Loan Bank stock
     65       49       101       16       32.7 %     (36 )     -35.6 %
                                                         
Securities available for sale
     1,071       1,054       1,482       17       1.6 %     (411 )     -27.7 %
Securities held to maturity
     270       250       389       20       8.0 %     (119 )     -30.6 %
Total securities
     1,341       1,304       1,871       37       2.8 %     (530 )     -28.3 %
                                                         
SBA loans
     1,225       1,300       1,498       (75 )     -5.8 %     (273 )     -18.2 %
SBA 504 loans
     1,093       1,091       1,147       2       0.2 %     (54 )     -4.7 %
Commercial loans
     4,454       4,488       4,973       (34 )     -0.8 %     (519 )     -10.4 %
Residential mortgage loans
     1,808       1,959       1,772       (151 )     -7.7 %     36       2.0 %
Consumer loans
     719       724       791       (5 )     -0.7 %     (72 )     -9.1 %
Total loans
     9,299       9,562       10,181       (263 )     -2.8 %     (882 )     -8.7 %
                                                         
Total interest income
     10,726       10,944       12,185       (218 )     -2.0 %     (1,459 )     -12.0 %
                                                         
INTEREST EXPENSE
                                                        
Interest-bearing demand deposits
     148       188       264       (40 )     -21.3 %     (116 )     -43.9 %
Savings deposits
     639       728       1,032       (89 )     -12.2 %     (393 )     -38.1 %
Time deposits
     1,450       1,687       2,950       (237 )     -14.0 %     (1,500 )     -50.8 %
Borrowed funds and subordinated debentures
     1,077       1,078       1,081       (1 )     -0.1 %     (4 )     -0.4 %
Total interest expense
     3,314       3,681       5,327       (367 )     -10.0 %     (2,013 )     -37.8 %
                                                         
Net interest income
     7,412       7,263       6,858       149       2.1 %     554       8.1 %
Provision for loan losses
     1,500       1,500       3,000       -       0.0 %     (1,500 )     -50.0 %
Net interest income after provision for loan losses
     5,912       5,763       3,858       149       2.6 %     2,054       53.2 %
                                                         
NONINTEREST INCOME
                                                        
Branch fee income
     359       331       373       28       8.5 %     (14 )     -3.8 %
Service and loan fee income
     251       245       398       6       2.4 %     (147 )     -36.9 %
Gain on sale of SBA loans held for sale, net
     269       147       -       122       83.0 %     269       100.0 %
Gain on sale of mortgage loans
     247       112       71       135       120.5 %     176       247.9 %
Bank owned life insurance (BOLI)
     79       78       56       1       1.3 %     23       41.1 %
Other-than-temporary impairment charges
     -       -       -       -       0.0 %     -       0.00 %
Net security gains
     35       4       158       31       775.0 %     (123 )     -77.8 %
Other income
     220       253       106       (33 )     -13.0 %     114       107.5 %
Total noninterest income (loss)
     1,460       1,170       1,162     $ 290       24.8 %   $ 298       25.6 %
                                                         
NONINTEREST EXPENSE
                                                        
Compensation and benefits
     2,960       2,822       2,909       138       4.9 %     51       1.8 %
Occupancy
     624       608       595       16       2.6 %     29       4.9 %
Processing and communications
     529       555       531       (26 )     -4.7 %     (2 )     -0.4 %
Furniture and equipment
     440       447       414       (7 )     -1.6 %     26       6.3 %
Professional services
     229       199       274       30       15.1 %     (45 )     -16.4 %
Loan collection costs
     272       243       315       29       11.9 %     (43 )     -13.7 %
OREO expense
     482       157       176       325       207.0 %     306       173.9 %
Deposit insurance
     333       320       351       13       4.1 %     (18 )     -5.1 %
Advertising
     130       241       147       (111 )     -46.1 %     (17 )     -11.6 %
Other expenses
     405       448       398       (43 )     -9.6 %     7       1.8 %
Total noninterest expense
     6,404       6,040       6,110       364       6.0 %     294       4.8 %
                                                         
Income (loss) before provision (benefit) for income taxes
     968       893       (1,090 )     75       8.4 %     2,058       188.8 %
Provision (benefit) for income taxes
     242       212       (343 )     30       14.2 %     585       170.6 %
Net income (loss)
     726       681       (747 )     45       6.6 %     1,473       197.2 %
Preferred stock dividends & discount accretion
     385       379       372       6       1.6 %     13       3.5 %
Income available (loss attributable) to common shareholders
   $ 341     $ 302     $ (1,119 )   $ 39       12.9 %   $ 1,460       130.5 %
                                                         
Effective tax rate
     25.0 %     23.7 %     31.5 %                                
                                                         
Net income (loss) per common share - Basic
   $ 0.05     $ 0.04     $ (0.16 )                                
Net income (loss) per common share - Diluted
   $ 0.05     $ 0.04     $ (0.16 )                                
                                                         
Weighted average common shares outstanding - Basic
     7,176       7,156       7,119                                  
Weighted average common shares outstanding - Diluted
     7,467       7,475       7,119                                  
                                                         

 
 
Page 6 of 12
 
 
 
UNITY BANCORP, INC.  
YTD CONSOLIDATED STATEMENTS OF INCOME  
September 30, 2010  
                         
                         
                         
   
Current YTD
    
Prior YTD
    
Current YTD VS. Prior YTD
  
Amounts in thousands, except percentages and per share amounts
  
9/30/2010
    
9/30/2009
      $       %  
                           
INTEREST INCOME
                          
Federal funds sold and interest-bearing deposits
   $ 76     $ 78     $ (2 )     -2.6 %
Federal Home Loan Bank stock
     148       219       (71 )     -32.4 %
                                 
Securities available for sale
     3,405       4,670       (1,265 )     -27.1 %
Securities held to maturity
     858       1,167       (309 )     -26.5 %
Total securities
     4,263       5,837       (1,574 )     -27.0 %
                                 
SBA loans
     3,977       4,668       (691 )     -14.8 %
SBA 504 loans
     3,270       3,663       (393 )     -10.7 %
Commercial loans
     13,546       15,040       (1,494 )     -9.9 %
Residential mortgage loans
     5,729       5,419       310       5.7 %
Consumer loans
     2,174       2,383       (209 )     -8.8 %
Total loans
     28,696       31,173       (2,477 )     -7.9 %
                                 
Total interest income
     33,183       37,307       (4,124 )     -11.1 %
                                 
INTEREST EXPENSE
                                
Interest-bearing demand deposits
     593       801       (208 )     -26.0 %
Savings deposits
     2,268       2,588       (320 )     -12.4 %
Time deposits
     4,952       10,084       (5,132 )     -50.9 %
Borrowed funds and subordinated debentures
     3,232       3,344       (112 )     -3.3 %
Total interest expense
     11,045       16,817       (5,772 )     -34.3 %
                                 
Net interest income
     22,138       20,490       1,648       8.0 %
Provision for loan losses
     4,500       6,000       (1,500 )     -25.0 %
Net interest income after provision for loan losses
     17,638       14,490       3,148       21.7 %
                                 
NONINTEREST INCOME
                                
Branch fee income
     1,051       1,038       13       1.3 %
Service and loan fee income
     705       946       (241 )     -25.5 %
Gain on sale of SBA loans held for sale, net
     416       29       387       1334.5 %
Gain on sale of mortgage loans
     504       184       320       173.9 %
Bank owned life insurance (BOLI)
     230       166       64       38.6 %
Other-than-temporary impairment charges
     -       (1,749 )     1,749       100.0 %
Net security gains
     42       675       (633 )     -93.8 %
Other income
     592       316       276       87.3 %
Total noninterest income
     3,540       1,605       1,935       120.6 %
                                 
NONINTEREST EXPENSE
                                
Compensation and benefits
     8,781       8,386       395       4.7 %
Occupancy
     1,910       1,929       (19 )     -1.0 %
Processing and communications
     1,609       1,554       55       3.5 %
Furniture and equipment
     1,311       1,381       (70 )     -5.1 %
Professional services
     657       780       (123 )     -15.8 %
Loan collection costs
     698       694       4       0.6 %
OREO expense
     669       193       476       246.6 %
Deposit insurance
     983       1,361       (378 )     -27.8 %
Advertising
     478       373       105       28.2 %
Other expenses
     1,288       1,218       70       5.7 %
Total noninterest expense
     18,384       17,869       515       2.9 %
                                 
Income (loss) before provision (benefit) for income taxes
     2,794       (1,774 )     4,568       257.5 %
Provision (benefit) for income taxes
     639       (559 )     1,198       214.3 %
Net income (loss)
     2,155       (1,215 )     3,370       277.4 %
Preferred stock dividends & discount accretion
     1,136       1,123       13       1.2 %
Income available (loss attributable) to common shareholders
   $ 1,019     $ (2,338 )   $ 3,357       143.6 %
                                 
Effective tax rate
     22.9 %     31.5 %                
                                 
Net income (loss) per common share - Basic
   $ 0.14     $ (0.33 )                
Net income (loss) per common share - Diluted
   $ 0.14     $ (0.33 )                
                                 
Weighted average common shares outstanding - Basic
     7,161       7,119                  
Weighted average common shares outstanding - Diluted
     7,417       7,119                  
 
 
 
Page 7 of 12
 
 
 
UNITY BANCORP, INC.  
QUARTER TO DATE NET INTEREST MARGIN  
September 30, 2010  
                                     
                                     
   
For the Three Months Ended
  
   
September 30, 2010
    
June 30, 2010
  
Amounts in thousands, except percentages
  
Average Balance
    
Interest
    
Rate/Yield
    
Average Balance
    
Interest
    
Rate/Yield
  
                                     
ASSETS
                                    
Interest-earning assets:
                                    
Federal funds sold and interest-bearing deposits
   $ 30,939     $ 21       0.27 %   $ 41,695     $ 29       0.28 %
Federal Home Loan Bank stock
     4,656       65       5.54 %     4,656       49       4.22 %
                                                 
Securities available for sale
     115,876       1,085       3.75 %     120,333       1,068       3.55 %
Securities held to maturity
     22,148       275       4.97 %     23,300       256       4.39 %
Total securities (A)
     138,024       1,360       3.94 %     143,633       1,324       3.69 %
                                                 
SBA loans
     94,723       1,225       5.17 %     98,214       1,300       5.29 %
SBA 504 loans
     65,506       1,093       6.62 %     66,318       1,091       6.60 %
Commercial loans
     283,267       4,454       6.24 %     285,709       4,488       6.30 %
Residential mortgage loans
     132,031       1,808       5.48 %     133,379       1,959       5.87 %
Consumer loans
     57,315       719       4.98 %     58,718       724       4.95 %
Total loans (A), (B)
     632,842       9,299       5.85 %     642,338       9,562       5.97 %
                                                 
Total interest-earning assets
   $ 806,461     $ 10,745       5.30 %   $ 832,322     $ 10,964       5.28 %
                                                 
Noninterest-earning assets:
                                                
Cash and due from banks
     20,469                       21,959                  
Allowance for loan losses
     (14,725 )                     (14,678 )                
Other assets
     41,374                       42,289                  
Total noninterest-earning assets
     47,118                       49,570                  
                                                 
Total assets
   $ 853,579                     $ 881,892                  
                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY                                                
Interest-bearing liabilities:
                                                
Interest-bearing demand deposits
   $ 95,348     $ 148       0.62 %   $ 100,108     $ 188       0.75 %
Savings deposits
     290,017       639       0.87 %     292,543       728       1.00 %
Time deposits
     203,346       1,450       2.83 %     227,722       1,687       2.97 %
Total interest-bearing deposits
     588,711       2,237       1.51 %     620,373       2,603       1.68 %
Borrowed funds and subordinated debentures
     103,296       1,077       4.08 %     101,907       1,078       4.18 %
                                                 
Total interest-bearing liabilities
   $ 692,007     $ 3,314       1.89 %   $ 722,280     $ 3,681       2.04 %
                                                 
Noninterest-bearing liabilities:
                                                
Noninterest-bearing demand deposits
     87,644                       86,772                  
Other liabilities
     4,115                       4,313                  
Total noninterest-bearing liabilities
     91,759                       91,085                  
                                                 
Total shareholders' equity
     69,813                       68,527                  
                                                 
Total liabilities and shareholders' equity
   $ 853,579                     $ 881,892                  
                                                 
Net interest spread
           $ 7,431       3.41 %           $ 7,283       3.24 %
Tax-equivalent basis adjustment
             (19 )                     (20 )        
Net interest income
           $ 7,412                     $ 7,263          
Net interest margin
                     3.66 %                     3.51 %
                                                 
(A) Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductible portion of interest expense, assuming a federal tax rate of 34 percent and applicable state rates.
  
(B) The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.
  

 
 
  Page 8 of 12
 
 
 
UNITY BANCORP, INC.  
QUARTER TO DATE NET INTEREST MARGIN  
September 30, 2010  
                                     
                                     
   
For the Three Months Ended
  
   
September 30, 2010
    
September 30, 2009
  
Amounts in thousands, except percentages
  
Average Balance
    
Interest
    
Rate/Yield
    
Average Balance
    
Interest
    
Rate/Yield
  
                                     
ASSETS
                                    
Interest-earning assets:
                                    
Federal funds sold and interest-bearing deposits
   $ 30,939     $ 21       0.27 %   $ 32,940     $ 32       0.39 %
Federal Home Loan Bank stock
     4,656       65       5.54 %     4,677       101       8.57 %
                                                 
Securities available for sale
     115,876       1,085       3.75 %     131,360       1,495       4.55 %
Securities held to maturity
     22,148       275       4.97 %     31,418       407       5.18 %
Total securities (A)
     138,024       1,360       3.94 %     162,778       1,902       4.67 %
                                                 
SBA loans
     94,723       1,225       5.17 %     102,691       1,498       5.83 %
SBA 504 loans
     65,506       1,093       6.62 %     71,764       1,147       6.34 %
Commercial loans
     283,267       4,454       6.24 %     301,010       4,973       6.55 %
Residential mortgage loans
     132,031       1,808       5.48 %     123,786       1,772       5.73 %
Consumer loans
     57,315       719       4.98 %     62,459       791       5.02 %
Total loans (A), (B)
     632,842       9,299       5.85 %     661,710       10,181       6.12 %
                                                 
Total interest-earning assets
   $ 806,461     $ 10,745       5.30 %   $ 862,105     $ 12,216       5.64 %
                                                 
Noninterest-earning assets:
                                                
Cash and due from banks
     20,469                       18,502                  
Allowance for loan losses
     (14,725 )                     (11,478 )                
Other assets
     41,374                       34,355                  
Total noninterest-earning assets
     47,118                       41,379                  
                                                 
Total assets
   $ 853,579                     $ 903,484                  
                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY                                                
Interest-bearing liabilities:
                                                
Interest-bearing demand deposits
   $ 95,348     $ 148       0.62 %   $ 88,284     $ 264       1.19 %
Savings deposits
     290,017       639       0.87 %     239,427       1,032       1.71 %
Time deposits
     203,346       1,450       2.83 %     323,484       2,950       3.62 %
Total interest-bearing deposits
     588,711       2,237       1.51 %     651,195       4,246       2.59 %
Borrowed funds and subordinated debentures
     103,296       1,077       4.08 %     100,465       1,081       4.21 %
                                                 
Total interest-bearing liabilities
   $ 692,007     $ 3,314       1.89 %   $ 751,660     $ 5,327       2.80 %
                                                 
Noninterest-bearing liabilities:
                                                
Noninterest-bearing demand deposits
     87,644                       79,965                  
Other liabilities
     4,115                       4,945                  
Total noninterest-bearing liabilities
     91,759                       84,910                  
                                                 
Total shareholders' equity
     69,813                       66,914                  
                                                 
Total liabilities and shareholders' equity
   $ 853,579                     $ 903,484                  
                                                 
Net interest spread
           $ 7,431       3.41 %           $ 6,889       2.84 %
Tax-equivalent basis adjustment
             (19 )                     (31 )        
Net interest income
           $ 7,412                     $ 6,858          
Net interest margin
                     3.66 %                     3.17 %
                                                 
(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.
  
 
 
 
Page 9 of 12
 

 
UNITY BANCORP, INC.  
YEAR TO DATE NET INTEREST MARGIN  
  September 30, 2010  
                                     
                                     
     For the Nine Months Ended  
   
September 30, 2010
    
September 30, 2009
Amounts in thousands, except percentages
  
Average Balance
    
Interest
    
Rate/Yield
    
Average Balance
    
Interest
    
Rate/Yield
  
                                     
ASSETS
                                    
Interest-earning assets:
                                    
Federal funds sold and interest-bearing deposits
   $ 35,037     $ 76       0.29 %   $ 19,222     $ 78       0.54 %
Federal Home Loan Bank stock
     4,663       148       4.24 %     5,190       219       5.64 %
                                                 
Securities available for sale
     122,445       3,446       3.75 %     133,446       4,709       4.71 %
Securities held to maturity
     24,238       885       4.87 %     33,277       1,222       4.90 %
Total securities (A)
     146,683       4,331       3.94 %     166,723       5,931       4.74 %
                                                 
SBA loans
     97,013       3,977       5.47 %     103,321       4,668       6.02 %
SBA 504 loans
     67,405       3,270       6.49 %     74,266       3,663       6.59 %
Commercial loans
     286,978       13,546       6.31 %     303,234       15,040       6.63 %
Residential mortgage loans
     133,331       5,729       5.73 %     125,667       5,419       5.75 %
Consumer loans
     58,595       2,174       4.96 %     62,630       2,383       5.09 %
Total loans (A), (B)
     643,322       28,696       5.96 %     669,118       31,173       6.22 %
                                                 
Total interest-earning assets
   $ 829,705     $ 33,251       5.35 %   $ 860,253     $ 37,401       5.81 %
                                                 
Noninterest-earning assets:
                                                
Cash and due from banks
     21,458                       18,838                  
Allowance for loan losses
     (14,662 )                     (11,173 )                
Other assets
     41,521                       33,409                  
Total noninterest-earning assets
     48,317                       41,074                  
                                                 
Total assets
   $ 878,022                     $ 901,327                  
                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY                                                
Interest-bearing liabilities:
                                                
Interest-bearing demand deposits
   $ 99,323     $ 593       0.80 %   $ 86,232     $ 801       1.24 %
Savings deposits
     290,606       2,268       1.04 %     192,559       2,588       1.80 %
Time deposits
     227,438       4,952       2.91 %     357,073       10,084       3.78 %
Total interest-bearing deposits
     617,367       7,813       1.69 %     635,864       13,473       2.83 %
Borrowed funds and subordinated debentures
     101,911       3,232       4.18 %     116,427       3,344       3.79 %
                                                 
Total interest-bearing liabilities
   $ 719,278     $ 11,045       2.04 %   $ 752,291     $ 16,817       2.98 %
                                                 
Noninterest-bearing liabilities:
                                                
Noninterest-bearing demand deposits
     85,876                       77,730                  
Other liabilities
     4,166                       4,297                  
Total noninterest-bearing liabilities
     90,042                       82,027                  
                                                 
Total shareholders' equity
     68,702                       67,009                  
                                                 
Total liabilities and shareholders' equity
   $ 878,022                     $ 901,327                  
                                                 
Net interest spread
           $ 22,206       3.31 %           $ 20,584       2.83 %
Tax-equivalent basis adjustment
             (68 )                     (94 )        
Net interest income
           $ 22,138                     $ 20,490          
Net interest margin
                     3.58 %                     3.20 %
                                                 
(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.
  

 
Page 10 of 12
 
 

UNITY BANCORP, INC.  
ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY SCHEDULES  
September 30, 2010  
                               
                               
                               
Amounts in thousands, except percentages
  
9/30/2010
    
6/30/2010
    
3/31/2010
    
12/31/2009
    
9/30/2009
  
                               
ALLOWANCE FOR LOAN LOSSES:
                              
Balance, beginning of period
   $ 13,946     $ 14,055     $ 13,842     $ 12,445     $ 10,665  
Provision for loan losses charged to expense
     1,500       1,500       1,500       2,000       3,000  
      15,446       15,555       15,342       14,445       13,665  
Less: Chargeoffs
                                        
SBA loans
     389       517       -       -       448  
SBA 504 loans
     -       -       750       500       -  
Commercial loans
     989       1,038       485       125       674  
Residential mortgage loans
     95       115       100       -       125  
Consumer loans
     9       2       -       5       11  
Total chargeoffs
     1,482       1,672       1,335       630       1,258  
Add: Recoveries
                                        
SBA loans
     17       53       45       23       14  
SBA 504 loans
     -       -       -       -       22  
Commercial loans
     178       10       3       3       -  
Residential mortgage loans
     -       -       -       -       -  
Consumer loans
     4       -       -       1       2  
Total recoveries
     199       63       48       27       38  
Net chargeoffs
     1,283       1,609       1,287       603       1,220  
Balance, end of period
   $ 14,163     $ 13,946     $ 14,055     $ 13,842     $ 12,445  
                                         
LOAN QUALITY INFORMATION:
                                        
Nonperforming loans
   $ 27,304     $ 26,071     $ 26,654     $ 25,496     $ 24,687  
Other real estate owned (OREO)
     5,773       3,728       3,318       1,530       2,774  
Nonperforming assets
     33,077       29,799       29,972       27,026       27,461  
Less:  Amount guaranteed by Small Business Administration
     2,094       1,436       2,205       1,931       1,759  
Net nonperforming assets
   $ 30,983     $ 28,363     $ 27,767     $ 25,095     $ 25,702  
                                         
Loans 90 days past due & still accruing
   $ 2,467     $ 2,780     $ 3,061     $ 2,286     $ 1,609  
                                         
Allowance for loan losses to:
                                        
Total loans at quarter end
     2.25 %     2.19 %     2.16 %     2.11 %     1.90 %
Nonperforming loans
     51.87 %     53.49 %     52.73 %     54.29 %     50.41 %
Nonperforming assets
     42.82 %     46.80 %     46.89 %     51.22 %     45.32 %
Net nonperforming assets
     45.71 %     49.17 %     50.62 %     55.16 %     48.42 %
                                         
QTD net chargeoffs (annualized) to QTD average loans:
                                  
SBA loans
     1.56 %     1.89 %     -0.19 %     -0.09 %     1.68 %
SBA 504 loans
     0.00 %     0.00 %     4.32 %     2.78 %     -0.12 %
Commercial loans
     1.14 %     1.44 %     0.67 %     0.16 %     0.89 %
Residential mortgage loans
     0.29 %     0.35 %     0.30 %     0.00 %     0.40 %
Consumer loans
     0.03 %     0.01 %     0.00 %     0.03 %     0.06 %
Total loans
     0.80 %     1.00 %     0.80 %     0.36 %     0.73 %
                                         
Nonperforming loans to total loans
     4.34 %     4.09 %     4.09 %     3.88 %     3.76 %
Nonperforming assets to total loans and OREO
     5.21 %     4.65 %     4.58 %     4.10 %     4.17 %
Nonperforming assets to total assets
     3.91 %     3.43 %     3.37 %     2.90 %     2.98 %

 
 
Page 11 of 12
 
 

UNITY BANCORP, INC.  
QUARTERLY FINANCIAL DATA  
September 30, 2010  
                               
                               
                               
                               
                               
Amounts in thousands, except percentages and per share amounts
  
9/30/2010
    
6/30/2010
    
3/31/2010
    
12/31/2009
    
9/30/2009
  
                               
SUMMARY OF INCOME:
                              
Total interest income
   $ 10,726     $ 10,944     $ 11,513     $ 12,101     $ 12,185  
Total interest expense
     3,314       3,681       4,049       4,766       5,327  
Net interest income
     7,412       7,263       7,464       7,335       6,858  
Provision for loan losses
     1,500       1,500       1,500       2,000       3,000  
Net interest income after provision for loan losses
     5,912       5,763       5,964       5,335       3,858  
Total noninterest income (loss)
     1,460       1,170       910       535       1,162  
Total noninterest expense
     6,404       6,040       5,941       6,076       6,110  
Income (loss) before provision (benefit) for income taxes
     968       893       933       (206 )     (1,090 )
Provision (benefit) for income taxes
     242       212       185       (340 )     (343 )
Net income (loss)
     726       681       748       134       (747 )
Preferred stock dividends & discount accretion
     385       379       373       373       372  
Income available (loss attributable) to common shareholders
   $ 341     $ 302     $ 375     $ (239 )   $ (1,119 )
                                         
Net income (loss) per common share - Basic
   $ 0.05     $ 0.04     $ 0.05     $ (0.03 )   $ (0.16 )
Net income (loss) per common share - Diluted
   $ 0.05     $ 0.04     $ 0.05     $ (0.03 )   $ (0.16 )
                                         
COMMON SHARE DATA:
                                        
Market price per share
   $ 5.25     $ 5.35     $ 5.29     $ 4.02     $ 4.20  
Dividends paid
   $ -     $ -     $ -     $ -     $ -  
Book value per common share
   $ 7.19     $ 7.11     $ 7.00     $ 6.90     $ 6.88  
QTD weighted average shares - basic
     7,176       7,156       7,150       7,126       7,119  
QTD weighted average shares - diluted
     7,467       7,475       7,294       7,126       7,119  
Outstanding common shares
     7,207       7,154       7,156       7,144       7,119  
                                         
OPERATING RATIOS (Annualized):
                                        
Return (loss) on average assets
     0.34 %     0.31 %     0.34 %     0.06 %     -0.33 %
Return (loss) on average equity
     2.66 %     2.43 %     3.09 %     -1.95 %     -9.14 %
Effficiency ratio
     72.47 %     71.66 %     70.98 %     71.05 %     77.72 %
                                         
BALANCE SHEET DATA:
                                        
Total assets
   $ 846,385     $ 869,735     $ 889,927     $ 930,357     $ 922,689  
Total deposits
     670,158       693,232       714,802       758,239       750,665  
Total loans
     629,516       637,180       651,200       657,016       656,520  
Total securities
     134,820       143,662       138,442       169,022       171,501  
Total shareholders' equity
     70,730       69,633       68,712       67,865       67,385  
Allowance for loan losses
     (14,163 )     (13,946 )     (14,055 )     (13,842 )     (12,445 )
                                         
TAX EQUIVALENT YIELDS AND RATES:
                                        
Interest-earning assets
     5.30 %     5.28 %     5.47 %     5.45 %     5.64 %
Interest-bearing liabilities
     1.89 %     2.04 %     2.20 %     2.44 %     2.80 %
Net interest spread
     3.41 %     3.24 %     3.27 %     3.01 %     2.84 %
Net interest margin
     3.66 %     3.51 %     3.57 %     3.30 %     3.17 %
                                         
CREDIT QUALITY:
                                        
Nonperforming assets
   $ 33,077     $ 29,799     $ 29,972     $ 27,026     $ 27,461  
QTD net chargeoffs (annualized) to QTD average loans
     0.80 %     1.00 %     0.80 %     0.36 %     0.73 %
Allowance for loan losses to total loans
     2.25 %     2.19 %     2.16 %     2.11 %     1.90 %
Nonperforming assets to total loans and OREO
     5.21 %     4.65 %     4.58 %     4.10 %     4.17 %
Nonperforming assets to total assets
     3.91 %     3.43 %     3.37 %     2.90 %     2.98 %
                                         
CAPITAL RATIOS AND OTHER:
                                        
Total equity to total assets
     8.36 %     8.01 %     7.72 %     7.29 %     7.30 %
Leverage ratio
     9.83 %     9.43 %     9.18 %     8.83 %     9.08 %
Tier 1 risk-based capital ratio
     12.67 %     12.39 %     12.02 %     11.75 %     11.83 %
Total risk-based capital ratio
     13.93 %     13.65 %     13.28 %     13.01 %     13.09 %
Number of banking offices
     16       16       16       16       16  
Number of ATMs
     18       18       19       19       19  
Number of employees
     173       165       171       174       174  
 
 
 
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