CLINTON, N.J., Feb. 4 /PRNewswire-FirstCall/ -- Unity Bancorp, Inc. (Nasdaq: UNTY), parent company of Unity Bank, reported net income of $584 thousand, or $0.07 per diluted share, for the quarter ended December 31, 2008, compared to net income of $680 thousand, or $0.09 per diluted share, for the quarter ended December 31, 2007.
For the year ended December 31, 2008, net income was $1.9 million, or $0.25 per diluted share, compared to $4.7 million, or $0.63 per diluted share for the same period a year ago. Return on average assets and average common equity for the year ended December 31, 2008, were 0.23% and 3.71%, respectively, as compared to 0.66% and 10.11%, respectively, for the prior year's comparable period.
James A. Hughes, Unity Bancorp's President and CEO, said, "Everyday there seems to be more negative news reporting increased turmoil in the financial markets, corporate bankruptcies, layoffs, rising unemployment, etc. Clearly, the economy is under considerable stress, and the financial institution sector has been hit the hardest. Our results have been affected by the economic downturn through higher loan loss provisions, security write-downs on FHLMC preferred stock and the collapse of the secondary market for Small Business Administration ("SBA") loan sales. However, throughout this period Unity has remained a profitable institution."
Mr. Hughes added, "The times are indeed challenging, however they are also a time of great opportunity. As the larger banks contract inward, it is time for community banks to increase market share by selling the message that when it comes to banking, smaller is better. We approach these opportunities as a well capitalized institution, ready to lend in our communities. The recent $20.6 million investment in the Company by the U.S. Treasury under the Capital Purchase Program will help us to continue to serve as a source of credit."
Net Interest Income
Since December 31, 2007, the Federal Open Market Committee has lowered interest rates 400 basis points in an attempt to stimulate economic activity. These decreases have resulted in lower yields on earning assets. During this period, our funding costs have also fallen. Unity has a large portfolio of variable rate, prime based loans. As a result of the drop in rates in the fourth quarter, the yield on the Company's interest-earning assets may continue to contract early in 2009. However, lower deposit pricing and additional equity capital should mitigate any material decline in net interest income.
For the quarter ended December 31, 2008, net interest income was $6.7 million, an increase of 6.1% from December 31, 2007. Factors affecting fourth quarter net interest income include:
- The yield on interest-earning assets decreased 96 basis points to 6.18% from 7.14% for the same period last year.
- The cost of interest-bearing liabilities decreased 75 basis points from 4.05% to 3.30% in the fourth quarter of 2008.
- Average earning assets, consisting primarily of loans, rose 17.8%.
- Net interest margin was 3.25%, a 37 basis point decline from 3.62% in the fourth quarter of 2007.
For the year ended December 31, 2008, net interest income was $27.3 million, an increase of 11.7% from the year ended December 31, 2007. Factors affecting net interest income for the year ended December 31 include:
- The yield on interest-earning assets decreased from 7.23% in 2007 to 6.52% for 2008.
- The cost of interest-bearing liabilities decreased from 4.16% in 2007 to 3.39% in 2008.
- Average earning assets, consisting primarily of loans, rose 15.1%.
- Net interest margin for 2008 was 3.51%, compared to 3.62% in 2007.
Noninterest income
Historically, Unity has had a strong source of noninterest income in the form of gains on the sale of its SBA loans. However, during the second half of 2008, pricing in the secondary market for SBA loans began to deteriorate in response to the credit crisis. Consequently, Unity held all current production of SBA loans. This decision resulted in reduced noninterest income for the quarter and will likely continue in the foreseeable future. In addition, other than temporarily impaired charges and losses on the sales of Federal Home Loan Mortgage Corporation ("FHLMC") perpetual preferred callable securities of $1.6 million have significantly reduced noninterest income during 2008.
For the quarter ended December 31, 2008, noninterest income was $555 thousand, a decrease of 47% from December 31, 2007:
- Service charges on deposit accounts remained relatively flat compared to the prior year's period.
- Service and loan fee income decreased 22.6% to $335 thousand in 2008, due to lower levels of prepayment fees.
- Net security losses amounted to $324 thousand, primarily due to other than temporary impairment charges on a pooled trust preferred security.
- There were no gains on sales of SBA loans, compared to $580 thousand a year ago.
For the year ended December 31, 2008, noninterest income was $2.7 million, a decrease of 55% vs. December 31, 2007:
- Service charges on deposit accounts were flat at $1.4 million.
- Service and loan fee income amounted to $1.3 million for the twelve months ended 2008, a decrease of $336 thousand, or 20.9%, as compared to the same period last year, primarily due to lower levels of prepayment penalties and SBA servicing income.
- Gains on sales of SBA loans amounted to $1.2 million for 2008, compared to $2.4 million for the same period a year ago, reflecting a lower volume of loans sold and lower premiums on loans sold.
- Net security losses amounted to $1.9 million primarily related to other than temporarily impaired charges and losses on the sales of FHLMC perpetual preferred callable securities.
- Other income amounted to $481 thousand for the twelve months ended 2008, a decrease of $391 thousand, or 44.8%, as compared to the same period last year, primarily due to lower levels of loan referral fees.
Noninterest Expense
As a result of current market conditions, there were significant head-count reductions enacted in the fourth quarter of 2008 and the Company undertook other expense saving measures which will benefit 2009. Unfortunately, some of these benefits which will be realized in 2009, will be offset by the anticipated increase in FDIC insurance premiums.
For the quarter ended December 31, 2008, noninterest expenses were $5.8 million, a decrease of 2.6% from December 31, 2007:
- Compensation and benefits expense decreased $115 thousand, due to reduced head count.
- Processing and communications and occupancy expense declined by 13.6% and 11.8%, respectively, due to reduced communications costs from renegotiated contracts and a decline in capital expenditures.
- Professional fees increased $88 thousand, due to increased consulting, legal and audit costs.
- Loan collection costs increased $55 thousand, due to increased collection costs on delinquent loans.
- FDIC insurance premiums increased $281 thousand, due primarily to the increase in FDIC insurance rates.
- Tax expense was reduced by the benefit from the other than temporary impairment charge for FHLMC preferred stock recognized in the third quarter.
For the year ended December 31, 2008, noninterest expenses were $22.9 million, an increase of 3.7% from December 31, 2007:
- Compensation and benefits expense increased $539 thousand, primarily due to annual cost of living increases.
- Processing and communications expense declined 7.5%, due to renegotiated contracts and lower items processing costs.
- Professional services expense increased $300 thousand, due to increased consulting costs related to tax planning, compliance with the Sarbanes Oxley and outsourced credit review fees.
- FDIC insurance premiums increased $522 thousand, due to the increase in FDIC insurance rates.
- Other expense decreased $401 thousand or 20%, primarily related to the collection of prior period retail losses, and reduced recruiting and stationary and supplies expense.
Financial Condition
At December 31, 2008, total assets were $898.3 million, a 19.4% increase from a year ago.
- Total loans increased $95.8 million, or 16.2%, from $590.1 million at December 31, 2007. The increase was across all product lines. SBA, commercial, residential and consumer loans increased 12.6%, 5.2%, 80.6% and 9.5%, respectively.
- Total securities increased $50.9 million as Unity took advantage of favorable credit spreads to invest excess liquidity.
- Total deposits increased 17.6% or $105.8 million to $707 million at December 31, 2008. This increase was due to a $154.8 million increase in time deposits, a $9.0 million increase in interest-bearing checking accounts and a $3.5 million increase in demand deposits, partially offset by a $61.5 million decline in savings deposits.
- Total borrowed funds increased $20.0 million to support the growth in the investment portfolio.
- The allowance for loan losses totaled $10.3 million at December 31, 2008, or 1.51% of total loans. The provision for loan losses for the first twelve months of 2008 amounted to $4.5 million, an increase of $3.0 million from the same period a year ago. Net charge-offs were $2.6 million for the year ended 2008, compared to $791 thousand for the same period a year ago.
- Nonperforming assets totaled $16.8 million at December 31, 2008, or 2.45% of total loans and "OREO" compared to $5.6 million, or 0.94% of total loans and "OREO" a year ago. The increase in nonperforming assets was primarily related to the credit deterioration in the SBA 7(a) and SBA 504 portfolios most of which is secured by real estate.
- Shareholders' equity was $67.8 million at December 31, 2008 an increase of $20.5 million, primarily due to the issuance of preferred stock, and book value per common share was $6.99.
- At December 31, 2008 the leverage, Tier I and total risk based capital ratios were 9.55%, 12.03% and 13.28%, respectively.
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $900 million in assets and $700 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.
Consolidated Financial Highlights
(Dollars in thousands, except per share data)
Dec. 08 vs.
--------------------
BALANCE SHEET Dec. 31, Sep. 30, Dec. 31,
DATA: 2008 2008 2007 Sep. 08 Dec. 07
------------- -------- -------- -------- -------- --------
Assets $898,310 $864,083 $752,196 4.0% 19.4%
Deposits 707,117 684,680 601,268 3.3 17.6
Loans 685,946 685,023 590,132 0.1 16.2
Securities 149,509 99,410 98,591 50.4 51.6
Shareholders'
equity 67,803 46,539 47,260 45.7 43.5
Allowance for
loan losses 10,326 9,913 8,383 4.2 23.2
FINANCIAL DATA -
QUARTER TO DATE:
-----------
Net income
(loss)
before taxes $218 $(1,141) $922 (119.1)% (76.4)%
Federal and
state
income tax
provision
(benefit) (366) (139) 242 163.3 (251.2)
---- ---- --- ----- ------
Net income
(loss) 584 (1,002) 680 (158.3) (14.1)
=== ====== === ====== =====
Per share-
basic 0.07 (0.14) 0.10 (150.0) (26.8)
Per share-
diluted 0.07 (0.14) 0.09 (150.0) (24.6)
Return on
average
assets 0.26% (0.50)% 0.36% (152.0) (27.8)
Return on
average
common equity 3.56 (8.39) 5.78 (142.5) (38.4)
Efficiency
ratio 75.81 70.51 74.07 7.5 2.4
FINANCIAL DATA -
YEAR TO DATE:
-----------
Net income
before taxes $2,546 - $6,703 - (62.0)%
Federal and
state
income tax
provision 616 - 1,978 - (68.9)
--- - ----- - -----
Net income 1,930 - 4,725 - (59.2)
===== == ===== == =====
Per share-
basic 0.26 - 0.65 - (60.0)
Per share-
diluted 0.25 - 0.63 - (60.3)
Return on
average
assets 0.23% - 0.66% - (65.2)
Return on
average
common equity 3.71 - 10.11 - (63.3)
Efficiency
ratio 71.90 - 71.48 - 0.6
SHARE INFORMATION:
-------------
Closing price
per share $3.90 $4.00 $8.10 (2.5)% (51.8)%
Cash
dividends
declared 0.00 0.00 0.05 - -
Book value
per common
share 6.99 6.76 6.70 3.4 4.4
Average
diluted
shares
outstanding
(QTD) 7,190 7,259 7,328 (1.0) (1.9)
CAPITAL RATIOS:
--------
Total equity
to total
assets 7.55% 5.76% 6.33% 31.1% 19.3%
Tier I
capital to
average
assets
(leverage) 9.54 7.42 8.25 28.6 15.6
Tier I
capital to
risk-
adjusted
assets 12.02 9.07 9.81 32.5 22.5
Total risk-
based
capital 13.27 10.33 11.06 28.5 20.0
CREDIT QUALITY
AND RATIOS:
------------
Nonperforming
assets $16,830 $10,954 $5,567 53.6% 202.3%
Net charge
offs to
average
loans (QTD) 0.52% 0.67% 0.24% (22.4) 116.7
Allowance for
loan losses
to total
loans 1.51 1.45 1.42 4.1 6.3
Nonperforming
assets to total
loans and OREO 2.45 1.60 0.94 53.1 160.6
Unity Bancorp, Inc.
Consolidated Balance Sheets
(In thousands) Dec. 08 vs.
--------------------
Dec. 31, Sep. 30, Dec. 31,
2008 2008 2007 Sep. 08 Dec. 07
-------- -------- -------- -------- --------
ASSETS
Cash and due
from banks $18,902 $21,987 $14,336 (14.0)% 31.8%
Federal funds
sold and
interest
bearing
deposits 15,529 29,356 21,976 (47.1) (29.3)
Securities:
Available for
sale 117,348 70,144 64,855 67.3 80.9
Held to
maturity 32,161 29,266 33,736 9.9 (4.7)
------ ------ ------ --- ----
Total securities 149,509 99,410 98,591 50.4 51.6
Loans:
SBA - Held
for sale 22,181 19,863 24,640 11.7 (10.0)
SBA - Held to
Maturity 83,127 82,551 68,875 0.7 20.7
Commercial 384,967 394,215 365,786 (2.3) 5.2
Residential
mortgage 133,110 128,216 73,697 3.8 80.6
Consumer 62,561 60,178 57,134 4.0 9.5
------ ------ ------ --- ---
Total loans 685,946 685,023 590,132 0.1 16.2
Less:
Allowance
for loan
losses 10,326 9,913 8,383 4.2 23.2
------ ----- ----- --- ----
Net loans 675,620 675,110 581,749 0.1 16.1
------- ------- ------- --- ----
Goodwill and
other intangibles 1,574 1,577 1,588 (0.2) (0.9)
Premises and
equipment, net 12,580 12,475 12,102 0.8 3.9
Accrued interest
receivable 4,712 4,364 3,994 8.0 18.0
Loan servicing
asset 1,503 1,721 2,056 (12.7) (26.9)
Bank Owned Life
Insurance 5,780 5,727 5,570 0.9 3.8
FHLB/ACBB Stock 4,857 5,307 4,395 (8.5) 10.5
Other assets 7,744 7,049 5,839 9.9 32.6
----- ----- ----- --- ----
Total Assets $898,310 $864,083 $752,196 4.0% 19.4%
======== ======== ======== === ====
LIABILITIES
AND SHAREHOLDERS'
EQUITY
Deposits:
Noninterest-
bearing
demand
deposits $74,090 $82,167 $70,600 (9.8)% 4.9%
Interest-
bearing
deposits:
Interest
bearing
checking 87,046 87,587 78,019 (0.6) 11.6
Savings 134,875 148,026 196,390 (8.9) (31.3)
Time, under
$100,000 270,275 274,845 168,244 (1.7) 60.6
Time,
$100,000
and over 140,831 92,055 88,015 53.0 60.0
------- ------ ------ ---- ----
Total deposits 707,117 684,680 601,268 3.3 17.6
------- ------- ------- --- ----
Borrowed funds
and subordinated
debentures 120,465 130,465 100,465 (7.7) 19.9
Accrued interest
payable 805 869 635 (7.4) 26.8
Accrued expenses
and other
liabilities 2,120 1,530 2,568 38.6 (17.4)
----- ----- ----- ---- -----
Total liabilities 830,507 817,544 704,936 1.6 17.8
Commitments and
Contingencies - - -
Shareholders' equity:
Common stock,
no par value,
12,500 shares
authorized 55,179 52,453 49,447 5.2 11.6
Preferred stock,
no par value,
500 shares
authorized 18,064 - - - -
Retained
earnings 1,085 591 2,472 83.6 (56.1)
Treasury stock
at cost (4,169) (4,169) (4,169) - -
Accumulated other
comprehensive loss,
net of tax (2,356) (2,336) (490) 0.9 380.8
------ ------ ---- --- -----
Total
shareholders'
equity 67,803 46,539 47,260 45.7 43.5
------ ------ ------ ---- ----
Total
Liabilities
and Shareholders'
Equity $898,310 $864,083 $752,196 4.0% 19.4%
======== ======== ======== === ====
COMMON SHARES AT
PERIOD END:
Issued 7,544 7,535 7,488
Outstanding 7,119 7,110 7,063
Treasury 425 425 425
N/M=Not meaningful
Unity Bancorp, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
Dec. 08 vs.
------------------
FOR THE THREE Dec. 31, Sep. 30, Dec. 31,
MONTHS ENDED: 2008 2008 2007 Sep. 08 Dec. 07
-------- -------- -------- ------- -------
INTEREST INCOME
Fed funds sold
and interest on
deposits $67 $113 $195 (40.7)% (65.6)%
FHLB/ACBB Stock 6 58 78 (89.7) (92.3)
Securities:
Available for sale 959 907 835 5.7 14.9
Held to maturity 366 381 443 (3.9) (17.4)
--- --- --- ---- -----
Total securities 1,325 1,288 1,278 2.9 3.7
Loans:
SBA 1,971 2,043 2,307 (3.5) (14.6)
Commercial 6,717 6,877 6,772 (2.3) (0.8)
Residential mortgage 1,963 1,720 1,093 14.1 79.6
Consumer 849 866 934 (2.0) (9.1)
--- --- --- ---- ----
Total loan
interest income 11,500 11,506 11,106 (0.1) 3.5
------ ------ ------ ---- ---
Total interest
income 12,898 12,965 12,657 (0.5) 1.9
------ ------ ------ ---- ---
INTEREST EXPENSE
Interest bearing
demand deposits 348 404 448 (13.9) (22.3)
Savings deposits 603 774 1,776 (22.1) (66.0)
Time deposits 4,057 3,553 3,089 14.2 31.3
Borrowed funds
and subordinated
debentures 1,154 1,152 997 0.2 15.7
----- ----- --- --- ----
Total interest
expense 6,162 5,883 6,310 4.7 (2.3)
----- ----- ----- --- ----
Net interest
income 6,736 7,082 6,347 (4.9) 6.1
Provision for
loan losses 1,300 2,100 550 (38.1) 136.4
----- ----- --- ----- -----
Net interest
income after
provision
for loan losses 5,436 4,982 5,797 9.1 (6.2)
----- ----- ----- --- ----
NONINTEREST INCOME
Service charges on
deposit accounts 351 381 357 (7.9) (1.7)
Service and loan
fee income 335 334 433 0.3 (22.6)
Gain on Mortgage
loan sales 19 - (9) - (311.1)
Gain on SBA
loan sales 9 215 580 (95.8) (98.4)
Bank owned life
insurance 53 53 50 - 6.0
Net securities
(loss) gains (324) (1,458) (603) 100.0 100.0
Other income 112 131 245 (14.5) (54.3)
--- --- --- ----- -----
Total noninterest
income 555 (344) 1,053 (261.3) (47.3)
--- ---- ----- ------ -----
NONINTEREST EXPENSES
Compensation
and benefits 2,837 2,948 2,952 (3.8) (3.9)
Processing and
communications 583 554 675 5.2 (13.6)
Occupancy, net 671 688 761 (2.5) (11.8)
Furniture and
equipment 451 423 462 6.6 (2.4)
Professional fees 272 285 184 (4.6) 47.8
Loan collection
costs 216 206 161 4.9 34.2
Advertising 152 158 145 (3.8) 4.8
FDIC Insurance 298 117 17 154.7 1,652.9
Other 293 400 571 (26.8) (48.7)
--- --- --- ----- -----
Total noninterest
expenses 5,773 5,779 5,928 (0.1) (2.6)
----- ----- ----- ---- ----
Income (loss)
before taxes 218 (1,141) 922 (119.1) (76.4)
Federal and state
income tax
provision
(benefit) (366) (139) 242 163.3 (251.2)
---- ---- --- ----- ------
Net Income (loss) $584 $(1,002) $680 (158.3)% (14.1)%
==== ======= ==== ====== =====
Net Income
Per Common
Share-Basic $0.07 $(0.14) $0.10 (150.0)% (26.8)%
===== ====== ===== ====== =====
Net Income
Per Common
Share-Diluted $0.07 $(0.14) $0.09 (150.0)% (24.6)%
===== ====== ===== ====== =====
AVERAGE COMMON
SHARES OUTSTANDING:
Basic 7,113 7,107 7,107
Diluted 7,190 7,259 7,328
Unity Bancorp, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Dec. 08 vs.
YEAR TO DATE Dec. 31, 2008 Dec. 31, 2007 Dec. 07
------------- ------------- -----------
INTEREST INCOME
Fed funds sold and interest
on deposits $471 $1,068 (55.9)%
FHLB/ACBB Stock 240 258 (7.0)
Securities:
Available for sale 3,673 3,167 16.0
Held to maturity 1,582 1,913 (17.3)
----- ----- -----
Total securities 5,255 5,080 3.4
Loans:
SBA 8,370 9,039 (7.4)
Commercial 26,996 25,738 4.9
Residential mortgage 5,971 3,995 49.5
Consumer 3,462 3,722 (7.0)
----- ----- ----
Total loan interest income 44,799 42,494 5.4
------ ------ ---
Total interest income 50,765 48,900 3.8
------ ------ ---
INTEREST EXPENSE
Interest bearing
demand deposits 1,468 1,928 (23.9)
Savings deposits 3,644 8,064 (54.8)
Time deposits 13,836 10,206 35.6
Borrowed funds and
subordinated debentures 4,526 4,276 5.8
----- ----- ---
Total interest expense 23,474 24,474 (4.1)
------ ------ ----
Net interest income 27,291 24,426 11.7
Provision for loan losses 4,500 1,550 190.3
----- ----- -----
Net interest income
after provision for
loan losses 22,791 22,876 (0.4)
------ ------ ----
NONINTEREST INCOME
Service charges on
deposit accounts 1,393 1,383 0.7
Service and loan fee income 1,271 1,607 (20.9)
Gain on of Mortgage Loans 40 52 (23.1)
Gain on SBA loan sales 1,217 2,399 (49.3)
Bank owned life insurance 210 198 6.1
Net securities (loss) gains (1,918) (571) 100.0
Other income 481 872 (44.8)
--- --- -----
Total noninterest income 2,694 5,940 (54.6)
----- ----- -----
NONINTEREST EXPENSES
Compensation and benefits 11,985 11,446 4.7
Processing and communications 2,251 2,433 (7.5)
Occupancy, net 2,773 2,777 (0.1)
Furniture and equipment 1,675 1,675 0.0
Professional fees 898 598 50.2
Loan collection costs 662 604 9.6
Advertising 451 457 (1.3)
FDIC Insurance 589 67 779.1
Other 1,655 2,056 (19.5)
----- ----- -----
Total noninterest
expenses 22,939 22,113 3.7
------ ------ ---
Income before taxes 2,546 6,703 (62.0)
Federal and state income
tax provision 616 1,978 (68.9)
--- ----- -----
Net Income $1,930 $4,725 (59.2)%
====== ====== =====
Net Income Per Common Share-Basic $0.26 $0.65 (60.0)%
===== ===== =====
Net Income Per Common Share-Diluted $0.25 $0.63 (60.3)%
===== ===== =====
Average common shares outstanding:
Basic 7,097 7,245
Diluted 7,249 7,527
Unity Bancorp, Inc.
Consolidated Average Balance Sheets
with Resultant Interest and Rates
(Tax-equivalent basis, dollars in thousands)
Three Months Ended
------------------
December 31, 2008 September 30, 2008
----------------- ------------------
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
ASSETS
Interest-earning assets:
Federal funds
sold and
interest-
bearing
deposits
with banks $37,262 $67 0.72% $24,118 $113 1.86%
FHLB/ACBB Stock 4,422 6 0.54 4,415 58 5.23
Securities:
Available for
sale 76,941 972 5.05 72,658 920 5.06
Held to
maturity 29,962 384 5.13 31,209 399 5.11
------ --- ---- ------ --- ----
Total
securities 106,903 1,356 5.07 103,867 1,319 5.08
------- ----- ---- ------- ----- ----
Loans, net of
unearned
discount:
SBA 103,682 1,971 7.60 102,383 2,043 7.98
Commercial 388,940 6,717 6.87 393,626 6,877 6.95
Residential
mortgage 131,557 1,963 5.97 114,058 1,720 6.03
Consumer 61,114 849 5.53 59,933 866 5.75
------ --- ---- ------ --- ----
Total loans 685,293 11,500 6.69 670,000 11,506 6.84
------- ------ ---- ------- ------ ----
Total
interest-
earning
assets 833,880 12,929 6.18 802,400 12,996 6.45
------- ------ ---- ------- ------ ----
Noninterest-
earning assets:
Cash and due
from banks 21,520 19,166
Allowance for
loan losses (10,111) (9,092)
Other assets 32,855 32,229
------ ------
Total
noninterest-
earning
assets 44,264 42,303
------ ------
Total Assets $878,144 $844,703
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing
liabilities:
Interest-
bearing
demand
deposits $88,166 348 1.57 $87,903 404 1.83
Savings
deposits 137,602 603 1.74 161,707 774 1.90
Time deposits 407,239 4,057 3.96 353,743 3,553 4.00
------- ----- ---- ------- ----- ----
Total
interest-
bearing
deposits 633,007 5,008 3.15 603,353 4,731 3.12
------- ----- ---- ------- ----- ----
Borrowed funds
and subordinated
debentures 110,802 1,154 4.14 110,684 1,152 4.14
------- ----- ---- ------- ----- ----
Total
interest-
bearing
liabilities 743,809 6,162 3.30 714,037 5,883 3.28
------- ----- ---- ------- ----- ----
Noninterest-
bearing
liabilities:
Demand deposits 78,351 81,157
Other
liabilities 3,058 2,321
----- -----
Total
noninterest-
bearing
liabilities 81,409 83,478
Shareholders'
equity 52,926 47,188
------ ------
Total
Liabilities
and Shareholders'
Equity $878,144 $844,703
======== ========
Net interest
spread 6,767 2.88% 7,113 3.17%
==== ====
Tax-equivalent
basis adjustment (31) (31)
--- ---
Net interest
income $6,736 $7,082
====== ======
Net interest
margin 3.25% 3.55%
==== ====
Unity Bancorp, Inc.
Consolidated Average Balance Sheets
with Resultant Interest and Rates
(Tax-equivalent basis, dollars in thousands)
Three Months Ended
------------------
December 31, 2008 December 31, 2007
----------------- -----------------
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
ASSETS
Interest-earning assets:
Federal funds
sold and
interest-
bearing
deposits with
banks $37,262 $67 0.72% $17,961 $195 4.31%
FHLB/ACBB Stock 4,422 6 0.54 3,786 78 8.17
Securities:
Available for
sale 76,941 972 5.05 67,765 875 5.16
Held to
maturity 29,962 384 5.13 35,157 461 5.25
------ --- ---- ------ --- ----
Total
securities 106,903 1,356 5.07 102,922 1,336 5.19
------- ----- ---- ------- ----- ----
Loans, net of
unearned
discount:
SBA 103,682 1,971 7.60 90,120 2,307 10.24
Commercial 388,940 6,717 6.87 362,512 6,772 7.41
Residential
mortgage 131,557 1,963 5.97 74,057 1,093 5.90
Consumer 61,114 849 5.53 56,421 934 6.57
------ --- ---- ------ --- ----
Total loans 685,293 11,500 6.69 583,110 11,106 7.57
------- ------ ---- ------- ------ ----
Total
interest-
earning
assets 833,880 12,929 6.18 707,779 12,715 7.14
------- ------ ---- ------- ------ ----
Noninterest-
earning assets:
Cash and due
from banks 21,520 14,518
Allowance for
loan losses (10,111) (8,499)
Other assets 32,855 29,130
------ ------
Total
noninterest-
earning
assets 44,264 35,149
------ ------
Total Assets $878,144 $742,928
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing
liabilities:
Interest-
bearing
demand
deposits $88,166 348 1.57 $81,759 448 2.17
Savings
deposits 137,602 603 1.74 195,241 1,776 3.61
Time deposits 407,239 4,057 3.96 253,790 3,089 4.83
------- ----- ---- ------- ----- ----
Total
interest-
bearing
deposits 633,007 5,008 3.15 530,790 5,313 3.97
------- ----- ---- ------- ----- ----
Borrowed funds
and subordinated
debentures 110,802 1,154 4.14 86,826 997 4.56
------- ----- ---- ------ --- ----
Total
interest-
bearing
liabilities 743,809 6,162 3.30 617,616 6,310 4.05
------- ----- ---- ------- ----- ----
Noninterest-
bearing
liabilities:
Demand deposits 78,351 76,406
Other
liabilities 3,058 2,267
----- -----
Total
noninterest-
bearing
liabilities 81,409 78,673
Shareholders'
equity 52,926 46,639
------ ------
Total
Liabilities
and Shareholders'
Equity $878,144 $742,928
======== ========
Net interest
spread 6,767 2.88% 6,405 3.09%
==== ====
Tax-equivalent
basis adjustment (31) (58)
--- ---
Net interest
income $6,736 $6,347
====== ======
Net interest
margin 3.25% 3.62%
==== ====
Unity Bancorp, Inc.
Consolidated Average Balance Sheets
with Resultant Interest and Rates
(Tax-equivalent basis, dollars in thousands)
Year to Date
------------
December 31, 2008 December 31, 2007
----------------- -----------------
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
ASSETS
Interest-earning
assets:
Federal funds
sold and
interest-
bearing
deposits
with banks $26,686 $471 1.76% $22,290 $1,068 4.79%
FHLB/ACBB
Stock 4,353 240 5.51 3,336 258 7.73
Securities:
Available
for sale 74,243 3,761 5.07 65,853 3,253 4.94
Held to
maturity 31,710 1,654 5.22 37,724 1,986 5.26
------ ----- ---- ------ ----- ----
Total
securities 105,953 5,415 5.11 103,577 5,239 5.06
------- ----- ---- ------- ----- ----
Loans, net
of unearned
discount:
SBA 101,430 8,370 8.25 84,185 9,039 10.74
Commercial 383,368 26,996 7.04 341,841 25,738 7.53
Residential
mortgage 100,110 5,971 5.96 68,443 3,995 5.84
Consumer 59,291 3,462 5.84 54,789 3,722 6.79
------ ----- ---- ------ ----- ----
Total loans 644,199 44,799 6.95 549,258 42,494 7.74
------- ------ ---- ------- ------ ----
Total
interest-
earning
assets 781,191 50,925 6.52 678,461 49,059 7.23
------- ------ ---- ------- ------ ----
Noninterest-
earning assets:
Cash and due
from banks 17,529 13,467
Allowance
for loan
losses (9,179) (8,184)
Other assets 31,667 29,304
------ ------
Total
noninterest-
earning
assets 40,017 34,587
------ ------
Total Assets $821,208 $713,048
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing
liabilities:
Interest-
bearing
demand
deposits $84,336 1,468 1.74 $85,750 1,928 2.25
Savings
deposits 168,784 3,644 2.16 204,214 8,064 3.95
Time
deposits 330,174 13,836 4.19 213,407 10,206 4.78
------- ------ ---- ------- ------ ----
Total
interest-
bearing
deposits 583,294 18,948 3.25 503,371 20,198 4.01
------- ------ ---- ------- ------ ----
Borrowed funds
and subordinated
debentures 108,214 4,526 4.18 84,962 4,276 5.03
------- ----- ---- ------ ----- ----
Total
interest-
bearing
liabilities 691,508 23,474 3.39 588,333 24,474 4.16
------- ------ ---- ------- ------ ----
Noninterest-
bearing
liabilities:
Demand
deposits 78,282 75,581
Other
liabilities 2,531 2,416
----- -----
Total
noninterest-
bearing
liabilities 80,813 77,997
Shareholders'
equity 48,887 46,718
------ ------
Total
Liabilities
and Shareholders'
Equity $821,208 $713,048
======== ========
Net interest spread 27,451 3.13% 24,585 3.07%
==== ====
Tax-equivalent
basis
adjustment (160) (159)
---- ----
Net interest
income $27,291 $24,426
======= =======
Net interest
margin 3.51% 3.62%
==== ====
Unity Bancorp, Inc.
Allowance for Loan Losses and Loan Quality Schedules
(Dollars in thousands)
12/31/2008 9/30/2008 6/30/2008 3/31/2008 12/31/2007
---------- --------- --------- --------- ----------
ALLOWANCE FOR LOAN
LOSSES:
Balance, beginning
of quarter $9,913 $8,945 $8,650 $8,383 $8,183
Provision charged
to expense 1,300 2,100 650 450 550
----- ----- --- --- ---
11,213 11,045 9,300 8,833 8,733
------ ------ ----- ----- -----
Less: Charge offs
SBA 310 423 249 264 260
Commercial 648 700 60 0 126
Residential
mortgage - - - 25 -
Consumer 5 78 56 6 20
- -- -- - --
Total Charge
Offs 963 1,201 365 295 406
--- ----- --- --- ---
Add: Recoveries
SBA 72 40 5 60 53
Commercial 4 29 4 2 3
Residential
mortgage - - - 0 -
Consumer 0 - 1 50 -
- - - -- -
Total Recoveries 76 69 10 112 56
-- -- -- --- --
Net Charge Offs 887 1,132 355 183 350
--- ----- --- --- ---
Balance, end of
quarter $10,326 $9,913 $8,945 $8,650 $8,383
======= ====== ====== ====== ======
LOAN QUALITY INFORMATION:
Nonperforming loans $16,120 $10,636 $6,621 $4,142 $5,461
Other real estate
owned, net 710 318 266 266 106
--- --- --- --- ---
Nonperforming assets $16,830 $10,954 $6,887 $4,408 $5,567
======= ======= ====== ====== ======
Loans 90 days past
due and still
accruing $2,536 $3,532 $76 $546 $155
Allowance for
loan losses to:
Total loans at
period end 1.51% 1.45% 1.39% 1.43% 1.42%
Nonperforming
loans 64.06 93.20 135.10 208.85 153.49
Nonperforming
assets 61.36 90.50 129.88 196.23 150.58
Net charge offs to
average loans (QTD) 0.52 0.67 0.23 0.12 0.24
Net charge offs to
average loans (YTD) 0.40 0.35 0.18 0.12 0.14
Nonperforming loans
to total loans 2.35 1.55 1.03 0.69 0.93
Nonperforming assets
to total loans and
OREO 2.45 1.60 1.07 0.73 0.94
Unity Bancorp, Inc.
Quarterly Financial Data
12/31/08 09/30/08 06/30/08 03/31/08 12/31/07
------------- -------- -------- -------- -------- --------
SUMMARY OF
INCOME (in
thousands) :
Interest
income $12,898 $12,965 $12,267 $12,635 $12,657
Interest
expense 6,162 5,883 5,429 6,000 6,310
-------- ----- ----- ----- ----- -----
Net interest
income 6,736 7,082 6,838 6,635 6,347
Provision for
loan losses 1,300 2,100 650 450 550
------------- ----- ----- --- --- ---
Net interest
income after
provision 5,436 4,982 6,188 6,185 5,797
Noninterest
income 555 (344) 1,028 1,455 1,053
Noninterest
expense 5,773 5,779 5,617 5,770 5,928
----------- ----- ----- ----- ----- -----
Income
before
income
taxes 218 (1,141) 1,599 1,870 922
Federal and
state income
tax provision
(benefit) (366) (139) 495 626 242
------------- ---- ---- --- --- ---
Net Income
(loss) 584 (1,002) 1,104 1,244 680
Basic $0.07 $(0.14) $0.16 $0.18 $0.10
Diluted 0.07 (0.14) 0.15 0.17 0.09
------------- ---- ----- ---- ---- ----
COMMON SHARE
DATA:
Cash dividends
declared $- $- $0.05 $0.05 $0.05
Book value per
common share
at quarter end 6.99 6.55 6.76 6.76 6.70
Market value at
quarter end 3.90 4.00 6.95 7.48 8.10
Average common
shares
outstanding:
(000's)
Basic 7,113 7,107 7,092 7,075 7,107
Diluted 7,190 7,259 7,275 7,271 7,328
Common shares
outstanding
at period
end (000's) 7,119 7,110 7,095 7,063 7,063
------------- ----- ----- ----- ----- -----
OPERATING
RATIOS:
Return on
average
assets 0.26% (0.50)% 0.56% 0.65% 0.36%
Return on
average
common
equity 3.56 (8.39) 9.29 10.50 5.78
Efficiency
ratio 75.81 70.51 69.59 71.95 74.07
---------- ----- ----- ----- ----- -----
BALANCE SHEET
DATA (in
thousands):
Assets $898,310 $864,083 $832,315 $807,874 $752,196
Deposits 707,117 684,680 671,881 642,282 601,267
Loans 685,946 685,023 643,039 602,943 590,132
Shareholders'
equity 67,803 46,539 47,951 47,896 47,260
Allowance for
loan losses 10,326 9,913 8,945 8,650 8,383
------------- ------ ----- ----- ----- -----
TAX-
EQUIVALENT
YIELDS AND
RATES:
Interest-
earning
assets 6.18% 6.45% 6.57% 6.93% 7.14%
Interest-bearing
liabilities 3.30 3.28 3.31 3.73 4.05
Net interest
spread 2.88 3.17 3.26 3.20 3.09
Net interest
margin 3.25 3.55 3.66 3.64 3.62
------------ ---- ---- ---- ---- ----
CREDIT QUALITY:
Nonperforming
assets (in
thousands) $16,830 $10,954 $6,887 $4,408 $5,567
Allowance for
loan losses
to period-
end loans 1.51% 1.45% 1.39% 1.43% 1.42%
Net charge
offs to
average loans 0.52 0.67 0.23 0.12 0.24
Nonperforming
assets to loans
and OREO 2.45 1.60 1.07 0.73 0.94
---------------- ---- ---- ---- ---- ----
CAPITAL AND OTHER:
Total
equity to
assets 7.55% 5.39% 5.76% 5.93% 6.28%
Tier I
capital to
average
assets
(leverage) 9.54 7.42 8.01 8.06 8.25
Tier I
capital
to risk-
adjusted
assets 12.02 9.07 9.42 9.66 9.81
Total capital
to risk-
adjusted assets 13.27 10.33 10.67 10.91 11.06
Number of
banking
offices 16 16 16 17 17
Number of ATMs 19 19 19 20 20
Number of
employees 167 176 191 188 201
---------- --- --- --- --- ---
SOURCE Unity Bancorp, Inc.
