Unity Bancorp Reports 66.8% Increase in Quarterly Earnings And 56.2% Increase in Annual Earnings

Jan 30, 2014, 06:00 ET from Unity Bancorp, Inc.

CLINTON, N.J., Jan. 30, 2014 /PRNewswire/ -- Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income available to common shareholders of $1.3 million, or $0.17 per diluted share, for the three months ended December 31, 2013, a 66.8% increase compared to $759 thousand, or $0.10 per diluted share, for the same period a year ago.  Return on average assets and average common equity for the quarter were 0.57% and 8.87%, respectively, compared to 0.57% and 5.34% for the same period a year ago. 

Fourth quarter highlights include:

  • 4.2% growth in commercial loans since September 30, 2013 and 20.5% since year-end 2012.
  • 5.2% growth in residential mortgage loans since September 30, 2013 and 37.8% since year-end 2012.
  • Closed $30.8 million in residential mortgage loans for the quarter and $153.7 million for the twelve month period. 
  • 1.6% deposit growth during the fourth quarter included the planned outflow of a short-term $36 million noninterest-bearing demand deposit. Since year-end 2012, total deposits increased 13.9% with an 18.9% increase in noninterest-bearing demand deposits.
  • Growth in net interest income compared to the third quarter 2013 and the prior year's quarter due to strong commercial and residential loan portfolio growth.
  • Continued reduction in noninterest expenses compared to the prior quarter periods.
  • Decreased nonperforming loans and other real estate owned compared to the prior quarter and year-end periods. 

"We have continued to build on our positive momentum," reported James A. Hughes, President and CEO.  "We have had a record year, with loans growing in excess of 15% and deposits growing by nearly 14%.   We are now seeing this growth contribute to an increase in top line revenues, and we expect this trend to continue.  We look forward to continued improvement in 2014."

For the year ended December 31, 2013, net income available to common shareholders totaled $4.1 million, or $0.53 per diluted share, a 56.2% increase compared to $2.6 million or $0.34 per diluted share for 2012.  Return on average assets and average common equity for the annual periods were 0.61% and 7.22%, respectively, compared to 0.53% and 4.80% for the same period a year ago. 

Net Interest Income

Year over year, net interest income was flat at $27.4 million; however, net interest income increased $326 thousand to $7.1 million for the quarter ended December 31, 2013 compared to the prior year's quarter.  Net interest income also showed an increase of $192 thousand over the quarter ending September 30, 2013.   The strong growth in commercial and residential mortgage loan volume over the past year has helped to offset lower yields on our securities and loan portfolios.  We expect net interest income to continue to expand in future quarters due to strong loan growth.   The net interest margin was 3.42% and 3.53% for the quarter and year-to-date periods, respectively.

Provision for Loan Losses

The provision for loan losses for the quarters ended December 31, 2013 and December 31, 2012 was $800 thousand.  For the twelve month period ended December 31, 2013, the provision declined to $2.4 million from $4.0 million in 2012.  The reduced provision, year over year, reflects an improvement in credit quality and a lower level of net charge-offs. 

Noninterest Income

Noninterest income decreased $537 thousand to $1.5 million for the three months and $734 thousand to $6.6 million for the year ended December 31, 2013, compared to the same periods last year. The decreases during both periods were driven by lower sales volume of residential mortgage loans.  In addition, there was a reduced volume of SBA loan sales and consequent gains realized.  These decreases were partially offset by increased service and fee income on loans and bank owned life insurance ("BOLI") income. 

During the quarter, $15.8 million in residential mortgage loans were sold at a gain of $312 thousand, compared to $34.0 million sold at a gain of $748 thousand during the prior year's quarter.  For the year, $78.4 million in residential mortgage loans were sold at a gain of $1.7 million, compared to $105.5 million sold at a gain of $2.3 million during the prior year's period.  We do not anticipate the rise in interest rates to have a material impact on our residential mortgage origination volume.

SBA loan sales totaled $2.1 million with gains on sale of $262 thousand for the fourth quarter 2012.  There were no sales during the quarter ended December 31, 2013.  For the twelve month period, SBA loan sales totaled $6.3 million with gains on sale of $628 thousand compared to sales of $6.8 million and $688 thousand in gains during the prior year.  We anticipate an increase in the volume of sales in 2014, due to the addition of SBA business development officers.

Noninterest Expense

Noninterest expense decreased $273 thousand to $5.9 million for the three months ended December 31, 2013, while year-to-date expense decreased $300 thousand to $24.0 million.  The decreases in each of these periods were the result of lower mortgage commissions, reduced salary compensation from position vacancies and lower occupancy expense as a result of cost savings realized from the purchase of three of our previously leased locations.  Partially offsetting these decreases were increased processing and communications expenses related to merchant services, electronic banking and check cashing services. Other notable expense fluctuations included a decrease in other expenses during the quarter compared to the prior year period due to a retail loss in 2012 reflected in noninterest expense during the year ago period.   On a year-to-date basis, advertising expenses declined based on the timing of retail related promotions and the utilization of cost effective avenues such as social media, loan collection costs remain elevated due to higher appraisal, insurance and other collection costs, and recruiting and director expenses increased.

Financial Condition

At December 31, 2013, total assets were $921.1 million, an increase of $101.4 million from the prior year-end:

  • Total loans increased $91.7 million or 15.6%, to $678.7 million at December 31, 2013. This growth came in our commercial and residential mortgage loan portfolios which increased $61.8 million and $50.0 million, respectively.  Future loan growth is expected to be primarily in commercial loans, while the Company plans to continue shrinking its out of market SBA portfolio.
  • Total deposits increased $89.9 million or 13.9%, to $738.7 million at December 31, 2013, due to growth in time deposits, noninterest-bearing demand deposits, and interest-bearing demand deposits.  Time deposits have increased $80.4 million from year-end, with the majority of this coming in the third and fourth quarters in response to a certificate of deposit ("CD") promotion and the addition of brokered CDs.
  • Shareholders' equity was $57.2 million at December 31, 2013, a decrease of $20.3 million from year-end 2012, due primarily to the redemption of $20.6 million in preferred stock issued in connection with the CPP and repurchase of the related warrants for $2.7 million
  • Book value per common share was $7.55 as of December 31, 2013.
  • At December 31, 2013, the leverage, Tier I and Total Risk Based Capital ratios were 8.08%, 10.74% and 11.99% respectively, all in excess of the ratios required to be deemed "well-capitalized." 

Credit Quality

  • Nonperforming assets totaled $15.9 million at December 31, 2013, or 2.34% of total loans and OREO, compared to $19.3 million or 3.28% of total loans and OREO at year-end 2012.
  • OREO decreased $1.2 million to $633 thousand at December 31, 2013, due to the sale of 12 properties.
  • The allowance for loan losses totaled $13.1 million at December 31, 2013, or 1.94% of total loans.
  • Net charge-offs were $1.2 million for the three months ended December 31, 2013, compared to $1.3 million for the same period a year ago.  For the year ended December 31, 2013, net charge-offs were $4.0 million compared to $5.6 million for the prior year period, representing a 29.0% decline.
  • Troubled debt restructurings ("TDRs") decreased $6.7 million from year-end to $7.9 million due to payoffs, note sales, a refinanced transaction and principal pay downs, partially offset by the addition of two loans.  At December 31, 2013, 94.1% of our TDRs were performing.  

"In 2014, we plan to raise a limited amount of capital through a common stock rights offering.  This capital will allow for continued loan and asset growth and will allow our existing shareholders to increase their investment in Unity," said James A. Hughes, President and CEO.

Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $921 million in assets and $739 million in deposits.  Unity Bank provides financial services to retail, corporate and small business customers through its 15 retail service centers located in Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County, Pennsylvania.  For additional information about Unity, visit our website at www.unitybank.com , or call 800- 618-BANK.

This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance.  These statements may be identified by use of the words "believe", "expect", "intend", "anticipate", "estimate", "project" or similar expressions.  These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company's control and could impede its ability to achieve these goals.  These factors include those items included in our Annual Report on Form 10-K under the heading "Item IA-Risk Factors" as well as general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, our ability to manage and reduce the level of our nonperforming assets, and results of regulatory exams, among other factors.

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

 

UNITY BANCORP, INC.

SUMMARY FINANCIAL HIGHLIGHTS 

December 31, 2013

December 31, 2013 vs.

September 30, 2013

December 31, 2012

(In thousands, except percentages and per share amounts)

December 31, 2013

September 30, 2013

December 31, 2012

%

%

BALANCE SHEET DATA:

Total assets

$

921,118

$

876,101

$

819,730

5.1

%

12.4

%

Total deposits

738,698

727,112

648,760

1.6

13.9

Total loans

678,701

660,617

587,036

2.7

15.6

Total securities

107,514

106,906

111,053

0.6

(3.2)

Total shareholders' equity

57,173

55,939

77,510

2.2

(26.2)

Allowance for loan losses

(13,141)

(13,550)

(14,758)

(3.0)

(11.0)

FINANCIAL DATA - QUARTER TO DATE:

Income before provision for income taxes

$

1,872

$

1,986

$

1,810

(5.7)

3.4

Provision for income taxes

606

684

643

(11.4)

(5.8)

Net income 

1,266

1,302

1,167

(2.8)

8.5

Preferred stock dividends and discount accretion

-

119

408

(100.0)

(100.0)

Income available to common shareholders

$

1,266

$

1,183

$

759

7.0

66.8

Net income per common share - Basic (1)

$

0.17

$

0.16

$

0.10

6.3

70.0

Net income per common share - Diluted (1)

$

0.17

$

0.15

$

0.10

13.3

70.0

Return on average assets

0.57

%

0.62

%

0.57

%

(8.1)

-

Return on average equity (2)

8.87

%

8.25

%

5.34

%

7.5

66.1

Efficiency ratio

68.87

%

69.93

%

70.66

%

(1.5)

(2.5)

FINANCIAL DATA - YEAR TO DATE:

Income before provision for income taxes

$

7,682

$

6,470

18.7

Provision for income taxes

2,567

2,226

15.3

Net income 

5,115

4,244

20.5

Preferred stock dividends and discount accretion

988

1,602

(38.3)

Income available to common shareholders

$

4,127

$

2,642

56.2

Net income per common share - Basic (1)

$

0.55

$

0.35

57.1

Net income per common share - Diluted (1)

$

0.53

$

0.34

55.9

Return on average assets

0.61

%

0.53

%

15.1

Return on average equity (2)

7.22

%

4.80

%

50.4

Efficiency ratio

71.34

%

71.06

%

0.4

SHARE INFORMATION:

Market price per share

$

7.66

$

7.46

$

6.24

2.7

22.8

Dividends paid

$

0.01

$

0.01

$

-

-

100.0

Book value per common share

$

7.55

$

7.41

$

7.62

1.9

(0.9)

Average diluted shares outstanding (QTD)

7,618

7,822

7,818

(2.6)

(2.6)

CAPITAL RATIOS:

Total equity to total assets

6.21

%

6.38

%

9.46

%

(2.7)

(34.4)

Leverage ratio

8.08

%

8.33

%

11.14

%

(3.0)

(27.5)

Tier 1 risk-based capital ratio

10.74

%

10.81

%

14.85

%

(0.6)

(27.7)

Total risk-based capital ratio

11.99

%

12.07

%

16.12

%

(0.7)

(25.6)

CREDIT QUALITY AND RATIOS:

Nonperforming assets

$

15,916

$

17,903

$

19,294

(11.1)

(17.5)

QTD net chargeoffs (annualized) to QTD average loans

0.72

%

0.84

%

0.90

%

(14.3)

(20.0)

Allowance for loan losses to total loans

1.94

%

2.05

%

2.51

%

(5.4)

(22.7)

Nonperforming assets to total loans and OREO

2.34

%

2.70

%

3.28

%

(13.3)

(28.7)

Nonperforming assets to total assets

1.73

%

2.04

%

2.35

%

(15.2)

%

(26.4)

%

(1)  Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by weighted average shares outstanding.

(2)  Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by average shareholders' equity (excluding preferred stock).

 

 

UNITY BANCORP, INC.

CONSOLIDATED BALANCE SHEETS 

December 31, 2013

 December 31, 2013 vs. 

September 30, 2013

December 31, 2012

(In thousands, except percentages)

December 31, 2013

September 30, 2013

December 31, 2012

%

%

ASSETS

Cash and due from banks

$

24,272

$

27,602

$

23,705

(12.1)

%

2.4

%

Federal funds sold and interest-bearing deposits

75,132

47,124

70,487

59.4

6.6

Cash and cash equivalents

99,404

74,726

94,192

33.0

5.5

Securities:

Securities available for sale

81,133

80,926

89,538

0.3

(9.4)

Securities held to maturity

26,381

25,980

21,515

1.5

22.6

Total securities

107,514

106,906

111,053

0.6

(3.2)

Loans:

SBA loans held for sale

6,673

5,893

6,937

13.2

(3.8)

SBA loans held to maturity

48,918

50,445

58,593

(3.0)

(16.5)

SBA 504 loans

31,564

37,041

41,438

(14.8)

(23.8)

Commercial loans

363,340

348,625

301,564

4.2

20.5

Residential mortgage loans

182,067

173,129

132,094

5.2

37.8

Consumer loans

46,139

45,484

46,410

1.4

(0.6)

Total loans

678,701

660,617

587,036

2.7

15.6

Allowance for loan losses

(13,141)

(13,550)

(14,758)

3.0

11.0

Net loans

665,560

647,067

572,278

2.9

16.3

Premises and equipment, net

15,672

15,671

12,062

-

29.9

Bank owned life insurance ("BOLI")

12,749

12,648

9,402

0.8

35.6

Deferred tax assets

6,752

6,880

5,954

(1.9)

13.4

Federal Home Loan Bank stock

5,392

3,952

3,989

36.4

35.2

Accrued interest receivable

3,272

3,131

3,298

4.5

(0.8)

Other real estate owned ("OREO")

633

1,249

1,826

(49.3)

(65.3)

Prepaid FDIC insurance

-

-

1,929

-

(100.0)

Goodwill and other intangibles

1,516

1,516

1,516

-

-

Other assets

2,654

2,355

2,231

12.7

19.0

Total assets

$

921,118

$

876,101

$

819,730

5.1

%

12.4

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing demand deposits

$

136,035

$

163,617

$

114,424

(16.9)

%

18.9

%

Interest-bearing demand deposits

130,806

119,579

114,838

9.4

13.9

Savings deposits

266,503

280,892

294,533

(5.1)

(9.5)

Time deposits, under $100,000

108,258

95,990

76,994

12.8

40.6

Time deposits, $100,000 and over

97,096

67,034

47,971

44.8

102.4

Total deposits

738,698

727,112

648,760

1.6

13.9

Borrowed funds

107,000

75,000

75,000

42.7

42.7

Subordinated debentures

15,465

15,465

15,465

-

-

Accrued interest payable

454

430

434

5.6

4.6

Accrued expenses and other liabilities

2,328

2,155

2,561

8.0

(9.1)

Total liabilities

863,945

820,162

742,220

5.3

16.4

Shareholders' equity:

Cumulative perpetual preferred stock

-

-

20,115

-

(100.0)

Common stock

52,051

51,944

54,274

0.2

(4.1)

Retained earnings

5,598

4,408

1,788

27.0

213.1

Accumulated other comprehensive income (loss)

(476)

(413)

1,333

(15.3)

(135.7)

Total shareholders' equity

57,173

55,939

77,510

2.2

(26.2)

Total liabilities and shareholders' equity

$

921,118

$

876,101

$

819,730

5.1

%

12.4

%

Preferred shares

-

-

21

Issued and outstanding common shares

7,577

7,546

7,534

 

 

UNITY BANCORP, INC.

QTD CONSOLIDATED STATEMENTS OF INCOME 

December 31, 2013

 December 31, 2013 vs. 

 For the three months ended 

September 30, 2013

December 31, 2012

(In thousands, except percentages and per share amounts)

December 31, 2013

September 30, 2013

December 31, 2012

$

%

$

%

INTEREST INCOME

Federal funds sold and interest-bearing deposits

$

9

$

9

$

16

$

-

-

%

$

(7)

(43.8)

%

Federal Home Loan Bank stock

40

40

44

-

-

(4)

(9.1)

Securities:

Taxable

585

591

644

(6)

(1.0)

(59)

(9.2)

Tax-exempt

106

109

103

(3)

(2.8)

3

2.9

Total securities

691

700

747

(9)

(1.3)

(56)

(7.5)

Loans:

SBA loans

519

586

779

(67)

(11.4)

(260)

(33.4)

SBA 504 loans

408

411

548

(3)

(0.7)

(140)

(25.5)

Commercial loans

4,684

4,387

4,270

297

6.8

414

9.7

Residential mortgage loans

1,953

1,861

1,577

92

4.9

376

23.8

Consumer loans

462

480

521

(18)

(3.8)

(59)

(11.3)

Total loans

8,026

7,725

7,695

301

3.9

331

4.3

Total interest income

8,766

8,474

8,502

292

3.4

264

3.1

INTEREST EXPENSE

Interest-bearing demand deposits

102

90

119

12

13.3

(17)

(14.3)

Savings deposits

186

183

251

3

1.6

(65)

(25.9)

Time deposits

598

510

575

88

17.3

23

4.0

Borrowed funds and subordinated debentures

817

820

820

(3)

(0.4)

(3)

(0.4)

Total interest expense

1,703

1,603

1,765

100

6.2

(62)

(3.5)

Net interest income

7,063

6,871

6,737

192

2.8

326

4.8

Provision for loan losses

800

600

800

200

33.3

-

-

Net interest income after provision for loan losses

6,263

6,271

5,937

(8)

(0.1)

326

5.5

NONINTEREST INCOME

Branch fee income

412

398

397

14

3.5

15

3.8

Service and loan fee income

396

351

297

45

12.8

99

33.3

Gain on sale of SBA loans held for sale, net

21

280

262

(259)

(92.5)

(241)

(92.0)

Gain on sale of mortgage loans, net

312

314

748

(2)

(0.6)

(436)

(58.3)

BOLI income

102

100

76

2

2.0

26

34.2

Net security gains 

22

34

59

(12)

(35.3)

(37)

(62.7)

Other income

206

173

169

33

19.1

37

21.9

Total noninterest income

1,471

1,650

2,008

(179)

(10.8)

(537)

(26.7)

NONINTEREST EXPENSE

Compensation and benefits

2,925

2,984

3,054

(59)

(2.0)

(129)

(4.2)

Occupancy

652

598

683

54

9.0

(31)

(4.5)

Processing and communications

588

598

549

(10)

(1.7)

39

7.1

Furniture and equipment

368

374

395

(6)

(1.6)

(27)

(6.8)

Professional services

194

210

192

(16)

(7.6)

2

1.0

Loan collection costs

229

188

229

41

21.8

-

-

OREO expenses

94

174

86

(80)

(46.0)

8

9.3

Deposit insurance

173

165

163

8

4.8

10

6.1

Advertising

228

218

210

10

4.6

18

8.6

Other expenses

411

426

574

(15)

(3.5)

(163)

(28.4)

Total noninterest expense

5,862

5,935

6,135

(73)

(1.2)

(273)

(4.4)

Income before provision for income taxes

1,872

1,986

1,810

(114)

(5.7)

62

3.4

Provision for income taxes

606

684

643

(78)

(11.4)

(37)

(5.8)

Net income 

1,266

1,302

1,167

(36)

(2.8)

99

8.5

Preferred stock dividends and discount accretion

-

119

408

(119)

(100.0)

(408)

(100.0)

Income available to common shareholders

$

1,266

$

1,183

$

759

$

83

7.0

%

$

507

66.8

%

Effective tax rate

32.4

%

34.4

%

35.5

%

Net income per common share - Basic (1)

$

0.17

$

0.16

$

0.10

Net income per common share - Diluted (1)

$

0.17

$

0.15

$

0.10

Weighted average common shares outstanding - Basic

7,560

7,545

7,514

Weighted average common shares outstanding - Diluted

7,618

7,822

7,818

(1)  Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by weighted average shares outstanding.

 

 

UNITY BANCORP, INC.

YTD CONSOLIDATED STATEMENTS OF INCOME

December 31, 2013

 For the twelve months ended December 31,  

Current YTD vs. Prior YTD

(In thousands, except percentages and per share amounts)

2013

2012

$

%

INTEREST INCOME

Federal funds sold and interest-bearing deposits

$

39

$

72

$

(33)

(45.8)

%

Federal Home Loan Bank stock

159

189

(30)

(15.9)

Securities:

Taxable

2,443

2,823

(380)

(13.5)

Tax-exempt

460

473

(13)

(2.7)

Total securities

2,903

3,296

(393)

(11.9)

Loans:

SBA loans

2,660

3,430

(770)

(22.4)

SBA 504 loans

1,911

2,645

(734)

(27.8)

Commercial loans

17,322

16,982

340

2.0

Residential mortgage loans

7,013

6,445

568

8.8

Consumer loans

1,947

2,144

(197)

(9.2)

Total loans

30,853

31,646

(793)

(2.5)

Total interest income

33,954

35,203

(1,249)

(3.5)

INTEREST EXPENSE

Interest-bearing demand deposits

383

486

(103)

(21.2)

Savings deposits

710

1,185

(475)

(40.1)

Time deposits

2,191

2,796

(605)

(21.6)

Borrowed funds and subordinated debentures

3,245

3,307

(62)

(1.9)

Total interest expense

6,529

7,774

(1,245)

(16.0)

Net interest income

27,425

27,429

(4)

-

Provision for loan losses

2,350

4,000

(1,650)

(41.3)

Net interest income after provision for loan losses

25,075

23,429

1,646

7.0

NONINTEREST INCOME

Branch fee income

1,505

1,528

(23)

(1.5)

Service and loan fee income

1,370

1,252

118

9.4

Gain on sale of SBA loans held for sale, net

628

688

(60)

(8.7)

Gain on sale of mortgage loans, net

1,650

2,274

(624)

(27.4)

BOLI income

347

296

51

17.2

Net security gains 

390

573

(183)

(31.9)

Other income

714

727

(13)

(1.8)

Total noninterest income

6,604

7,338

(734)

(10.0)

NONINTEREST EXPENSE

Compensation and benefits

12,251

12,560

(309)

(2.5)

Occupancy

2,571

2,722

(151)

(5.5)

Processing and communications

2,309

2,180

129

5.9

Furniture and equipment

1,478

1,480

(2)

(0.1)

Professional services

828

789

39

4.9

Loan collection costs

822

682

140

20.5

OREO expenses

458

483

(25)

(5.2)

Deposit insurance

666

664

2

0.3

Advertising

747

839

(92)

(11.0)

Other expenses

1,867

1,898

(31)

(1.6)

Total noninterest expense

23,997

24,297

(300)

(1.2)

Income before provision for income taxes

7,682

6,470

1,212

18.7

Provision for income taxes

2,567

2,226

341

15.3

Net income 

5,115

4,244

871

20.5

Preferred stock dividends and discount accretion

988

1,602

(614)

(38.3)

Income available to common shareholders

$

4,127

$

2,642

$

1,485

56.2

%

Effective tax rate

33.4

%

34.4

%

Net income per common share - Basic (1)

$

0.55

$

0.35

Net income per common share - Diluted (1)

$

0.53

$

0.34

Weighted average common shares outstanding - Basic

7,547

7,477

Weighted average common shares outstanding - Diluted

7,810

7,794

(1)  Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by weighted average shares outstanding.

 

 

UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

December 31, 2013

(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)

For the three months ended

December 31, 2013

September 30, 2013

Average Balance

Interest

Rate/Yield

Average Balance

Interest

Rate/Yield

ASSETS

Interest-earning assets:

Federal funds sold and interest-bearing deposits

$

46,533

$

9

0.08

%

$

25,841

$

9

0.14

%

Federal Home Loan Bank stock

4,009

40

3.96

4,022

40

3.95

Securities:

Taxable

89,275

585

2.62

87,694

591

2.70

Tax-exempt

16,975

157

3.70

18,474

162

3.51

Total securities (A)

106,250

742

2.79

106,168

753

2.84

Loans:

SBA loans

55,536

519

3.74

59,755

586

3.92

SBA 504 loans

33,253

408

4.87

37,971

411

4.29

Commercial loans

356,939

4,684

5.21

335,404

4,387

5.19

Residential mortgage loans

176,880

1,953

4.42

163,805

1,861

4.54

Consumer loans

45,708

462

4.01

45,709

480

4.17

Total loans (B)

668,316

8,026

4.78

642,644

7,725

4.78

Total interest-earning assets

$

825,108

$

8,817

4.25

%

$

778,675

$

8,527

4.36

%

Noninterest-earning assets:

Cash and due from banks

23,877

24,367

Allowance for loan losses

(13,653)

(14,310)

Other assets

43,147

44,184

Total noninterest-earning assets

53,371

54,241

Total assets

$

878,479

$

832,916

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing liabilities:

Interest-bearing demand deposits

$

122,977

$

102

0.33

%

$

115,085

$

90

0.31

%

Savings deposits

268,745

186

0.27

277,501

183

0.26

Time deposits

186,200

598

1.27

150,533

510

1.34

Total interest-bearing deposits

577,922

886

0.60

543,119

783

0.57

Borrowed funds and subordinated debentures

91,738

817

3.48

92,025

820

3.49

Total interest-bearing liabilities

$

669,660

$

1,703

0.99

%

$

635,144

$

1,603

0.99

%

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

149,252

137,711

Other liabilities

2,946

2,918

Total noninterest-bearing liabilities

152,198

140,629

Total shareholders' equity

56,621

57,143

Total liabilities and shareholders' equity

$

878,479

$

832,916

Net interest spread

$

7,114

3.26

%

$

6,924

3.37

%

Tax-equivalent basis adjustment

(51)

(53)

Net interest income

$

7,063

$

6,871

Net interest margin

3.42

%

3.53

%

(A) Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis.  They are reduced by the nondeductible portion of interest expense, 

assuming a federal tax rate of 34 percent and applicable state rates.

(B) The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.

 

 

UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

December 31, 2013

(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)

For the three months ended

December 31, 2013

December 31, 2012

Average Balance

Interest

Rate/Yield

Average Balance

Interest

Rate/Yield

ASSETS

Interest-earning assets:

Federal funds sold and interest-bearing deposits

$

46,533

$

9

0.08

%

$

61,710

$

16

0.10

%

Federal Home Loan Bank stock

4,009

40

3.96

3,990

44

4.39

Securities:

Taxable

89,275

585

2.62

95,626

644

2.69

Tax-exempt

16,975

157

3.70

14,172

153

4.32

Total securities (A)

106,250

742

2.79

109,798

797

2.91

Loans:

SBA loans

55,536

519

3.74

66,669

779

4.67

SBA 504 loans

33,253

408

4.87

41,584

548

5.24

Commercial loans

356,939

4,684

5.21

304,413

4,270

5.58

Residential mortgage loans

176,880

1,953

4.42

133,799

1,577

4.71

Consumer loans

45,708

462

4.01

46,571

521

4.45

Total loans (B)

668,316

8,026

4.78

593,036

7,695

5.17

Total interest-earning assets

$

825,108

$

8,817

4.25

%

$

768,534

$

8,552

4.44

%

Noninterest-earning assets:

Cash and due from banks

23,877

18,386

Allowance for loan losses

(13,653)

(15,566)

Other assets

43,147

38,312

Total noninterest-earning assets

53,371

41,132

Total assets

$

878,479

$

809,666

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing liabilities:

Interest-bearing demand deposits

$

122,977

$

102

0.33

%

$

112,958

$

119

0.42

%

Savings deposits

268,745

186

0.27

287,047

251

0.35

Time deposits

186,200

598

1.27

126,233

575

1.81

Total interest-bearing deposits

577,922

886

0.60

526,238

945

0.72

Borrowed funds and subordinated debentures

91,738

817

3.48

90,498

820

3.55

Total interest-bearing liabilities

$

669,660

$

1,703

0.99

%

$

616,736

$

1,765

1.14

%

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

149,252

113,164

Other liabilities

2,946

3,181

Total noninterest-bearing liabilities

152,198

116,345

Total shareholders' equity

56,621

76,585

Total liabilities and shareholders' equity

$

878,479

$

809,666

Net interest spread

$

7,114

3.26

%

$

6,787

3.30

%

Tax-equivalent basis adjustment

(51)

(50)

Net interest income

$

7,063

$

6,737

Net interest margin

3.42

%

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.

 

 

UNITY BANCORP, INC.

YEAR TO DATE NET INTEREST MARGIN

December 31, 2013

(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)

For the twelve months ended

December 31, 2013

December 31, 2012

Average Balance

Interest

Rate/Yield

Average Balance

Interest

Rate/Yield

ASSETS

Interest-earning assets:

Federal funds sold and interest-bearing deposits

$

39,971

$

39

0.10

%

$

49,355

$

72

0.15

%

Federal Home Loan Bank stock

4,007

159

3.97

4,015

189

4.71

Securities:

Taxable

93,132

2,443

2.62

100,365

2,823

2.81

Tax-exempt

18,587

681

3.66

15,455

701

4.54

Total securities (A)

111,719

3,124

2.79

115,820

3,524

3.04

Loans:

SBA loans

60,891

2,660

4.37

68,536

3,430

5.00

SBA 504 loans

37,920

1,911

5.04

46,153

2,645

5.73

Commercial loans

328,229

17,322

5.28

299,820

16,982

5.66

Residential mortgage loans

155,237

7,013

4.52

134,214

6,445

4.80

Consumer loans

45,705

1,947

4.26

46,487

2,144

4.61

Total loans (B)

627,982

30,853

4.92

595,210

31,646

5.31

Total interest-earning assets

$

783,679

$

34,175

4.37

%

$

764,400

$

35,431

4.63

%

Noninterest-earning assets:

Cash and due from banks

22,728

16,665

Allowance for loan losses

(14,423)

(16,458)

Other assets

41,688

39,625

Total noninterest-earning assets

49,993

39,832

Total assets

$

833,672

$

804,232

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing liabilities:

Interest-bearing demand deposits

$

118,289

$

383

0.32

%

$

108,825

$

486

0.45

%

Savings deposits

277,891

710

0.26

282,115

1,185

0.42

Time deposits

146,115

2,191

1.50

138,233

2,796

2.02

Total interest-bearing deposits

542,295

3,284

0.61

529,173

4,467

0.84

Borrowed funds and subordinated debentures

91,475

3,245

3.50

90,473

3,307

3.60

Total interest-bearing liabilities

$

633,770

$

6,529

1.03

%

$

619,646

$

7,774

1.24

%

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

130,768

106,412

Other liabilities

3,164

3,335

Total noninterest-bearing liabilities

133,932

109,747

Total shareholders' equity

65,970

74,839

Total liabilities and shareholders' equity

$

833,672

$

804,232

Net interest spread

$

27,646

3.34

%

$

27,657

3.39

%

Tax-equivalent basis adjustment

(221)

(228)

Net interest income

$

27,425

$

27,429

Net interest margin

3.53

%

3.62

%

(A) Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductible portion of interest expense, assuming a federal tax rate of 34 percent and applicable state rates.

(B) The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.

 

 

UNITY BANCORP, INC.

QUARTERLY ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY SCHEDULES 

December 31, 2013

Amounts in thousands, except percentages 

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

ALLOWANCE FOR LOAN LOSSES:

Balance, beginning of period

$

13,550

$

14,309

$

14,345

$

14,758

$

15,294

Provision for loan losses charged to expense

800

600

300

650

800

14,350

14,909

14,645

15,408

16,094

Less: Chargeoffs

SBA loans

128

211

167

570

251

SBA 504 loans

203

590

200

200

-

Commercial loans

564

253

200

375

1,190

Residential mortgage loans

125

125

-

125

152

Consumer loans

300

229

-

59

-

Total chargeoffs

1,320

1,408

567

1,329

1,593

Add: Recoveries

SBA loans

93

12

8

137

22

SBA 504 loans

3

-

154

25

50

Commercial loans

14

24

65

101

184

Residential mortgage loans

-

13

2

2

-

Consumer loans

1

-

2

1

1

Total recoveries

111

49

231

266

257

Net chargeoffs

1,209

1,359

336

1,063

1,336

Balance, end of period

$

13,141

$

13,550

$

14,309

$

14,345

$

14,758

LOAN QUALITY INFORMATION:

Nonperforming loans (1)

$

15,283

$

16,654

$

13,357

$

14,904

$

17,468

Other real estate owned ("OREO")

633

1,249

752

1,052

1,826

Nonperforming assets

15,916

17,903

14,109

15,956

19,294

Less:  Amount guaranteed by SBA

540

592

736

1,863

1,849

Net nonperforming assets

$

15,376

$

17,311

$

13,373

$

14,093

$

17,445

Loans 90 days past due & still accruing

$

19

$

861

$

429

$

632

$

109

Performing Troubled Debt Restructurings (TDRs)

$

7,452

$

7,705

$

10,649

$

15,068

$

13,576

(1) Nonperforming TDRs included in nonperforming loans

467

1,765

1,658

1,084

1,087

Total TDRs

$

7,919

$

9,470

$

12,307

$

16,152

$

14,663

Allowance for loan losses to:

Total loans at quarter end

1.94

%

2.05

%

2.30

%

2.40

%

2.51

%

Nonperforming loans (1)

85.98

81.36

107.13

96.25

84.49

Nonperforming assets

82.56

75.69

101.42

89.90

76.49

Net nonperforming assets

85.46

78.27

107.00

101.79

84.60

QTD net chargeoffs (annualized) to QTD average loans:

SBA loans

0.25

%

1.32

%

1.01

%

2.69

%

1.37

%

SBA 504 loans

2.39

6.16

0.47

1.73

(0.48)

Commercial loans

0.61

0.27

0.17

0.36

1.31

Residential mortgage loans

0.28

0.27

(0.01)

0.37

0.45

Consumer loans

2.60

1.99

(0.02)

0.51

(0.01)

Total loans

0.72

%

0.84

%

0.22

%

0.73

%

0.90

%

Nonperforming loans to total loans

2.25

%

2.52

%

2.15

%

2.50

%

2.98

%

Nonperforming loans and TDRs to total loans

3.35

3.69

3.86

5.02

5.29

Nonperforming assets to total loans and OREO

2.34

2.70

2.26

2.67

3.28

Nonperforming assets to total assets

1.73

2.04

1.71

1.93

2.35

 

 

UNITY BANCORP, INC.

QUARTERLY FINANCIAL DATA 

December 31, 2013

(In thousands, except percentages and per share amounts)

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

SUMMARY OF INCOME:

Total interest income

$

8,766

$

8,474

$

8,401

$

8,313

$

8,502

Total interest expense

1,703

1,603

1,599

1,624

1,765

Net interest income

7,063

6,871

6,802

6,689

6,737

Provision for loan losses

800

600

300

650

800

Net interest income after provision for loan losses

6,263

6,271

6,502

6,039

5,937

Total noninterest income

1,471

1,650

1,658

1,825

2,008

Total noninterest expense

5,862

5,935

6,074

6,126

6,135

Income before provision for income taxes

1,872

1,986

2,086

1,738

1,810

Provision for income taxes

606

684

739

538

643

Net income 

1,266

1,302

1,347

1,200

1,167

Preferred stock dividends and discount accretion

-

119

465

404

408

Income available to common shareholders

$

1,266

$

1,183

$

882

$

796

$

759

Net income per common share - Basic (1)

$

0.17

$

0.16

$

0.12

$

0.11

$

0.10

Net income per common share - Diluted (1)

$

0.17

$

0.15

$

0.11

$

0.10

$

0.10

COMMON SHARE DATA:

Market price per share

$

7.66

$

7.46

$

7.10

$

6.51

$

6.24

Dividends paid

$

0.01

$

0.01

$

0.01

$

-

$

-

Book value per common share

$

7.55

$

7.41

$

7.70

$

7.67

$

7.62

Weighted average common shares outstanding - Basic

7,560

7,545

7,544

7,538

7,514

Weighted average common shares outstanding - Diluted

7,618

7,822

7,911

7,845

7,818

Issued and outstanding common shares

7,577

7,546

7,544

7,548

7,534

OPERATING RATIOS (Annualized):

Return on average assets

0.57

%

0.62

%

0.67

%

0.59

%

0.57

%

Return on average equity (2)

8.87

8.25

6.11

5.65

5.34

Efficiency ratio

68.87

69.93

72.72

73.91

70.66

BALANCE SHEET DATA:

Total assets

$

921,118

$

876,101

$

824,575

$

827,182

$

819,730

Total deposits

738,698

727,112

628,369

652,117

648,760

Total loans

678,701

660,617

622,316

596,571

587,036

Total securities

107,514

106,906

111,269

119,334

111,053

Total shareholders' equity

57,173

55,939

68,287

78,157

77,510

Allowance for loan losses

(13,141)

(13,550)

(14,309)

(14,345)

(14,758)

TAX EQUIVALENT YIELDS AND RATES:

Interest-earning assets

4.25

%

4.36

%

4.51

%

4.33

%

4.44

%

Interest-bearing liabilities

0.99

0.99

1.06

1.04

1.14

Net interest spread

3.26

3.37

3.45

3.29

3.30

Net interest margin

3.42

3.53

3.66

3.52

3.51

CREDIT QUALITY:

Nonperforming assets

15,916

17,903

14,109

15,956

19,294

QTD net chargeoffs (annualized) to QTD average loans

0.72

%

0.84

%

0.22

%

0.73

%

0.90

%

Allowance for loan losses to total loans

1.94

2.05

2.30

2.40

2.51

Nonperforming assets to total loans and OREO

2.34

2.70

2.26

2.67

3.28

Nonperforming assets to total assets

1.73

2.04

1.71

1.93

2.35

CAPITAL RATIOS AND OTHER:

Total equity to total assets

6.21

%

6.38

%

8.28

%

9.45

%

9.46

%

Leverage ratio

8.08

8.33

10.23

11.12

11.14

Tier 1 risk-based capital ratio

10.74

10.81

13.36

14.54

14.85

Total risk-based capital ratio

11.99

12.07

14.63

15.80

16.12

Number of banking offices

15

15

15

15

15

Number of ATMs

16

16

16

16

16

Number of employees

163

160

153

166

165

(1)  Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by weighted average shares outstanding.

(2)  Defined as net income adjusted for dividends accrued and accretion of discount on perpetual preferred stock divided by average shareholders' equity (excluding preferred stock).

 

SOURCE Unity Bancorp, Inc.



RELATED LINKS

http://www.unitybank.com