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| 8-K - 8-K - UNITY BANCORP INC /NJ/ | unty-8kq2earnings.htm |
Unity Bancorp, Inc.
64 Old Highway 22
Clinton, NJ 08809
800-618-BANK
www.unitybank.com
NewsNewsNewsNewsNews
For Immediate Release:
July 25, 2016
News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308
Unity Bancorp Reports 16% Increase in Quarterly Net Income
Clinton, NJ - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported increased quarterly and year-to-date earnings. Major contributing factors included strong loan growth, expanded net interest margin, increased levels of noninterest income and expense control.
Net income was $2.8 million, or $0.33 per diluted share, for the three months ended June 30, 2016, a 16.3% increase compared to net income of $2.4 million, or $0.28 per diluted share, for the same period a year ago. Return on average assets and average common equity for the quarter were 1.03% and 13.59%, respectively, compared to 1.01% and 13.35% for the same period a year ago.
Year-to-date net income was $7.0 million, or $0.82 per diluted share, for the six months ended June 30, 2016, a 61.0% increase compared to net income of $4.4 million, or $0.51 per diluted share, for the same period a year ago. Return on average assets and average common equity for the period were 1.28% and 17.25%, respectively, compared to 0.92% and 12.23% for the same period a year ago.
During the first quarter, the Company repurchased $5.2 million of its outstanding subordinated debentures at a price of $0.5475 per dollar, thus reducing its outstanding subordinated debt to $10.3 million. The repurchase resulted in a nonrecurring pre-tax gain of approximately $2.26 million. Net income, excluding the nonrecurring gain on the repurchased subordinated debentures, was $5.6 million, or $0.65 per diluted share, for the six months ended June 30, 2016, compared to net income of $4.4 million, or $0.51 per diluted share, for the same period a year ago. Return on average assets and average common equity for the six months ended June 30, 2016 would have been 1.01% and 13.63%, respectively, compared to 0.92% and 12.23% for the same period a year ago.
Management believes excluding the nonrecurring gain from year-to-date net income and reporting it in a format which is not in compliance with generally accepted accounting principles (“non-GAAP”) is beneficial to the reader and provides better comparability of the Company’s performance over both periods.
Second quarter highlights also included:
• | Announced plans to open our 17th branch location in Emerson, New Jersey. |
• | Total loans increased 11.4% compared to June 30, 2015. |
• | Total deposits increased 11.9% and noninterest-bearing demand deposits grew 19.8% since June 30, 2015. |
• | Net interest income increased 11.6% compared to the prior year’s quarter due to strong loan growth. |
• | Net interest margin increased to 3.61% this quarter compared to 3.48% in the prior quarter due to a reduced Fed Funds balance. |
• | Credit quality continues to improve. Nonperforming loans fell 26.0% from June 30, 2015. |
Mr. James A. Hughes, President and CEO, commented on this quarter’s performance, stating “During the second quarter we continued to execute on our plan and delivered another quarter of strong financial results. We continue to build a platform for future growth and profitability. That platform consists of high quality professionals that reach out to every small business in our footprint and sell our personalized banking services. It is our culture of service that brings results.”
Net Interest Income
Net interest income, our core driver of earnings, increased $973 thousand to $9.3 million for the quarter ended June 30, 2016 compared to the prior year’s period, while year-to-date, net interest income increased $1.9 million to $18.3 million. This increase was the result of strong commercial, residential mortgage and consumer loan growth over the past year. Quarterly average commercial loans increased $52.2 million, average residential mortgage loans have increased $20.8 million and consumer loans increased $14.9 million compared to the second quarter in 2015.
The cost of interest-bearing liabilities equaled 1.05% for the quarterly and year-to-date periods. While the quarterly cost of deposits increased 12 basis points to 0.82%, the cost of borrowed funds and subordinated debentures decreased 82 basis points compared to the prior year due to the modification of borrowings with the Federal Home Loan Bank (“FHLB”) over the past year. The increase in the cost of deposits was primarily driven by the intentional growth of five year time deposits and a promotional savings product.
The net interest margin was 3.61% for the quarter-ended June 30, 2016, an increase of 13 basis points from the quarter-ended March 31, 2016. The increase in the net interest margin for the quarter was due to lower yielding fed funds being deployed in the loan portfolio and the restructuring of our FHLB borrowing.
Provision for Loan Losses
The provision for loan losses was $400 thousand for the three months ended June 30, 2016 and $600 thousand for the six months ended June 30, 2016. In the prior year’s periods, there was no loan loss provision during the quarter ended June 30, 2015 and a $200 thousand loan loss provision for the six months ended June 30, 2015. The increase in the quarterly and year-to-date provision for 2016 versus 2015 was due to higher net charge-offs in each period. Net charge-offs were $276 thousand for the quarter and $601 thousand year-to-date at June 30, 2016, compared to net recoveries of $223 thousand and net charge-offs of $347 thousand for the quarter and year-to-date periods ended June 30, 2015.
Noninterest Income
Noninterest income increased $341 thousand to $2.2 million for the three months ended June 30, 2016, compared to the same period last year. Quarterly noninterest income increased due to gains on the sale of Small Business Administration (SBA) loans. Year-to-date, noninterest income increased $716 thousand to $4.3 million due to SBA and mortgage loan gains on sale along with security gains.
SBA loan sales during the second quarter of 2016 totaled $7.2 million with a net gain of $637 thousand. There were no sales during the prior year’s quarter. Year-to-date, SBA loan sales totaled $10.6 million in 2016 and $3.5 million in 2015 with net gains on sale of $945 thousand and $363 thousand, respectively.
During the quarter, $26.0 million in residential mortgage loans were sold at a gain of $593 thousand, compared to $27.1 million in loans sold at a gain of $687 thousand during the prior year’s quarter. Our mortgage pipeline remains strong and we expect a good year in mortgage originations.
In addition to the increase in noninterest income related to gains on SBA and mortgage sales noted above, other notable items included:
• | Branch fee income declined in the quarterly and year-to-date periods due to lower levels of overdraft fees, partially offset by increased fees from commercial checking accounts. |
• | Service and loan fee income declined in the quarterly and year-to-date periods due to reduced loan payoff fees. |
• | Security gains totaled $81 thousand and $28 thousand for the quarters ended June 30, 2016 and 2015, respectively. Year-to-date, security gains were $175 thousand and $28 thousand. |
Noninterest Expense
Noninterest expenses increased $76 thousand or 1.1% to $6.7 million for the quarter and $184 thousand or 1.4% for the six months ended June 30, 2016. The increases in both periods were due to higher compensation and employee benefit expenses such as medical insurance, retirement and 401(k) plan benefits and other expense items such as director fees and employee training and education expenses. These increases were partially offset by reduced occupancy expenses.
Financial Condition
At June 30, 2016, total assets were $1.1 billion, an increase of $43.5 million from year-end 2015:
• | Total loans increased $26.1 million or 2.9%, from year-end 2015 to $915.0 million at June 30, 2016. Commercial, consumer and residential mortgage loan portfolios increased $16.2 million, $7.2 million and $4.3 million, respectively. |
• | Other assets increased due to the purchase of the Company’s Clinton, New Jersey headquarters for $4.12 million. |
• | Total deposits increased $17.7 million or 2.0%, to $912.2 million at June 30, 2016. Noninterest-bearing demand deposits increased $24.8 million and savings deposits grew $16.7 million, while interest-bearing demand and time deposits declined $13.4 million and $10.4 million, respectively. The declines were due to reduced levels of municipal deposits from year-end and a roll-off of institutional certificates of deposit. |
• | Borrowed funds increased $22.0 million to $114.0 million at June 30, 2016, due to increased overnight borrowings of $12.0 million compared to year-end 2015 and the addition of a $10.0 million Federal Home Loan Bank (FHLB) borrowing. Also, during the six month period, $10.0 million in FHLB borrowings at an average cost of 4.27% were extended to 2020 at an average rate of 2.10%. |
• | Subordinated debentures decreased from year-end due to the repurchase of $5.0 million at a discount of $0.5475 per dollar. |
• | Shareholders’ equity was $85.0 million at June 30, 2016, an increase of $6.5 million from year-end 2015, due to year-to-date net income less the dividends paid to shareholders and a decrease in accumulated other comprehensive income due to the fluctuation in interest rates. |
• | Book value per common share was $10.01 as of June 30, 2016. |
• | At June 30, 2016, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 8.52%, 9.70%, 10.85% and 12.11% respectively, all in excess of the ratios required to be deemed “well-capitalized”. |
Credit Quality
• | Nonperforming assets totaled $8.2 million at June 30, 2016, or 0.90% of total loans and OREO, compared to $8.9 million or 0.99% of total loans and OREO at year-end 2015. |
• | Nonperforming loans decreased 9.9% to $6.5 million at June 30, 2016 from year-end. |
• | OREO increased $111 thousand to $1.7 million at June 30, 2016 from year-end. |
• | The allowance for loan losses totaled $12.8 million at June 30, 2016, or 1.39% of total loans compared to $12.4 million and 1.51% at June 30, 2015. |
• | Net charge-offs were $276 thousand for the three months ended June 30, 2016, compared to net recoveries of $223 thousand for the same period a year ago. Net charge-offs were $601 thousand for six months ended June 30, 2016, compared to $347 thousand for the same period a year ago. |
Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.1 billion in assets and $912 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
NON-GAAP
June 30, 2016
Jun 30, 2016 vs. | ||||||||||||||||||||
Mar 31, 2016 | Jun 30, 2015 | |||||||||||||||||||
(In thousands, except percentages and per share amounts) | Jun 30, 2016 | Mar 31, 2016 | Jun 30, 2015 | % | % | |||||||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Total assets | $ | 1,128,370 | $ | 1,120,955 | $ | 1,024,303 | 0.7 | % | 10.2 | % | ||||||||||
Total deposits | 912,198 | 926,819 | 815,427 | (1.6 | ) | 11.9 | ||||||||||||||
Total loans | 915,043 | 886,990 | 821,696 | 3.2 | 11.4 | |||||||||||||||
Total securities | 73,994 | 66,729 | 74,375 | 10.9 | (0.5 | ) | ||||||||||||||
Total shareholders' equity | 84,967 | 82,276 | 73,690 | 3.3 | 15.3 | |||||||||||||||
Allowance for loan losses | (12,758 | ) | (12,634 | ) | (12,404 | ) | (1.0 | ) | 2.9 | |||||||||||
FINANCIAL DATA - QUARTER TO DATE: | ||||||||||||||||||||
Income before provision for income taxes and gain on subordinated debenture | $ | 4,448 | $ | 4,196 | $ | 3,610 | 6.0 | 23.2 | ||||||||||||
Provision for income taxes | 1,624 | 1,464 | 1,182 | 10.9 | 37.4 | |||||||||||||||
Net income before gain on subordinated debenture | $ | 2,824 | $ | 2,732 | $ | 2,428 | 3.4 | 16.3 | ||||||||||||
Gain on subordinated debenture, net of tax | — | 1,473 | — | NM | NM | |||||||||||||||
Net income | $ | 2,824 | $ | 4,205 | $ | 2,428 | (32.8 | ) | 16.3 | |||||||||||
Net income before gain on subordinated debenture per: | ||||||||||||||||||||
Common share - basic | $ | 0.33 | $ | 0.32 | $ | 0.29 | 3.1 | 13.8 | ||||||||||||
Common share - diluted | $ | 0.33 | $ | 0.31 | $ | 0.28 | 6.5 | 17.9 | ||||||||||||
Net income per: | ||||||||||||||||||||
Common share - basic | $ | 0.33 | $ | 0.50 | $ | 0.29 | (34.0 | ) | 13.8 | |||||||||||
Common share - diluted | $ | 0.33 | $ | 0.48 | $ | 0.28 | (31.3 | ) | 17.9 | |||||||||||
Net income before gain on subordinated debenture ratios: | ||||||||||||||||||||
Return on average assets | 1.03 | % | 1.00 | % | 1.01 | % | 3.0 | 2.0 | ||||||||||||
Return on average equity | 13.59 | % | 13.67 | % | 13.35 | % | (0.6 | ) | 1.8 | |||||||||||
Efficiency ratio | 58.53 | % | 60.56 | % | 64.99 | % | (3.4 | ) | (9.9 | ) | ||||||||||
Net income ratios: | ||||||||||||||||||||
Return on average assets | 1.03 | % | 1.54 | % | 1.01 | % | (33.1 | ) | 2.0 | |||||||||||
Return on average equity | 13.59 | % | 21.05 | % | 13.35 | % | (35.4 | ) | 1.8 | |||||||||||
Efficiency ratio | 58.53 | % | 50.16 | % | 64.99 | % | 16.7 | (9.9 | ) | |||||||||||
Net interest margin | 3.61 | % | 3.48 | % | 3.70 | % | 3.7 | (2.4 | ) | |||||||||||
FINANCIAL DATA - YEAR TO DATE: | ||||||||||||||||||||
Income before provision for income taxes and gain on subordinated debenture | $ | 8,643 | $ | 6,569 | 31.6 | |||||||||||||||
Provision for income taxes | 3,087 | 2,202 | 40.2 | |||||||||||||||||
Net income before gain on subordinated debenture | $ | 5,556 | $ | 4,367 | 27.2 | |||||||||||||||
Gain on subordinated debenture, net of tax | 1,473 | — | NM | |||||||||||||||||
Net income | $ | 7,029 | $ | 4,367 | 61.0 | |||||||||||||||
Net income before gain on subordinated debenture per: | ||||||||||||||||||||
Common share - basic | $ | 0.66 | $ | 0.52 | 26.9 | |||||||||||||||
Common share - diluted | $ | 0.65 | $ | 0.51 | 27.5 | |||||||||||||||
Jun 30, 2016 vs. | ||||||||||||||||||||
Mar 31, 2016 | Jun 30, 2015 | |||||||||||||||||||
(In thousands, except percentages and per share amounts) | Jun 30, 2016 | Mar 31, 2016 | Jun 30, 2015 | % | % | |||||||||||||||
Net income per: | ||||||||||||||||||||
Common share - basic | $ | 0.83 | $ | 0.52 | 59.6 | |||||||||||||||
Common share - diluted | $ | 0.82 | $ | 0.51 | 60.8 | |||||||||||||||
Net income before gain on subordinated debenture ratios: | ||||||||||||||||||||
Return on average assets | 1.01 | % | 0.92 | % | 9.8 | |||||||||||||||
Return on average equity | 13.63 | % | 12.23 | % | 11.4 | |||||||||||||||
Efficiency ratio | 59.53 | % | 66.12 | % | (10.0 | ) | ||||||||||||||
Net income ratios: | ||||||||||||||||||||
Return on average assets | 1.28 | % | 0.92 | % | 39.1 | |||||||||||||||
Return on average equity | 17.25 | % | 12.23 | % | 41.0 | |||||||||||||||
Efficiency ratio | 54.06 | % | 66.12 | % | (18.2 | ) | ||||||||||||||
Net interest margin | 3.55 | % | 3.67 | % | (3.3 | ) | ||||||||||||||
SHARE INFORMATION: | ||||||||||||||||||||
Market price per share | $ | 12.71 | $ | 11.37 | $ | 9.79 | 11.8 | 29.8 | ||||||||||||
Dividends paid | $ | 0.04 | $ | 0.04 | $ | 0.03 | — | 0.3 | ||||||||||||
Book value per common share | $ | 10.01 | $ | 9.72 | $ | 8.75 | 3.0 | 14.4 | ||||||||||||
Average diluted shares outstanding (QTD) | 8,608 | 8,682 | 8,524 | (0.9 | ) | 1.0 | ||||||||||||||
CAPITAL RATIOS: | ||||||||||||||||||||
Total equity to total assets | 7.53 | % | 7.34 | % | 7.19 | % | 2.6 | 4.7 | ||||||||||||
Leverage ratio | 8.52 | % | 8.31 | % | 9.09 | % | 2.5 | (6.3 | ) | |||||||||||
Common equity tier 1 risk-based capital ratio | 9.70 | % | 9.77 | % | 9.39 | % | n/a | n/a | ||||||||||||
Tier 1 risk-based capital ratio | 10.85 | % | 10.97 | % | 11.33 | % | (1.1 | ) | (4.2 | ) | ||||||||||
Total risk-based capital ratio | 12.11 | % | 12.22 | % | 12.59 | % | (0.9 | ) | (3.8 | ) | ||||||||||
CREDIT QUALITY AND RATIOS: | ||||||||||||||||||||
Nonperforming assets | $ | 8,243 | $ | 8,304 | $ | 11,102 | (0.7 | ) | (25.8 | ) | ||||||||||
QTD net chargeoffs (annualized) to QTD average loans | 0.12 | % | 0.15 | % | (0.11 | ) | % | (20.0 | ) | 209.1 | ||||||||||
Allowance for loan losses to total loans | 1.39 | % | 1.42 | % | 1.51 | % | (2.1 | ) | (7.9 | ) | ||||||||||
Nonperforming assets to total loans and OREO | 0.90 | % | 0.93 | % | 1.35 | % | (3.2 | ) | (33.3 | ) | ||||||||||
Nonperforming assets to total assets | 0.73 | % | 0.74 | % | 1.08 | % | (1.4 | ) % | (32.4 | ) % | ||||||||||
UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2016
Jun 30, 2016 vs. | ||||||||||||||||||||
Dec 31, 2015 | Jun 30, 2015 | |||||||||||||||||||
(In thousands, except percentages) | Jun 30, 2016 | Dec 31, 2015 | Jun 30, 2015 | % | % | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 20,169 | $ | 22,681 | $ | 28,240 | (11.1 | ) % | (28.6 | ) % | ||||||||||
Federal funds sold and interest-bearing deposits | 75,908 | 65,476 | 62,202 | 15.9 | 22.0 | |||||||||||||||
Cash and cash equivalents | 96,077 | 88,157 | 90,442 | 9.0 | 6.2 | |||||||||||||||
Securities: | ||||||||||||||||||||
Securities available for sale | 45,266 | 52,865 | 55,766 | (14.4 | ) | (18.8 | ) | |||||||||||||
Securities held to maturity | 28,728 | 18,471 | 18,609 | 55.5 | 54.4 | |||||||||||||||
Total securities | 73,994 | 71,336 | 74,375 | 3.7 | (0.5 | ) | ||||||||||||||
Loans: | ||||||||||||||||||||
SBA loans held for sale | 13,245 | 13,114 | 11,368 | 1.0 | 16.5 | |||||||||||||||
SBA loans held for investment | 40,006 | 39,393 | 39,663 | 1.6 | 0.9 | |||||||||||||||
SBA 504 loans | 27,038 | 29,353 | 29,125 | (7.9 | ) | (7.2 | ) | |||||||||||||
Commercial loans | 481,713 | 465,518 | 428,371 | 3.5 | 12.5 | |||||||||||||||
Residential mortgage loans | 268,774 | 264,523 | 243,259 | 1.6 | 10.5 | |||||||||||||||
Consumer loans | 84,267 | 77,057 | 69,910 | 9.4 | 20.5 | |||||||||||||||
Total loans | 915,043 | 888,958 | 821,696 | 2.9 | 11.4 | |||||||||||||||
Allowance for loan losses | (12,758 | ) | (12,759 | ) | (12,404 | ) | — | 2.9 | ||||||||||||
Net loans | 902,285 | 876,199 | 809,292 | 3.0 | 11.5 | |||||||||||||||
Premises and equipment, net | 20,397 | 15,171 | 15,385 | 34.4 | 32.6 | |||||||||||||||
Bank owned life insurance ("BOLI") | 13,568 | 13,381 | 13,190 | 1.4 | 2.9 | |||||||||||||||
Deferred tax assets | 6,223 | 5,968 | 5,928 | 4.3 | 5.0 | |||||||||||||||
Federal Home Loan Bank ("FHLB") stock | 5,092 | 4,600 | 5,635 | 10.7 | (9.6 | ) | ||||||||||||||
Accrued interest receivable | 3,953 | 3,884 | 3,690 | 1.8 | 7.1 | |||||||||||||||
Other real estate owned ("OREO") | 1,702 | 1,591 | 2,265 | 7.0 | (24.9 | ) | ||||||||||||||
Goodwill and other intangibles | 1,516 | 1,516 | 1,516 | — | — | |||||||||||||||
Other assets | 3,563 | 3,063 | 2,585 | 16.3 | 37.8 | |||||||||||||||
Total assets | $ | 1,128,370 | $ | 1,084,866 | $ | 1,024,303 | 4.0 | % | 10.2 | % | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing demand | $ | 210,024 | $ | 185,267 | $ | 175,287 | 13.4 | % | 19.8 | % | ||||||||||
Interest-bearing demand | 117,189 | 130,605 | 117,988 | (10.3 | ) | (0.7 | ) | |||||||||||||
Savings | 318,184 | 301,447 | 284,369 | 5.6 | 11.9 | |||||||||||||||
Time, under $100,000 | 144,394 | 134,468 | 113,846 | 7.4 | 26.8 | |||||||||||||||
Time, $100,000 and over, under $250,000 | 91,770 | 104,106 | 100,039 | (11.8 | ) | (8.3 | ) | |||||||||||||
Time, $250,000 and over | 30,637 | 38,600 | 23,898 | (20.6 | ) | 28.2 | ||||||||||||||
Total deposits | 912,198 | 894,493 | 815,427 | 2.0 | 11.9 | |||||||||||||||
Borrowed funds | 114,000 | 92,000 | 115,000 | 23.9 | (0.9 | ) | ||||||||||||||
Subordinated debentures | 10,310 | 15,465 | 15,465 | (33.3 | ) | (33.3 | ) | |||||||||||||
Accrued interest payable | 368 | 461 | 418 | (20.2 | ) | (12.0 | ) | |||||||||||||
Accrued expenses and other liabilities | 6,527 | 3,977 | 4,303 | 64.1 | 51.7 | |||||||||||||||
Total liabilities | 1,043,403 | 1,006,396 | 950,613 | 3.7 | 9.8 | |||||||||||||||
Shareholders' equity: | ||||||||||||||||||||
Common stock | 59,844 | 59,371 | 59,067 | 0.8 | 1.3 | |||||||||||||||
Retained earnings | 25,916 | 19,566 | 15,055 | 32.5 | 72.1 | |||||||||||||||
Accumulated other comprehensive (loss) | (793 | ) | (467 | ) | (432 | ) | NM | NM | ||||||||||||
Total shareholders' equity | 84,967 | 78,470 | 73,690 | 8.3 | 15.3 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 1,128,370 | $ | 1,084,866 | $ | 1,024,303 | 4.0 | % | 10.2 | % | ||||||||||
Issued and outstanding common shares | 8,487 | 8,436 | 8,425 | |||||||||||||||||
UNITY BANCORP, INC.
QTD CONSOLIDATED STATEMENTS OF INCOME
NON-GAAP
June 30, 2016
Jun 30, 2016 vs. | ||||||||||||||||||||||||||||
For the three months ended | Mar 31, 2016 | Jun 30, 2015 | ||||||||||||||||||||||||||
(In thousands, except percentages and per share amounts) | Jun 30, 2016 | Mar 31, 2016 | Jun 30, 2015 | $ | % | $ | % | |||||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||||||||||
Federal funds sold and interest-bearing deposits | $ | 41 | $ | 44 | $ | 6 | $ | (3 | ) | (6.8 | )% | $ | 35 | 583.3 | % | |||||||||||||
FHLB stock | 55 | 52 | 38 | 3 | 5.8 | 17 | 44.7 | |||||||||||||||||||||
Securities: | ||||||||||||||||||||||||||||
Taxable | 427 | 363 | 363 | 64 | 17.6 | 64 | 17.6 | |||||||||||||||||||||
Tax-exempt | 55 | 62 | 71 | (7 | ) | (11.3 | ) | (16 | ) | (22.5 | ) | |||||||||||||||||
Total securities | 482 | 425 | 434 | 57 | 13.4 | 48 | 11.1 | |||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||
SBA loans | 788 | 721 | 605 | 67 | 9.3 | 183 | 30.2 | |||||||||||||||||||||
SBA 504 loans | 344 | 385 | 369 | (41 | ) | (10.6 | ) | (25 | ) | (6.8 | ) | |||||||||||||||||
Commercial loans | 5,860 | 5,676 | 5,276 | 184 | 3.2 | 584 | 11.1 | |||||||||||||||||||||
Residential mortgage loans | 2,937 | 2,942 | 2,716 | (5 | ) | (0.2 | ) | 221 | 8.1 | |||||||||||||||||||
Consumer loans | 980 | 931 | 774 | 49 | 5.3 | 206 | 26.6 | |||||||||||||||||||||
Total loans | 10,909 | 10,655 | 9,740 | 254 | 2.4 | 1,169 | 12.0 | |||||||||||||||||||||
Total interest income | 11,487 | 11,176 | 10,218 | 311 | 2.8 | 1,269 | 12.4 | |||||||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||||||||
Interest-bearing demand deposits | 124 | 137 | 103 | (13 | ) | (9.5 | ) | 21 | 20.4 | |||||||||||||||||||
Savings deposits | 381 | 366 | 271 | 15 | 4.1 | 110 | 40.6 | |||||||||||||||||||||
Time deposits | 954 | 951 | 725 | 3 | 0.3 | 229 | 31.6 | |||||||||||||||||||||
Borrowed funds and subordinated debentures | 686 | 735 | 750 | (49 | ) | (6.7 | ) | (64 | ) | (8.5 | ) | |||||||||||||||||
Total interest expense | 2,145 | 2,189 | 1,849 | (44 | ) | (2.0 | ) | 296 | 16.0 | |||||||||||||||||||
Net interest income | 9,342 | 8,987 | 8,369 | 355 | 4.0 | 973 | 11.6 | |||||||||||||||||||||
Provision for loan losses | 400 | 200 | — | 200 | 100.0 | 400 | 100.0 | |||||||||||||||||||||
Net interest income after provision for loan losses | 8,942 | 8,787 | 8,369 | 155 | 1.8 | 573 | 6.8 | |||||||||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||||||||||
Branch fee income | 286 | 333 | 373 | (47 | ) | (14.1 | ) | (87 | ) | (23.3 | ) | |||||||||||||||||
Service and loan fee income | 267 | 255 | 466 | 12 | 4.7 | (199 | ) | (42.7 | ) | |||||||||||||||||||
Gain on sale of SBA loans held for sale, net | 637 | 308 | — | 329 | 106.8 | 637 | 100.0 | |||||||||||||||||||||
Gain on sale of mortgage loans, net | 593 | 715 | 687 | (122 | ) | (17.1 | ) | (94 | ) | (13.7 | ) | |||||||||||||||||
BOLI income | 93 | 94 | 95 | (1 | ) | (1.1 | ) | (2 | ) | (2.1 | ) | |||||||||||||||||
Net security gains | 81 | 94 | 28 | (13 | ) | (13.8 | ) | 53 | 189.3 | |||||||||||||||||||
Other income | 277 | 217 | 244 | 60 | 27.6 | 33 | 13.5 | |||||||||||||||||||||
Total noninterest income | 2,234 | 2,016 | 1,893 | 218 | 10.8 | 341 | 18.0 | |||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
Compensation and benefits | 3,709 | 3,549 | 3,481 | 160 | 4.5 | 228 | 6.5 | |||||||||||||||||||||
Occupancy | 513 | 618 | 601 | (105 | ) | (17.0 | ) | (88 | ) | (14.6 | ) | |||||||||||||||||
Processing and communications | 600 | 598 | 614 | 2 | 0.3 | (14 | ) | (2.3 | ) | |||||||||||||||||||
Furniture and equipment | 395 | 420 | 422 | (25 | ) | (6.0 | ) | (27 | ) | (6.4 | ) | |||||||||||||||||
Professional services | 239 | 255 | 242 | (16 | ) | (6.3 | ) | (3 | ) | (1.2 | ) | |||||||||||||||||
Loan costs | 59 | 198 | 160 | (139 | ) | (70.2 | ) | (101 | ) | (63.1 | ) | |||||||||||||||||
OREO expenses | 82 | 24 | 67 | 58 | 241.7 | 15 | 22.4 | |||||||||||||||||||||
Deposit insurance | 165 | 160 | 150 | 5 | 3.1 | 15 | 10.0 | |||||||||||||||||||||
Advertising | 303 | 241 | 343 | 62 | 25.7 | (40 | ) | (11.7 | ) | |||||||||||||||||||
Other expenses | 663 | 544 | 572 | 119 | 21.9 | 91 | 15.9 | |||||||||||||||||||||
Total noninterest expense | 6,728 | 6,607 | 6,652 | 121 | 1.8 | 76 | 1.1 | |||||||||||||||||||||
Income before provision for income taxes and gain on subordinated debenture | 4,448 | 4,196 | 3,610 | 252 | 6.0 | 838 | 23.2 | |||||||||||||||||||||
Provision for income taxes | 1,624 | 1,464 | 1,182 | 160 | 10.9 | 442 | 37.4 | |||||||||||||||||||||
Jun 30, 2016 vs. | ||||||||||||||||||||||||||||
For the three months ended | Mar 31, 2016 | Jun 30, 2015 | ||||||||||||||||||||||||||
(In thousands, except percentages and per share amounts) | Jun 30, 2016 | Mar 31, 2016 | Jun 30, 2015 | $ | % | $ | % | |||||||||||||||||||||
Net income before gain on subordinated debenture | $ | 2,824 | $ | 2,732 | $ | 2,428 | $ | 92 | 3.4 | % | $ | 396 | 16.3 | % | ||||||||||||||
Gain on subordinated debenture, net of tax | — | 1,473 | — | (1,473 | ) | NM | — | NM | ||||||||||||||||||||
Net income | $ | 2,824 | $ | 4,205 | $ | 2,428 | $ | (1,381 | ) | (32.8 | )% | $ | 396 | 16.3 | % | |||||||||||||
Effective tax rate | 36.5 | % | 34.9 | % | 32.7 | % | ||||||||||||||||||||||
Net income before gain on subordinated debenture per: | ||||||||||||||||||||||||||||
Common share - basic | $ | 0.33 | $ | 0.32 | $ | 0.29 | ||||||||||||||||||||||
Common share - diluted | $ | 0.33 | $ | 0.31 | $ | 0.28 | ||||||||||||||||||||||
Net income per: | ||||||||||||||||||||||||||||
Common share - basic | $ | 0.33 | $ | 0.50 | $ | 0.29 | ||||||||||||||||||||||
Common share - diluted | $ | 0.33 | $ | 0.48 | $ | 0.28 | ||||||||||||||||||||||
Weighted average common shares outstanding - Basic | 8,471 | 8,459 | 8,425 | |||||||||||||||||||||||||
Weighted average common shares outstanding - Diluted | 8,608 | 8,682 | 8,524 | |||||||||||||||||||||||||
UNITY BANCORP, INC.
YTD CONSOLIDATED STATEMENTS OF INCOME
NON-GAAP
June 30, 2016
For the six months ended June 30, | Current YTD vs. Prior YTD | |||||||||||||||||
(In thousands, except percentages and per share amounts) | 2016 | 2015 | $ | % | ||||||||||||||
INTEREST INCOME | ||||||||||||||||||
Federal funds sold and interest-bearing deposits | $ | 85 | $ | 16 | $ | 69 | 431.3 | % | ||||||||||
FHLB stock | 107 | 81 | 26 | 32.1 | ||||||||||||||
Securities: | ||||||||||||||||||
Taxable | 791 | 750 | 41 | 5.5 | ||||||||||||||
Tax-exempt | 117 | 143 | (26 | ) | (18.2 | ) | ||||||||||||
Total securities | 908 | 893 | 15 | 1.7 | ||||||||||||||
Loans: | ||||||||||||||||||
SBA loans | 1,509 | 1,284 | 225 | 17.5 | ||||||||||||||
SBA 504 loans | 729 | 715 | 14 | 2.0 | ||||||||||||||
Commercial loans | 11,538 | 10,342 | 1,196 | 11.6 | ||||||||||||||
Residential mortgage loans | 5,878 | 5,298 | 580 | 10.9 | ||||||||||||||
Consumer loans | 1,911 | 1,473 | 438 | 29.7 | ||||||||||||||
Total loans | 21,565 | 19,112 | 2,453 | 12.8 | ||||||||||||||
Total interest income | 22,665 | 20,102 | 2,563 | 12.7 | ||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||
Interest-bearing demand deposits | 261 | 209 | 52 | 24.9 | ||||||||||||||
Savings deposits | 748 | 535 | 213 | 39.8 | ||||||||||||||
Time deposits | 1,904 | 1,411 | 493 | 34.9 | ||||||||||||||
Borrowed funds and subordinated debentures | 1,421 | 1,558 | (137 | ) | (8.8 | ) | ||||||||||||
Total interest expense | 4,334 | 3,713 | 621 | 16.7 | ||||||||||||||
Net interest income | 18,331 | 16,389 | 1,942 | 11.8 | ||||||||||||||
Provision for loan losses | 600 | 200 | 400 | 200.0 | ||||||||||||||
Net interest income after provision for loan losses | 17,731 | 16,189 | 1,542 | 9.5 | ||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||
Branch fee income | 619 | 719 | (100 | ) | (13.9 | ) | ||||||||||||
Service and loan fee income | 522 | 762 | (240 | ) | (31.5 | ) | ||||||||||||
Gain on sale of SBA loans held for sale, net | 945 | 363 | 582 | 160.3 | ||||||||||||||
Gain on sale of mortgage loans, net | 1,308 | 1,031 | 277 | 26.9 | ||||||||||||||
BOLI income | 187 | 189 | (2 | ) | (1.1 | ) | ||||||||||||
Net security gains | 175 | 28 | 147 | 525.0 | ||||||||||||||
Other income | 494 | 442 | 52 | 11.8 | ||||||||||||||
Total noninterest income | 4,250 | 3,534 | 716 | 20.3 | ||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||
Compensation and benefits | 7,258 | 6,952 | 306 | 4.4 | ||||||||||||||
Occupancy | 1,131 | 1,273 | (142 | ) | (11.2 | ) | ||||||||||||
Processing and communications | 1,198 | 1,210 | (12 | ) | (1.0 | ) | ||||||||||||
Furniture and equipment | 815 | 795 | 20 | 2.5 | ||||||||||||||
Professional services | 494 | 478 | 16 | 3.3 | ||||||||||||||
Loan costs | 257 | 382 | (125 | ) | (32.7 | ) | ||||||||||||
OREO expenses | 105 | 103 | 2 | 1.9 | ||||||||||||||
Deposit insurance | 326 | 333 | (7 | ) | (2.1 | ) | ||||||||||||
Advertising | 544 | 525 | 19 | 3.6 | ||||||||||||||
Other expenses | 1,210 | 1,103 | 107 | 9.7 | ||||||||||||||
Total noninterest expense | 13,338 | 13,154 | 184 | 1.4 | ||||||||||||||
Income before provision for income taxes and gain on subordinated debenture | 8,643 | 6,569 | 2,074 | 31.6 | ||||||||||||||
Provision for income taxes | 3,087 | 2,202 | 885 | 40.2 | ||||||||||||||
Net income before gain on subordinated debenture | $ | 5,556 | $ | 4,367 | $ | 1,189 | $ | 27.2 | ||||||||||
Gain on subordinated debenture, net of tax | 1,473 | — | 1,473 | 100.0 | ||||||||||||||
Net income | $ | 7,029 | $ | 4,367 | $ | 2,662 | 61.0 | % | ||||||||||
For the six months ended June 30, | ||||||||||||||||||
(In thousands, except percentages and per share amounts) | 2016 | 2015 | ||||||||||||||||
Effective tax rate | 35.6 | % | 33.5 | % | ||||||||||||||
Net income before gain on subordinated debenture per: | ||||||||||||||||||
Common share - basic | 0.66 | 0.52 | ||||||||||||||||
Common share - diluted | 0.65 | 0.51 | ||||||||||||||||
Net income per: | ||||||||||||||||||
Common share - basic | 0.83 | 0.52 | ||||||||||||||||
Common share - diluted | 0.82 | 0.51 | ||||||||||||||||
Weighted average common shares outstanding - Basic | 8,465 | 8,421 | ||||||||||||||||
Weighted average common shares outstanding - Diluted | 8,597 | 8,519 | ||||||||||||||||
UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
June 30, 2016
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis) | ||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||
June 30, 2016 | March 31, 2016 | |||||||||||||||||||||
Average Balance | Interest | Rate/Yield | Average Balance | Interest | Rate/Yield | |||||||||||||||||
ASSETS | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Federal funds sold and interest-bearing deposits | $ | 62,652 | $ | 41 | 0.26 | % | $ | 78,681 | $ | 44 | 0.22 | % | ||||||||||
FHLB stock | 4,904 | 55 | 4.51 | 4,549 | 52 | 4.60 | ||||||||||||||||
Securities: | ||||||||||||||||||||||
Taxable | 62,561 | 427 | 2.75 | 59,152 | 363 | 2.47 | ||||||||||||||||
Tax-exempt | 8,177 | 83 | 4.08 | 9,548 | 94 | 3.96 | ||||||||||||||||
Total securities (A) | 70,738 | 510 | 2.90 | 68,700 | 457 | 2.68 | ||||||||||||||||
Loans: | ||||||||||||||||||||||
SBA loans | 56,719 | 788 | 5.59 | 53,942 | 721 | 5.38 | ||||||||||||||||
SBA 504 loans | 27,273 | 344 | 5.07 | 29,232 | 385 | 5.30 | ||||||||||||||||
Commercial loans | 474,573 | 5,860 | 4.97 | 463,927 | 5,676 | 4.92 | ||||||||||||||||
Residential mortgage loans | 264,599 | 2,937 | 4.46 | 264,208 | 2,942 | 4.48 | ||||||||||||||||
Consumer loans | 82,295 | 980 | 4.79 | 78,328 | 931 | 4.78 | ||||||||||||||||
Total loans (B) | 905,459 | 10,909 | 4.85 | 889,637 | 10,655 | 4.82 | ||||||||||||||||
Total interest-earning assets | $ | 1,043,753 | $ | 11,515 | 4.44 | % | $ | 1,041,567 | $ | 11,208 | 4.33 | % | ||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||
Cash and due from banks | 25,993 | 27,006 | ||||||||||||||||||||
Allowance for loan losses | (12,850 | ) | (12,926 | ) | ||||||||||||||||||
Other assets | 49,250 | 45,486 | ||||||||||||||||||||
Total noninterest-earning assets | 62,393 | 59,566 | ||||||||||||||||||||
Total assets | $ | 1,106,146 | $ | 1,101,133 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Total interest-bearing demand deposits | $ | 129,263 | $ | 124 | 0.39 | % | $ | 131,339 | $ | 137 | 0.42 | % | ||||||||||
Total savings deposits | 310,329 | 381 | 0.49 | 310,251 | 366 | 0.47 | ||||||||||||||||
Total time deposits | 275,700 | 954 | 1.39 | 282,110 | 951 | 1.36 | ||||||||||||||||
Total interest-bearing deposits | 715,292 | 1,459 | 0.82 | 723,700 | 1,454 | 0.81 | ||||||||||||||||
Borrowed funds and subordinated debentures | 106,277 | 686 | 2.60 | 104,350 | 735 | 2.83 | ||||||||||||||||
Total interest-bearing liabilities | $ | 821,569 | $ | 2,145 | 1.05 | % | $ | 828,050 | $ | 2,189 | 1.06 | % | ||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing demand deposits | 194,649 | 187,226 | ||||||||||||||||||||
Other liabilities | 6,370 | 5,528 | ||||||||||||||||||||
Total noninterest-bearing liabilities | 201,019 | 192,754 | ||||||||||||||||||||
Total shareholders' equity | 83,558 | 80,329 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,106,146 | $ | 1,101,133 | ||||||||||||||||||
Net interest spread | $ | 9,370 | 3.39 | % | $ | 9,019 | 3.27 | % | ||||||||||||||
Tax-equivalent basis adjustment | (28 | ) | (32 | ) | ||||||||||||||||||
Net interest income | $ | 9,342 | $ | 8,987 | ||||||||||||||||||
Net interest margin | 3.61 | % | 3.48 | % | ||||||||||||||||||
(A) | Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 35 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
June 30, 2016
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis) | ||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||
June 30, 2016 | June 30, 2015 | |||||||||||||||||||||
Average Balance | Interest | Rate/Yield | Average Balance | Interest | Rate/Yield | |||||||||||||||||
ASSETS | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Federal funds sold and interest-bearing deposits | $ | 62,652 | $ | 41 | 0.26 | % | $ | 20,259 | $ | 6 | 0.12 | % | ||||||||||
FHLB stock | 4,904 | 55 | 4.51 | 3,720 | 38 | 4.10 | ||||||||||||||||
Securities: | ||||||||||||||||||||||
Taxable | 62,561 | 427 | 2.75 | 63,834 | 363 | 2.28 | ||||||||||||||||
Tax-exempt | 8,177 | 83 | 4.08 | 11,803 | 105 | 3.57 | ||||||||||||||||
Total securities (A) | 70,738 | 510 | 2.90 | 75,637 | 468 | 2.48 | ||||||||||||||||
Loans: | ||||||||||||||||||||||
SBA loans | 56,719 | 788 | 5.59 | 47,249 | 605 | 5.14 | ||||||||||||||||
SBA 504 loans | 27,273 | 344 | 5.07 | 29,539 | 369 | 5.01 | ||||||||||||||||
Commercial loans | 474,573 | 5,860 | 4.97 | 422,371 | 5,276 | 5.01 | ||||||||||||||||
Residential mortgage loans | 264,599 | 2,937 | 4.46 | 243,821 | 2,716 | 4.47 | ||||||||||||||||
Consumer loans | 82,295 | 980 | 4.79 | 67,353 | 774 | 4.61 | ||||||||||||||||
Total loans (B) | 905,459 | 10,909 | 4.85 | 810,333 | 9,740 | 4.82 | ||||||||||||||||
Total interest-earning assets | $ | 1,043,753 | $ | 11,515 | 4.44 | % | $ | 909,949 | $ | 10,252 | 4.52 | % | ||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||
Cash and due from banks | 25,993 | 24,768 | ||||||||||||||||||||
Allowance for loan losses | (12,850 | ) | (12,430 | ) | ||||||||||||||||||
Other assets | 49,250 | 43,596 | ||||||||||||||||||||
Total noninterest-earning assets | 62,393 | 55,934 | ||||||||||||||||||||
Total assets | $ | 1,106,146 | $ | 965,883 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Total interest-bearing demand deposits | $ | 129,263 | $ | 124 | 0.39 | % | $ | 123,663 | $ | 103 | 0.33 | % | ||||||||||
Total savings deposits | 310,329 | 381 | 0.49 | 287,911 | 271 | 0.38 | ||||||||||||||||
Total time deposits | 275,700 | 954 | 1.39 | 220,403 | 725 | 1.32 | ||||||||||||||||
Total interest-bearing deposits | 715,292 | 1,459 | 0.82 | 631,977 | 1,099 | 0.70 | ||||||||||||||||
Borrowed funds and subordinated debentures | 106,277 | 686 | 2.60 | 87,944 | 750 | 3.42 | ||||||||||||||||
Total interest-bearing liabilities | $ | 821,569 | $ | 2,145 | 1.05 | % | $ | 719,921 | $ | 1,849 | 1.03 | % | ||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing demand deposits | 194,649 | 168,585 | ||||||||||||||||||||
Other liabilities | 6,370 | 4,413 | ||||||||||||||||||||
Total noninterest-bearing liabilities | 201,019 | 172,998 | ||||||||||||||||||||
Total shareholders' equity | 83,558 | 72,964 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,106,146 | $ | 965,883 | ||||||||||||||||||
Net interest spread | $ | 9,370 | 3.39 | % | $ | 8,403 | 3.49 | % | ||||||||||||||
Tax-equivalent basis adjustment | (28 | ) | (34 | ) | ||||||||||||||||||
Net interest income | $ | 9,342 | $ | 8,369 | ||||||||||||||||||
Net interest margin | 3.61 | % | 3.70 | % | ||||||||||||||||||
(A) | Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 35 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
June 30, 2016
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis) | ||||||||||||||||||||||
For the six months ended | ||||||||||||||||||||||
June 30, 2016 | June 30, 2015 | |||||||||||||||||||||
Average Balance | Interest | Rate/Yield | Average Balance | Interest | Rate/Yield | |||||||||||||||||
ASSETS | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Federal funds sold and interest-bearing deposits | $ | 70,666 | $ | 85 | 0.24 | % | $ | 28,722 | $ | 16 | 0.11 | % | ||||||||||
FHLB stock | 4,726 | 107 | 4.55 | 3,783 | 81 | 4.32 | ||||||||||||||||
Securities: | ||||||||||||||||||||||
Taxable | 60,856 | 791 | 2.61 | 65,431 | 750 | 2.31 | ||||||||||||||||
Tax-exempt | 8,863 | 176 | 3.99 | 11,893 | 212 | 3.59 | ||||||||||||||||
Total securities (A) | 69,719 | 967 | 2.79 | 77,324 | 962 | 2.51 | ||||||||||||||||
Loans: | ||||||||||||||||||||||
SBA loans | 55,331 | 1,509 | 5.48 | 47,824 | 1,284 | 5.41 | ||||||||||||||||
SBA 504 loans | 28,253 | 729 | 5.19 | 31,457 | 715 | 4.58 | ||||||||||||||||
Commercial loans | 469,248 | 11,538 | 4.94 | 414,278 | 10,342 | 5.03 | ||||||||||||||||
Residential mortgage loans | 264,403 | 5,878 | 4.47 | 235,022 | 5,298 | 4.55 | ||||||||||||||||
Consumer loans | 80,312 | 1,911 | 4.79 | 64,868 | 1,473 | 4.58 | ||||||||||||||||
Total loans (B) | 897,547 | 21,565 | 4.83 | 793,449 | 19,112 | 4.86 | ||||||||||||||||
Total interest-earning assets | $ | 1,042,658 | $ | 22,724 | 4.38 | % | $ | 903,278 | $ | 20,171 | 4.50 | % | ||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||
Cash and due from banks | 26,500 | 27,324 | ||||||||||||||||||||
Allowance for loan losses | (12,888 | ) | (12,565 | ) | ||||||||||||||||||
Other assets | 47,369 | 43,403 | ||||||||||||||||||||
Total noninterest-earning assets | 60,981 | 58,162 | ||||||||||||||||||||
Total assets | $ | 1,103,639 | $ | 961,440 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Total interest-bearing demand deposits | $ | 130,301 | $ | 261 | 0.40 | % | $ | 125,120 | $ | 209 | 0.34 | % | ||||||||||
Total savings deposits | 310,290 | 748 | 0.48 | 288,953 | 535 | 0.37 | ||||||||||||||||
Total time deposits | 278,904 | 1,904 | 1.37 | 215,939 | 1,411 | 1.32 | ||||||||||||||||
Total interest-bearing deposits | 719,495 | 2,913 | 0.81 | 630,012 | 2,155 | 0.69 | ||||||||||||||||
Borrowed funds and subordinated debentures | 105,314 | 1,421 | 2.71 | 89,916 | 1,558 | 3.49 | ||||||||||||||||
Total interest-bearing liabilities | $ | 824,809 | $ | 4,334 | 1.05 | % | $ | 719,928 | $ | 3,713 | 1.04 | % | ||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing demand deposits | 190,938 | 165,176 | ||||||||||||||||||||
Other liabilities | 5,948 | 4,359 | ||||||||||||||||||||
Total noninterest-bearing liabilities | 196,886 | 169,535 | ||||||||||||||||||||
Total shareholders' equity | 81,944 | 71,977 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,103,639 | $ | 961,440 | ||||||||||||||||||
Net interest spread | $ | 18,390 | 3.33 | % | $ | 16,458 | 3.46 | % | ||||||||||||||
Tax-equivalent basis adjustment | (59 | ) | (69 | ) | ||||||||||||||||||
Net interest income | $ | 18,331 | $ | 16,389 | ||||||||||||||||||
Net interest margin | 3.55 | % | 3.67 | % | ||||||||||||||||||
(A) | Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 35 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
June 30, 2016
Amounts in thousands, except percentages | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | |||||||||||||||
ALLOWANCE FOR LOAN LOSSES: | ||||||||||||||||||||
Balance, beginning of period | $ | 12,634 | $ | 12,759 | $ | 12,421 | $ | 12,404 | $ | 12,181 | ||||||||||
Provision for loan losses charged to expense | 400 | 200 | 100 | 200 | — | |||||||||||||||
13,034 | 12,959 | 12,521 | 12,604 | 12,181 | ||||||||||||||||
Less: Chargeoffs | ||||||||||||||||||||
SBA loans | 142 | 86 | 151 | 86 | 6 | |||||||||||||||
SBA 504 loans | — | — | — | — | — | |||||||||||||||
Commercial loans | 152 | 228 | 52 | 10 | 147 | |||||||||||||||
Residential mortgage loans | — | — | — | 50 | — | |||||||||||||||
Consumer loans | — | 28 | 41 | 52 | 7 | |||||||||||||||
Total chargeoffs | 294 | 342 | 244 | 198 | 160 | |||||||||||||||
Add: Recoveries | ||||||||||||||||||||
SBA loans | 4 | 11 | 6 | 10 | 2 | |||||||||||||||
SBA 504 loans | — | — | — | — | — | |||||||||||||||
Commercial loans | 13 | 6 | 476 | 5 | 370 | |||||||||||||||
Residential mortgage loans | — | — | — | — | 10 | |||||||||||||||
Consumer loans | 1 | — | — | — | 1 | |||||||||||||||
Total recoveries | 18 | 17 | 482 | 15 | 383 | |||||||||||||||
Net chargeoffs (recoveries) | 276 | 325 | (238 | ) | 183 | (223 | ) | |||||||||||||
Balance, end of period | $ | 12,758 | $ | 12,634 | $ | 12,759 | $ | 12,421 | $ | 12,404 | ||||||||||
LOAN QUALITY INFORMATION: | ||||||||||||||||||||
Nonperforming loans (1) | $ | 6,541 | $ | 6,887 | $ | 7,260 | $ | 10,742 | $ | 8,837 | ||||||||||
Other real estate owned ("OREO") | 1,702 | 1,417 | 1,591 | 1,759 | 2,265 | |||||||||||||||
Nonperforming assets | 8,243 | 8,304 | 8,851 | 12,501 | 11,102 | |||||||||||||||
Less: Amount guaranteed by SBA | 134 | 243 | 288 | 225 | 267 | |||||||||||||||
Net nonperforming assets | $ | 8,109 | $ | 8,061 | $ | 8,563 | $ | 12,276 | $ | 10,835 | ||||||||||
Loans 90 days past due & still accruing | $ | 485 | $ | — | $ | — | $ | 272 | $ | 273 | ||||||||||
Performing Troubled Debt Restructurings (TDRs) | $ | 772 | $ | 844 | $ | 3,015 | $ | 3,268 | $ | 3,360 | ||||||||||
(1) Nonperforming TDRs included in nonperforming loans | 161 | 293 | 293 | 2,808 | 2,843 | |||||||||||||||
Total TDRs | $ | 933 | $ | 1,137 | $ | 3,308 | $ | 6,076 | $ | 6,203 | ||||||||||
Allowance for loan losses to: | ||||||||||||||||||||
Total loans at quarter end | 1.39 | % | 1.42 | % | 1.44 | % | 1.45 | % | 1.51 | % | ||||||||||
Nonperforming loans (1) | 195.05 | 183.45 | 175.74 | 115.63 | 140.36 | |||||||||||||||
Nonperforming assets | 154.77 | 152.14 | 144.15 | 99.36 | 111.73 | |||||||||||||||
Net nonperforming assets | 157.33 | 156.73 | 149.00 | 101.18 | 114.48 | |||||||||||||||
QTD net chargeoffs (annualized) to QTD average loans: | ||||||||||||||||||||
SBA loans | 0.98 | % | 0.56 | % | 1.05 | % | 0.57 | % | 0.03 | % | ||||||||||
SBA 504 loans | — | — | — | — | — | |||||||||||||||
Commercial loans | 0.12 | 0.19 | (0.37 | ) | — | (0.21 | ) | |||||||||||||
Residential mortgage loans | — | — | — | 0.08 | (0.02 | ) | ||||||||||||||
Consumer loans | — | 0.14 | 0.21 | 0.28 | 0.04 | |||||||||||||||
Total loans | 0.12 | % | 0.15 | % | (0.11 | )% | 0.09 | % | (0.11 | )% | ||||||||||
Nonperforming loans to total loans | 0.71 | % | 0.78 | % | 0.82 | % | 1.26 | % | 1.08 | % | ||||||||||
Nonperforming loans and TDRs to total loans | 0.80 | 0.87 | 1.16 | 1.64 | 1.48 | |||||||||||||||
Nonperforming assets to total loans and OREO | 0.90 | 0.93 | 0.99 | 1.46 | 1.35 | |||||||||||||||
Nonperforming assets to total assets | 0.73 | 0.74 | 0.82 | 1.19 | 1.08 | |||||||||||||||
UNITY BANCORP, INC.
QUARTERLY FINANCIAL DATA
NON-GAAP
June 30, 2016
(In thousands, except percentages and per share amounts) | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | |||||||||||||||
SUMMARY OF INCOME: | ||||||||||||||||||||
Total interest income | $ | 11,487 | $ | 11,176 | $ | 10,995 | $ | 10,554 | $ | 10,218 | ||||||||||
Total interest expense | 2,145 | 2,189 | 2,015 | 1,932 | 1,849 | |||||||||||||||
Net interest income | 9,342 | 8,987 | 8,980 | 8,622 | 8,369 | |||||||||||||||
Provision for loan losses | 400 | 200 | 100 | 200 | — | |||||||||||||||
Net interest income after provision for loan losses | 8,942 | 8,787 | 8,880 | 8,422 | 8,369 | |||||||||||||||
Total noninterest income | 2,234 | 2,016 | 1,920 | 2,275 | 1,893 | |||||||||||||||
Total noninterest expense | 6,728 | 6,607 | 6,846 | 6,852 | 6,652 | |||||||||||||||
Income before provision for income taxes and gain on subordinated debenture | 4,448 | 4,196 | 3,954 | 3,845 | 3,610 | |||||||||||||||
Provision for income taxes | 1,624 | 1,464 | 1,315 | 1,294 | 1,182 | |||||||||||||||
Net income before gain on subordinated debenture | $ | 2,824 | $ | 2,732 | $ | 2,639 | $ | 2,551 | $ | 2,428 | ||||||||||
Gain on subordinated debenture, net of tax | — | 1,473 | — | — | — | |||||||||||||||
Net income | $ | 2,824 | $ | 4,205 | $ | 2,639 | $ | 2,551 | $ | 2,428 | ||||||||||
Net income per common share - Basic | $ | 0.33 | $ | 0.50 | $ | 0.31 | $ | 0.30 | $ | 0.29 | ||||||||||
Net income per common share - Diluted | $ | 0.33 | $ | 0.48 | $ | 0.31 | $ | 0.30 | $ | 0.28 | ||||||||||
COMMON SHARE DATA: | ||||||||||||||||||||
Market price per share | $ | 12.71 | $ | 11.37 | $ | 12.47 | $ | 9.77 | $ | 9.79 | ||||||||||
Dividends paid | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.03 | ||||||||||
Book value per common share | $ | 10.01 | $ | 9.72 | $ | 9.30 | $ | 9.02 | $ | 8.75 | ||||||||||
Weighted average common shares outstanding - Basic | 8,471 | 8,459 | 8,430 | 8,427 | 8,425 | |||||||||||||||
Weighted average common shares outstanding - Diluted | 8,608 | 8,682 | 8,547 | 8,536 | 8,524 | |||||||||||||||
Issued and outstanding common shares | 8,487 | 8,468 | 8,436 | 8,429 | 8,425 | |||||||||||||||
OPERATING RATIOS (Annualized): | ||||||||||||||||||||
Return on average assets | 1.03 | % | 1.54 | % | 1.00 | % | 1.00 | % | 1.01 | % | ||||||||||
Return on average equity | 13.59 | 21.05 | 13.59 | 13.54 | 13.35 | |||||||||||||||
Efficiency ratio | 58.53 | 50.16 | 62.81 | 62.88 | 64.99 | |||||||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Total assets | 1,128,370 | 1,120,955 | 1,084,866 | 1,052,711 | 1,024,303 | |||||||||||||||
Total deposits | 912,198 | 926,819 | 894,493 | 866,247 | 815,427 | |||||||||||||||
Total loans | 915,043 | 886,990 | 888,958 | 855,560 | 821,696 | |||||||||||||||
Total securities | 73,994 | 66,729 | 71,336 | 71,492 | 74,375 | |||||||||||||||
Total shareholders' equity | 84,967 | 82,276 | 78,470 | 76,065 | 73,690 | |||||||||||||||
Allowance for loan losses | (12,758 | ) | (12,634 | ) | (12,759 | ) | (12,421 | ) | (12,404 | ) | ||||||||||
TAX EQUIVALENT YIELDS AND RATES: | ||||||||||||||||||||
Interest-earning assets | 4.44 | % | 4.33 | % | 4.40 | % | 4.41 | % | 4.52 | % | ||||||||||
Interest-bearing liabilities | 1.05 | 1.06 | 1.02 | 1.01 | 1.03 | |||||||||||||||
Net interest spread | 3.39 | 3.27 | 3.38 | 3.40 | 3.49 | |||||||||||||||
Net interest margin | 3.61 | 3.48 | 3.60 | 3.60 | 3.70 | |||||||||||||||
CREDIT QUALITY: | ||||||||||||||||||||
Nonperforming assets | 8,243 | 8,304 | 8,851 | 12,501 | 11,102 | |||||||||||||||
QTD net chargeoffs (annualized) to QTD average loans | 0.12 | % | 0.15 | % | (0.11 | )% | 0.09 | % | (0.11 | )% | ||||||||||
Allowance for loan losses to total loans | 1.39 | 1.42 | 1.44 | 1.45 | 1.51 | |||||||||||||||
Nonperforming assets to total loans and OREO | 0.90 | 0.93 | 0.99 | 1.46 | 1.35 | |||||||||||||||
Nonperforming assets to total assets | 0.73 | 0.74 | 0.82 | 1.19 | 1.08 | |||||||||||||||
(In thousands, except percentages and per share amounts) | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | |||||||||||||||
CAPITAL RATIOS AND OTHER: | ||||||||||||||||||||
Total equity to total assets | 7.53 | 7.34 | 7.23 | 7.23 | 7.19 | |||||||||||||||
Leverage ratio | 8.52 | 8.31 | 8.82 | 8.92 | 9.09 | |||||||||||||||
Common equity tier 1 risk-based capital ratio | 9.70 | 9.77 | 9.37 | 9.37 | 9.39 | |||||||||||||||
Tier 1 risk-based capital ratio | 10.85 | 10.97 | 11.18 | 11.25 | 11.33 | |||||||||||||||
Total risk-based capital ratio | 12.11 | 12.22 | 12.43 | 12.50 | 12.59 | |||||||||||||||
Number of banking offices | 15 | 15 | 15 | 15 | 15 | |||||||||||||||
Number of ATMs | 16 | 16 | 16 | 16 | 16 | |||||||||||||||
Number of employees | 172 | 164 | 162 | 163 | 177 | |||||||||||||||