UNITY BANCORP INC /NJ/ - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - 8-K - UNITY BANCORP INC /NJ/	unty-20210714x8k.htm

Exhibit 99.1

For Immediate Release	News Media & Financial Analyst Contact:
Unity Bancorp, Inc. (NSDQ: UNTY)	George Boyan, EVP and CFO
July 14, 2021	(908) 713-4565

Unity Bancorp Reports

Quarterly Earnings of $8.4 Million

A picture containing chart

Description automatically generated

Clinton, NJ, July 14, 2021 - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $8.4 million, or $0.80 per diluted share, for the quarter ended June 30, 2021, a 62.8% increase compared to net income of $5.2 million, or $0.47 per diluted share for the prior year’s second quarter. For the six months ended June 30, 2021, Unity reported net income of $16.9 million, or $1.60 per diluted share, a 60.5% increase compared to $10.5 million or $0.96 per diluted share for the prior year’s period.

Second Quarter Earnings Highlights

●

Net interest income, our primary driver of earnings, increased $2.9 million to $18.4 million for the quarter ended June 30, 2021, compared to $15.5 million for the prior year’s quarter, due to SBA PPP loans, commercial loan growth and a reduction in the cost of funds.

●

Net interest margin (“NIM”) increased to 4.03% for the quarter ended June 30, 2021, compared to 3.73% for the prior year’s quarter and decreased six basis points from 4.09% in the prior sequential quarter ended March 31, 2021.

●

The Company reported no provision for loan losses for the quarter ended June 30, 2021 compared to the prior year’s quarter. The provision for loan losses decreased $3.5 million for the six months ended June 30, 2021 compared to the prior year’s period. The decreases were due to an improved economic environment.

●

Noninterest income increased $84 thousand to $2.9 million compared to the prior year’s quarter, primarily due to increased gains on SBA loan sales. Noninterest income decreased $831 thousand compared to the prior sequential quarter, primarily due a decrease in sales of residential mortgage loans. For the quarter ended June 30, 2021 SBA loan sales totaled $3.6 million with net gains of $496 thousand.

●

Noninterest expense increased $1.3 million to $10.5 million compared to the prior year’s quarter and increased $658 thousand compared to the prior sequential quarter. The increases were primarily due to increased expenses related to a deferred compensation adjustment and increased advertising expenses.

●

The effective tax rate was 22.7% compared to 22.3% in the prior year’s quarter.

Balance Sheet Highlights

●

Total loans increased $26.2 million, or 1.6%, from year-end 2020 to $1.7 billion at June 30, 2021. The increase was primarily due to increases in commercial, SBA PPP and residential construction loans. Residential mortgage loans decreased 9.7% due to prepayments.

●

Total deposits increased $36.4 million, or 2.3%, from year-end 2020 to $1.6 billion at June 30, 2021. The Company’s deposit composition at June 30, 2021 consisted of 32.5% in savings deposits, 30.7% in noninterest-bearing demand deposits, 23.7% in time deposits and 13.1% in interest-bearing demand deposits.

●

Borrowed funds decreased $35.0 million to $165.0 million at June 30, 2021, due to decreased FHLB advances.

●

Shareholders’ equity was $188.8 million at June 30, 2021 compared to $173.9 million at year-end 2020.

●

Book value per common share was $18.12 as of June 30, 2021. During the second quarter, the Company repurchased 40,434 shares of common stock for a total cost of $874 thousand.

●

At June 30, 2021, the Community Bank Leverage Ratio was 10.11%.

●

Net nonperforming assets were $9.5 million at June 30, 2021, compared to $11.7 million at December 31, 2020. Most of the nonperforming assets are residential loans, the resolution of which has been impacted by foreclosure restrictions due to COVID-19. The allowance to total loans ratio excluding SBA PPP loans was 1.50% at June 30, 2021.

Paycheck Protection Program Loans

As of June 30, 2021, the Company funded 955 Small Business Administration Paycheck Protection Program Round 2 loans, totaling $101.0 million. This is in addition to the 1,224 SBA PPP loans, totaling $143.0 million funded during the year ended December 31, 2020.

The table below summarizes SBA PPP loans as of June 30, 2021:


	Round 1		Round 2		Total
	$	#	$	#	$	#
Funded	143,001	1,224	101,048	955	244,049	2,179
Forgiven	105,106	901	6,568	17	111,674	918
Outstanding	37,895	323	94,480	938	132,375	1,261

Loan Deferrals

The Bank worked with borrowers who were unable to meet their contractual obligations because of the effects of COVID-19. By June 30, 2021, $5.7 million in loans were on deferral. Some loan deferrals are expected for the duration of 2021.

The table below summarizes loan deferrals as of June 30, 2021:


(In thousands)	Total Loan Portfolio balance		Full Deferrals		Principal Only Deferrals		Total Loans in Deferral		% Deferrals to Total Loans
SBA loans held for sale	$	11,314	$	—	$	—	$	—	0.00%
SBA loans held for investment		38,114		—		—		—	0.00%
SBA PPP loans		132,375		—		—		—	0.00%
Commercial loans		885,566		—		5,508		5,508	0.62%
Residential mortgage loans		422,188		231		—		231	0.05%
Consumer loans		64,557		—		—		—	0.00%
Residential construction loans		99,874		—		—		—	0.00%
Total loans	$	1,653,988	$	231	$	5,508	$	5,739	0.35%

Other Highlights

Unity Bank has been named one of the 2021 Best Places to Work in New Jersey – the only bank in New Jersey to make the prestigious list. It is the fifth year in a row that Unity has been honored by the survey and awards program, which identifies, recognizes and honors the top places of employment in New Jersey that benefit the state's economy, workforce and businesses.

Unity Bank donated $50,000 to St. Jude Children’s Research Hospital® as part of the Inspiration4 campaign, a $200 million fundraising initiative inspired by the world’s first all-civilian mission to space. Jared Isaacman, Founder and Chief Executive Officer of Shift4 Payments (NYSE: FOUR), headquartered in Allentown, Pa., is funding the historic three-day journey in space to support the lifesaving mission of St. Jude: Finding cures. Saving children.®

Unity Bank was the top ranked New Jersey community bank on the recently published American Banker magazine list of the Top 200 Publicly Traded Community Banks with less than $2 billion in assets. Unity was ranked 20th nationally on the respected industry list, which reviewed 511 institutions throughout the U.S.

On May 21, 2021, the Company announced a cash dividend of $0.09 per common share, an increase of 12.5%, payable on June 25, 2021, to shareholders of record as of June 11, 2021.

Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $2.0 billion in assets and $1.6 billion in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 19 retail service centers located in Bergen, Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County in 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 amended or supplemented by our subsequent filings with the SEC, 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, results of regulatory exams, and the impact of COVID-19 on the Bank, its employees and customers, among other factors.

UNITY BANCORP, INC.

SUMMARY FINANCIAL HIGHLIGHTS

June 30,2021


										Jun. 30, 2021 vs.
										Dec. 31, 2020		Jun. 30, 2020
(In thousands, except percentages and per share amounts)	Jun. 30, 2021			Dec. 31, 2020			Jun. 30, 2020			%		%
BALANCE SHEET DATA:
Total assets	$	1,973,311		$	2,004,818		$	1,900,774		(1.6)	%	3.8	%
Total deposits		1,594,316			1,628,393			1,483,457		(2.1)		7.5
Total loans		1,653,988			1,668,448			1,592,507		(0.9)		3.9
Total securities		37,054			34,551			54,888		7.2		(32.5)
Total shareholders' equity		188,756			181,186			166,607		4.2		13.3
Allowance for loan losses		22,801			22,965			20,234		(0.7)		12.7

FINANCIAL DATA - QUARTER TO DATE:
Income before provision for income taxes	$	10,884		$	11,442		$	6,659		(4.9)		63.4
Provision for income taxes		2,466			2,946			1,488		(16.3)		65.7
Net income	$	8,418		$	8,496		$	5,171		(0.9)		62.8

Net income per common share - Basic	$	0.81		$	0.81		$	0.48		—		68.8
Net income per common share - Diluted	$	0.80		$	0.80		$	0.47		—		70.2

Performance ratios:
Return on average assets		1.77	%		1.85	%		1.19	%
Return on average equity		18.29	%		19.51	%		12.59	%
Efficiency ratio		49.06	%		45.74	%		50.27	%
Net interest margin		4.03	%		4.09	%		3.73	%
Noninterest expense to average assets		2.19	%		2.13	%		2.10	%

FINANCIAL DATA - YEAR TO DATE:
Income before provision for income taxes	$	22,325					$	13,625				63.9
Provision for income taxes		5,411						3,086				75.3
Net income	$	16,914					$	10,539				60.5

Net income per common share - Basic	$	1.62					$	0.97				67.0
Net income per common share - Diluted	$	1.60					$	0.96				66.7

Performance ratios:
Return on average assets		1.81	%					1.25	%			44.8
Return on average equity		18.88	%					12.91	%			46.2
Efficiency ratio		47.39	%					51.34	%			(7.7)
Net interest margin		4.06	%					3.82	%			6.3
Noninterest expense to average assets		2.16	%					2.19	%			(1.4)

SHARE INFORMATION:
Market price per share	$	22.05		$	22.00		$	14.30		0.2		54.2
Dividends paid	$	0.09		$	0.08		$	0.08		13		12.5
Book value per common share	$	18.12		$	17.38		$	15.53		4.3		16.7
Average diluted shares outstanding (QTD)		10,569			10,565			10,888		0.0		(2.9)

CAPITAL RATIOS:
Total equity to total assets		9.57	%		9.04	%		8.77	%
Community bank leverage ratio		10.11	%		10.19	%		10.01	%

CREDIT QUALITY AND RATIOS:
Nonperforming assets	$	9,685		$	11,788		$	10,184		(17.8)		(4.9)
QTD net chargeoffs to QTD average loans		0.04	%		0.16	%		(0.09)	%

Allowance for loan losses to total loans	1.38	%	1.38	%	1.27	%
Nonperforming assets to total loans	0.59	%	0.71	%	0.59	%
Nonperforming assets to total assets	0.49	%	0.59	%	0.54	%

UNITY BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

June 30,2021


							June 30, 2021 vs.
							December 31,		June 30,
	June 30,		December 31,		June 30,		2020		2020
(In thousands, except percentages)	2021		2020		2020		%		%
ASSETS
Cash and due from banks	$	24,527	$	22,750	$	24,066	7.8	%	1.9	%
Federal funds sold and interest-bearing deposits		197,325		196,561		162,617	0.4		21.3
Cash and cash equivalents		221,852		219,311		186,683	1.2		18.8
Securities:
Securities available for sale		32,810		45,617		53,102	(28.1)		(38.2)
Securities held to maturity		2,000		—		—	100.0		100.0
Equity securities		2,244		1,954		1,786	14.8		25.6
Total securities		37,054		47,571		54,888	(22.1)		(32.5)
Loans:
SBA loans held for sale		11,314		9,335		10,602	21.2		6.7
SBA loans held for investment		38,114		39,587		36,966	(3.7)		3.1
SBA PPP loans		132,375		118,257		136,039	11.9		(2.7)
Commercial loans		885,566		839,788		792,752	5.5		11.7
Residential mortgage loans		422,188		467,586		469,987	(9.7)		(10.2)
Consumer loans		64,557		66,100		68,719	(2.3)		(6.1)
Residential construction loans		99,874		87,164		77,442	14.6		29.0
Total loans		1,653,988		1,627,817		1,592,507	1.6		3.9
Allowance for loan losses		(22,801)		(23,105)		(20,234)	(1.3)		12.7
Net loans		1,631,187		1,604,712		1,572,273	1.6		3.7
Premises and equipment, net		19,799		20,226		20,751	(2.1)		(4.6)
Bank owned life insurance ("BOLI")		26,560		26,514		26,435	0.2		0.5
Deferred tax assets		9,377		9,183		7,274	2.1		28.9
Federal Home Loan Bank ("FHLB") stock		9,060		10,594		11,629	(14.5)		(22.1)
Accrued interest receivable		9,486		10,429		11,039	(9.0)		(14.1)
Other real estate owned ("OREO")		—		—		711	—		(100.0)
Goodwill		1,516		1,516		1,516	—		—
Other assets		7,420		8,858		7,575	(16.2)		(2.0)
Total assets	$	1,973,311	$	1,958,914	$	1,900,774	0.7	%	3.8	%

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	489,700	$	459,677	$	429,899	6.5	%	13.9	%
Interest-bearing demand		208,802		204,236		154,803	2.2		34.9
Savings		518,405		455,449		426,563	13.8		21.5
Time, under $100,000		245,423		264,671		271,860	(7.3)		(9.7)
Time, $100,000 to $250,000		74,282		95,595		113,351	(22.3)		(34.5)
Time, $250,000 and over		57,704		78,331		86,981	(26.3)		(33.7)
Total deposits		1,594,316		1,557,959		1,483,457	2.3		7.5
Borrowed funds		165,000		200,000		223,000	(17.5)		(26.0)
Subordinated debentures		10,310		10,310		10,310	—		—
Accrued interest payable		231		248		228	(6.9)		1.3
Accrued expenses and other liabilities		14,698		16,486		17,172	(10.8)		(14.4)
Total liabilities		1,784,555		1,785,003		1,734,167	(0.0)		2.9
Shareholders' equity:
Common stock		92,810		91,873		91,103	1.0		1.9
Retained earnings		105,811		90,669		79,253	16.7		33.5
Treasury stock, at cost		(9,668)		(7,442)		(2,991)	29.9		223.2
Accumulated other comprehensive loss		(197)		(1,189)		(758)	NM*		NM*
Total shareholders' equity		188,756		173,911		166,607	8.5		13.3
Total liabilities and shareholders' equity	$	1,973,311	$	1,958,914	$	1,900,774	0.7	%	3.8	%


COMMON SHARES AT PERIOD END:
Shares issued		11,031		10,961		10,939
Shares outstanding		10,415		10,456		10,728
Treasury shares		615		505		211

NM=Not meaningful

UNITY BANCORP, INC.

QTD CONSOLIDATED STATEMENTS OF INCOME

June 30,2021


										Jun. 30, 2021 vs.
	For the three months ended									Mar. 31, 2021				Jun. 30, 2020
(In thousands, except percentages and per share amounts)	Jun. 30, 2021			Mar. 31, 2021			Jun. 30, 2020			$		%		$		%
INTEREST INCOME
Federal funds sold and interest-bearing deposits	$	33		$	24		$	23		$	9	37.5	%	$	10	43.5	%
FHLB stock		53			63			79			(10)	(15.9)			(26)	(32.9)
Securities:
Taxable		253			292			437			(39)	(13.4)			(184)	(42.1)
Tax-exempt		9			10			17			(1)	(10)			(8)	(47.1)
Total securities		262			302			454			(40)	(13.2)			(192)	(42.3)
Loans:
SBA loans		776			783			709			(7)	(0.9)			67	9.4
SBA PPP loans		1,748			1,730			723			18	1.0			1,025	141.8
Commercial loans		10,734			10,474			9,815			260	2.5			919	9.4
Residential mortgage loans		4,906			5,128			5,554			(222)	(4.3)			(648)	(11.7)
Consumer loans		682			857			875			(175)	(20.4)			(193)	(22.1)
Residential construction loans		1,486			1,215			1,046			271	22.3			440	42.1
Total loans		20,332			20,187			18,722			145	0.7			1,610	8.6
Total interest income		20,680			20,576			19,278			104	0.5			1,402	7.3
INTEREST EXPENSE
Interest-bearing demand deposits		307			309			329			(2)	(0.6)			(22)	(6.7)
Savings deposits		419			431			547			(12)	(2.8)			(128)	(23.4)
Time deposits		1,171			1,463			2,454			(292)	(20.0)			(1,283)	(52.3)
Borrowed funds and subordinated debentures		334			355			423			(21)	(5.9)			(89)	(21.0)
Total interest expense		2,231			2,558			3,753			(327)	(12.8)			(1,522)	(40.6)
Net interest income		18,449			18,018			15,525			431	2.4			2,924	18.8
Provision for loan losses		—			500			2,500			(500)	(100.0)			(2,500)	(100.0)
Net interest income after provision for loan losses		18,449			17,518			13,025			931	5.3			5,424	41.6
NONINTEREST INCOME
Branch fee income		269			295			207			(26)	(8.8)			62	30.0
Service and loan fee income		509			625			390			(116)	(18.6)			119	30.5
Gain on sale of SBA loans held for sale, net		496			245			92			251	102.4			404	439.1
Gain on sale of mortgage loans, net		1,066			1,750			1553			(684)	(39.1)			(487)	(31.4)
BOLI income		133			129			154			4	3.1			(21)	(13.6)
Net security gains		23			310			79			(287)	(92.6)			(56)	(70.9)
Other income		399			372			336			27	7.3			63	18.8
Total noninterest income		2,895			3,726			2,811			(831)	(22.3)			84	3.0
NONINTEREST EXPENSE
Compensation and benefits		6,333			6,063			5,553			270	4.5			780	14.0
Processing and communications		750			807			769			(57)	(7.1)			(19)	(2.5)
Furniture and equipment		659			649			641			10	1.5			18	2.8
Occupancy		631			706			630			(75)	(10.6)			1	0.2
Professional services		339			380			261			(41)	(10.8)			78	29.9
BSA expenses		282			168			488			114	67.9			(206)	(42.2)
Other loan expenses		165			143			168			22	15.4			(3)	(1.8)
Loan collection & OREO expenses (recoveries)		54			(49)			1			103	(210.2)			53	5,300.0
Deposit insurance		225			214			159			11	5			66	41.5
Advertising		403			268			207			135	50.4			196	94.7
Director fees		204			208			181			(4)	(1.9)			23	12.7
Other expenses		415			245			119			170	69.4			296	248.7
Total noninterest expense		10,460			9,802			9,177			658	6.7			1,283	14.0
Income before provision for income taxes		10,884			11,442			6,659			(558)	(4.9)			4,225	63.4
Provision for income taxes		2,466			2,946			1,488			(480)	(16.3)			978	65.7
Net income	$	8,418		$	8,496		$	5,171		$	(78)	(0.9)	%	$	3,247	62.8	%

Effective tax rate		22.7	%		25.7	%		22.3	%
Net income per common share - Basic	$	0.81		$	0.81		$	0.48
Net income per common share - Diluted	$	0.80		$	0.80		$	0.47

Weighted average common shares outstanding - Basic			10,427			10,437			10,792
Weighted average common shares outstanding - Diluted			10,569			10,565			10,888

UNITY BANCORP, INC.

YTD CONSOLIDATED STATEMENTS OF INCOME

June 30,2021


	For the six months ended June 30,						Current YTD vs. Prior YTD
(In thousands, except percentages and per share amounts)	2021			2020			$		%
INTEREST INCOME
Federal funds sold and interest-bearing deposits	$	57		$	212		$	(155)	(73.1)	%
FHLB stock		116			188			(72)	(38.3)
Securities:
Taxable		546			948			(402)	(42.4)
Tax-exempt		18			39			(21)	(53.8)
Total securities		564			987			(423)	(42.9)
Loans:
SBA loans		1,559			1,694			(135)	(8.0)
SBA PPP loans		3,477			723			2,754	380.9
Commercial loans		21,210			19,748			1,462	7.4
Residential mortgage loans		10,034			11,324			(1,290)	(11.4)
Consumer loans		1,538			1,835			(297)	(16.2)
Residential construction loans		2,701			2,153			548	25.5
Total loans		40,519			37,477			3,042	8.1
Total interest income		41,256			38,864			2,392	6.2
INTEREST EXPENSE
Interest-bearing demand deposits		616			706			(90)	(12.7)
Savings deposits		851			1,499			(648)	(43.2)
Time deposits		2,634			4,900			(2,266)	(46.2)
Borrowed funds and subordinated debentures		688			989			(301)	(30.4)
Total interest expense		4,789			8,094			(3,305)	(40.8)
Net interest income		36,467			30,770			5,697	18.5
Provision for loan losses		500			4,000			(3,500)	(87.5)
Net interest income after provision for loan losses		35,967			26,770			9,197	34.4
NONINTEREST INCOME
Branch fee income		564			523			41	7.8
Service and loan fee income		1,133			766			367	47.9
Gain on sale of SBA loans held for sale, net		741			565			176	31.2
Gain on sale of mortgage loans, net		2,817			2,604			213	8.2
BOLI income		261			327			(66)	(20.2)
Net security gains (loss)		333			(91)			424	(465.9)
Other income		772			662			110	16.6
Total noninterest income		6,621			5,356			1,265	23.6
NONINTEREST EXPENSE
Compensation and benefits		12,396			10,992			1,404	12.8
Processing and communications		1,557			1,477			80	5.4
Furniture and equipment		1,308			1,296			12	0.9
Occupancy		1,337			1,253			84	6.7
Professional services		720			531			189	35.6
BSA expenses		450			550			(100)	(18.2)
Other loan expenses		308			257			51	19.8
Loan collection & OREO expenses		5			187			(182)	(97.3)
Deposit insurance		439			247			192	77.7
Advertising		671			497			174	35.0
Director fees		412			381			31	8.1
Other expenses		660			833			(173)	(20.8)
Total noninterest expense		20,263			18,501			1,762	9.5
Income before provision for income taxes		22,325			13,625			8,700	63.9
Provision for income taxes		5,411			3,086			2,325	75.3
Net income	$	16,914		$	10,539		$	6,375	60.5	%

Effective tax rate		24.2	%		22.6	%
Net income per common share - Basic	$	1.62		$	0.97
Net income per common share - Diluted	$	1.60		$	0.96
Weighted average common shares outstanding - Basic		10,432			10,838
Weighted average common shares outstanding - Diluted		10,567			10,962

UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

June 30,2021

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


	For the three months ended
	June 30, 2021						June 30, 2020
	Average						Average
	Balance		Interest		Rate/Yield		Balance		Interest		Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits	$	124,728	$	33	0.11	%	$	73,899	$	23	0.13	%
FHLB stock		4,725		53	4.46			5,976		79	5.32
Securities:
Taxable		34,609		253	2.94			53,592		437	3.28
Tax-exempt		1,754		11	2.49			3,534		21	2.39
Total securities (A)		36,363		264	2.92			57,126		458	3.22
Loans:
SBA loans		50,742		776	6.14			47,964		709	5.95
SBA PPP loans		164,073		1,748	4.27			100,586		723	2.89
Commercial loans		865,292		10,734	4.98			783,962		9,815	5.04
Residential mortgage loans		434,558		4,906	4.53			461,156		5,554	4.84
Consumer loans		61,357		682	4.46			72,495		875	4.85
Residential construction loans		94,388		1,486	6.31			73,475		1,046	5.73
Total loans (B)		1,670,410		20,332	4.88			1,539,638		18,722	4.89
Total interest-earning assets	$	1,836,226	$	20,682	4.52	%	$	1,676,639	$	19,282	4.63	%

Noninterest-earning assets:
Cash and due from banks		23,511						20,698
Allowance for loan losses		(23,043)						(17,909)
Other assets		75,300						74,076
Total noninterest-earning assets		75,768						76,865
Total assets	$	1,911,994					$	1,753,504

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits	$	219,244	$	307	0.56	%	$	163,685	$	329	0.81	%
Total savings deposits		509,476		419	0.33			421,647		547	0.52
Total time deposits		422,472		1,171	1.11			482,734		2,454	2.04
Total interest-bearing deposits		1,151,192		1,897	0.66			1,068,066		3,330	1.25
Borrowed funds and subordinated debentures		78,991		334	1.69			107,761		423	1.58
Total interest-bearing liabilities	$	1,230,183	$	2,231	0.73	%	$	1,175,827	$	3,753	1.28	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		482,536						394,723
Other liabilities		14,713						17,682
Total noninterest-bearing liabilities		497,249						412,405
Total shareholders' equity		184,562						165,272
Total liabilities and shareholders' equity	$	1,911,994					$	1,753,504

Net interest spread			$	18,451	3.79	%			$	15,529	3.35	%
Tax-equivalent basis adjustment				(2)						(4)
Net interest income			$	18,449					$	15,525
Net interest margin					4.03	%					3.73	%

(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 21 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 30,2021

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


	For the three months ended
	June 30, 2021						March 31, 2021
	Average						Average
	Balance		Interest		Rate/Yield		Balance		Interest		Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits	$	124,728	$	33	0.11	%	$	90,830	$	24	0.11	%
FHLB stock		4,725		53	4.46			5,167		63	4.98
Securities:
Taxable		34,609		253	2.94			38,741		292	3.06
Tax-exempt		1,754		11	2.49			2,405		12	2.03
Total securities (A)		36,363		264	2.92			41,146		304	3.00
Loans:
SBA loans		50,742		776	6.14			48,845		783	6.50
SBA PPP loans		164,073		1,748	4.27			142,581		1,730	4.92
Commercial loans		865,292		10,734	4.98			849,065		10,474	5.00
Residential mortgage loans		434,558		4,906	4.53			455,782		5,128	4.56
Consumer loans		61,357		682	4.46			63,440		857	5.48
Residential construction loans		94,388		1,486	6.31			88,992		1,215	5.54
Total loans (B)		1,670,410		20,332	4.88			1,648,705		20,187	4.97
Total interest-earning assets	$	1,836,226	$	20,682	4.52	%	$	1,785,848	$	20,578	4.67	%

Noninterest-earning assets:
Cash and due from banks		23,511						23,781
Allowance for loan losses		(23,043)						(23,308)
Other assets		75,300						76,309
Total noninterest-earning assets		75,768						76,782
Total assets	$	1,911,994					$	1,862,630

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits	$	219,244	$	307	0.56	%	$	209,020	$	309	0.60	%
Total savings deposits		509,476		419	0.33			476,463		431	0.37
Total time deposits		422,472		1,171	1.11			438,250		1,463	1.35
Total interest-bearing deposits		1,151,192		1,897	0.66			1,123,733		2,203	0.80
Borrowed funds and subordinated debentures		78,991		334	1.69			89,699		355	1.61
Total interest-bearing liabilities	$	1,230,183	$	2,231	0.73	%	$	1,213,432	$	2,558	0.85	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		482,536						455,146
Other liabilities		14,713						17,418
Total noninterest-bearing liabilities		497,249						472,564
Total shareholders' equity		184,562						176,634
Total liabilities and shareholders' equity	$	1,911,994					$	1,862,630

Net interest spread			$	18,451	3.79	%			$	18,020	3.82	%
Tax-equivalent basis adjustment				(2)						(2)
Net interest income			$	18,449					$	18,018
Net interest margin					4.03	%					4.09	%

(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 21 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 30,2021

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


	For the year ended
	June 30, 2021							June 30, 2020
	Average							Average
	Balance		Interest		Rate/Yield			Balance		Interest		Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits	$	107,873	$	57		0.11	%	$	71,548	$	212	0.60	%
FHLB stock		4,945		116		4.73			6,429		188	5.88
Securities:
Taxable		36,664		546		3.00			56,917		948	3.35
Tax-exempt		2,077		23		2.23			3,659		49	2.69
Total securities (A)		38,741		569		2.96			60,576		997	3.31
Loans:
SBA loans		49,799		1,559		6.31			49,127		1,694	6.93
SBA PPP loans		153,387		3,477		4.57			50,412		723	2.88
Commercial loans		857,223		21,210		4.99			776,729		19,748	5.11
Residential mortgage loans		445,111		10,034		4.55			461,952		11,324	4.93
Consumer loans		62,393		1,538		4.97			72,445		1,835	5.09
Residential construction loans		91,705		2,701		5.94			71,682		2,153	6.04
Total loans (B)		1,659,618		40,519		4.92			1,482,347		37,477	5.08
Total interest-earning assets	$	1,811,177	$	41,261		4.59	%	$	1,620,900	$	38,874	4.82	%

Noninterest-earning assets:
Cash and due from banks		23,645							21,320
Allowance for loan losses		(23,175)							(17,303)
Other assets		75,803							72,228
Total noninterest-earning assets		76,273							76,245
Total assets	$	1,887,450						$	1,697,145

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits	$	214,160	$	616		0.58	%	$	162,939	$	706	0.87	%
Total savings deposits		493,061		851		0.35			423,277		1,499	0.71
Total time deposits		430,317		2,634		1.23			459,218		4,900	2.15
Total interest-bearing deposits		1,137,538		4,101		0.73			1,045,434		7,105	1.37
Borrowed funds and subordinated debentures		84,316		688		1.65			119,409		989	1.67
Total interest-bearing liabilities	$	1,221,854	$	4,789		0.79	%	$	1,164,843	$	8,094	1.40	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		468,916							351,203
Other liabilities		16,069							16,891
Total noninterest-bearing liabilities		484,985							368,094
Total shareholders' equity		180,611							164,208
Total liabilities and shareholders' equity	$	1,887,450						$	1,697,145

Net interest spread			$	36,472		3.80	%			$	30,780	3.42	%
Tax-equivalent basis adjustment				(5)							(10)
Net interest income			$	36,467						$	30,770
Net interest margin						4.06	%					3.82	%

(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 21 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 30,2021


Amounts in thousands, except percentages	Jun. 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		Jun. 30, 2020
ALLOWANCE FOR LOAN LOSSES:
Balance, beginning of period	$	22,965	$	23,105	$	22,237	$	20,234	$	17,376
Provision for loan losses charged to expense		—		500		1,000		2,000		2,500
		22,965		23,605		23,237		22,234		19,876
Less: Chargeoffs
SBA loans		164		282		—		1		—
Commercial loans		20		373		150		—		219
Consumer loans		—		1		—		—		—
Total chargeoffs		184		656		150		1		219
Add: Recoveries
SBA loans		19		15		—		3		75
Commercial loans		1		1		18		1		502
Total recoveries		20		16		18		4		577
Net chargeoffs (recoveries)		164		640		132		(3)		(358)
Balance, end of period	$	22,801	$	22,965	$	23,105	$	22,237	$	20,234

LOAN QUALITY INFORMATION:
Nonperforming loans:
SBA loans	$	1,713	$	1,560	$	2,473	$	3,446	$	2,363
Commercial loans		1,637		952		1,325		527		413
Residential mortgage loans		4,043		6,711		5,217		3,722		6,192
Consumer loans		3		—		1,295		1,293		505
Residential construction loans		2,289		2,565		1,750		—		—
Total nonperforming loans		9,685		11,788		12,060		8,988		9,473
Other real estate owned ("OREO")		—		—		—		711		711
Nonperforming assets		9,685		11,788		12,060		9,699		10,184
Less: Amount guaranteed by SBA		139		139		371		812		307
Net nonperforming assets	$	9,546	$	11,649	$	11,689	$	8,887	$	9,877

Loans 90 days past due & still accruing	$	574	$	2,540	$	449	$	—	$	—

Performing Troubled Debt Restructurings (TDRs)	$	1,068	$	1,079	$	663	$	673	$	684

Allowance for loan losses to:
Total nonperforming loans		235.43		194.82		191.58		247.41		213.60
Nonperforming assets		235.43		194.82		191.58		229.27		198.68
Net nonperforming assets		238.85		197.14		197.66		250.22		204.86

UNITY BANCORP, INC.

QUARTERLY FINANCIAL DATA

June 30,2021


(In thousands, except percentages and per share amounts)	Jun. 30, 2021			Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020			Jun. 30, 2020
SUMMARY OF INCOME:
Total interest income	$	20,680		$	20,576		$	20,288		$	19,764		$	19,278
Total interest expense		2,231			2,558			2,949			3,437			3,753
Net interest income		18,449			18,018			17,339			16,327			15,525
Provision for loan losses		—			500			1,000			2,000			2,500
Net interest income after provision for loan losses		18,449			17,518			16,339			14,327			13,025
Total noninterest income		2,895			3,726			4,254			3,336			2,811
Total noninterest expense		10,460			9,802			10,725			10,037			9,177
Income before provision for income taxes		10,884			11,442			9,868			7,626			6,659
Provision for income taxes		2,466			2,946			2,523			1,866			1,488
Net income	$	8,418		$	8,496		$	7,345		$	5,760		$	5,171

Net income per common share - Basic	$	0.81		$	0.81		$	0.70		$	0.54		$	0.48
Net income per common share - Diluted	$	0.80		$	0.80		$	0.69		$	0.54		$	0.47

COMMON SHARE DATA:
Market price per share	$	22.05		$	22.00		$	17.55		$	11.58		$	14.30
Dividends paid	$	0.09		$	0.08		$	0.08		$	0.08		$	0.08
Book value per common share	$	18.12		$	17.38		$	16.63		$	16.01		$	15.53

Weighted average common shares outstanding - Basic		10,427			10,437			10,532			10,630			10,792
Weighted average common shares outstanding - Diluted		10,569			10,565			10,629			10,706			10,888
Issued common shares		11,031			10,996			10,961			10,943			10,939
Outstanding common shares		10,416			10,422			10,456			10,570			10,728
Treasury shares		615			574			505			373			211

PERFORMANCE RATIOS (Annualized):
Return on average assets		1.77	%		1.85	%		1.61	%		1.28	%		1.19	%
Return on average equity		18.29			19.51			17.07			13.76			12.59
Efficiency ratio		49.06			45.74			50.31			50.80			50.27
Noninterest expense to average assets		2.19			2.13			2.35			2.23			2.10

BALANCE SHEET DATA:
Total assets	$	1,973,311		$	2,004,818		$	1,958,914		$	1,930,836		$	1,900,774
Total deposits		1,594,316			1,628,393			1,557,959			1,493,440			1,483,457
Total loans		1,653,988			1,668,448			1,627,817			1,613,291			1,592,507
Total securities		37,054			34,551			47,571			50,387			54,888
Total shareholders' equity		188,756			181,186			173,911			169,234			166,607
Allowance for loan losses		22,801			22,965			23,105			22,237			20,234

TAX EQUIVALENT YIELDS AND RATES:
Interest-earning assets		4.52	%		4.67	%		4.64	%		4.58	%		4.63	%
Interest-bearing liabilities		0.73			0.85			0.98			1.15			1.28
Net interest spread		3.79			3.82			3.66			3.43			3.35
Net interest margin		4.03			4.09			3.97			3.78			3.73

CREDIT QUALITY:
Nonperforming assets	$	9,685		$	11,788		$	12,060		$	9,699		$	10,184
QTD net chargeoffs (recoveries) (annualized) to QTD average loans		0.04	%		0.16	%		0.03	%		—	%		(0.09)	%
Allowance for loan losses to total loans		1.38			1.38			1.42			1.38			1.27
Nonperforming assets to total loans		0.59			0.71			0.74			0.56			0.59
Nonperforming assets to total assets		0.49			0.59			0.62			0.50			0.54

CAPITAL RATIOS AND OTHER:
Total equity to total assets		9.57	%		9.04	%		8.88	%		8.76	%		8.77	%
Community bank leverage ratio		10.11			10.19			10.09			9.95			10.01

Number of banking offices		19			19			19			19			19
Number of ATMs		20			20			20			20			20
Number of employees		208			209			206			196			191

UNITY BANCORP INC /NJ/ - FORM 8-K - EX-99.1 - July 14, 2021

Attached files

UNITY BANCORP INC /NJ/ Reports