SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

April 18, 2019
Date of Report (Date of earliest event reported)
__________________________________

UNITYLOGOA15.JPG
UNITY BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)

New Jersey
(State or Other Jurisdiction of Incorporation)

1-12431
(Commission File Number)

22-3282551
(IRS Employer Identification No.)

64 Old Highway 22
Clinton, NJ 08809
(Address of Principal Executive Office)

(908) 730-7630
(Registrant's Telephone Number, Including Area Code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02     Results of Operation and Financial Condition

The Registrant issued a press release on April 18, 2019 announcing results for the three months ended March 31, 2019 , the full text of which is incorporated by reference to this Item.

Item 9.01    Financial Statements and Exhibits

(d) Exhibits

Exhibit 99.1 Press release issued by the Registrant on April 18, 2019 .


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.



UNITY BANCORP, INC.
(Registrant)


Date: April 18, 2019
By: /s/ Alan J. Bedner
Alan J. Bedner
EVP and Chief Financial Officer





EXHIBIT INDEX
 

EXHIBIT #      DESCRIPTION

99.1        Press release issued by the Registrant on April 18, 2019






For Immediate Release
News Media & Financial Analyst Contact:
Unity Bancorp, Inc. (NSDQ: UNTY)
Alan J. Bedner, EVP and CFO
April 18, 2019
(908) 713-4308

ULOGOA07.JPG Unity Bancorp Reports ULOGOA06.JPG
Quarterly Earnings up 9.8%

PRESSRELEASEA02.JPG

Clinton, NJ, April 18, 2019 - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $5.7 million, or $0.52 per diluted share, for the quarter ended March 31, 2019, compared to $5.2 million, or $0.48 per diluted share, for the prior year’s first quarter.  





First Quarter Earnings Highlights
•
Net interest income, our primary driver of earnings, increased $1.3 million to $14.2 million for the quarter ended March 31, 2019, compared to the prior year’s quarter, due to loan growth and an increased net interest margin.
•
Net interest margin expanded 7 basis points to 4.06%, compared to 3.99% for the prior year’s quarter and increased 5 basis points from 4.01% in the prior sequential quarter ended December 31, 2018 despite the inverted yield curve. The net interest margin is expected to remain stable.
•
The provision for loan losses was unchanged at $500 thousand for each of the quarters ended March 31, 2019 and 2018.
•
Noninterest income decreased $266 thousand to $2.0 million compared to the prior year’s quarter and increased $66 thousand compared to the prior sequential quarter. The quarter included lower loan payoff charges and reduced premiums received on SBA loan sales.
•
Noninterest expense increased $282 thousand to $8.5 million compared to the prior year’s quarter and increased $208 thousand compared to the prior sequential quarter. The increases were primarily due to investments in software and equipment to remain efficient, secure and competitive technologically. Compensation and benefits expense remained flat as lower benefits costs partially offset increased salary expense.
•
The effective tax rate was 20.9% compared to 19.1% in the prior year’s quarter


Balance Sheet Highlights

•
Total loans increased $8.4 million, or 0.6%, from year-end 2018 to $1.3 billion at March 31, 2019. Loan originations for the quarter were on target. However, overall growth was impacted by increased payoffs in both commercial and residential mortgage loans. Commercial, residential mortgage and consumer loan portfolios increased $8.1 million, $2.4 million and $1.6 million, respectively, partially offset by a decline of $3.7 million in SBA loans. We experienced record volume in residential mortgage originations during the quarter.
•
Total deposits increased $18.9 million, or 1.6%, from year-end 2018 to $1.2 billion at March 31, 2019. Growth consisted primarily of time deposits while demand deposits declined due to seasonal outflows of municipal deposits.
•
Borrowed funds decreased $15.0 million to $205.0 million at March 31, 2019.
•
Shareholders’ equity was $143.7 million at March 31, 2019, an increase of $5.2 million from year-end 2018, due to retained net income.
•
Book value per common share was $13.28 as of March 31, 2019.
•
At March 31, 2019, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 10.09%, 11.78%, 12.62% and 13.87% respectively, all in excess of the ratios required to be deemed “well-capitalized.”
•
Credit qu ality remains strong. Nonperforming loans consisted of $5.2 million in well secured residential mortgage loans. N onperforming assets to total assets were 0.47% and the allowance to total loans ratio remained at 1.19% at March 31, 2019. Net charge-offs were $304 thousand for the quarter.

Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.6 billion in assets and $1.2 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 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
March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31, 2019 vs.
 
 
 
 
 
 
 
 
 
 
Dec 31, 2018
 
Mar 31, 2018
 
(In thousands, except percentages and per share amounts)
 
Mar 31, 2019
 
Dec 31, 2018
 
Mar 31, 2018
 
 
 %
 
 %
 
BALANCE SHEET DATA:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
1,590,046

 
$
1,579,157

 
$
1,439,902

 
 
0.7
 %
 
10.4
 %
 
Total deposits
 
1,226,586

 
1,207,687

 
1,117,514

 
 
1.6

 
9.8

 
Total loans
 
1,312,994

 
1,304,566

 
1,195,110

 
 
0.6

 
9.9

 
Total securities
 
62,962

 
63,732

 
67,521

 
 
(1.2
)
 
(6.8
)
 
Total shareholders' equity
 
143,717

 
138,488

 
123,104

 
 
3.8

 
16.7

 
Allowance for loan losses
 
(15,684
)
 
(15,488
)
 
(14,196
)
 
 
1.3

 
10.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL DATA - QUARTER TO DATE:
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
$
7,260

 
$
7,350

 
$
6,464

 
 
(1.2
)
 
12.3

 
Provision for income taxes
 
1,520

 
1,547

 
1,235

 
 
(1.7
)
 
23.1

 
Net income
 
$
5,740

 
$
5,803

 
$
5,229

 
 
(1.1
)
 
9.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.53

 
$
0.54

 
$
0.49

 
 
(1.9
)
 
8.2

 
Net income per common share - Diluted
 
$
0.52

 
$
0.53

 
$
0.48

 
 
(1.9
)
 
8.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.55

%
1.56

%
1.53

%
 
 
 
 
 
Return on average equity
 
16.52

%
17.00

%
17.69

%
 
 
 
 
 
Efficiency ratio
 
52.53

%
50.69

%
54.00

%
 
 
 
 
 
Net interest margin
 
4.06

%
4.01

%
3.99

%
 
 
 
 
 
Noninterest expense to average assets
 
2.29

%
2.22

%
2.40

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SHARE INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
 
Market price per share
 
$
18.88

 
$
20.76

 
$
22.00

 
 
(9.1
)
 
(14.2
)
 
Dividends paid
 
$
0.07

 
$
0.07

 
$
0.06

 
 
—

 
16.7

 
Book value per common share
 
$
13.28

 
$
12.85

 
$
11.50

 
 
3.3

 
15.5

 
Average diluted shares outstanding (QTD)
 
10,955

 
10,935

 
10,853

 
 
0.2

 
0.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
Total equity to total assets
 
9.04

%
8.77

%
8.55

%
 
 
 
 
 
Leverage ratio
 
10.09

%
9.90

%
9.46

%
 
 
 
 
 
Common equity tier 1 risk-based capital ratio
 
11.78

%
11.40

%
11.14

%
 
 
 
 
 
Tier 1 risk-based capital ratio
 
12.62

%
12.24

%
12.07

%
 
 
 
 
 
Total risk-based capital ratio
 
13.87

%
13.49

%
13.24

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY AND RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
$
7,547

 
$
6,929

 
$
4,333

 
 
8.9

 
74.2

 
QTD net chargeoffs (annualized) to QTD average loans
 
0.09

%
—

%
(0.05
)
%
 
 
 
 
 
Allowance for loan losses to total loans
 
1.19

%
1.19

%
1.19

%
 
 
 
 
 
Nonperforming assets to total loans
and OREO
 
0.57

%
0.53

%
0.36

%
 
 
 
 
 
Nonperforming assets to total assets
 
0.47

%
0.44

%
0.30

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31, 2019 vs.
 
 
 
 
 
 
 
 
 
 
Dec 31, 2018
 
Mar 31, 2018
 
(In thousands, except percentages)
 
Mar 31, 2019
 
Dec 31, 2018
 
Mar 31, 2018
 
 
 %
 
 %
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
20,737

 
$
20,028

 
$
17,044

 
 
3.5
 %
 
21.7
 %
 
Federal funds sold, interest-bearing deposits and repos
 
128,400

 
125,487

 
99,243

 
 
2.3

 
29.4

 
Cash and cash equivalents
 
149,137

 
145,515

 
116,287

 
 
2.5

 
28.2

 
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Securities available for sale
 
45,934

 
46,713

 
50,162

 
 
(1.7
)
 
(8.4
)
 
Securities held to maturity
 
14,780

 
14,875

 
16,168

 
 
(0.6
)
 
(8.6
)
 
Equity securities
 
2,248

 
2,144

 
1,191

 
 
4.9

 
88.7

 
Total securities
 
62,962

 
63,732

 
67,521

 
 
(1.2
)
 
(6.8
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans held for sale
 
8,010

 
11,171

 
21,579

 
 
(28.3
)
 
(62.9
)
 
SBA loans held for investment
 
38,815

 
39,333

 
42,734

 
 
(1.3
)
 
(9.2
)
 
Commercial loans
 
702,235

 
694,102

 
636,684

 
 
1.2

 
10.3

 
Residential mortgage loans
 
438,431

 
436,056

 
380,857

 
 
0.5

 
15.1

 
Consumer loans
 
125,503

 
123,904

 
113,256

 
 
1.3

 
10.8

 
Total loans
 
1,312,994

 
1,304,566

 
1,195,110

 
 
0.6

 
9.9

 
Allowance for loan losses
 
(15,684
)
 
(15,488
)
 
(14,196
)
 
 
1.3

 
10.5

 
Net loans
 
1,297,310

 
1,289,078

 
1,180,914

 
 
0.6

 
9.9

 
Premises and equipment, net
 
23,059

 
23,371

 
23,405

 
 
(1.3
)
 
(1.5
)
 
Bank owned life insurance ("BOLI")
 
24,861

 
24,710

 
24,398

 
 
0.6

 
1.9

 
Deferred tax assets
 
5,320

 
5,350

 
4,059

 
 
(0.6
)
 
31.1

 
Federal Home Loan Bank ("FHLB") stock
 
10,120

 
10,795

 
9,308

 
 
(6.3
)
 
8.7

 
Accrued interest receivable
 
6,926

 
6,399

 
5,898

 
 
8.2

 
17.4

 
Other real estate owned ("OREO")
 
273

 
56

 
56

 
 
387.5

 
387.5

 
Goodwill
 
1,516

 
1,516

 
1,516

 
 
—

 
—

 
Other assets
 
8,562

 
8,635

 
6,540

 
 
(0.8
)
 
30.9

 
Total assets
 
$
1,590,046

 
$
1,579,157

 
$
1,439,902

 
 
0.7
 %
 
10.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
 
$
259,114

 
$
270,152

 
$
265,346

 
 
(4.1
) %
 
(2.3
) %
 
Interest-bearing demand
 
166,409

 
185,792

 
162,848

 
 
(10.4
)
 
2.2

 
Savings
 
399,006

 
394,727

 
408,255

 
 
1.1

 
(2.3
)
 
Time Deposits
 
402,057

 
357,016

 
281,065

 
 
12.6

 
43.0

 
Total deposits
 
1,226,586

 
1,207,687

 
1,117,514

 
 
1.6

 
9.8

 
Borrowed funds
 
195,000

 
210,000

 
181,000

 
 
(7.1
)
 
7.7

 
Subordinated debentures
 
10,310

 
10,310

 
10,310

 
 
—

 
—

 
Accrued interest payable
 
419

 
406

 
410

 
 
3.2

 
2.2

 
Accrued expenses and other liabilities
 
14,014

 
12,266

 
7,564

 
 
14.3

 
85.3

 
Total liabilities
 
1,446,329

 
1,440,669

 
1,316,798

 
 
0.4

 
9.8

 
Shareholders' equity:
 
 
 
 
 
 
 
 
 
 
 
 
Common stock
 
88,779

 
88,484

 
87,361

 
 
0.3

 
1.6

 
Retained earnings
 
55,145

 
50,161

 
35,713

 
 
9.9

 
54.4

 
Accumulated other comprehensive (loss) income
 
(207
)
 
(157
)
 
30

 
 
 NM
 
 NM
 
Total shareholders' equity
 
143,717

 
138,488

 
123,104

 
 
3.8

 
16.7

 
Total liabilities and shareholders' equity
 
$
1,590,046

 
$
1,579,157

 
$
1,439,902

 
 
0.7
 %
 
10.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issued and outstanding common shares
 
10,822

 
10,780

 
10,709

 
 
 
 
 
 
NM=Not meaningful




UNITY BANCORP, INC.
QTD CONSOLIDATED STATEMENTS OF INCOME
March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31, 2019 vs.
 
 
 
 For the three months ended
 
 
Dec 31, 2018
 
Mar 31, 2018
 
(In thousands, except percentages and per share amounts)
 
Mar 31, 2019
 
Dec 31, 2018
 
Mar 31, 2018
 
 
$
 
%
 
$
 
%
 
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
221

 
$
210

 
$
205

 
 
$
11

 
5.2
%
 
$
16

 
7.8
%
 
FHLB stock
 
116

 
104

 
134

 
 
12

 
11.5

 
(18
)
 
(13.4
)
 
Securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
475

 
466

 
492

 
 
9

 
1.9

 
(17
)
 
(3.5
)
 
Tax-exempt
 
29

 
28

 
31

 
 
1

 
3.6

 
(2
)
 
(6.5
)
 
Total securities
 
504

 
494

 
523

 
 
10

 
2.0

 
(19
)
 
(3.6
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
995

 
974

 
1,183

 
 
21

 
2.2

 
(188
)
 
(15.9
)
 
Commercial loans
 
9,069

 
9,167

 
7,726

 
 
(98
)
 
(1.1
)
 
1,343

 
17.4

 
Residential mortgage loans
 
5,560

 
5,172

 
4,340

 
 
388

 
7.5

 
1,220

 
28.1

 
Consumer loans
 
2,035

 
1,939

 
1,529

 
 
96

 
5.0

 
506

 
33.1

 
Total loans
 
17,659

 
17,252

 
14,778

 
 
407

 
2.4

 
2,881

 
19.5

 
Total interest income
 
18,500

 
18,060

 
15,640

 
 
440

 
2.4

 
2,860

 
18.3

 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
 
409

 
389

 
224

 
 
20

 
5.1

 
185

 
82.6

 
Savings deposits
 
1,119

 
1,103

 
776

 
 
16

 
1.5

 
343

 
44.2

 
Time deposits
 
2,007

 
1,861

 
1,000

 
 
146

 
7.8

 
1,007

 
100.7

 
Borrowed funds and subordinated debentures
 
749

 
543

 
768

 
 
206

 
37.9

 
(19
)
 
(2.5
)
 
Total interest expense
 
4,284

 
3,896

 
2,768

 
 
388

 
10.0

 
1,516

 
54.8

 
Net interest income
 
14,216

 
14,164

 
12,872

 
 
52

 
0.4

 
1,344

 
10.4

 
Provision for loan losses
 
500

 
500

 
500

 
 
—

 
—

 
—

 
—

 
Net interest income after provision for loan losses
 
13,716

 
13,664

 
12,372

 
 
52

 
0.4

 
1,344

 
10.9

 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branch fee income
 
368

 
413

 
330

 
 
(45
)
 
(10.9
)
 
38

 
11.5

 
Service and loan fee income
 
442

 
690

 
564

 
 
(248
)
 
(35.9
)
 
(122
)
 
(21.6
)
 
Gain on sale of SBA loans held for sale, net
 
316

 
298

 
547

 
 
18

 
6.0

 
(231
)
 
(42.2
)
 
Gain on sale of mortgage loans, net
 
350

 
277

 
424

 
 
73

 
26.4

 
(74
)
 
(17.5
)
 
BOLI income
 
151

 
165

 
171

 
 
(14
)
 
(8.5
)
 
(20
)
 
(11.7
)
 
Net security gains (losses)
 
100

 
(193
)
 
(15
)
 
 
293

 
151.8

 
115

 
766.7

 
Other income
 
293

 
304

 
265

 
 
(11
)
 
(3.6
)
 
28

 
10.6

 
Total noninterest income
 
2,020

 
1,954

 
2,286

 
 
66

 
3.4

 
(266
)
 
(11.6
)
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
4,845

 
4,845

 
4,834

 
 
—

 
—

 
11

 
0.2

 
Occupancy
 
694

 
681

 
690

 
 
13

 
1.9

 
4

 
0.6

 
Processing and communications
 
716

 
716

 
689

 
 
—

 
—

 
27

 
3.9

 
Furniture and equipment
 
657

 
616

 
536

 
 
41

 
6.7

 
121

 
22.6

 
Professional services
 
288

 
252

 
251

 
 
36

 
14.3

 
37

 
14.7

 
Loan collection & OREO expenses
 
66

 
31

 
6

 
 
35

 
112.9

 
60

 
1,000.0

 
Other loan expenses (recoveries)
 
46

 
(2
)
 
33

 
 
48

 
2,400.0

 
13

 
39.4

 
Deposit insurance
 
167

 
189

 
186

 
 
(22
)
 
(11.6
)
 
(19
)
 
(10.2
)
 
Advertising
 
348

 
360

 
319

 
 
(12
)
 
(3.3
)
 
29

 
9.1

 
Director fees
 
163

 
169

 
162

 
 
(6
)
 
(3.6
)
 
1

 
0.6

 
Other expenses
 
486

 
411

 
488

 
 
75

 
18.2

 
(2
)
 
(0.4
)
 
Total noninterest expense
 
8,476

 
8,268

 
8,194

 
 
208

 
2.5

 
282

 
3.4

 
Income before provision for income taxes
 
7,260

 
7,350

 
6,464

 
 
(90
)
 
(1.2
)
 
796

 
12.3

 
Provision for income taxes
 
1,520

 
1,547

 
1,235

 
 
(27
)
 
(1.7
)
 
285

 
23.1

 
Net income
 
$
5,740

 
$
5,803

 
$
5,229

 
 
$
(63
)
 
(1.1
)%
 
$
511

 
9.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Effective tax rate
 
20.9
%
 
21.0
%
 
19.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.53

 
$
0.54

 
$
0.49

 
 
 
 
 
 
 
 
 
 
Net income per common share - Diluted
 
$
0.52

 
$
0.53

 
$
0.48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,801

 
10,765

 
10,678

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Diluted
 
10,955

 
10,935

 
10,853

 
 
 
 
 
 
 
 
 
 





UNITY BANCORP, INC.
QUARTER TO DATE NET INTEREST MARGIN
March 31, 2019
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
For the three months ended
 
 
March 31, 2019
 
December 31, 2018
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
38,066

 
$
221

 
2.35
%
 
$
34,551

 
$
210

 
2.41
%
FHLB stock
 
6,951

 
116

 
6.77

 
5,762

 
104

 
7.16

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
58,735

 
475

 
3.28

 
58,350

 
466

 
3.17

Tax-exempt
 
4,588

 
36

 
3.18

 
4,776

 
35

 
2.91

Total securities (A)
 
63,323

 
511

 
3.27

 
63,126

 
501

 
3.15

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
50,015

 
995

 
8.07

 
53,803

 
974

 
7.18

Commercial loans
 
697,856

 
9,069

 
5.27

 
698,609

 
9,167

 
5.21

Residential mortgage loans
 
439,904

 
5,560

 
5.13

 
423,674

 
5,172

 
4.84

Consumer loans
 
125,987

 
2,035

 
6.55

 
121,214

 
1,939

 
6.35

Total loans (B)
 
1,313,762

 
17,659

 
5.45

 
1,297,300

 
17,252

 
5.28

Total interest-earning assets
 
$
1,422,102

 
$
18,507

 
5.28
%
 
$
1,400,739

 
$
18,067

 
5.12
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
26,105

 
 
 
 
 
25,410

 
 
 
 
Allowance for loan losses
 
(15,753
)
 
 
 
 
 
(15,266
)
 
 
 
 
Other assets
 
70,586

 
 
 
 
 
66,925

 
 
 
 
Total noninterest-earning assets
 
80,938

 
 
 
 
 
77,069

 
 
 
 
Total assets
 
$
1,503,040

 
 
 
 
 
$
1,477,808

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
182,080

 
$
409

 
0.91
%
 
$
187,827

 
$
389

 
0.82
%
Total savings deposits
 
397,209

 
1,119

 
1.14

 
406,681

 
1,103

 
1.08

Total time deposits
 
370,990

 
2,007

 
2.19

 
356,520

 
1,861

 
2.07

Total interest-bearing deposits
 
950,279

 
3,535

 
1.51

 
951,028

 
3,353

 
1.40

Borrowed funds and subordinated debentures
 
134,877

 
749

 
2.25

 
108,465

 
543

 
1.99

Total interest-bearing liabilities
 
$
1,085,156

 
$
4,284

 
1.60
%
 
$
1,059,493

 
$
3,896

 
1.46
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
262,664

 
 
 
 
 
271,440

 
 
 
 
Other liabilities
 
14,327

 
 
 
 
 
11,454

 
 
 
 
Total noninterest-bearing liabilities
 
276,991

 
 
 
 
 
282,894

 
 
 
 
Total shareholders' equity
 
140,893

 
 
 
 
 
135,421

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,503,040

 
 
 
 
 
$
1,477,808

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
14,223

 
3.68
%
 
 
 
$
14,171

 
3.66
%
Tax-equivalent basis adjustment
 
 
 
(7
)
 
 
 
 
 
(7
)
 
 
Net interest income
 
 
 
$
14,216

 
 
 
 
 
$
14,164

 
 
Net interest margin
 
 
 
 
 
4.06
%
 
 
 
 
 
4.01
%
(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
March 31, 2019
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
 
 
For the three months ended
 
 
March 31, 2019
 
March 31, 2018
 
 
Average Balance
 
Interest
 
 Rate/Yield
 
Average Balance
 
Interest
 
 Rate/Yield
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Federal funds sold, interest-bearing deposits and repos
 
$
38,066

 
$
221

 
2.35
%
 
$
48,936

 
$
205

 
1.70
%
FHLB stock
 
6,951

 
116

 
6.77

 
7,799

 
134

 
6.97

Securities:
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
58,735

 
475

 
3.28

 
63,393

 
492

 
3.15

Tax-exempt
 
4,588

 
36

 
3.18

 
5,349

 
38

 
2.88

Total securities (A)
 
63,323

 
511

 
3.27

 
68,742

 
530

 
3.13

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
SBA loans
 
50,015

 
995

 
8.07

 
68,376

 
1,183

 
7.02

Commercial loans
 
697,856

 
9,069

 
5.27

 
632,409

 
7,726

 
4.95

Residential mortgage loans
 
439,904

 
5,560

 
5.13

 
371,061

 
4,340

 
4.74

Consumer loans
 
125,987

 
2,035

 
6.55

 
110,947

 
1,529

 
5.59

Total loans (B)
 
1,313,762

 
17,659

 
5.45

 
1,182,793

 
14,778

 
5.07

Total interest-earning assets
 
$
1,422,102

 
$
18,507

 
5.28
%
 
$
1,308,270

 
$
15,647

 
4.85
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
26,105

 
 
 
 
 
23,244

 
 
 
 
Allowance for loan losses
 
(15,753
)
 
 
 
 
 
(13,949
)
 
 
 
 
Other assets
 
70,586

 
 
 
 
 
65,686

 
 
 
 
Total noninterest-earning assets
 
80,938

 
 
 
 
 
74,981

 
 
 
 
Total assets
 
$
1,503,040

 
 
 
 
 
$
1,383,251

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing demand deposits
 
$
182,080

 
$
409

 
0.91
%
 
$
178,385

 
$
224

 
0.51
%
Total savings deposits
 
397,209

 
1,119

 
1.14

 
403,222

 
776

 
0.78

Total time deposits
 
370,990

 
2,007

 
2.19

 
252,000

 
1,000

 
1.61

Total interest-bearing deposits
 
950,279

 
3,535

 
1.51

 
833,607

 
2,000

 
0.97

Borrowed funds and subordinated debentures
 
134,877

 
749

 
2.25

 
167,458

 
768

 
1.86

Total interest-bearing liabilities
 
$
1,085,156

 
$
4,284

 
1.60
%
 
$
1,001,065

 
$
2,768

 
1.12
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
262,664

 
 
 
 
 
252,128

 
 
 
 
Other liabilities
 
14,327

 
 
 
 
 
8,910

 
 
 
 
Total noninterest-bearing liabilities
 
276,991

 
 
 
 
 
261,038

 
 
 
 
Total shareholders' equity
 
140,893

 
 
 
 
 
121,148

 
 
 
 
Total liabilities and shareholders' equity
 
$
1,503,040

 
 
 
 
 
$
1,383,251

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
$
14,223

 
3.68
%
 
 
 
$
12,879

 
3.73
%
Tax-equivalent basis adjustment
 
 
 
(7
)
 
 
 
 
 
(7
)
 
 
Net interest income
 
 
 
$
14,216

 
 
 
 
 
$
12,872

 
 
Net interest margin
 
 
 
 
 
4.06
%
 
 
 
 
 
3.99
%
(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
March 31, 2019
Amounts in thousands, except percentages
 
Mar 31, 2019
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
ALLOWANCE FOR LOAN LOSSES:
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
 
$
15,488

 
$
14,988

 
$
14,634

 
$
14,196

 
$
13,556

Provision for loan losses charged to expense
 
500

 
500

 
500

 
550

 
500

 
 
15,988

 
15,488

 
15,134

 
14,746

 
14,056

Less: Chargeoffs
 
 
 
 
 
 
 
 
 
 
SBA loans
 
308

 
—

 
169

 
104

 
81

Commercial loans
 
1

 
10

 
—

 
—

 
—

Residential mortgage loans
 
—

 
—

 
—

 
—

 
—

Consumer loans
 
1

 
—

 
—

 
16

 
6

Total chargeoffs
 
310

 
10

 
169

 
120

 
87

Add: Recoveries
 
 
 
 
 
 
 
 
 
 
SBA loans
 
1

 
3

 
1

 
3

 
64

Commercial loans
 
5

 
5

 
5

 
4

 
16

Residential mortgage loans
 
—

 
—

 
—

 
—

 
13

Consumer loans
 
—

 
2

 
17

 
1

 
134

Total recoveries
 
6

 
10

 
23

 
8

 
227

Net chargeoffs (recoveries)
 
304

 
—

 
146

 
112

 
(140
)
Balance, end of period
 
$
15,684

 
$
15,488

 
$
14,988

 
$
14,634

 
$
14,196

 
 
 
 
 
 
 
 
 
 
 
LOAN QUALITY INFORMATION:
 
 
 
 
 
 
 
 
 
 
Nonperforming loans:
 
 
 
 
 
 
 
 
 
 
SBA loans
 
$
814

 
$
1,560

 
$
1,296

 
$
1,421

 
$
933

Commercial loans
 
1,046

 
1,076

 
1,234

 
2,061

 
1,069

Residential mortgage loans
 
5,243

 
4,211

 
3,537

 
1,660

 
1,952

Consumer loans
 
171

 
26

 
128

 
67

 
323

Total nonperforming loans (1)
 
7,274

 
6,873

 
6,195

 
5,209

 
4,277

Other real estate owned ("OREO")
 
273

 
56

 
56

 
56

 
56

Nonperforming assets
 
7,547

 
6,929

 
6,251

 
5,265

 
4,333

Less: Amount guaranteed by SBA
 
68

 
89

 
104

 
129

 
27

Net nonperforming assets
 
$
7,479

 
$
6,840

 
$
6,147

 
$
5,136

 
$
4,306

 
 
 
 
 
 
 
 
 
 
 
 Loans 90 days past due & still accruing
 
$
39

 
$
98

 
$
546

 
$
286

 
$
—

 
 
 
 
 
 
 
 
 
 
 
Performing Troubled Debt Restructurings (TDRs)
 
$
738

 
$
745

 
$
755

 
$
767

 
$
774

(1) Nonperforming TDRs included in nonperforming loans
 
—

 
—

 
—

 
—

 
—

Total TDRs
 
$
738

 
$
745

 
$
755

 
$
767

 
$
774

 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses to:
 
 
 
 
 
 
 
 
 
 
Total loans at quarter end
 
1.19
%
 
1.19
%
 
1.17
%
 
1.17
%
 
1.19
%
Nonperforming loans (1)
 
215.62

 
225.35

 
241.94

 
280.94

 
331.91

Nonperforming assets
 
207.82

 
223.52

 
239.77

 
277.95

 
327.63

Net nonperforming assets
 
209.71

 
226.43

 
243.83

 
284.93

 
329.68

 
 
 
 
 
 
 
 
 
 
 
QTD net chargeoffs (annualized) to QTD average loans:
 
 
 
 
 
 
 
 
 
 
SBA loans
 
2.49
%
 
(0.02
)%
 
1.17
%
 
0.65
%
 
0.10
%
Commercial loans
 
—

 
—

 
—

 
—

 
(0.01
)
Residential mortgage loans
 
—

 
—

 
—

 
—

 
(0.01
)
Consumer loans
 
—

 
(0.01
)
 
(0.06
)
 
0.05

 
(0.47
)
Total loans
 
0.09
%
 
—
%
 
0.05
%
 
0.04
%
 
(0.05
)%
 
 
 
 
 
 
 
 
 
 
 
Nonperforming loans to total loans
 
0.55
%
 
0.53
%
 
0.48
%
 
0.42
%
 
0.36
%
Nonperforming loans and TDRs to total loans
 
0.61

 
0.58

 
0.54

 
0.48

 
0.42

Nonperforming assets to total loans and OREO
 
0.57

 
0.53

 
0.49

 
0.42

 
0.36

Nonperforming assets to total assets
 
0.47

 
0.44

 
0.40

 
0.35

 
0.30





UNITY BANCORP, INC.
QUARTERLY FINANCIAL DATA
March 31, 2019
(In thousands, except percentages and per share amounts)
 
Mar 31, 2019
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
SUMMARY OF INCOME:
 
 
 
 
 
 
 
 
 
 
Total interest income
 
$
18,500

 
$
18,060

 
$
17,194

 
$
16,369

 
$
15,640

Total interest expense
 
4,284

 
3,896

 
3,627

 
3,225

 
2,768

Net interest income
 
14,216

 
14,164

 
13,567

 
13,144

 
12,872

Provision for loan losses
 
500

 
500

 
500

 
550

 
500

Net interest income after provision for loan losses
 
13,716

 
13,664

 
13,067

 
12,594

 
12,372

Total noninterest income
 
2,020

 
1,954

 
2,479

 
2,312

 
2,286

Total noninterest expense
 
8,476

 
8,268

 
8,801

 
8,158

 
8,194

Income before provision for income taxes
 
7,260

 
7,350

 
6,745

 
6,748

 
6,464

Provision for income taxes
 
1,520

 
1,547

 
1,255

 
1,351

 
1,235

Net income
 
$
5,740

 
$
5,803

 
$
5,490

 
$
5,397

 
$
5,229

 
 
 
 
 
 
 
 
 
 
 
Net income per common share - Basic
 
$
0.53

 
$
0.54

 
$
0.51

 
$
0.50

 
$
0.49

Net income per common share - Diluted
 
$
0.52

 
$
0.53

 
$
0.50

 
$
0.49

 
$
0.48

 
 
 
 
 
 
 
 
 
 
 
COMMON SHARE DATA:
 
 
 
 
 
 
 
 
 
 
Market price per share
 
$
18.88

 
$
20.76

 
$
22.90

 
$
22.75

 
$
22.00

Dividends paid
 
$
0.07

 
$
0.07

 
$
0.07

 
$
0.07

 
$
0.06

Book value per common share
 
$
13.28

 
$
12.85

 
$
12.37

 
$
11.94

 
$
11.50

 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - Basic
 
10,801

 
10,765

 
10,743

 
10,717

 
10,678

Weighted average common shares outstanding - Diluted
 
10,955

 
10,935

 
10,936

 
10,915

 
10,853

Issued and outstanding common shares
 
10,822

 
10,780

 
10,756

 
10,731

 
10,709

 
 
 
 
 
 
 
 
 
 
 
PERFORMANCE RATIOS (Annualized):
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.55
%
 
1.56
%
 
1.50
%
 
1.53
%
 
1.53
%
Return on average equity
 
16.52

 
17.00

 
16.64

 
17.32

 
17.69

Efficiency ratio
 
52.53

 
50.69

 
54.86

 
52.80

 
54.00

Noninterest expense to average assets
 
2.29

 
2.22

 
2.41

 
2.32

 
2.40

 
 
 
 
 
 
 
 
 
 
 
BALANCE SHEET DATA:
 
 
 
 
 
 
 
 
 
 
Total assets
 
1,590,046

 
1,579,157

 
1,553,152

 
1,514,120

 
1,439,902

Total deposits
 
1,226,586

 
1,207,687

 
1,219,473

 
1,146,399

 
1,117,514

Total loans
 
1,312,994

 
1,304,566

 
1,283,304

 
1,246,511

 
1,195,110

Total securities
 
62,962

 
63,732

 
63,399

 
65,682

 
67,521

Total shareholders' equity
 
143,717

 
138,488

 
133,067

 
128,141

 
123,104

Allowance for loan losses
 
(15,684
)
 
(15,488
)
 
(14,988
)
 
(14,634
)
 
(14,196
)
 
 
 
 
 
 
 
 
 
 
 
TAX EQUIVALENT YIELDS AND RATES:
 
 
 
 
 
 
 
 
 
 
Interest-earning assets
 
5.28
%
 
5.12
%
 
4.97
%
 
4.91
%
 
4.85
%
Interest-bearing liabilities
 
1.60

 
1.46

 
1.38

 
1.27

 
1.12

Net interest spread
 
3.68

 
3.66

 
3.59

 
3.64

 
3.73

Net interest margin
 
4.06

 
4.01

 
3.92

 
3.95

 
3.99

 
 
 
 
 
 
 
 
 
 
 
CREDIT QUALITY:
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
 
7,547

 
6,929

 
6,251

 
5,265

 
4,333

QTD net chargeoffs (annualized) to QTD average loans
 
0.09
%
 
—
%
 
0.05
%
 
0.04
%
 
(0.05
)%
Allowance for loan losses to total loans
 
1.19

 
1.19

 
1.17

 
1.17

 
1.19

Nonperforming assets to total loans and OREO
 
0.57

 
0.53

 
0.49

 
0.42

 
0.36

Nonperforming assets to total assets
 
0.47

 
0.44

 
0.40

 
0.35

 
0.30

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




(In thousands, except percentages and per share amounts)
 
Mar 31, 2019
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
CAPITAL RATIOS AND OTHER:
 
 
 
 
 
 
 
 
 
 
Total equity to total assets
 
9.04
%
 
8.77
%
 
8.57
%
 
8.46
%
 
8.55
%
Leverage ratio
 
10.09

 
9.90

 
9.74

 
9.63

 
9.46

Common equity tier 1 risk-based capital ratio
 
11.78

 
11.40

 
11.15

 
11.05

 
11.14

Tier 1 risk-based capital ratio
 
12.62

 
12.24

 
12.00

 
11.92

 
12.07

Total risk-based capital ratio
 
13.87

 
13.49

 
13.25

 
13.14

 
13.24

Number of banking offices
 
19

 
19

 
19

 
19

 
18

Number of ATMs
 
20

 
20

 
20

 
20

 
19

Number of employees
 
190

 
198

 
195

 
197

 
199