CLINTON, N.J., April 24, 2017 (GLOBE NEWSWIRE) -- Unity Bancorp, Inc. (NASDAQ:UNTY), parent company of Unity Bank, reported a 16.8% increase in earnings, excluding the effect of a nonrecurring gain during the prior year’s quarter. Major contributing factors included strong loan growth, increased levels of noninterest income and expense control. 

Net income for the three months ended March 31, 2017 was $3.2 million, or $0.30 per diluted share.  Net income, excluding a nonrecurring gain on the repurchase of subordinated debentures, was $2.7 million, or $0.29 per diluted share, for the three months ended March 31, 2016.  This represented a 16.8% increase from the same period a year ago.  Return on average assets and average common equity for the quarter were 1.07% and 12.02%, respectively, compared to 1.00% and 13.68% for the same period a year ago.    

During the prior year’s quarter, the Company repurchased $5.0 million of its outstanding subordinated “capital qualifying” 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.  Management believes excluding the nonrecurring gain from 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. 

Net income for the three months ended March 31, 2017 was $3.2 million or $0.30 per diluted share, a decline of 24.1 percent compared to the prior year period net income of $4.2 million or $0.44 per diluted share which included the nonrecurring gain on the repurchase of subordinated debentures.  Return on average assets and average common equity, including the nonrecurring gain, for the quarter ended March 31, 2017 was 1.07% and 12.02%, respectively compared to 1.54% and 21.05% for the prior year period.    

First quarter highlights included:

• Voted one of the best places to work in New Jersey by NJBIZ.
• Installed a new modern teller system which will increase automation and efficiency.
• 2.8% loan growth:  5.7% increase in residential mortgage loans, 5.0% increase in consumer loans and 2.0% increase in commercial loans.  Total loans now exceed $1 billion.
• 3.7 % deposit growth:  2.2% increase in noninterest-bearing demand deposits and 7.2% increase in savings deposits.
• Net interest income increased 15.6% compared to the prior year’s quarter due to strong loan growth. 
• Net interest margin increased to 3.70% this quarter compared to 3.48% in the prior year’s quarter due to strong loan growth and the benefit of a rising rate environment.

“We continue to successfully implement our business plan,” stated James A. Hughes, President and CEO.  “We had a strong first quarter and see 2017 as a year of continued growth and success.  Our newest branches add geographic presence and situational opportunity to our growth plans and are performing well.  Our balance sheet is well positioned to weather interest rate changes and to profit from them. Our ongoing success presents an excellent opportunity for me to commend our dedicated and efficient employees as Unity was named by NJBIZ as one of the "Best Places to Work" in New Jersey. ”

Net Interest Income

Net interest income, our core driver of earnings, increased $1.4 million to $10.4 million for the quarter ended March 31, 2017 compared to the prior year’s quarter and the net interest margin expanded 22 basis points to 3.70% compared to 3.48% for the prior year’s quarter. 

The yield on earning assets increased 15 basis points to 4.48% for the quarter ended March 31, 2017 compared to 4.33% for the prior year’s quarter.  This increase was the result of strong commercial, residential mortgage and consumer loan growth over the prior year’s period and the benefit of a rising rate environment.  Quarterly average commercial loans increased $48.6 million, average residential mortgage loans have increased $33.0 million and consumer loans increased $15.9 million compared to the first quarter in 2016.
The cost of interest-bearing liabilities fell 4 basis points to 1.02% for the quarter ended March 31, 2017.  While the cost of deposits increased 2 basis points to 0.83%, the cost of borrowed funds and subordinated debentures decreased 68 basis points compared to the prior year due to the modification of borrowings with the Federal Home Loan Bank (“FHLB”) and the addition of new borrowing at lower rates over the past year.  The increase in the cost of deposits was primarily driven by the growth in savings deposits.

Provision for Loan Losses

The provision for loan losses was $250 thousand for the quarter ended March 31, 2017, an increase of $50 thousand, compared to the $200 thousand provision for loan losses for the quarter ended March 31, 2016. Quarterly net charge-offs declined $177 thousand to $148 thousand compared to the first quarter 2016.

Noninterest Income

Noninterest income increased $188 thousand to $2.2 million for the three months ended March 31, 2017, compared to the same period last year.  Quarterly noninterest income increased due to higher service and loan fee income and gains on the sale of SBA loans.  Service and loan fee income increased due to higher loan processing fees, prepayment and payoff fees.  Gains on the sale of SBA loans increased due to a higher volume of loan sales this quarter compared with the prior year’s quarter.  SBA loan sales totaled $6.0 million with net gains on sale of $485 thousand for the quarter ended March 31, 2017, compared to $3.5 million in sales and a net gain of $308 thousand in the prior year’s quarter.  In addition, gains on the sale of mortgage loans during the quarter were $637 thousand compared to $715 thousand in the prior year’s quarter.  Mortgage loan sale volume totaled $25.7 million and $25.0 million, respectively. 

Noninterest Expense

Noninterest expense increased $833 thousand or 12.6% to $7.4 million for the quarter due primarily to compensation and benefits expenses and loan legal and OREO costs.  Since March 31, 2016, compensation and benefit expenses have risen due to the addition of two new retail branches as well as additional lending staff.  Loan legal and OREO costs increased $269 thousand compared to the prior year’s quarter due to a loss of $253 thousand on the sale of an OREO property. 

Financial Condition

At March 31, 2017, total assets were $1.2 billion, an increase of $36.2 million from year-end 2016:

• Total securities increased $11.5 million due to purchases of $15.2 million during the quarter.
• Total loans increased $27.3 million or 2.8%, from year-end 2016 to $1.0 billion at March 31, 2017. Residential mortgage, commercial and consumer loan portfolios increased $16.5 million, $10.2 million and $4.5 million, respectively.  SBA loans declined on sales of $6.0 million.  Our pipeline in all categories remains strong and loan growth is expected in future quarters.
• Total deposits increased $35.0 million or 3.7%, to $980.7 million at March 31, 2017 due to our eSavings promotion. 
• Borrowed funds decreased $1.0 million to $120.0 million at March 31, 2017 due to reduced overnight borrowings.    
• Shareholders’ equity was $109.3 million at March 31, 2017, an increase of $3.0 million from year-end 2016, due to year-to-date net income less the dividends paid to shareholders.
• Book value per common share was $10.38 as of March 31, 2017.
• At March 31, 2017, the leverage, common equity Tier I, Tier I and Total Risk Based Capital ratios were 9.72%, 11.46%, 12.53% and 13.78% respectively, all in excess of the ratios required to be deemed “well-capitalized”. 

Credit Quality

• Nonperforming assets totaled $8.9 million at March 31, 2017, or 0.89% of total loans and OREO, compared to $8.3 million or 0.85% of total loans and OREO at year-end 2016.  
• Nonperforming loans increased 7.20% to $7.8 million at March 31, 2017 from year-end.
• OREO totaled $1.2 million at March 31, 2017, an increase of $122 thousand from year-end.
• The allowance for loan losses totaled $12.7 million at March 31, 2017, or 1.27% of total loans compared to $12.6 million and 1.42% at March 31, 2016.
• Net charge-offs were $148 thousand for the three months ended March 31, 2017, compared to $325 thousand for the same period a year ago. 

Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $1.2 billion in assets and $981 million in deposits.  Unity Bank provides financial services to retail, corporate and small business customers through its 17 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
NON-GAAP
March 31, 2017
												March 31, 2017 vs.
												December 31, 2016		March 31, 2016
(In thousands, except percentages and per share amounts)		March 31, 2017			December 31, 2016			March 31, 2016				%		%
BALANCE SHEET DATA:
Total assets		$	1,226,168		$	1,189,906		$	1,120,955			3.0	%	9.4	%
Total deposits			980,703			945,723			926,819			3.7		5.8
Total loans			1,000,677			973,414			886,990			2.8		12.8
Total securities			73,022			61,547			66,729			18.6		9.4
Total shareholders' equity			109,305			106,291			82,276			2.8		32.9
Allowance for loan losses			(12,681)			(12,579)			(12,634)			(0.8)		0.4
FINANCIAL DATA - QUARTER TO DATE:
Income before provision for income taxes		$	4,904		$	4,925		$	4,196			(0.4)		16.9
Provision for income taxes			1,712			1,765			1,464			(3.0)		16.9
Net income before gain on subordinated debenture		$	3,192		$	3,160		$	2,732			1.0		16.8
Gain on subordinated debenture, net of tax			-			-			1,473			NM		NM
Net income		$	3,192		$	3,160		$	4,205			1.0		(24.1)
Performance ratios before gain on subordinated debenture per:
Common share - basic		$	0.30		$	0.33		$	0.29			(9.1)		3.4
Common share - diluted		$	0.30		$	0.32		$	0.29			(6.3)		3.4
Net income per:
Common share - basic		$	0.30		$	0.33		$	0.45			(9.1)		(33.3)
Common share - diluted		$	0.30		$	0.32		$	0.44			(6.3)		(31.8)
Performance ratios before gain on subordinated debenture per:
Return on average assets			1.07	%		1.07	%		1.00	%		-		7.0
Return on average equity			12.02	%		13.47	%		13.68	%		(10.8)		(12.1)
Efficiency ratio			59.08	%		59.91	%		60.56	%		(1.4)		(2.4)
Performance ratios:
Return on average assets			1.07	%		1.07	%		1.54	%		-		(30.5)
Return on average equity			12.02	%		13.47	%		21.05	%		(10.8)		(42.9)
Efficiency ratio			59.08	%		59.90	%		50.16	%		(1.4)		17.8
Net interest margin			3.70	%		3.60	%		3.48	%		2.8		6.3
SHARE INFORMATION:
Market price per share		$	16.95		$	15.70		$	10.34			8.0		63.9
Dividends paid quarterly		$	0.05		$	0.05		$	0.04			-		0.3
Book value per common share		$	10.38		$	10.14		$	8.83			2.4		17.6
Average diluted shares outstanding (QTD)			10,705			9,878			9,550			8.4		12.1
CAPITAL RATIOS:
Total equity to total assets			8.91	%		8.93	%		7.34	%		(0.2)		21.4
Leverage ratio			9.72	%		9.73	%		8.31	%		(0.1)		17.0
Common equity tier 1 risk-based capital ratio			11.46	%		11.49	%		9.77	%		(0.3)		17.3
Tier 1 risk-based capital ratio			12.53	%		12.58	%		10.97	%		(0.4)		14.2
Total risk-based capital ratio			13.78	%		13.84	%		12.22	%		(0.4)		12.8
CREDIT QUALITY AND RATIOS:
Nonperforming assets		$	8,930		$	8,287		$	8,304			7.8		7.5
QTD net chargeoffs (annualized) to QTD average loans			0.06	%		0.13	%		0.15	%		(53.8)		(60.0)
Allowance for loan losses to total loans			1.27	%		1.29	%		1.42	%		(1.6)		(10.6)
Nonperforming assets to total loans and OREO			0.89	%		0.85	%		0.93	%		4.7		(4.3)
Nonperforming assets to total assets			0.73	%		0.70	%		0.74	%		4.3	%	(1.4)	%
All share information has been adjusted for the 10% stock dividend paid September 30, 2016

			UNITY BANCORP, INC.
			CONSOLIDATED BALANCE SHEETS
			March 31, 2017
												March 31, 2017 vs.
												December 31, 2016		March 31, 2016
(In thousands, except percentages)		March 31, 2017			December 31, 2016			March 31, 2016				%		%
ASSETS
Cash and due from banks		$	18,345		$	22,105		$	26,919			(17.0)	%	(31.9)	%
Federal funds sold and interest-bearing deposits			84,859			83,790			99,554			1.3		(14.8)
Cash and cash equivalents			103,204			105,895			126,473			(2.5)		(18.4)
Securities:
Securities available for sale			52,246			40,568			48,566			28.8		7.6
Securities held to maturity			20,776			20,979			18,163			(1.0)		14.4
Total securities			73,022			61,547			66,729			18.6		9.4
Loans:
SBA loans held for sale			12,163			14,773			13,224			(17.7)		(8.0)
SBA loans held for investment			42,403			42,492			38,863			(0.2)		9.1
SBA 504 loans			25,111			26,344			27,482			(4.7)		(8.6)
Commercial loans			519,338			509,171			467,266			2.0		11.1
Residential mortgage loans			305,578			289,093			260,957			5.7		17.1
Consumer loans			96,084			91,541			79,198			5.0		21.3
Total loans			1,000,677			973,414			886,990			2.8		12.8
Allowance for loan losses			(12,681)			(12,579)			(12,634)			(0.8)		0.4
Net loans			987,996			960,835			874,356			2.8		13.0
Premises and equipment, net			23,261			23,398			19,211			(0.6)		21.1
Bank owned life insurance ("BOLI")			13,847			13,758			13,475			0.6		2.8
Deferred tax assets			5,552			5,512			6,029			0.7		(7.9)
Federal Home Loan Bank ("FHLB") stock			5,992			6,037			4,735			(0.7)		26.5
Accrued interest receivable			4,483			4,462			3,839			0.5		16.8
Other real estate owned ("OREO")			1,172			1,050			1,417			11.6		(17.3)
Goodwill and other intangibles			1,516			1,516			1,516			-		-
Other assets			6,123			5,896			3,175			3.9		92.9
Total assets		$	1,226,168		$	1,189,906		$	1,120,955			3.0	%	9.4	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand		$	220,750		$	215,963		$	188,026			2.2	%	17.4	%
Interest-bearing demand			146,091			145,654			128,774			0.3		13.4
Savings			389,802			363,462			320,982			7.2		21.4
Time, under $100,000			124,907			123,724			145,784			1.0		(14.3)
Time, $100,000 and over, under $250,000			76,835			75,567			106,419			1.7		(27.8)
Time, $250,000 and over			22,318			21,353			36,834			4.5		(39.4)
Total deposits			980,703			945,723			926,819			3.7		5.8
Borrowed funds			120,000			121,000			95,000			(0.8)		26.3
Subordinated debentures			10,310			10,310			10,310			-		-
Accrued interest payable			405			430			390			(5.8)		3.8
Accrued expenses and other liabilities			5,445			6,152			6,160			(11.5)		(11.6)
Total liabilities			1,116,863			1,083,615			1,038,679			3.1		7.5
Shareholders' equity:
Common stock			85,757			85,383			59,546			0.4		44.0
Retained earnings			23,414			20,748			23,431			12.8		(0.1)
Accumulated other comprehensive income			134			160			(701)			NM		NM
Total shareholders' equity			109,305			106,291			82,276			2.8		32.9
Total liabilities and shareholders' equity		$	1,226,168		$	1,189,906		$	1,120,955			3.0	%	9.4	%
Issued and outstanding common shares			10,535			10,477			9,315
NM=Not meaningful

			UNITY BANCORP, INC.
			QTD CONSOLIDATED STATEMENTS OF INCOME
			NON-GAAP
			March 31, 2017
												March 31, 2017 vs.
		For the three months ended										December 31, 2016						March 31, 2016
(In thousands, except percentages and per share amounts)		March 31, 2017			December 31, 2016			March 31, 2016				$			%			$			%
INTEREST INCOME
Federal funds sold and interest-bearing deposits		$	129		$	79		$	44			$	50			63.3	%	$	85			193.2	%
FHLB stock			93			71			52				22			31.0			41			78.8
Securities:
Taxable			491			452			363				39			8.6			128			35.3
Tax-exempt			44			44			62				-			-			(18)			(29.0)
Total securities			535			496			425				39			7.9			110			25.9
Loans:
SBA loans			854			850			721				4			0.5			133			18.4
SBA 504 loans			301			306			385				(5)			(1.6)			(84)			(21.8)
Commercial loans			6,166			6,226			5,676				(60)			(1.0)			490			8.6
Residential mortgage loans			3,384			3,188			2,942				196			6.1			442			15.0
Consumer loans			1,132			1,064			931				68			6.4			201			21.6
Total loans			11,837			11,634			10,655				203			1.7			1,182			11.1
Total interest income			12,594			12,280			11,176				314			2.6			1,418			12.7
INTEREST EXPENSE
Interest-bearing demand deposits			153			147			137				6			4.1			16			11.7
Savings deposits			583			537			366				46			8.6			217			59.3
Time deposits			804			845			951				(41)			(4.9)			(147)			(15.5)
Borrowed funds and subordinated debentures			664			696			735				(32)			(4.6)			(71)			(9.7)
Total interest expense			2,204			2,225			2,189				(21)			(0.9)			15			0.7
Net interest income			10,390			10,055			8,987				335			3.3			1,403			15.6
Provision for loan losses			250			200			200				50			25.0			50			25.0
Net interest income after provision for loan losses			10,140			9,855			8,787				285			2.9			1,353			15.4
NONINTEREST INCOME
Branch fee income			331			329			333				2			0.6			(2)			(0.6)
Service and loan fee income			407			224			255				183			81.7			152			59.6
Gain on sale of SBA loans held for sale, net			485			515			308				(30)			(5.8)			177			57.5
Gain on sale of mortgage loans, net			637			702			715				(65)			(9.3)			(78)			(10.9)
BOLI income			88			94			94				(6)			(6.4)			(6)			(6.4)
Net security gains			-			238			94				(238)			(100.0)			(94)			(100.0)
Other income			256			271			217				(15)			(5.5)			39			18.0
Total noninterest income			2,204			2,373			2,016				(169)			(7.1)			188			9.3
NONINTEREST EXPENSE
Compensation and benefits			4,095			3,822			3,549				273			7.1			546			15.4
Occupancy			600			618			618				(18)			(2.9)			(18)			(2.9)
Processing and communications			604			648			644				(44)			(6.8)			(40)			(6.2)
Furniture and equipment			511			453			420				58			12.8			91			21.7
Professional services			226			266			255				(40)			(15.0)			(29)			(11.4)
Loan collections & OREO expenses			341			387			72				(46)			(11.9)			269			373.6
Other loan expenses			83			32			104				51			159.4			(21)			(20.2)
Deposit insurance			76			220			160				(144)			(65.5)			(84)			(52.5)
Advertising			236			247			241				(11)			(4.5)			(5)			(2.1)
Director fees			197			144			135				53			36.8			62			45.9
Other expenses			471			466			409				5			1.1			62			15.2
Total noninterest expense			7,440			7,303			6,607				137			1.9			833			12.6
Income before provision for income taxes			4,904			4,925			4,196				(21)			(0.4)			708			16.9
Provision for income taxes			1,712			1,765			1,464				(53)			(3.0)			248			16.9
Net income before gain on subordinated debenture		$	3,192		$	3,160		$	2,732			$	32			1.0	%	$	460			16.8	%
Gain on subordinated debenture, net of tax			-			-			1,473				-			NM			(1,473)			NM
Net income		$	3,192		$	3,160		$	4,205			$	32			1.0	%	$	(1,013)			(24.1)	%
Effective tax rate			34.9	%		35.8	%		34.9	%
Net income per:
Common share - basic		$	0.30		$	0.33		$	0.45
Common share - diluted		$	0.30		$	0.32		$	0.44
Weighted average common shares outstanding - Basic			10,509			9,700			9,304
Weighted average common shares outstanding - Diluted			10,705			9,878			9,550

			UNITY BANCORP, INC.
			QUARTER TO DATE NET INTEREST MARGIN
			March 31, 2017
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
		For the three months ended
		March 31, 2017									December 31, 2016
		Average Balance			Interest			Rate/Yield			Average Balance			Interest			Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits		$	77,943		$	129			0.67	%	$	73,087		$	79			0.43	%
FHLB stock			5,776			93			6.53			5,773			71			4.89
Securities:
Taxable			64,148			491			3.10			58,622			452			3.07
Tax-exempt			6,443			67			4.22			6,420			67			4.15
Total securities (A)			70,591			558			3.21			65,042			519			3.17
Loans:
SBA loans			57,960			854			5.98			59,519			850			5.68
SBA 504 loans			26,050			301			4.69			25,498			306			4.77
Commercial loans			512,543			6,166			4.88			504,331			6,226			4.91
Residential mortgage loans			297,203			3,384			4.62			289,028			3,188			4.39
Consumer loans			94,217			1,132			4.87			90,549			1,064			4.67
Total loans (B)			987,973			11,837			4.86			968,925			11,634			4.78
Total interest-earning assets		$	1,142,283		$	12,617			4.48	%	$	1,112,827		$	12,303			4.40	%
Noninterest-earning assets:
Cash and due from banks			23,578									24,851
Allowance for loan losses			(12,785)									(12,819)
Other assets			55,493									53,614
Total noninterest-earning assets			66,286									65,646
Total assets		$	1,208,569								$	1,178,473
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits		$	152,392		$	153			0.41	%	$	142,872		$	147			0.41	%
Total savings deposits			378,439			583			0.62			361,379			537			0.59
Total time deposits			222,307			804			1.47			230,594			845			1.46
Total interest-bearing deposits			753,138			1,540			0.83			734,845			1,529			0.83
Borrowed funds and subordinated debentures			125,499			664			2.15			125,440			696			2.21
Total interest-bearing liabilities		$	878,637		$	2,204			1.02	%	$	860,285		$	2,225			1.03	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			215,405									218,216
Other liabilities			6,792									6,631
Total noninterest-bearing liabilities			222,197									224,847
Total shareholders' equity			107,735									93,341
Total liabilities and shareholders' equity		$	1,208,569								$	1,178,473
Net interest spread					$	10,413			3.46	%				$	10,078			3.37	%
Tax-equivalent basis adjustment						(23)									(23)
Net interest income					$	10,390								$	10,055
Net interest margin									3.70	%								3.60	%
(A) Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis.  They are reduced by the nondeductible
portion of interest expense, assuming a federal tax rate of 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
			March 31, 2017
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)
		For the three months ended
		March 31, 2017									March 31, 2016
		Average Balance			Interest			Rate/Yield			Average Balance			Interest			Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits		$	77,943		$	129			0.67	%	$	78,681		$	44			0.22	%
FHLB stock			5,776			93			6.53			4,549			52			4.60
Securities:
Taxable			64,148			491			3.10			59,152			363			2.47
Tax-exempt			6,443			67			4.22			9,548			94			3.96
Total securities (A)			70,591			558			3.21			68,700			457			2.68
Loans:
SBA loans			57,960			854			5.98			53,942			721			5.38
SBA 504 loans			26,050			301			4.69			29,232			385			5.30
Commercial loans			512,543			6,166			4.88			463,927			5,676			4.92
Residential mortgage loans			297,203			3,384			4.62			264,208			2,942			4.48
Consumer loans			94,217			1,132			4.87			78,328			931			4.78
Total loans (B)			987,973			11,837			4.86			889,637			10,655			4.82
Total interest-earning assets		$	1,142,283		$	12,617			4.48	%	$	1,041,567		$	11,208			4.33	%
Noninterest-earning assets:
Cash and due from banks			23,578									27,006
Allowance for loan losses			(12,785)									(12,926)
Other assets			55,493									45,486
Total noninterest-earning assets			66,286									59,566
Total assets		$	1,208,569								$	1,101,133
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits		$	152,392		$	153			0.41	%	$	131,339		$	137			0.42	%
Total savings deposits			378,439			583			0.62			310,251			366			0.47
Total time deposits			222,307			804			1.47			282,110			951			1.36
Total interest-bearing deposits			753,138			1,540			0.83			723,700			1,454			0.81
Borrowed funds and subordinated debentures			125,499			664			2.15			104,350			735			2.83
Total interest-bearing liabilities		$	878,637		$	2,204			1.02	%	$	828,050		$	2,189			1.06	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			215,405									187,226
Other liabilities			6,792									5,528
Total noninterest-bearing liabilities			222,197									192,754
Total shareholders' equity			107,735									80,329
Total liabilities and shareholders' equity		$	1,208,569								$	1,101,133
Net interest spread					$	10,413			3.46	%				$	9,019			3.27	%
Tax-equivalent basis adjustment						(23)									(32)
Net interest income					$	10,390								$	8,987
Net interest margin									3.70	%								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 nondeductible
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
			March 31, 2017
Amounts in thousands, except percentages		Mar. 31, 2017			Dec. 31, 2016			Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016
ALLOWANCE FOR LOAN LOSSES:
Balance, beginning of period		$	12,579		$	12,685		$	12,758		$	12,634		$	12,759
Provision for loan losses charged to expense			250			200			420			400			200
			12,829			12,885			13,178			13,034			12,959
Less: Chargeoffs
SBA loans			109			189			140			142			86
Commercial loans			76			19			376			152			228
Residential mortgage loans			-			101			-			-			-
Consumer loans			66			2			-			-			28
Total chargeoffs			251			311			516			294			342
Add: Recoveries
SBA loans			37			1			17			4			11
Commercial loans			53			4			6			13			6
Residential mortgage loans			12			-			-			-			-
Consumer loans			1			-			-			1			-
Total recoveries			103			5			23			18			17
Net chargeoffs (recoveries)			148			306			493			276			325
Balance, end of period		$	12,681		$	12,579		$	12,685		$	12,758		$	12,634
LOAN QUALITY INFORMATION:
Nonperforming loans (1)		$	7,758		$	7,237		$	6,527		$	6,541		$	6,887
Other real estate owned ("OREO")			1,172			1,050			1,703			1,702			1,417
Nonperforming assets			8,930			8,287			8,230			8,243			8,304
Less:  Amount guaranteed by SBA			60			60			624			134			243
Net nonperforming assets		$	8,870		$	8,227		$	7,606		$	8,109		$	8,061
Loans 90 days past due & still accruing		$	-		$	-		$	-		$	485		$	-
Performing Troubled Debt Restructurings (TDRs)		$	-		$	-		$	665		$	772		$	844
(1) Nonperforming TDRs included in nonperforming loans			-			153			154			161			293
Total TDRs		$	-		$	153		$	819		$	933		$	1,137
Allowance for loan losses to:
Total loans at quarter end			1.27	%		1.29	%		1.34	%		1.39	%		1.42	%
Nonperforming loans (1)			163.46			173.82			194.35			195.05			183.45
Nonperforming assets			142.00			151.79			154.13			154.77			152.14
Net nonperforming assets			142.97			152.90			166.78			157.33			156.73
QTD net chargeoffs (annualized) to QTD average loans:
SBA loans			0.50	%		1.26	%		0.86	%		0.98	%		0.56	%
Commercial loans			0.02			0.01			0.30			0.12			0.19
Residential mortgage loans			(0.02)			0.14			-			-			-
Consumer loans			0.28			0.01			-			-			0.14
Total loans			0.06	%		0.13	%		0.21	%		0.12	%		0.15	%
Nonperforming loans to total loans			0.78	%		0.74	%		0.69	%		0.71	%		0.78	%
Nonperforming loans and TDRs to total loans			0.78			0.74			0.76			0.80			0.87
Nonperforming assets to total loans and OREO			0.89			0.85			0.86			0.90			0.93
Nonperforming assets to total assets			0.73			0.70			0.71			0.73			0.74

			UNITY BANCORP, INC.
			QUARTERLY FINANCIAL DATA
			NON-GAAP
			March 31, 2017
(In thousands, except percentages and per share amounts)		Mar. 31, 2017			Dec. 31, 2016			Sept. 30, 2016			Jun. 30, 2016			Mar. 31, 2016
SUMMARY OF INCOME:
Total interest income		$	12,594		$	12,280		$	12,081		$	11,487		$	11,176
Total interest expense			2,204			2,225			2,208			2,145			2,189
Net interest income			10,390			10,055			9,873			9,342			8,987
Provision for loan losses			250			200			420			400			200
Net interest income after provision for loan losses			10,140			9,855			9,453			8,942			8,787
Total noninterest income			2,204			2,373			2,173			2,234			2,016
Total noninterest expense			7,440			7,303			6,993			6,728			6,607
Income before provision for income taxes and gain on subordinated debenture			4,904			4,925			4,633			4,448			4,196
Provision for income taxes			1,712			1,765			1,613			1,624			1,464
Net income before gain on subordinated debenture		$	3,192		$	3,160		$	3,020		$	2,824		$	2,732
Gain on subordinated debenture, net of tax			-			-			-			-			1,473
Net income		$	3,192		$	3,160		$	3,020		$	2,824		$	4,205
Net income per common share - Basic		$	0.30		$	0.33		$	0.32		$	0.30		$	0.45
Net income per common share - Diluted		$	0.30		$	0.32		$	0.32		$	0.30		$	0.44
COMMON SHARE DATA:
Market price per share		$	16.95		$	15.70		$	12.82		$	11.56		$	10.34
Dividends paid		$	0.05		$	0.05		$	0.05		$	0.04		$	0.04
Book value per common share		$	10.38		$	10.14		$	9.45		$	9.10		$	8.83
Weighted average common shares outstanding - Basic			10,509			9,700			9,339			9,318			9,304
Weighted average common shares outstanding - Diluted			10,705			9,878			9,496			9,468			9,550
Issued and outstanding common shares			10,535			10,477			9,331			9,336			9,315
PERFORMANCE RATIOS (Annualized):
Return on average assets			1.07	%		1.07	%		1.05	%		1.03	%		1.54	%
Return on average equity			12.02			13.47			13.90			13.59			21.05
Efficiency ratio			59.08			59.90			58.11			58.53			50.16
BALANCE SHEET DATA:
Total assets		$	1,226,168		$	1,189,906		$	1,152,896		$	1,128,370		$	1,120,955
Total deposits			980,703			945,723			933,320			912,198			926,819
Total loans			1,000,677			973,414			949,832			915,043			886,990
Total securities			73,022			61,547			72,360			73,994			66,729
Total shareholders' equity			109,305			106,291			88,152			84,967			82,276
Allowance for loan losses			(12,681)			(12,579)			(12,685)			(12,758)			(12,634)
TAX EQUIVALENT YIELDS AND RATES:
Interest-earning assets			4.48	%		4.40	%		4.45	%		4.44	%		4.33	%
Interest-bearing liabilities			1.02			1.03			1.04			1.05			1.06
Net interest spread			3.46			3.37			3.41			3.39			3.27
Net interest margin			3.70			3.60			3.63			3.61			3.48
CREDIT QUALITY:
Nonperforming assets			8,930			8,287			8,230			8,243			8,304
QTD net chargeoffs (annualized) to QTD average loans			0.06	%		0.13	%		0.21	%		0.12	%		0.15	%
Allowance for loan losses to total loans			1.27			1.29			1.34			1.39			1.42
Nonperforming assets to total loans and OREO			0.89			0.85			0.86			0.90			0.93
Nonperforming assets to total assets			0.73			0.70			0.71			0.73			0.74
CAPITAL RATIOS AND OTHER:
Total equity to total assets			8.91	%		8.93	%		7.65	%		7.53	%		7.34	%
Leverage ratio			9.72			9.73			8.49			8.52			8.31
Common equity tier 1 risk-based capital ratio			11.46			11.49			9.63			9.70			9.77
Tier 1 risk-based capital ratio			12.53			12.58			10.74			10.85			10.97
Total risk-based capital ratio			13.78			13.84			11.48			12.11			12.22
Number of banking offices			17			17			15			15			15
Number of ATMs			18			18			16			16			16
Number of employees			181			184			180			172			172

News Media & Financial Analyst Contact:
Alan J. Bedner, EVP
Chief Financial Officer
(908) 713-4308

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.