Market Overview

Unity Bancorp Reports Continued Improvement in Earnings

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CLINTON, N.J., Oct. 25, 2012 /PRNewswire/ -- Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income available to common shareholders of $799 thousand, or $0.10 per diluted share, for the three months ended September 30, 2012, compared to $700 thousand, or $0.09 per diluted share, for the same period a year ago.  Return on average assets and average common equity for the quarter were 0.60% and 5.74%, respectively, compared to 0.54% and 5.27% for the same period a year ago. 

For the nine months ended September 30, 2012, net income available to common shareholders totaled $1.9 million, or $0.24 per diluted share, compared to $786 thousand, or $0.10 per diluted share, for the same period a year ago.  Return on average assets and average common equity for the nine months were 0.51% and 4.61%, respectively, compared to 0.32% and 2.04% for the same period a year ago. 

Highlights for the quarter include:

  • Nonperforming assets improved for the third consecutive quarter with a decline of $3.4 million to $18.8 million from $22.2 million at June 30, 2012.
  • Improved credit quality resulted in lower loan loss provisions as well as reduced loan collection expenses and costs to maintain other real estate owned ("OREO").
  • Significant increases in residential mortgage originations resulted in increased gains on sale of mortgage loans.
  • Net interest margin expanded to 3.72% this quarter from 3.68% for the quarter ended June 30, 2012.
  • Continued deposit product mix improvement.  Growth in core demand deposits and savings deposits, while higher costing time deposits declined. 
  • Further improvement in our capital ratios as we remain "well-capitalized."
  • Closed our William Penn Highway, Pennsylvania branch and received regulatory approval for the new Somerset, New Jersey branch which is expected to open in November 2012.

James A. Hughes, President and CEO, stated, "This was another quarter of increased earnings as our core fundamentals continued to improve and asset quality strengthened.  We enhanced our net interest margin over the second quarter of 2012 through strategic deposit pricing, coupled with increasing levels of noninterest-bearing deposits.  The trends are very positive and I remain extremely optimistic about the long-term opportunities ahead."    

Net Interest Income

Net interest income decreased $326 thousand to $7.0 million for the three months ended September 30, 2012 compared to the prior year's quarter and decreased $1.6 million to $20.7 million for the nine months ended September 30, 2012 compared to the prior year's period.  In addition, the net interest margin contracted 13 basis points to 3.72% for the quarter ended September 30, 2012 and contracted 23 basis points to 3.65% for the nine months ended September 30, 2012 when compared to the prior year periods. 

Our net interest income continues to be influenced by the sustained low interest rate environment, which the Federal Open Market Committee ("FOMC") forecasts will remain through mid-2015.  This rate environment has resulted in a tighter net interest margin as our earning assets re-price at lower rates.  The yield on earning assets fell 51 basis points to 4.70% and 58 basis points to 4.70% for the quarter and year-to-date periods ending September 30, 2012, respectively, when compared to the same periods in 2011.   Partially offsetting these declines are lower funding costs. The cost of interest-bearing liabilities decreased 43 basis points to 1.19% for the three month period and decreased 37 basis points to 1.29% for the nine month period.

Noninterest Income

Noninterest income increased $120 thousand to $1.8 million and $974 thousand to $5.3 million for the three and nine months ended September 30, 2012, respectively, compared to the prior year's period. These increases were driven by record levels of residential mortgage loan originations and sales.  Additional factors affecting noninterest income were:

  • Branch fee income, which consists of deposit service charges and overdraft fees, increased due to higher levels of overdraft fees year-to-date partially offset by reduced deposit account service charges.
  • Service and loan fee income increased due to late charges, servicing income and other processing fees.   
  • Gains on sales of SBA loans decreased due to a lower volume of loans being sold in each period.  For the three month period, $442 thousand in SBA loans were sold compared to $5.1 million in sales in the third quarter of 2011.  Year-to-date, $4.7 million in SBA loans were sold compared to $11.1 million in the prior year period. 
  • Gains on sales of residential mortgage loans increased on a significantly higher volume of loan sales.   For the three month period, $30.1 million in residential mortgage loans were sold compared to $13.3 million in the third quarter of 2011.  Year-to-date, $71.6 million in residential mortgage loans were sold compared to $29.0 million in the prior year's period. 
  • Security gains of $7 thousand and $514 thousand were realized during the quarter and year to date periods, respectively. 

Noninterest Expense

Noninterest expense totaled $6.0 million and $6.1 million for the three months ended September 30, 2012 and 2011, respectively, and $18.2 million and $18.5 million for the nine months ended September 30, 2012 and 2011, respectively. 

Noninterest expense in the current and prior year periods included the impact of our branch network restructuring.   In March 2012, we opened our Washington Township, New Jersey branch.  In the third quarter of 2012, we announced we would be closing our William Penn Highway, Pennsylvania branch and recognized approximately $32 thousand in residual lease and fixed asset disposal expenses.  Also, during the third quarter we announced we would be opening a new branch in Somerset, New Jersey and have subsequently begun to incur lease and other operating expenses.  For the nine months ended September 30, 2011, we incurred $215 thousand in residual lease obligation and fixed asset disposals related to closing two underperforming branches.  Other factors which affected noninterest expense include:

  • Compensation and benefits expense increased due to higher payroll costs, mortgage origination commissions, equity compensation and medical benefits expenses.
  • Occupancy expense increased over the third quarter of 2011 due to rental expense from our new Somerset branch, residual lease expenses from closing our William Penn branch and increased depreciation expenses due to the new Washington branch.  For the year-to-date period, occupancy expense declined as the above noted increases were offset by higher snow removal expenses in 2011 and the branch closure related expenses in 2011 noted above.
  • Furniture and equipment expense decreased due primarily to the branch closure cost savings noted above, partially offset by expenses related to our new Washington branch. 
  • Loan collection costs decreased due to lower loan legal, appraisal, insurance and other collection related expenses. 
  • OREO costs, such as property valuation adjustments, property taxes and maintenance expenses, decreased significantly as credit quality improved.
  • Deposit insurance expense decreased year-to-date due to the new assets-based assessment method put into place by the FDIC on April 1, 2011. 
  • Advertising expenses, such as promotional activities related to our new branches and in response to increased competition within our market place, combined with participation in community events and higher direct mail costs, increased year-to-date.

Financial Condition

At September 30, 2012, total assets were $802.7 million, a decrease of $8.2 million from the prior year-end.

  • Total securities decreased $1.1 million since December 31, 2011, due to $32.8 million in security purchases, offset by sales and an increased level of prepayments. 
  • Total loans increased $4.3 million or 0.7% to $596.9 million at September 30, 2012. The Company plans to continue shrinking its SBA portfolio.  Future loan growth is expected in both the commercial and residential portfolios as reflected in our year-to-date performance. The net increase was the result of the following:
    • Commercial loans increased $23.5 million or 8.3%,
    • Residential mortgage loans increased $3.1 million or 2.3%,
    • SBA 504 loans decreased $13.3 million or 24.2%,
    • SBA 7(a) loans decreased $4.8 million or 6.7%, and
    • Consumer loans decreased $4.1 million or 8.4%.    
  • Core deposits, which exclude time deposits, increased $21.0 million during the year to $505.6 million, due primarily to a $10.3 million increase in municipal deposits.  The net changes by product type include: 
    • A $17.0 million increase in savings deposits, and a
    • $4.3 million increase in noninterest-bearing demand deposits, partially offset by a
    • $280 thousand decrease in interest-bearing demand deposits.
  • Time deposits decreased $31.9 million from year-end due to the maturity and planned run off of brokered deposits, as well as a high rate retail promotion that was completed late in 2008 to bolster liquidity.   
  • Shareholders' equity was $76.4 million at September 30, 2012, an increase of $2.9 million from year-end 2011, primarily due to the increase in net income.
  • Book value per common share was $7.52 as of September 30, 2012.
  • At September 30, 2012 the leverage, Tier I and Total Risk Based Capital ratios were 11.20%, 14.52% and 15.78%, respectively, all in excess of the ratios required to be deemed "well-capitalized."

Credit Quality

"Nonperforming assets have declined $7.0 million or 27.2% to $18.8 million since year-end 2011.  This is the lowest level since 2008 and I expect this trend to continue", said James A. Hughes.   "Many of our problem commercial and SBA relationships have been resolved and the majority of our problem relationships are behind us."

  • Nonperforming assets totaled $18.8 million at September 30, 2012 or 3.14% of total loans and OREO, compared to $25.8 million or 4.33% of total loans and OREO at year-end 2011.
  • The allowance for loan losses totaled $15.3 million at September 30, 2012 or 2.56% of total loans. The provision for loan losses for the quarter ended September 30, 2012 was $1.0 million compared to $1.4 million for the prior year's quarter.  The provision for loan losses for the nine months ended September 30, 2012 was $3.2 million compared to $5.7 million for the prior year's period.
  • Net charge-offs were $2.0 million for the three months ended September 30, 2012, compared to $971 thousand for the same period a year ago.  For the nine months ended September 30, 2012, net charge-offs were $4.3 million, compared to $3.6 million for the prior year's period.
  • Troubled debt restructurings ("TDRs") decreased $2.2 million from year-end to $18.9 million due to loan payoffs.  At September 30, 2012, 91.4% of our TDRs were performing.  

Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $803 million in assets and $633 million in deposits.  Unity Bank provides financial services to retail, corporate and small business customers through its 15 retail service centers located in Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County, Pennsylvania.  For additional information about Unity, visit our website at www.unitybank.com, or call 800-618-BANK.

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

 

UNITY BANCORP, INC.


SUMMARY FINANCIAL HIGHLIGHTS 


September 30, 2012











































 September 30, 2012 vs. 











June 30, 2012


September 30, 2011


(In thousands, except percentages and per share amounts)


September 30, 2012


June 30, 2012


September 30, 2011



%


%


BALANCE SHEET DATA:
















Total assets


$

802,675


$

785,111


$

820,652



2.2%


(2.2)%


Total deposits



633,126



616,443



654,171



2.7


(3.2)


Total loans



596,910



604,901



603,633



(1.3)


(1.1)


Total securities



106,437



114,846



100,752



(7.3)


5.6


Total shareholders' equity



76,387



74,901



73,136



2.0


4.4


Allowance for loan losses



(15,294)



(16,284)



(16,447)



6.1


7.0


















FINANCIAL DATA - QUARTER TO DATE:
















Income before provision for income taxes


$

1,802


$

1,494


$

1,506



20.6


19.7


Provision for income taxes



606



518



420



17.0


44.3


Net income 



1,196



976



1,086



22.5


10.1


Preferred stock dividends and discount accretion



397



401



386



(1.0)


2.8


Income available to common shareholders


$

799


$

575


$

700



39.0


14.1


















Net income per common share - Basic (1)


$

0.11


$

0.08


$

0.09



37.5


22.2


Net income per common share - Diluted (1)


$

0.10


$

0.07


$

0.09



42.9


11.1


















Return on average assets



0.60%


0.49%



0.54%



22.4


11.1


Return on average equity (2)



5.74%


4.25%



5.27%



35.1


8.9


Efficiency ratio



68.22%


73.72%



69.80%



(7.5)


(2.3)


















FINANCIAL DATA - YEAR TO DATE:
















Income before provision for income taxes


$

4,660





$

2,498





86.5


Provision for income taxes



1,583






548





188.9


Net income 



3,077






1,950





57.8


Preferred stock dividends and discount accretion



1,195






1,164





2.7


Income available to common shareholders


$

1,882





$

786





139.4


















Net income per common share - Basic (1)


$

0.25





$

0.11





127.3


Net income per common share - Diluted (1)


$

0.24





$

0.10





140.0


















Return on average assets



0.51%





0.32%





59.4


Return on average equity (2)



4.61%





2.04%





126.0


Efficiency ratio



71.20%





70.36%





1.2


















SHARE INFORMATION:
















Market price per share


$

6.13


$

6.00


$

6.65



2.2


(7.8)


Dividends paid


$

-


$

-


$

-



-


-


Book value per common share


$

7.52


$

7.38


$

7.25



1.9


3.7


Average diluted shares outstanding (QTD)



7,782



7,784



7,781



-


-


















CAPITAL RATIOS:
















Total equity to total assets



9.52%


9.54%



8.91%



(0.2)


6.8


Leverage ratio



11.20%


11.08%



10.69%



1.1


4.8


Tier 1 risk-based capital ratio



14.52%


14.22%



13.88%



2.1


4.6


Total risk-based capital ratio



15.78%


15.49%



15.14%



1.9


4.2


















CREDIT QUALITY AND RATIOS:
















Nonperforming assets


$

18,790


$

22,186


$

24,153



(15.3)


(22.2)


QTD net chargeoffs (annualized) to QTD average loans



1.32%


0.71%



0.63%



85.9


109.5


Allowance for loan losses to total loans



2.56%


2.69%



2.72%



(4.8)


(5.9)


Nonperforming assets to total loans and OREO



3.14%


3.65%



3.98%



(14.0)


(21.1)


Nonperforming assets to total assets



2.34%



2.83%



2.94%



(17.3)%


(20.4)%


































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




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


















































UNITY BANCORP, INC.


CONSOLIDATED BALANCE SHEETS 


September 30, 2012














































 September 30, 2012 vs. 














December 31, 2011


September 30, 2011


(In thousands, except percentages)


September 30, 2012


December 31, 2011


September 30, 2011



%


%


ASSETS
















Cash and due from banks


$

17,027


$

17,688


$

15,965



(3.7)%


6.7%


Federal funds sold and interest-bearing deposits



55,536



64,886



74,125



(14.4)


(25.1)


Cash and cash equivalents



72,563



82,574



90,090



(12.1)


(19.5)


Securities:
















Securities available for sale



90,852



88,765



88,083



2.4


3.1


Securities held to maturity



15,585



18,771



12,669



(17.0)


23.0


Total securities



106,437



107,536



100,752



(1.0)


5.6


Loans:
















SBA loans held for sale



7,708



7,668



9,284



0.5


(17.0)


SBA loans held to maturity



59,299



64,175



66,363



(7.6)


(10.6)


SBA 504 loans



41,771



55,108



55,520



(24.2)


(24.8)


Commercial loans



306,569



283,104



284,046



8.3


7.9


Residential mortgage loans



137,192



134,090



136,942



2.3


0.2


Consumer loans



44,371



48,447



51,478



(8.4)


(13.8)


Total loans



596,910



592,592



603,633



0.7


(1.1)


Allowance for loan losses



(15,294)



(16,348)



(16,447)



6.4


7.0


Net loans



581,616



576,244



587,186



0.9


(0.9)


















Premises and equipment, net



12,016



11,350



10,648



5.9


12.8


Bank owned life insurance ("BOLI")



9,327



9,107



9,033



2.4


3.3


Deferred tax assets



6,221



6,878



6,889



(9.6)


(9.7)


Federal Home Loan Bank stock



3,989



4,088



4,088



(2.4)


(2.4)


Accrued interest receivable



3,478



3,703



3,519



(6.1)


(1.2)


Other real estate owned ("OREO")



1,456



3,032



3,555



(52.0)


(59.0)


Prepaid FDIC insurance



2,079



2,545



2,653



(18.3)


(21.6)


Goodwill and other intangibles



1,518



1,530



1,533



(0.8)


(1.0)


Other assets



1,975



2,259



706



(12.6)


179.7


















Total assets


$

802,675


$

810,846


$

820,652



(1.0)%


(2.2)%


















LIABILITIES AND SHAREHOLDERS' EQUITY
















Liabilities:
















Deposits:
















Noninterest-bearing demand deposits


$

105,529


$

101,193


$

93,706



4.3%


12.6%


Interest-bearing demand deposits



104,469



104,749



100,807



(0.3)


3.6


Savings deposits



295,567



278,603



296,571



6.1


(0.3)


Time deposits, under $100,000



78,104



102,809



105,840



(24.0)


(26.2)


Time deposits, $100,000 and over



49,457



56,617



57,247



(12.6)


(13.6)


Total deposits



633,126



643,971



654,171



(1.7)


(3.2)


















Borrowed funds



75,000



75,000



75,000



-


-


Subordinated debentures



15,465



15,465



15,465



-


-


Accrued interest payable



464



523



533



(11.3)


(12.9)


Accrued expenses and other liabilities



2,233



2,329



2,347



(4.1)


(4.9)


Total liabilities



726,288



737,288



747,516



(1.5)


(2.8)


















Shareholders' equity:
















Cumulative perpetual preferred stock



19,968



19,545



19,409



2.2


2.9


Common stock



54,176



53,746



53,663



0.8


1.0


Retained earnings (deficit)



1,028



(854)



(1,056)



220.4


197.3


Accumulated other comprehensive income 



1,215



1,121



1,120



8.4


8.5


Total shareholders' equity



76,387



73,558



73,136



3.8


4.4


















Total liabilities and shareholders' equity


$

802,675


$

810,846


$

820,652



(1.0)%


(2.2)%


















Preferred shares



21



21



21







Issued and outstanding common shares



7,503



7,459



7,413


























































UNITY BANCORP, INC.





QTD CONSOLIDATED STATEMENTS OF INCOME 





September 30, 2012




















































 For the three months ended 



 September 30, 2012 vs. 











June 30, 2012


September 30, 2011


(In thousands, except percentages and per share amounts)


September 30, 2012


June 30, 2012


September 30, 2011



$


%


$


%


INTEREST INCOME
























Federal funds sold and interest-bearing deposits


$

13


$

11


$

6



$

2



18.2%


$

7



116.7%


Federal Home Loan Bank stock



50



44



46




6



13.6



4



8.7


Securities:
























Securities available for sale



656



690



804




(34)



(4.9)



(148)



(18.4)


Securities held to maturity



146



163



157




(17)



(10.4)



(11)



(7.0)


Total securities



802



853



961




(51)



(6.0)



(159)



(16.5)


Loans:
























SBA loans



881



846



1,243




35



4.1



(362)



(29.1)


SBA 504 loans



647



691



838




(44)



(6.4)



(191)



(22.8)


Commercial loans



4,313



4,216



4,417




97



2.3



(104)



(2.4)


Residential mortgage loans



1,631



1,582



1,825




49



3.1



(194)



(10.6)


Consumer loans



534



529



616




5



0.9



(82)



(13.3)


Total loans



8,006



7,864



8,939




142



1.8



(933)



(10.4)


Total interest income



8,871



8,772



9,952




99



1.1



(1,081)



(10.9)


INTEREST EXPENSE
























Interest-bearing demand deposits



108



123



137




(15)



(12.2)



(29)



(21.2)


Savings deposits



293



287



536




6



2.1



(243)



(45.3)


Time deposits



619



689



979




(70)



(10.2)



(360)



(36.8)


Borrowed funds and subordinated debentures



824



816



947




8



1.0



(123)



(13.0)


Total interest expense



1,844



1,915



2,599




(71)



(3.7)



(755)



(29.0)


Net interest income



7,027



6,857



7,353




170



2.5



(326)



(4.4)


Provision for loan losses



1,000



1,000



1,400




-



-



(400)



(28.6)


Net interest income after provision for loan losses



6,027



5,857



5,953




170



2.9



74



1.2


NONINTEREST INCOME
























Branch fee income



383



362



374




21



5.8



9



2.4


Service and loan fee income



366



287



213




79



27.5



153



71.8


Gain on sale of SBA loans held for sale, net



46



223



338




(177)



(79.4)



(292)



(86.4)


Gain on sale of mortgage loans, net



662



453



250




209



46.1



412



164.8


BOLI income



74



73



74




1



1.4



-



-


Net security gains 



7



283



266




(276)



(97.5)



(259)



(97.4)


Other income



236



160



139




76



47.5



97



69.8


Total noninterest income



1,774



1,841



1,654




(67)



(3.6)



120



7.3


NONINTEREST EXPENSE
























Compensation and benefits



3,191



3,133



2,944




58



1.9



247



8.4


Occupancy



690



740



615




(50)



(6.8)



75



12.2


Processing and communications



544



553



549




(9)



(1.6)



(5)



(0.9)


Furniture and equipment



368



355



384




13



3.7



(16)



(4.2)


Professional services



196



211



206




(15)



(7.1)



(10)



(4.9)


Loan collection costs



182



91



235




91



100.0



(53)



(22.6)


OREO expenses



36



237



491




(201)



(84.8)



(455)



(92.7)


Deposit insurance



162



168



60




(6)



(3.6)



102



170.0


Advertising



181



302



187




(121)



(40.1)



(6)



(3.2)


Other expenses



449



414



430




35



8.5



19



4.4


Total noninterest expense



5,999



6,204



6,101




(205)



(3.3)



(102)



(1.7)


Income before provision for income taxes



1,802



1,494



1,506




308



20.6



296



19.7


Provision for income taxes



606



518



420




88



17.0



186



44.3


Net income 



1,196



976



1,086




220



22.5



110



10.1


Preferred stock dividends and discount accretion



397



401



386




(4)



(1.0)



11



2.8


Income available to common shareholders


$

799


$

575


$

700



$

224



39.0%


$

99



14.1%


























Effective tax rate



33.6%



34.7%



27.9%







































Net income per common share - Basic (1)


$

0.11


$

0.08


$

0.09















Net income per common share - Diluted (1)


$

0.10


$

0.07


$

0.09







































Weighted average common shares outstanding - Basic



7,473



7,462



7,413















Weighted average common shares outstanding - Diluted



7,782



7,784



7,781







































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








 

UNITY BANCORP, INC.


YTD CONSOLIDATED STATEMENTS OF INCOME


September 30, 2012


































 For the nine months ended September 30,  



Current YTD vs. Prior YTD


(In thousands, except percentages and per share amounts)


2012


2011



$


%


INTEREST INCOME















Federal funds sold and interest-bearing deposits


$

56


$

26



$

30



115.4%


Federal Home Loan Bank stock



144



147




(3)



(2.0)


Securities:















Securities available for sale



2,066



2,558




(492)



(19.2)


Securities held to maturity



482



625




(143)



(22.9)


Total securities



2,548



3,183




(635)



(19.9)


Loans:















SBA loans



2,652



3,671




(1,019)



(27.8)


SBA 504 loans



2,098



2,626




(528)



(20.1)


Commercial loans



12,707



13,304




(597)



(4.5)


Residential mortgage loans



4,869



5,502




(633)



(11.5)


Consumer loans



1,624



1,931




(307)



(15.9)


Total loans



23,950



27,034




(3,084)



(11.4)


Total interest income



26,698



30,390




(3,692)



(12.1)


INTEREST EXPENSE















Interest-bearing demand deposits



368



420




(52)



(12.4)


Savings deposits



933



1,701




(768)



(45.1)


Time deposits



2,222



3,119




(897)



(28.8)


Borrowed funds and subordinated debentures



2,486



2,851




(365)



(12.8)


Total interest expense



6,009



8,091




(2,082)



(25.7)


Net interest income



20,689



22,299




(1,610)



(7.2)


Provision for loan losses



3,200



5,650




(2,450)



(43.4)


Net interest income after provision for loan losses



17,489



16,649




840



5.0


NONINTEREST INCOME















Branch fee income



1,131



1,054




77



7.3


Service and loan fee income



954



840




114



13.6


Gain on sale of SBA loans held for sale, net



427



848




(421)



(49.6)


Gain on sale of mortgage loans, net



1,526



506




1,020



201.6


BOLI income



220



221




(1)



(0.5)


Net security gains 



514



353




161



45.6


Other income



558



534




24



4.5


Total noninterest income



5,330



4,356




974



22.4


NONINTEREST EXPENSE















Compensation and benefits



9,505



8,881




624



7.0


Occupancy



2,038



2,161




(123)



(5.7)


Processing and communications



1,631



1,593




38



2.4


Furniture and equipment



1,085



1,178




(93)



(7.9)


Professional services



598



599




(1)



(0.2)


Loan collection costs



453



660




(207)



(31.4)


OREO expenses



398



936




(538)



(57.5)


Deposit insurance



502



661




(159)



(24.1)


Advertising



630



510




120



23.5


Other expenses



1,319



1,328




(9)



(0.7)


Total noninterest expense



18,159



18,507




(348)



(1.9)


Income before provision for income taxes



4,660



2,498




2,162



86.5


Provision for income taxes



1,583



548




1,035



188.9


Net income 



3,077



1,950




1,127



57.8


Preferred stock dividends and discount accretion



1,195



1,164




31



2.7


Income available to common shareholders


$

1,882


$

786



$

1,096



139.4%

















Effective tax rate



34.0



21.9
























Net income per common share - Basic (1)


$

0.25



0.11









Net income per common share - Diluted (1)


$

0.24



0.10
























Weighted average common shares outstanding - Basic



7,465



7,301









Weighted average common shares outstanding - Diluted



7,786



7,719
























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

 




UNITY BANCORP, INC.





QUARTER TO DATE NET INTEREST MARGIN 





September 30, 2012




































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









For the three months ended




September 30, 2012


June 30, 2012




Average Balance


Interest


 Rate/Yield 


Average Balance


Interest


 Rate/Yield 


ASSETS