Unity Bancorp, Inc. · NASDAQ:UNTY
Unity Bancorp — Investor Presentation (July 2017)
25 slides from Unity Bancorp's investor presentation, Jul 31, 2017
Slide 1: Unity Bancorp, Inc.
W Unity BANCORP INC 6/30/17 NASDAQ: UNTY
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements with respect to Unity Bancorp’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward- looking statements can be identified by the use of words such as “ma
Slide 3: Company Snapshot
Company Snapshot « Founded September 16, 1991 « Headquartered in Clinton, New Jersey « Approximately $1.3 billion in assets and $1.0 billion in deposits « Unity Bank provides financial services to retail, corporate and small business customers through its 17 retail service offices located in Bergen,
Slide 4: Franchise
1 2 3 4 5 6 7 8 9 Forks Township, PA Phillipsburg, NJ Washington, NJ Clinton, NJ Flemington, NJ Whitehouse, NJ Somerset, NJ North Plainfield, NJ Middlesex, NJ Franchise Highland Park, NJ Edison, NJ South Plainfield, NJ Scotch Plains, NJ Union, NJ Linden, NJ Somerville, NJ Emerson, NJ
Slide 5: Strategic Goals
Strategic Goals « To grow our business relationships by being a responsive bank, providing excellent service with flexible terms and conditions— 10% loan growth « Mortgage Division — 15% growth rate « SBA Division — Increase 7A Volume no less than $40 million « Growth in core deposits of at least 5%
Slide 6: Senior Management
Senior Mar James A. Hughes, CPA Alan J. Bedner, Jr. CPA emen m + President and Chief Executive Officer + Chief Financial Officer + Joined the company in 2000 + Joined the company in 2001 + 30 years banking experience * 21 years banking experience + Previously employed at Summit Bancorp + Previously
Slide 7: Engaged Board of Directors
Engaged Board of Directors ¢ David Dallas, Chairman of the Board, and Robert Dallas, Board Member, both founding members of the Bank @ Average tenure of Board Members is 15 years @ Diverse experience including financial industry, medical professionals, university professional and business ownership
Slide 8: Recent Financial Performance
Recent Financial Performance an
Slide 9: Summary Balance Sheet
Summary Balance Sheet (dollars in millions) 12/31/2015 12/31/2016 6/30/17 Assets $ 1,084.9 |$ 1,189.9 |$ 1295.5 Total Loans 889.0 973.4 1,046.8 Deposits 894.5 945.7 1,004.0 Total Equity 78.6 106.3 112.4
Slide 10: Loan Mix
$1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 S$. Loan (dollars in r Mix millions) $ 1,046.8 973.4 $ $105.7 = S771 $ $617.0 : 2013 2014 2015 2016 2Q2017 wCommercial Loans mMortgageLoans GSBALoans Consumer Loans
Slide 11: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) Mortgage Growth $200.00 $192 $180.9 $180.00 $160.00 $153.4 $140.00 $i $120.00 $100.00 $97.2 $80.00 $60.00 $40.00 $20.00 2013 2014 2015 2016 2Q2017 @Purchases MRefinances 10
Slide 12: Asset Quality Continues to Improve
0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Asset Quality Continues to Improve O80 0.76% 0.78% 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 wNonperforming Loans @TDRs u
Slide 13: Deposit Trend
5 Year Deposit Trend (dollars in millions) $1,200.00 $ 1,004.0 $1,000.00 $945.7 $994.5 $794.3 $800.00 S338 $600.00 $400.00 $200.00 s- 2013 2014 2015 2016 2Q2017 lnterest-bearing DDA & SAV deposits mTotal time deposits ms Noninterest-bearing demand deposits
Slide 14: Summary Income Statement and Profitability
Summary Income Statement and Profitability (dollars in millions) INet Interest Income 8 183 |s [Provision for Loan Losses 06 INoninterest Income 65* INoninterest Expense 13.3 [Provision for Income Taxes 3.9 [Net Income s 70_|s [Dituted Earnings Per Share s 074 |s 0.62 Retum on Average Assets 1.28 %
Slide 15: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin (dollars in millions) $45.00 4.00% 3.75% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 2013 2014 2015 2016 2Q2016 YTD 2Q2017 YTD amaNet Interest Income ={aj=Net Interest Margin
Slide 16: Strong Levels of Noninterest Income
Strong Levels of Noninterest Income (dollars in millions) joninterest Income (excludes gains [losses] on securities) $10.00 20.00% A 18.46% ost $9.00 poe 17-79%" ee 18.00% $8.00 1634% $7.00 16.00% $6.00 14.00% $5.00 a8 12.00% $3.00 10.00% $2.00 8.00% $1.00 s- 6.00% 2013 2014 2015 2016 2Q2016 YTD 220
Slide 17: Noninterest Income
Noninterest Income (dollars in thousands) 2Q2016 2Q2017 Branch fee income s 619s 675 Service and loan fee income 52] 1,024 Gain on sale of SBA loans held for sale, net 945| 963 Gain on sale of mortgage loans, net 1,308 796 BOLI income 187] 178 Net security gains 175| 16 Net gain on repurchase of sub
Slide 18: Noninterest Expense Controls
Noninterest Expen: $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 Noninterest Expense Controls (dollars in millions) 2.88% 2.69% 2.69% 242% 242% 2013 2014 2015 sama Noninterest Expense 2016 ©. 2Q2016 YTD 2Q2017 YTD “B-Noninterest Expense/Average Assets 2.00% 0.00% a
Slide 19: Noninterest Expense
Noninterest Expense (dollars in thousands) 2016 Compensation and benefits $ 7,258)$ 8394 Occupancy 1,131 1,190} Processing and communications 1,287 1,236] Furniture and equipment 815 1,024 Professional services 494 ATT Loan collection & OREO expenses 172 379) Other loan expenses 101 102 Deposit insu
Slide 20: Profitability Progression
Profitability Progression Diluted Earni 2013 2014 2015 2016 2Q2016 YTD 2Q2017 YTD @@ Effect of nonrecurring gain on repurchase of subordinated debenture rt
Slide 21: Tangible Book Value Per Share
$11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 $6.50 $6.00 Tangible Book Value Per Share (Non-GAAP) Saat | 2013 2014 2015 2016 2Q2017 Note: 2013 reflects redemption of TARP preferred stock and the associated warrant * Capital Raise of $15 millon at a weighted average price per share of $14
Slide 22: Market Price
$19.00 $17.00 $15.00 $13.00 $11.00 $9.00 $7.00 $5.00 $3.00 Market Price 2013 2014 2015 2016 6/30/2017 a
Slide 23: Capital Ratios
Capital Ratios Total 1 Risk-Based Capital [unity Bancorp, inc. 16.00% GM Fpic-insured Commercial Banks 12.00% Total Risk-Based Capital 8.00% 18.00% 15.00% 4.00% 2013 2014 2015 2016 1Q2017 12.00% Leverage 12.00% 9.00% 10.00% 6.00% 8.00% 3.00% 2013 2014 2015 2016 = 12017 6.00% 4.00% 2013 2014 2015 201
Slide 24: Investment Highlights
Compelling Investment Highlights Knowledgeable and experienced management team of Attractive branch franchise 23
Slide 25: Data sources
The previous slides contained data from the following sources: FDIC-Insured Commercial Banks: Obtained from FDIC. gov Quarterly Banking Profile SNL