Slide 1: 2009 Shareholders' Meeting
Slide 2: A tough year for the financial sector
A tough year for the financial sector… • 2008 was a period of unprecedented financial, credit and capital market stress – Consumers living beyond their means – Since 2001, home prices rose 46% – 3.3% decline in median income – Fannie and Freddie create secondary market for subprime mortgages – Broke
Slide 3: How has the recession affected UNITY?
How has the recession affected UNITY ? • Unity’s 2008 results were affected by: – Markets for the guaranteed portion of SBA loans have closed down – Scale back of the SBA program – Other-than-temporary impairment charges (“OTTI”) of $1.5 million in 2008 – Higher provision for loan losses due to the
Slide 4: Unity's Accomplishments
UNITY’S Accomplishments! • Despite this challenging environment, Unity’s performance in 2008 included the following accomplishments: – Total assets increased 19.4 percent – Total loans increased 16.2 percent – Total deposits increased 17.6 percent – Continued improvements in infrastructure – Unity r
Slide 5: Strategic Direction
Strategic Direction • 2009 Sales Direction • One sales leader, one bank with common goals • Everyone working as a team • Capitalize on market turmoil • Increasing market share • Relationship-based business model • Focus on demand deposits and savings versus high cost time deposits • Stabilize Credit
Slide 6: Lackawanna / Montgomery
Lackawanna “a \. Montgomery
Slide 7: Recent UNITY Highlights
Recent UNITY Highlights • Brought the items processing function in-house • ATM conversion to a surcharge free network • ATM upgrades and security enhancements • E-statements (“Go Green!”) • Enhancements to the E-corp system • VISA gift cards • New residential mortgage website - online applications •
Slide 8: Unity makes us feel comfortable and secure
“Unity makes us feel comfortable and secure,” 50.8 Loyalty Savings Unity Bank WELCOMES vou to the neighborhood hough these bunt times, al sssist the Unity BANK, we are hi financial needs of our communi continue to grow with you,
Slide 9: Key Bank Ratios
For the year ended December 31, 2008 Unity NJ FDIC- Insured Commercial Banks All FDIC- Insured Commercial Banks Key Bank Ratios Return on Average Assets 0.23% 0.46% 0.16% Return on Average Equity 3.72% 4.85% 1.62% Efficiency Ratio 71.90% 81.93% 58.32% Total Nonperforming Assets to Total Assets 1.87%
Slide 10: Income Statement
For the years ended % 2008 2007 Change Income Statement (dollars in thousands) Net Interest Income $ 27,291 $ 24,426 11.7% Provision for Loan Losses (4,500) (1,550) 190.3% Noninterest Income 4,612 6,511 -29.2% OTTI Charges & Net Security (Losses) Gains (1,918) (571) 235.9% Noninterest Expense (22,93
Slide 11: Prime Rate
Prime Rate 5.25% 7.25% 8.25% 7.25% 3.25%
Slide 12: Total Asset Growth
Total Asset Growth (dollars in millions) Ø In 2008, Unity grew total assets by 19.4% versus 10.2 % for all FDIC-Insured Commercial Banks.
Slide 13: Total Loan Growth
Total Loan Growth (dollars in millions) Ø In 2008, Unity grew total loans by 16.1% versus 3.2% for all FDIC- Insured Commercial Banks.
Slide 14: Nonperforming Loans by Category
12/31/2008 12/31/2007 Selected Ratios 12/31/2008 12/31/2007 Nonperforming Loans by Category (dollars in thousands) Category $ Value # of Loans $ Value # of Loans SBA 7(a) 4,228 2,110 SBA 4,600 - - Commercial 5,247 1,630 Residential Mortgage 1,808 1,192 Consumer Total 16,120 5,461 Net Charge-offs to
Slide 15: Total Deposit Growth
Total Deposit Growt h (dollars in millions) Ø In 2008, Unity grew total deposits by 17.6% versus 10.6 % for all FDIC-Insured Commercial Banks.
Slide 16: Unity Bancorp, Inc. vs FDIC-Insured Commercial Banks
Unity Bancorp, Inc. FDIC-Insured Commercial Banks
Slide 17: Unity's Capital & Dividend Policy
UNITY’S Capital & Dividend Policy • Unity is to maintain a well-capitalized Bank – Capital Purchase Program (“CPP”) participation, $20.6 million, 5% annual dividend • The Board established a targeted dividend ratio of 20 percent of the Company’s earnings and will be paid once annually • Curtailment
Slide 18: Stock Price Valuation
Stock Price Valuation Unity Bancorp, Inc. Market Price of $3.90/Book Value of $6.99 = 55.8% Price/Book Ratio All publicly traded banks with assets < $5 billion
Slide 19: Compelling Investment Considerations
Compelling Investment Considerations • Deep discount to book • Knowledgeable and experienced management team • Prudent risk management practices • Current focus on capital management, liquidity and overall asset quality • Positioned for economic rebound • Insider ownership
Slide 20: Growing with you!
growing with you! The previous slides contained data from the following sources: • FDIC-Insured Commercial Banks (All & NJ-only): Ø Obtained from FDIC.gov Quarterly Banking Profile • All publicly traded banks with assets < $5 billion Ø Obtained from SNL Financial
Slide 21: UNITY
UNITY®