Unity Bancorp, Inc. · NASDAQ:UNTY
Unity Bancorp — Shareholder Meeting (April 2020)
20 slides from Unity Bancorp's shareholder meeting presentation, Apr 21, 2020
Slide 1: 2020 Shareholders' Meeting
w Unity BANCORP INC 2020 Shareholders’ Meeting April 23, 2020
Slide 2: Financial Highlights
Financial Highlights < $2.14 9937 $1,425.6 $1,304.6 bo I$1,250.1 {$1,207.7 $219 2018 2019 2018 2019 2018 2019 sa Net Income Diluted EPS Total Loans ui Total Deposits Total Loans — 9.3% increase + Total Deposits — 3.5% increase ¢ 15.8% increase in consumer loans + 3.6% increase in noninterest-bearing
Slide 3: Recent Performance
Recent Performance & As of As of 3/31/2020 12/31/2019 Unity Bancorp QTD* YTD Return on average assets 1.32% 1.54% Return on average equity 13.23% 15.86% ‘Net interest margin 3.92% 3.95% Efficiency ratio 51.92% 52.00% * Includes additional $1.0M provision to loan losses as a response to the COVID-19
Slide 4: Unity's Accomplishments
Unity’s Accomplishments « Only NJ Bank to be Named One of the 2020 Best Places to Work in New Jersey + Recognized for the fourth year in a row « Selected for the Sandler O’Neill Sm-All Stars Class of 2019 + Named for the second year in a row « Ranked 13% Nationally on American Banker magazine’s Top
Slide 5: Unity Bank Initiatives
Unity Bank Initiatives Y « Record mortgage production in 2019: $255.5 million in loans originated with $144.5 million sold in the secondary market « Record consumer production in 2019: $104.0 million in loans originated « 2019 commercial production: $158.1 million in loans originated « Commercial lo
Slide 6: Bank Franchise
Bank Franchise 7 nity Bank Branch Locations 1 | Forks Township, PA 2 | Phillipsburg, NJ 3 | Washington, NJ 4 | Clinton, NU 5 | Flemington, NJ 6 | Whitehouse, NJ Te Somerset, NJ 8 North Plainfield, NJ 9 | Middlesex, NJ 10 | Highland Park, NJ 11 | Edison, NJ 12 | South Plainfield, NJ 13 | Scotch Plain
Slide 7: Historical Growth
Historical Growth (dollars in millions) Total Assets Total Loans 2,000.0 — 1,600.0 — 1,800.0 xe 2 siziss ievo a as ; $1,425.6 = 1,200.0 $1,170.7 1.0000 | $973.4 800.0 600.0 400.0 200.0 21S 2016 = 2017S 018.2019 21S 2016 «2017S 2018-2019 Total DenOS, oa Total Equity ax 1,400.0 ‘Seth ene eS 1.2077 $12
Slide 8: Asset Quality
1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Asset Quality Nonperforming Assets to Total Assets w 0.82% 0.70% 0.44% 0.43% wa Net Charge-Offs to Average Loans 0.20% 2015 2016 2017 2018 2019 0 0.16% os 0.12% 0.08% 0.04% 0.00% 2015 2016 «2017 2018 2019
Slide 9: Summary Income Statement and Profitability
Summary Income Statement and Profitability (dollars in millions) |Net Interest Income IS 53.7 1$ 57.6 Provision for Loan Losses 24 21 |Noninterest Income oF 96 |Noninterest Expense 33.4 34.7 Provision for Income Taxes 5.4 67 |Net Income IS 21.9 |$ 23.7 Diluted Earnings Per Share IS 2.01 iS 2.14 |Ret
Slide 10: Net Interest Income & Net Interest Margin
(dollars in millions) Net Interest Income & Net Interest Margin ¥ $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 S- 2015 2016 2017 2018 2019 tgaaNet Interest Income =i Net Interest Margin
Slide 11: Noninterest Income
Noninterest Income (dollars in thousands) & Branch fee income $ 1,519]$ Service and loan fee income 2,130 Gain on sale of SBA loans held for sale, net 1,680 Gain on sale of mortgage loans, net 1,719 BOLI income 975 Net security (losses) gains (199) Other income 1,207 1,502 1,965 909 2,090 588 373 2,
Slide 12: Noninterest Expense
Noninterest Expense (dollars in millions) $50.00 3.00% 2.69% $45.00 a ee ae 44% 2.37% $40.00 ass 2 a ee $35.00 3.00% $30.00 $25.00 $20.00 $15.00 1.00% $10.00 $5.00 s- 0.00% 2015 2016 2017 2018 2019 ssmiNoninterest Expense =tit-Noninterest Expense/Average Assets
Slide 13: Noninterest Expense
Noninterest Expense (dollars in thousands) Compensation and benefits $ 20,666 Occupancy 2,650 Processing and communications 2,788 2,924 Furniture and equipment 2,348 2,894 Professional services 934 1,061 Loan collection & OREO (recoveries) expenses (361) 41 Other loan expenses 208 272 Deposit insura
Slide 14: Profitability
Profitability $2.50 $2.00 ae 01 $1.50 BEG EG 93 berad $1.00 $0.50 s- - - - 1 1 2015 2016 2017 2018 2019 Effect of nonrecurring gain on repurchase Effect of Tax Cut and Jobs Act. 2017 Diluted Earning per Share would of subordinated debenture have been $1.36, net of the $1.7 million deferred tax asset
Slide 15: Tangible Book Value Per Share
Tangible Book Value Per Share (Non-GAAP) $16.00 $14.00 $12.00 $10.00, $10.00 $8.00 $6.00 $4.00 $2.00 se 2015 2016 2017 2018 2019 * Capital Raise of $15 million at a weighted average price per share of $14.04; net increase of $14.4 million after expenses. Although we have suspended our stock repurcha
Slide 16: Dividends Paid
Dividends Paid y Dividends Paid 0.35 $0.31 0.30 $0.27 0.25 $0.23 0.20 5 7 0.15 5 5 0.10 $0:08 0.05 LW 0.00 T T T T 2015 2016 2017 2018 2019 =Q1 2020
Slide 17: Stock (UNTY) Ownership
Stock (UNTY) Ownership y Share Ownership by Type Additi Notes: 10,880,603 Outstanding Shares as of 12/31/2019 Insider ownership includes 1,711,635 shares (15.7%) held under Dallas Financial Holdings 1,877,039 shares (17.3%) held by top 3 institutions- Banc Funds Co, Endicott Mgmt, and Wellington Mgm
Slide 18: Pending FDIC BSA Consent Order
Pending FDIC BSA Consent Order « Unity has begun to take steps toward the improvement of its BSA/AML program, including: « Established an Independent Board Compliance Committee to oversee BSA/AML enhancements. « Additional investment into processes and Financial Crime Risk Management system upgrades
Slide 19: COVID-19 Pandemic
COVID-19 Pandemic ( « Impact to employees: + Some employees assigned to work in alternate locations; non-essential employees working from home + Employees with medical issues or at higher risk allowed to work from home. « Branch restrictions put in place for the safety of customers: + Lobbies closed
Slide 20: Questions?
Questions? The previous slides contained data from the following sources: ¢ FDIC-Insured Commercial Banks: Obtained from FDIC. gov Quarterly Banking Profile SNL Census.gov