Unity Bancorp, Inc. · NASDAQ:UNTY
Unity Bancorp — Investor Presentation (February 2018)
25 slides from Unity Bancorp's investor presentation, Feb 1, 2018
Slide 1: Unity Bancorp
& Unity BANCORP NASDAQ: UNTY
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements with respectto 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 “may
Slide 3: Company Snapshot and Financial Summary
mpan « Founded September 16, 1991 « Headquartered in Clinton, New Jersey Snapshot + Approximately $1.5 billion in assets and $1.0 billion in deposits « Unity Bank provides financial services to retail, corporate and small business customers through its 18 retail service offices located in Bergen, Hu
Slide 4: Unity Bank Branch Locations
Bank Franck nity Bank Branch Locations Forks Township, PA Phillipsburg, NJ Washington, NJ Glinton, NJ Flemington, NJ Whitehouse, NJ Somerset, NJ North Plainfield, NU Middlesex, NJ Highland Park, NJ Edison, NJ South Plainfield, NJ Scotch Plains, NU Union, NJ Linden, NJ Somenille, NJ Emerson, NJ Ramse
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: Management Team
[anagemen am James A. Hughes, CPA Alan J. Bedner, Jr. CPA + President and Chief Executive Officer * Chief Financial Officer * Joined the company in 2000 + Joined the company in 2001 * 31 years banking experience + 22 years banking experience + Previously employed at Summit Bancorp + Previously emplo
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 >
Slide 9: Summary Balance Sheet
Summary Balance Sheet (dollars in millions) 12/31/2015 12/31/2016 12/31/2017 Assets $ 1,084.9 |§ 1,189.9 |§ 1,455.5 Total Loans 889.0 973.4 1,170.7 Deposits 804.5 945.7 1,043.1 Total Equity 78.5 106.3 118.1
Slide 10: Loan Mix
Loan Mix (dollars in millions) $ 1,170.7 $109.9 $973.4 $889.0 Te (77.1) $723: $617.0 1" 2013 2014 2015 2016 2017 Commercial Loans tMortgage Loans uSBALoans Consumer Loans
Slide 11: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) Mortgage Growth $221.6 $192.3 $200.00 $180.9 $153.4 $150.00 $129.7 $100.00 $50.00 2013 2014 2015 2016 2017 wPurchases wRefinances
Slide 12: NPLs / Loans
NPLs/ Loans Asset Quality Continues to Improve 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 u
Slide 13: Deposit Trend
5 Year Deposit Trend (dollars in millions) $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 > $ 1,043.1 $9457 $894.5 —— $794.3 2013 2014 2015 2016 2017 uilnterest-bearing DDA & SAV deposits mi Total time deposits ta Noninterest-bearing demand deposits 2
Slide 14: Summary Income Statement and Profitability
Summary Income Statement and Profitability (dollars in millions) 16 INet Interest Income 38.3 45.9 [Provision for Loan Losses 12 17 INoninterest Income fii? 83 lNoninterest Expense 21.6 30.0 [Provision for Income Taxes 13 95° [Net Income s B2_|s 29 [Dituted Earnings Per Share s 138 |s 1.20 IRetum on
Slide 15: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin (dollars in millions) nT $40.00 3.83% 4.00% f 3.50% 3.00% 2.50% F 2.00% $30.00 $20.00 $10.00 S- 1.50% 2013 2014 2015 2016 ) tmaNet Interest Income =i» Net Interest Margin 2017 1.00%
Slide 16: Strong Levels of Noninterest Income
Strong Levels of Noninterest Income (dollars in millions) oninterest Income (excludes gains [losses] on securities) $10.00 20.00% A 18.46% $0100 18.30% see 18.00% $8.00 $7.00 16.00% $6.00 14.00% $5.00 $40 12.00% $3.00 10.00% $2.00 8.00% $1.00 Ss 6.00% 2013 2014 2015 2016 2017 GiNoninterest Income —
Slide 17: Noninterest Income
Noninterest Income (dollars in thousands) 2017 Branch fee income $ 1,269|$ 1,384 Service and loan fee income 1,020 2,100 Gain on sale of SBA loans held for sale, net 2,099 1,617 Gain on sale of mortgage loans, net * 2,621 1,530 BOLI income 378 469 (Net security gains 424 62 (Net gain on repurchase o
Slide 18: Noninterest Expense Controls
Noninterest Expense Controls (dollars in millions) interest Expense $30.00 2.88% 2.69% 2.71% $25.00 2.00% $20.00 $15.00 $10.00 T T 0.00% 2013 2014 2015 2016 2017 smmaNoninterest Expense =i Noninterest Expense/Average Assets a
Slide 19: Noninterest Expense
Noninterest Expense (dollars in thousands) 2016 2017 Compensation and benefits $ 14,952|$ 17,117 Occupancy 2,360} 2,381 Processing and communications 2,628} 2551 Furniture and equipment 1,700 2,079] Professional services 976| 1,022 Loan collection & OREO expenses 654 463 Other loan expenses 152| 186
Slide 20: Profitability Progression
Profitability Progression Diluted Effect of nonrecurring gain on repurchase of subordinated debenture Effect of Tax Cut and Jobs Act. 2017 Diluted Eaming per Share would have been $1.36, net of the $1.7 million deferred tax asset adjustment. 9
Slide 21: Tangible Book Value Per Share (Non-GAAP)
$12.00 $11.00 $10.00 $9.00 $8.00 $7.00 $6.00 Tangible Book Value Per Share (Non-GAAP) $10.00 2013 2014 2015 2016 2017 Note: 2013 reflects redemption of TARP preferred stock and the associated warrant, * Capital Raise of $15 million at a weighted average price per share of $14.04; net increase of $14
Slide 22: Market Price
Market Price $21.00 $19.00 $17.00 $15.00 $13.00 $11.00 $9.00 $7.00 ssa $3.00 T T r T 1 2013 2014 2015 2016 2017
Slide 23: Capital Ratios
18.00% 15.00% 12.00% 9.00% 6.00% 3.00% [Bl unity Bancorp. Inc. Capital Ratios 16.00% GM Fpic-insured Commercial 12.00% Banks Total Risk-Based Capital 8.00% 2013 2014 2015 4.00% 12.00% 10.00% 2016 = 3Q2017 8.00% 6.00% 4.00% Tier 1 Risk-Based Capital 2013 2014 2015 2016 = 3Q2017 Leverage 2013 2014 201
Slide 24: Compelling Investment Highlights
Compelling Investment Highlights Knowledgeable and experienced management team Attractive branch franchise Diversity of loan products Insider ownership Consolidation of NJ Community Banks 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
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