Unity Bancorp, Inc. · NASDAQ:UNTY
Unity Bancorp — Shareholder Meeting (April 2019)
29 slides from Unity Bancorp's shareholder meeting presentation, Apr 25, 2019
Slide 1: Unity Bancorp 2019 Shareholders' Meeting
w Unity BANCORP INC 2019 Shareholders’ Meeting April 25, 2019
Slide 2: 2018 earnings, loan and deposit growth highlights
C) Earnings of $21.9 million, a 70.0% increase from $12.9 million in the prior year » Excluding DTA tax adjustment, 2017 core earnings of $14.6 million UO) Diluted EPS of $2.01 vs. $1.20 in 2017, a 67.5% increase O) Total Loans — 11.4% increase * 10.4% increase in commercial loans 10.4% 1 1 * 19.4%
Slide 3: Awards, rankings and operational achievements
CJ Named one of the Best Places to work in NJ from NJ BIZ for the third year in a row O) Ranked 19% Nationally on American Banker magazine’s Top 200 Publicly Traded Community Banks (total assets less than $2 billion) * Unity Bank climbed from 27" in 2017 to 19% in 2018. U) Five consecutive quarters
Slide 4: Bank Franchise
Bank Franchise Unity Bank Branch Locations Unity B Locations Forks Township, PA. Philipsburg, NJ Washington, NU Clinton, NJ Flemington, NJ Whitehouse, NJ ‘Somerset, NU North Plainfield, NU Middlesex, NJ Highland Park, NJ Edison, NJ South Plainfield, NU Scotch Plains, NJ earvouson+ Union, NJ Linden,
Slide 5: Recent Financial Performance
Recent Financial Performance
Slide 6: Key Bank Ratios
Key Bank Ratios For the year ended December 31, 2018 Public Banks Unity Bancorp $1.0- $3.0 billion Return on average assets Return on average equity ‘Net interest margin Efficiency ratio
Slide 7: Quarterly return on assets trend
0.80% 0.60% 0.40% 1.07% 1.09% 2Q2017 1.12% 3Q0017 1.25% 4Q2017 153% 1Q2018 2Q2018 3QU018 4Q2018
Slide 8: Recent Performance
Recent Performance As of As of 3/31/2019 12/31/2018 Unity Bancorp QTD YTD Return on average assets 1.53% Return on average equity 17.10% [Net interest margin 3.97% Efficiency ratio 53.07%
Slide 9: Summary Balance Sheet
Summary Balance Sheet (dollars in millions) Assets $ 1,579 |$ 1,455 Total Loans 1,305 ible Deposits 1,208 1,043 Total Equity 138 118
Slide 10: Loan Growth
Loan Growth (dollars in millions) $1,400.00 $1,305 $1,200.00 $1171 $1,000.00 s22 $ 889 $800.00 762 $600.00 $400.00 $200.00 $: 2014 2015 2016 2017 2018 mCommercial Loans mMortgageLoans wSBALoans Consumer Loans 10
Slide 11: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) _ $221.3 $224.7 $200.00 StS0E $192.3 $150.00 $129.7 $100.00 $50.00 2014 2015 2016 2017 2018 wPurchases mRefinances
Slide 12: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) $250.00 3 $224.7 $192.3 $200.00 SISO. $150.00 $129.7 $100.00 $50.00 2014 2015 2016 2017 2018 Conforming t&Non-Conforming 2
Slide 13: Nonperforming Assets
Nonperforming Assets (dollars in millions) $8.9 $8.3 $6.9 2014 2015 2016 2017 2018 ‘aCommercial nonperforming loans Residential nonperforming loans t=3OREO ti Nonperforming Assets to Total Assets 1.50% 1.00% 0.50% 0.00% 0.50% -1.00% -1.50% -2.00% -2.50% 3.00%
Slide 14: Net Charge-Offs
$3,500.00 $3,000.00 $2,500.00 $2,000.00 $1,500.00 $1,000.00 $500.00 $< Net Charge-Offs (dollars in thousands) $3,140 p 0.65% + 0.45% + 0.25% 0.01% + 0.05% + -0.15% + -0.35% hol $118 he 2014 2015 2016 2017 2018 tamiNet charge-offs ti Net charge-off (recoveries) to average loans -0.55% “
Slide 15: Year Deposit Trend
5 Year Deposit Trend (dollars in millions) $1,400.00 $ 1,208 $1,200.00 $ 1,043 $1,000.00 $800.00 $600.00 $400.00 $200.00 $ + 2014 2015 2016 2017 2018 wInterest-bearing DDA & SAV deposits Total time deposits i Noninterest-bearing demand deposits 15
Slide 16: Summary Income Statement and Profitability
Summary Income Statement and Profitability (dollars in millions) (Net Interest Income Ss 53.7 |$ 45.8 Provision for Loan Losses 21 17 |Noninterest Income Ee | 8.3 |Noninterest Expense 33.4 30.0 Provision for Income Taxes 5.4 9.5 [Net Income Ss 219 |s 12.9 Diluted Earnings Per Share Ss 2.01 $s 1.20 R
Slide 17: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin (dollars in millions) 2014 2015 2016 2017 ‘Net Interest Income i “tNet Interest Margin 2018 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% a
Slide 18: Core Noninterest Income
Core Noninterest Income (dollars in millions) 16.98% 18.46% 16.98% 14.70% $8.00 $6.00 $4.00 $2.00 s- T T T T 2014 2015 Noninterest Income 2016 2017 ti Noninterest Income/Revenue 2018 * 2016 noninterest income to revenue ratio excludes an extraordinary gain on repurchase of subordinated debentures.
Slide 19: Noninterest Income
Noninterest Income (dollars in thousands) [Branch fee income $ 1,519]$ 1,384! Service and loan fee income 2,130} 2,100) Gain on sale of SBA loans held for sale, net 1,680 1,617) Gain on sale of mortgage loans, net 1,719] 1,530] [BOLI income 975 469) [Net security (losses) gains (199) 62 Other income
Slide 20: Noninterest Expenses
$30.00 $25.00 $20.00 $15.00 $10.00 Noninterest Expenses (dollars in millions) 2.69% 2.70% 2014 2015 2016 2017 2018 semaNoninterest Expense =ti-Noninterest Expense/Average Assets 3.00% 2.00% 1.00% 0.00%
Slide 21: Noninterest Expense
Noninterest Expense (dollars in thousands) 2018 2017 Compensation and benefits $ 20,119]$ 17,117 Occupancy 23139 2,381 Processing and communications 2,788 2551. Furniture and equipment 2348 2,079 Professional services 934 1,022 Loan collection & OREO expenses (288) 463 Other loan expenses 135 186 ‘D
Slide 22: Profitability Progression
$2.00 $1.50 $1.00 $0.50 Profitability Progression 2014 2015 2016 2017 2018
Slide 23: Tangible Book Value Per Share
Tangible Book Value Per Share $14.00 $13.00 $12.00 $11.00 $10.00 $9.00 $8.00 a $6.00 T T 2014 2015 2016 2017 2018
Slide 24: Market Price
$23.00 $21.00 $19.00 $17.00 $15.00 $13.00 $11.00 $9.00 $7.00 $5.00 $3.00 Market Price 2014 2015 2017 * * On June 23, 2017 Unity was included in the Russell 2000, which provides enhanced liquidity.
Slide 25: Stock Performance
Stock Performance 350.00 26.23% * 300.00 ey 8 Ss 8 11.06% * Index Value 6.63% * 2013 2014 2015 2016 2017 2018 —*-Unity Bancorp, Inc. -™-KBW NASDAQ Bank Index —#-NASDAQ Composite Index * Compound Annual Growth Rate 25
Slide 26: Cash Dividends
Cash Dividends $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 2014 2015 2016 2017 2018
Slide 27: Capital Ratios
Capital Ratios Leverage Ratio 12.00% 10.00% Total Risk-Based Capital Ratio 2.00% 18.00% 15.00% 6.00% 12.00% 4.00% 2014 2015 2016 2017 2018 9.00% + Tier 1 Risk-Based Capital Ratio 6.00% + 16.00% 3.00% + 2014 2015 2016 2017 2018 12.00% 8.00% 4.00% + 2014 2015 2016 2017 2018 Pa
Slide 28: Compelling Investment Highlights
Compelling Investment Highlights 28
Slide 29: Unity Bank
w UNITY BANK growing aith you The previous slides contained data from the following sources: ¢ FDIC-Insured Commercial Banks: Obtained from FDIC. gov Quarterly Banking Profile # S&P Global 29