Unity Bancorp, Inc. · NASDAQ:UNTY
Unity Bancorp — Investor Presentation (January 2019)
25 slides from Unity Bancorp's investor presentation, Jan 29, 2019
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 $1.6 billion in assets and $1.2 billion in deposits « Unity Bank provides financial services to retail, corporate and small business customers through its 19 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) 12/31/2016 12/31/2017 12/31/2018 Assets $ 1,189.9 |$ 1,455.5 |$ 1,579.2 Total Loans 973.4 1,170.7 1,304.6 Deposits 945.7 1,043.1 1207.7 Total Equity 106.3 118.1 138.5
Slide 10: Loan Mix
$1,400.00 $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 S- Loan (dollars inn Mix millions) $ 1,304.6 $1,170.7 {s 123.9 | $1099 $973.4 58889 =a $771 2014 2015 2016 2017 2018 Commercial Loans Mortgage Loans SBA Loans .sConsumer Loans
Slide 11: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) Mortgage Growth $250.00 $221.6 $224.7 $200.00 31005 $192.3 $150.00 a $100.00 $50.00 2014 2015 2016 2017 2018 Purchases mRefinances
Slide 12: Asset Quality
0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Asset Quality 4Q2017 1Q2018 2Q2018 3Q2018 4Qn018 u
Slide 13: Deposit Trend
5 Year Deposit Trend (dollars in millions) $1,400.00 $ 1,207.7 $1,200.00 $ 1,043.1 $945.7 $1,000.00 7 $794.3 $800.00 $600.00 $400.00 $200.00 to 2014 2015 2016 2017 2018 uilnterest-bearing DDA & SAV deposits Total time deposits Noninterest-bearing demand deposits
Slide 14: Summary Income Statement and Profitability
Summary Income Statement and Profitability (dollars in millions) Net Interest Income $ 45.8 |S 53.8 Provision for Loan Losses ee 24 /Noninterest Income 8.3 9.0 Noninterest Expense 30.0 33.4 Provision for Income Taxes 9.5 5.4 Net Income $ 12.9 _|s 219 Diluted Eamings Per Share s 120 |s 2.01 Retum on
Slide 15: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin $50.00 $40.00 $30.00 $20.00 $10.00 (dollars in millions) 3.83% % 3.53% 3.63% 3 2014 2015 2016 2017 sma Net Interest Income ti Net Interest Margin 2018 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00%
Slide 16: Strong Levels of Noninterest Income
Strong Levels of Noninterest Income (dollars in millions) oninterest Income (exclude: on securities) $10.00 TEC - 20.00% $9.00 16.69% BA 18.00% $8.00 16.00% $7.00 14.00% $6.00 12.00% $5.00 10.00% $4.00 8.00% $3.00 6.00% $2.00 4.00% $1.00 2.00% s- 0.00% 2014 2015 2016 2017 2018 GRNoninterest Income —
Slide 17: Noninterest Income
Noninterest Income (dollars in thousands) 2018 Branch fee income $ 1,384 1,519 Service and loan fee income 2,100} 2,130} Gain on sale of SBA loans held for sale, net 1,617 1,680 Gain on sale of mortgage loans, net 1,530 1,719 BOLI income 469 975 Net security gains (losses) 62 (199) Other income 1,10
Slide 18: Noninterest Expense Controls
interest Expense $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 Noninterest Expense Controls (dollars in millions) 2.69% 2.69% 2.44% 237% 2014 2015 tama Noninterest Expense 2016 2017 ~+Noninterest Expense/Average Assets 2018 2.00% 0.00% a
Slide 19: Noninterest Expense
Noninterest Expense (dollars in thousands) 2017 2018 Compensation and benefits s 17,117/8 20,119] Occupancy 2381 2,739] Processing and communications 2,551 2,788} Furniture and equipment 2,079] 2,348} Professional services 1,022 934] Loan collection & OREO expenses (recoveries) 463 (288) Other loan
Slide 20: Profitability Progression
$2.50 $2.00 $1.50 $1.00 $0.50 Profitability Progression Diluted Earni $1.38 $1.36 i $0.16 2014 2015 2016 2017 2018 Effect of nonrecurring gain on repurchase Effect of Tax Cut and Jobs Act. 2017 of subordinated debenture Diluted Eaming per Share would have been $1.36, net of the $1.7 million deferred
Slide 21: Tangible Book Value Per Share
$14.00 $13.00 $12.00 $11.00 $10.00 $9.00 $8.00 $7.00 $6.00 Tangible Book Value Per Share (Non-GAAP) $10.00 2014 2015 2016 2017 2018 * Capital Raise of $15 million at a weighted average price per share of $14.04; net increase of $14.4 million after expenses.
Slide 22: Market Price
Market Price $25.00 $20.00 $15.00 $10.00 _ i ' $- r , T T 1 2014 2015 2016 2017 2018
Slide 23: Capital Ratios
Capital Ratios Tier 1 Risk-Based Capital ; 16.00% [Bl unity Bancorp. Inc. (Ml Fvic-nsured Commercial 12.00% Banks Total Risk-Based Capital 8.00% 18.00% 15.00% 4.00% 2014 2015 2016 2017 2018 12.00% Leverage 9.00% 12.00% 6.00% 10.00% 3.00% 2014 2015 2016 2017 2018 8.00% 6.00% 4.00% 2014 2015 2016 2017
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