Unity Bancorp, Inc. · NASDAQ:UNTY
Unity Bancorp — Investor Presentation (December 2019)
30 slides from Unity Bancorp's investor presentation, Dec 11, 2019
Slide 1: Unity Bancorp Inc
& Unity BANCORP INC 9/30/19 NASDAQ: UNTY
Slide 2: Forward-Looking Statements
Forward-Looking Statements 7 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 “m
Slide 3: Company Snapshot
Company Snapshot y « Founded September 16, 1991 « Headquartered in Clinton, New Jersey « Approximately $1.7 billion in assets and $1.3 billion in deposits « Unity Bank provides financial services to retail, corporate and small business customers through its 19 retail service offices located in Berge
Slide 4: 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 5: New Jersey Overview
New Jersey Overview y Located in the heart of the U.S. Northeast Population estimate of 8.9 million people (Cuan * Median household income is over $76 + Gives companies access to one of the thousand per year ~ $14 thousand more than most concentrated and affluent the national median in household inc
Slide 6: Scarcity Value of Community Banks in New Jersey
Scarcity Value of Community Banks in New Jersey « Unity Bank is one of 22 community banks in New Jersey having less than $3.0 billion in assets * Unity bank has been deeply rooted in the communities we serve. * Our success is based on the personal relationships we have with our customers and employe
Slide 7: Executive Management Team
Executive Management Team James A. Hughes, CPA President! Chief Executive Officer Alan J. Bedner, Jr, CPA John J. Kauchak Janice Bolomey Chief Financial Officer Chief Operating Officer Director of Sales/ Chief Administrative Officer Joined in 2000 Joined in 2001 Joined in 1996 Joined in 2001 31 year
Slide 8: 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 9: Recent Financial Performance
w Recent Financial Performance
Slide 10: Historical Growth
Historical Growth (dollars in millions) Total Assets Total Loans as il 1,800.0 1,600.0 1,400.0 1,200.0 1,000.0 $1,579.2 phan ay $1,189.9 2015-2016 20172018 Total Deposits 9730/2019 2015 ncn Ao $1,368.5 $1,170.7 2016 2017 2018 Total Equity 9/30/2019 75: ‘$1,207.7 SizB4 2016 2017 2018 9/30/2019 ee aa
Slide 11: Efficiency & Performance
Avg, equity/Avg, Assets Efficiency & Performance Efficiency 16.00% 80.00% 64.41% 12.00% 2 3.07% 52.25% g 2 9.61% e 8.00% | 40.00% 3 7.42% 7.59% 2 4.00% 20.00% 0.00% 0.00% 2015 2016 += 2017-2018 9/30/2019 B-Average equity to average assets Efficiency Ratio 20.00% 16.00% 0.00% Performance 17.10% L 201
Slide 12: Loan Mix
Loan Mix An (dollars in millions) \ y $1,500.00 Loan Composition - Regulatory Classification Comm & Other Consumer $1,250.00 $1,000.00 $888.9 $365. $750.00 264: $500.00 $250.00 + Balance ‘Non Owner Occ. CRE $ 245,563 1-4 Family 554,811 s- Constr & Land Dev 133.072 2015 2016 2017 2018 9/30/2019 ‘Owne
Slide 13: Loan Composition
Loan Composition Cr (dollars in thousands) FY Loan Composition Balance % of Total Balance % of Total Balance % of Total Balance % of Total_—Balance—_% of Total ‘Non Owner Oce. CRE $162,031 18.2% $176,459 «18.1% © $198,552 17.0% = $211,137 16.2% «$245,563 17.9% 1.4 Family 325,088 36.6% 360,565 37.0%
Slide 14: Mortgage Loan Originations
(dollars in millions) Mortgage Loan Originations ” $250.00 $221.6 $224.7 $200.00 $192.3 $180.9 $176.4 $150.00 $100.00 $50.00 = 2015 2016 2017 2018 9/30/2019 Purchases uRefinances
Slide 15: Asset Quality
Asset Quality Yy Nonperforming Assets to Total Assets Net Charge-Offs to Average Loans 1.00% 0.20% 0.82% 0.80% 0.16% as 0.60% 0.12% IN a 0.44% 0.44% fs / 0.40% 0.08% 29 7% ” [aah Fs 0.20% 0.04% 01 0.00% 0.00% 2015 2016 ~—S—«2017-~S«2018 9/30/2019 2015 2016 =« 2017-2018 9/30/2019 Allowance for Loan L
Slide 16: Deposit Trend
Deposit Trend (dollars in millions) 7 $1,400.00 . - an Deposit Composition Ro: $1,200.00 cag Money Market sous $ 1,043.1 $270) $1,000.00 9575 $7 | i $256. $800.00 +—$ 185 16 $600.00 $400.00 $200.00 % 2015 2016 2017 2018 9/30/2019 uNoninterest-bearing demand deposits wTotal time deposits wlnterest-be
Slide 17: Summary Income Statement and Profitability
Summary Income Statement and Profitability (dollars in millions) |Net Interest Income Ss 39.6 |$ 42.8 Provision for Loan Losses 1.6 1.6 |Noninterest Income 7A 7A |Noninterest Expense 25.2 26.0 |Provision for Income Taxes 3.8 48 |Net Income S$ 16.1 |S 17.5 |Diluted Earnings Per Share $s 1.48 Ss 1.59
Slide 18: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin (dollars in millions) $70.00 4.50% 6.00% 5.41% 3.97% 3.95% 3.97% 5.16% 5.11% 7 400% 5 ogy | 4si%e 483% 493% $538 : 3.50% 4.00% 3.39% 3.00% 3.14% 3.12% 3.1% 3.208% 3.00% : 2.50% 2.00% 2.00% 1.61% 1.50% 1.00% 116% ari 082% 0.86% 1.00% 0.00% 2015 2016 2017 2018
Slide 19: Interest Rate Sensitivity
Interest Rate Sensitivity Interest Rate Scenario -400 -300 -200 Base +200 +300 +400 Net Interest Income Change - Next 12 Months 5.0% 5.0% 48% 0.0% 34% 4.7% 5.5% Interest Rate Scenario -400 -300 -200 Base +200 +300 +400 EVE Change 5.7% 5.7% 3.9% 0.0% 0.2% 1.7% 3.1%
Slide 20: Core Noninterest Income
Core Noninterest Income DS (dollars in millions) y TT-19% 16.69% | 17.00% $10.00 15.18% ~ 13.86% 15.00% 2 s8.00 — 2 13.00% z ss4 a $7.7 = —_ 11.00% $7.1 $6.9 $6.00 9.00% 7.00% $4.00 5.00% 0 $2.00 20M } 1.00% $ -1.00% 2015 2016 2017 2018 9/30/2018 9/30/2019 GNoninterest Income —_ =i Noninterest Incom
Slide 21: Noninterest Income
Noninterest Income (dollars in thousands) & 9/30/2018 9/30/2019 Branch fee income $ 1,107/$ 1,120 Service and loan fee income 1,441 1,533 (Gain on sale of SBA loans held for sale, net 1,383 554 Gain on sale of mortgage loans, net 1,442) 1,525 BOLI income 810 435 Net security (losses) gains (6) 216 O
Slide 22: Noninterest Expense
Noninterest Expense (dollars in millions) $45.00 2.69% $40.00 Sa aa 2.37% Sa aa 380% $35.00 $30.00 2.00% $25.00 $20.00 $15.00 $10.00 $5.00 ‘ 0.00% 2015 2016 2017 2018, 9/30/2018 9/30/2019 sca Noninterest Expense _ =ti+Noninterest Expense/Average Assets
Slide 23: Noninterest Expense
Noninterest Expense (dollars in thousands) |Compensation and benefits $ 15,274/$ 15,384 Occupancy 2,057 1,997 Processing and communications 2,072 2,213 Furniture and equipment 1,732 2,086 Professional services 682 839 Loan collection & OREO (recoveries) expenses (320) 9 Other loan expenses 137 202 [
Slide 24: Profitability Progression
Profitability Progression $2.50 $2.00 0 $1.50 $1.38 $136 , $1.00 1 $0.50 S- r T ; T r 1 2015 2016 2017 2018 9/30/2018 9/30/2019 Effect of nonrecurring gain on repurchase —_«@ Effect of Tax Cut and Jobs Act. 2017 Diluted Eaming per Share would of subordinated debenture have been $1.36, net of the $1.
Slide 25: 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 . 4 2015 2016 2017 2018 9/30/2019 *Capital Raise of $15 million at a weighted average price per share of $14.04; net increase of $14.4 million after expenses.
Slide 26: Market Price
Market Price y $25.00 $20.00 $15.00 $10.00 $5.00 I S- r T T : 1 2015 2016 2017 2018 9/30/2019
Slide 27: Stock (UNTY) Ownership
Stock (UNTY) Ownership y Share Ownership by Type Additional Notes: 10,869,425 Outstanding Shares as of 11/12/2019 Insider ownership includes 1,711,019 shares (15.7%) held under Dallas Financial Holdings 2,137,939 shares (19.7%) held by top 3 institutions- Banc Funds Co, Endicott Mgmt, and Wellington
Slide 28: Capital Ratios
Capital Ratios 15.00% 14.00% 13.00% 12.00% 11.00% 10.00% Total Risk-Based Capital Hl 2015 2016 2017 2018 9/30/2019 13.00% 12.00% 11.00% 10.00% 10.00% 6.00% Tier 1 Risk-Based Capital ATL 2015 2016 2017 2018 9/30/2019 Leverage 2015 2016 2017 2018 9/30/2019
Slide 29: Compelling Investment Highlights
Compelling Investment Highlights Sf Knowledgeable and experienced management team VY Attractive branch franchise 4 Insider ownership Diversity of loan products
Slide 30: Data sources
The previous slides contained data from the following sources: ¢ FDIC-Insured Commercial Banks: Obtained from FDIC. gov Quarterly Banking Profile SNL Census.gov
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