Unity Bancorp, Inc. · NASDAQ:UNTY
Unity Bancorp — Shareholder Meeting (April 2018)
31 slides from Unity Bancorp's shareholder meeting presentation, Apr 26, 2018
Slide 1: 2018 Shareholders' Meeting
w Unity BANCORP INC 2018 Shareholders’ Meeting April 26, 2018
Slide 2: 2017 earnings, loan and deposit growth highlights
C) 2017 core earnings of $14.6 million vs. $11.7 million in the prior year + Earnings of $12.9 million, a 2.4% decrease from $13.2 million in 2016 O) 2017 core diluted EPS of $1.36 vs. $1.23 in 2016 * Diluted EPS of $1.20 vs. $1.38 in 2016, an 11.6% decrease UO) Total Loans — 20.3% increase * 19.2%
Slide 3: 2017 awards and accomplishments
UC) Named one of the Best Places to work in NJ from NJ BIZ for the second year in a row U) Received the prestigious 5-Star Rating from Bauer Financial, Inc. QO) Ranked 27 Nationally on American Banker magazine’s Top 200 Publicly Traded Community Banks. + Nationally, 669 institutions fit the category
Slide 4: 2018 goals
C) To grow our business relationships by being a responsive bank, providing excellent service with flexible terms and conditions — 10% loan growth OU) Mortgage Division — 15% growth rate CO) SBA Division — Increase 7A Volume no less than $40 million UO) Growth in core deposits of at least 8% CO) Con
Slide 5: 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 6: Recent Events
Recent Events UO Ramsey Branch opened in December.
Slide 7: Recent Events
Recent Events O Phillipsburg Branch relocatedin December. C) Previous rent = $107,000/yr QC) New rent = $60,000/yr
Slide 8: Recent Financial Performance
Recent Financial Performance
Slide 9: Key Bank Ratios
Key Bank Ratios For the year ended December 31, 2017 Public Banks Unity Bancorp $1.0- $2.0 billion Return on average assets Return on average equity ‘Net interest margin Efficiency ratio
Slide 10: Quarterly return on average assets
1.12% 1.10% 1.09% 1.07% 1.05% tose ——1.04% ° 100% 1.01% 1Q2016 2Q2016 3Q2016- 4Q2016-—-1Q2017 2Q2017 3Q2017-- 4Q2017 10
Slide 11: Recent Performance
Recent Performance As of Core* as of Unity Bancorp 3/31/2018 12/31/2017 Return on average assets 1.25% Return on average equity 14.46% [Net interest margin 3.99% 3.83% Efficiency ratio 54.00% 52.45% * Excludes deferred tax asset adjustment of $1.7 million u
Slide 12: Summary Balance Sheet
Summary Balance Sheet (dollars in millions) Assets iS 1,455 |$ 1,190 |$ 1,085 Total Loans 1,171 973 889 Deposits 1,043 946 894 Total Equity 118 106" 78 * Raised $14.4 million additional capital as a result of the completion of the common stock rights offering in 2016. 2
Slide 13: Loan Mix
$1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 Loan Mix (dollars in millions) $1iu $973 $889 $762 | sat | $82 2013 2014 2015 2016 2017 Commercial Loans mMortgageLoans USBALoans Consumer Loans B
Slide 14: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) $250.00 $221.3 $192.3 $200.00 SISOS $153.4 $150.00 $129.7 $100.00 $50.00 2013 2014 2015 2016 2017 Purchases mRefinances
Slide 15: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) $250.00 $2213 $1923 $200.00 S808 $1534 $150.00 $129.7 $100.00 $50.00 S- , , , , 1 2013 2014 2015 2016 2017 wConforming t&Non-Conforming
Slide 16: Asset Quality
$25.00 $20.00 $15.00 $10.00 Asset Quality (dollars in millions) 1.73%. 2013 2014 2015 2016 2017 ‘sNonperforming Assets -t+Nonperforming Assets to Total Assets 1.80% 1.40% 1.00% 0.60% 0.20% -0.20%
Slide 17: Deposit Trend
5 Year Deposit Trend (dollars in millions) $1,200.00 $ 1,043 $1,000.00 $946 $800.00 $600.00 $400.00 $200.00 $:. 2013 2014 2015 2016 2017 wInterest-bearing DDA & SAV deposits s Total time deposits si Noninterest-bearing demand deposits
Slide 18: Summary Income Statement and Profitability
Summary Income Statement and Profitability (dollars in millions) 2017 2016 Net Interest Income Ky 45.8 IS 38.2 Provision for Loan Losses 17. 1.2 Noninterest Income 8.3 111 Noninterest Expense 30.0 27.6 Provision for Income Taxes 9.5 73. Net Income iS 12.9 iS 13.2 Diluted Earnings Per Share Ky 1.20 i
Slide 19: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin (dollars in millions) $50.00 3.83% 4.00% 9 $45.00 53% 53% a 3.58% $40.00 [20% $35.00 | 3.00% $30.00 $25.00 2.50% $20.00 L 2.009 $15.00 200% $10.00 L e096 $5.00 s- : : + 1.00% 2013 2014 2015 2016 2017 iNet Interest Income —=tiNet Interest Margin 9
Slide 20: Core Noninterest Income
Core Noninterest Income (dollars in millions) $10.00 20.00% 18.30% 18.46% $9.00 17-79% 18.00% $8.00 $7.00 16.00% sem) 14.00% $5.00 So 12.00% $3.00 10.00% $2.00 8.00% $1.00 s- 6.00% 2013 2014 2015 2016 2017 WiNoninterest Income =fit+Noninterest Income/Revenue * 2016 noninterest income to revenue rati
Slide 21: Noninterest Income
Noninterest Income (dollars in thousands) 2016 Branch fee income IS 1,384 |$ 1,269 Service and loan fee income 2,100 1,020 Gain on sale of SBA loans held for sale, net 1,617 2,099 Gain on sale of mortgage loans, net 1,530 *2,621 BOLI income 469 378 Net security gains 62 424 Net gain on repurchase of
Slide 22: Noninterest Expense Controls
Noninterest Expense Controls (dollars in millions) $35.00 4.00% $30.00 + 3.00% $25.00 f 2.00% $20.00 F 1.00% $15.00 $10.00 0.00% 2013 2014 2015 2016 2017 sma Noninterest Expense ‘ti Noninterest Expense/Average Assets
Slide 23: Noninterest Expense
Noninterest Expense (dollars in thousands) 2017 2016 Compensation and benefits 17,117|$ 14,952 Occupancy 2381 2360 Processing and communications 2551 2,628 Furniture and equipment 2,079} 1,700 Professional services 1,022 976 Loan collection & OREO expenses 463 654 Other loan expenses 186 152 Deposit
Slide 24: Core Profitability Progression
Core Profitability Progression 2013 2014 2015 2016 2017
Slide 25: Tangible Book Value Per Share
Tangible Book Value Per Share $12.00 $11.00 $10.00 $9.00 $8.00 s700 {I | = 2013 2014 2015 2016 2017
Slide 26: 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 2013 2014 2016 2017* * On June 23, 2017 Unity was included in the Russell 2000, which provides enhanced liquidity. 3/31/2018
Slide 27: Stock Performance
Stock Performance 29.79% * 17.93% * 19.47% * Index Value 2012 2013 2014 2015 2016 2017 Unity Bancorp, Inc. | -8+KBW NASDAQ Bank Index —t-NASDAQ Composite Index * Compound Annual Growth Rate Pa
Slide 28: Cash Dividends
$0.25 $0.20 $0.15 $0.10 $0.05 Cash Dividends 28
Slide 29: Capital Ratios
Capital Ratios Leverage Ratio . 12.00% [Bl unity Bancorp. Inc. (Ml Fvic-nsured Commercial opie Banks 8.00% Total Risk-Based Capital Ratio 6.00% 18.00% 5 4.00% 15.00% 2013 2014 2015 2016 2017 12.00% Tier 1 Risk-Based Capital Ratio 16.00% 9.00% cd 12.00% 3.00% 201320142015 2016 ©2017 8.00% 4.00% 20130
Slide 30: Compelling Investment Highlights
Compelling Investment Highlights 30
Slide 31: Unity Bank: growing with you
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 SNL 31