Unity Bancorp, Inc. · NASDAQ:UNTY
Unity Bancorp — Shareholder Meeting (April 2017)
28 slides from Unity Bancorp's shareholder meeting presentation, Apr 27, 2017
Slide 1: 2017 Shareholders' Meeting
w Unity BANCORP INC 2017 Shareholders’ Meeting April 27, 2017
Slide 2: 2016 earnings and growth highlights
¢ Earnings of $13.2 million, a 38.2% increase from $9.6 million in the prior year * 2016 core earings of $11.7 million * Diluted EPS of $1.38 vs. $1.02 in 2015, a 35.3% increase * 2016 core diluted EPS of $1.23 * Total Loans — 9.5% increase * 9.4% increase in commercial loans * 9.3% increase in mort
Slide 3: 2016 accomplishments
* Raised $15 million in common stock through an at the market (ATM) structure in Q4 at a weighted average share price of $14.04 ¢ Named one of the Best Places to work in NJ in the small/medium category from NJ BIZ * Opened two new retail locations in Somerville and Emerson, NJ * Celebrated our 25 An
Slide 4: 2017 goals and strategy
¢ 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% * Growth of bra
Slide 5: Bank Franchise
Bank Franchise Forks Township, PA Phillipsburg, NJ Washington, NJ Clinton, NJ Flemington, NJ Whitehouse, NJ Somerset, NJ North Plainfield, NU Middlesex, NJ Highland Park, NJ Edison, NJ ‘South Plainfield, NJ Scotch Plains, NJ Union, NJ Linden, NJ Somerville, NJ Emerson, NJ
Slide 6: Recent Events
Recent Events = Emerson branch opened in October = Somerville branch opened in November
Slide 7: Recent Financial Performance
Recent Financial Performance
Slide 8: Key Bank Ratios
Key Bank Ratios For the year ended December 31, 2016 Public Banks $500 million - Unity Bancorp $1.5 billion Return on average assets Return on average equity ‘Net interest margin Efficiency ratio
Slide 9: Key Bank Ratios
Key Bank Ratios Core* as of Unity Bancorp 3/31/2017 12/31/2016 Return on average assets Return on average equity : zl ‘Net interest margin 3.70%! 3.58% 3.58% Efficiency ratio 59.08%! 56.51% 59.26% * Excludes gain on repurchase of subordinated debentures
Slide 10: Summary Balance Sheet
Summary Balance Sheet (dollars in millions) Assets iS 1,190 |$ 1,085 |$ 1,009 Total Loans 973 889 762 Deposits 946 894 794 Total Equity 106 78 70 + Raised $14.4 million and $6.1 million additional capital as a result of the completions of the common stock rights offerings in 2016 and 2014, respectiv
Slide 11: Loan Mix
Loan Mix (dollars in millions) $1,200.00 $1,000.00 $973 $889 $800.00 $762 $679 $600.00 $387. $400.00 $200.00 $0.00 , - 2012 2013 2014 2015 2016 Commercial Loans M_— Mortgage Loans MH SBA Loans HH Consumer Loans u
Slide 12: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) $220.00 s200000 J $192.2 $180.00 aL $160.00 $153.4 sigooo | $135.2 0st $120.00 $100.00 $30.00 | $60.00 $40.00 $20.00 80,00 , ' ' ' ' 2012 2013, 2014 2015 2016 Purchases M__Refinances 2
Slide 13: Mortgage Loan Originations
Mortgage Loan Originations (dollars in millions) $220.00 s200000 J $192.2 $180.00 aL $160.00 $153.4 sigooo | $135.2 0st $120.00 $100.00 $30.00 | $60.00 $40.00 $20.00 80,00 , ' ' ' ' 2012 2013, 2014 2015 2016 BH Conforming BH Non-Conforming B
Slide 14: Asset Quality Continues to Improve
Asset Quality Continues to Improve 3.00% 2.50% 2.00%. 150% 100% 0.50% 0.00% Nonperforming Assets to Total Assets 2012 2013 2014 2015 4
Slide 15: Deposit Trend
5 Year Deposit Trend (dollars in millions) $1,000.00 ee $900.00 $054 $800,00 Sia: $739 $700.00 $049 $600.00 $500.00 $400.00 $300.00 $200.00 $100.00 0,00 ' 2012 2013, 2014 2015 2016 HE Interest-bearing DDA& SAV deposits M|_ Total time deposits __ Noninterest-bearing demand deposits
Slide 16: Summary Income Statement and Profitability
Summary Income Statement and Profitability (dollars in millions) 2016 201 ‘Net Interest Income iS 38.2 Ky 34.0 Provision for Loan Losses 1.2 0.5 ‘Noninterest Income IT 78 ‘Noninterest Expense 27.6 26.9 Provision for Income Taxes 73 48 ‘Net Income g 13.2 g 9.6 Diluted Earnings Per Share iS 138 iS 1.0
Slide 17: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin (dollars in millions) $45.00 4 400% 36 3.63% $40.00 id 3.53% 3.53% | 3.50% $35.00 $30.00 3.00% 2 325.00 5 |-2.50% 2 s2000 sisoo 4 [2.00% sioo0 4 | 1.50% $5.00 $0.00 - . ’ , 100% 2012 2013 2014 2015 2016 ME Net Interest Income —f— Net Interest Margin
Slide 18: Strong Levels of Noninterest Income
Strong Levels of Noninterest Income (dollars in millions) $1000 4 15%. 20.0% 183% 185% $9.00 17.0% $s00 | 16.0% $7.00 2 $6.00 12.0% 2 % $5.00 = ss00 | } 8.0% $3.00 4 $2.00 4.0% si00 | $0.00 . . ' , 0.0% 2012 2013 2014 201s 2016# HE Noninterest Income HE Noninterest Income/Revenue * Non-GAAP - 2016 d
Slide 19: Noninterest Income
Noninterest Income (dollars in thousands) Branch fee income IS 1,269 |$ 1,520 Service and loan fee income 2,030 1,996 Gain on sale of SBA loans held for sale, net 2,099 1,204 Gain on sale of mortgage loans, net 1,610 1,674 BOLI income 378 380 Net security gains 424 28 Net gain on repurchase of subor
Slide 20: Noninterest Expense Controls
Noninterest Expense Controls (dollars in miltions) 302% $30.00 a [2.50% $25.00 | 1 s0% $20.00 0.50% 2012 2013 2014 2015 2016 TE Noninterest Expense HE Noninterest Expense/Average Assets
Slide 21: Noninterest Expense
Noninterest Expense (dollars in thousands) Cc IS 14,952 |$ 14,295 ‘ompensation and benefits Occupancy 2,360 2,515 Processing and communications 2,445 2,461 Furniture and equipment 1,700 1,643 Professional services 976 942 Loan costs and OREO expenses 989 1,141 Deposit insurance 713 669 Advertising 1
Slide 22: Profitability Progression
Profitability Progression $1.50 $125 S100 $0.75 $0.50 $0.25 $0.00 <4 —_ 2013 2014 201s 2016 Effect of nonrecurring gain on repurchase of subordinated debenture ‘All share information has been adjusted for the 10% stock dividend paid September 30, 2016. 2
Slide 23: Tangible Book Value Per Share
$10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 $6.50 $6.00 Tangible Book Value Per Share $10.00 2012 2018, 2014 2015 2016 Capital raise of $15 million at a weighted average price per share of $14.04; net increase of $14.4 million after expenses All share information has been adjusted for the 10%
Slide 24: Market Price
$16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 Market Price 2012 2018, 2014 2015 2016 All share information has been adjusted for the 10% stock dividend paid September 30, 2016.
Slide 25: Cash Dividends
$0.20 $0.15 $0.10 $0.05, $0.00 Cash Dividends 2014 2015 2016
Slide 26: Capital Ratios
Capital Ratios Leverage 12.00% 5 Unity Bancorp, Inc. FDIC-Insured Commercial Banks io.00% 800% Total Risk-Based Capital 6.00% 18.00% 400% y y y y 15.00% 212-2013, 201420152016 12.00% Tier 1 Risk-B: ital 00% ie isk-Based Capi 16.00% 4 6.00% 3.00% ' inte 2012-2013, 201420182016 8.00% 4.00% ' ' ’ 2012-
Slide 27: Compelling Investment Highlights
Compelling Investment Highlights
Slide 28: Unity Bank - data sources
wy UniTy BANK The previous slides contained data from the following sources: ¢ FDIC-Insured Commercial Banks: Obtained from FDIC. gov Quarterly Banking Profile ¢ SNL 28