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August 2009 The Company continues to gain market share and the fundamentals of the Bank remain sound; although, the challenges of the economy continue to have an impact on both our loan and investment portfolios. This quarter’s results included a $1.7 million impairment charge on two pooled trust preferred securities and an additional $400 thousand FDIC assessment. Based on a recent third-party review of the pooled trust securities, we believe that these securities have limited future valuation risk. You may recall that we shifted our Small Business program from National to local last year; however, our portfolio continues to experience an increase in past due accounts. We have recorded a $1.5 million provision for loan losses this past quarter, and it is likely that the provision will continue to be robust until we experience a reduction in delinquent accounts. There continues to be many positive happenings at Unity. Our strategic sales and marketing efforts are proving effective resulting in another quarter of strong deposit growth. Total deposits improved over four percent (4%) for the quarter and are up almost nine percent (9%) from a year ago. In addition, we have reduced our portfolio of time deposits due to the tremendous success of our new Loyalty Savings product. As a result, total savings accounts have increased thirty percent (30%) from the prior quarter. Our pricing strategy is to reduce our cost of funds to improve our net interest margin. This quarter, our net interest margin increased to 3.24% from 3.14% in the first quarter. As higher-costing time deposits re-price in a lower rate environment, we expect to see further increases in our net interest margin for the remainder of the year. With the improvement in margin and continued expense control, we are optimistic about the long-term financial forecast for Unity. We remain a strong financial institution and our capital levels continue to exceed the requirements to be well capitalized. We are committed to providing an exceptional customer experience and long-term value for our shareholders. We support and invest in our employees and our communities to help them grow to be the best. If you have any comments or questions, I can be reached at (908) 713-4306. I look forward to hearing from you. Very truly yours, James A. Hughes
President/CEO
This news release contains certain forward-looking statements, either expressed or implied, which anticipates future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company's control and could impede its ability to achieve these goals. These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.
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Message from James A. Hughes 