Clinton, NJ, April 14, 2022 - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $9.1 million, or $0.85 per diluted share, for the quarter ended March 31, 2022, a 7.2 percent increase compared to net income of $8.5 million, or $0.80 per diluted share for the prior year’s first quarter.
First Quarter Earnings Highlights
- Net interest income, our primary driver of earnings, increased $1.9 million to $19.9 million for the quarter ended March 31, 2022, compared to $18.0 million for the prior year’s quarter, primarily due to commercial loan growth and residential construction loan growth. During the quarter ended March 31, 2022, the Company earned $688 thousand on SBA PPP fees.
- Net interest margin (“NIM”) increased 2 basis points to 4.11% for the quarter ended March 31, 2022, compared to the prior year’s quarter.
- The Company released $178 thousand of its provision for loan losses for the quarter ended March 31, 2022. The provision for loan losses decreased $678 thousand compared to the prior year’s period due to an improved outlook on credit quality.
- Noninterest income decreased $1.5 million to $2.2 million compared to the prior year’s quarter. The decreases were primarily due to a decline in the gains on residential mortgage loan sales and a decrease in the fair market value of our equity securities, partially offset by an increase in in the net gain on sale of SBA loans. For the quarter ended March 31, 2022, SBA loan sales totaled $6.8 million with net gains of $852 thousand.
- Noninterest expense increased $608 thousand to $10.4 million compared to the prior year’s quarter, primarily due to increased compensation expenses.
- The effective tax rate was 23.5% compared to 25.7% in the prior year’s quarter.
Balance Sheet Highlights
- Total loans increased $51.9 million, or 3.1%, from year-end 2021 due to increases in commercial loans, residential mortgage loans and residential construction loans. SBA PPP loans decreased $17.8 million due to loans being forgiven and paid off. At March 31, 2022, $1.9 million in loans, or 0.11% of the total loan portfolio, were on deferral, compared to, $8.4 million in loans, or 0.51% of the total loan portfolio at December 31, 2021.
- Total deposits increased $12.3 million from year-end 2021 to $1.8 billion at March 31, 2022. The Company’s deposit composition at March 31, 2022 consisted of 39.9% in savings deposits, 30.6% in noninterest-bearing demand deposits, 15.9% in time deposits and 13.6% in interest-bearing demand deposits.
- Borrowed funds and subordinated debentures remained flat at $50.3 million compared to the prior year’s quarter.
- Shareholders’ equity was $214.9 million at March 31, 2022 compared to $205.7 million at year end 2021.
- Book value per common share was $20.48 as of March 31, 2022, compared to $19.80 as of December 31, 2021.
- At March 31, 2022, the Community Bank Leverage Ratio was 10.67%, compared to 10.51% at December 31, 2021.
- Nonperforming assets were $9.3 million at March 31, 2022, compared to $9.6 million at December 31, 2021. The allowance to total loans ratio was 1.30% at March 31, 2022.
Mr. Allen Tucker, who has served more than 25 years on the Board of Directors, expects to retire following the conclusion of the 2022 Annual Meeting. The Board as well as all Unity Bank employees commemorate Mr. Tucker for his invaluable service.
Unity Bank has launched a partnership program with America’s Grow-A-Row (AGAR), donating $25,000 as the lead sponsor of the Pittstown non-profit organization’s 2022 Farm to Fork Volunteer Sponsorship program, supporting the activities of more than 9,000 volunteers who help to harvest and distribute over 2.4 million pounds of free fresh produce to people in need in nine states. Unity employees also volunteer several times a year at AGAR’s four Hunterdon County farms.
For the second year in a row, Unity Bank has donated $5,000 to the NID Housing Counseling Agency (NIDHCA), a U.S. Department of Housing and Urban Development (HUD) approved national network of housing counselors and community-development consultants. Unity is partnering with the agency to supplement the bank’s Low-Moderate Income Mortgage Program.
Unity Bancorp, Inc. is a financial services organization headquartered in Clinton, New Jersey, with approximately $2.1 billion in assets and $1.8 billion in deposits. Unity Bank, the Company’s wholly owned subsidiary, provides financial services to retail, corporate and small business customers through its 19 retail service centers located in Bergen, Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County in Pennsylvania. For additional information about Unity, visit our website at www.unitybank.com , or call 800- 618-BANK.
This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements may be identified by use of the words “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions. 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 those items included in our Annual Report on Form 10-K under the heading “Item IA-Risk Factors” as amended or supplemented by our subsequent filings with the SEC, as well as general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, our ability to manage and reduce the level of our nonperforming assets, results of regulatory exams, and the impact of COVID-19 on the Bank, its employees and customers, among other factors.
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