Unity Bancorp Inc. Reports Operating Results (10-Q)

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Aug 10, 2012
Unity Bancorp Inc. (UNTY, Financial) filed Quarterly Report for the period ended 2012-06-30.

Unity Bancorp, Inc. has a market cap of $44.7 million; its shares were traded at around $5.95 with a P/E ratio of 23 and P/S ratio of 1. Unity Bancorp, Inc. had an annual average earning growth of 1.3% over the past 10 years.

Highlight of Business Operations:

The average volume of interest-earning assets decreased $22 million to $755.1 million for the second quarter of 2012 compared to $777.1 million for the same period in 2011. This was due primarily to a $15.1 million decrease in average loans and a $9.7 million decrease in Federal funds sold and interest-bearing deposits, partially offset by a $2.9 million increase in average investment securities.

Net gains on SBA loan sales amounted to $223 thousand on $2.3 million in sales and $381 thousand on $4.2 million in sales for the three and six months ended June 30, 2012, respectively, compared to net gains of $399 thousand on $4.9 million in sales and $510 thousand on $6.0 million in sales during the same periods in 2011.

For the three and six months ended June 30, 2012, gains on the sale of residential mortgage loans increased $366 and $608 thousand compared to the same periods in the prior year. The increased gains are due to a significantly higher volume of loan sales. Net gains on mortgage loan sales amounted to $453 thousand on $20.3 million in sales and $864 thousand on $41.5 million in sales for the three and six months ended June 30, 2012, respectively, compared to net gains of $87 thousand on $6.0 million in sales and $256 thousand on $15.7 million in sales during the same periods in 2011.

Other real estate owned (“OREO”) properties totaled $2.4 million at June 30, 2012, a decrease of $677 thousand from $3.0 million at year-end 2011 and a $367 thousand decrease from $2.7 million at June 30, 2011. During the six months ended June 30, 2012, the Company took title to nine properties totaling $2.0 million and recorded valuation adjustments of $490 thousand on four OREO properties. The Company sold seven OREO properties, resulting in a net loss of $168 thousand on the sales.

Total deposits decreased $27.5 million to $616.4 million at June 30, 2012, from $644.0 million at December 31, 2011. This decrease in deposits was due to decreases of $25.3 million, $5.2 million and $3.3 million in time deposits, savings deposits and interest-bearing demand deposits, respectively, partially offset by an increase of $6.3 million in noninterest-bearing demand deposits. The decline in time deposits was due to the planned run off of brokered CDs and a maturing high rate promotion done at the end of 2008 to bolster liquidity and the decline in savings deposits included a $5.0 million decrease in municipal deposits. The increase in noninterest-bearing deposits was a result of new sales initiatives and efforts by branch personnel to bring in deposit relationships.

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