Unity Bancorp(UNTY) - 2019 Q4 - Annual Report

Part I Business Overview Unity Bancorp, Inc. is a New Jersey bank holding company providing comprehensive commercial and consumer financial services through its 19-branch subsidiary, Unity Bank, competing with larger institutions via localized services - Unity Bancorp, Inc. is a New Jersey bank holding company primarily offering commercial and consumer financial services through its wholly-owned subsidiary, Unity Bank[10][13] - As of December 31, 2019, the company had 197 full-time and 12 part-time employees[16] - Unity Bank operates 17 branches in New Jersey and 2 in Pennsylvania, primarily serving specific areas in New Jersey and Eastern Pennsylvania[11][14] - The company faces intense competition from national, major regional banks, large savings institutions, and credit unions, which often possess greater capital and resources[15] General Information%20General) As Unity Bank's holding company, Unity Bancorp, Inc. provides diverse deposit and loan products, focusing its services on specific counties in New Jersey and Pennsylvania - The company's primary business is owning and overseeing Unity Bank, offering comprehensive commercial and community banking services, including various deposit and loan products[10][13] - The bank operates 19 branches in New Jersey and Pennsylvania, serving Hunterdon, Somerset, Union, Middlesex, Warren, and Bergen counties in New Jersey, and Northampton County in Pennsylvania[11][14] - The company competes with larger financial institutions by offering competitively priced loans, deposits, and other services, along with local decision-making and personalized service[15] Supervision and Regulation The company, as a bank and financial holding company, is extensively regulated by federal and state authorities, with new regulations like Dodd-Frank and Basel III significantly impacting capital, consumer protection, and operations - As a bank holding company, the company is regulated by the FRB and has elected to be a financial holding company, allowing it to engage in a broader range of financial activities[19][22][45] - The company and bank must comply with Basel III and Dodd-Frank Act capital adequacy guidelines, including minimum CET1, Tier 1, and total capital ratios, plus a 2.5% capital conservation buffer[24][25][26][30] - The Dodd-Frank Act significantly impacted the banking regulatory landscape, permanently increasing FDIC deposit insurance limits to $250,000, establishing the Consumer Financial Protection Bureau (CFPB), and imposing new obligations on mortgage originators[37][40][41] - Unity Bank, a New Jersey-chartered commercial bank, is regulated by the New Jersey Department of Banking and Insurance and the FDIC, with regulations impacting its capital levels, dividend payment ability, and expansion[36][39] Risk Factors The company faces significant risks from economic downturns, real estate market volatility, loan defaults, interest rate fluctuations, stringent regulations, and operational challenges, including technology disruptions and tax law changes - The company's business and operating results are influenced by U.S. financial markets and macroeconomic conditions (e.g., interest rates, inflation, home prices, unemployment rates), as well as economic conditions in its New Jersey and Pennsylvania trade areas[50][51][52] - A significant portion of the company's loan portfolio is collateralized by real estate (approximately 94% as of December 31, 2019), making it vulnerable to increased defaults and declining collateral values if the real estate market weakens[53] - The company faces the risk that loans may not be repaid on time or in full, and its allowance for loan losses may be insufficient to cover actual losses, especially during deteriorating economic conditions[55][56] - Net interest income constitutes a significant portion of the company's earnings, and interest rate fluctuations could negatively impact its financial performance[57] - The company is subject to extensive government regulation, and laws like the Dodd-Frank Act may increase compliance costs and restrict revenue sources[58][59][60] - The company relies on communication and information systems for its operations, and system failures, disruptions, or security breaches could harm its reputation, lead to customer loss, and incur financial liabilities[74][77] - Changes in U.S. tax laws and New Jersey legislation (e.g., temporary surtaxes and mandatory combined reporting) could increase the company's tax expenses[80][81][82] - LIBOR reform and uncertainty could adversely affect the value and returns of the company's LIBOR-based financial assets and liabilities, potentially requiring significant changes to contracts and systems[83][84] Unresolved Staff Comments This report contains no unresolved staff comments - There are no unresolved staff comments in this report[86] Properties The company operates from its main office and 19 branches, owning 10 properties and leasing 9 with total annual rent of $414,728 as of December 31, 2019 - The company operates through its main office in Clinton, New Jersey, and 19 branches, also leasing additional back-office space in Clinton[86] Company Property Information (As of December 31, 2019) | Location | Leased or Owned | 2019 Annual Rent (USD) | | :--- | :--- | :--- | | North Plainfield, NJ | Owned | — | | Linden, NJ | Owned | — | | Whitehouse, NJ | Owned | — | | Union, NJ | Leased | 18,750 | | Scotch Plains, NJ | Owned | — | | Flemington, NJ | Owned | — | | Forks Township, PA | Leased | 62,677 | | Middlesex, NJ | Owned | — | | Somerset, NJ | Leased | 128,895 | | Washington, NJ | Owned | — | | Highland Park, NJ | Owned | — | | South Plainfield, NJ | Owned | — | | Edison, NJ | Owned | — | | Clinton, NJ | Owned | — | | Somerville, NJ | Owned | — | | Emerson, NJ | Owned | — | | Ramsey, NJ | Leased | 60,987 | | Phillipsburg, NJ | Leased | 60,000 | | Clinton, NJ | Leased | 27,600 | | Bethlehem, PA | Leased | 76,719 | Legal Proceedings The company is not currently involved in any legal proceedings or claims that would materially adversely affect its business or financial performance - The company is currently unaware of any legal proceedings or claims that could have a material adverse effect on its business, financial condition, or operating results[89] Mine Safety Disclosures This section is not applicable - Mine safety disclosures are not applicable[90] Executive Officers of the Registrant As of December 31, 2019, key executive officers included the COO, CFO (resigned Jan 2020), CAO, and Interim Chief Accounting and Financial Officer Executive Officers of the Company (As of December 31, 2019) | Name | Age | Position | Tenure | | :--- | :--- | :--- | :--- | | John Kauchak | 66 | Chief Operating Officer and Executive Vice President | 2002 | | Alan J. Bedner | 48 | Chief Financial Officer and Executive Vice President | 2003* | | Janice Bolomey | 51 | Chief Administrative Officer and Executive Vice President | 2013 | | Laureen S. Cook | 51 | Interim Chief Accounting and Financial Officer and Senior Vice President | 2020* | *Alan J. Bedner resigned on January 24, 2020, and Laureen S. Cook assumed an interim role in 2020 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq under "UNTY"; a 2019 authorization allows repurchasing up to 525,000 shares, though no shares were repurchased in fiscal years 2017-2019 - The company's common stock is listed on the Nasdaq Global Market under the trading symbol “UNTY”[94] - On July 16, 2019, the company authorized the repurchase of up to 525,000 shares of common stock, representing approximately 5% of its outstanding common stock[94] - As of December 31, 2019, 2018, and 2017, the company did not repurchase any shares[94] Selected Financial Data This section presents selected financial data for fiscal year 2017, highlighting the $1.7 million one-time income tax expense increase due to the Tax Act, and presenting non-GAAP metrics for better performance reflection Key Financial Data for Fiscal Year 2017 (GAAP vs. Non-GAAP) | Metric | GAAP ($ thousand) | Tax Act Adjustment ($ thousand) | Non-GAAP ($ thousand) | | :--- | :--- | :--- | :--- | | Federal and State Income Tax Expense | 9,540 | (1,733) | 7,807 | | Net Income | 12,893 | 1,733 | 14,626 | | Basic Earnings Per Share | 1.22 | 0.16 | 1.38 | | Diluted Earnings Per Share | 1.20 | 0.16 | 1.36 | | Return on Average Assets | 1.02% | 0.13% | 1.15% | | Return on Average Equity | 11.47% | 1.55% | 13.02% | | Effective Tax Rate | 42.50% | (7.70)% | 34.80% | - The 2017 Tax Cuts and Jobs Act reduced the corporate tax rate from 35% to 21%, resulting in a one-time net tax expense increase of $1.7 million, impacting GAAP financial metrics[97] - The company believes that non-GAAP financial metrics, excluding the tax act's impact, better reflect its financial performance[97] Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes the company's 2019-2017 performance, highlighting $23.7 million net income in 2019 driven by loan growth, increased assets and liabilities, and a detailed discussion of market risk, liquidity, capital, and accounting policies Operating Performance Highlights for Fiscal Years 2019-2017 | Metric | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | | :--- | :--- | :--- | :--- | | Net Income ($ million) | 23.7 | 21.9 | 12.9 | | Diluted EPS ($) | 2.14 | 2.01 | 1.20 | | Return on Average Assets | 1.54% | 1.53% | 1.02% | | Return on Average Equity | 15.86% | 17.10% | 11.47% | | Efficiency Ratio | 52.00% | 53.07% | 55.57% | | Net Interest Income ($ million) | 57.6 | 53.7 | 45.9 | | Net Interest Margin | 3.95% | 3.97% | 3.83% | | Noninterest Income ($ million) | 9.5 | 9.0 | 8.3 | | Noninterest Expense ($ million) | 34.7 | 33.4 | 30.0 | | Effective Tax Rate | 22.0% | 19.7% | 42.5% | | Total Loan Growth | 9.3% | - | - | | Total Deposit Growth | 3.5% | - | - | - In 2019, net interest income grew 7.2% to $57.6 million, primarily due to strong loan growth, though net interest margin slightly decreased by 2 basis points to 3.95% due to Federal Reserve rate cuts[106][109] - In 2019, total assets grew 8.9% to $1.7 billion, driven by a $120 million increase in net loans, with strong growth in commercial, residential, and consumer loans[133] - In 2019, total deposits increased by $42.4 million, primarily from growth in time deposits and noninterest-bearing demand deposits; borrowings increased by $73 million, mainly from new fixed-rate advances and overnight borrowings[134][181][185] - At year-end 2019, the company's shareholder equity increased by $22.2 million to $160.7 million, primarily driven by $23.7 million in net income[135][209] Overview Unity Bancorp, Inc., through its subsidiary Unity Bank, offers comprehensive commercial and retail banking services via 19 branches and the internet, including various deposit and credit products - Unity Bancorp, Inc. is a New Jersey bank holding company whose wholly-owned subsidiary, Unity Bank, provides comprehensive commercial and retail banking services[103] - The bank operates through the internet and 19 branches in New Jersey and Pennsylvania, offering deposit and various credit services[103] Results of Operations In 2019, net income reached $23.7 million with $2.14 diluted EPS, driven by 11.0% pretax income growth, 7.2% net interest income growth to $57.6 million, and increased loans and deposits Operating Performance Overview for Fiscal Years 2019-2017 | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net Income ($ million) | 23.7 | 21.9 | 12.9 | | Diluted EPS ($) | 2.14 | 2.01 | 1.20 | | Return on Average Assets | 1.54% | 1.53% | 1.02% | | Return on Average Equity | 15.86% | 17.10% | 11.47% | | Efficiency Ratio | 52.00% | 53.07% | 55.57% | - In 2019, pretax net income increased by 11.0% to $30.3 million[106] - In 2019, net interest income grew 7.2% to $57.6 million, primarily driven by strong loan growth[106] - In 2019, net interest margin decreased by 2 basis points to 3.95%, mainly due to recent Federal Reserve rate cuts[106] - In 2019, noninterest income was $9.5 million, an increase of $0.508 million year-over-year, driven by equity securities market fluctuations, increased gains on securities sales, and higher mortgage banking income[106] - In 2019, total noninterest expense was $34.7 million, an increase of $1.3 million year-over-year, primarily due to higher compensation and mortgage commissions[106] - In 2019, the effective tax rate increased to 22.0%, mainly due to recent New Jersey tax law changes[106] - In 2019, total loans grew 9.3%, with consumer loans increasing 15.8%, commercial loans 10.2%, and residential mortgage loans 7.3%[106] - In 2019, total deposits grew 3.5%, with time deposits increasing 13.2% and noninterest-bearing demand deposits 3.6%[106] Net Interest Income Net interest income, the primary revenue source, reached $57.6 million in 2019, with net interest margin slightly declining to 3.95% due to rate cuts, while 2018 saw significant growth from loan expansion and rising rates - In 2019, net interest income after tax was $57.6 million, an increase of $3.8 million from 2018; net interest margin decreased by 2 basis points to 3.95%[109] - In 2019, interest income after tax was $75.7 million, a 12.5% year-over-year increase, driven by a $105.3 million increase in average interest-earning assets (primarily loans) and a 21 basis point rise in yield to 5.18%[110][112] - In 2019, total interest expense was $18.1 million, a 33.6% year-over-year increase, driven by higher rates on interest-bearing deposits and increased time deposit volumes, with the average cost of interest-bearing liabilities rising by 32 basis points to 1.64%[110][112] - In 2018, net interest income after tax was $53.8 million, an increase of $7.9 million from 2017; net interest margin increased by 14 basis points to 3.97%, primarily due to strong loan growth and rising interest rates[111] - In 2018, interest income after tax was $67.3 million, a 21.5% year-over-year increase, driven by a $153.9 million increase in average interest-earning assets (primarily loans) and a 36 basis point rise in yield to 4.97%[113][115] - In 2018, total interest expense was $13.5 million, a 43.0% year-over-year increase, driven by higher rates on interest-bearing deposits and increased time deposit volumes, with the average cost of interest-bearing liabilities rising by 28 basis points to 1.32%[113][115] Provision for Loan Losses The company's provision for loan losses was $2.1 million in 2019 and 2018, and $1.7 million in 2017, determined by continuous analysis of the loan portfolio and various risk factors Provision for Loan Losses (Fiscal Years 2017-2019) | Year | Provision for Loan Losses ($ million) | | :--- | :--- | | 2019 | 2.1 | | 2018 | 2.1 | | 2017 | 1.7 | - The provision for loan losses is determined based on an analysis of the loan portfolio, considering its size and composition, net charge-off levels, delinquency status, current economic conditions, and other internal and external risk factors[121] Noninterest Income Noninterest income reached $9.5 million in 2019, up $0.508 million from 2018, driven by equity market fluctuations, mortgage sales, and property gains, while 2018 saw growth from BOLI and mortgage sales Noninterest Income Composition (Fiscal Years 2017-2019) | Item | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | | :--- | :--- | :--- | :--- | | Branch Fee Income | 1,502 | 1,519 | 1,384 | | Service and Loan Fee Income | 1,965 | 2,130 | 2,100 | | Net Gains on SBA Loan Sales | 909 | 1,680 | 1,617 | | Net Gains on Mortgage Loan Sales | 2,090 | 1,719 | 1,530 | | BOLI Income | 588 | 975 | 469 | | Net Gains (Losses) on Securities | 373 | (199) | 62 | | Gains on Sale of Property and Equipment | 766 | — | — | | Other Income | 1,346 | 1,207 | 1,108 | | Total Noninterest Income | 9,539 | 9,031 | 8,270 | - In 2019, noninterest income increased by $0.508 million year-over-year, primarily due to equity securities market fluctuations (an increase of $0.321 million), increased gains on mortgage loan sales (an increase of $0.371 million), and gains on property sales (an increase of $0.766 million)[123] - In 2019, net gains on SBA loan sales decreased by $0.771 million to $0.909 million, primarily due to reduced SBA loan sales volume[123] - In 2018, noninterest income increased by $0.761 million year-over-year, primarily due to increased BOLI income (an increase of $0.506 million, including $0.291 million in death benefits) and increased gains on mortgage loan sales (an increase of $0.189 million)[124] Noninterest Expense Total noninterest expense reached $34.7 million in 2019, up $1.3 million from 2018, driven by increased compensation, mortgage commissions, and technology investments, following a $3.4 million increase in 2018 due to expansion Noninterest Expense Composition (Fiscal Years 2017-2019) | Item | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | | :--- | :--- | :--- | :--- | | Salaries and Employee Benefits | 20,666 | 20,119 | 17,117 | | Occupancy Expense | 2,650 | 2,739 | 2,381 | | Processing and Communications | 2,924 | 2,788 | 2,551 | | Furniture and Equipment | 2,894 | 2,348 | 2,079 | | Professional Services | 1,061 | 934 | 1,022 | | Loan Collection and OREO Expense (Recovery) | 41 | (361) | 463 | | Other Loan Expenses | 272 | 208 | 186 | | Deposit Insurance | 301 | 782 | 546 | | Advertising | 1,358 | 1,411 | 1,179 | | Directors' Fees | 673 | 671 | 637 | | Other Expenses | 1,877 | 1,782 | 1,883 | | Total Noninterest Expense | 34,717 | 33,421 | 30,044 | - In 2019, noninterest expense increased by $1.3 million year-over-year, primarily due to a $0.547 million increase in salaries and benefits, a $0.546 million increase in furniture and equipment expenses (technology investment), and a $0.127 million increase in professional services fees[126][128] - In 2019, deposit insurance expenses decreased by $0.481 million, primarily due to a $0.279 million FDIC assessment credit received in the second half of 2019[128] - In 2018, noninterest expense increased by $3.4 million year-over-year, primarily due to a $3.0 million increase in salaries and benefits (branch expansion and increased staffing), a $0.358 million increase in occupancy expenses, and a $0.269 million increase in furniture and equipment expenses (technology infrastructure investment)[127][129] Income Tax Expense Income tax expense was $6.7 million in 2019, with an effective tax rate of 22.0%, influenced by the 2017 Tax Act's federal rate reduction and 2018 New Jersey tax law changes Income Tax Expense and Effective Tax Rate (Fiscal Years 2017-2019) | Year | Income Tax Expense ($ million) | Effective Tax Rate | | :--- | :--- | :--- | | 2019 | 6.7 | 22.0% | | 2018 | 5.4 | 19.7% | | 2017 | 9.5 | 42.5% | - The 2017 Tax Cuts and Jobs Act reduced the federal corporate tax rate from 35% to 21%, resulting in significant tax benefits for the company[131] - On July 1, 2018, New Jersey legislation implemented a temporary surtax (2.5% for 2018-2019, 1.5% for 2020-2021) and mandatory unitary combined reporting, leading to changes in the effective tax rate[130] Financial Condition As of December 31, 2019, total assets grew 8.9% to $1.7 billion, driven by a $120 million increase in net loans, with corresponding increases in deposits, borrowings, and shareholder equity - As of December 31, 2019, total assets grew 8.9% to $1.7 billion, primarily driven by a $120 million increase in net loans, with strong growth in commercial, residential, and consumer loans[133] - Total deposits increased by $42.4 million, primarily from growth in time deposits and noninterest-bearing demand deposits[134] - Borrowings increased by $73 million to $283 million, primarily from new $40 million fixed-rate advances and $33 million in overnight borrowings[134][185] - Shareholder equity increased by $22.2 million, primarily due to $23.7 million in net income, partially offset by $3.3 million in common stock dividends[135] Securities The securities portfolio, comprising AFS, HTM, and equity investments, saw AFS debt securities grow to $64.3 million in 2019, with all HTM securities transferred to AFS, and 64% of the total portfolio being fixed-rate - The company's securities portfolio includes available-for-sale (AFS), held-to-maturity (HTM), and equity investments, used for asset/liability management, liquidity, and profitability purposes[138] - In 2019, AFS debt securities increased to $64.3 million, a 37.6% year-over-year increase, primarily due to $14.2 million in HTM portfolio transfers to AFS, $13.1 million in new securities purchases, and $1.4 million in market value appreciation[140][146] - In 2019, the company transferred all its HTM securities to the AFS debt securities portfolio; HTM securities were $14.9 million at year-end 2018[141] - In 2019, equity securities increased to $2.3 million, a 6.7% year-over-year increase, primarily influenced by $0.321 million in market value adjustments[144][147] - As of December 31, 2019, approximately 64% of the total investment portfolio was fixed-rate, down from 80% in 2018[148] Loans The loan portfolio, the largest asset and revenue source, grew 9.3% to $1.4 billion in 2019, driven by commercial, residential mortgage, and consumer loans, with SBA 7(a) loans being high-risk and often sold - In 2019, total loans grew 9.3% to $1.4 billion, primarily driven by increases in commercial loans ($70.9 million), residential mortgage loans ($31.7 million), and consumer loans ($19.6 million)[150] Loan Classification (As of December 31, 2019) | Loan Category | Amount ($ thousand) | Percentage of Total Loans | | :--- | :--- | :--- | | SBA Loans (Held for Sale) | 13,529 | 0.9% | | SBA Loans (Held for Investment) | 35,767 | 2.5% | | Commercial Loans | 765,032 | 53.7% | | Residential Mortgage Loans | 467,706 | 32.8% | | Consumer Loans | 143,524 | 10.1% | | Total Loans | 1,425,558 | 100.0% | - SBA 7(a) loans are considered high-risk products, with their guaranteed portions typically sold in the secondary market, while unguaranteed portions are retained as held-for-investment loans[152][154] - Commercial loans are primarily used for working capital, equipment purchases, and commercial real estate financing, totaling $765 million as of December 31, 2019[156] - Residential mortgage loans primarily target individuals who do not qualify for traditional financing, totaling $467.7 million as of December 31, 2019[157] - Consumer loans include home equity loans, construction loans, and personal consumer loans, totaling $143.5 million as of December 31, 2019[158] Troubled Debt Restructurings Troubled Debt Restructurings (TDRs) involve creditor concessions due to debtor financial distress; as of December 31, 2019, one $0.705 million loan was classified as a TDR and impaired - Troubled Debt Restructurings (TDRs) are concessions granted by creditors due to a debtor's financial difficulties, typically involving reduced interest rates, extended loan terms, or modified payment schedules[163] - As of December 31, 2019, the company had one loan of $0.705 million classified as a TDR and deemed impaired, which was modified in 2017 to reduce the principal balance and continues to perform under the restructured terms[164] Asset Quality The company minimizes credit risk through diversification and strict policies; as of December 31, 2019, nonperforming loans were $5.6 million, OREO increased to $1.7 million due to new acquisitions, and potential problem loans rose to $7.4 million - The company minimizes credit risk through loan diversification and stringent credit management policies and procedures[166] - Nonperforming assets include nonperforming loans and other real estate owned (OREO); nonperforming loans are those 90 days or more past due or where the ability to collect principal and interest is doubtful[168] Nonperforming Assets and Loans 90 Days Past Due and Still Accruing (Fiscal Years 2015-2019) | Metric | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | 2016 ($ thousand) | 2015 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Nonperforming Loans | 5,649 | 6,873 | 2,994 | 7,237 | 7,260 | | OREO | 1,723 | 56 | 426 | 1,050 | 1,591 | | Total Nonperforming Assets | 7,372 | 6,929 | 3,420 | 8,287 | 8,851 | | Total Loans 90 Days Past Due and Still Accruing | 930 | 98 | 60 | — | — | | Nonperforming Loans to Total Loans | 0.40% | 0.53% | 0.26% | 0.74% | 0.82% | | Nonperforming Assets to Total Assets | 0.43% | 0.44% | 0.23% | 0.70% | 0.82% | - In 2019, nonperforming loans were $5.6 million, a $1.2 million decrease from year-end 2018[169] - In 2019, OREO properties increased to $1.7 million, primarily due to the company acquiring four new properties valued at $1.7 million[170] - In 2019, potential problem loans increased to $7.4 million, a $2.9 million increase from year-end 2018[171] Allowance for Loan Losses and Reserve for Unfunded Loan Commitments The company quarterly assesses its allowance for loan losses, totaling $16.4 million or 1.15% of total loans in 2019, based on specific and general allowances, with $1.2 million in net charge-offs and a $0.273 million reserve for unfunded commitments - The allowance for loan losses is assessed using specific allowances (for individually impaired loans and TDRs) and general allowances (based on historical net charge-off rates adjusted for environmental factors)[173][174] - In 2019, the total allowance for loan losses was $16.4 million, representing 1.15% of total loans, compared to $15.5 million or 1.19% of total loans in 2018[176] - In 2019, net charge-offs were $1.2 million, compared to $0.118 million in 2018[176] Summary of Allowance for Loan Losses Changes (Fiscal Years 2015-2019) | Metric | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | | :--- | :--- | :--- | :--- | | Balance at Beginning of Year | 15,488 | 13,556 | 12,579 | | Provision Charged to Expense | 2,100 | 2,050 | 1,650 | | Total Charge-offs | 1,242 | 386 | 911 | | Total Recoveries | 49 | 268 | 238 | | Total Net Charge-offs | 1,193 | 118 | 673 | | Balance at End of Year | 16,395 | 15,488 | 13,556 | | Allowance for Loan Losses to Total Loans | 1.15% | 1.19% | 1.16% | | Allowance for Loan Losses to Nonperforming Loans | 290.23% | 225.35% | 452.77% | | Net Charge-offs to Average Loans | 0.09% | 0.01% | 0.06% | - The company maintains a $0.273 million reserve for unfunded loan commitments to absorb estimated probable losses[178] Deposits Deposits, the primary funding source, grew $42.4 million to $1.3 billion in 2019, driven by time and noninterest-bearing demand deposits, with time deposits representing 32.3% of the total - Deposits are the company's primary source of funds, and the company focuses on building and expanding comprehensive relationships with customers[180] - In 2019, total deposits increased by $42.4 million to $1.3 billion, primarily driven by growth in time deposits (an increase of $47.2 million) and noninterest-bearing demand deposits (an increase of $9.6 million)[181] Deposit Composition (As of December 31, 2019) | Deposit Category | Amount ($ thousand) | Percentage of Total Deposits | | :--- | :--- | :--- | | Noninterest-Bearing Demand Deposits | 279,793 | 22.4% | | Interest-Bearing Demand Deposits | 176,335 | 14.1% | | Savings Deposits | 389,795 | 31.2% | | Time Deposits | 404,191 | 32.3% | | Total Deposits | 1,250,114 | 100.0% | - Compared to year-end 2018, in 2019, time deposits increased by 2.7%, while savings deposits and interest-bearing demand deposits decreased by 1.4% and 1.3%, respectively[182] Borrowed Funds and Subordinated Debentures Borrowings, primarily FHLB advances, totaled $293.3 million in 2019, up $73 million from 2018 due to new fixed-rate and overnight advances, with interest rate swaps used to convert adjustable-rate borrowings to fixed-rate - Borrowings primarily consist of Federal Home Loan Bank (FHLB) advances, used to provide liquidity or support asset growth[184] - In 2019, total borrowings and subordinated debentures were $293.3 million, an increase of $73 million from 2018, primarily due to new $40 million FHLB fixed-rate advances and $33 million in FHLB overnight borrowings[185] Composition of Borrowings and Subordinated Debentures (As of December 31, 2019) | Item | 2019 ($ thousand) | 2018 ($ thousand) | | :--- | :--- | :--- | | FHLB Fixed-Rate Advances | 40,000 | — | | FHLB Adjustable-Rate Advances | 50,000 | 50,000 | | FHLB Overnight Advances | 193,000 | 160,000 | | Subordinated Debentures | 10,310 | 10,310 | | Total Borrowings and Subordinated Debentures | 293,310 | 220,310 | - The company uses interest rate swap agreements to convert FHLB adjustable-rate advances into 5-year fixed-rate borrowings to hedge against interest rate fluctuation risk[186] - Subordinated debentures are floating-rate (3-month LIBOR plus 159 basis points) and were converted to a 3-year fixed rate of 3.435% via a new interest rate swap agreement on July 5, 2019[189] Market Risk The company's primary market risk is interest rate risk, managed by the RMC using gap ratios, simulation, and economic value models, with all simulated net interest income and equity economic value results within board-approved guidelines as of December 31, 2019 - The company's primary market risk is interest rate risk, managed by the Risk Management Committee (RMC) to control interest rate risk levels in balance sheet accounts[191] - The company uses “gap” ratios to measure maturity and repricing mismatches between interest-sensitive assets and liabilities, where a positive gap indicates increased net interest income when interest rates rise[192] - As of December 31, 2019, the company had a $4.6 million six-month asset-sensitive gap and a $23.7 million one-year asset-sensitive gap, both within the board-approved +/-20% guidelines[195] - Simulation models indicate that a 200 basis point increase in interest rates over 12 months would increase net interest income by approximately $0.522 million (0.9%); a 200 basis point decrease would reduce net interest income by approximately $1.8 million (2.9%), both within the board-approved +/-10% guidelines[196] - The Economic Value of Portfolio Equity (EVPE) model shows that under a 200 basis point interest rate shock, the change in economic value of equity in 2019 would decrease by 1.8% in a rising rate environment and 1.9% in a falling rate environment, both within the board-approved +/-20% guidelines[197] Liquidity Liquidity, sourced from deposits, loan payments, and borrowings, saw $33.2 million net cash from operations, $133.1 million used in investing, and $112.4 million from financing in 2019, with off-balance sheet commitments also disclosed - Liquidity measures the company's ability to meet current and future cash flow needs, primarily sourced from deposits, principal and interest payments on loans and investment securities, securities sales, and borrowings[198][199] Summary of Cash Flows (Fiscal Years 2018-2019) | Activity Category | 2019 ($ million) | 2018 ($ million) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 33.2 | 38.6 | | Net Cash Used in Investing Activities | 133.1 | 140.7 | | Net Cash from Financing Activities | 112.4 | 97.3 | | Cash and Cash Equivalents, End of Period | 158.0 | 145.5 | - The parent company's cash needs are primarily met by dividends paid by the bank and corporate headquarters rent[203] Off-Balance Sheet Arrangements and Contractual Obligations (As of December 31, 2019) | Item | Within One Year ($ thousand) | One to Three Years ($ thousand) | Three to Five Years ($ thousand) | More Than Five Years ($ thousand) | Total ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Standby Letters of Credit | 4,025 | — | — | 799 | 4,824 | | Time Deposits | 236,210 | 159,946 | 7,667 | 368 | 404,191 | | Borrowings and Subordinated Debentures | 243,000 | — | 40,000 | 10,310 | 293,310 | | Purchase Obligations | 2,062 | 4,124 | 2,234 | — | 8,420 | | Total | 485,297 | 164,070 | 49,901 | 11,477 | 710,745 | - As of December 31, 2019, the company had $219.7 million in additional FHLB credit available[208] Capital Adequacy As of December 31, 2019, shareholder equity increased by $22.2 million to $160.7 million, with both the company and bank meeting all federal "well-capitalized" regulatory capital adequacy requirements - As of December 31, 2019, shareholder equity increased by $22.2 million to $160.7 million, primarily due to $23.7 million in net income[209] - Federal regulators categorize capital into Tier 1 capital (including common stock, qualifying preferred stock, and hybrid instruments) and Tier 2 capital (including a portion of the allowance for loan losses and qualifying long-term debt)[211] Regulatory Capital Ratios (As of December 31, 2019) | Ratio | Company | Bank | Capital Adequacy Requirement (Effective January 1, 2019) | To Be a 'Well-Capitalized' Bank | | :--- | :--- | :--- | :--- | :--- | | Leverage Ratio | 10.59% | 10.15% | 4.00% | 5.00% | | CET1 | 11.59% | 11.81% | 7.00% (1) | 6.50% | | Tier 1 Risk-Based Capital Ratio | 12.32% | 11.81% | 8.50% (1) | 8.00% | | Total Risk-Based Capital Ratio | 13.06% | 12.58% | 10.50% (1) | 10.00% | (1) Includes a 2.5% capital conservation buffer - As of December 31, 2019, Unity Bank was considered “well-capitalized” under applicable regulatory capital adequacy guidelines[410] Forward-Looking Statements This report includes forward-looking statements about future financial performance, subject to risks, uncertainties, and assumptions, with actual results potentially differing due to various economic, regulatory, and operational factors - This report contains forward-looking statements intended to help readers understand anticipated future financial performance, but these involve risks, uncertainties, estimates, and assumptions[215] - Actual results may differ materially from expectations due to factors such as economic and interest rate environments, customer repayment ability, allowance for loan losses adequacy, competition, changes in tax, accounting, or regulatory practices, and technological changes[216] Critical Accounting Policies and Estimates Financial statement preparation requires management estimates and judgments, with critical accounting policies like non-temporary impairment of securities, servicing assets, loan loss allowance, and income taxes involving high complexity and subjective judgment - The preparation of the company's financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses[217] - Management believes that accounting policies for non-temporary impairment of securities, servicing assets, allowance for loan losses, and income taxes involve high complexity and subjective judgment, potentially having a significant impact on operating results due to changes in assumptions or estimates[217] Quantitative and Qualitative Disclosures About Market Risk Quantitative and qualitative disclosures regarding market risk are provided in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Risk" - Quantitative and qualitative disclosures about market risk are detailed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk” section[232] Financial Statements and Supplementary Data This section presents consolidated financial statements for 2019-2017, including balance sheets, income statements, and cash flow statements, along with detailed notes on accounting policies and an unqualified audit opinion - This section includes the company's consolidated balance sheets as of December 31, 2019 and 2018, and consolidated statements of income, comprehensive income, changes in shareholders' equity, and cash flows for the years ended December 31, 2019, 2018, and 2017[233][235][237][239][244] - Notes to the financial statements elaborate on the company's accounting policies, securities, loans, allowance for loan losses, deposits, borrowings, employee benefit plans, and fair value, among other important financial information[247][317][330][356][366][367][411][428] - Independent registered public accounting firm RSM US LLP has issued an unqualified opinion on the company's consolidated financial statements as of December 31, 2019 and 2018[466] Consolidated Balance Sheets As of December 31, 2019, total assets reached $1.7189 billion, with $1.4092 billion in net loans, $1.2501 billion in deposits, and $160.7 million in shareholder equity Consolidated Balance Sheets Summary (As of December 31, 2019 and December 31, 2018) | Item | December 31, 2019 ($ thousand) | December 31, 2018 ($ thousand) | | :--- | :--- | :--- | | Assets | | | | Cash and Cash Equivalents | 158,016 | 145,515 | | Total Securities | 66,564 | 63,732 | | Net Loans | 1,409,163 | 1,289,078 | | Total Assets | 1,718,942 | 1,579,157 | | Liabilities and Shareholders' Equity | | | | Total Deposits | 1,250,114 | 1,207,687 | | Borrowed Funds and Subordinated Debentures | 293,310 | 220,310 | | Total Liabilities | 1,558,233 | 1,440,669 | | Total Shareholders' Equity | 160,709 | 138,488 | | Total Liabilities and Shareholders' Equity | 1,718,942 | 1,579,157 | Consolidated Statements of Income In 2019, net income grew to $23.653 million, with $57.593 million in net interest income, $9.539 million in noninterest income, and $2.14 diluted EPS Consolidated Statements of Income Summary (Fiscal Years 2017-2019) | Item | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | | :--- | :--- | :--- | :--- | | Total Interest Income | 75,648 | 67,263 | 55,310 | | Total Interest Expense | 18,055 | 13,516 | 9,453 | | Net Interest Income | 57,593 | 53,747 | 45,857 | | Provision for Loan Losses | 2,100 | 2,050 | 1,650 | | Total Noninterest Income | 9,539 | 9,031 | 8,270 | | Total Noninterest Expense | 34,717 | 33,421 | 30,044 | | Income Tax Expense | 6,662 | 5,388 | 9,540 | | Net Income | 23,653 | 21,919 | 12,893 | | Diluted Earnings Per Share | 2.14 | 2.01 | 1.20 | | Diluted Weighted Average Common Shares Outstanding | 11,029 | 10,916 | 10,749 | Consolidated Statements of Comprehensive Income In 2019, total comprehensive income was $23.964 million, consisting of $23.653 million net income and $0.311 million net other comprehensive income, primarily from AFS securities and hedging adjustments Consolidated Statements of Comprehensive Income Summary (Fiscal Years 2017-2019) | Item | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | | :--- | :--- | :--- | :--- | | Net Income | 23,653 | 21,919 | 12,893 | | Net Other Comprehensive Income (Loss) | 311 | (328) | 46 | | Total Comprehensive Income | 23,964 | 21,591 | 12,939 | - In 2019, other comprehensive income primarily included unrealized holding gains on available-for-sale securities ($1.332 million), amortization of defined benefit plans ($0.136 million), and unrealized losses on cash flow hedges ($0.862 million)[237] Consolidated Statements of Changes in Shareholders' Equity As of December 31, 2019, total shareholder equity increased to $160.7 million, primarily from $23.653 million net income and $0.311 million other comprehensive income, partially offset by $3.255 million in dividends Consolidated Statements of Changes in Shareholders' Equity Summary (Fiscal Years 2017-2019) | Item | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | | :--- | :--- | :--- | :--- | | Shareholders' Equity Balance at Beginning of Year | 138,488 | 118,105 | 106,291 | | Net Income | 23,653 | 21,919 | 12,893 | | Net Other Comprehensive Income (Loss) | 311 | (328) | 46 | | Common Stock Dividends (Per Share) | 0.31 | 0.27 | 0.23 | | Common Stock Issued and Related Tax Impact | 1,512 | 1,595 | 1,255 | | Shareholders' Equity Balance at End of Year | 160,709 | 138,488 | 118,105 | - In 2019, shareholder equity increased by $22.2 million, primarily contributed by net income and common stock issuances, partially offset by dividend payments[239] Consolidated Statements of Cash Flows In 2019, cash and cash equivalents increased by $12.501 million to $158 million, with $33.204 million net cash from operations, $133.115 million used in investing, and $112.412 million from financing Consolidated Statements of Cash Flows Summary (Fiscal Years 2017-2019) | Activity Category | 2019 ($ thousand) | 2018 ($ thousand) | 2017 ($ thousand) | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 33,204 | 38,590 | 14,449 | | Net Cash Used in Investing Activities | (133,115) | (140,653) | (219,633) | | Net Cash from Financing Activities | 112,412 | 97,324 | 249,543 | | Increase (Decrease) in Cash and Cash Equivalents | 12,501 | (4,739) | 44,359 | | Cash and Cash Equivalents, End of Period | 158,016 | 145,515 | 150,254 | - In 2019, operating activities provided $33.204 million in net cash, primarily from net income and gains on loan sales[200][244] - In 2019, investing activities used $133.115 million in net cash, primarily for new loan originations and securities purchases[201][244] - In 2019, financing activities provided $112.412 million in net cash, primarily from increased borrowings and deposits[202][244] Notes to Consolidated Financial Statements This section provides detailed notes to the consolidated financial statements, covering significant accounting policies, financial instrument classifications, valuation methods, loan loss allowance, deposits, borrowings, employee benefits, and fair value measurements - The notes detail the company's significant accounting policies, including securities classification, loan valuation, allowance for loan losses, income taxes, and fair value measurements[247][251][253][263][274][290][299] - The notes disclose the composition of the company's securities portfolio, unrealized gains and losses, realized gains and losses, and equity securities information[317][321][324][326] - The notes provide detailed classification of the loan portfolio, credit quality indicators, nonperforming loans, impaired loans, and troubled debt restructuring information[330][335][343][346][350] - The notes detail the calculation methods and changes in the allowance for loan losses and the reserve for unfunded loan commitments[356][360][362] - The notes disclose the maturity distribution and composition of deposits, as well as the balances, interest rates, and maturity profiles of borrowings and subordinated debentures, including FHLB borrowings and interest rate swap agreements[366][367][368][369] - The notes also include detailed disclosures on employee benefit plans, such as stock options, restricted stock, 401(k) plans, and executive retirement plans[411][416][417][419] Quarterly Financial Information (Unaudited) This section presents unaudited quarterly financial information for 2019, 2018, and 2017, covering key income statement metrics like net income and diluted EPS, with all adjustments being normal and recurring Quarterly Financial Information for 2019 (Unaudited) | Metric ($ thousand, except per share data) | March 31 | June 30 | September 30 | December 31 | | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | 18,500 | 18,781 | 19,055 | 19,312 | | Net Income | 5,740 | 5,834 | 5,959 | 6,120 | | Diluted Earnings Per Share | 0.52 | 0.53 | 0.54 | 0.55 | Quarterly Financial Information for 2018 (Unaudited) | Metric ($ thousand, except per share data) | March 31 | June 30 | September 30 | December 31 | | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | 15,640 | 16,369 | 17,194 | 18,060 | | Net Income | 5,229 | 5,397 | 5,490 | 5,803 | | Diluted Earnings Per Share | 0.48 | 0.49 | 0.50 | 0.53 | Quarterly Financial Information for 2017 (Unaudited) | Metric ($ thousand, except per share data) | March 31 | June 30 | September 30 | December 31 | | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | 12,594 | 13,477 | 14,195 | 15,044 | | Net Income | 3,192 | 3,444 | 3,757 | 2,500 | | Diluted Earnings Per Share | 0.30 | 0.32 | 0.35 | 0.23 | Selected Consolidated Financial Data This section presents five-year selected consolidated financial data through 2019, showing sustained growth in net income and EPS, expanded assets, robust capital ratios, and low nonperforming loans and net charge-off rates Selected Consolidated Financial Data Summary (Fiscal Years 2015-2019) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Selected Operating Results | | | | | | | Net Income ($ thousand) | 23,653 | 21,919 | 12,893 | 13,209 | 9,557 | | Per Share Data | | | | | | | Diluted EPS ($) | 2.14 | 2.01 | 1.20 | 1.38 | 1.02 | | Book Value Per Share ($) | 14.77 | 12.85 | 11.13 | 10.14 | 8.45 | | Cash Dividends Per Share ($) | 0.31 | 0.27 | 0.23 | 0.18 | 0.13 | | Selected Balance Sheet Data | | | | | | | Assets ($ thousand) | 1,718,942 | 1,579,157 | 1,455,496 | 1,189,906 | 1,084,866 | | Loans ($ thousand) | 1,425,558 | 1,304,566 | 1,170,674 | 973,414 | 888,958 | | Deposits ($ thousand) | 1,250,114 | 1,207,687 | 1,043,137 | 945,723 | 894,493 | | Shareholders' Equity ($ thousand) | 160,709 | 138,488 | 118,105 | 106,291 | 78,470 | | Performance Ratios | | | | | | | Return on Average Assets | 1.54% | 1.53% | 1.02% | 1.17% | 0.96% | | Return on Average Equity | 15.86% | 17.10% | 11.47% | 15.37% | 12.92% | | Efficiency Ratio | 52.00% | 53.07% | 55.57% | 56.51% | 64.41% | | Net Interest Margin | 3.95% | 3.97% | 3.83% | 3.58% | 3.63% | | Asset Quality Ratios | | | | | | | Allowance for Loan Losses to Loans | 1.15% | 1.19% | 1.16% | 1.29% | 1.44% | | Nonperforming Loans to Total Loans | 0.40% | 0.53% | 0.26% | 0.74% | 0.82% | | Net Charge-offs to Average Loans | 0.09% | 0.01% | 0.06% | 0.15% | 0.04% | | Capital Ratios - Company | | | | | | | Leverage Ratio | 10.59% | 9.90% | 9.37% | 9.73% | 8.82% | | CET1 Risk-Based Capital Ratio | 11.59% | 11.40% | 10.81% | 11.49% | 9.37% | | Total Risk-Based Capital Ratio | 13.06% | 13.49% | 12.87% | 13.84% | 12.43% | - In 2019, net income and diluted EPS continued to grow, total assets and loan portfolio expanded, and deposits and shareholder equity increased[464] - In 2019, return on average assets and return on average equity remained high, and the efficiency ratio improved[464] - In 2019, net interest margin slightly decreased but remained at a high level[464] - In terms of asset quality, both the nonperforming loans to total loans ratio and net charge-offs to average loans ratio remained low[464] - Both the company's and the bank's capital ratios were well above regulatory requirements, indicating a strong capital position[464][465] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure This report indicates no changes in accountants or disagreements regarding accounting and financial disclosure - There are no changes in accountants or disagreements with accountants on accounting and financial disclosure in this report[471] Controls and Procedures As of December 31, 2019, the CEO and Interim CFO/CAO affirmed effective disclosure controls and internal financial reporting controls, with RSM US LLP issuing an unqualified opinion and no significant changes reported - As of December 31, 2019, the company's CEO and Interim Chief Financial and Accounting Officer assessed and determined the disclosure controls and procedures to be effective[472] - Management, based on the COSO 2013 framework, assessed and determined the company's internal control over financial reporting to be effective as of December 31, 2019[473] - Independent registered public accounting firm RSM US LLP issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[474][475] - No significant changes in internal control occurred during the reporting period that could materially affect these controls[474] Other Information No other information is reported - No other information[482] Part III Directors, Executive Officers and Corporate Governance; Compliance with Section 16(a) of the Exchange Act Information on directors, executive officers, corporate governance, and Section 16(a) compliance is incorporated by reference from the 2020 Annual Meeting proxy statement - Information regarding directors, executive officers, and corporate governance, as well as compliance with Section 16(a) of the Exchange Act, is incorporated by reference to the company's proxy statement for its 2020 Annual Meeting of Shareholders[484] - Some executive officer information is included in Item 4A, “Executive Officers,” of this Form 10-K Annual Report[485] Executive Compensation Executive compensation information is incorporated by reference from the company's 2020 Annual Meeting of Shareholders proxy statement - Information regarding executive compensation is incorporated by reference to the company's proxy statement for its 2020 Annual Meeting of Shareholders[486] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership information for beneficial owners and management is incorporated by reference; as of December 31, 2019, equity incentive plans included 614,311 outstanding options and 108,740 restricted shares, with 443,100 available for future grants - Information regarding security ownership of certain beneficial owners and management is incorporated by reference to the company's proxy statement for its 2020 Annual Meeting of Shareholders[487] Equity Compensation Plan Information (As of December 31, 2019) | Item | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (A) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (B) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) (C) | | :--- | :--- | :--- | :--- | | Equity Compensation Plans Approved by Security Holders (Stock Option Plan) | 614,311 | $14.78 | 443,100 | | Equity Compensation Plans Approved by Security Holders (Restricted Stock Plan) | 108,740 | — | — | | Total | 723,051 | $12.56 | 443,100 | Certain Relationships and Related Transactions and Director Independence Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2020 Annual Meeting proxy statement - Information regarding certain relationships and related transactions and director independence is incorporated by reference to the company's proxy statement for its 2020 Annual Meeting of Shareholders[490] Principal Accountant Fees and Services Information on principal accountant fees, services, and pre-approval policies is incorporated by reference from the 2020 Annual Meeting proxy statement - Information regarding principal accountant fees and services and related pre-approval policies is incorporated by reference to the company's proxy statement for its 2020 Annual Meeting of Shareholders[491] Part IV Exhibits and Financial Statement Schedules This section lists consolidated financial statements, supplementary data, and notes, along with the independent auditor's report and a comprehensive list of various exhibits, including corporate governance documents and equity plans - This annual report includes the consolidated financial statements and supplementary data of the company and its subsidiaries, comprising consolidated balance sheets, statements of income, comprehensive income, changes in shareholders' equity, and cash flows, along with notes to the financial statements and the independent registered public accounting firm's report[493] - All financial statement schedules have been omitted because the required information is not applicable or has been presented in the consolidated financial statements or related notes[493] - The exhibit list includes the company's articles of incorporation, stock option plans, employment agreements, equity incentive plans, subsidiary information, auditor consent letters, and various certifications required by the Sarbanes-Oxley Act[494] Form 10-K Summary No Form 10-K summary is provided - No Form 10-K summary[497] Signatures This report is signed by authorized representatives of Unity Bancorp, Inc., including the Interim Chief Financial and Accounting Officer, Chairman, President, CEO, and other directors - This report has been signed by authorized representatives of Unity Bancorp, Inc., including Interim Chief Financial and Accounting Officer Laureen S. Cook[499][501] - Signatories include David D. Dallas, Chairman of the Board and Director, James A. Hughes, President, Chief Executive Officer and Director, and other directors[502][503]