CLINTON, N.J., Feb. 29, 2016 (GLOBE NEWSWIRE) -- Unity Bancorp, Inc. (NASDAQ:UNTY), parent company of Unity Bank, announced today that the Company repurchased $5.0 million of its outstanding subordinated debentures on February 26, 2016, reducing its outstanding subordinated debt to $10 million. The subordinated debentures were repurchased at a price of $0.5475 per dollar, resulting in a pre-tax gain of approximately $2.25 million on the transaction.
The subordinated debentures were previously issued by Unity (NJ) Statutory Trust III, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., on December 19, 2006 and were due on December 19, 2036. The floating interest rate was 3 month Libor plus 165 basis points and repriced quarterly.
These securities qualified as Tier I capital under the terms of the Dodd-Frank Wall Street Reform and Consumer Protection Act and thus repurchasing them reduced Tier I capital. Below are our reported December 31, 2015 capital ratios and pro forma ratios. All ratios are in excess of those required to be “well-capitalized.”
“Although the securities were an inexpensive form of capital, the discount was too large to pass up,” said James A Hughes, President and CEO. “The transaction will be accretive to Book value per share of approximately $0.18. I am confident that our earnings will generate ample capital to continue our growth in 2016 and beyond.”
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Pro Forma |
|
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December 31, 2015 |
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December 31, 2015 |
|
Leverage ratio |
|
|
8.82 |
% |
|
8.60 |
% |
Common equity Tier 1 capital (CET1) |
|
|
9.37 |
|
|
9.71 |
|
Tier I risk-based capital ratio |
|
|
11.18 |
|
|
10.92 |
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Total risk-based capital ratio |
|
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12.43 |
|
|
12.17 |