8-K - UNTY - Equibles

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

April 18, 2022

Date of Report (Date of earliest event reported)

UNITY BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

New Jersey

(State or Other Jurisdiction of Incorporation)


1-12431	22-3282551
(Commission File Number)	(IRS Employer Identification No.)

64 Old Highway 22

Clinton , NJ **** 08809

(Address of Principal Executive Office)

( 908 ) 730-7630

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	UNTY	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operation and Financial Condition

The Registrant issued a press release on April 14, 2022 announcing results for the three months ended March 31, 2022, the full text of which is incorporated by reference to this Item.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit 99.1Press release issued by the Registrant on April 14, 2022.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

April 14, 2022
	UNITY BANCORP, INC.
	(Registrant)

Date: April 18, 2022
	By:	/s/ George Boyan
		George Boyan
		Executive Vice President and Chief Financial Officer

Exhibit 99.1

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.
---	---

Other Highlights

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 (NID-HCA), 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.

UNITY BANCORP, INC.

SUMMARY FINANCIAL HIGHLIGHTS

March 31, 2022


										March 31, 2022 vs.
										Dec. 31, 2021		Mar. 31, 2021
(In thousands, except percentages and per share amounts)	Mar. 31, 2022			Dec. 31, 2021			Mar. 31, 2021			%		%
BALANCE SHEET DATA
Total assets	$	2,067,692		$	2,033,713		$	2,004,818		1.7	%	3.1	%
Total deposits		1,771,168			1,758,881			1,628,393		0.7		8.8
Total loans		1,701,384			1,649,448			1,668,448		3.1		2.0
Total securities		116,254			79,322			34,551		46.6		236.5
Total shareholders' equity		214,928			205,729			181,186		4.5		18.6
Allowance for loan losses		22,168			22,302			22,965		(0.6)		(3.5)

FINANCIAL DATA - QUARTER TO DATE
Income before provision for income taxes	$	11,911		$	13,132		$	11,442		(9.3)		4.1
Provision for income taxes		2,803			3,386			2,946		(17.2)		(4.9)
Net income	$	9,108		$	9,746		$	8,496		(6.5)		7.2

Net income per common share - Basic	$	0.87		$	0.94		$	0.81		(7.4)		7.4
Net income per common share - Diluted		0.85			0.93			0.80		(8.6)		6.2

PERFORMANCE RATIOS - QUARTER TO DATE
Return on average assets		1.80	%		1.90	%		1.85	%
Return on average equity		17.64			19.23			19.51
Efficiency ratio		45.86			45.55			45.74
Net interest margin		4.11			4.24			4.09
Noninterest expense to average assets		2.06			2.08			2.13

SHARE INFORMATION
Market price per share	$	27.98		$	26.25		$	22.00		6.6		27.2
Dividends paid		0.10			0.10			0.08		-		25.0
Book value per common share		20.48			19.80			17.38		3.4		17.8
Average diluted shares outstanding (QTD)		10,664			10,555			10,565		1.0		0.9

CAPITAL RATIOS
Total equity to total assets		10.39	%		10.12	%		9.04	%
Community bank leverage ratio		10.67			10.51			10.19

CREDIT QUALITY AND RATIOS
Nonperforming assets	$	9,301		$	9,686		$	11,788		(4.0)		(21.1)
QTD net chargeoffs (recoveries) to QTD average loans		0.01	%		0.02	%		(0.16)	%
Allowance for loan losses to total loans		1.30			1.35			1.38
Nonperforming loans to total loans		0.55			0.59			0.71
Nonperforming assets to total assets		0.45			0.48			0.59

UNITY BANCORP, INC.

CONSOLIDATED BALANCE SHEETS


							March 31, 2022 vs.
							Dec. 31, 2021		Mar. 31, 2021
(In thousands, except percentages)	Mar. 31, 2022		Dec. 31, 2021		Mar. 31, 2021		%		%
ASSETS
Cash and due from banks	$	26,728	$	26,053	$	25,911	2.6	%	3.2	%
Interest-bearing deposits		160,998		218,765		213,666	(26.4)		(24.6)
Cash and cash equivalents		187,726		244,818		239,577	(23.3)		(21.6)
Securities:
Debt securities available for sale		77,878		56,480		32,330	37.9		140.9
Securities held to maturity		30,367		14,276		-	112.7		100.0
Equity securities with readily determinable fair values		8,009		8,566		2,221	(6.5)		260.6
Total securities		116,254		79,322		34,551	46.6		236.5
Loans:
SBA loans held for sale		25,282		27,373		8,809	(7.6)		187.0
SBA loans held for investment		33,048		36,075		38,296	(8.4)		(13.7)
SBA PPP loans		28,618		46,450		169,117	(38.4)		(83.1)
Commercial loans		979,911		931,726		853,078	5.2		14.9
Residential mortgage loans		427,165		409,355		448,149	4.4		(4.7)
Consumer loans		77,702		77,944		60,502	(0.3)		28.4
Residential construction loans		129,658		120,525		90,497	7.6		43.3
Total loans		1,701,384		1,649,448		1,668,448	3.1		2.0
Allowance for loan losses		(22,168)		(22,302)		(22,965)	(0.6)		(3.5)
Net loans		1,679,216		1,627,146		1,645,483	3.2		2.1
Premises and equipment, net		19,593		19,914		20,043	(1.6)		(2.2)
Bank owned life insurance ("BOLI")		26,652		26,608		26,535	0.2		0.4
Deferred tax assets		9,928		10,040		9,116	(1.1)		8.9
Federal Home Loan Bank ("FHLB") stock		3,541		3,550		9,269	(0.3)		(61.8)
Accrued interest receivable		9,568		9,586		9,831	(0.2)		(2.7)
Goodwill		1,516		1,516		1,516	-		-
Prepaid expenses and other assets		13,698		11,213		8,897	22.2		54.0
Total assets	$	2,067,692	$	2,033,713	$	2,004,818	1.7	%	3.1	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	541,990	$	529,227	$	465,511	2.4	%	16.4	%
Interest-bearing demand		240,757		244,073		217,714	(1.4)		10.6
Savings		707,498		694,161		502,300	1.9		40.9
Time, under $100,000		186,260		194,961		272,298	(4.5)		(31.6)
Time, $100,000 to $250,000		60,569		62,668		94,933	(3.3)		(36.2)
Time, $250,000 and over		34,094		33,791		75,637	0.9		(54.9)
Total deposits		1,771,168		1,758,881		1,628,393	0.7		8.8
Borrowed funds		40,000		40,000		170,000	-		(76.5)
Subordinated debentures		10,310		10,310		10,310	-		-
Accrued interest payable		132		129		255	2.3		(48.2)
Accrued expenses and other liabilities		31,154		18,664		14,674	66.9		112.3
Total liabilities		1,852,764		1,827,984		1,823,632	1.4		1.6
Shareholders' equity:
Common stock		94,855		94,003		92,180	0.9		2.9
Retained earnings		131,100		123,037		98,331	6.6		33.3
Treasury stock, at cost		(11,637)		(11,633)		(8,791)	-		(32.4)
Accumulated other comprehensive income (loss)		610		322		(534)	NM*		NM*
Total shareholders' equity		214,928		205,729		181,186	4.5		18.6
Total liabilities and shareholders' equity	$	2,067,692	$	2,033,713	$	2,004,818	1.7	%	3.1	%
COMMON SHARES AT PERIOD END:
Shares issued		11,196		11,094		10,996
Shares outstanding		10,493		10,391		10,422
Treasury shares		703		703		574

*NM=Not meaningful

UNITY BANCORP, INC.

QTD CONSOLIDATED STATEMENTS OF INCOME

March 31, 2022


										Mar. 31, 2022 vs.
	For the three months ended									Dec. 31, 2021				Mar. 31, 2021
(In thousands, except percentages and per share amounts)	Mar. 31, 2022			Dec. 31, 2021			Mar. 31, 2021				%				%
INTEREST INCOME
Interest-bearing deposits	$	96		$	89		$	24				7.9	%			300.0	%
FHLB stock		33			41			63				(19.5)				(47.6)
Securities:
Taxable		652			460			292				41.7				123.3
Tax-exempt		6			5			10				20.0				(40.0)
Total securities		658			465			302				41.5				117.9
Loans:
SBA loans		923			828			783				11.5				17.9
SBA PPP loans		777			1,978			1,730				(60.7)				(55.1)
Commercial loans		11,497			11,677			10,474				(1.5)				9.8
Residential mortgage loans		4,390			4,587			5,128				(4.3)				(14.4)
Consumer loans		921			871			857				5.7				7.5
Residential construction loans		1,824			1,734			1,215				5.2				50.1
Total loans		20,332			21,675			20,187				(6.2)				0.7
Total interest income		21,119			22,270			20,576				(5.2)				2.6
INTEREST EXPENSE
Interest-bearing demand deposits		164			210			309				(21.9)				(46.9)
Savings deposits		345			444			431				(22.3)				(20.0)
Time deposits		480			541			1,463				(11.3)				(67.2)
Borrowed funds and subordinated debentures		226			226			355				-				(36.3)
Total interest expense		1,215			1,421			2,558				(14.5)				(52.5)
Net interest income		19,904			20,849			18,018				(4.5)				10.5
Provision for loan losses		(178)			(319)			500				44.2				(135.6)
Net interest income after provision for loan losses		20,082			21,168			17,518				(5.1)				14.6
NONINTEREST INCOME
Branch fee income		275			273			295				0.7				(6.8)
Service and loan fee income		584			820			625				(28.8)				(6.6)
Gain on sale of SBA loans held for sale, net		852			-			245				10,000.0				247.8
Gain on sale of mortgage loans, net		521			782			1,750				(33.4)				(70.2)
BOLI income		163			289			129				(43.6)				26.4
Net security (losses) gains		(557)			73			310				(863.0)				(279.7)
Other income		401			387			372				3.6				7.8
Total noninterest income		2,239			2,624			3,726				(14.7)				(39.9)
NONINTEREST EXPENSE
Compensation and benefits		6,508			6,655			6,063				(2.2)				7.3
Processing and communications		752			747			807				0.7				(6.8)
Occupancy		775			670			706				15.7				9.8
Furniture and equipment		576			655			649				(12.1)				(11.2)
Other loan expenses		135			163			143				(17.2)				(5.6)
Professional services		447			402			380				11.2				17.6
Advertising		225			304			268				(26.0)				(16.0)
Deposit insurance		269			206			214				30.6				25.7
Director fees		233			210			208				11.0				12.0
Loan collection expenses (recoveries)		58			69			(49)				(15.9)				218.4
Other expenses		432			579			413				(25.4)				4.6
Total noninterest expense		10,410			10,660			9,802				(2.3)				6.2
Income before provision for income taxes		11,911			13,132			11,442				(9.3)				4.1
Provision for income taxes		2,803			3,386			2,946				(17.2)				(4.9)
Net income	$	9,108		$	9,746		$	8,496				(6.5)	%			7.2	%

Effective tax rate		23.5	%		25.8	%		25.7	%

Net income per common share - Basic	$	0.87		$	0.94		$	0.81
Net income per common share - Diluted		0.85			0.93			0.80

Weighted average common shares outstanding - Basic		10,446			10,376			10,437
Weighted average common shares outstanding - Diluted		10,664			10,555			10,565

*NM=Not meaningful

All values are in US Dollars.

UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

March 31, 2022

(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)


		For the three months ended
		March 31, 2022									March 31, 2021
		Average Balance			Interest			Rate/Yield			Average Balance				Interest					Rate/Yield
ASSETS
Interest-earning assets:
Interest-bearing deposits		$	210,601		$	96			0.18	%	$	90,830				$	24				0.11	%
FHLB stock			3,550			33			3.81			5,167					63				4.98
Securities:
Taxable			84,739			653			3.12			38,741					292				3.06
Tax-exempt			990			8			3.07			2,405					12				2.03
Total securities (A)			85,729			661			3.12			41,146					304				3.00
Loans:
SBA loans			63,543			923			5.89			48,845					783				6.50
SBA PPP loans			36,989			777			8.52			142,581					1,730				4.92
Commercial loans			949,948			11,497			4.91			849,065					10,474				5.00
Residential mortgage loans			413,308			4,390			4.31			455,782					5,128				4.56
Consumer loans			78,989			921			4.73			63,440					857				5.48
Residential construction loans			122,993			1,824			6.01			88,992					1,215				5.54
Total loans (B)			1,665,770			20,332			4.95			1,648,705					20,187				4.97
Total interest-earning assets		$	1,965,650		$	21,122			4.36	%	$	1,785,848				$	20,578				4.67	%

Noninterest-earning assets:
Cash and due from banks			23,679									23,781
Allowance for loan losses			(22,331)									(23,308)
Other assets			79,631									76,309
Total noninterest-earning assets			80,979									76,782
Total assets		$	2,046,629								$	1,862,630

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits		$	249,329		$	164			0.27	%	$	209,020				$	309				0.60	%
Total savings deposits			701,281			345			0.20			476,463					431				0.37
Total time deposits			288,155			480			0.68			438,250					1,463				1.35
Total interest-bearing deposits			1,238,765			989			0.32			1,123,733					2,203				0.80
Borrowed funds and subordinated debentures			50,310			226			1.82			89,699					355				1.61
Total interest-bearing liabilities		$	1,289,075		$	1,215			0.38	%	$	1,213,432				$	2,558				0.85	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			526,931									455,146
Other liabilities			21,217									17,418
Total noninterest-bearing liabilities			548,148									472,564
Total shareholders' equity			209,406									176,634
Total liabilities and shareholders' equity		$	2,046,629								$	1,862,630

Net interest spread					$	19,907			3.98	%						$	18,020				3.82	%
Tax-equivalent basis adjustment						(2)											(2)
Net interest income					$	19,905										$	18,018
Net interest margin									4.11	%								4.09	%
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---

(A)	Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 21 percent and applicable state rates.
(B)	The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.
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UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

March 31, 2022

(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully tax-equivalent basis)


		For the three months ended
		March 31, 2022									December 31, 2021
		Average Balance			Interest			Rate/Yield			Average Balance			Interest			Rate/Yield
ASSETS
Interest-earning assets:
Interest-bearing deposits		$	210,601		$	96			0.18	%	$	222,683		$	89			0.16	%
FHLB stock			3,550			33			3.81			3,526			41			4.58
Securities:
Taxable			84,739			653			3.12			60,087			460			3.04
Tax-exempt			990			8			3.07			1,033			6			2.39
Total securities (A)			85,729			661			3.12			61,120			466			3.03
Loans:
SBA loans			63,543			923			5.89			58,718			828			5.60
SBA PPP loans			36,989			777			8.52			61,854			1,978			12.68
Commercial loans			949,948			11,497			4.91			936,078			11,678			4.95
Residential mortgage loans			413,308			4,390			4.31			414,955			4,587			4.39
Consumer loans			78,989			921			4.73			74,207			871			4.65
Residential construction loans			122,993			1,824			6.01			116,305			1,734			5.91
Total loans (B)			1,665,770			20,332			4.95			1,662,117			21,676			5.17
Total interest-earning assets		$	1,965,650		$	21,122			4.36	%	$	1,949,446		$	22,272			4.53	%

Noninterest-earning assets:
Cash and due from banks			23,679									25,065
Allowance for loan losses			(22,331)									(22,572)
Other assets			79,631									80,810
Total noninterest-earning assets			80,979									83,303
Total assets		$	2,046,629								$	2,032,749

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits		$	249,329		$	164			0.27	%	$	255,083		$	210			0.33	%
Total savings deposits			701,281			345			0.20			684,215			444			0.26
Total time deposits			288,155			480			0.68			302,088			541			0.71
Total interest-bearing deposits			1,238,765			989			0.32			1,241,386			1,195			0.38
Borrowed funds and subordinated debentures			50,310			226			1.82			50,799			227			1.77
Total interest-bearing liabilities		$	1,289,075		$	1,215			0.38	%	$	1,292,185		$	1,422			0.44	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			526,931									519,709
Other liabilities			21,217									19,824
Total noninterest-bearing liabilities			548,148									539,533
Total shareholders' equity			209,406									201,031
Total liabilities and shareholders' equity		$	2,046,629								$	2,032,749

Net interest spread					$	19,907			3.98	%				$	20,850			4.10	%
Tax-equivalent basis adjustment						(2)									(1)
Net interest income					$	19,905								$	20,849
Net interest margin									4.11	%								4.24	%

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(C)	Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductable portion of interest expense, assuming a federal tax rate of 21 percent and applicable state rates.
(D)	The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.
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UNITY BANCORP, INC.

QUARTERLY ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY SCHEDULES

March 31, 2022


Amounts in thousands, except percentages	Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		Jun. 30, 2021		Mar. 31, 2021
ALLOWANCE FOR LOAN LOSSES:
Balance, beginning of period	$	22,302	$	22,537	$	22,801	$	22,965	$	23,105
Provision for loan losses charged to expense		(178)		(319)		-		-		500
		22,124		22,218		22,801		22,965		23,605
Less: Chargeoffs
SBA loans		-		-		145		164		282
Commercial loans		-		-		158		20		373
Residential mortgage loans		-		-		-		-		-
Consumer loans		6		-		3		-		1
Residential construction loans		-		-		-		-		-
Total chargeoffs		6		-		306		184		656
Add: Recoveries
SBA loans		22		52		-		19		15
Commercial loans		28		32		-		1		1
Residential mortgage loans		-		-		42		-		-
Consumer loans		-		-		-		-		-
Residential construction loans		-		-		-		-		-
Total recoveries		50		84		42		20		16
Net recoveries (chargeoffs)		44		84		(264)		(164)		(640)
Balance, end of period	$	22,168	$	22,302	$	22,537	$	22,801	$	22,965

LOAN QUALITY INFORMATION:

Nonperforming loans:
SBA loans	$	537	$	510	$	660	$	1,713	$	1,560
Commercial loans		2,292		2,582		2,879		1,637		952
Residential mortgage loans		2,999		3,262		2,626		4,043		6,711
Consumer loans		200		210		-		3		-
Residential construction loans		3,273		3,122		2,637		2,289		2,565
Total nonperforming loans		9,301		9,686		8,802		9,685		11,788
OREO		-		-		-		-		-
Nonperforming assets		9,301		9,686		8,802		9,685		11,788
Less: Amount guaranteed by SBA		1,102		59		139		139		139
Net nonperforming assets	$	8,199	$	9,627	$	8,663	$	9,546	$	11,649

Loans 90 days past due & still accruing	$	488	$	-	$	2,265	$	574	$	2,540

Performing Troubled Debt Restructurings (TDRs)	$	1,917	$	1,046	$	1,057	$	1,068	$	1,079

Allowance for loan losses to:
Total nonperforming loans		238.34		230.25		256.04		235.43		194.82
Nonperforming assets		238.34		230.25		256.04		235.43		194.82
Net nonperforming assets		270.37		231.66		260.15		238.85		197.14

UNITY BANCORP, INC.

QUARTERLY FINANCIAL DATA

March 31, 2022


(In thousands, except percentages and per share amounts)	Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			Jun. 30, 2021			Mar. 31, 2021
SUMMARY OF INCOME:
Total interest income	$	21,119		$	22,271		$	21,254		$	20,680		$	20,576
Total interest expense		1,215			1,422			1,531			2,231			2,558
Net interest income		19,904			20,849			19,723			18,449			18,018
Provision for loan losses		(178)			(319)			-			-			500
Net interest income after provision for loan losses		20,082			21,168			19,723			18,449			17,518
Total noninterest income		2,239			2,624			2,809			2,895			3,726
Total noninterest expense		10,410			10,660			9,860			10,460			9,802
Income before provision for income taxes		11,911			13,132			12,672			10,884			11,442
Provision for income taxes		2,803			3,386			3,213			2,466			2,946
Net income	$	9,108		$	9,746		$	9,459		$	8,418		$	8,496

Net income per common share - Basic	$	0.87		$	0.94		$	0.91		$	0.81		$	0.81
Net income per common share - Diluted		0.85			0.92			0.90			0.80			0.80

COMMON SHARE DATA:
Market price per share	$	27.98		$	26.25		$	23.40		$	22.05		$	22.00
Dividends paid		0.10			0.10			0.09			0.09			0.08
Book value per common share		20.48			19.80			18.94			18.12			17.38

Weighted average common shares outstanding - Basic		10,446			10,376			10,372			10,427			10,437
Weighted average common shares outstanding - Diluted		10,664			10,555			10,507			10,569			10,565
Issued common shares		11,196			11,094			11,063			11,031			10,996
Outstanding common shares		10,493			10,391			10,363			10,416			10,422
Treasury shares		703			703			700			615			574

PERFORMANCE RATIOS (Annualized):
Return on average assets		1.80	%		1.90	%		1.96	%		1.77	%		1.85	%
Return on average equity		17.64			19.23			19.57			18.29			19.51
Efficiency ratio		45.86			45.55			44.15			49.06			45.74
Noninterest expense to average assets		2.06			2.08			2.05			2.19			2.13

BALANCE SHEET DATA:
Total assets	$	2,067,692		$	2,033,713		$	1,991,115		$	1,973,311		$	2,004,818
Total deposits		1,771,168			1,758,881			1,706,185			1,594,316			1,628,393
Total loans		1,701,384			1,649,448			1,664,891			1,653,988			1,668,448
Total securities		116,254			79,322			49,807			37,054			34,551
Total shareholders' equity		214,928			205,729			196,267			188,756			181,186
Allowance for loan losses		22,168			22,302			22,537			22,801			22,965

TAX EQUIVALENT YIELDS AND RATES:
Interest-earning assets		4.36	%		4.53	%		4.60	%		4.52	%		4.67	%
Interest-bearing liabilities		0.38			0.44			0.51			0.73			0.85
Net interest spread		3.98			4.10			4.09			3.79			3.82
Net interest margin		4.11			4.24			4.27			4.03			4.09

CREDIT QUALITY:
Nonperforming assets	$	9,301		$	9,686		$	8,802		$	9,685		$	11,788
QTD net recoveries (chargeoffs) (annualized) to QTD average loans		0.01	%		0.02	%		(0.06)	%		(0.04)	%		(0.16)	%
Allowance for loan losses to total loans		1.30			1.35			1.35			1.38			1.38
Nonperforming loans to total loans		0.55			0.59			0.53			0.59			0.71
Nonperforming assets to total assets		0.45			0.48			0.44			0.49			0.59

CAPITAL RATIOS AND OTHER:
Total equity to total assets		10.39	%		10.12	%		9.86	%		9.57	%		9.04	%
Community bank leverage ratio		10.67			10.51			10.70			10.31			10.19

Number of banking offices		19			19			19			19			19
Number of ATMs		20			20			20			20			20
Number of employees		209			211			208			208			209