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

July 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 July 14, 2022, announcing results for the three and six months ended June 30, 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 July 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.

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

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

Exhibit 99.1

Clinton, NJ, July 14, 2022 - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $9.5 million, or $0.88 per diluted share, for the quarter ended June 30, 2022, a 12.3% increase compared to net income of $8.4 million, or $0.80 per diluted share for the prior year’s second quarter. For the six months ended June 30, 2022, Unity reported net income of $18.6 million, or $1.74 per diluted share, a 9.7% increase compared to $16.9 million or $1.60 per diluted share for the prior year’s period.

Second Quarter Earnings Highlights

●	Net interest income, our primary driver of earnings, increased $3.3 million to $21.8 million for the quarter ended June 30, 2022, compared to $18.4 million for the prior year’s quarter, primarily due to loan growth. During the quarter ended June 30, 2022, the Company earned $438 thousand on SBA PPP fees.
●	Net interest margin (“NIM”) increased 36 basis points to 4.39% for the quarter ended June 30, 2022, compared to the prior year’s quarter, and increased 28 basis points from 4.11% in the prior sequential quarter.
---	---
●	The provision for loan losses was $1.2 million for the quarter ended June 30, 2022, compared to the release of $178 thousand in provision for loan losses for the prior sequential quarter, due to the sizable increase in total loans.
---	---
●	Noninterest income increased $510 thousand compared to the prior sequential quarter, primarily due to a non-recurring gain of $1.2 million recognized from the termination of a swap derivative instrument, partially offset by the decrease in gains on the sale of SBA loans resulting from the strategic decision to not sell SBA loans during the quarter.
---	---
●	Noninterest expense was $10.7 million for the quarter ended June 30, 2022, an increase of $301 thousand compared to the prior sequential quarter and $251 thousand compared to the prior year’s quarter, primarily due to increased compensation expenses.
---	---
●	The effective tax rate was 25.0% compared to 22.7% in the prior year’s quarter.
---	---

Balance Sheet Highlights

●	Total loans increased $152.2 million, or 9.2%, from year-end 2021 due to increases in commercial loans, residential mortgage loans and residential construction loans. SBA PPP loans decreased $32.2 million due to loans being forgiven and paid off.
●	Total deposits decreased $60.9 million from year-end 2021 to $1.7 billion at June 30, 2022. The decrease was primarily due to a decrease in savings deposits and noninterest-bearing demand deposits, as well as the maturity of a $20.0 million Brokered Certificate of Deposit. The Company’s deposit composition at June 30, 2022 consisted of 39.5% in savings deposits, 30.1% in noninterest-bearing demand deposits, 15.7% in time deposits and 14.7% in interest-bearing demand deposits.
---	---
●	Borrowed funds increased $125.0 million to $165.0 million at June 30, 2022, due to increased customer demands for loans.
---	---
●	Shareholders’ equity was $220.8 million at June 30, 2022 compared to $205.7 million at year-end 2021.
---	---
●	Book value per common share was $21.01 as of June 30, 2022, compared to $19.80 as of December 31, 2021.
---	---
●	At June 30, 2022, the Community Bank Leverage Ratio was 11.06%, compared to 10.51% at December 31, 2021.
---	---
●	Nonperforming assets were $7.7 million at June 30, 2022, compared to $9.6 million at December 31, 2021. The allowance to total loans ratio was 1.27% at June 30, 2022, compared to 1.35% at December 31, 2021.
---	---

Other Highlights

❖

Unity Bancorp, Inc., parent company of Unity Bank, was added as a member of the U.S. small-cap Russell 2000® Index, widely regarded as a bellwether of the U.S. economy due to its focus on American small businesses. Inclusion in the Russell 2000® index became effective on June 27th, as part of the 2022 Russell indexes reconstitution. Membership in the Russell 2000® Index, which remains in place for one year, is based on membership in the broad-market Russell 3000® Index. Unity’s stock also was automatically added to the appropriate growth and value indexes.

❖	Unity Bank Chief Operating Officer/Executive Vice President John Kauchak and retired Vice Chairman Allen Tucker were selected as recipients of the NJBIZ 2022 ICON Award. The honor recognizes leaders over the age of 60 from New Jersey financial services and other industries for work throughout their careers.

❖

Banking industry veteran Jim Donovan has joined Unity Bank as Chief Lending Officer (CLO), bringing more than 35 years of financial services industry leadership experience to Unity Bank. Donovan previously served as a Senior Vice President with Bryn Mawr Trust and a Group Vice President with M&T Bank. He started his banking career as a Credit Analyst with Corestates Bank and also served as Vice President and Commercial Relationship Manager with Meridian Bank. Donovan earned a Master of Business Administration from St. Joseph's University and a Bachelor’s in Accounting from Shippensburg University of Pennsylvania.

Unity Bancorp, Inc. is a financial services organization headquartered in Clinton, New Jersey, with approximately $2.1 billion in assets and $1.7 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

June 30, 2022


										June 30, 2022 vs.
										March 31, 2022		June 30, 2021
(In thousands, except percentages and per share amounts)	June 30, 2022			March 31, 2022			June 30, 2021			%		%
BALANCE SHEET DATA
Total assets	$	2,117,156		$	2,067,692		$	1,973,311		2.4	%	7.3	%
Total deposits		1,697,967			1,771,168			1,594,316		(4.1)		6.5
Total loans		1,801,593			1,701,384			1,653,987		5.9		8.9
Total securities		139,835			116,254			37,054		20.3		277.4
Total shareholders' equity		220,789			214,928			188,756		2.7		17.0
Allowance for loan losses		22,858			22,168			22,801		3.1		0.2

FINANCIAL DATA - QUARTER TO DATE
Income before provision for income taxes	$	12,607		$	11,911		$	10,884		5.8		15.8
Provision for income taxes		3,156			2,803			2,466		12.6		28.0
Net income	$	9,451		$	9,108		$	8,418		3.8		12.3

Net income per common share - Basic	$	0.90		$	0.87		$	0.81		3.4		11.1
Net income per common share - Diluted		0.88			0.85			0.80		3.5		10.0

PERFORMANCE RATIOS - QUARTER TO DATE
Return on average assets		1.83	%		1.80	%		1.77	%
Return on average equity		17.32			17.64			18.29
Efficiency ratio		42.84			45.86			49.06
Net interest margin		4.39			4.11			4.03
Noninterest expense to average assets		2.08			2.06			2.19

FINANCIAL DATA - YEAR TO DATE
Income before provision for income taxes	$	24,519					$	22,325				9.8
Provision for income taxes		5,960						5,411				10.1
Net income	$	18,559					$	16,914				9.7

Net income per common share - Basic	$	1.77					$	1.62				9.3
Net income per common share - Diluted		1.74						1.60				8.7

PERFORMANCE RATIOS - YEAR TO DATE
Return on average assets		1.82	%					1.81	%			0.6
Return on average equity		17.48						18.88				(7.4)
Efficiency ratio		44.27						47.39				(6.6)
Net interest margin		4.25						4.06				4.7
Noninterest expense to average assets		2.07						2.16				(4.2)

SHARE INFORMATION
Market price per share	$	26.48		$	27.98		$	22.05		(5.4)		20.1
Dividends paid		0.11			0.10			0.09		10.0		22.2
Book value per common share		21.01			20.48			18.12		2.6		15.9
Average diluted shares outstanding (QTD)		10,706			10,664			10,569		0.4		1.3

CAPITAL RATIOS
Total equity to total assets		10.43	%		10.39	%		9.57	%
Community bank leverage ratio		11.20			10.87			10.31

CREDIT QUALITY AND RATIOS
Nonperforming assets	$	7,680		$	9,301		$	9,685		(17.4)		(20.7)
QTD net chargeoffs/(recoveries) to QTD average loans		0.11	%		(0.01)	%		0.04	%
Allowance for loan losses to total loans		1.27			1.30			1.38
Nonperforming loans to total loans		0.43			0.55			0.59
Nonperforming assets to total assets		0.36			0.45			0.49

UNITY BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

June 30, 2022


							June 30, 2022 vs.
							Dec. 31, 2021		June 30, 2021
(In thousands, except percentages)	June 30, 2022		Dec. 31, 2021		June 30, 2021		%		%
ASSETS
Cash and due from banks	$	23,997	$	26,053	$	24,527	(7.9)	%	(2.2)	%
Interest-bearing deposits		85,046		218,765		197,325	(61.1)		(56.9)
Cash and cash equivalents		109,043		244,818		221,852	(55.5)		(50.8)
Securities:
Debt securities available for sale		93,972		56,480		32,810	66.4		186.4
Securities held to maturity		36,813		14,276		2,000	157.9		1,740.7
Equity securities with readily determinable fair values		9,050		8,566		2,244	5.7		303.3
Total securities		139,835		79,322		37,054	76.3		277.4
Loans:
SBA loans held for sale		32,183		27,373		11,314	17.6		184.5
SBA loans held for investment		33,089		36,075		38,114	(8.3)		(13.2)
SBA PPP loans		14,216		46,450		132,375	(69.4)		(89.3)
Commercial loans		1,026,313		931,726		885,566	10.2		15.9
Residential mortgage loans		481,687		409,355		422,188	17.7		14.1
Consumer loans		79,645		77,944		64,557	2.2		23.4
Residential construction loans		134,460		120,525		99,874	11.6		34.6
Total loans		1,801,593		1,649,448		1,653,988	9.2		8.9
Allowance for loan losses		(22,858)		(22,302)		(22,801)	2.5		0.2
Net loans		1,778,735		1,627,146		1,631,187	9.3		9.0
Premises and equipment, net		19,288		19,914		19,799	(3.1)		(2.6)
Bank owned life insurance ("BOLI")		26,464		26,608		26,560	(0.5)		(0.4)
Deferred tax assets		11,933		10,040		9,377	18.9		27.3
Federal Home Loan Bank ("FHLB") stock		9,223		3,550		9,060	159.8		1.8
Accrued interest receivable		9,961		9,586		9,486	3.9		5.0
Goodwill		1,516		1,516		1,516	-		-
Prepaid expenses and other assets		11,158		11,213		7,420	(0.5)		50.4
Total assets	$	2,117,156	$	2,033,713	$	1,973,311	4.1	%	7.3	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	511,062	$	529,227	$	489,700	(3.4)	%	4.4	%
Interest-bearing demand		249,997		244,073		208,802	2.4		19.7
Savings		670,129		694,161		518,405	(3.5)		29.3
Time, under $100,000		167,462		194,961		245,423	(14.1)		(31.8)
Time, $100,000 to $250,000		63,105		62,668		74,282	0.7		(15.0)
Time, $250,000 and over		36,212		33,791		57,704	7.2		(37.2)
Total deposits		1,697,967		1,758,881		1,594,316	(3.5)		6.5
Borrowed funds		165,000		40,000		165,000	312.5		-
Subordinated debentures		10,310		10,310		10,310	-		-
Accrued interest payable		128		129		231	(0.8)		(44.6)
Accrued expenses and other liabilities		22,962		18,664		14,698	23.0		56.2
Total liabilities		1,896,367		1,827,984		1,784,555	3.7		6.3
Shareholders' equity:
Common stock		95,650		94,003		92,810	1.8		3.1
Retained earnings		139,395		123,037		105,811	13.3		31.7
Treasury stock, at cost		(11,634)		(11,633)		(9,668)	-		(20.3)
Accumulated other comprehensive (loss) income		(2,622)		322		(197)	NM*		NM*
Total shareholders' equity		220,789		205,729		188,756	7.3		17.0
Total liabilities and shareholders' equity	$	2,117,156	$	2,033,713	$	1,973,311	4.1	%	7.3	%
COMMON SHARES AT PERIOD END:
Shares issued		11,214		11,094		11,031
Shares outstanding		10,511		10,391		10,416
Treasury shares		703		703		615

*NM=Not meaningful

UNITY BANCORP, INC.

QTD CONSOLIDATED STATEMENTS OF INCOME

June 30, 2022


										June 30, 2022 vs.
	For the three months ended									March 31, 2022				June 30, 2021
(In thousands, except percentages and per share amounts)	June 30, 2022			March 31, 2022			June 30, 2021				%				%
INTEREST INCOME
Interest-bearing deposits	$	152		$	96		$	33				58.3	%			360.6	%
FHLB stock		50			33			53				51.5				(5.7)
Securities:
Taxable		1,115			652			253				71.0				340.7
Tax-exempt		10			6			9				66.7				11.1
Total securities		1,125			658			262				71.0				329.4
Loans:
SBA loans		926			923			776				0.3				19.3
SBA PPP loans		492			777			1,748				(36.7)				(71.9)
Commercial loans		12,414			11,497			10,734				8.0				15.7
Residential mortgage loans		4,982			4,390			4,906				13.5				1.5
Consumer loans		919			921			682				(0.2)				34.8
Residential construction loans		2,011			1,824			1,486				10.3				35.3
Total loans		21,744			20,332			20,332				6.9				6.9
Total interest income		23,071			21,119			20,680				9.2				11.6
INTEREST EXPENSE
Interest-bearing demand deposits		198			164			307				20.7				(35.5)
Savings deposits		412			345			419				19.4				(1.7)
Time deposits		419			480			1,171				(12.7)				(64.2)
Borrowed funds and subordinated debentures		285			226			334				26.1				(14.7)
Total interest expense		1,314			1,215			2,231				8.1				(41.1)
Net interest income		21,757			19,904			18,449				9.3				17.9
Provision (benefit) for loan losses		1,188			(178)			-				NM*				NM*
Net interest income after provision (benefit) for loan losses		20,569			20,082			18,449				2.4				11.5
NONINTEREST INCOME
Branch fee income		281			275			269				2.2				4.5
Service and loan fee income		688			584			509				17.8				35.2
Gain on sale of SBA loans held for sale, net		-			852			496				(100.0)				(100.0)
Gain on sale of mortgage loans, net		431			521			1,066				(17.3)				(59.6)
BOLI income		161			163			133				(1.2)				21.1
Net security (losses) gains		(498)			(557)			23				10.6				NM*
Other income		1,686			401			399				320.4				322.6
Total noninterest income		2,749			2,239			2,895				22.8				(5.0)
NONINTEREST EXPENSE
Compensation and benefits		6,811			6,508			6,333				4.7				7.5
Processing and communications		706			752			750				(6.1)				(5.9)
Occupancy		727			775			631				(6.2)				15.2
Furniture and equipment		618			576			659				7.3				(6.2)
Other loan (income) expenses		(5)			135			165				(103.7)				(103.0)
Professional services		392			447			339				(12.3)				15.6
Advertising		340			225			403				51.1				(15.6)
Deposit insurance		250			269			225				(7.1)				11.1
Director fees		225			233			204				(3.4)				10.3
Loan collection expenses		36			58			54				(37.9)				(33.3)
Other expenses		611			432			697				41.4				(12.3)
Total noninterest expense		10,711			10,410			10,460				2.9				2.4
Income before provision for income taxes		12,607			11,911			10,884				5.8				15.8
Provision for income taxes		3,156			2,803			2,466				12.6				28.0
Net income	$	9,451		$	9,108		$	8,418				3.8	%			12.3	%

Effective tax rate		25.0	%		23.5	%		22.7	%

Net income per common share - Basic	$	0.90		$	0.87		$	0.81
Net income per common share - Diluted		0.88			0.85			0.80

Weighted average common shares outstanding - Basic		10,504			10,446			10,427
Weighted average common shares outstanding - Diluted		10,706			10,664			10,569

*NM=Not meaningful<br><br><br><br>

All values are in US Dollars.

UNITY BANCORP, INC.

YTD CONSOLIDATED STATEMENTS OF INCOME

June 30, 2022



	For the six months ended June 30,						Current YTD vs. Prior YTD
(In thousands, except percentages and per share amounts)	2022			2021				%
INTEREST INCOME
Interest-bearing deposits	$	248		$	57				335.1	%
FHLB stock		83			116				(28.4)
Securities:
Taxable		1,768			546				223.8
Tax-exempt		16			18				(11.1)
Total securities		1,784			564				216.3
Loans:
SBA loans		1,849			1,559				18.6
SBA PPP loans		1,269			3,477				(63.5)
Commercial loans		23,910			21,210				12.7
Residential mortgage loans		9,372			10,034				(6.6)
Consumer loans		1,840			1,538				19.6
Residential construction loans		3,835			2,701				42.0
Total loans		42,075			40,519				3.8
Total interest income		44,190			41,256				7.1
INTEREST EXPENSE
Interest-bearing demand deposits		362			616				(41.2)
Savings deposits		757			851				(11.0)
Time deposits		899			2,634				(65.9)
Borrowed funds and subordinated debentures		511			688				(25.7)
Total interest expense		2,529			4,789				(47.2)
Net interest income		41,661			36,467				14.2
Provision for loan losses		1,009			500				101.8
Net interest income after provision for loan losses		40,652			35,967				13.0
NONINTEREST INCOME
Branch fee income		556			564				(1.4)
Service and loan fee income		1,272			1,133				12.3
Gain on sale of SBA loans held for sale, net		852			741				15.0
Gain on sale of mortgage loans, net		952			2,817				(66.2)
BOLI income		324			261				24.1
Net security (losses) gains		(1,055)			333				(416.8)
Other income		2,088			772				170.5
Total noninterest income		4,989			6,621				(24.6)
NONINTEREST EXPENSE
Compensation and benefits		13,319			12,396				7.4
Processing and communications		1,458			1,557				(6.4)
Occupancy		1,502			1,337				12.3
Furniture and equipment		1,194			1,308				(8.7)
Professional services		839			720				16.5
Advertising		565			671				(15.8)
Other loan expenses		130			308				(57.8)
Deposit insurance		519			439				18.2
Director fees		459			412				11.4
Loan collection & OREO expenses		93			5				1,760.0
Other expenses		1,043			1,110				(6.0)
Total noninterest expense		21,121			20,263				4.2
Income before provision for income taxes		24,520			22,325				9.8
Provision for income taxes		5,961			5,411				10.2
Net income	$	18,559		$	16,914				9.7	%

Effective tax rate		24.3	%		24.2	%

Net income per common share - Basic	$	1.77		$	1.62
Net income per common share - Diluted		1.74			1.60

Weighted average common shares outstanding - Basic		10,475			10,432
Weighted average common shares outstanding - Diluted		10,685			10,567

*NM=Not meaningful

All values are in US Dollars.

UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

June 30, 2022


		For the three months ended
(Dollar amounts in thousands, interest amounts and		June 30, 2022									June 30, 2021
interest rates/yields on a fully tax-equivalent basis)		Average Balance			Interest			Rate/Yield			Average Balance				Interest					Rate/Yield
ASSETS
Interest-earning assets:
Interest-bearing deposits		$	101,430		$	152			0.60	%	$	124,728				$	33				0.11	%
FHLB stock			3,996			50			4.99			4,725					53				4.46
Securities:
Taxable			127,539			1,115			3.51			34,609					253				2.94
Tax-exempt			1,258			11			3.69			1,754					11				2.49
Total securities (A)			128,797			1,126			3.51			36,363					264				2.92
Loans:
SBA loans			63,804			926			5.82			50,742					776				6.14
SBA PPP loans			23,900			492			8.25			164,073					1,748				4.27
Commercial loans			1,006,183			12,414			4.95			865,292					10,734				4.98
Residential mortgage loans			449,963			4,982			4.44			434,558					4,906				4.53
Consumer loans			78,400			919			4.70			61,357					682				4.46
Residential construction loans			129,780			2,011			6.21			94,388					1,486				6.31
Total loans (B)			1,752,030			21,744			4.98			1,670,410					20,332				4.88
Total interest-earning assets		$	1,986,253		$	23,072			4.66	%	$	1,836,226				$	20,682				4.52	%

Noninterest-earning assets:
Cash and due from banks			24,041									23,511
Allowance for loan losses			(22,179)									(23,043)
Other assets			79,130									75,300
Total noninterest-earning assets			80,992									75,768
Total assets		$	2,067,245								$	1,911,994

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits		$	270,380		$	198			0.29	%	$	219,244				$	307				0.56	%
Total savings deposits			686,058			412			0.24			509,476					419				0.33
Total time deposits			278,206			419			0.60			422,472					1,171				1.11
Total interest-bearing deposits			1,234,644			1,029			0.33			1,151,192					1,897				0.66
Borrowed funds and subordinated debentures			59,090			285			1.94			78,991					334				1.69
Total interest-bearing liabilities		$	1,293,734		$	1,314			0.41	%	$	1,230,183				$	2,231				0.73	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			532,496									482,536
Other liabilities			22,192									14,713
Total noninterest-bearing liabilities			554,688									497,249
Total shareholders' equity			218,823									184,562
Total liabilities and shareholders' equity		$	2,067,245								$	1,911,994

Net interest spread					$	21,758			4.25	%						$	18,451				3.79	%
Tax-equivalent basis adjustment						(1)											(2)
Net interest income					$	21,757										$	18,449
Net interest margin									4.39	%											4.03	%

---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---

(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.
---	---

UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

June 30, 2022


		For the three months ended
(Dollar amounts in thousands, interest amounts and		June 30, 2022									March 31, 2022
interest rates/yields on a fully tax-equivalent basis)		Average Balance			Interest			Rate/Yield			Average Balance			Interest			Rate/Yield
ASSETS
Interest-earning assets:
Interest-bearing deposits		$	101,430		$	152			0.60	%	$	210,601		$	96			0.18	%
FHLB stock			3,996			50			4.99			3,550			33			3.81
Securities:
Taxable			127,539			1,115			3.51			84,739			652			3.12
Tax-exempt			1,258			11			3.69			990			8			3.07
Total securities (A)			128,797			1,126			3.51			85,729			660			3.12
Loans:
SBA loans			63,804			926			5.82			63,543			923			5.89
SBA PPP loans			23,900			492			8.25			36,989			777			8.52
Commercial loans			1,006,183			12,414			4.95			949,948			11,497			4.91
Residential mortgage loans			449,963			4,982			4.44			413,308			4,390			4.31
Consumer loans			78,400			919			4.70			78,989			921			4.73
Residential construction loans			129,780			2,011			6.21			122,993			1,824			6.01
Total loans (B)			1,752,030			21,744			4.98			1,665,770			20,332			4.95
Total interest-earning assets		$	1,986,253		$	23,072			4.66	%	$	1,965,650		$	21,121			4.36	%

Noninterest-earning assets:
Cash and due from banks			24,041									23,679
Allowance for loan losses			(22,179)									(22,331)
Other assets			79,130									79,631
Total noninterest-earning assets			80,992									80,979
Total assets		$	2,067,245								$	2,046,629

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits		$	270,380		$	198			0.29	%	$	249,329		$	164			0.27	%
Total savings deposits			686,058			412			0.24			701,281			345			0.20
Total time deposits			278,206			419			0.60			288,155			480			0.68
Total interest-bearing deposits			1,234,644			1,029			0.33			1,238,765			989			0.32
Borrowed funds and subordinated debentures			59,090			285			1.94			50,310			226			1.82
Total interest-bearing liabilities		$	1,293,734		$	1,314			0.41	%	$	1,289,075		$	1,215			0.38	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			532,496									526,931
Other liabilities			22,192									21,217
Total noninterest-bearing liabilities			554,688									548,148
Total shareholders' equity			218,823									209,406
Total liabilities and shareholders' equity		$	2,067,245								$	2,046,629

Net interest spread					$	21,758			4.25	%				$	19,906			3.98	%
Tax-equivalent basis adjustment						(1)									(2)
Net interest income					$	21,757								$	19,904
Net interest margin									4.39	%								4.11	%

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(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.
---	---

UNITY BANCORP, INC.

YEAR TO DATE NET INTEREST MARGIN

June 30, 2022


	For the six months ended
(Dollar amounts in thousands, interest amounts and	June 30, 2022							June 30, 2021
interest rates/yields on a fully tax-equivalent basis)	Average Balance		Interest		Rate/Yield			Average Balance		Interest		Rate/Yield
ASSETS
Interest-earning assets:
Interest-bearing deposits	$	155,714	$	248		0.32	%	$	107,873	$	57		0.11	%
FHLB stock		3,774		83		4.44			4,945		116		4.73
Securities:
Taxable		106,257		1,768		3.35			36,664		546		3.00
Tax-exempt		1,124		19		3.42			2,077		23		2.23
Total securities (A)		107,381		1,787		3.36			38,741		569		2.96
Loans:
SBA loans		63,674		1,849		5.86			49,799		1,559		6.31
SBA PPP loans		30,408		1,269		8.42			153,387		3,477		4.57
Commercial loans		978,221		23,910		4.93			857,223		21,210		4.99
Residential mortgage loans		431,737		9,372		4.38			445,111		10,034		4.55
Consumer loans		78,693		1,840		4.71			62,393		1,538		4.97
Residential construction loans		126,405		3,835		6.12			91,705		2,701		5.94
Total loans (B)		1,709,138		42,075		4.96			1,659,618		40,519		4.92
Total interest-earning assets	$	1,976,007	$	44,193		4.51	%	$	1,811,177	$	41,261		4.59	%

Noninterest-earning assets:
Cash and due from banks		23,861							23,645
Allowance for loan losses		(22,254)							(23,175)
Other assets		79,379							75,803
Total noninterest-earning assets		80,986							76,273
Total assets	$	2,056,993						$	1,887,450

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits	$	259,913	$	362		0.28	%	$	214,160	$	616		0.58	%
Total savings deposits		693,627		757		0.22			493,061		851		0.35
Total time deposits		283,153		899		0.64			430,317		2,634		1.23
Total interest-bearing deposits		1,236,693		2,018		0.33			1,137,538		4,101		0.73
Borrowed funds and subordinated debentures		54,724		511		1.88			84,316		688		1.65
Total interest-bearing liabilities	$	1,291,417	$	2,529		0.40	%	$	1,221,854	$	4,789		0.79	%

Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		529,729							468,916
Other liabilities		21,706							16,069
Total noninterest-bearing liabilities		551,435							484,985
Total shareholders' equity		214,141							180,611
Total liabilities and shareholders' equity	$	2,056,993						$	1,887,450

Net interest spread			$	41,664		4.12	%			$	36,472		3.80	%
Tax-equivalent basis adjustment				(3)							(5)
Net interest income			$	41,661						$	36,467
Net interest margin						4.25	%						4.06	%

(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.
---	---

UNITY BANCORP, INC.

QUARTERLY ALLOWANCE FOR LOAN LOSSES AND LOAN QUALITY SCHEDULES

June 30, 2022


Amounts in thousands, except percentages	June 30, 2022			March 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021
ALLOWANCE FOR LOAN LOSSES:
Balance, beginning of period	$	22,168		$	22,302		$	22,537		$	22,801		$	22,965
Provision (benefit) for loan losses charged to expense		1,188			(178)			(319)			-			-
		23,356			22,124			22,218			22,801			22,965
Less: Chargeoffs
SBA loans		-			-			-			145			164
Commercial loans		501			-			-			158			20
Residential mortgage loans		-			-			-			-			-
Consumer loans		40			6			-			3			-
Residential construction loans		-			-			-			-			-
Total chargeoffs		541			6			-			306			184
Add: Recoveries
SBA loans		6			22			52			-			19
Commercial loans		32			28			32			-			1
Residential mortgage loans		1			-			-			42			-
Consumer loans		4			-			-			-			-
Residential construction loans		-			-			-			-			-
Total recoveries		43			50			84			42			20
Net (chargeoffs)/recoveries		(498)			44			84			(264)			(164)
Balance, end of period	$	22,858		$	22,168		$	22,302		$	22,537		$	22,801

LOAN QUALITY INFORMATION:

Nonperforming loans:
SBA loans	$	604		$	537		$	510		$	660		$	1,713
Commercial loans		1,717			2,292			2,582			2,879			1,637
Residential mortgage loans		2,668			2,999			3,262			2,626			4,043
Consumer loans		-			200			210			-			3
Residential construction loans		2,691			3,273			3,122			2,637			2,289
Total nonperforming loans		7,680			9,301			9,686			8,802			9,685
OREO		-			-			-			-			-
Nonperforming assets		7,680			9,301			9,686			8,802			9,685
Less: Amount guaranteed by Small Business Administration		15			1,102			59			139			139
Net nonperforming assets	$	7,665		$	8,199		$	9,627		$	8,663		$	9,546

Loans 90 days past due & still accruing	$	43		$	488		$	-		$	2,265		$	574

Performing Troubled Debt Restructurings (TDRs)	$	1,885		$	1,917		$	1,046		$	1,057		$	1,068

Allowance for loan losses to:
Total loans at quarter end		1.27	%		1.30	%		1.35	%		1.35	%		1.38
Total nonperforming loans		297.63			238.34			230.25			256.04			235.43

UNITY BANCORP, INC.

QUARTERLY FINANCIAL DATA

June 30, 2022


(In thousands, except percentages and per share amounts)	June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021
SUMMARY OF INCOME:
Total interest income	$	23,071		$	21,119		$	22,271		$	21,254		$	20,680
Total interest expense		1,314			1,215			1,422			1,531			2,231
Net interest income		21,757			19,904			20,849			19,723			18,449
Provision (benefit) for loan losses		1,188			(178)			(319)			-			-
Net interest income after provision for loan losses		20,569			20,082			21,168			19,723			18,449
Total noninterest income		2,749			2,239			2,624			2,809			2,895
Total noninterest expense		10,711			10,410			10,660			9,860			10,460
Income before provision for income taxes		12,607			11,911			13,132			12,672			10,884
Provision for income taxes		3,156			2,803			3,386			3,213			2,466
Net income	$	9,451		$	9,108		$	9,746		$	9,459		$	8,418

Net income per common share - Basic	$	0.90		$	0.87		$	0.94		$	0.91		$	0.81
Net income per common share - Diluted		0.88			0.85			0.92			0.90			0.80

COMMON SHARE DATA:
Market price per share	$	26.48		$	27.98		$	26.25		$	23.40		$	22.05
Dividends paid		0.11			0.10			0.10			0.09			0.09
Book value per common share		21.01			20.48			19.80			18.94			18.12

Weighted average common shares outstanding - Basic		10,504			10,446			10,376			10,372			10,427
Weighted average common shares outstanding - Diluted		10,706			10,664			10,555			10,507			10,569
Issued common shares		11,214			11,196			11,094			11,063			11,031
Outstanding common shares		10,511			10,493			10,391			10,363			10,416
Treasury shares		703			703			703			700			615

PERFORMANCE RATIOS (Annualized):
Return on average assets		1.83	%		1.80	%		1.90	%		1.96	%		1.77	%
Return on average equity		17.32			17.64			19.23			19.57			18.29
Efficiency ratio		42.84			45.86			45.55			44.15			49.06
Noninterest expense to average assets		2.08			2.06			2.08			2.05			2.19

BALANCE SHEET DATA:
Total assets	$	2,117,156		$	2,067,692		$	2,033,713		$	1,991,115		$	1,973,311
Total deposits		1,697,967			1,771,168			1,758,881			1,706,185			1,594,316
Total loans		1,801,593			1,701,384			1,649,448			1,664,891			1,653,988
Total securities		139,835			116,254			79,322			49,807			37,054
Total shareholders' equity		220,789			214,928			205,729			196,267			188,756
Allowance for loan losses		22,858			22,168			22,302			22,537			22,801

TAX EQUIVALENT YIELDS AND RATES:
Interest-earning assets		4.66	%		4.36	%		4.53	%		4.60	%		4.52	%
Interest-bearing liabilities		0.41			0.38			0.44			0.51			0.73
Net interest spread		4.25			3.98			4.10			4.09			3.79
Net interest margin		4.39			4.11			4.24			4.27			4.03

CREDIT QUALITY:
Nonperforming assets	$	7,680		$	9,301		$	9,686		$	8,802		$	9,685
QTD net chargeoffs/(recoveries) to QTD average loans		(0.11)	%		0.01	%		0.02	%		(0.06)	%		(0.04)	%
Allowance for loan losses to total loans		1.27			1.30			1.35			1.35			1.38
Nonperforming loans to total loans		0.43			0.55			0.59			0.53			0.59
Nonperforming assets to total assets		0.36			0.45			0.48			0.44			0.49

CAPITAL RATIOS AND OTHER:
Total equity to total assets		10.43	%		10.39	%		10.12	%		9.86	%		9.57	%
Community bank leverage ratio		11.20			10.87			10.51			10.70			10.31

Number of banking offices		19			19			19			19			19
Number of ATMs		20			20			20			20			20
Number of employees		213			209			211			208			208