# EDGAR Filing Document

**Accession Number:** 0000920427
**File Stem:** 0000920427-23-000003
**Filing Date:** 2023-1
**Character Count:** 49411
**Document Hash:** e70abbddb033e1e411e28fa00ca52e2e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000920427-23-000003.hdr.sgml**: 20230113

**ACCESSION NUMBER**: 0000920427-23-000003

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230113

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230113

**DATE AS OF CHANGE**: 20230113

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** UNITY BANCORP INC /NJ/
- **CENTRAL INDEX KEY:** 0000920427
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **IRS NUMBER:** 223282551
- **STATE OF INCORPORATION:** NJ
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-12431
- **FILM NUMBER:** 23529338

**BUSINESS ADDRESS:**
- **STREET 1:** 64 OLD HIGHWAY 22
- **CITY:** CLINTON
- **STATE:** NJ
- **ZIP:** 08809
- **BUSINESS PHONE:** 8006182265

**MAIL ADDRESS:**
- **STREET 1:** 64 OLD HIGHWAY 22
- **CITY:** CLINTON
- **STATE:** NJ
- **ZIP:** 08809

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** UNITY BANCORP INC /DE/
- **DATE OF NAME CHANGE:** 19940316

?xml version='1.0' encoding='UTF-8'?

------

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

**January 13, 2023**

Date of Report (Date of earliest event reported)

![Graphic](unty-20230113x8k003.jpg)

**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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Results of Operation and Financial Condition
The Registrant issued a press release on January 13, 2023 announcing results for the three and twelve months ended December 31, 2022, the full text of which is incorporated by reference to this Item.

#### Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and Exhibits
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits

[Exhibit 99.1](unty-20230113xex99d1.htm)Press release issued by the Registrant on January 13, 2023.

#### 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.

---

| | | |
|:---|:---|:---|
| January 13, 2023<br>|  |  |
|  | **UNITY BANCORP, INC.** | **UNITY BANCORP, INC.** |
|  | **(Registrant)** | **(Registrant)** |
| Date: January 13, 2023 |  |  |
|  | By: | /s/ George Boyan |
|  |  | George Boyan |
|  |  | Executive Vice President and Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

![Diagram Description automatically generated with low confidence](unty-20230113xex99d1001.jpg)

------

Clinton, NJ -- Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $10.0 million, or $0.93 per diluted share, for the quarter ended December 31, 2022, compared to net income of $9.7 million, or $0.93 per diluted share for the prior year's fourth quarter. This represents a 2.2% increase in net income and net income per diluted share remains flat. For the twelve months ended December 31, 2022, Unity reported net income of $38.5 million, or $3.59 per diluted share, compared to $36.1 million or $3.43 per diluted share for the prior year. This represents a 6.5% increase in net income and a 4.7% increase in net income per diluted share.

*Fourth Quarter Earnings Highlights*

● Net interest income, our primary driver of earnings, increased $3.9 million to $24.7 million for the quarter ended December 31, 2022, compared to $20.8 million for the prior year's quarter. The increase was primarily due to higher interest income on loans, resulting from loan growth.

● Net interest margin ("NIM") increased 23 basis points to 4.47% for the quarter ended December 31, 2022, compared to the prior year's quarter, and decreased 14 basis points from 4.61% for the quarter ended September 30, 2022 because the cost of interest-bearing liabilities increased faster than the repricing of interest-earning assets.

● The provision for loan losses was $1.6 million for the quarter ended December 31, 2022, compared to $1.5 million in provision for loan losses for the quarter ended September 30, 2022. The increase was primarily driven by the sizable increase in total loans period over period.

● Non-interest income was $1.9 million for the quarter ended December 31, 2022. This represented an increase of $0.8 million compared to the quarter ended September 30, 2022. The increase was primarily driven by net unrealized securities gains for the quarter ended December 31, 2022.

● Non-interest expense was $11.4 million for the quarter ended December 31, 2022, an increase of $1.3 million compared to the prior sequential quarter and an increase of $0.7 million compared to the prior year's quarter.

● The effective tax rate was 27.0% compared to 25.8% in the prior year's quarter as a result of one-time activities in the real estate investment trust subsidiary .

*Balance Sheet Highlights*

● Total gross loans increased $457.1 million, or 27.7%, from year-end 2021 primarily due to increases in commercial loans, residential mortgage loans and residential construction loans. SBA PPP loans decreased $40.5 million due to loans being forgiven.

● Total deposits increased $28.6 million, or 1.6%, from year-end 2021. The Company's deposit composition at December 31, 2022 consisted of 33.1% in savings deposits, 27.6% in noninterest-bearing demand deposits, 23.8% in time deposits and 15.5% in interest-bearing demand deposits.

● Borrowed funds increased $343.0 million from year-end 2021. The increase was due to loan demand.

● Shareholders' equity was $239.2 million at December 31, 2022 compared to $205.7 million at year-end 2021.

● Book value per common share was $22.60 as of December 31, 2022, compared to $19.80 as of December 31, 2021.

● At December 31, 2022, the Community Bank Leverage Ratio was 10.45%, compared to 10.51% at December 31, 2021.

● Nonperforming assets were $9.1 million at December 31, 2022, compared to $9.7 million at December 31, 2021. The allowance to total loans ratio was 1.20% at December 30, 2022, compared to 1.35% at December 31, 2021. The decrease in the allowance to total loans ratio was primarily driven by the resolution of certain nonperforming loans, as well as a shift in loan product mix toward residential mortgage loans.

------

*Other Highlights*

❖ In November 2022, the FDIC and NJDOBI terminated the BSA Consent Order previously issued in July 2020.

---

| | |
|:---|:---|
| ❖ | In December 2022, Unity Bank opened a new full service branch in Lakewood, New Jersey's fastest growing municipality, to service customers in Ocean County. Additionally, in Q1 2023, Unity plans to open a Fort Lee branch to expand the bank's footprint in Bergen County. Further, Unity plans to open its first Morris County location mid-2023. |

---

❖ In Q4 2022, Unity Bank commenced an online account opening process to facilitate customer servicing and streamline deposit gathering.

---

| | |
|:---|:---|
| ❖ | As of December 31, 2022, the loan to deposit ratio was approximately 118%, which is above the Company's target threshold of 110%. In addition to the new branches discussed above, which are expected to assist in deposit aggregation, for 2023 the Company plans to reduce transactional-based lending and focus on lending to entities that will result in full-banking relationships, such as owner-occupied businesses. |

---

*Unity Bancorp, Inc. is a financial services organization headquartered in Clinton, New Jersey, with approximately $2.4 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 robust branch network located in Bergen, Hunterdon, Middlesex, Ocean, 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**

**December 31, 2022**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | **December 31, 2022 vs.** | **December 31, 2022 vs.** |
| | | | | **September 30, 2022** | **December 31, 2021** |
| <br>*(In thousands, except percentages and per share amounts)* | <br>**December 31, 2022** | <br>**September 30, 2022** | <br>**December 31, 2021** | **%** | **%** |
| **BALANCE SHEET DATA** |  |  |  |  |  |
| Total assets | $**2444948** | $2339537 | $2033713 | 4.5% | 20.2% |
| Total deposits | **1787528** | 1796597 | 1758881 | (0.5) | 1.6 |
| Total gross loans | **2106559** | 1942414 | 1649448 | 8.5 | 27.7 |
| Total securities | **140946** | 136871 | 79322 | 3.0 | 77.7 |
| Total shareholders' equity | **239231** | 230234 | 205729 | 3.9 | 16.3 |
| Allowance for loan losses | **25196** | 23861 | 22302 | 5.6 | 13.0 |
| **FINANCIAL DATA - QUARTER TO DATE** |  |  |  |  |  |
| Income before provision for income taxes | $**13634** | $13267 | $13132 | 2.8 | 3.8 |
| Provision for income taxes | **3678** | 3325 | 3386 | 10.6 | 8.6 |
| Net income | $**9956** | $9942 | $9746 | 0.1 | 2.2 |
| Net income per common share - Basic  | $**0.94** | $0.94 | $0.94 | - | - |
| Net income per common share - Diluted  | **0.93** | 0.93 | 0.93 | - | - |
| **PERFORMANCE RATIOS - QUARTER TO DATE** |  |  |  |  |  |
| &nbsp;&nbsp;Return on average assets | **1.72%** | 1.85% | 1.90% |  |  |
| &nbsp;&nbsp;Return on average equity  | **16.82** | 17.39 | 19.23 |  |  |
| &nbsp;&nbsp;Efficiency ratio | **43.24** | 39.59 | 45.55 |  |  |
| &nbsp;&nbsp;Net interest margin | **4.47** | 4.61 | 4.24 |  |  |
| &nbsp;&nbsp;Noninterest expense to average assets | **1.96** | 1.87 | 2.08 |  |  |
| **FINANCIAL DATA - YEAR TO DATE** |  |  |  |  |  |
| Income before provision for income taxes | $**51421** |  | $48130 |  | 6.8 |
| Provision for income taxes | **12964** |  | 12011 |  | 7.9 |
| Net income | $**38457** |  | $36119 |  | 6.5 |
| Net income per common share - Basic  | $**3.66** |  | $3.47 |  | 5.5 |
| Net income per common share - Diluted  | **3.59** |  | 3.43 |  | 4.7 |
| **PERFORMANCE RATIOS - YEAR TO DATE** |  |  |  |  |  |
| &nbsp;&nbsp;Return on average assets | **1.80%** |  | 1.87% |  |  |
| &nbsp;&nbsp;Return on average equity  | **17.28** |  | 19.16 |  |  |
| &nbsp;&nbsp;Efficiency ratio | **42.80** |  | 46.09 |  |  |
| &nbsp;&nbsp;Net interest margin | **4.40** |  | 4.16 |  |  |
| &nbsp;&nbsp;Noninterest expense to average assets | **1.99** |  | 2.11 |  |  |
| **SHARE INFORMATION** |  |  |  |  |  |
| &nbsp;&nbsp;Market price per share | $**27.33** | $25.11 | $26.25 | 8.8 | 4.1 |
| &nbsp;&nbsp;Dividends paid | **0.11** | 0.11 | 0.10 | - | 10.0 |
| &nbsp;&nbsp;Book value per common share | **22.60** | 21.86 | 19.80 | 3.4 | 14.1 |
| &nbsp;&nbsp;Average diluted shares outstanding (QTD) | **10740** | 10714 | 10555 | 0.2 | 1.8 |
| **CAPITAL RATIOS** |  |  |  |  |  |
| &nbsp;&nbsp;Total equity to total assets | **9.78%** | 9.84% | 10.12% |  |  |
| &nbsp;&nbsp;Community bank leverage ratio | **10.45** | 10.85 | 10.51 |  |  |
| **CREDIT QUALITY AND RATIOS** |  |  |  |  |  |
| &nbsp;&nbsp;Nonperforming assets | $**9065** | $8033 | $9686 | 12.8 | (6.4) |
| &nbsp;&nbsp;QTD net chargeoffs/(recoveries) to QTD average loans | **0.06%** | 0.11% | (0.02)% |  |  |
| &nbsp;&nbsp;Allowance for loan losses to total loans | **1.20** | 1.23 | 1.35 |  |  |
| &nbsp;&nbsp;Nonperforming loans to total loans | **0.43** | 0.41 | 0.59 |  |  |
| &nbsp;&nbsp;Nonperforming assets to total assets | **0.37** | 0.34 | 0.48 |  |  |

---

------

**UNITY BANCORP, INC.**

**CONSOLIDATED BALANCE SHEETS**

**December 31, 2022**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | **December 31, 2022 vs.** | **December 31, 2022 vs.** |
| | | | | **September 30, 2022** | **December 31, 2021** |
| <br>*(In thousands, except percentages)* | <br>**December 31, 2022** | <br>**September 30, 2022** | <br>**December 31, 2021** | **%** | **%** |
| **ASSETS** |  |  |  |  |  |
| Cash and due from banks | $**19699** | $24959 | $26053 | (21.1)% | (24.4)% |
| Interest-bearing deposits | **95094** | 138421 | 218765 | (31.3) | (56.5) |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | **114793** | 163380 | 244818 | (29.7) | (53.1) |
| Securities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt securities available for sale | **95393** | 92500 | 56480 | 3.1 | 68.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt securities held to maturity | **35760** | 35897 | 14276 | (0.4) | 150.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity securities with readily determinable fair values | **9793** | 8474 | 8566 | 15.6 | 14.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total securities | **140946** | 136871 | 79322 | 3.0 | 77.7 |
| Loans: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans held for sale | **27928** | 36338 | 27373 | (23.1) | 2.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans held for investment | **38468** | 30747 | 36075 | 25.1 | 6.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA PPP loans | **5908** | 6706 | 46450 | (11.9) | (87.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **1187543** | 1106059 | 931726 | 7.4 | 27.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **605091** | 533737 | 409355 | 13.4 | 47.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans  | **78164** | 79662 | 77944 | (1.9) | 0.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans | **163457** | 149165 | 120525 | 9.6 | 35.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | **2106559** | 1942414 | 1649448 | 8.5 | 27.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for loan losses | **(25196)** | (23861) | (22302) | (5.6) | (13.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loans  | **2081363** | 1918553 | 1627146 | 8.5 | 27.9 |
| Premises and equipment, net | **20002** | 19094 | 19914 | 4.8 | 0.4 |
| Bank owned life insurance ("BOLI") | **26776** | 26634 | 26608 | 0.5 | 0.6 |
| Deferred tax assets | **12345** | 12910 | 10040 | (4.4) | 23.0 |
| Federal Home Loan Bank ("FHLB") stock | **19064** | 14398 | 3550 | 32.4 | 437.0 |
| Accrued interest receivable | **13403** | 11385 | 9586 | 17.7 | 39.8 |
| Goodwill | **1516** | 1516 | 1516 | - | - |
| Prepaid expenses and other assets | **14740** | 34796 | 11213 | (57.6) | 31.5 |
| Total assets | $**2444948** | $2339537 | $2033713 | 4.5% | 20.2% |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** | **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |
| Liabilities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noninterest-bearing demand | $**494184** | $497752 | $529227 | (0.7)% | (6.6)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing demand  | **276218** | 267558 | 244073 | 3.2 | 13.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Savings  | **591826** | 682756 | 694161 | (13.3) | (14.7) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time, under $100,000 | **273954** | 233447 | 194961 | 17.4 | 40.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time, $100,000 to $250,000 | **84002** | 70649 | 62668 | 18.9 | 34.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time, $250,000 and over | **67344** | 44435 | 33791 | 51.6 | 99.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | **1787528** | 1796597 | 1758881 | (0.5) | 1.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Borrowed funds | **383000** | 280000 | 40000 | 36.8 | 857.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debentures | **10310** | 10310 | 10310 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | **691** | 294 | 129 | 135.0 | 435.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | **24188** | 22102 | 18664 | 9.4 | 29.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | **2205717** | 2109303 | 1827984 | 4.6 | 20.7 |
| Shareholders' equity: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock | **97204** | 96493 | 94003 | 0.7 | 3.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | **156958** | 148174 | 123037 | 5.9 | 27.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Treasury stock | **(11671)** | (11633) | (11633) | (0.3) | (0.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive (loss) income | **(3260)** | (2800) | 322 | (16.4) | NM\* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | **239231** | 230234 | 205729 | 3.9 | 16.3 |
| Total liabilities and shareholders' equity | $**2444948** | $2339537 | $2033713 | 4.5% | 20.2% |
| **COMMON SHARES AT PERIOD END:** | **COMMON SHARES AT PERIOD END:** |  |  |  |  |
| Shares issued | **11289** | 11236 | 11094 |  |  |
| Shares outstanding | **10584** | 10533 | 10391 |  |  |
| Treasury shares | **705** | 703 | 703 |  |  |
| \*NM=Not meaningful |  |  |  |  |  |

---

------

**UNITY BANCORP, INC.**

**QTD CONSOLIDATED STATEMENTS OF INCOME**

**December 31, 2022**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| |  |  |  | **December 31, 2022 vs.** | **December 31, 2022 vs.** | **December 31, 2022 vs.** | **December 31, 2022 vs.** |
| | **For the three months ended** | **For the three months ended** | **For the three months ended** | **September 30, 2022** | **September 30, 2022** | **December 31, 2021** | **December 31, 2021** |
| <br>*(In thousands, except percentages and per share amounts)* | **December 31, 2022** | **September 30, 2022** | **December 31, 2021** | $**%** | **%** | $**%** | **%** |
| **INTEREST INCOME** |  |  |  |  |  |  |  |
| Interest-bearing deposits | $**319** | $168 | $89 |  | 89.9% |  | 258.4% |
| FHLB stock | **220** | 93 | 41 |  | 136.6 |  | 436.6 |
| Securities: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | **1589** | 1397 | 460 |  | 13.7 |  | 245.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt | **19** | 18 | 5 |  | 5.6 |  | 280.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total securities | **1608** | 1415 | 465 |  | 13.6 |  | 245.8 |
| Loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans | **1370** | 1083 | 828 |  | 26.5 |  | 65.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA PPP loans | **50** | 277 | 1978 |  | (81.9) |  | (97.5) |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **15894** | 14017 | 11678 |  | 13.4 |  | 36.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **7111** | 5912 | 4587 |  | 20.3 |  | 55.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans | **1217** | 1075 | 871 |  | 13.2 |  | 39.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans | **2536** | 2184 | 1734 |  | 16.1 |  | 46.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | **28178** | 24548 | 21676 |  | 14.8 |  | 30.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest income | **30325** | 26224 | 22271 |  | 15.6 |  | 36.2 |
| **INTEREST EXPENSE** |  |  |  |  |  |  |  |
| Interest-bearing demand deposits | **703** | 320 | 210 |  | 119.7 |  | 234.8 |
| Savings deposits | **1475** | 878 | 444 |  | 68.0 |  | 232.2 |
| Time deposits | **1258** | 600 | 541 |  | 109.7 |  | 132.5 |
| Borrowed funds and subordinated debentures | **2180** | 688 | 227 |  | 216.9 |  | 860.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest expense | **5616** | 2486 | 1422 |  | 125.9 |  | 294.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income | **24709** | 23738 | 20849 |  | 4.1 |  | 18.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for loan losses | **1632** | 1517 | (319) |  | 7.6 |  | NM\* |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income after provision for loan losses | **23077** | 22221 | 21168 |  | 3.9 |  | 9.0 |
| **NONINTEREST INCOME** |  |  |  |  |  |  |  |
| Branch fee income | **224** | 336 | 273 |  | (33.3) |  | (17.9) |
| Service and loan fee income | **618** | 543 | 820 |  | 13.8 |  | (24.6) |
| Gain on sale of SBA loans held for sale, net | **103** | - | - |  | NM\* |  | NM\* |
| Gain on sale of mortgage loans, net | **167** | 280 | 782 |  | (40.4) |  | (78.6) |
| BOLI income | **142** | 170 | 289 |  | (16.5) |  | (50.9) |
| Net security gains (losses) | **319** | (576) | 73 |  | NM\* |  | NM\* |
| Other income | **373** | 357 | 387 |  | 4.5 |  | (3.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | **1946** | 1110 | 2624 |  | 75.3 |  | (25.8) |
| **NONINTEREST EXPENSE** |  |  |  |  |  |  |  |
| Compensation and benefits | **7160** | 6471 | 6655 |  | 10.6 |  | 7.6 |
| Processing and communications | **682** | 708 | 747 |  | (3.7) |  | (8.7) |
| Occupancy | **758** | 702 | 670 |  | 8.0 |  | 13.1 |
| Furniture and equipment | **683** | 617 | 655 |  | 10.7 |  | 4.3 |
| Professional services | **341** | 221 | 402 |  | 54.3 |  | (15.2) |
| Advertising | **339** | 307 | 304 |  | 10.4 |  | 11.5 |
| Other loan expenses  | **1** | 109 | 163 |  | (99.1) |  | (99.4) |
| Deposit insurance | **270** | 233 | 206 |  | 15.9 |  | 31.1 |
| Director fees | **218** | 240 | 210 |  | (9.2) |  | 3.8 |
| Loan collection expenses | **140** | 45 | 69 |  | 211.1 |  | 102.9 |
| Other expenses | **797** | 411 | 579 |  | 93.9 |  | 37.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | **11389** | 10064 | 10660 |  | 13.2 |  | 6.8 |
| Income before provision for income taxes | **13634** | 13267 | 13132 |  | 2.8 |  | 3.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for income taxes | **3678** | 3325 | 3386 |  | 10.6 |  | 8.6 |
| Net income | $**9956** | $9942 | $9746 |  | 0.1% |  | 2.2% |
| Effective tax rate | **27.0%** | 25.1% | 25.8% |  |  |  |  |
| Net income per common share - Basic  | $**0.94** | $0.94 | $0.94 |  |  |  |  |
| Net income per common share - Diluted  | **0.93** | 0.93 | 0.93 |  |  |  |  |
| Weighted average common shares outstanding - Basic | **10557** | 10522 | 10376 |  |  |  |  |
| Weighted average common shares outstanding - Diluted | **10740** | 10714 | 10555 |  |  |  |  |
| \*NM=Not meaningful |  |  |  |  |  |  |  |

---

------

**UNITY BANCORP, INC.**

**YTD CONSOLIDATED STATEMENTS OF INCOME**

**December 31, 2022**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the years ended December 31,**  | **For the years ended December 31,**  | **Current YTD vs. Prior YTD** | **Current YTD vs. Prior YTD** |
| <br>*(In thousands, except percentages and per share amounts)* | **2022** | **2021** | $**%** | **%** |
| **INTEREST INCOME** |  |  |  |  |
| Interest-bearing deposits | $**735** | $194 |  | 278.9% |
| FHLB stock | **396** | 197 |  | 101.0 |
| Securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | **4754** | 1298 |  | 266.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt | **53** | 31 |  | 71.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total securities | **4807** | 1329 |  | 261.7 |
| Loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans | **4303** | 3252 |  | 32.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA PPP loans | **1596** | 7206 |  | (77.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **53820** | 44167 |  | 21.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **22395** | 19227 |  | 16.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans | **4132** | 3145 |  | 31.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans | **8555** | 6063 |  | 41.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | **94801** | 83060 |  | 14.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest income | **100739** | 84780 |  | 18.8 |
| **INTEREST EXPENSE** |  |  |  |  |
| Interest-bearing demand deposits | **1384** | 1073 |  | 29.0 |
| Savings deposits | **3110** | 1685 |  | 84.6 |
| Time deposits | **2757** | 3834 |  | (28.1) |
| Borrowed funds and subordinated debentures | **3380** | 1149 |  | 194.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest expense | **10631** | 7741 |  | 37.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income | **90108** | 77039 |  | 17.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for loan losses | **4159** | 181 |  | 2197.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income after provision for loan losses | **85949** | 76858 |  | 11.8 |
| **NONINTEREST INCOME** |  |  |  |  |
| Branch fee income | **1117** | 1130 |  | (1.2) |
| Service and loan fee income | **2433** | 2757 |  | (11.8) |
| Gain on sale of SBA loans held for sale, net | **954** | 741 |  | 28.7 |
| Gain on sale of mortgage loans, net | **1399** | 4567 |  | (69.4) |
| BOLI income | **636** | 689 |  | (7.7) |
| Net security (losses) gains | **(1313)** | 609 |  | NM\* |
| Other income | **2819** | 1561 |  | 80.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | **8045** | 12054 |  | (33.3) |
| **NONINTEREST EXPENSE** |  |  |  |  |
| Compensation and benefits | **26949** | 24771 |  | 8.8 |
| Processing and communications | **2848** | 3050 |  | (6.6) |
| Occupancy | **2963** | 2661 |  | 11.3 |
| Furniture and equipment | **2493** | 2590 |  | (3.7) |
| Professional services | **1401** | 1437 |  | (2.5) |
| Advertising | **1212** | 1236 |  | (1.9) |
| Other loan expenses | **240** | 922 |  | (74.0) |
| Deposit insurance | **1022** | 844 |  | 21.1 |
| Director fees | **916** | 811 |  | 12.9 |
| Loan collection | **278** | 135 |  | 105.9 |
| Other expenses | **2251** | 2325 |  | (3.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | **42573** | 40782 |  | 4.4 |
| Income before provision for income taxes | **51421** | 48130 |  | 6.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for income taxes | **12964** | 12011 |  | 7.9 |
| Net income | $**38457** | $36119 |  | 6.5% |
| Effective tax rate | **25.2**% | 25.0% |  |  |
| Net income per common share - Basic  | $**3.66** | $3.47 |  |  |
| Net income per common share - Diluted  | **3.59** | 3.43 |  |  |
| Weighted average common shares outstanding - Basic | **10508** | 10403 |  |  |
| Weighted average common shares outstanding - Diluted | **10705** | 10546 |  |  |
| \*NM=Not meaningful |  |  |  |  |

---

------

**UNITY BANCORP, INC.**

**QUARTER TO DATE NET INTEREST MARGIN**

**December 31, 2022**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** |
| *(Dollar amounts in thousands, interest amounts and* | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 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 | $**37640**  | $**319** | **3.37%** | $222683  | $89 | 0.16% |
| FHLB stock | **11785**  | **220** | **7.39**  | 3526  | 41 | 4.58  |
| Securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | **134661**  | **1589** | **4.72**  | 60087  | 460 | 3.04  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt | **1741**  | **20** | **4.47**  | 1033  | 6 | 2.39  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total securities (A) | **136402**  | **1609** | **4.72**  | 61120  | 466 | 3.03  |
| Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans | **67448**  | **1370** | **8.13**  | 58718  | 828 | 5.60  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA PPP loans | **6355**  | **50** | **3.17**  | 61854  | 1978 | 12.68  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **1134102**  | **15894** | **5.48**  | 936078  | 11678 | 4.95  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **569698**  | **7111** | **4.99**  | 414955  | 4587 | 4.39  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans  | **75229**  | **1217** | **6.33**  | 74207  | 871 | 4.65  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans | **156282**  | **2536** | **6.35**  | 116305  | 1734 | 5.91  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans (B) | **2009114**  | **28178** | **5.49**  | 1662117  | 21676 | 5.17  |
| Total interest-earning assets | $**2194941**  | $**30326** | **5.48%** | $1949446  | $22272 | 4.53% |
| *Noninterest-earning assets:* |  |  |  |  |  |  |
| Cash and due from banks | **20352**  |  |  | 25065  |  |  |
| Allowance for loan losses | **(24301)** |  |  | (22572) |  |  |
| Other assets | **109515**  |  |  | 80810  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest-earning assets | **105566**  |  |  | 83303  |  |  |
| Total assets | $**2300507**  |  |  | $2032749  |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |  |
| *Interest-bearing liabilities:* |  |  |  |  |  |  |
| Total interest-bearing demand deposits | $**289524**  | $**703** | **0.96%** | $255083  | $210 | 0.33% |
| Total savings deposits | **636230**  | **1475** | **0.92**  | 684215  | 444 | 0.26  |
| Total time deposits | **385423**  | **1258** | **1.29**  | 302088  | 541 | 0.71  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | **1311177**  | **3436** | **1.04**  | 1241386  | 1195 | 0.38  |
| Borrowed funds and subordinated debentures | **231720**  | **2180** | **3.68**  | 50799  | 227 | 1.77  |
| Total interest-bearing liabilities | $**1542897**  | $**5616** | **1.44%** | $1292185  | $1422 | 0.44% |
| *Noninterest-bearing liabilities:* |  |  |  |  |  |  |
| Noninterest-bearing demand deposits | **496993**  |  |  | 519709  |  |  |
| Other liabilities | **25820**  |  |  | 19824  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest-bearing liabilities | **522813**  |  |  | 539533  |  |  |
| Total shareholders' equity | **234797**  |  |  | 201031  |  |  |
| Total liabilities and shareholders' equity | $**2300507**  |  |  | $2032749  |  |  |
| Net interest spread |  | $**24710** | **4.04%** |  | $20850 | 4.10% |
| Tax-equivalent basis adjustment |  | **(1)** |  |  | (1) |  |
| Net interest income |  | $**24709** |  |  | $20849 |  |
| Net interest margin |  |  | **4.47%** |  |  | 4.24% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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 nondeductible portion of interest expense, assuming a federal tax rate of 21 percent and applicable state rates.

&nbsp;&nbsp;&nbsp;&nbsp;(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**

**December 31, 2022**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** | **For the three months ended** |
| *(Dollar amounts in thousands, interest amounts and* | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **September 30, 2022** | **September 30, 2022** | **September 30, 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 | $**37640**  | $**319**  | **3.37%** | $34605  | $168 | 1.92% |
| FHLB stock | **11785**  | **220**  | **7.39**  | 6200  | 93 | 5.96  |
| Securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | **134661**  | **1589**  | **4.72**  | 137590  | 1397 | 4.03  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt | **1741**  | **20**  | **4.47**  | 1841  | 20 | 4.27  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total securities (A) | **136402**  | **1609**  | **4.72**  | 139431  | 1417 | 4.03  |
| Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans | **67448**  | **1370** | **8.13**  | 65941  | 1083 | 6.52  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA PPP loans | **6355**  | **50** | **3.17**  | 9576  | 277 | 11.47  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **1134102**  | **15894** | **5.48**  | 1069917  | 14017 | 5.20  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **569698**  | **7111** | **4.99**  | 504787  | 5912 | 4.65  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans  | **75229**  | **1217** | **6.33**  | 76957  | 1075 | 5.54  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans | **156282**  | **2536** | **6.35**  | 137681  | 2184 | 6.29  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans (B) | **2009114**  | **28178** | **5.49**  | 1864859  | 24548 | 5.22  |
| Total interest-earning assets | $**2194941**  | $**30326**  | **5.48%** | $2045095  | $26226 | 5.09% |
| *Noninterest-earning assets:* |  |  |  |  |  |  |
| Cash and due from banks | **20352**  |  |  | 24350  |  |  |
| Allowance for loan losses | **(24301)** |  |  | (22848) |  |  |
| Other assets | **109515**  |  |  | 83168  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest-earning assets | **105566**  |  |  | 84670  |  |  |
| Total assets | $**2300507**  |  |  | $2129765  |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |  |
| *Interest-bearing liabilities:* |  |  |  |  |  |  |
| Total interest-bearing demand deposits | $**289524**  | $**703**  | **0.96%** | $269486  | $320 | 0.47% |
| Total savings deposits | **636230**  | **1475**  | **0.92**  | 674486  | 878 | 0.52  |
| Total time deposits | **385423**  | **1258**  | **1.29**  | 310842  | 600 | 0.77  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | **1311177**  | **3436**  | **1.04**  | 1254814  | 1798 | 0.57  |
| Borrowed funds and subordinated debentures | **231720**  | **2180**  | **3.68**  | 108135  | 688 | 2.53  |
| Total interest-bearing liabilities | $**1542897**  | $**5616**  | **1.44%** | $1362949  | $2486 | 0.72% |
| *Noninterest-bearing liabilities:* |  |  |  |  |  |  |
| Noninterest-bearing demand deposits | **496993**  |  |  | 516898  |  |  |
| Other liabilities | **25820**  |  |  | 23130  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest-bearing liabilities | **522813**  |  |  | 540028  |  |  |
| Total shareholders' equity | **234797**  |  |  | 226788  |  |  |
| Total liabilities and shareholders' equity | $**2300507**  |  |  | $2129765  |  |  |
| Net interest spread |  | $**24710** | **4.04%** |  | $23740 | 4.37% |
| Tax-equivalent basis adjustment |  | **(1)** |  |  | (2) |  |
| Net interest income |  | $**24709** |  |  | $23738 |  |
| Net interest margin |  |  | **4.47%** |  |  | 4.61% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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 nondeductible portion of interest expense, assuming a federal tax rate of 21 percent and applicable state rates.

&nbsp;&nbsp;&nbsp;&nbsp;(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**

**December 31, 2022**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended**  | **For the years ended**  | **For the years ended**  | **For the years ended**  | **For the years ended**  | **For the years ended**  |
| *(Dollar amounts in thousands, interest amounts and* | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 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 | $**95427**  | $**735**  | **0.77%** | $143311  | $194 | 0.14% |
| FHLB stock | **6405**  | **396**  | **6.18**  | 4275  | 197 | 4.62  |
| Securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | **121314**  | **4754**  | **3.92**  | 43847  | 1298 | 2.96  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt | **1461**  | **58**  | **3.99**  | 1587  | 39 | 2.45  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total securities (A) | **122775**  | **4812**  | **3.92**  | 45434  | 1337 | 2.94  |
| Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans | **65197**  | **4303** | **6.60**  | 53279  | 3252 | 6.10  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA PPP loans | **19095**  | **1596** | **8.36**  | 119440  | 7206 | 6.03  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **1040624**  | **53820** | **5.10**  | 887525  | 44167 | 4.98  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **484923**  | **22395** | **4.62**  | 430466  | 19227 | 4.47  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans  | **77382**  | **4132** | **5.27**  | 66477  | 3145 | 4.73  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans  | **136778**  | **8555** | **6.17**  | 101486  | 6063 | 5.97  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans (B) | **1823999**  | **94801** | **5.13**  | 1658673  | 83060 | 5.01  |
| Total interest-earning assets | $**2048606**  | $**100744**  | **4.92%** | $1851693  | $84788 | 4.58% |
| *Noninterest-earning assets:* |  |  |  |  |  |  |
| Cash and due from banks | **23100**  |  |  | 23862  |  |  |
| Allowance for loan losses | **(22920)** |  |  | (22911) |  |  |
| Other assets | **87930**  |  |  | 77105  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest-earning assets | **88110**  |  |  | 78056  |  |  |
| Total assets | $**2136716**  |  |  | $1929749  |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |  |
| *Interest-bearing liabilities:* |  |  |  |  |  |  |
| Total interest-bearing demand deposits | $**269789**  | $**1384**  | **0.51%** | $227750  | $1073 | 0.47% |
| Total savings deposits | **674335**  | **3110**  | **0.46**  | 557700  | 1685 | 0.30  |
| Total time deposits | **315910**  | **2757**  | **0.87**  | 376696  | 3834 | 1.02  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | **1260034**  | **7251**  | **0.58**  | 1162146  | 6592 | 0.57  |
| Borrowed funds and subordinated debentures | **112799**  | **3380**  | **2.96**  | 68812  | 1149 | 1.67  |
| Total interest-bearing liabilities | $**1372833**  | $**10631**  | **0.77%** | $1230958  | $7741 | 0.63% |
| *Noninterest-bearing liabilities:* |  |  |  |  |  |  |
| Noninterest-bearing demand deposits | **518244**  |  |  | 493213  |  |  |
| Other liabilities | **23104**  |  |  | 17018  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest-bearing liabilities | **541348**  |  |  | 510231  |  |  |
| Total shareholders' equity | **222535**  |  |  | 188560  |  |  |
| Total liabilities and shareholders' equity | $**2136716**  |  |  | $1929749  |  |  |
| Net interest spread |  | $**90113** | **4.15%** |  | $77047 | 3.95% |
| Tax-equivalent basis adjustment |  | **(5)** |  |  | (8) |  |
| Net interest income |  | $**90108** |  |  | $77039 |  |
| Net interest margin |  |  | **4.40%** |  |  | 4.16% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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 nondeductible portion of interest expense, assuming a federal tax rate of 21 percent and applicable state rates.

&nbsp;&nbsp;&nbsp;&nbsp;(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**

**December 31, 2022**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *Amounts in thousands, except percentages*  | **December 31, 2022** | **September 30, 2022** | **June 30, 2022** | **March 31, 2022** | **December 31, 2021** |
| **ALLOWANCE FOR LOAN LOSSES:** |  |  |  |  |  |
| Balance, beginning of period | $**23861** | $22858 | $22168 | $22302 | $22537 |
| Provision (benefit) for loan losses charged to expense | **1632** | 1517 | 1188 | (178) | (319) |
|  | **25493** | 24375 | 23356 | 22124 | 22218 |
| Less: Chargeoffs |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans | **59** | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **-** | 501 | 501 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **-** | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans | **300** | 50 | 40 | 6 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans | **-** | - | - | - | - |
| Total chargeoffs | **359** | 551 | 541 | 6 | - |
| Add: Recoveries |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans | **-** | 5 | 6 | 22 | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **26** | 23 | 32 | 28 | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **2** | - | 1 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans | **34** | 9 | 4 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans | **-** | - | - | - | - |
| Total recoveries | **62** | 37 | 43 | 50 | 84 |
| Net (chargeoffs)/recoveries | **(297)** | (514) | (498) | 44 | 84 |
| Balance, end of period | $**25196** | $23861 | $22858 | $22168 | $22302 |
| **LOAN QUALITY INFORMATION:** |  |  |  |  |  |
| Nonperforming loans: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loans | $**690** | $1491 | $604 | $537 | $510 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | **1582** | 1147 | 1717 | 2292 | 2582 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgage loans | **3361** | 3404 | 2668 | 2999 | 3262 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer loans | **-** | - | - | 200 | 210 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential construction loans | **3432** | 1991 | 2691 | 3273 | 3122 |
| Total nonperforming loans | **9065** | 8033 | 7680 | 9301 | 9686 |
| OREO | **-** | - | - | - | - |
| Nonperforming assets | **9065** | 8033 | 7680 | 9301 | 9686 |
| Loans 90 days past due & still accruing | $**-** | $75 | $43 | $488 | $- |
| Performing Troubled Debt Restructurings (TDRs) | $**1423** | $1860 | $1885 | $1917 | $1046 |
| Allowance for loan losses to: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total loans at quarter end | **1.20%** | 1.23% | 1.27% | 1.30% | 1.35 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming loans | **277.95** | 297.04 | 297.63 | 238.34 | 230.25 |

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**UNITY BANCORP, INC.**

**QUARTERLY FINANCIAL DATA**

**December 31, 2022**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *(In thousands, except percentages and per share amounts)* | **December 31, 2022** | **September 30, 2022** | **June 30, 2022** | **March 31, 2022** | **December 31, 2021** |
| **SUMMARY OF INCOME:** |  |  |  |  |  |
| Total interest income | $**30325** | $26224 | $23071 | $21119 | $22271 |
| Total interest expense | **5616** | 2486 | 1314 | 1215 | 1422 |
| Net interest income | **24709** | 23738 | 21757 | 19904 | 20849 |
| Provision (benefit) for loan losses | **1632** | 1517 | 1188 | (178) | (319) |
| Net interest income after provision for loan losses | **23077** | 22221 | 20569 | 20082 | 21168 |
| Total noninterest income | **1946** | 1110 | 2750 | 2239 | 2624 |
| Total noninterest expense | **11389** | 10064 | 10710 | 10410 | 10660 |
| Income before provision for income taxes | **13634** | 13267 | 12609 | 11911 | 13132 |
| Provision for income taxes | **3678** | 3325 | 3158 | 2803 | 3386 |
| Net income | $**9956** | $9942 | $9451 | $9108 | $9746 |
| Net income per common share - Basic | $**0.94** | $0.94 | $0.90 | $0.87 | $0.94 |
| Net income per common share - Diluted | **0.93** | 0.93 | 0.88 | 0.85 | 0.93 |
| **COMMON SHARE DATA:** |  |  |  |  |  |
| Market price per share | $**27.33** | $25.11 | $26.48 | $27.98 | $26.25 |
| Dividends paid | **0.11** | 0.11 | 0.11 | 0.10 | 0.10 |
| Book value per common share | **22.60** | 21.86 | 21.01 | 20.48 | 19.80 |
| Weighted average common shares outstanding - Basic | **10557** | 10522 | 10504 | 10446 | 10376 |
| Weighted average common shares outstanding - Diluted | **10740** | 10714 | 10706 | 10664 | 10555 |
| Issued common shares | **11289** | 11236 | 11214 | 11196 | 11094 |
| Outstanding common shares | **10584** | 10533 | 10511 | 10493 | 10391 |
| Treasury shares | **705** | 703 | 703 | 703 | 703 |
| **PERFORMANCE RATIOS (Annualized):** |  |  |  |  |  |
| Return on average assets | **1.72%** | 1.85% | 1.83% | 1.80% | 1.90% |
| Return on average equity | **16.82** | 17.39 | 17.32 | 17.64 | 19.23 |
| Efficiency ratio | **43.24** | 39.59 | 42.84 | 45.86 | 45.55 |
| Noninterest expense to average assets | **1.96** | 1.87 | 2.08 | 2.06 | 2.08 |
| **BALANCE SHEET DATA:** |  |  |  |  |  |
| Total assets | $**2444948** | $2339537 | $2117156 | $2067692 | $2033713 |
| Total securities | **140946** | 136871 | 139835 | 116254 | 79322 |
| Total loans | **2106559** | 1942414 | 1801593 | 1701384 | 1649448 |
| Allowance for loan losses | **25196** | 23861 | 22858 | 22168 | 22302 |
| Total deposits  | **1787528** | 1796597 | 1697967 | 1771168 | 1758881 |
| Total shareholders' equity | **239231** | 230234 | 220789 | 214928 | 205729 |
| **TAX EQUIVALENT YIELDS AND RATES:** |  |  |  |  |  |
| Interest-earning assets | **5.48%** | 5.09% | 4.66% | 4.36% | 4.53% |
| Interest-bearing liabilities | **1.44** | 0.72 | 0.41 | 0.38 | 0.44 |
| Net interest spread | **4.04** | 4.37 | 4.25 | 3.98 | 4.10 |
| Net interest margin | **4.47** | 4.61 | 4.39 | 4.11 | 4.24 |
| **CREDIT QUALITY:** |  |  |  |  |  |
| Nonperforming assets | $**9065** | $8033 | $7680 | $9301 | $9686 |
| QTD net (chargeoffs)/recoveries to QTD average loans | **(0.06)%** | (0.11)% | (0.11)% | 0.01% | 0.02% |
| Allowance for loan losses to total loans | **1.20** | 1.23 | 1.27 | 1.30 | 1.35 |
| Nonperforming loans to total loans | **0.43** | 0.41 | 0.43 | 0.55 | 0.59 |
| Nonperforming assets to total assets | **0.37** | 0.34 | 0.36 | 0.45 | 0.48 |
| **CAPITAL RATIOS AND OTHER:** |  |  |  |  |  |
| Total equity to total assets | **9.78%** | 9.84% | 10.43% | 10.39% | 10.12% |
| Community bank leverage ratio | **10.45** | 10.85 | 11.20 | 10.87 | 10.51 |
| Number of banking offices | **19** | 18 | 19 | 19 | 19 |
| Number of ATMs | **20** | 19 | 20 | 20 | 20 |
| Number of employees | **231** | 222 | 213 | 209 | 211 |

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