Unity Bancorp Inc.

04/14/2026 | Press release | Distributed by Public on 04/14/2026 04:04

Business/Financial Results (Form 8-K)

Clinton, NJ -- Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $14.3 million, or $1.40 per diluted share, for the quarter ended March 31, 2026, compared to net income of $15.5 million, or $1.52 per diluted share for the quarter ended December 31, 2025.

Quarterly Earnings Highlights

● Net interest income, the primary driver of earnings, was $30.7 million for the quarter ended March 31, 2026, a decrease of $0.7 million, as compared to $31.4 million for the quarter ended December 31, 2025. Net interest margin ("NIM") decreased 7 basis points to 4.53% for the quarter ended March 31, 2026, compared to the quarter ended December 31, 2025. The decrease in net interest income was primarily due to day count.
● The provision for credit losses on loans was $1.0 million for the quarter ended March 31, 2026, compared to $2.2 million for the quarter ended December 31, 2025. The provision in the current quarter was primarily driven by loan growth, with additional increases in qualitative adjustments.
● Noninterest income was $2.9 million for the quarter ended March 31, 2026, compared to $3.9 million for the quarter ended December 31, 2025. The $1.0 million decrease was primarily due to the $1.5 million unrealized gain associated with Patriot recognized in the prior quarter, partially offset by increased service and loan fee income and gain on sale of SBA and mortgage loans.
● Noninterest expense was $14.1 million for the quarter ended March 31, 2026, compared to $13.3 million for the quarter ended December 31, 2025. The increase was primarily due to increased compensation and benefits expenses, partially offset by decreases in furniture and equipment, professional services and other expenses. During the quarter ended December 31, 2025, compensation and benefits expenses included $0.7 million of one-time accrual reversals.
● The effective tax rate was 22.7% for the quarter ended March 31, 2026, compared to 21.4% for the quarter ended December 31, 2025. During the fourth quarter of 2025, Unity purchased $8.0 million of federal tax credits, resulting in $0.5 million of tax savings. Furthermore, during the first quarter of 2026, Unity purchased $5.1 million of tax credits, resulting in $0.4 million of tax savings.

Balance Sheet Highlights

● Total gross loans increased $56.9 million, or 2.2%, from December 31, 2025, primarily due to increases in the commercial and residential and commercial construction loan categories. Furthermore, gross loans increased $256.5 million, or 10.9% from March 31, 2025.
● As of March 31, 2026, the allowance for credit losses as a percentage of gross loans was 1.28%.
● As of March 31, 2026, nonaccrual assets (including OREO) were $32.1 million, compared to $31.3 million as of December 31, 2025. The ratio of nonaccrual loans to total loans was 1.18% as of March 31, 2026. The ratio of nonaccrual assets to total assets was 1.06% as of March 31, 2026. During the fourth quarter of 2025, one $15.5 million commercial real estate relationship migrated to nonaccrual status. This isolated relationship accounts for nearly half of nonaccrual assets.
● Total deposits increased $55.1 million, or 2.4%, from December 31, 2025. As of March 31, 2026, uninsured or uncollateralized deposits represented 21.6% of total deposits. The Company's deposit composition as of March 31, 2026, consisted of 19.0% in noninterest bearing demand deposits, 17.2% in interest-bearing demand deposits, 24.9% in savings deposits and 38.9% in time deposits.
● Borrowed funds decreased $7.5 million from December 31, 2025. Borrowed funds were entirely comprised of borrowings from the FHLB.
● Shareholders' equity was $358.1 million as of March 31, 2026, compared to $345.6 million as of December 31, 2025. The $12.5 million increase was primarily driven by 2026 earnings, partially offset by dividend payments and share repurchase activity. During the quarter ended March 31, 2026, Unity Bancorp, Inc. repurchased 6,616 shares at a weighted average price of $49.01 per share.
● Book value per common share was $35.66 as of March 31, 2026, compared to $34.63 as of December 31, 2025. This increase is primarily due to net income partially offset by dividends and share repurchases.
● Below is a summary of Unity Bancorp's regulatory capital ratios:
o The Leverage Ratio increased 21 basis points to 12.93% at March 31, 2026, compared to 12.72% at December 31, 2025.
o The Common Equity Tier 1 Capital Ratio increased 5 basis points to 14.50% at March 31, 2026, compared to 14.45% at December 31, 2025.
o The Tier 1 Capital Ratio increased 4 basis points to 14.91% at March 31, 2026, compared to 14.87% at December 31, 2025.
o The Total Capital Ratio increased 4 basis points, to 16.16% at March 31, 2026, compared to 16.12% at December 31, 2025.
● At March 31, 2026, the Company held $229.2 million of cash and cash equivalents. The Company also maintained approximately $410.7 million of funding available from various sources, including the FHLB, FRB Discount Window and other lines of credit. Total available funding plus cash on hand represented 124.4% of uninsured or uncollateralized deposits.

Other Highlights

❖ In January 2026, Unity Bancorp, Inc. was named as one of Piper Sandler's Top Bank Investment Ideas for 2026, which compiles the firm's highest-conviction investment recommendations across the banking sector.
❖ In February 2026, Unity Bancorp, Inc. announced a 7% increase for its first quarter dividend from $0.15 per common share to $0.16 per common share.
❖ Unity Bancorp, Inc. will hold its virtual annual shareholder meeting on Thursday, April 23rd at 8:00 AM EDT. Refer to our 2026 Proxy for further details.

Unity Bancorp, Inc. is a financial services organization headquartered in Clinton, New Jersey, with approximately $3.0 billion in assets and $2.4 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, Morris, 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 that 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, the impact of any health crisis or national disasters on the Bank, its employees and customers, and the impact of uncertain or changing political conditions or any current or future federal government shutdown and uncertainty regarding the federal government's debt limit or changes in fiscal, monetary, trade or regulatory policy, among other factors.

UNITY BANCORP, INC.

SUMMARY FINANCIAL HIGHLIGHTS

March 31, 2026

March 31, 2026 vs.

December 31, 2025

March 31, 2025

(In thousands, except percentages and per share amounts)

March 31, 2026

December 31, 2025

March 31, 2025

%

%

BALANCE SHEET DATA

Total assets

$

3,027,327

$

2,966,652

$

2,767,943

2.0

%

9.4

%

Total deposits

2,379,140

2,324,061

2,175,398

2.4

9.4

Total gross loans

2,601,656

2,544,713

2,345,130

2.2

10.9

Total securities

115,268

124,015

142,092

(7.1)

(18.9)

Total shareholders' equity

358,095

345,631

306,142

3.6

17.0

Allowance for credit losses

33,354

32,342

27,651

3.1

20.6

FINANCIAL DATA - QUARTER TO DATE

Income before provision for income taxes

$

18,487

$

19,694

$

15,424

(6.1)

19.9

Provision for income taxes

4,199

4,222

3,826

(0.5)

9.7

Net income

$

14,288

$

15,472

$

11,598

(7.7)

23.2

Net income per common share - Basic

$

1.43

$

1.55

$

1.15

(7.7)

24.3

Net income per common share - Diluted

1.40

1.52

1.13

(7.9)

23.9

PERFORMANCE RATIOS - QUARTER TO DATE (ANNUALIZED)

Return on average assets

2.04

%

2.20

%

1.83

%

Return on average equity

16.38

18.08

15.56

Efficiency ratio**

41.77

39.52

42.89

Cost of funds

2.38

2.38

2.46

Net interest margin

4.53

4.60

4.46

Noninterest expense to average assets

2.01

1.89

1.99

SHARE INFORMATION

Market price per share

$

51.83

$

51.72

$

40.70

0.2

27.3

Dividends paid (QTD)

0.16

0.15

0.14

6.7

14.3

Book value per common share

35.66

34.63

30.38

3.0

17.4

Average diluted shares outstanding (QTD)

10,199

10,195

10,247

-

(0.5)

UNITY BANCORP CAPITAL RATIOS

Total equity to total assets

11.83

%

11.65

%

11.06

%

1.5

7.0

Leverage ratio

12.93

12.72

12.32

1.7

5.0

Common Equity Tier 1 Capital Ratio

14.50

14.45

13.87

0.3

4.5

Risk-based Tier 1 Capital Ratio

14.91

14.87

14.33

0.3

4.0

Risk-based Total Capital Ratio

16.16

16.12

15.58

0.2

3.7

CREDIT QUALITY AND RATIOS

Nonaccrual assets

$

32,092

$

31,308

$

17,990

2.5

78.4

QTD annualized net chargeoffs to QTD average loans

(0.01)

%

(0.02)

%

(0.09)

%

Allowance for credit losses to total loans

1.28

1.27

1.18

Nonaccrual loans to total loans

1.18

1.17

0.72

Nonaccrual assets to total assets

1.06

1.06

0.65

** The efficiency ratio is a non-GAAP measure, calculated based on the noninterest expense divided by the sum of net interest income plus non interest income, excluding net gains and losses on securities.

UNITY BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

March 31, 2026

March 31, 2026 vs.

December 31, 2025

March 31, 2025

(In thousands, except percentages)

March 31, 2026

December 31, 2025

March 31, 2025

%

%

ASSETS

Cash and due from banks

$

24,591

$

19,841

$

26,378

23.9

%

(6.8)

%

Interest-bearing deposits

204,569

196,678

185,215

4.0

10.4

Cash and cash equivalents

229,160

216,519

211,593

5.8

8.3

Securities:

Debt securities available for sale, at market value, net of valuation allowance

63,301

70,870

90,438

(10.7)

(30.0)

Debt securities held to maturity, at book value

36,648

36,576

40,947

0.2

(10.5)

Equity securities, at market value

15,319

16,569

10,707

(7.5)

43.1

Total securities

115,268

124,015

142,092

(7.1)

(18.9)

Loans:

Loans held for sale

12,557

9,490

14,000

32.3

(10.3)

SBA loans held for investment

32,499

34,259

37,993

(5.1)

(14.5)

Commercial loans

1,559,166

1,518,032

1,357,023

2.7

14.9

Commercial construction loans

159,200

147,215

129,831

8.1

22.6

Residential mortgage loans

668,739

677,221

654,250

(1.3)

2.2

Consumer loans

85,614

85,219

78,620

0.5

8.9

Residential construction loans

83,881

73,277

73,413

14.5

14.3

Total loans

2,601,656

2,544,713

2,345,130

2.2

10.9

Allowance for credit losses

(33,354)

(32,342)

(27,651)

3.1

20.6

Net loans

2,568,302

2,512,371

2,317,479

2.2

10.8

Premises and equipment, net

18,118

18,022

18,715

0.5

(3.2)

Bank owned life insurance ("BOLI")

26,764

26,547

25,925

0.8

3.2

Deferred tax assets

14,888

14,640

14,627

1.7

1.8

Federal Home Loan Bank ("FHLB") stock

13,989

14,314

13,583

(2.3)

3.0

Accrued interest receivable

13,255

12,896

12,998

2.8

2.0

Goodwill

1,516

1,516

1,516

-

-

Other real estate owned ("OREO")

1,472

1,472

-

-

*NM

Prepaid expenses and other assets

24,595

24,340

9,415

1.0

161.2

Total assets

$

3,027,327

$

2,966,652

$

2,767,943

2.0

%

9.4

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing demand

$

451,138

$

465,596

$

454,425

(3.1)

%

(0.7)

%

Interest-bearing demand

378,162

369,131

351,485

2.4

7.6

Savings

582,730

535,044

491,449

8.9

18.6

Brokered deposits

270,603

274,203

202,323

(1.3)

33.7

Time deposits

696,507

680,087

675,716

2.4

3.1

Total deposits

2,379,140

2,324,061

2,175,398

2.4

9.4

Borrowed funds

248,274

255,774

243,292

(2.9)

2.0

Subordinated debentures

10,310

10,310

10,310

-

-

Accrued interest payable

2,302

2,138

2,147

7.7

7.2

Accrued expenses and other liabilities

29,206

28,738

30,654

1.6

(4.7)

Total liabilities

2,669,232

2,621,021

2,461,801

1.8

8.4

Shareholders' equity:

Common stock

106,034

105,892

104,033

0.1

1.9

Retained earnings

256,620

243,935

237,518

5.2

8.0

Treasury stock, at cost

(3,425)

(3,101)

(33,577)

(10.4)

(89.8)

Accumulated other comprehensive loss

(1,134)

(1,095)

(1,832)

3.6

(38.1)

Total shareholders' equity

358,095

345,631

306,142

3.6

17.0

Total liabilities and shareholders' equity

$

3,027,327

$

2,966,652

$

2,767,943

2.0

%

9.4

%

Shares issued

10,114

10,048

11,666

Shares outstanding

10,041

9,982

10,076

Treasury shares

73

66

1,590

*NM=Not meaningful

UNITY BANCORP, INC.

QTD CONSOLIDATED STATEMENTS OF INCOME

March 31, 2026

March 31, 2026 vs.

For the three months ended

December 31, 2025

March 31, 2025

(In thousands, except percentages and per share amounts)

March 31, 2026

December 31, 2025

March 31, 2025

$

%

$

%

INTEREST INCOME

Interest-bearing deposits

$

558

$

674

$

332

$

(116)

(17.2)

%

$

226

68.1

%

FHLB stock

134

133

182

1

0.8

(48)

(26.4)

Securities:

Taxable

1,409

1,561

1,786

(152)

(9.7)

(377)

(21.1)

Tax-exempt

18

18

18

-

-

-

-

Total securities

1,427

1,579

1,804

(152)

(9.6)

(377)

(20.9)

Loans:

SBA loans

844

1,037

934

(193)

(18.6)

(90)

(9.6)

Commercial loans

25,016

25,626

21,314

(610)

(2.4)

3,702

17.4

Commercial construction loans

3,038

2,666

2,946

372

14.0

92

3.1

Residential mortgage loans

10,913

10,838

9,947

75

0.7

966

9.7

Consumer loans

1,424

1,524

1,346

(100)

(6.6)

78

5.8

Residential construction loans

1,825

1,791

1,996

34

1.9

(171)

(8.6)

Total loans

43,060

43,482

38,483

(422)

(1.0)

4,577

11.9

Total interest income

45,179

45,868

40,801

(689)

(1.5)

4,378

10.7

INTEREST EXPENSE

Interest-bearing demand deposits

1,910

2,009

1,622

(99)

(4.9)

288

17.8

Savings deposits

3,160

3,165

2,593

(5)

(0.2)

567

21.9

Brokered deposits

2,267

2,033

1,787

234

11.5

480

26.9

Time deposits

6,128

6,350

6,415

(222)

(3.5)

(287)

(4.5)

Borrowed funds and subordinated debentures

984

942

1,133

42

4.5

(149)

(13.2)

Total interest expense

14,449

14,499

13,550

(50)

(0.3)

899

6.6

Net interest income

30,730

31,369

27,251

(639)

(2.0)

3,479

12.8

Provision for credit losses, loans

1,043

2,208

1,358

(1,165)

(52.8)

(315)

(23.2)

Provision (Release) for credit losses, off-balance sheet

5

50

(41)

(45)

(90.0)

46

112.2

(Release) provision of credit losses, securities

-

-

-

-

-

-

-

Net interest income after provision for credit losses

29,682

29,111

25,934

571

2.0

3,748

14.5

NONINTEREST INCOME

Branch fee income

489

475

447

14

2.9

42

9.4

Service and loan fee income

912

705

864

207

29.4

48

5.6

Gain on sale of SBA loans held for sale, net

427

165

139

262

158.8

288

207.2

Gain on sale of mortgage loans, net

500

343

168

157

45.8

332

197.6

BOLI income

217

228

151

(11)

(4.8)

66

43.7

Net securities (losses) gains

(82)

1,570

(49)

(1,652)

*NM

(33)

(67.3)

Other income

413

412

381

1

0.2

32

8.4

Total noninterest income

2,876

3,898

2,101

(1,022)

(26.2)

775

36.9

NONINTEREST EXPENSE

Compensation and benefits

8,673

7,693

7,902

980

12.7

771

9.8

Processing and communications

1,146

1,077

986

69

6.4

160

16.2

Occupancy

987

880

880

107

12.2

107

12.2

Furniture and equipment

715

854

746

(139)

(16.3)

(31)

(4.2)

Professional services

488

640

364

(152)

(23.8)

124

34.1

Advertising

393

379

391

14

3.7

2

0.5

Loan related expenses

473

426

46

47

11.0

427

928.3

Deposit insurance

300

300

241

-

-

59

24.5

Director fees

260

271

495

(11)

(4.1)

(235)

(47.5)

Other expenses

636

795

560

(159)

(20.0)

76

13.6

Total noninterest expense

14,071

13,315

12,611

756

5.7

1,460

11.6

Income before provision for income taxes

18,487

19,694

15,424

(1,207)

(6.1)

3,063

19.9

Provision for income taxes

4,199

4,222

3,826

(23)

(0.5)

373

9.7

Net income

$

14,288

$

15,472

$

11,598

$

(1,184)

(7.7)

%

$

2,690

23.2

%

Effective tax rate

22.7

%

21.4

%

24.8

%

Net income per common share - Basic

$

1.43

$

1.55

$

1.15

Net income per common share - Diluted

1.40

1.52

1.13

Weighted average common shares outstanding - Basic

10,012

10,008

10,054

Weighted average common shares outstanding - Diluted

10,199

10,195

10,247

*NM=Not meaningful

UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

March 31, 2026

For the three months ended

(Dollar amounts in thousands, interest amounts and

March 31, 2026

March 31, 2025

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

$

61,424

$

558

3.69

%

$

30,259

$

332

4.45

%

FHLB stock

7,214

134

7.53

7,459

182

9.90

Securities:

Taxable

118,488

1,409

4.76

142,847

1,786

5.00

Tax-exempt

1,486

21

5.60

1,596

18

4.59

Total securities (A)

119,974

1,430

4.77

144,443

1,804

5.00

Loans:

SBA loans

41,576

844

8.12

49,638

934

7.53

Commercial loans

1,528,022

25,016

6.55

1,306,052

21,314

6.53

Commercial construction loans

152,561

3,038

7.96

140,946

2,946

8.36

Residential mortgage loans

678,359

10,913

6.44

639,742

9,947

6.22

Consumer loans

84,037

1,424

6.78

75,156

1,346

7.16

Residential construction loans

80,226

1,825

9.10

84,414

1,996

9.46

Total loans (B)

2,564,781

43,060

6.72

2,295,948

38,483

6.70

Total interest-earning assets

$

2,753,393

$

45,182

6.66

%

$

2,478,109

$

40,801

6.68

%

Noninterest-earning assets:

Cash and due from banks

24,735

23,117

Allowance for credit losses

(33,007)

(27,455)

Other assets

98,891

91,553

Total noninterest-earning assets

90,619

87,215

Total assets

$

2,844,012

$

2,565,324

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing liabilities:

Interest-bearing demand deposits

$

385,444

$

1,910

2.01

%

$

341,991

$

1,622

1.92

%

Savings deposits

563,220

3,160

2.28

495,051

2,593

2.12

Brokered deposits

265,877

2,267

3.46

213,517

1,787

3.39

Time deposits

685,355

6,128

3.63

637,936

6,415

4.08

Total interest-bearing deposits

1,899,896

13,465

2.87

1,688,495

12,417

2.98

Borrowed funds and subordinated debentures

108,231

984

3.64

119,135

1,133

3.80

Total interest-bearing liabilities

$

2,008,127

$

14,449

2.92

%

$

1,807,630

$

13,550

3.04

%

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

457,603

425,569

Other liabilities

24,594

29,833

Total noninterest-bearing liabilities

482,197

455,402

Total shareholders' equity

353,688

302,292

Total liabilities and shareholders' equity

$

2,844,012

$

2,565,324

Net interest spread

$

30,733

3.74

%

$

27,251

3.64

%

Tax-equivalent basis adjustment

(3)

-

Net interest income

$

30,730

$

27,251

Net interest margin

4.53

%

4.46

%

(A) Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis, assuming a federal tax rate of 21 percent.
(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

March 31, 2026

For the three months ended

(Dollar amounts in thousands, interest amounts and

March 31, 2026

December 31, 2025

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

$

61,424

$

558

3.69

%

$

66,840

$

674

4.00

%

FHLB stock

7,214

134

7.53

6,859

133

7.67

Securities:

Taxable

118,488

1,409

4.76

128,384

1,561

4.86

Tax-exempt

1,486

21

5.60

1,474

21

5.67

Total securities (A)

119,974

1,430

4.77

129,858

1,582

4.87

Loans:

SBA Loans

41,576

844

8.12

45,686

1,037

9.08

Commercial loans

1,528,022

25,016

6.55

1,487,472

25,626

6.74

Commercial construction loans

152,561

3,038

7.96

131,268

2,666

7.95

Residential mortgage loans

678,359

10,913

6.44

680,679

10,838

6.37

Consumer loans

84,037

1,424

6.78

84,318

1,524

7.07

Residential construction loans

80,226

1,825

9.10

74,915

1,791

9.35

Total loans (B)

2,564,781

43,060

6.72

2,504,338

43,482

6.79

Total interest-earning assets

$

2,753,393

$

45,182

6.66

%

$

2,707,895

$

45,871

6.72

%

Noninterest-earning assets:

Cash and due from banks

24,735

23,135

Allowance for credit losses

(33,007)

(30,791)

Other assets

98,891

91,977

Total noninterest-earning assets

90,619

84,321

Total assets

$

2,844,012

$

2,792,216

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing liabilities:

Interest-bearing demand deposits

$

385,444

$

1,910

2.01

%

$

391,005

$

2,009

2.04

%

Savings deposits

563,220

3,160

2.28

546,025

3,165

2.30

Brokered deposits

265,877

2,267

3.46

231,956

2,033

3.48

Time deposits

685,355

6,128

3.63

687,058

6,350

3.67

Total interest-bearing deposits

1,899,896

13,465

2.87

1,856,044

13,557

2.90

Borrowed funds and subordinated debentures

108,231

984

3.64

100,689

942

3.66

Total interest-bearing liabilities

$

2,008,127

$

14,449

2.92

%

$

1,956,733

$

14,499

2.94

%

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

457,603

462,977

Other liabilities

24,594

33,026

Total noninterest-bearing liabilities

482,197

496,003

Total shareholders' equity

353,688

339,480

Total liabilities and shareholders' equity

$

2,844,012

$

2,792,216

Net interest spread

$

30,733

3.74

%

$

31,372

3.78

%

Tax-equivalent basis adjustment

(3)

(3)

Net interest income

$

30,730

$

31,369

Net interest margin

4.53

%

4.60

%

(A) Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis, assuming a federal tax rate of 21 percent.
(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 CREDIT LOSSES AND LOAN QUALITY SCHEDULES

March 31, 2026

Amounts in thousands, except percentages

March 31, 2026

December 31, 2025

September 30, 2025

June 30, 2025

March 31, 2025

ALLOWANCE FOR CREDIT LOSSES:

Balance, beginning of period

$

32,342

$

30,245

$

29,012

$

27,651

$

26,788

Provision for credit losses for loans

1,043

2,208

1,409

1,725

1,358

33,385

32,453

30,421

29,376

28,146

Less: Chargeoffs

SBA loans

50

265

211

105

350

Commercial loans

140

-

-

100

2

Residential mortgage loans

-

46

85

282

130

Consumer loans

10

11

30

21

50

Residential construction loans

40

-

-

-

-

Total chargeoffs

240

322

326

508

532

Add: Recoveries

SBA loans

5

4

50

2

5

Commercial loans

93

196

92

102

5

Residential mortgage loans

100

-

-

-

-

Consumer loans

11

11

8

40

27

Residential construction loans

-

-

-

-

-

Total recoveries

209

211

150

144

37

Net chargeoffs

(31)

(111)

(176)

(364)

(495)

Balance, end of period

$

33,354

$

32,342

$

30,245

$

29,012

$

27,651

ASSET QUALITY INFORMATION:

Nonaccrual loans:

SBA loans

$

1,645

$

1,751

$

4,225

$

4,177

$

3,231

Commercial loans

18,375

18,473

4,006

3,512

4,821

Residential mortgage loans

8,915

8,173

11,174

7,980

8,622

Consumer loans

1,557

1,268

938

-

-

Residential construction loans

128

171

171

171

171

Total nonaccrual loans

30,620

29,836

20,514

15,840

16,845

Debt securities available for sale, net of valuation allowance

-

-

-

-

1,145

OREO

1,472

1,472

-

-

-

Nonaccrual assets

32,092

31,308

20,514

15,840

17,990

Loans 90 days past due & still accruing

$

90

$

-

$

356

$

2,876

$

1,123

Nonaccrual loans to total loans

1.18

%

1.17

%

0.83

%

0.66

%

0.72

%

Nonaccrual assets to total assets

1.06

1.06

0.71

0.54

0.65

Allowance for credit losses to:

Total loans

1.28

%

1.27

%

1.23

%

1.22

%

1.18

%

Total nonaccrual loans

108.93

108.40

147.44

183.16

164.15

UNITY BANCORP, INC.

QUARTERLY FINANCIAL DATA

March 31, 2026

(In thousands, except %'s, employee, office and per share amounts)

March 31, 2026

December 31, 2025

September 30, 2025

June 30, 2025

March 31, 2025

SUMMARY OF INCOME:

Total interest income

$

45,179

$

45,868

$

44,361

$

42,600

$

40,799

Total interest expense

14,449

14,499

14,505

14,043

13,548

Net interest income

30,730

31,369

29,856

28,557

27,251

Provision (Release) for credit losses

1,048

2,258

542

(175)

1,316

Net interest income after provision for credit losses

29,682

29,111

29,314

28,732

25,935

Total noninterest income

2,876

3,898

2,967

5,815

2,099

Total noninterest expense

14,071

13,315

13,415

13,019

12,610

Income before provision for income taxes

18,487

19,694

18,866

21,528

15,424

Provision for income taxes

4,199

4,222

4,476

5,037

3,826

Net income

$

14,288

$

15,472

$

14,390

$

16,491

$

11,598

Net income per common share - Basic

$

1.43

$

1.55

$

1.43

$

1.64

$

1.16

Net income per common share - Diluted

1.40

1.52

1.41

1.61

1.13

COMMON SHARE DATA:

Market price per share

$

51.83

$

51.72

$

48.87

$

47.08

$

40.70

Dividends paid

0.16

0.15

0.15

0.14

0.14

Book value per common share

35.66

34.63

33.26

31.88

30.38

Weighted average common shares outstanding - Basic

10,012

10,008

10,036

10,033

10,054

Weighted average common shares outstanding - Diluted

10,199

10,195

10,233

10,212

10,247

Issued common shares

10,114

10,048

11,681

11,672

11,666

Outstanding common shares

10,041

9,982

10,041

10,032

10,076

Treasury shares

73

66

1,640

1,640

1,590

QUARTERLY PERFORMANCE RATIOS (ANNUALIZED):

Return on average assets

2.04

%

2.20

%

2.11

%

2.51

%

1.83

%

Return on average equity

16.38

18.08

17.41

21.15

15.56

Efficiency ratio **

41.77

39.52

41.47

42.31

42.89

Noninterest expense to average assets

2.01

1.89

1.97

1.98

1.99

BALANCE SHEET DATA:

Total assets

$

3,027,327

$

2,966,652

$

2,876,365

$

2,928,523

$

2,767,943

Total securities

115,268

124,015

131,252

139,348

142,092

Total loans

2,601,656

2,544,713

2,468,527

2,382,594

2,345,130

Allowance for credit losses

33,354

32,342

30,245

29,012

27,651

Total deposits

2,379,140

2,324,061

2,267,484

2,187,366

2,175,398

Total shareholders' equity

358,095

345,631

334,023

319,840

306,142

TAX EQUIVALENT YIELDS AND RATES:

Interest-earning assets

6.66

%

6.72

%

6.74

%

6.70

%

6.68

%

Interest-bearing liabilities

2.92

2.94

3.05

3.05

3.04

Net interest spread

3.74

3.78

3.69

3.66

3.64

Net interest margin

4.53

4.60

4.54

4.49

4.46

CREDIT QUALITY:

Nonaccrual assets

$

32,092

$

31,308

$

20,514

$

15,840

$

17,990

QTD annualized net chargeoffs to QTD average loans

(0.01)

%

(0.02)

%

(0.03)

%

(0.06)

%

(0.09)

%

Allowance for credit losses to total loans

1.28

1.27

1.23

1.22

1.18

Nonaccrual loans to total loans

1.18

1.17

0.83

0.66

0.72

Nonaccrual assets to total assets

1.06

1.06

0.71

0.54

0.65

UNITY BANCORP CAPITAL RATIOS

Total equity to total assets

11.83

%

11.65

%

11.61

%

10.92

%

11.06

%

Leverage ratio

12.93

12.72

12.71

12.50

12.32

Common Equity Tier 1 Capital Ratio

14.50

14.45

14.45

13.96

13.87

Risk-based Tier 1 Capital Ratio

14.91

14.87

14.88

14.39

14.33

Risk-based Total Capital Ratio

16.16

16.12

16.13

15.65

15.58

Number of banking offices

22

22

22

21

21

Employee Full-Time Equivalent

244

242

238

237

227

** The efficiency ratio is a non-GAAP measure, calculated based on the noninterest expense divided by the sum of net interest income plus non interest income, excluding net gains and losses on securities.

UNITY BANCORP, INC.

LOAN PORTFOLIO COMPOSITION

March 31, 2026

In thousands, except percentages

March 31, 2026

%

December 31, 2025

%

Loans Held for Sale

$

12,557

0.5%

$

9,490

0.4%

SBA Loans

32,499

1.2%

34,259

1.3%

Commercial Loans

SBA 504

43,254

1.7%

43,802

1.7%

Commercial & industrial

185,207

7.1%

183,163

7.2%

Commercial mortgage - owner occupied

681,803

26.2%

660,427

26.0%

Commercial mortgage - nonowner occupied

561,057

21.6%

531,954

20.9%

Other

87,845

3.4%

98,686

3.9%

Total Commercial Loans

1,559,166

60.0%

1,518,032

59.7%

Commercial Construction Loans

159,200

6.1%

147,215

5.8%

Residential Mortgage Loans

Primary residence

467,329

18.0%

472,482

18.6%

Secondary residence

67,835

2.6%

71,656

2.8%

Investor property

133,575

5.1%

133,083

5.2%

Total Residential Mortgage Loans

668,739

25.7%

677,221

26.6%

Consumer Loans

Home equity

82,980

3.2%

82,488

3.2%

Consumer other

2,634

0.1%

2,731

0.1%

Total Consumer Loans

85,614

3.3%

85,219

3.3%

Residential Construction Loans

83,881

3.2%

73,277

2.9%

Total Gross Loans

$

2,601,656

100.0%

$

2,544,713

100.0%

UNITY BANCORP, INC.

QUARTERLY NON-GAAP / CORE RECONCILIATION

March 31, 2026

For the three months ended

(In thousands, except percentages and per share amounts)

March 31, 2026

December 31, 2025

March 31, 2025

Adjusted net income:

Net income (GAAP)

$

14,288

$

15,472

$

11,598

Non-recurring transactions:

Less: Net securities gains, unrealized

-

(1,475)

-

Add: Adjusted release of income taxes

-

354

-

Adjusted net income (non-GAAP)

$

14,288

$

14,351

$

11,598

Adjusted net income per common share:

Weighted average common shares outstanding - Basic

10,012

10,008

10,054

Weighted average common shares outstanding - Diluted

10,199

10,195

10,247

Net income per common share - Basic (GAAP)

$

1.43

$

1.55

$

1.15

Net income per common share - Diluted (GAAP)

1.40

1.52

1.13

Adjusted net income per common share - Basic (non-GAAP)

$

N/A

$

1.43

$

N/A

Adjusted net income per common share - Diluted (non-GAAP)

N/A

1.41

N/A

Adjusted return on average assets:

Total QTD average assets

2,844,012

2,792,216

2,565,324

Return on average assets (GAAP)

2.04

%

2.20

%

1.83

%

Adjusted return on average assets (non-GAAP)

N/A

2.04

N/A

Adjusted return on average equity:

Total QTD average equity

353,688

339,480

302,292

Return on average equity (GAAP)

16.38

%

18.08

%

15.56

%

Adjusted return on average equity (non-GAAP)

N/A

16.77

N/A

Management uses these non-GAAP measures as internal benchmarks in evaluating operating performance and in planning and forecasting future periods.

Unity Bancorp Inc. published this content on April 14, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 14, 2026 at 10:05 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]