8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

April 19, 2021

Date of Report (Date of earliest event reported)

UNITY BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

New Jersey

(State or Other Jurisdiction of Incorporation)

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

64 Old Highway 22

Clinton, NJ 08809

(Address of Principal Executive Office)

(908) 730-7630

(Registrant’s Telephone Number, Including Area Code)

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

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

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

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

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

Emerging growth company ☐

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

Item 2.02            Results of Operation and Financial Condition

The Registrant issued a press release on April 15, 2021 announcing results for the three months ended March 31, 2021, the full text of which is incorporated by reference to this Item.

Item 9.01             Financial Statements and Exhibits

(d) Exhibits

Exhibit 99.1         Press release issued by the Registrant on April 15, 2021.

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.

	UNITY BANCORP, INC.
	(Registrant)
Date: April 19, 2021
	By:	/s/ George Boyan
		George Boyan
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

EXHIBIT #DESCRIPTION

99.1Press release issued by the Registrant on April 15, 2021

EX-99.1

Exhibit 99.1

For Immediate Release	News Media & Financial Analyst Contact:
Unity Bancorp, Inc. (NSDQ: UNTY)	George Boyan, EVP and CFO
April 15, 2021	(908) 713-4535

     Unity Bancorp Reports     

Quarterly Earnings of $8.5 Million

Clinton, NJ, April 15, 2021 - Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $8.5 million, or $0.80 per diluted share, for the quarter ended March 31, 2021, a 58.3% increase compared to net income of $5.4 million, or $0.49 per diluted share for the prior year’s first quarter, primarily due to revenue generated by the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”), improved net interest margin and an increase in non-interest income.

First Quarter Earnings Highlights

● Net interest income, our primary driver of earnings, increased $2.8 million to $18.0 million for the quarter ended March 31, 2021, compared to the prior year’s quarter, due to SBA PPP loans, commercial loan growth and a reduction in the cost of funds.

● Net interest margin (“NIM”) increased to 4.09% for the quarter ended March 31, 2021, compared to 3.92% for the prior year’s quarter.

● The provision for loan losses was $500 thousand for the quarter ended March 31, 2021, a decrease of $1.0 million from the prior year’s quarter due to an improved outlook on credit quality and higher levels of allowance.

● Noninterest income increased $1.2 million to $3.7 million compared to the prior year’s quarter, primarily due to increased gains on mortgage loan sales and increased net gains on securities. For the quarter ended March 31, 2021, residential mortgage loan sales were $101.9 million, compared to $28.8 million for the prior year’s quarter.

● Noninterest expense increased $479 thousand to $9.8 million compared to the prior year’s quarter, primarily due to increased compensation as a result of mortgage commissions paid.

● The effective tax rate was 25.7% compared to 22.9% in the prior year’s quarter.

Balance Sheet Highlights

● Total loans increased $40.6 million, or 2.5%, from year-end 2020 to $1.7 billion at March 31, 2021. The increase was primarily due to increases in SBA PPP and commercial loans.

● Total deposits increased $70.4 million, or 4.5%, from year-end 2020 to $1.6 billion at March 31, 2021.

● Borrowed funds decreased $30.0 million to $170.0 million at March 31, 2021, due to decreased FHLB advances.

● Shareholders’ equity was $181.1 million at March 31, 2021.

● Book value per common share was $17.37 as of March 31, 2021.

● At March 31, 2021, the Community Bank Leverage Ratio was 10.19%.

● Net nonperforming assets were $11.6 million at March 31, 2021, compared to $11.7 million at December 31, 2020. Most of the nonperforming assets are residential loans, the resolution of which has been impacted by foreclosure restrictions due to COVID-19. The allowance to total loans ratio excluding SBA PPP loans was 1.45% at March 31, 2021.

Paycheck Protection Program Loans

As of March 31, 2021, the Company funded 723 Small Business Administration Paycheck Protection Program Round 2 loans, totaling $85.6 million. This is in addition to the 1,224 SBA PPP loans, totaling $143.0 million funded during the year ended December 31, 2020.

Loan Deferrals

The Bank’s initiative to work with borrowers that were unable to meet their contractual obligations because of the effects of COVID-19 was a successful effort. Loan deferrals which were granted have steadily declined during the first quarter to $20.2 million, from $32.5 million at December 31, 2020.

The table below summarizes loan deferrals as of March 31, 2021:

(In thousands)	Total Loan Portfolio balance		Full Deferrals		Principal Only Deferrals		Total Loans in Deferral		% Deferrals to Total Loans
SBA loans held for sale	$	8,809	$	—	$	—	$	—	0%
SBA loans held for investment		38,296		—		342		342	1%
SBA PPP loans		169,117		—		—		—	0%
Commercial loans		853,078		2,918		15,503		18,421	2%
Residential mortgage loans		448,149		1,400		—		1,400	0%
Consumer loans		60,502		—		—		—	0%
Consumer construction loans		90,497		—		—		—	0%
Total loans	$	1,668,448	$	4,318	$	15,845	$	20,163	1%

Unity Bancorp, Inc. is a financial service organization headquartered in Clinton, New Jersey, with approximately $2.0 billion in assets and $1.6 billion in deposits. Unity Bank provides financial services to retail, corporate and small business customers through its 19 retail service centers located in Bergen, Hunterdon, Middlesex, Somerset, Union and Warren Counties in New Jersey and Northampton County in Pennsylvania. For additional information about Unity, visit our website at www.unitybank.com , or call 800-618-BANK.

This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements may be identified by use of the words “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the company’s control and could impede its ability to achieve these goals. These factors include those items included in our Annual Report on Form 10-K under the heading “Item IA-Risk Factors” as amended or supplemented by our subsequent filings with the SEC, as well as general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, our ability to manage and reduce the level of our nonperforming assets, results of regulatory exams, and the impact of COVID-19 on the Bank, its employees and customers, among other factors.

UNITY BANCORP, INC.

SUMMARY FINANCIAL HIGHLIGHTS

March 31, 2021

										Mar. 31, 2021 vs.
										Dec. 31, 2020		Mar. 31, 2020
(In thousands, except percentages and per share amounts)	Mar. 31, 2021			Dec. 31, 2020			Mar. 31, 2020			%		%
BALANCE SHEET DATA:
Total assets	$	2,004,818		$	1,958,914		$	1,740,076		2.3	%	15.2	%
Total deposits		1,628,393			1,557,959			1,378,618		4.5		18.1
Total loans		1,668,448			1,627,817			1,439,645		2.5		15.9
Total securities		34,551			47,571			58,002		(27.4)		(40.4)
Total shareholders' equity		181,186			173,911			164,305		4.2		10.3
Allowance for loan losses		(22,965)			(23,105)			(17,376)		(0.6)		32.2
FINANCIAL DATA - QUARTER TO DATE:
Income before provision for income taxes	$	11,442		$	9,868		$	6,966		16.0		64.3
Provision for income taxes		2,946			2,523			1,598		16.8		84.4
Net income	$	8,496		$	7,345		$	5,368		15.7		58.3
Net income per common share - Basic	$	0.81		$	0.70		$	0.49		15.7		65.3
Net income per common share - Diluted	$	0.80		$	0.69		$	0.49		15.9		63.3
Performance ratios:
Return on average assets		1.85	%		1.61	%		1.53	%
Return on average equity		19.51	%		17.07	%		15.41	%
Efficiency ratio		45.74	%		50.31	%		51.29	%
Net interest margin		4.09	%		3.97	%		3.88	%
Noninterest expense to average assets		2.13	%		2.35	%		2.17	%
SHARE INFORMATION:
Market price per share	$	22.00		$	17.55		$	11.70		25.4		88.0
Dividends paid	$	0.08		$	0.08		$	0.08		—		—
Book value per common share	$	17.38		$	16.63		$	15.10		4.5		15.1
Average diluted shares outstanding (QTD)		10,565			10,629			11,037		(0.6)		(4.3)
CAPITAL RATIOS:
Total equity to total assets		9.04	%		8.88	%		9.44	%
Community bank leverage ratio		10.19	%		10.09	%		10.56	%
CREDIT QUALITY AND RATIOS:
Nonperforming assets	$	11,788		$	12,060		$	11,178		(2.3)		5.5
QTD net chargeoffs to QTD average loans		0.16	%		0.03	%		0.15	%
Allowance for loan losses to total loans		1.38	%		1.42	%		1.21	%
Nonperforming assets to total loans		0.71	%		0.74	%		0.67	%
Nonperforming assets to total assets		0.59	%		0.62	%		0.64	%

UNITY BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

March 31, 2021

							March 31, 2021 vs.
							December 31,		March 31,
	March 31,		December 31,		March 31,		2020		2020
(In thousands, except percentages)	2021		2020		2020		%		%
ASSETS
Cash and due from banks	$	25,911	$	22,750	$	20,377	13.9	%	27.2	%
Federal funds sold and interest-bearing deposits		213,666		196,561		158,618	8.7		34.7
Cash and cash equivalents		239,577		219,311		178,995	9.2		33.8
Securities:
Securities available for sale		32,330		45,617		56,290	(29.1)		(42.6)
Equity securities		2,221		1,954		1,712	13.7		29.7
Total securities		34,551		47,571		58,002	(27.4)		(40.4)
Loans:
SBA loans held for sale		8,809		9,335		10,726	(5.6)		(17.9)
SBA loans held for investment		38,296		39,587		37,074	(3.3)		3.3
SBA PPP loans		169,117		118,257		—	43.0		—
Commercial loans		853,078		839,788		786,077	1.6		8.5
Residential mortgage loans		448,149		467,586		456,072	(4.2)		(1.7)
Consumer loans		60,502		66,100		76,326	(8.5)		(20.7)
Consumer construction loans		90,497		87,164		73,370	3.8		23.3
Total loans		1,668,448		1,627,817		1,439,645	2.5		15.9
Allowance for loan losses		(22,965)		(23,105)		(17,376)	(0.6)		32.2
Net loans		1,645,483		1,604,712		1,422,269	2.5		15.7
Premises and equipment, net		20,043		20,226		21,046	(0.9)		(4.8)
Bank owned life insurance ("BOLI")		26,535		26,514		26,379	0.1		0.6
Deferred tax assets		9,116		9,183		6,305	(0.7)		44.6
Federal Home Loan Bank ("FHLB") stock		9,269		10,594		9,054	(12.5)		2.4
Accrued interest receivable		9,831		10,429		7,396	(5.7)		32.9
Other real estate owned ("OREO")		—		—		1,523	—		(100.0)
Goodwill		1,516		1,516		1,516	—		—
Other assets		8,897		8,858		7,591	0.4		17.2
Total assets	$	2,004,818	$	1,958,914	$	1,740,076	2.3	%	15.2	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing demand	$	465,511	$	459,677	$	334,731	1.3	%	39.1	%
Interest-bearing demand		217,714		204,236		149,428	6.6		45.7
Savings		502,300		455,449		405,775	10.3		23.8
Time Deposits		442,868		438,597		488,684	1.0		(9.4)
Total deposits		1,628,393		1,557,959		1,378,618	4.5		18.1
Borrowed funds		170,000		200,000		169,000	(15.0)		0.6
Subordinated debentures		10,310		10,310		10,310	—		—
Accrued interest payable		255		248		237	2.8		7.6
Accrued expenses and other liabilities		14,674		16,486		17,606	(11.0)		(16.7)
Total liabilities		1,823,632		1,785,003		1,575,771	2.2		15.7
Shareholders' equity:
Common stock		92,180		91,873		90,370	0.3		2.0
Retained earnings		98,331		90,669		74,939	8.5		31.2
Treasury stock, at cost		(8,791)		(7,442)		(172)	18.1		5,011.0
Accumulated other comprehensive (loss) income		(534)		(1,189)		(832)	NM*		NM*
Total shareholders' equity		181,186		173,911		164,305	4.2		10.3
Total liabilities and shareholders' equity	$	2,004,818	$	1,958,914	$	1,740,076	2.3	%	15.2	%
COMMON SHARES AT PERIOD END:
Shares issued		10,996		10,961		10,894
Shares oustanding		10,422		10,456		10,883
Treasury shares		574		505		11

NM=Not meaningful

UNITY BANCORP, INC.

QTD CONSOLIDATED STATEMENTS OF INCOME

March 31, 2021

										Mar. 31, 2021 vs.
	For the three months ended									Dec. 31, 2020				Mar. 31, 2020
(In thousands, except percentages and per share amounts)	Mar. 31, 2021			Dec. 31, 2020			Mar. 31, 2020			$		%		$		%
INTEREST INCOME
Federal funds sold and interest-bearing deposits	$	24		$	23		$	188		$	1	4.3	%	$	(164)	(87.2)	%
FHLB stock		63			64			109			(1)	(1.6)			(46)	(42.2)
Securities:
Taxable		292			364			511			(72)	(19.8)			(219)	(42.9)
Tax-exempt		10			11			22			(1)	(9)			(12)	(54.5)
Total securities		302			375			533			(73)	(19.5)			(231)	(43.3)
Loans:
SBA loans		783			819			985			(36)	(4.4)			(202)	(20.5)
SBA PPP loans		1,730			1,361			—			369	27.1			1,730	—
Commercial loans		10,474			10,155			9,933			319	3.1			541	5.4
Residential mortgage loans		5,128			5,441			5,770			(313)	(5.8)			(642)	(11.1)
Consumer loans		857			824			960			33	4.0			(103)	(10.7)
Consumer construction loans		1,215			1,226			1,107			(11)	(0.9)			108	9.8
Total loans		20,187			19,826			18,755			361	1.8			1,432	7.6
Total interest income		20,576			20,288			19,585			288	1.4			991	5.1
INTEREST EXPENSE
Interest-bearing demand deposits		309			319			378			(10)	(3.1)			(69)	(18.3)
Savings deposits		431			463			951			(32)	(6.9)			(520)	(54.7)
Time deposits		1,463			1,726			2,447			(263)	(15.2)			(984)	(40.2)
Borrowed funds and subordinated debentures		355			441			565			(86)	(19.5)			(210)	(37.2)
Total interest expense		2,558			2,949			4,341			(391)	(13.3)			(1,783)	(41.1)
Net interest income		18,018			17,339			15,244			679	3.9			2,774	18.2
Provision for loan losses		500			1,000			1,500			(500)	(50.0)			(1,000)	(66.7)
Net interest income after provision for loan losses		17,518			16,339			13,744			1,179	7.2			3,774	27.5
NONINTEREST INCOME
Branch fee income		295			285			317			10	3.5			(22)	(6.9)
Service and loan fee income		625			557			376			68	12.2			249	66.2
Gain on sale of SBA loans held for sale, net		245			543			473			(298)	(54.9)			(228)	(48.2)
Gain on sale of mortgage loans, net		1,750			2,027			1051			(277)	(13.7)			699	66.5
BOLI income		129			139			173			(10)	(7.2)			(44)	(25.4)
Net security gains (losses)		310			280			-170			30	10.7			480	(282.4)
Other income		372			423			325			(51)	(12.1)			47	14.5
Total noninterest income		3,726			4,254			2,545			(528)	(12.4)			1,181	46.4
NONINTEREST EXPENSE
Compensation and benefits		6,063			6,371			5,439			(308)	(4.8)			624	11.5
Processing and communications		807			956			708			(149)	(15.6)			99	14.0
Furniture and equipment		649			673			655			(24)	(3.6)			(6)	(0.9)
Occupancy		706			650			624			56	8.6			82	13.1
Professional services		380			340			269			40	11.8			111	41.3
Advertising		268			218			290			50	22.9			(22)	(7.6)
Deposit insurance		214			230			88			(16)	(7.0)			126	143.2
Director fees		208			202			200			6	3.0			8	4.0
BSA expenses		168			623			63			(455)	(73)			105	166.7
Other loan expenses		143			149			89			(6)	(4.0)			54	60.7
Loan collection & OREO (recoveries) expenses		(49)			(5)			186			(44)	880.0			(235)	(126.3)
Other expenses		245			318			712			(73)	(23.0)			(467)	(65.6)
Total noninterest expense		9,802			10,725			9,323			(923)	(8.6)			479	5.1
Income before provision for income taxes		11,442			9,868			6,966			1,574	16.0			4,476	64.3
Provision for income taxes		2,946			2,523			1,598			423	16.8			1,348	84.4
Net income	$	8,496		$	7,345		$	5,368		$	1,151	15.7	%	$	3,128	58.3	%
Effective tax rate		25.7	%		25.6	%		22.9	%
Net income per common share - Basic	$	0.81		$	0.70		$	0.49
Net income per common share - Diluted	$	0.80		$	0.69		$	0.49
Weighted average common shares outstanding - Basic		10,437			10,532			10,883

Weighted average common shares outstanding - Diluted 10,565 10,629 11,037

UNITY BANCORP, INC.

QUARTER TO DATE NET INTEREST MARGIN

March 31, 2021

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

	For the three months ended
	March 31, 2021						March 31, 2020
	Average						Average
	Balance		Interest		Rate/Yield		Balance		Interest		Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits	$	90,830	$	24	0.11	%	$	69,076	$	188	1.10	%
FHLB stock		5,167		63	4.98			6,883		109	6.37
Securities:
Taxable		38,741		292	3.06			60,363		511	3.40
Tax-exempt		2,405		12	2.03			3,783		31	3.35
Total securities (A)		41,146		304	3.00			64,146		542	3.40
Loans:
SBA loans		48,845		783	6.50			50,528		985	7.84
SBA PPP loans		142,581		1,730	4.92			—		—	—
Commercial loans		849,065		10,474	5.00			769,497		9,933	5.19
Residential mortgage loans		455,782		5,128	4.56			462,748		5,770	5.02
Consumer loans		63,440		857	5.48			72,394		960	5.33
Consumer construction loans		88,992		1,215	5.54			69,890		1,107	6.37
Total loans (B)		1,648,705		20,187	4.97			1,425,057		18,755	5.29
Total interest-earning assets	$	1,785,848	$	20,578	4.67	%	$	1,565,162	$	19,594	5.04	%
Noninterest-earning assets:
Cash and due from banks		23,781						21,942
Allowance for loan losses		(23,308)						(16,698)
Other assets		76,309						70,381
Total noninterest-earning assets		76,782						75,625
Total assets	$	1,862,630					$	1,640,787
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits	$	209,020	$	309	0.60	%	$	162,193	$	378	0.94	%
Total savings deposits		476,463		431	0.37			424,905		951	0.90
Total time deposits		438,250		1,463	1.35			435,705		2,447	2.26
Total interest-bearing deposits		1,123,733		2,203	0.80			1,022,803		3,776	1.48
Borrowed funds and subordinated debentures		89,699		355	1.61			131,057		565	1.73
Total interest-bearing liabilities	$	1,213,432	$	2,558	0.85	%	$	1,153,860	$	4,341	1.50	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		455,146						307,683
Other liabilities		17,418						16,101
Total noninterest-bearing liabilities		472,564						323,784
Total shareholders' equity		176,634						163,143
Total liabilities and shareholders' equity	$	1,862,630					$	1,640,787
Net interest spread			$	18,020	3.82	%			$	15,253	3.54	%
Tax-equivalent basis adjustment				(2)						(9)
Net interest income			$	18,018					$	15,244
Net interest margin					4.09	%					3.92	%

(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

March 31, 2021

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

	For the three months ended
	March 31, 2021						December 31, 2020
	Average						Average
	Balance		Interest		Rate/Yield		Balance		Interest		Rate/Yield
ASSETS
Interest-earning assets:
Federal funds sold and interest-bearing deposits	$	90,830	$	24	0.11	%	$	64,359	$	23	0.14	%
FHLB stock		5,167		63	4.98			5,732		64	4.44
Securities:
Taxable		38,741		292	3.06			46,873		364	3.09
Tax-exempt		2,405		12	2.03			2,491		13	2.08
Total securities (A)		41,146		304	3.00			49,364		377	3.04
Loans:
SBA loans		48,845		783	6.50			53,383		819	6.10
SBA PPP loans		142,581		1,730	4.92			134,946		1,361	4.01
Commercial loans		849,065		10,474	5.00			814,366		10,155	4.96
Residential mortgage loans		455,782		5,128	4.56			465,117		5,441	4.65
Consumer loans		63,440		857	5.48			66,963		824	4.90
Consumer construction loans		88,992		1,215	5.54			84,112		1,226	5.80
Total loans (B)		1,648,705		20,187	4.97			1,618,888		19,826	4.87
Total interest-earning assets	$	1,785,848	$	20,578	4.67	%	$	1,738,343	$	20,290	4.64	%
Noninterest-earning assets:
Cash and due from banks		23,781						24,128
Allowance for loan losses		(23,308)						(22,907)
Other assets		76,309						75,488
Total noninterest-earning assets		76,782						76,709
Total assets	$	1,862,630					$	1,815,053
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Total interest-bearing demand deposits	$	209,020	$	309	0.60	%	$	205,049	$	319	0.62	%
Total savings deposits		476,463		431	0.37			461,345		463	0.40
Total time deposits		438,250		1,463	1.35			427,208		1,726	1.61
Total interest-bearing deposits		1,123,733		2,203	0.80			1,093,602		2,508	0.91
Borrowed funds and subordinated debentures		89,699		355	1.61			102,256		441	1.72
Total interest-bearing liabilities	$	1,213,432	$	2,558	0.85	%	$	1,195,858	$	2,949	0.98	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		455,146						431,030
Other liabilities		17,418						17,025
Total noninterest-bearing liabilities		472,564						448,055
Total shareholders' equity		176,634						171,140
Total liabilities and shareholders' equity	$	1,862,630					$	1,815,053
Net interest spread			$	18,020	3.82	%			$	17,341	3.66	%
Tax-equivalent basis adjustment				(2)						(3)
Net interest income			$	18,018					$	17,338
Net interest margin					4.09	%					3.97	%

(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

March 31, 2021

Amounts in thousands, except percentages	Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		Jun. 30, 2020		Mar. 31, 2020
ALLOWANCE FOR LOAN LOSSES:
Balance, beginning of period	$	23,105	$	22,237	$	20,234	$	17,376	$	16,395
Provision for loan losses charged to expense		500		1,000		2,000		2,500		1,500
		23,605		23,237		22,234		19,876		17,895
Less: Chargeoffs
SBA loans		282		—		1		—		25
Commercial loans		373		150		—		219		300
Residential mortgage loans		—		—		—		—		200
Consumer loans		1		—		—		—		—
Total chargeoffs		656		150		1		219		525
Add: Recoveries
SBA loans		15		—		3		75		5
Commercial loans		1		18		1		502		1
Residential mortgage loans		—		—		—		—		—
Consumer loans		—		—		—		—		—
Total recoveries		16		18		4		577		6
Net chargeoffs (recoveries)		640		132		(3)		(358)		519
Balance, end of period	$	22,965	$	23,105	$	22,237	$	20,234	$	17,376
LOAN QUALITY INFORMATION:
Nonperforming loans:
SBA loans	$	1,560	$	2,473	$	3,446	$	2,363	$	1,627
Commercial loans		952		1,325		527		413		613
Residential mortgage loans		6,711		5,217		3,722		6,192		6,910
Consumer loans		—		1,295		1,293		505		505
Consumer construction loans		2,565		1,750		—		—		—
Total nonperforming loans		11,788		12,060		8,988		9,473		9,655
Other real estate owned ("OREO")		—		—		711		711		1,523
Nonperforming assets		11,788		12,060		9,699		10,184		11,178
Less: Amount guaranteed by SBA		139		371		812		307		427
Net nonperforming assets	$	11,649	$	11,689	$	8,887	$	9,877	$	10,751
Loans 90 days past due & still accruing	$	2,540	$	449	$	—	$	—	$	—
Performing Troubled Debt Restructurings (TDRs)	$	1,079	$	663	$	673	$	684	$	694
Allowance for loan losses to:
Total nonperforming loans		194.82		191.58		247.41		213.60		179.97
Nonperforming assets		194.82		191.58		229.27		198.68		155.45
Net nonperforming assets		197.14		197.66		250.22		204.86		161.62

UNITY BANCORP, INC.

QUARTERLY FINANCIAL DATA

March 31, 2021

(In thousands, except percentages and per share amounts)	Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020			Jun. 30, 2020			Mar. 31, 2020
SUMMARY OF INCOME:
Total interest income	$	20,576		$	20,288		$	19,764		$	19,278		$	19,585
Total interest expense		2,558			2,949			3,437			3,753			4,341
Net interest income		18,018			17,339			16,327			15,525			15,244
Provision for loan losses		500			1,000			2,000			2,500			1,500
Net interest income after provision for loan losses		17,518			16,339			14,327			13,025			13,744
Total noninterest income		3,726			4,254			3,336			2,811			2,545
Total noninterest expense		9,802			10,725			10,037			9,177			9,323
Income before provision for income taxes		11,442			9,868			7,626			6,659			6,966
Provision for income taxes		2,946			2,523			1,866			1,488			1,598
Net income	$	8,496		$	7,345		$	5,760		$	5,171		$	5,368
Net income per common share - Basic	$	0.81		$	0.70		$	0.54		$	0.48		$	0.49
Net income per common share - Diluted	$	0.80		$	0.69		$	0.54		$	0.47		$	0.49
COMMON SHARE DATA:
Market price per share	$	22.00		$	17.55		$	11.58		$	14.30		$	11.70
Dividends paid	$	0.08		$	0.08		$	0.08		$	0.08		$	0.08
Book value per common share	$	17.38		$	16.63		$	16.01		$	15.53		$	15.10
Weighted average common shares outstanding - Basic		10,437			10,532			10,630			10,792			10,883
Weighted average common shares outstanding - Diluted		10,565			10,629			10,706			10,888			11,037
Issued common shares		10,996			10,961			10,943			10,939			10,894
Outstanding common shares		10,422			10,456			10,570			10,728			10,883
Treasury shares		574			505			373			211			11
PERFORMANCE RATIOS (Annualized):
Return on average assets		1.85	%		1.61	%		1.28	%		1.19	%		1.32	%
Return on average equity		19.51			17.07			13.76			12.59			13.23
Efficiency ratio		45.74			50.31			50.80			50.27			51.92
Noninterest expense to average assets		2.13			2.35			2.23			2.10			2.29
BALANCE SHEET DATA:
Total assets	$	2,004,818		$	1,958,914		$	1,930,836		$	1,900,774		$	1,740,076
Total deposits		1,628,393			1,557,959			1,493,440			1,483,457			1,378,618
Total loans		1,668,448			1,627,817			1,613,291			1,592,507			1,439,645
Total securities		34,551			47,571			50,387			54,888			58,002
Total shareholders' equity		181,186			173,911			169,234			166,607			164,305
Allowance for loan losses		(22,965)			(23,105)			(22,237)			(20,234)			(17,376)
TAX EQUIVALENT YIELDS AND RATES:
Interest-earning assets		4.67	%		4.64	%		4.58	%		4.63	%		5.04	%
Interest-bearing liabilities		0.85			0.98			1.15			1.28			1.51
Net interest spread		3.82			3.66			3.43			3.35			3.53
Net interest margin		4.09			3.97			3.78			3.73			3.92
CREDIT QUALITY:
Nonperforming assets	$	11,788		$	12,060		$	9,699		$	10,184		$	11,178
QTD net chargeoffs (annualized) to QTD average loans		0.16	%		0.03	%		—	%		(0.09)	%		0.15	%
Allowance for loan losses to total loans		1.38			1.42			1.38			1.27			1.21
Nonperforming assets to total loans		0.71			0.74			0.56			0.59			0.67
Nonperforming assets to total assets		0.59			0.62			0.50			0.54			0.64
CAPITAL RATIOS AND OTHER:
Total equity to total assets		9.04	%		8.88	%		8.76	%		8.77	%		9.44	%
Community bank leverage ratio		10.19			10.09			9.95			10.01			10.56
Number of banking offices		19			19			19			19			19
Number of ATMs		20			20			20			20			20
Number of employees		209			206			196			191			205

XML

Document and Entity Information	Apr. 15, 2021
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Apr. 19, 2021
Entity File Number	1-12431
Entity Registrant Name	UNITY BANCORP, INC.
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-3282551
Entity Address, Address Line One	64 Old Highway 22
Entity Address, City or Town	Clinton
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08809
City Area Code	908
Local Phone Number	730-7630
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock
Trading Symbol	UNTY
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000920427
Amendment Flag	false