10-Q/A

DRAFT: 12/17/03

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED September 30, 2003
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM                 TO                .

Commission file number   1-12431

Unity Bancorp, Inc.

(Exact Name of registrant as specified in its charter)

New Jersey	22-3282551
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
64 Old Highway 22, Clinton, NJ	08809
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code (908) 730-7630

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934, as amended, during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý    No  o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b-2 of the Exchange Act) Yes  o  No ý

The number of shares outstanding of each of the registrant’s classes of common equity stock, as of October 31, 2003: common stock, no par value:  5,407,017 shares outstanding

TABLE OF CONTENTS

2

AMENDMENT NO. 1

The undersigned hereby amends the following items, financial statements, exhibits or other portions of Part I of the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2003 of Unity Bancorp, Inc., (filed with the Securities and Exchange Commission on November 19, 2003 [the “Original Form 10-Q”]) as set forth in the pages attached hereto:

Item 1.              Consolidated Financial Statements – Note 1 to Accompanying Notes to Consolidated Financial Statements.

Item 1.              Consolidated Financial Statements – Note 4 to the Accompanying Notes to Consolidated Financial Statements.

3

Item 1.-Consolidated Financial Statements- Note 1 to the Accompanying Notes to Consolidated Financial Statements

Note 1 to the Accompanying Notes to Consolidated Financial Statements contained in the Original Form 10-Q is hereby deleted in its entirety and the following substituted in lieu thereof:

Unity Bancorp, Inc

Notes to the Consolidated Financial Statements (Unaudited)

September 30, 2003

NOTE 1. Summary of Significant Accounting Policies

The accompanying consolidated financial statements include the accounts of Unity Bancorp, Inc. (the “Parent Company”) and its wholly-owned subsidiaries, Unity (NJ) Statutory Trust I and Unity Bank (the “Bank”, or when consolidated with the Parent Company, the “Company”), reflect all adjustments and disclosures which are, in the opinion of management, necessary for a fair presentation of interim results.  All significant intercompany balances and transactions have been eliminated in consolidation.  Certain reclassifications have been made to prior year amounts to conform to the current year presentation.  The financial information has been prepared in accordance with generally accepted accounting principles and has not been audited.  In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the statements of financial condition and revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

Estimates that are particularly susceptible to significant changes related to the determination of the allowance for loan losses.  Management believes that the allowance for loan losses is adequate.  While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the market. The interim unaudited consolidated financial statements included herein have been prepared in accordance with instructions for Form 10-Q and the rules and regulations of the Securities and Exchange Commission (“SEC”).  The results of operations for the three and nine months ended September 30, 2003 are not necessarily indicative of the results which may be expected for the entire year. As used in this Form 10-Q, “we” and “us” and “our” refer to Unity Bancorp, Inc and its consolidated subsidiaries, Unity Bank and Unity (NJ) Statutory Trust I, depending on the context. Interim financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2002, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

The Company applies Accounting Principles Board Opinion 25 and related Interpretations in accounting for its Option Plans. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans have an exercise price equal to the market value of their underlying common stock on the date of grant. The following is the expanded disclosure of SFAS 148, for the three and nine months ended September 30, 2003 and 2002.

SFAS 148 Proforma Restatement

(In thousands, except per share data)	Three months ended September 30,				Nine months ended September 30,
	2003		2002		2003		2002
Net income to common shareholders as reported:
As reported	$	1,302	$	954	$	3,669	$	2,677
Pro forma	1,254		877		3,525		2,446
Income per share:
Basic as reported	$	0.24	$	0.17	$	0.68	$	0.49
Basic Pro forma	0.23		0.16		0.65		0.46
Diluted as reported	$	0.23	$	0.16	$	0.65	$	0.46
Diluted Pro forma	0.22		0.15		0.62		0.42

4

Item 1.    Consolidated Financial Statements –Note 4 to the Accompanying Notes to Consolidated Financial Statements

The following is hereby added after Note 4 to the Accompanying Notes to Consolidated Financial Statements:

NOTE 5. Subsequent Events

The Audit Committee of the Company has completed its inquiry concerning certain expense reimbursement requests and other actions taken by its President.  The results of such inquiry will not require any adjustments to the Company’s financial statements for any previously reported interim or annual periods due to such expense reimbursement requests or other actions. The Company is currently evaluating the findings of its Audit Committee’s inquiry and, among other things, will determine an appropriate course of action as it relates to the Company’s President.  The President remains on a leave of absence pending completion of such evaluation. The Company estimates that the cost of the inquiry will be approximately $650,000 and will be recognized in the fourth quarter of 2003.

5

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 thereunto duly authorized.

		UNITY BANCORP, INC.
Dated:    December 18, 2003		By:	/s/ James A. Hughes
			JAMES A. HUGHES,
	Executive Vice President and Chief Financial Officer

6

EXHIBIT INDEX

QUARTERLY REPORT ON FORM 10-Q/A

(Amendment No. 1)

EXHIBIT NO.	DESCRIPITION
31.1	Exhibit 31.1-Certification of David D. Dallas Required by Rule 13a-14(a) or Rule 15d-14(a) and section 302 of the Sarbanes-Oxley Act of.
31.2	Exhibit 31.2-Certification of James A. Hughes Required by Rule 13a-14(a) or Rule 15d-14(a) and section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Exhibit 32.1-Certification of David D. Dallas and James A. Hughes Required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

7

EX-31.1

Exhibit 31.1

I, David D. Dallas, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q/A (Amendment No. 1) of Unity Bancorp, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 18, 2003	/s/ David D. Dallas
	David D. Dallas
	Chairman of the Board of Directors and Chief Executive Officer

1

EX-31.2

Exhibit 31.2

I, James A. Hughes, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q/A (Amendment No. 1) of Unity Bancorp, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 18, 2003	/s/ James A. Hughes
	James A. Hughes
	Executive Vice President and Chief Financial Officer

1

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C.

Section 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF SARBANES-OXLEY ACT OF 2003

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Unity Bancorp, Inc.(the “Company”), certifies that:

(1)the Quarterly Report on Form 10-Q/A (Amendment No. 1) of the Company for the quarterly period ended September 30, 2003 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d));and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: December 18, 2003	/s/ David D. Dallas
	David D. Dallas
	Chairman of the Board of Directors and Chief Executive Officer
Dated: December 18, 2003	/s/ James A. Hughes
	James A. Hughes
	Chief Financial Officer

This certification is made solely for the purposes of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose

NWK3: 788624.03

1