UNITY BANCORP INC /NJ/

Previous wording

Net income totaled $14.4 million, or $1.41 per diluted share for the three months ended September 30, 2025, compared to $10.9 million, or $1.07 per diluted share for the same period in 2024. Return on average assets and return on average common equity for the quarter were 2.11 percent and 17.41 percent, respectively, compared to 1.76 percent and 15.55 percent for the same period in 2024.

Current wording

Net income totaled $14.3 million, or $1.40 per diluted share for the three months ended March 31, 2026, compared to $11.6 million, or $1.13 per diluted share for the same period in 2025. Return on average assets and return on average common equity for the quarter were 2.04 percent and 16.38 percent, respectively, compared to 1.83 percent and 15.56 percent for the same period in 2025.

Previous wording

During the three months ended September 30, 2025, tax-equivalent net interest income amounted to $29.9 million, an increase of $5.0 million or 20.1 percent when compared to the same period in 2024. The net interest margin increased 38 basis points to 4.54 percent for the three months ended September 30, 2025, compared to 4.16 percent for the same period in 2024.

Current wording

During the three months ended March 31, 2026, tax-equivalent net interest income amounted to $30.7 million, an increase of $3.5 million or 12.8 percent when compared to the same period in 2025. The net interest margin increased 7 basis points to 4.53 percent for the three months ended March 31, 2026, compared to 4.46 percent for the same period in 2025.

Previous wording

During the three months ended September 30, 2025, tax-equivalent interest income was $44.4 million, an increase of $4.8 million or 12.2 percent when compared to the same period in 2024. This increase was mainly driven by increases in the average balance of loans and the yield of loans.

Current wording

During the three months ended March 31, 2026, tax-equivalent interest income was $45.2 million, an increase of $4.4 million or 10.7 percent when compared to the same period in 2025. This increase was mainly driven by increases in the average balance of loans, yield of loans and volume of interest-bearing deposits.

Previous wording

Total interest expense was $14.5 million for the three months ended September 30, 2025, a decrease of $0.2 million or 1.3 percent compared to the same period in 2024. This decrease was driven by the lower rate paid on interest bearing deposits, which was partially offset by an increase in the volume of time deposits.

Current wording

Total interest expense was $14.4 million for the three months ended March 31, 2026, an increase of $0.9 million or 6.6 percent compared to the same period in 2025. This increase was driven by the increased average volume of interest-bearing deposits, partially offset by decreased cost of time deposits.

Previous wording

The provision for credit losses for loans was $1.4 and $4.5 million during the three and nine months ended September 30, 2025, compared to $1.0 million and $1.9 million for the same periods in 2024. The increase was primarily driven by increases in the general reserve calculation due to loan growth.

Current wording

The provision for credit losses for loans was $1.0 million during the three months ended March 31, 2026, compared to $1.4 million for the same period in 2025.

Previous wording

The provision for credit losses for off-balance sheet exposures had a release of $80 thousand and a provision of $16 thousand for the three and nine months ended September 30, 2025, respectively, compared to a provision $51 and $66 thousand for the same periods in 2024, respectively.

Current wording

The provision for credit losses for off-balance sheet exposures was $5 thousand for the three months ended March 31, 2026, compared to a release of $41 thousand for the same period in 2025.

Previous wording

There was a $0.8 million and $2.8 million release in provision for credit losses on securities for the three and nine months ended September 30, 2025 and 2024, respectively, compared to no provision and a $0.6 million provision for the same periods in 2024, respectively.

Current wording

There was no provision for credit losses on securities for the three months ended March 31, 2026 and 2025.

Previous wording

Each period’s credit loss provision is the result of Management’s analysis of the loan portfolio and reflects changes in the size and composition of the portfolio, the level of net charge-offs, delinquencies, current and expected economic conditions and other internal and external factors impacting the risk within the loan portfolio. Additional information may be found under the captions “Financial Condition - Asset Quality” and “Financial Condition - Allowance for Credit Losses and Reserve for Unfunded Loan Commitments.” The current provision is considered appropriate under Management’s assessment of the adequacy of the allowance for credit losses.

Current wording

Each period’s credit loss provision is the result of Management’s analysis of the loan portfolio and reflects changes in the size and composition of the portfolio, the level of net charge-offs, delinquencies, current and expected economic conditions and other internal and external factors impacting the risk within the loan portfolio. Additional information may be found under the captions “Financial Condition - Asset Quality” and “Financial Condition - Allowance for Credit

Previous wording

For the quarter ended September 30, 2025, the Company reported income tax expense of $4.5 million for an effective tax rate of 23.7 percent, compared to income tax expense of $3.7 million and an effective tax rate of 25.1 percent for the prior year’s quarter. For the nine months ended September 30, 2025, the Company reported income tax expense of $13.3 million for an effective tax rate of 23.9 percent, compared to an income tax expense of $10.0 million and an effective tax rate of 25.0 percent for the nine months ended September 30, 2024.

Current wording

For the quarter ended March 31, 2026, the Company reported income tax expense of $4.2 million for an effective tax rate of 22.7 percent, compared to income tax expense of $3.8 million and an effective tax rate of 24.8 percent for the prior year’s quarter. During the first quarter of 2026, Unity purchased $5.1 million of tax credits, resulting in $0.4 million of tax savings.

Previous wording

Total assets increased $222.3 million or 8.4 percent, to $2.9 billion at September 30, 2025, when compared to year end 2024. This increase was primarily due to increases of $207.9 million in gross loans, $23.0 million in cash and cash equivalents, $6.2 million in prepaid expenses and other assets and $0.9 million in deferred tax assets, partially offset by a decrease of $13.8 million in securities.

Current wording

Total assets increased $60.7 million or 2.0 percent, to $3.0 billion at March 31, 2026, when compared to year end 2025. This increase was primarily due to increases of $56.9 million in gross loans, $12.6 million in cash and cash equivalents, and $0.4 million in accrued interest receivable, partially offset by a decrease of $8.7 million in securities.

Previous wording

Total shareholders’ equity increased $38.4 million, when compared to year end 2024, primarily due to earnings and an increase in common stock, partially offset by dividends paid on common stock and the repurchase of shares during the nine months ended September 30, 2025.

Current wording

Total shareholders’ equity increased $12.5 million, when compared to year end 2025, primarily due to earnings and an increase in common stock, partially offset by dividends paid on common stock and the repurchase of shares during the three months ended March 31, 2026.

Previous wording

AFS debt securities totaled $82.1 million at September 30, 2025, a decrease of $11.8 million or 12.6 percent, compared to $93.9 million at December 31, 2024. This net decrease was the result of:

Current wording

AFS debt securities totaled $63.3 million at March 31, 2026, a decrease of $7.6 million or 10.7 percent, compared to $70.9 million at December 31, 2025. This net decrease was the result of:

Previous wording

The weighted average life of AFS debt securities, adjusted for prepayments, amounted to 4.8 years and 4.9 years at September 30, 2025 and December 31, 2024, respectively. The effective duration of AFS debt securities amounted to 1.7 and 1.4 years at September 30, 2025 and December 31, 2024, respectively.

Current wording

The weighted average life of AFS debt securities, adjusted for prepayments, amounted to 4.9 years and 5.1 years at March 31, 2026 and December 31, 2025, respectively. The effective duration of AFS debt securities amounted to 2.0 and 1.9 years at March 31, 2026 and December 31, 2025, respectively.

Previous wording

The weighted average life of HTM securities, adjusted for prepayments, amounted to 15.1 years and 14.3 years at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, the fair value of HTM securities was $30.0 million and $33.8 million, respectively. The effective duration of HTM securities amounted to 10.5 years and 9.0 years at September 30, 2025 and December 31, 2024, respectively.

Current wording

The weighted average life of HTM securities, adjusted for prepayments, amounted to 12.9 years and 14.8 years at March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026 and December 31, 2025, the fair value of HTM securities was $30.4 million. The effective duration of HTM securities amounted to 10.3 years and 10.7 years at March 31, 2026 and December 31, 2025, respectively.

Previous wording

Equity securities totaled $12.7 million at September 30, 2025, an increase of $2.8 million or 28.8 percent, compared to $9.9 million at December 31, 2024. This net increase was the result of:

Current wording

Equity securities totaled $15.3 million at March 31, 2026, a decrease of $1.3 million or 7.5 percent, compared to $16.6 million at December 31, 2025. This net decrease was the result of:

Previous wording

Securities with a carrying value of $79.4 million and $11.5 million at September 30, 2025 and December 31, 2024, respectively, were held at the FHLB or FRB and were pledged for borrowing purposes; however, there were no securities borrowed against at September 30, 2025 and December 31, 2024.

Current wording

Securities with a carrying value of $69.0 million and $69.2 million at March 31, 2026 and December 31, 2025, respectively, were held at the FHLB or FRB and were pledged for borrowing purposes; however, there were no securities borrowed against at March 31, 2026 and December 31, 2025.

Previous wording

Approximately 60 percent of the total debt security investment portfolio had a fixed rate of interest at September 30, 2025.

Current wording

Approximately 61 percent of the total debt security investment portfolio had a fixed rate of interest at March 31, 2026 compared to 65 percent at March 31, 2025.

Previous wording

The loan portfolio, which represents the Company’s largest asset group, is a significant source of both interest and fee income. The portfolio consists of SBA, commercial, residential mortgage, consumer and residential construction loans. Each of these segments is subject to differing levels of credit and interest rate risk.

Current wording

The loan portfolio, which represents the Company’s largest asset group, is a significant source of both interest and fee income. The portfolio consists of SBA, commercial, commercial construction, residential mortgage, consumer and residential construction loans. Each of these segments is subject to differing levels of credit and interest rate risk.

Previous wording

Total loans increased $207.9 million or 9.2 percent to $2.5 billion at September 30, 2025, compared to year end 2024. Commercial, residential mortgage, consumer and loans held for sale increased by $171.0 million, $45.9 million, $6.1 million and $3.3 million, respectively. This was offset by decreases of $17.7 million and $0.8 million in residential construction and SBA loans, respectively.

Current wording

Total loans increased $56.9 million or 2.2 percent to $2.6 billion at March 31, 2026, compared to year end 2025. Commercial, commercial construction, residential construction, loans held for sale and consumer loans increased by $41.1 million, $12.0 million, $10.6 million, $3.1 million and $0.4 million, respectively. This was offset by decreases of $8.5 million and $1.8 million in residential mortgage and SBA loans, respectively.

Previous wording

Average loans increased $190.8 million or 8.8 percent to $2.4 billion the nine months ended September 30, 2025 from $2.2 billion for the same period in 2024. The increase in average loans was due to increases in average commercial, residential mortgages and consumer loans, partially offset by decreases in average residential construction and SBA loans. The yield on the overall loan portfolio increased 22 basis points to 6.75 percent for the nine months ended September 30, 2025 when compared to the same period in the prior year.

Current wording

Average loans increased $268.8 million or 11.7 percent to $2.6 billion for the three months ended March 31, 2026 from $2.3 billionfor the same period in 2025. The increase in average loans was due to increases in average commercial, residential mortgages, commercial construction and consumer loans, partially offset by decreases in average residential construction and SBA loans. The yield on the overall loan portfolio increased 2 basis points to 6.72 percent for the three months ended March 31, 2026 when compared to the same period in the prior year.

Previous wording

SBA loans held for sale, carried at the lower of cost or market, amounted to $8.3 million at September 30, 2025, a decrease of $3.9 million from $12.2 million at December 31, 2024. SBA 7(a) loans held for investment amounted to $37.5 million at September 30, 2025, a decrease of $0.8 million from $38.3 million at December 31, 2024. The yield on SBA loans, which are generally floating and adjust quarterly to the Prime rate, was 7.55 percent for the nine months ended September 30, 2025 compared to 8.71 percent for the same period in the prior year. The Company sold $7.7 million of SBA loans during the nine months ended September 30, 2025.

Current wording

SBA loans held for sale, carried at the lower of cost or market, amounted to $8.2 million at March 31, 2026, an increase of $0.2 million from $8.0 million at December 31, 2025. SBA 7(a) loans held for investment amounted to $32.5 million at March 31, 2026, a decrease of $1.8 million from $34.3 million at December 31, 2025. The yield on SBA loans, which are generally floating and adjust quarterly to the Prime rate, was 8.12 percent for the three months ended March 31, 2026 compared to 7.53 percent for the same period in the prior year. The Company sold $4.0 million of SBA loans during the three months ended March 31, 2026.

Previous wording

The guarantee rates on SBA 7(a) loans range from 50 percent to 90 percent, with the majority of the portfolio having a guarantee rate of 75 percent at origination. The guarantee rates are determined by the SBA and can vary from year to year depending on government funding and the goals of the SBA program. Approximately $51.5 million and $72.6 million in SBA loans were sold but serviced by the Bank at September 30, 2025 and December 31, 2024, respectively, and are not included on the Company’s Balance Sheet. There is no relationship or correlation between the guarantee percentages and the level of charge-offs and recoveries on the Company’s SBA 7(a) loans. Charge-offs taken on SBA 7(a) loans effect the unguaranteed portion of the loan. SBA loans are underwritten to the same credit standards irrespective of the guarantee percentage.

Current wording

The guarantee rates on SBA 7(a) loans range from 50 percent to 90 percent, with the majority of the portfolio having a guarantee rate of 75 percent at origination. The guarantee rates are determined by the SBA and can vary from year to year depending on government funding and the goals of the SBA program. Approximately $49.4 million and $49.2 million in SBA loans were sold but serviced by the Bank at March 31, 2026 and December 31, 2025, respectively, and are not included on the Company’s Balance Sheet. There is no relationship or correlation between the guarantee percentages and the level of charge-offs and recoveries on the Company’s SBA 7(a) loans. Charge-offs taken on SBA 7(a) loans effect the unguaranteed portion of the loan. SBA loans are underwritten to the same credit standards irrespective of the guarantee percentage.

Previous wording

Commercial loans are generally made in the Company’s marketplace for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. These loans amounted to $1.6 billion at September 30, 2025, an increase of $171.0 million from year end 2024. The yield on commercial loans was 6.79 percent for the nine months ended September 30, 2025, compared to 6.49 percent for the same period in 2024. In most cases, these loans are secured by underlying real estate collateral. SBA 504 program loans, which consist of real estate backed commercial mortgages where the Company has the first mortgage and the SBA has the second mortgage on the property, are included in the Commercial loan portfolio. At September 30, 2025, Commercial Mortgage – Owner Occupied, Commercial Mortgage – Nonowner Occupied and Commercial Construction represent 26.0 percent, 21.3 percent and 4.7 percent of the Company’s loan portfolio, respectively. The Company will

Current wording

Commercial loans are generally made in the Company’s marketplace for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. These loans amounted to $1.6 billion at March 31, 2026, an increase of $41.1 million from year end 2025. The yield on commercial loans was 6.55 percent for the three months ended March 31, 2026, compared to 6.53 percent for the same period in 2025. The SBA 504 program, which consists of real estate backed commercial mortgages where the Company has the first mortgage and the SBA has the second mortgage on the property, is included in the Commercial loan portfolio. The Commercial Real Estate sub-category includes both owner occupied and non-owner occupied commercial mortgages.

Previous wording

Residential mortgage loans consist of loans secured by 1 to 4 family residential properties. These loans amounted to $676.9 million at September 30, 2025, an increase of $45.9 million from year end 2024. Sales of conforming mortgage loans totaled $50.9 million for the nine months ended September 30, 2025, compared to sales of $48.7 million in the prior year period. The yield on residential mortgages was 6.30 percent for the nine months ended September 30, 2025, compared to 6.00 percent for the same period in 2024. Residential mortgage loans maintained in portfolio are generally to individuals that do not qualify for conventional financing. In extending credit to this category of borrowers, the Bank considers other mitigating factors such as credit history, equity and liquid reserves of the borrower. As a result, the residential mortgage loan portfolio of the Bank includes adjustable rate mortgages with rates that exceed the rates on conventional fixed-rate mortgage loan products but which are not considered high priced mortgages.

Current wording

Residential mortgage loans consist of loans secured by 1 to 4 family residential properties. These loans amounted to $668.7 million at March 31, 2026, a decrease of $8.5 million from year end 2025. Sales of conforming mortgage loans totaled $19.3 million for the three months ended March 31, 2026, compared to sales of $7.5 million in the prior year period. The yield on residential mortgages was 6.44 percent for the three months ended March 31, 2026, compared to 6.22 percent for the same period in 2025. Residential mortgage loans maintained in portfolio are generally to individuals that do not qualify for conventional financing. In extending credit to this category of borrowers, the Bank considers other mitigating factors such as credit history, equity and liquid reserves of the borrower. As a result, the residential mortgage loan portfolio of the Bank includes adjustable rate mortgages with rates that exceed the rates on conventional fixed-rate mortgage loan products but which are not considered high priced mortgages.

Previous wording

Consumer loans consist of home equity loans and loans for the purpose of financing the purchase of consumer goods, home improvements and other personal needs, and are generally secured by 1 to 4 family residences. These loans amounted to $82.9 million at September 30, 2025, an increase of $6.1 million from year end 2024. The yield on consumer loans was 7.09 percent for the nine months ended September 30, 2025, compared to 7.90 percent for the same period in 2024.

Current wording

Consumer loans consist of home equity loans and loans for the purpose of financing the purchase of consumer goods, home improvements and other personal needs, and are generally secured by 1 to 4 family residences. These loans amounted to $85.6 million at March 31, 2026, an increase of $0.4 million from year end 2025. The yield on consumer loans was 6.78 percent for the three months ended March 31, 2026, compared to 7.16 percent for the same period in 2025.

Previous wording

Residential construction loans consist of short-term loans for the purpose of funding the costs of building a home. These loans amounted to $73.2 million at September 30, 2025, a decrease of $17.7 million from year end 2024. The yield on residential construction loans was 9.49 percent for the nine months ended September 30, 2025, compared to 8.38 percent for the same period in 2024.

Current wording

Residential construction loans consist of short-term loans for the purpose of funding the costs of building a home. These loans amounted to $83.9 million at March 31, 2026, an increase of $10.6 million from year end 2025. The yield on residential construction loans was 9.10 percent for the three months ended March 31, 2026, compared to 9.46 percent for the same period in 2025.

Previous wording

Nonaccrual loans were $20.5 million at September 30, 2025, a $7.4 million increase from $13.1 million at December 31, 2024 and a $7.5 million increase from $13.0 million at September 30, 2024, respectively. Since year end 2024, nonaccrual loans in the residential mortgage, commercial, consumer and SBA segments increased, offset by a decrease in nonaccrual loans in the residential construction segment. In addition, there was $0.4 million in loans past due 90 days or more and still accruing interest at September 30, 2025, compared to $0.8 million at December 31, 2024 and none at September 30, 2024.

Current wording

Nonaccrual loans were $30.6 million at March 31, 2026, a $0.8 million increase from $29.8 million at December 31, 2025 and a $13.8 million increase from $16.8 million at March 31, 2025, respectively. Since year end 2025, nonaccrual loans in the residential mortgage and consumer segments increased, offset by a decrease in nonaccrual loans in the SBA, commercial and residential construction segments. In addition, there was $0.1 million in loans past due 90 days or more and still accruing interest at March 31, 2026, compared to none at December 31, 2025 and 1.1 million at March 31, 2025.

Previous wording

The Company also monitors potential problem loans. Potential problem loans are those loans where information about possible credit problems of borrowers causes Management to have doubts as to the ability of such borrowers to comply with loan repayment terms. These loans are categorized by their non-passing risk rating and performing loan status.

Current wording

The Company also monitors potential problem loans. Potential problem loans are those loans where information about possible credit problems of borrowers causes Management to have doubts as to the ability of such borrowers to comply with loan repayment terms. These loans are categorized by their non-passing risk rating and performing loan status. Potential problem loans totaled $7.8 million at March 31, 2026, a decrease of $3.7 million from $11.5 million at December 31, 2025.

Previous wording

The allowance for credit losses on loans totaled $30.2 million at September 30, 2025, compared to $26.8 million at December 31, 2024 and $27.0 million at September 30, 2024, with a resulting allowance to total loan ratio of 1.23 percent at September 30,2025, compared to 1.18 percent at December 31,2024 and 1.22 percent at September 30, 2024. Net charge-offs amounted to $1.0 million for the nine months ended September 30, 2025, compared to net charge-offs of $0.8 million for the same period in 2024.

Current wording

The allowance for credit losses on loans totaled $33.4 million at March 31, 2026, compared to $32.3 million at December 31, 2025 and $27.7 million at March 31, 2025, with a resulting allowance to total loan ratio of 1.28 percent at March 31,2026, compared to 1.27 percent at December 31,2025 and 1.18 percent at March 31, 2025. Net charge-offs amounted to $31 thousand for the three months ended March 31, 2026, compared to net charge-offs of $0.5 million for the same period in 2025. As of March 31, 2026, there was no allowance for credit losses on individually evaluated loans based upon the valuation of the collateral securing each loan.

Previous wording

The Company maintains a reserve for unfunded loan commitments at a level that Management believes is adequate to absorb estimated expected losses. Adjustments to the reserve are made through provision for credit losses and applied to the reserve which is classified in Other liabilities. At September 30, 2025 and December 31, 2024, the commitment reserve totaled $0.6 million.

Current wording

The Company maintains a reserve for unfunded loan commitments at a level that Management believes is adequate to absorb estimated expected losses. Adjustments to the reserve are made through provision for credit losses and applied to the reserve which is classified in Other liabilities. At March 31, 2026 and December 31, 2025, the commitment reserve totaled $0.7 million.

Previous wording

Deposits, which include noninterest-bearing demand deposits, interest-bearing demand deposits, savings deposits and time deposits, are the primary source of the Company’s funds. The Company offers a variety of products designed to attract and retain customers, with primary focus on building and expanding relationships. The Company continues to focus on establishing a comprehensive relationship with business borrowers, seeking deposits as well as lending relationships.

Current wording

Deposits, which include noninterest-bearing demand deposits, interest-bearing demand deposits, savings deposits and time deposits, are the primary source of the Company’s funds. The Company offers a variety of products designed to attract and retain customers, with primary focus on building and expanding relationships. The Company continues to

Previous wording

Total deposits increased $167.2 million to $2.3 billion at September 30, 2025 from year end 2024. This increase was due to increases of $58.2 million in time deposits, $44.4 million in savings deposits, $40.7 million in interest-bearing demand deposits, $17.2 million in brokered deposits and $6.7 million in noninterest-bearing demand deposits. The change in the composition of the portfolio from December 31, 2024 reflects a 12.6 percent increase in interest-bearing demand deposits, a 9.3 percent increase in time deposits, a 9.0 percent increase in savings deposits, a 7.9 percent increase in brokered deposits and a 1.5 percent increase in noninterest-bearing deposits.

Current wording

Total deposits increased $55.1 million to $2.4 billion at March 31, 2026 from year end 2025. This increase was due to increases of $47.7 million in savings deposits, $16.4 million in time deposits, $9.0 million in interest-bearing demand deposits, partially offset by decreases of $3.6 million in brokered deposits and $14.4 million in noninterest-bearing demand deposits. The change in the composition of the portfolio from December 31, 2025 reflects a 8.9 percent increase in savings deposits, a 2.4 percent increase in time deposits, a 2.4 percent increase in interest-bearing demand deposits, partially offset by a 1.3 percent decrease in brokered deposits and a 3.1 percent decrease in noninterest-bearing deposits.

Previous wording

As of September 30, 2025, 21.6 percent of total deposits were uninsured or uncollateralized. The Company’s deposit composition as of September, 2025, consisted of 19.7 percent in noninterest-bearing demand deposits, 17.4 percent in interest-bearing demand deposits, 23.7 percent in savings deposits and 39.2 percent in time deposits.

Current wording

As of March 31, 2026, 21.6 percent of total deposits were uninsured or uncollateralized. The Company’s deposit composition as of March 31, 2026, consisted of 19.0 percent in noninterest-bearing demand deposits, 17.2 percent in interest-bearing demand deposits, 24.9 percent in savings deposits and 38.9 percent in time deposits.

Previous wording

Borrowed funds and subordinated debentures totaled $242.0 million and $230.8 million at September 30, 2025 and December 31, 2024, respectively, and are broken down in the following table:

Current wording

Borrowed funds and subordinated debentures totaled $258.6 million and $266.1 million at March 31, 2026 and December 31, 2025, respectively, and are broken down in the following table:

Previous wording

In September 2025, the FHLB issued a $230.0 million municipal deposit letter of credit in the name of Unity Bank naming the New Jersey Department of Banking and Insurance as beneficiary, to secure municipal deposits as required under New Jersey law. The FHLB issued an additional $33.0 million municipal deposit letter of credit in the name of Unity Bank naming certain townships in Pennsylvania as beneficiary, to secure municipal deposits as required under Pennsylvania law.

Current wording

In March 2026, the FHLB issued a $250.0 million municipal deposit letter of credit in the name of Unity Bank naming the New Jersey Department of Banking and Insurance as beneficiary, to secure municipal deposits as required under New Jersey law. The FHLB issued an additional $33.0 million municipal deposit letter of credit in the name of Unity Bank naming certain townships in Pennsylvania as beneficiary, to secure municipal deposits as required under Pennsylvania law.

Previous wording

At September 30, 2025, the Company had $317.2 million of additional credit available at the FHLB, $211.0 million of additional credit available at the FRB and $20.0 million of additional credit available from other sources. Pledging additional collateral in the form of 1 to 4 family residential mortgages, commercial loans and investment securities can increase the lines with the FHLB and FRB.

Current wording

At March 31, 2026, the Company had $108.5 million of additional credit available at the FHLB, $282.2 million of additional credit available at the FRB and $20.0 million of additional credit available from other sources. Pledging additional collateral in the form of 1 to 4 family residential mortgages, commercial loans and investment securities can increase the lines with the FHLB and FRB.

Previous wording

For the nine months ended September 30, 2025, average FHLB Borrowings were $108.2 million with a weighted average cost of 3.49%.

Current wording

For the three months ended March 31, 2026, average FHLB Borrowings were $97.9 million with a weighted average cost of 3.45%.

Previous wording

On July 24, 2006, Unity (NJ) Statutory Trust II, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., issued $10.0 million of floating rate capital trust pass through securities to investors due on July 24, 2036. The subordinated debentures are redeemable in whole or part. The floating interest rate on the subordinated debentures is the daily compounded SOFR rate with a 0.262 percent spread. The floating interest rate was 5.864 percent at September 30, 2025 and 6.189 percent at December 31, 2024.

Current wording

On July 24, 2006, Unity (NJ) Statutory Trust II, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., issued $10.0 million of floating rate capital trust pass through securities to investors due on July 24, 2036. The subordinated debentures are redeemable in whole or part. The floating interest rate on the subordinated debentures is the daily compounded SOFR rate with a 0.262 percent spread. The floating interest rate was 5.539 percent at March 31, 2026 and 5.537 percent at December 31, 2025.

Previous wording

The principal sources of funds at the Bank are deposits, scheduled amortization and prepayments of investment and loan principal, sales and maturities of investment securities, additional borrowings and funds provided by operations. While scheduled loan payments and maturing investments are relatively predictable sources of funds, deposit inflows and outflows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Consolidated Statement of Cash Flows provides detail on the Company’s sources and uses of cash, as well as an indication of the Company’s ability to maintain an adequate level of liquidity. At September 30, 2025, the balance of cash and cash equivalents was $203.5 million, an increase of $23.0 million from December 31, 2024. A discussion of on- and off-balance sheet liquidity follows.

Current wording

The principal sources of funds at the Bank are deposits, scheduled amortization and prepayments of investment and loan principal, sales and maturities of investment securities, additional borrowings and funds provided by operations. While scheduled loan payments and maturing investments are relatively predictable sources of funds, deposit inflows and outflows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Consolidated Statement of Cash Flows provides detail on the Company’s sources and uses of cash, as well as an indication of the Company’s ability to maintain an adequate level of liquidity. At March 31, 2026, the balance of cash and cash equivalents was $229.2 million, an increase of $12.6 million from December 31, 2025. A discussion of on- and off-balance sheet liquidity follows.

Previous wording

On August 1, 2024, the Board authorized a repurchase plan permitting the repurchase of up to 500 thousand shares, or approximately 5.0% of the Company’s outstanding common stock, in addition to the previously approved repurchase plan authorizing the repurchase of up to 500 thousand shares of common stock. No shares were repurchased during the quarter ended September 30, 2025, leaving 635 thousand shares available for repurchase. For the quarter ended September 30, 2024, a total of 10,334 shares were repurchased at a weighted average price of $27.27. The timing and amount of additional purchases, if any, will depend upon several factors including the Company’s capital needs, the Company’s liquidity position, the performance of its loan portfolio, the need for additional provisions for credit losses and the market price of the Company’s stock.

Current wording

On August 1, 2024, the Board authorized a repurchase plan permitting the repurchase of up to 500 thousand shares, or approximately 5.0% of the Company’s outstanding common stock, in addition to the previously approved repurchase plan authorizing the repurchase of up to 500 thousand shares of common stock. For the quarter ended March 31, 2026, a total of 6,616 shares were repurchased at a weighted average price of $49.01, leaving 562 thousand shares available for repurchase. The timing and amount of additional purchases, if any, will depend upon several factors including the Company’s capital needs, the Company’s liquidity position, the performance of its loan portfolio, the need for additional provisions for credit losses and the market price of the Company’s stock.