Unity Bancorp Reports 53.4% Increase in Quarterly Earnings and Increased Six Month Earnings

 Unity Bancorp Reports 53.4% Increase in Quarterly Earnings and Increased Six
                                Month Earnings

PR Newswire

CLINTON, N.J., July 25, 2013

CLINTON, N.J., July 25, 2013 /PRNewswire/ -- Unity Bancorp, Inc. (NASDAQ:
UNTY), parent company of Unity Bank, reported net income available to common
shareholders of $882 thousand, or $0.11 per diluted share, for the three
months ended June 30, 2013, a 53.4% increase compared to $575 thousand, or
$0.07 per diluted share, for the same period a year ago. Return on average
assets and average common equity for the quarter were 0.67% and 6.11%,
respectively, compared to 0.49% and 4.25% for the same period a year ago.

Second quarter highlights included:

  oRepurchased $10.3 million of preferred stock issued in connection with
    Unity's participation in the Treasury's Capital Purchase Program ("CPP")
    during the quarter with the remaining $10.3 million repurchased July 3,
    2013.
  oPaid our first cash dividend to shareholders since prior to entering into
    the CPP program in December 2008.
  oTotal loans increased 6.0% from year-end 2012, driven by strong loan
    demand.
  oNoninterest-bearing deposits reached a record high of $128.0 million, an
    11.9% increase from year-end, and now represent 20.4% of total deposits.
  oContinued asset quality improvement as evidenced by: a 36.4% decrease in
    nonperforming assets from a year ago and a 68.2% decrease in net
    charge-offs.
  oNet interest margin continued to remain strong versus prior periods.
  oIncreased gains on the sales of mortgage loans resulting from record
    residential mortgage loan originations.
  oTotal noninterest expense continued to be stable compared to the prior
    year period.
  oRemained well-capitalized in excess of regulatory requirements after the
    CPP repurchase and dividend payment.
  oLaunched the Unity Bank Facebook page on June 10, 2013.
  oClosed on the purchase of three of our previously leased branch locations
    which will result in future cost savings.
  oOpened a residential mortgage loan production office in Elmwood Park, New
    Jersey.

"This was a milestone quarter for Unity," reported James A. Hughes, President
and CEO. "Due to significantly improved fundamentals of the Company, we were
able to repay $20.6 million in high cost capital. In addition, loan demand
has improved significantly, which should bolster revenue and enhance our
future performance."

For the six months ended June 30, 2013, net income available to common
shareholders totaled $1.7 million, or $0.21 per diluted share, compared to
$1.1 million or $0.14 per diluted share. Return on average assets and average
common equity for the six month periods were 0.63% and 5.88%, respectively,
compared to 0.47% and 4.03% for the same period a year ago.

Net Interest Income

Compared to a year ago, net interest income decreased $55 thousand and $172
thousand for the three and six month periods, respectively. The net interest
margin was 3.66% and 3.59% in the quarter and year-to-date periods,
respectively. While slightly lower than the prior year, the net interest
margin has stabilized and increased compared to the quarter ending March 31,
2013, as the increased loan volume offset lower yields on our securities and
loan portfolios. 

Provision for Loan Losses

The provision for loan losses for the quarter ended June 30, 2013 was $300
thousand compared to $1.0 million for the prior year's quarter, and for the
six month period ended June 30, 2013, the provision declined to $950 thousand
from $2.2 million in the first six months of 2012. The reduced provision
reflects a lower level of net charge-offs for the quarter and year-to-date
periods as well as a lower level of nonperforming assets.

Noninterest Income

Noninterest income decreased $183 thousand to $1.7 million for the three
months and $74 thousand to $3.5 million for the six months ended June 30,
2013, compared to the same periods last year. The decreases were driven by
lower levels of security gains being recognized, a lower volume of SBA loans
being sold during the periods and recognition of lower gains on sales, and
decreased fees on overdrawn accounts during the periods. Partially offsetting
these decreases were increased gains on the sale of residential mortgage loans
due to a higher volume of loans sold. We do not anticipate a material
reduction in mortgage loan volume due to the recent increase in interest
rates.

Noninterest Expense

Noninterest expense decreased $130 thousand to $6.1 million for the three
months ended June 30, 2013, while year-to-date expense increased $38 thousand
to $12.2 million. During both of these periods, occupancy, other real estate
owned ("OREO") and advertising expenses decreased. Occupancy expense
decreased as a result of cost savings realized from the purchase of three of
our previously leased locations in April 2013. OREO expenses fell during
each period as the number of properties and subsequent property taxes,
maintenance and insurance costs declined compared to the prior year's periods.
Advertising expenses varied based on the timing of retail branch related
promotions such as the opening of the new branch in Washington Township, New
Jersey in 2012. Loan collection costs remain elevated in both periods due to
higher loan legal, insurance and other collection costs. Other expenses
increased due to higher employee recruiting, increased director fees and an
increase to the reserve for unfunded loan commitments.

Financial Condition

At June 30, 2013, total assets were $824.6 million, an increase of $4.8
million from the prior year end:

  oTotal loans increased $35.3 million or 6.0%, to $622.3 million at June 30,
    2013. This growth came from our residential mortgage and commercial loan
    portfolios. Future loan growth is expected in both the commercial and
    residential portfolios. The Company plans to continue shrinking its out
    of market SBA portfolio.
  oTotal deposits decreased $20.4 million to $628.4 million at June 30,
    2013. Noninterest-bearing demand deposits have increased 11.9% since
    year-end and represent 20.4% of total deposits. Time deposits remain
    relatively flat at $126.0 million while savings and interest-bearing
    demand deposits decreased due to a reduction in municipal deposits.
  oShareholders' equity was $68.3 million at June 30, 2013, a decrease of
    $9.2 million from year-end 2012, due primarily to the repurchase of $10.3
    million in preferred stock issued in connection with the CPP during the
    second quarter. The remaining preferred stock was repurchased on July
    3^rd.
  oBook value per common share was $7.70 as of June 30, 2013.
  oAt June 30, 2013 the leverage, Tier I and Total Risk Based Capital ratios
    were 10.23%, 13.36% and 14.63% respectively, all in excess of the ratios
    required to be deemed "well-capitalized". If the remaining $10.3 million
    in preferred stock which was repurchased on July 3, 2013 had been
    repurchased prior to quarter-end, the leverage, Tier I and Total Risk
    Based Capital ratios would have been 9.05%, 11.71% and 12.98%
    respectively, all in excess of the ratios required to be deemed
    "well-capitalized".

Credit Quality

  oNonperforming assets totaled $14.1 million at June 30, 2013 or 2.26% of
    total loans and OREO, compared to $19.3 million or 3.28% of total loans
    and OREO at year-end 2012.
  oOREO decreased $1.1 million to $752 thousand at June 30, 2013 due to the
    sale of 5 properties.
  oThe allowance for loan losses totaled $14.3 million at June 30, 2013 or
    2.30% of total loans. The provision for loan losses for the quarter ended
    June 30, 2013 was $300 thousand compared to $1.0 million for the prior
    year's quarter.
  oNet charge-offs were $336 thousand for the three months ended June 30,
    2013, compared to $1.1 million for the same period a year ago. For the
    six months ended June 30, 2013, net charge-offs were $1.4 million compared
    to $2.3 million for the prior year period.
  oTroubled debt restructurings ("TDRs") decreased $2.4 million from year-end
    to $12.3 million. At June 30, 2013, 86.5% of our TDRs were performing. 

Unity Bancorp, Inc. is a financial service organization headquartered in
Clinton, New Jersey, with approximately $825 million in assets and $628
million in deposits. Unity Bank provides financial services to retail,
corporate and small business customers through its 15 retail service centers
located in Hunterdon, Middlesex, Somerset, Union and Warren Counties in New
Jersey and Northampton County, 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 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, and results of regulatory exams, among other
factors.



UNITY BANCORP, INC.
SUMMARY FINANCIAL HIGHLIGHTS
June 30, 2013
                                                             June 30, 2013
                                                             vs.
                                                             March    June
                                                             31,      30,
                                                             2013     2012
(In thousands,
except              June 30,      March 31,    June 30,
percentages and     2013          2013         2012          %        %
per share
amounts)
BALANCE SHEET
DATA:
Total assets        $  824,575    $ 827,182    $ 785,111     (0.3)  % 5.0    %
Total deposits         628,369      652,117      616,443     (3.6)    1.9
Total loans            622,316      596,571      604,901     4.3      2.9
Total securities       111,269      119,334      114,846     (6.8)    (3.1)
Total
shareholders'          68,287       78,157       74,901      (12.6)   (8.8)
equity
Allowance for          (14,309)     (14,345)     (16,284)    0.3      12.1
loan losses
FINANCIAL DATA -
QUARTER TO DATE:
Income before
provision for       $  2,086      $ 1,738      $ 1,494       20.0     39.6
income taxes
Provision for          739          538          518         37.4     42.7
income taxes
Net income            1,347        1,200        976         12.3     38.0
Preferred stock
dividends and          465          404          401         15.1     16.0
discount
accretion
Income available
to common           $  882        $ 796        $ 575         10.8     53.4
shareholders
Net income per
common share -      $  0.12       $ 0.11       $ 0.08        9.1      50.0
Basic (1)
Net income per
common share -      $  0.11       $ 0.10       $ 0.07        10.0     57.1
Diluted (1)
Return on average      0.67     %   0.59     %   0.49     %  13.6     36.7
assets
Return on average      6.11     %   5.65     %   4.25     %  8.1      43.8
equity (2)
Efficiency ratio       72.72    %   73.91    %   73.72    %  (1.6)    (1.4)
FINANCIAL DATA -
YEAR TO DATE:
Income before
provision for       $  3,824                   $ 2,858                33.8
income taxes
Provision for          1,278                     977                  30.8
income taxes
Net income            2,546                     1,881                35.4
Preferred stock
dividends and          869                       797                  9.0
discount
accretion
Income available
to common           $  1,677                   $ 1,084                54.7
shareholders
Net income per
common share -      $  0.22                    $ 0.15                 46.7
Basic (1)
Net income per
common share -      $  0.21                    $ 0.14                 50.0
Diluted (1)
Return on average      0.63     %                0.47     %           34.0
assets
Return on average      5.88     %                4.03     %           45.9
equity (2)
Efficiency ratio       73.31    %                72.76    %           0.8
SHARE
INFORMATION:
Market price per    $  7.10       $ 6.51       $ 6.00        9.1      18.3
share
Dividends paid      $  0.01       $ -          $ -           100.0    100.0
Book value per      $  7.70       $ 7.67       $ 7.38        0.4      4.3
common share
Average diluted
shares                 7,911        7,845        7,784       0.8      1.6
outstanding (QTD)
CAPITAL RATIOS:
Total equity to        8.28     %   9.45     %   9.54     %  (12.4)   (13.2)
total assets
Leverage ratio         10.23    %   11.12    %   11.08    %  (8.0)    (7.7)
Tier 1 risk-based      13.36    %   14.54    %   14.22    %  (8.1)    (6.0)
capital ratio
Total risk-based       14.63    %   15.80    %   15.49    %  (7.4)    (5.6)
capital ratio
CREDIT QUALITY
AND RATIOS:
Nonperforming       $  14,109     $ 15,956     $ 22,186      (11.6)   (36.4)
assets
QTD net
chargeoffs             0.22     %   0.73     %   0.71     %  (69.9)   (69.0)
(annualized) to
QTD average loans
Allowance for
loan losses to         2.30     %   2.40     %   2.69     %  (4.2)    (14.5)
total loans
Nonperforming
assets to total        2.26     %   2.67     %   3.65     %  (15.4)   (38.1)
loans and OREO
Nonperforming
assets to total        1.71     %   1.93     %   2.83     %  (11.4) % (39.6) %
assets
(1) Defined as net income adjusted for dividends accrued and
accretion of discount on perpetual preferred stock divided by
weighted average shares outstanding.
(2) Defined as net income adjusted for dividends accrued and accretion of
discount on perpetual preferred stock divided by average shareholders'
equity (excluding preferred stock).





UNITY BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2013
                                                          June 30, 2013
                                                          vs.
                                                          December   June
                                                          31, 2012   30,
                                                                     2012
(In thousands,       June 30,    December    June 30,     %          %
except percentages)  2013        31, 2012    2012
ASSETS
Cash and due from    $ 21,860    $ 23,705    $ 18,600     (7.8)    % 17.5    %
banks
Federal funds sold
and                    34,450      70,487      19,235     (51.1)     79.1
interest-bearing
deposits
Cash and cash          56,310      94,192      37,835     (40.2)     48.8
equivalents
Securities:
Securities             84,212      89,538      97,965     (5.9)      (14.0)
available for sale
Securities held to     27,057      21,515      16,881     25.8       60.3
maturity
 Total securities     111,269     111,053     114,846    0.2        (3.1)
Loans:
SBA loans held for     7,772       6,937       6,087      12.0       27.7
sale
SBA loans held to      52,279      58,593      60,382     (10.8)     (13.4)
maturity
SBA 504 loans          39,070      41,438      45,247     (5.7)      (13.7)
Commercial loans       323,476     301,564     310,331    7.3        4.2
Residential            154,716     132,094     136,514    17.1       13.3
mortgage loans
Consumer loans         45,003      46,410      46,340     (3.0)      (2.9)
 Total loans          622,316     587,036     604,901    6.0        2.9
  Allowance for      (14,309)    (14,758)    (16,284)   3.0        12.1
loan losses
   Net loans        608,007     572,278     588,617    6.2        3.3
Premises and           15,823      12,062      12,146     31.2       30.3
equipment, net
Bank owned life        12,548      9,402       9,253      33.5       35.6
insurance ("BOLI")
Deferred tax assets    6,658       5,954       6,977      11.8       (4.6)
Federal Home Loan      5,527       3,989       3,989      38.6       38.6
Bank stock
Accrued interest       3,353       3,298       3,415      1.7        (1.8)
receivable
Other real estate      752         1,826       2,355      (58.8)     (68.1)
owned ("OREO")
Prepaid FDIC           --          1,929       2,230      (100.0)    (100.0)
insurance
Goodwill and other     1,516       1,516       1,522      -          (0.4)
intangibles
Other assets           2,812       2,231       1,926      26.0       46.0
Total assets         $ 824,575   $ 819,730   $ 785,111    0.6      % 5.0     %
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities:
Deposits:

Noninterest-bearing  $ 128,045   $ 114,424   $ 107,497    11.9     % 19.1    %
demanddeposits
 Interest-bearing     108,176     114,838     101,420    (5.8)      6.7
demand deposits
 Savings deposits     266,168     294,533     273,395    (9.6)      (2.6)
 Time deposits,       74,950      76,994      83,138     (2.7)      (9.8)
under $100,000
 Time deposits,       51,030      47,971      50,993     6.4        0.1
$100,000 and over
  Total            628,369     648,760     616,443    (3.1)      1.9
deposits
Borrowed funds         110,000     75,000      75,000     46.7       46.7
Subordinated           15,465      15,465      15,465     -          -
debentures
Accrued interest       443         434         470        2.1        (5.7)
payable
Accrued expenses
and other              2,011       2,561       2,832      (21.5)     (29.0)
liabilities
  Total             756,288     742,220     710,210    1.9        6.5
liabilities
Shareholders'
equity:
Cumulative
perpetual preferred    10,209      20,115      19,824     (49.2)     (48.5)
stock
Common stock           54,461      54,274      53,917     0.3        1.0
Retained earnings      3,390       1,788       231        89.6       1,367.5
Accumulated other
comprehensive          227         1,333       929        (83.0)     (75.6)
income
 Total
shareholders'          68,287      77,510      74,901     (11.9)     (8.8)
equity
Total liabilities
and shareholders'    $ 824,575   $ 819,730   $ 785,111    0.6      % 5.0     %
equity
Preferred shares       10          21          21
Issued and
outstanding common     7,544       7,534       7,461
shares





                    UNITY BANCORP, INC.
                    QTD CONSOLIDATED STATEMENTS OF INCOME
                    June 30, 2013
                                                June 30, 2013 vs.
                  For the three months         March 31, 2013     June 30, 2012
                  ended
(In thousands,
except            June     March     June
percentages and   30,      31,       30,        $        %         $        %
per share         2013     2013      2012
amounts)
INTEREST INCOME
Federal funds
sold and          $ 7      $ 14      $ 11       $ (7)     (50.0) % $ (4)     (36.4) %
interest-bearing
deposits
Federal Home        35       44        44         (9)     (20.5)     (9)     (20.5)
Loan Bank stock
Securities:
Taxable             620      647       733        (27)    (4.2)      (113)   (15.4)
Tax-exempt          125      120       120        5       4.2        5       4.2
 Total             745      767       853        (22)    (2.9)      (108)   (12.7)
securities
Loans:
SBA loans           778      777       846        1       0.1        (68)    (8.0)
SBA 504 loans       441      651       691        (210)   (32.3)     (250)   (36.2)
Commercial loans    4,250    4,001     4,216      249     6.2        34      0.8
Residential         1,649    1,550     1,582      99      6.4        67      4.2
mortgage loans
Consumer loans      496      509       529        (13)    (2.6)      (33)    (6.2)
 Total loans       7,614    7,488     7,864      126     1.7        (250)   (3.2)
 Total           8,401    8,313     8,772      88      1.1        (371)   (4.2)
interest income
INTEREST EXPENSE
Interest-bearing    90       101       123        (11)    (10.9)     (33)    (26.8)
demand deposits
Savings deposits    164      177       287        (13)    (7.3)      (123)   (42.9)
Time deposits       537      546       689        (9)     (1.6)      (152)   (22.1)
Borrowed funds
and subordinated    808      800       816        8       1.0        (8)     (1.0)
debentures
 Total interest    1,599    1,624     1,915      (25)    (1.5)      (316)   (16.5)
expense
 Net interest    6,802    6,689     6,857      113     1.7        (55)    (0.8)
income
  Provision     300      650       1,000      (350)   (53.8)     (700)   (70.0)
for loan losses
 Net interest
income after        6,502    6,039     5,857      463     7.7        645     11.0
provision for
loan losses
NONINTEREST
INCOME
Branch fee          348      347       362        1       0.3        (14)    (3.9)
income
Service and loan    319      304       287        15      4.9        32      11.1
fee income
Gain on sale of
SBA loans held      86       241       223        (155)   (64.3)     (137)   (61.4)
for sale, net
Gain on sale of
mortgage loans,     547      477       453        70      14.7       94      20.8
net
BOLI income         75       70        73         5       7.1        2       2.7
Net security        108      226       283        (118)   (52.2)     (175)   (61.8)
gains
Other income        175      160       160        15      9.4        15      9.4
Total
noninterest         1,658    1,825     1,841      (167)   (9.2)      (183)   (9.9)
income
NONINTEREST
EXPENSE
Compensation and    3,166    3,176     3,133      (10)    (0.3)      33      1.1
benefits
Occupancy           627      694       740        (67)    (9.7)      (113)   (15.3)
Processing and      562      561       553        1       0.2        9       1.6
communications
Furniture and       371      365       355        6       1.6        16      4.5
equipment
Professional        234      190       211        44      23.2       23      10.9
services
Loan collection     228      177       91         51      28.8       137     150.5
costs
OREO expenses       63       127       237        (64)    (50.4)     (174)   (73.4)
Deposit             179      149       168        30      20.1       11      6.5
insurance
Advertising         181      120       302        61      50.8       (121)   (40.1)
Other expenses      463      567       414        (104)   (18.3)     49      11.8
Total
noninterest         6,074    6,126     6,204      (52)    (0.8)      (130)   (2.1)
expense
Income before
provision for       2,086    1,738     1,494      348     20.0       592     39.6
income taxes
Provision for       739      538       518        201     37.4       221     42.7
income taxes
Net income         1,347    1,200     976        147     12.3       371     38.0
Preferred stock
dividends and       465      404       401        61      15.1       64      16.0
discount
accretion
Income available
to common         $ 882    $ 796     $ 575      $ 86      10.8   % $ 307     53.4   %
shareholders
Effective tax       35.4  %  31.0  %   34.7  %
rate
Net income per
common share -    $ 0.12   $ 0.11    $ 0.08
Basic (1)
Net income per
common share -    $ 0.11   $ 0.10    $ 0.07
Diluted (1)
Weighted average
common shares       7,544    7,538     7,462
outstanding -
Basic
Weighted average
common shares       7,911    7,845     7,784
outstanding -
Diluted
(1) Defined as net income adjusted for dividends accrued and accretion of discount
on perpetual preferred stock divided by weighted average shares outstanding.





UNITY BANCORP, INC.
YTD CONSOLIDATED STATEMENTS OF INCOME
June 30, 2013
                         For the six months    Current YTD vs.
                         ended June 30,       Prior YTD
(In thousands, except
percentages and per      2013        2012       $          %
share amounts)
INTEREST INCOME
Federal funds sold and
interest-bearing         $   22      $ 43       $ (21)      (48.8) %
deposits
Federal Home Loan Bank       78        95         (17)      (17.9)
stock
Securities:
Taxable                      1,267     1,483      (216)     (14.6)
Tax-exempt                   245       263        (18)      (6.8)
 Total securities           1,512     1,746      (234)     (13.4)
Loans:
SBA loans                    1,555     1,770      (215)     (12.1)
SBA 504 loans                1,092     1,451      (359)     (24.7)
Commercial loans             8,251     8,397      (146)     (1.7)
Residential mortgage         3,199     3,237      (38)      (1.2)
loans
Consumer loans               1,005     1,089      (84)      (7.7)
 Total loans                15,102    15,944     (842)     (5.3)
 Total interest           16,714    17,828     (1,114)   (6.2)
income
INTEREST EXPENSE
Interest-bearing             191       259        (68)      (26.3)
demand deposits
Savings deposits             340       641        (301)     (47.0)
Time deposits                1,083     1,603      (520)     (32.4)
Borrowed funds and
subordinated                 1,609     1,662      (53)      (3.2)
debentures
Total interest expense       3,223     4,165      (942)     (22.6)
 Net interest income        13,491    13,663     (172)     (1.3)
 Provision for loan       950       2,200      (1,250)   (56.8)
losses
Net interest income
after provision for          12,541    11,463     1,078     9.4
loan losses
NONINTEREST INCOME
Branch fee income            695       748        (53)      (7.1)
Service and loan fee         623       588        35        6.0
income
Gain on sale of SBA
loans held for sale,         327       381        (54)      (14.2)
net
Gain on sale of              1,025     864        161       18.6
mortgage loans, net
BOLI income                  146       146        -         -
Net security gains          334       507        (173)     (34.1)
Other income                 332       322        10        3.1
Total noninterest            3,482     3,556      (74)      (2.1)
income
NONINTEREST EXPENSE
Compensation and             6,341     6,315      26        0.4
benefits
Occupancy                    1,321     1,348      (27)      (2.0)
Processing and               1,123     1,087      36        3.3
communications
Furniture and                736       717        19        2.6
equipment
Professional services        424       402        22        5.5
Loan collection costs        406       271        135       49.8
OREO expenses                190       362        (172)     (47.5)
Deposit insurance            328       339        (11)      (3.2)
Advertising                  301       448        (147)     (32.8)
Other expenses               1,029     872        157       18.0
Total noninterest            12,199    12,161     38        0.3
expense
Income before
provision for income         3,824     2,858      966       33.8
taxes
Provision for income         1,278     977        301       30.8
taxes
Net income                  2,546     1,881      665       35.4
Preferred stock
dividends and discount       869       797        72        9.0
accretion
Income available to      $   1,677   $ 1,084    $ 593       54.7   %
common shareholders
Effective tax rate           33.4      34.2
Net income per common    $   0.22      0.15
share - Basic (1)
Net income per common    $   0.21      0.14
share - Diluted (1)
Weighted average
common shares                7,541     7,461
outstanding - Basic
Weighted average
common shares                7,881     7,788
outstanding - Diluted
(1) Defined as net income adjusted for dividends accrued and accretion of
discount on perpetual preferred stock divided by weighted average shares
outstanding.



                       UNITY BANCORP, INC.
                       QUARTER TO DATE NET INTEREST MARGIN
                       June 30, 2013
(Dollar amounts in thousands, interest amounts and interest rates/yields
on a fully tax-equivalent basis)
                     For the three months ended
                     June 30, 2013                        March 31, 2013
                     Average     Interest  Rate/Yield   Average     Interest  Rate/Yield
                     Balance                              Balance
ASSETS
Interest-earning
assets:
Federal funds sold
and                  $ 25,312    $  7           0.11    % $ 62,530    $  14          0.09    %
interest-bearing
deposits
Federal Home Loan      4,007        35          3.50        3,989        44          4.47
Bank stock
Securities:
Taxable                95,675       620         2.59        100,062      647         2.59
Tax-exempt             20,440       186         3.64        18,475       178         3.85
 Total securities     116,115      806         2.77        118,537      825         2.79
(A)
Loans:
SBA loans              63,007       778         4.94        65,386       777         4.75
SBA 504 loans          39,408       441         4.49        41,135       651         6.42
Commercial loans       315,128      4,250       5.41        304,790      4,001       5.32
Residential            143,835      1,649       4.59        135,886      1,550       4.56
mortgage loans
Consumer loans         45,295       496         4.39        46,111       509         4.48
 Total loans (B)      606,673      7,614       5.03        593,308      7,488       5.09
Total
interest-earning     $ 752,107   $  8,462       4.51    % $ 778,364   $  8,371       4.33    %
assets
Noninterest-earning
assets:
Cash and due from      22,866                               19,737
banks
Allowance for loan     (14,747)                             (14,998)
losses
Other assets           41,435                               37,905
Total
noninterest-earning    49,554                               42,644
assets
Total assets         $ 801,661                            $ 821,008
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing     $ 116,414   $  90          0.31    % $ 118,668   $  101         0.35    %
demand deposits
Savings deposits       270,097      164         0.24        295,520      177         0.24
Time deposits          124,285      537         1.73        122,695      546         1.80
Total
interest-bearing       510,796      791         0.62        536,883      824         0.62
deposits
Borrowed funds and
subordinated           91,653       808         3.49        90,465       800         3.54
debentures
Total
interest-bearing     $ 602,449   $  1,599       1.06    % $ 627,348   $  1,624       1.04    %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing    122,635                              113,000
demand deposits
Other liabilities      3,554                                3,242
Total
noninterest-bearing    126,189                              116,242
liabilities
Total shareholders'    73,023                               77,418
equity
Total liabilities
and shareholders'    $ 801,661                            $ 821,008
equity
Net interest spread              $  6,863       3.45    %             $  6,747       3.29    %
Tax-equivalent                      (61)                                 (58)
basis adjustment
Net interest income              $  6,802                             $  6,689
Net interest margin                             3.66    %                            3.52    %
(A) Yields related to securities exempt from federal and state income taxes are stated on a
fully tax-equivalent basis. They are reduced by the nondeductible portion of interest
expense,assuming a federal tax rate of 34 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
                       June 30, 2013
(Dollar amounts in thousands, interest amounts and interest rates/yields
on a fully tax-equivalent basis)
                     For the three months ended
                     June 30, 2013                        June 30, 2012
                     Average     Interest  Rate/Yield   Average     Interest  Rate/Yield
                     Balance                              Balance
ASSETS
Interest-earning
assets:
Federal funds sold
and                  $ 25,312    $  7           0.11    % $ 30,832    $  11          0.14    %
interest-bearing
deposits
Federal Home Loan      4,007        35          3.50        3,993        44          4.43
Bank stock
Securities:
Taxable                95,675       620         2.59        105,903      733         2.77
Tax-exempt             20,440       186         3.64        15,554       178         4.58
 Total securities     116,115      806         2.77        121,457      911         3.00
(A)
Loans:
SBA loans              63,007       778         4.94        69,273       846         4.89
SBA 504 loans          39,408       441         4.49        46,804       691         5.94
Commercial loans       315,128      4,250       5.41        303,409      4,216       5.59
Residential            143,835      1,649       4.59        133,643      1,582       4.74
mortgage loans
Consumer loans         45,295       496         4.39        45,658       529         4.66
 Total loans (B)      606,673      7,614       5.03        598,787      7,864       5.28
Total
interest-earning     $ 752,107   $  8,462       4.51    % $ 755,069   $  8,830       4.70    %
assets
Noninterest-earning
assets:
Cash and due from      22,866                               16,101
banks
Allowance for loan     (14,747)                             (16,980)
losses
Other assets           41,435                               39,774
 Total
noninterest-earning    49,554                               38,895
assets
Total assets         $ 801,661                            $ 793,964
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing     $ 116,414   $  90          0.31    % $ 110,343   $  123         0.45    %
demand deposits
Savings deposits       270,097      164         0.24        270,990      287         0.43
Time deposits          124,285      537         1.73        138,554      689         2.00
Total
interest-bearing       510,796      791         0.62        519,887      1,099       0.85
deposits
Borrowed funds and
subordinated           91,653       808         3.49        90,465       816         3.57
debentures
Total
interest-bearing     $ 602,449   $  1,599       1.06    % $ 610,352   $  1,915       1.25    %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing    122,635                              106,043
demand deposits
Other liabilities      3,554                                3,438
Total
noninterest-bearing    126,189                              109,481
liabilities
Total shareholders'    73,023                               74,131
equity
Total liabilities
and shareholders'    $ 801,661                            $ 793,964
equity
Net interest spread              $  6,863       3.45    %             $  6,915       3.45    %
Tax-equivalent                      (61)                                 (58)
basis adjustment
Net interest income              $  6,802                             $  6,857
Net interest margin                             3.66    %                            3.68    %
(A) Yields related to securities exempt from federal and state income taxes are stated on a
fully tax-equivalent basis. They are reduced by the nondeductible portion of interest
expense,assuming a federal tax rate of 34 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.
                     YEAR TO DATE NET INTEREST MARGIN
                     June 30, 2013
(Dollar amounts in thousands, interest amounts and interest rates/yields on a fully
tax-equivalent basis)
                     For the six months ended
                     June 30, 2013                        June 30, 2012
                     Average     Interest  Rate/Yield   Average     Interest  Rate/Yield
                     Balance                              Balance
ASSETS
Interest-earning
assets:
Federal funds sold
and                  $ 43,818    $ 22           0.10    % $ 47,746    $ 43           0.18    %
interest-bearing
deposits
Federal Home Loan      3,998       78           3.93        4,041       95           4.73
Bank stock
Securities:
Taxable                97,856      1,267        2.59        104,263     1,483        2.84
Tax-exempt             19,463      363          3.73        16,703      389          4.66
 Total securities     117,319     1,630        2.78        120,966     1,872        3.10
(A)
Loans:
SBA loans              64,190      1,555        4.84        70,516      1,770        5.02
SBA 504 loans          40,266      1,092        5.47        49,257      1,451        5.92
Commercial loans       309,990     8,251        5.37        293,823     8,397        5.75
Residential            139,882     3,199        4.57        133,234     3,237        4.86
mortgage loans
Consumer loans         45,700      1,005        4.43        46,633      1,089        4.70
 Total loans (B)      600,028     15,102       5.06        593,463     15,944       5.40
Total
interest-earning     $ 765,163   $ 16,832       4.42    % $ 766,216   $ 17,954       4.71    %
assets
Noninterest-earning
assets:
Cash and due from      21,310                               16,025
banks
Allowance for loan     (14,872)                             (16,884)
losses
Other assets           39,680                               40,030
 Total
noninterest-earning    46,118                               39,171
assets
Total assets         $ 811,281                            $ 805,387
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Interest-bearing     $ 117,535   $ 191          0.33    % $ 109,665   $ 259          0.47    %
demand deposits
Savings deposits       282,738     340          0.24        277,125     641          0.47
Time deposits          123,495     1,083        1.77        147,778     1,603        2.18
Total
interest-bearing       523,768     1,614        0.62        534,568     2,503        0.94
deposits
Borrowed funds and
subordinated           91,063      1,609        3.51        90,465      1,662        3.63
debentures
Total
interest-bearing     $ 614,831   $ 3,223        1.05    % $ 625,033   $ 4,165        1.33    %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing    117,844                              103,269
demand deposits
Other liabilities      3,398                                3,344
Total
noninterest-bearing    121,242                              106,613
liabilities
Total shareholders'    75,208                               73,741
equity
Total liabilities
and shareholders'    $ 811,281                            $ 805,387
equity
Net interest spread              $ 13,609       3.37    %             $ 13,789       3.38    %
Tax-equivalent                     (118)                                (126)
basis adjustment
Net interest income              $ 13,491                             $ 13,663
Net interest margin                             3.59    %                            3.62    %
(A) Yields related to securities exempt from federal and state income taxes are stated on a
fully tax-equivalent basis. They are reduced by the nondeductible portion of interest
expense,assuming a federal tax rate of 34 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
                        June 30, 2013
Amounts in            June 30,   March 31,   December   September   June 30,
thousands, except     2013       2013        31, 2012   30, 2012    2012
percentages
ALLOWANCE FOR LOAN
LOSSES:
Balance, beginning    $ 14,345   $  14,758   $ 15,294   $  16,284   $ 16,339
of period
Provision for loan
losses charged to       300         650        800         1,000      1,000
expense
                        14,645      15,408     16,094      17,284     17,339
Less: Chargeoffs
SBA loans               167         570        251         254        213
SBA 504 loans           200         200        -           481        100
Commercial loans        200         375        1,190       1,428      540
Residential mortgage    -           125        152         65         494
loans
Consumer loans          -           59         -           31         25
Total chargeoffs        567         1,329      1,593       2,259      1,372
Add: Recoveries
SBA loans               8           137        22          195        249
SBA 504 loans           154         25         50          15         15
Commercial loans        65          101        184         58         53
Residential mortgage    2           2          -           -          -
loans
Consumer loans          2           1          1           1          -
Total recoveries        231         266        257         269        317
Net chargeoffs          336         1,063      1,336       1,990      1,055
Balance, end of       $ 14,309   $  14,345   $ 14,758   $  15,294   $ 16,284
period
LOAN QUALITY
INFORMATION:
Nonperforming loans   $ 13,357   $  14,904   $ 17,468   $  17,334   $ 19,831
(1)
Other real estate       752         1,052      1,826       1,456      2,355
owned ("OREO")
Nonperforming assets    14,109      15,956     19,294      18,790     22,186
Less: Amount           736         1,863      1,849       566        526
guaranteed by SBA
Net nonperforming     $ 13,373   $  14,093   $ 17,445   $  18,224   $ 21,660
assets
Loans 90 days past    $ 429      $  632      $ 109      $  1,630    $ 2,443
due & still accruing
Performing Troubled
Debt Restructurings   $ 10,649   $  15,068   $ 13,576   $  17,250   $ 20,541
(TDRs)
(1) Nonperforming       1,658       1,084      1,087       1,628      871
TDRs included above
Total TDRs            $ 12,307   $  16,152   $ 14,663   $  18,878   $ 21,412
Allowance for loan
losses to:
Total loans at          2.30   %    2.40   %   2.51   %    2.56   %   2.69   %
quarter end
Nonperforming loans     107.13      96.25      84.49       88.23      82.11
(1)
Nonperforming assets    101.42      89.90      76.49       81.39      73.40
Net nonperforming       107.00      101.79     84.60       83.92      75.18
assets
QTD net chargeoffs
(annualized) to QTD
average loans:
SBA loans               1.01   %    2.69   %   1.37   %    0.35   %   (0.21) %
SBA 504 loans           0.47        1.73       (0.48)      4.16       0.73
Commercial loans        0.17        0.36       1.31        1.77       0.65
Residential mortgage    (0.01)      0.37       0.45        0.19       1.49
loans
Consumer loans          (0.02)      0.51       (0.01)      0.26       0.22
 Total loans           0.22   %    0.73   %   0.90   %    1.32   %   0.71   %
Nonperforming loans     2.15   %    2.50   %   2.98   %    2.90   %   3.28   %
to total loans
Nonperforming loans
and TDRs to total       3.86        5.02       5.29        5.79       6.67
loans
Nonperforming assets
to total loans and      2.26        2.67       3.28        3.14       3.65
OREO
Nonperforming assets    1.71        1.93       2.35        2.34       2.83
to total assets



                    UNITY BANCORP, INC.
                    QUARTERLY FINANCIAL DATA
                    June 30, 2013
(In thousands,
except            June 30,    March 31,    December     September    June 30,
percentages and   2013        2013         31, 2012     30, 2012     2012
per share
amounts)
SUMMARY OF
INCOME:
Total interest    $ 8,401     $ 8,313      $ 8,502      $ 8,871      $ 8,772
income
Total interest      1,599       1,624        1,765        1,844        1,915
expense
Net interest        6,802       6,689        6,737        7,027        6,857
income
Provision for       300         650          800          1,000        1,000
loan losses
Net interest
income after        6,502       6,039        5,937        6,027        5,857
provision for
loan losses
Total
noninterest         1,658       1,825        2,008        1,774        1,841
income
Total
noninterest         6,074       6,126        6,135        5,999        6,204
expense
Income before
provision for       2,086       1,738        1,810        1,802        1,494
income taxes
Provision for       739         538          643          606          518
income taxes
Net income         1,347       1,200        1,167        1,196        976
Preferred stock
dividends and       465         404          408          397          401
discount
accretion
Income available
to common         $ 882       $ 796        $ 759        $ 799        $ 575
shareholders
Net income per
common share -    $ 0.12      $ 0.11       $ 0.10       $ 0.11       $ 0.08
Basic (1)
Net income per
common share -    $ 0.11      $ 0.10       $ 0.10       $ 0.10       $ 0.07
Diluted (1)
COMMON SHARE
DATA:
Market price per  $ 7.10      $ 6.51       $ 6.24       $ 6.13       $ 6.00
share
Dividends paid    $ 0.01      $ -          $ -          $ -          $ -
Book value per    $ 7.70      $ 7.67       $ 7.62       $ 7.52       $ 7.38
common share
Weighted average
common shares       7,544       7,538        7,514        7,473        7,462
outstanding -
Basic
Weighted average
common shares       7,911       7,845        7,818        7,782        7,784
outstanding -
Diluted
Issued and
outstanding         7,544       7,548        7,534        7,503        7,461
common shares
OPERATING RATIOS
(Annualized):
Return on           0.67     %  0.59     %   0.57     %   0.60     %   0.49     %
average assets
Return on
average equity      6.11        5.65         5.34         5.74         4.25
(2)
Efficiency ratio    72.72       73.91        70.66        68.22        73.72
BALANCE SHEET
DATA:
Total assets      $ 824,575   $ 827,182    $ 819,730    $ 802,675    $ 785,111
Total deposits      628,369     652,117      648,760      633,126      616,443
Total loans         622,316     596,571      587,036      596,910      604,901
Total securities    111,269     119,334      111,053      106,437      114,846
Total
shareholders'       68,287      78,157       77,510       76,387       74,901
equity
Allowance for       (14,309)    (14,345)     (14,758)     (15,294)     (16,284)
loan losses
TAX EQUIVALENT
YIELDS AND
RATES:
Interest-earning    4.51     %  4.33     %   4.44     %   4.70     %   4.70     %
assets
Interest-bearing    1.06        1.04         1.14         1.19         1.25
liabilities
Net interest        3.45        3.29         3.30         3.51         3.45
spread
Net interest        3.66        3.52         3.51         3.72         3.68
margin
CREDIT QUALITY:
Nonperforming       14,109      15,956       19,294       18,790       22,186
assets
QTD net
chargeoffs
(annualized) to     0.22     %  0.73     %   0.90     %   1.32     %   0.71     %
QTD average
loans
Allowance for
loan losses to      2.30        2.40         2.51         2.56         2.69
total loans
Nonperforming
assets to total     2.26        2.67         3.28         3.14         3.65
loans and OREO
Nonperforming
assets to total     1.71        1.93         2.35         2.34         2.83
assets
CAPITAL RATIOS
AND OTHER:
Total equity to     8.28     %  9.45     %   9.46     %   9.52     %   9.54     %
total assets
Leverage ratio      10.23       11.12        11.14        11.20        11.08
Tier 1
risk-based          13.36       14.54        14.85        14.52        14.22
capital ratio
Total risk-based    14.63       15.80        16.12        15.78        15.49
capital ratio
Number of           15          15           15           15           15
banking offices
Number of ATMs      16          16           16           16           16
Number of           153         166          165          161          169
employees
(1) Defined as net income adjusted for dividends accrued and
accretion of discount on perpetual preferred stock divided by weighted
average shares outstanding.
(2) Defined as net income adjusted for dividends accrued and accretion of
discount on perpetual preferred stock divided by average shareholders' equity
(excluding preferred stock).



SOURCE Unity Bancorp, Inc.

Website: http://www.unitybank.com
Contact: News Media & Financial Analyst, Alan J. Bedner, EVP, Chief Financial
Officer, (908) 713-4308