A tough year for the financial sector…

•2008 was a period of unprecedented financial, credit and
capital market stress

–Consumers living beyond their means

–Since 2001, home prices rose 46%

–3.3% decline in median income

–Fannie and Freddie create secondary market for subprime
mortgages

–Brokerage firms are allowed to leverage 30 to 1

How has the recession affected UNITY?

•Unity’s 2008 results were affected by:

–Markets for the guaranteed portion of SBA loans have closed
down

–Scale back of the SBA program

–Other-than-temporary impairment charges (“OTTI”) of $1.5
million in 2008

–Higher provision for loan losses due to the economy

–Increase in past due accounts

–Increase in FDIC insurance

UNITY’SAccomplishments!

•Despite this challenging environment, Unity’s performance in
2008 included the following accomplishments:

–Total assets increased 19.4 percent

–Total loans increased 16.2 percent

–Total deposits increased 17.6 percent

–Continued improvements in infrastructure

–Unity remains well-capitalized

–Unity remains profitable

Strategic Direction

•2009 Sales Direction

•One sales leader, one bank with common goals

•Everyone working as a team

•Capitalize on market turmoil

•Increasing market share

•Relationship-based business model

•Focus on demand deposits and savings versus high cost time
deposits

•Stabilize Credit Quality

•Effective cost control

UNITY’S Branch Network

Recent UNITY Highlights

•Brought the items processing function in-house

•ATM conversion to a surcharge free network

•ATM upgrades and security enhancements

•E-statements (“Go Green!”)

•Enhancements to the E-corp system

•VISA gift cards

•New residential mortgage website - online applications

•Marketing promotions, brand recognition

Marketing Initiatives

Key Bank Ratios

For the year ended December 31, 2008

Unity

NJ FDIC-
Insured
Commercial
Banks

All FDIC-
Insured
Commercial
Banks

Return on Average Assets

0.23%

0.46%

0.16%

Return on Average Equity

3.72%

4.85%

1.62%

Efficiency Ratio

71.90%

81.93%

58.32%

Total Nonperforming Assets to Total Assets

1.87%

1.34%

1.82%

Net Charge-offs to Average Loans

0.40%

0.35%

1.31%

Income Statement
(dollars in thousands)

For the years ended

%

2008

2007

Change

Net Interest Income

$27,291

$24,426

11.7%

Provision for Loan Losses

(4,500)

(1,550)

190.3%

Noninterest Income

4,612

6,511

-29.2%

OTTI Charges& Net Security (Losses) Gains

(1,918)

(571)

235.9%

Noninterest Expense

(22,939)

(22,113)

3.7%

Net Income Before Taxes

2,546

6,703

-62.0%

Net Income

$1,930

$4,725

-59.2%

Net Income per Share - Diluted

$0.25

$0.63

-60.3%

Prime Rate

5.25%

7.25%

8.25%

7.25%

3.25%

Total Asset Growth(dollars in millions)

Ø In 2008, Unity grew total assets
by 19.4% versus 10.2 % for all
FDIC-Insured Commercial Banks.

Total Loan Growth(dollars in millions)

Ø In 2008, Unity grew total loans
by 16.1% versus 3.2% for all FDIC-
Insured Commercial Banks.

Nonperforming Loans by Category
(dollars in thousands)

12/31/2008

12/31/2007

Category

$ Value

# of Loans

$ Value

# of Loans

SBA7(a)

4,228

49

2,110

32

SBA 504

4,600

3

-

-

Commercial

5,247

8

1,630

6

Residential Mortgage

1,808

7

1,192

7

Consumer

237

8

529

7

Total

16,120

75

5,461

52

Selected Ratios

12/31/2008

12/31/2007

Net Charge-offs to Average Loans

0.40%

0.14%

Nonperforming Loans to Total Loans

2.35%

0.93%

Allowance for Loan Losses to Total Loans

1.51%

1.42%

Total Deposit Growth
(dollars in millions)

Ø In 2008, Unity grew total
deposits by 17.6% versus 10.6 %
for all FDIC-Insured Commercial
Banks.

Unity Bancorp, Inc.

FDIC-Insured Commercial Banks

UNITY’S Capital &Dividend Policy

•Unity is to maintain a well-capitalized Bank

–Capital Purchase Program (“CPP”) participation, $20.6 million,
5% annual dividend

•The Board established a targeted dividend ratio of 20 percent
of the Company’s earnings and will be paid once annually

•Curtailment of stock dividend

Stock Price Valuation

Unity Bancorp, Inc.

Market Price of $3.90/Book Value of $6.99 = 55.8% Price/Book Ratio

All publicly traded banks with assets < $5 billion

Compelling Investment Considerations

•Deep discount to book

•Knowledgeable and experienced management team

•Prudent risk management practices

•Current focus on capital management, liquidity and overall asset
quality

•Positioned for economic rebound

•Insider ownership

 growing with you!

The previous slides contained data from the
following sources:

•FDIC-Insured Commercial Banks

(All & NJ-only):

Ø Obtained from FDIC.gov Quarterly Banking
Profile

•All publicly traded banks with assets < $5

billion

Ø Obtained from SNL Financial