President's Message

Message from James A. Hughes
Unity Bank President

Every day, every employee at Unity Bank is focused on our core values. As we look back over 2012, that is how Unity Bank has grown stronger in a challenging marketplace. Dedication to creating happy customers and employees produces results for our stakeholders. We are committed to serving our communities, and we continue to achieve this goal by providing value-added, competitively priced services to our customers. At the same time, we are dedicated to providing our shareholders with a responsible, profitable investment opportunity astutely managed to capitalize on industry trends.

Growth is considered in everything we do. We are designed for growth more than ever before. Our focus on building relationships, improving operational efficiencies, and deepening product lines always starts with an analysis of growth potential. We continue to prioritize areas with the greatest opportunities. In today's market, we must create opportunities and lead our customers to success. We continue to increase the bank's profitability; realizing a $4.2 million profit in 2012, a 67 percent increase over the previous year.

It was another record-breaking year for the mortgage division with a 62 percent increase in mortgage funding as compared to 2011. The mortgage success can be attributed to our commitment to building relationships with a large portion of the loan activity coming from professional alliances who value the personal, competitive, consistent service Unity Bank provides. It continues to be a great time for borrowers to finance new properties or refinance, as evidenced by the success of our mortgage division.

On the other end of the spectrum, we continue to be concerned about the interest rate environment, which will remain a challenge for the foreseeable future. Banks throughout the industry continue to feel the pinch of record low interest rates, resulting in narrow margins for all lenders. The reality of this marketplace means that profitability will be tied to loan growth more than ever.

Unity Bank's commercial loan portfolio continued to experience modest growth as production outpaced payoffs. We are seeing improvement in business lending, but the uncertain economy continues to impact this part of our business. We remain concerned about credit quality, but not nearly to the extent experienced in the past two years. We did not abandon our good customers during troubled times. We have made accommodations where appropriate. We believe these customers will come back strong and our partnership with them will have long term benefits. Our portfolio has improved from a credit risk perspective, which means resources can be far more focused on sales and service efforts.

Unity Bank continues to improve branch operations through both expansion and maximizing operational efficiencies. We are in the process of reviewing purchase options on some of our currently leased facilities, which will also improve our long-term financial strength. As we continue to make improvements to our balance sheet we will be addressing our plan for repayment of capital funds.

We are moving forward in 2013 with a strong hold on our expenses, a commitment to continue to improve efficiency and the expectation that we will build on the positive momentum of 2012. We are very excited about the year that lies ahead for Unity Bank. As always, we are committed to exceptional customer service and partnering with our community in every possible way.

The Board of Directors, management and staff thank our loyal customers and shareholders for their continued support.

James A. Hughes
President/CEO

This news release contains certain forward-looking statements, either expressed or implied, which anticipates future financial performance. 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 general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.