On September 10, 2026, Unity Bancorp, Inc. (the "Company") purchased approximately $27.6 million of transferable federal investment tax credits pursuant to Section 6418 of the Internal Revenue Code. The Company purchased the credits for approximately $25.1 million, representing a purchase price of approximately $0.91 per dollar of tax credit.

 

The Company intends to utilize the acquired tax credits primarily through a carry-back claim permitted under applicable federal tax laws. As a result, the Company currently expects to recognize a one-time reduction in income tax expense, and corresponding increase in net income, of approximately $2.5 million during the quarter ending September 30, 2026.

 

The Company obtained customary tax, legal and other third-party diligence in connection with the transaction and believes the investment is consistent with its strategy of prudently enhancing shareholder value through selective tax-advantaged investments. Under applicable federal tax rules, the transferred tax credits remain subject to a five-year recapture period. The Company obtained customary contractual protections and other credit support designed to mitigate potential recapture-related losses.

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