Unity Bancorp Reports Quarterly Earnings of $10.9 Million

Rhea-AI Summary

Unity Bancorp (NASDAQ: UNTY) reported record quarterly earnings of $10.9 million, or $1.07 per diluted share, for Q3 2024. This represents a 15.3% increase in net income and a 15.1% increase in net income per diluted share compared to Q2 2024. For the first nine months of 2024, net income remained stable at $29.9 million, with earnings per share increasing 2.1% to $2.94.

Key highlights include:

• Net interest margin expanded to 4.16%
• ROA of 1.76% and ROE of 15.55%
• Gross loans grew $46.9 million (2.2%) quarter-over-quarter
• Commercial loans increased $50.6 million (3.8%)
• Customer deposits grew $42.6 million (2.4%)

The company maintains strong profitability metrics across interest rate scenarios and continues to focus on supporting local communities through loan and deposit growth.

Positive

• Record quarterly earnings of $10.9 million, up 15.3% from previous quarter
• Earnings per diluted share increased 15.1% quarter-over-quarter to $1.07
• Net interest margin expanded to 4.16%
• Strong ROA of 1.76% and ROE of 15.55%
• Gross loans grew 2.2% and commercial loans increased 3.8% sequentially
• Customer deposits increased 2.4% quarter-over-quarter

Negative

• Net income for the first nine months of 2024 remained flat compared to the same period in 2023

Insights

Financial Analyst

Unity Bancorp's Q3 2024 results showcase impressive growth and profitability. Net income increased by 15.3% quarter-over-quarter to $10.9 million, with EPS rising 15.1% to $1.07. The bank's performance metrics are strong, with a 4.16% net interest margin, 1.76% ROA and 15.55% ROE. Loan growth of 2.2% and deposit growth of 2.4% indicate healthy business expansion. The bank's ability to maintain profitability across interest rate scenarios is particularly noteworthy, especially given the recent Fed rate cut. However, investors should monitor the flat year-over-year net income for the nine-month period, which suggests some challenges in maintaining growth momentum over longer periods. Overall, Unity Bancorp's strong quarterly performance and robust financial metrics position it well in the competitive banking landscape.

Market Research Analyst

Unity Bancorp's focus on small and medium-sized businesses in local communities is a strategic advantage in the current economic climate. The 3.8% growth in commercial loans indicates strong demand and potential market share gains. The bank's ability to grow deposits alongside loans is important for sustainable expansion. The recent Fed rate cut could pressure margins industry-wide, but Unity's management claims adaptability to various rate environments. This resilience could be a differentiator. Investors should note the bank's relatively small size ($2.6 billion in assets) which may limit economies of scale but allows for agility in serving niche markets. The emphasis on employee talent and community support aligns with growing ESG considerations in banking. Looking ahead, Unity's performance relative to peers and its ability to maintain growth in a potentially challenging economic environment will be key factors to watch.

CLINTON, N.J., Oct. 11, 2024 (GLOBE NEWSWIRE) -- Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $10.9 million, or $1.07 per diluted share, for the quarter ended September 30, 2024, compared to net income of $9.5 million, or $0.93 per diluted share for the quarter ended June 30, 2024. This represents a 15.3% increase in net income and a 15.1% increase in net income per diluted share. For the nine months ended September 30, 2024, Unity Bancorp reported net income of $29.9 million, or $2.94 per diluted share, compared to net income of $29.9 million, or $2.88 per diluted share, for the nine months ended September 30, 2023. This represents no change in net income and a 2.1% increase in net income per diluted share, reflecting the Company’s repurchase of outstanding shares.

James A. Hughes, President and CEO, commented on the financial results: “We are excited to announce the highest quarterly earnings results in the Unity Bancorp Inc.’s history. For the quarter, we achieved $10.9 million of net income, equivalent to $1.07 per diluted share. Our net interest margin expanded to 4.16% and we delivered an impressive ROA of 1.76% and ROE of 15.55%.

In the third quarter, our organization demonstrated its commitment to granting credit to small and medium-sized businesses operating in our local communities. Gross loans grew $46.9 million, or 2.2%, and commercial loans grew $50.6 million, or 3.8%, sequentially.

We have also benefited from continued deposit momentum, with customer deposits growing $42.6 million, or 2.4% sequentially. Deposits will continue to be the fuel that enables our credit growth. We look forward to continuing to support our communities by growing loans and deposits in tandem.

In September, the Federal Reserve cut short-term interest rates 50 basis points, signaling a change to the operating environment. At Unity, we are able to maintain strong profitability metrics in all interest rate scenarios. We will continue to manage our interest rate sensitivity, maintain a conservative capital position and ensure ample liquidity levels. Our asset quality ratios remain favorable and we closely monitor and manage our nonperforming and past-due credit relationships.

Lastly, our strong financial results are a reflection of our talented employee base. Their hard work and dedication to our company significantly support the local economies of the communities we serve.”

For the full version of the Company’s quarterly earnings release, including financial tables, please visit News - Unity Bank (q4ir.com).

Unity Bancorp, Inc. is a financial services organization headquartered in Clinton, New Jersey, with approximately $2.6 billion in assets and $2.0 billion in deposits. Unity Bank, the Company’s wholly owned subsidiary, provides financial services to retail, corporate and small business customers through its robust branch network located in Bergen, Hunterdon, Middlesex, Morris, Ocean, Somerset, Union and Warren Counties in New Jersey and Northampton County in 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 amended or supplemented by our subsequent filings with the SEC, 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, results of regulatory exams, and the impact of any health crisis or national disasters on the Bank, its employees and customers, among other factors.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

News Media & Financial Analyst Contact:
George Boyan, EVP and CFO
(908) 713-4565

FAQ

What was Unity Bancorp's (UNTY) net income for Q3 2024?

Unity Bancorp reported net income of $10.9 million for Q3 2024, which is a record quarterly earnings result for the company.

How much did Unity Bancorp's (UNTY) earnings per share increase in Q3 2024?

Unity Bancorp's earnings per diluted share increased by 15.1% to $1.07 in Q3 2024 compared to $0.93 in Q2 2024.

What was Unity Bancorp's (UNTY) net interest margin in Q3 2024?

Unity Bancorp's net interest margin expanded to 4.16% in Q3 2024.

How much did Unity Bancorp's (UNTY) gross loans grow in Q3 2024?

Unity Bancorp's gross loans grew by $46.9 million, or 2.2%, in Q3 2024 compared to the previous quarter.

What was the growth in customer deposits for Unity Bancorp (UNTY) in Q3 2024?

Unity Bancorp's customer deposits grew by $42.6 million, or 2.4%, in Q3 2024 compared to the previous quarter.