Unity Bancorp Reports Quarterly Earnings of $9.5 Million

Rhea-AI Summary

Unity Bancorp reported net income of $9.5 million for Q2 2024, slightly down from $9.6 million in Q1 2024. Quarterly earnings per diluted share held steady at $0.93. For the first half of 2024, net income was $19.0 million, down from $20.0 million in the same period in 2023, with earnings per share dropping from $1.91 to $1.86.

CEO James A. Hughes highlighted the company's resilience amid economic challenges, noting a strong net interest margin above 4%, ROA of 1.56%, and ROE of 14.07%. Customer deposits increased by $63.3 million, with noninterest-bearing deposits rising by $26.5 million. Though loan growth was modest in early 2024, a robust loan pipeline is expected to drive mid-to-high single-digit growth in the second half.

Unity Bancorp's strong capital position, liquidity, and stable asset quality underpin its service to local communities. The company has approximately $2.6 billion in assets and $2.0 billion in deposits, serving customers across New Jersey and Pennsylvania.

Positive

• Net interest margin remained above 4%.
• Return on Assets (ROA) was 1.56%.
• Return on Equity (ROE) was 14.07%.
• Customer deposits increased by $63.3 million (3.7%).
• Noninterest-bearing deposits surged by $26.5 million (6.7%).
• Expected mid-to-high single-digit loan growth in the second half of 2024.
• Strong capital position and ample liquidity levels.
• Stable asset quality metrics.

Negative

• Net income for Q2 2024 decreased by 1.4% compared to Q1 2024.
• Net income for the first half of 2024 decreased by 4.7% compared to the same period in 2023.
• Earnings per share for the first half of 2024 decreased by 2.6% compared to the same period in 2023.
• Loan growth was subdued in the first half of 2024.

Insights

Financial Analyst

Unity Bancorp's quarterly earnings show a slight decline in net income, dropping 1.4% compared to the previous quarter, while net income per diluted share remained stable at $0.93. This indicates some pressure on earnings despite relatively stable performance metrics. An important factor to consider is the company's net interest margin, which remains above 4%, showcasing effective interest rate management. However, the 14.07% return on equity (ROE) and 1.56% return on assets (ROA) are strong indicators of profitability compared to industry standards. The $63.3 million increase in customer deposits, with a notable rise in noninterest-bearing deposits by $26.5 million, reflects good customer trust and effective deposit gathering strategies. Overall, while there's a slight decline in net income, the company's performance metrics suggest stability and efficient operations.

Market Research Analyst

Examining Unity Bancorp's market position, the fact that they have increased deposits significantly indicates strong consumer confidence and effective market penetration within their operational geography. The 6.7% rise in noninterest-bearing deposits is particularly noteworthy as it reflects customer preference for Unity Bank's offerings during uncertain economic times. The comment about robust commercial and consumer loan pipelines suggests potential revenue growth in the upcoming quarters. However, investors should be cautious of the subdued loan growth in the first half; the anticipated mid-to-high single-digit growth targets will need close monitoring to ensure they are met. Additionally, Unity's conservative capital position and stable asset quality metrics are positive signs for long-term resilience, supporting its mission to serve local communities effectively.

CLINTON, N.J., July 12, 2024 (GLOBE NEWSWIRE) -- Unity Bancorp, Inc. (NASDAQ: UNTY), parent company of Unity Bank, reported net income of $9.5 million, or $0.93 per diluted share, for the quarter ended June 30, 2024, compared to net income of $9.6 million, or $0.93 per diluted share for the quarter ended March 31, 2024. This represents a 1.4% decrease in net income and no change in net income per diluted share. For the six months ended June 30, 2024, Unity Bancorp reported net income of $19.0 million, or $1.86 per diluted share, compared to net income of $20.0 million, or $1.91 per diluted share, for the six months ended June 30, 2023. This represents a 4.7% decrease in net income and a 2.6% decrease in net income per diluted share.

James A. Hughes, President and CEO, commented on the financial results: “Despite the persistent challenges posed by the inverted yield curve, we are pleased to announce another strong quarter for Unity Bancorp, Inc. For the quarter, we achieved $9.5 million of net income, equivalent to $0.93 per diluted share. Our net interest margin remained above 4% and we delivered an impressive ROA of 1.56% and ROE of 14.07%.

In the second quarter, our organization demonstrated its retail capabilities by increasing customer deposit balances sequentially by $63.3 million, or 3.7%. Notably, noninterest bearing deposits surged by a remarkable $26.5 million, or 6.7%.

While loan growth was subdued in the first half of the year, our commercial and consumer loan pipelines are robust. We are confident that we are on track for mid-to-high single-digit loan growth in the second half of 2024.

Unity’s conservative capital position, ample liquidity levels and stable asset quality metrics provide a solid foundation for delivering best-in-class service to the local communities we serve. Our financial results are a testament to the dedication and hard work of our talented employees and their unwavering commitment to our mission. ”

For the full version of the Company’s 2024 first quarter 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 COVID-19 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 were Unity Bancorp's earnings for Q2 2024?

Unity Bancorp reported net income of $9.5 million for Q2 2024.

How did Unity Bancorp's Q2 2024 earnings compare to Q1 2024?

Unity Bancorp's net income for Q2 2024 was $9.5 million, a slight decrease from $9.6 million in Q1 2024.

What was Unity Bancorp's earnings per share for Q2 2024?

Unity Bancorp's earnings per diluted share for Q2 2024 were $0.93.

How did Unity Bancorp's earnings for the first half of 2024 compare to the same period in 2023?

Unity Bancorp's net income for the first half of 2024 was $19.0 million, down from $20.0 million in the same period in 2023.

What is Unity Bancorp's expected loan growth for the second half of 2024?

Unity Bancorp expects mid-to-high single-digit loan growth in the second half of 2024.

How much did Unity Bancorp's customer deposits increase in Q2 2024?

Customer deposits increased by $63.3 million, or 3.7%, in Q2 2024.

What were Unity Bancorp's ROA and ROE for Q2 2024?

Unity Bancorp achieved an ROA of 1.56% and an ROE of 14.07% for Q2 2024.