Unity Bancorp(UNTY) - 2025 Q4 - Annual Results

Financial Performance - Unity Bancorp reported net income of $15.5 million, or $1.52 per diluted share, for Q4 2025, up from $14.4 million, or $1.41 per diluted share in Q3 2025, representing a year-over-year increase in net income of 40% from $41.5 million in 2024[3] - Net income for the quarter reached $15,472, representing a 7.5% increase from $14,390 in the previous quarter and a 34.5% increase from $11,505 year-over-year[11] - Net income for the three months ended December 31, 2025, was $15,472, representing a 7.5% increase from $14,390 in the same period last year[16] - Net income per common share (Basic) rose to $1.55, an 8.4% increase from $1.43 in the previous quarter and 34.8% from $1.15 year-over-year[11] - Net income per common share - Basic increased to $1.55 from $1.43 year-over-year[16] - The Return on average assets was 2.20%, up from 1.83% a year ago, indicating improved profitability[30] Income and Revenue - Net interest income for Q4 2025 was $31.4 million, an increase of $1.5 million from $29.9 million in Q3 2025, with a net interest margin of 4.60%, up 6 basis points[6] - Total interest income for the three months ended December 31, 2025, was $45,868, an increase of 3.4% compared to $44,361 for the same period in 2024[16] - Total interest income for the year ended December 31, 2025, was $173,628, an increase of 11.5% compared to $155,738 in 2024[18] - Total noninterest income increased significantly by 31.4% to $3,898 from $2,967 year-over-year[16] - Total noninterest income rose to $3,898,000, compared to $1,916,000 in the same quarter last year, marking a significant increase of 103%[30] Loans and Deposits - Total gross loans increased by $284.1 million, or 12.6%, year-over-year, and by $76.2 million, or 3.1%, quarter-over-quarter[6] - Total loans reached $2,544,713, up 3.1% from $2,468,527 in the previous quarter and 12.6% from $2,260,657 year-over-year[11] - Total loans for the same period reached $2,504,338,000, with a total interest income of $43,482,000, reflecting a loan yield of 6.79%[20] - Total deposits rose by $223.7 million, or 10.7%, year-over-year, and by $56.6 million, or 2.5%, quarter-over-quarter, with uninsured deposits at 21.7% of total deposits[6] - Total deposits grew to $2,324,061, a 2.5% increase from $2,267,484 in the previous quarter and 10.7% from $2,100,313 year-over-year[11] Assets and Equity - Total assets increased to $2,966,652, up 3.1% from $2,876,365 in the previous quarter and 11.8% from $2,654,017 year-over-year[11] - The total assets of the company as of December 31, 2025, were $2,792,216,000, an increase from $2,501,821,000 in the prior year[20] - Total shareholders' equity reached $345,631, a 3.5% increase from $334,023 in the previous quarter and 16.9% from $295,583 year-over-year[11] - The total shareholders' equity rose to $339,480,000, up from $290,291,000 year-over-year[20] Operational Efficiency - Efficiency ratio decreased to 39.52%, down from 41.47% in the previous quarter and 44.44% year-over-year, indicating improved operational efficiency[11] - The efficiency ratio improved to 39.52%, down from 44.44% a year ago, indicating better cost management[30] Tax and Credit Losses - The effective tax rate decreased to 21.4% in Q4 2025 from 23.7% in Q3 2025, aided by the purchase of $8.0 million in federal tax credits[6] - The effective tax rate decreased to 21.4% from 23.7% in the previous year[16] - The allowance for credit losses as a percentage of gross loans was 1.27% as of December 31, 2025[6] - Provision for credit losses on loans was $2,208, a substantial increase of 56.7% compared to $1,409 in the prior year[16] Nonaccrual Assets - Nonaccrual assets increased to $31.3 million, with a nonaccrual loans to total loans ratio of 1.17% as of December 31, 2025[9] - Nonaccrual assets increased to $31,308, a 52.6% rise from $20,514 in the previous quarter and 108.1% from $15,046 year-over-year[12] - Nonaccrual loans totaled $29,836, representing an increase from $20,514, which is a 45.5% rise[28] - Nonaccrual loans to total loans ratio was 1.17%, up from 0.83%[28] Recognition and Expansion - Unity Bancorp was recognized in Piper Sandler's Sm-All Stars Class of 2025, highlighting its performance among small-cap banks[9] - The number of banking offices increased to 22, up from 21 a year ago, reflecting ongoing expansion efforts[31]