Unity Bancorp(US:UNTY)2026-03-04 21:40Financial Performance - Net income for the year ended December 31, 2025, increased by 39.8% to $58.0 million, or $5.67 per diluted share, compared to $41.5 million, or $4.06 per diluted share in 2024[162][163]. - Net interest income rose by $18.4 million, or 18.7%, to $117.0 million from $98.6 million in the prior year, driven by increased volume and rates of interest-earning assets[163][172]. - Noninterest income increased by 74.5% to $14.8 million, primarily due to higher net securities gains and service fees[163]. - The return on average assets increased to 2.17% in 2025 from 1.68% in 2024[165]. - The effective tax rate decreased to 23.3% from 23.8% in the prior year[166]. Loan and Deposit Growth - Total gross loans increased by $284.1 million, or 12.6%, with commercial loans up by 18.5% and residential mortgage loans up by 7.3%[166]. - Total deposits rose by $223.7 million, or 10.7%, driven by increases in brokered deposits and interest-bearing demand deposits[166]. - Total loans increased to $2.5 billion at December 31, 2025, up by $284.1 million or 12.6% compared to year-end 2024[209]. - Total deposits increased to $2.32 billion in 2025 from $2.10 billion in 2024, with time deposits making up 29.3% of the total[241]. Asset Management - Total assets grew by $312.6 million, or 11.8%, to $3.0 billion at December 31, 2025, driven by a $284.1 million increase in gross loans[191]. - Total shareholders' equity rose by $50.0 million compared to December 31, 2024, due to earnings and an increase in common stock[193]. - The Company reported net charge-offs of $1.1 million for 2025, a decrease from $1.5 million in 2024[234]. Interest and Noninterest Expenses - Noninterest expense increased by $3.7 million to $52.4 million, mainly due to higher compensation and benefits[166]. - Total noninterest expense increased to $52.4 million in 2025, up $3.7 million from $48.7 million in 2024, largely due to higher compensation and benefits[188]. Credit Quality - Provision for credit losses for loans increased to $6.7 million in 2025 from $2.4 million in 2024, reflecting loan growth and increased nonaccrual assets[182]. - Nonaccrual loans increased to $29.8 million at December 31, 2025, up $16.7 million from $13.1 million in 2024, with notable increases in commercial and residential mortgage loans[229]. - The allowance for credit losses rose to $32.3 million at December 31, 2025, compared to $26.8 million in 2024, resulting in an allowance to total loans ratio of 1.27%[234]. Funding and Liquidity - Total borrowed funds increased by $35.3 million, or 16.0%, from the prior year[166]. - Borrowed funds and subordinated debentures totaled $266.1 million at December 31, 2025, an increase from $230.8 million in 2024[247]. - The Company believes it has the necessary liquidity to honor all commitments, with total available funding plus cash on hand representing 142.1% of uninsured or uncollateralized deposits[260]. Investment Portfolio - AFS debt securities decreased by $23.0 million, or 24.5%, to $70.9 million at December 31, 2025, primarily due to a release in credit losses[197]. - Equity securities increased by $6.7 million, or 68.2%, to $16.6 million at December 31, 2025, reflecting market conditions and investment strategies[201]. - Approximately 57% of the total investment portfolio had a fixed rate of interest at December 31, 2025[206]. Capital Adequacy - Unity Bank exceeded all capital requirements of federal banking regulators as of December 31, 2025, and was considered well capitalized[264]. - The average deposit size was $8.2 million as of December 31, 2025, with total government deposits at $444.9 million, up from $400.6 million in 2024[260].