Unity Bancorp reported record fourth‑quarter 2025 earnings, with net income of $15.5 million and diluted earnings per share of $1.52, up from $14.4 million and $1.41 in the prior quarter. Full‑year net income reached $58.0 million and diluted EPS rose to $5.67, a 39.8% increase from $41.5 million in 2024. The results reflect a 2.17% return on assets and 18.07% return on equity, underscoring the bank’s efficient use of capital.
Gross loans grew 12.6% to $2.47 billion, driven by a $284 million increase in commercial lending, while total deposits rose 10.7% to $2.30 billion, supported by $168 million growth in customer deposits. The mix shift toward higher‑margin commercial loans and the expansion of the bank’s branch network, including a new location in Madison, NJ, contributed to the loan and deposit momentum.
The quarter included a $15.5 million credit that migrated to nonaccrual status late in the period. Management described the asset as well‑secured and unlikely to result in a material loss, noting that the borrower’s cash flow was impacted by tariff‑related disruptions in its supply chain. The event represents a modest headwind but is expected to have limited impact on earnings.
Net interest margin increased 6 basis points to 4.60% from 4.54% in the prior quarter, driven by a decline in rates on interest‑bearing liabilities while loan rates remained stable. Operating income rose to $23.8 million, up 8.5% from $21.9 million in Q3, reflecting disciplined cost control and the benefit of a higher loan‑to‑deposit ratio. The bank’s ROA and ROE improvements are a result of both margin expansion and efficient capital deployment.
CEO James A. Hughes highlighted the bank’s “record year” and emphasized continued focus on disciplined cost control, organic growth, and relationship‑based banking. He noted that the nonaccrual credit would not materially affect the year‑end results and that the bank’s lending pipeline remains healthy. The outlook remains positive, with management projecting continued demand for commercial loans and a constructive economic backdrop for 2026.
Investors reacted positively to the earnings release, with market participants noting the strong beat on earnings and revenue, the record full‑year performance, and the robust growth in loans and deposits.
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