Unity Bancorp Reports 32.3% Increase in Net Income for Third Quarter 2025

Unity Bancorp, Inc. reported a significant increase in financial performance for the third quarter of 2025, with net income reaching $14.4 million, or $1.41 per diluted share, compared to $10.9 million, or $1.07 per diluted share, in the same period last year. This represents a 32.3% increase in net income year-over-year. The return on average assets and return on average common equity improved to 2.11% and 17.41%, respectively, up from 1.76% and 15.55% in the prior year. The company attributed this growth primarily to a 20.1% increase in net interest income, driven by higher yields and volumes on loans, alongside a decrease in the cost of deposits.

Total assets for Unity Bancorp increased by $222.3 million, or 8.4%, to $2.9 billion as of September 30, 2025, compared to the end of 2024. This growth was largely fueled by a $207.9 million increase in gross loans, which reached $2.5 billion. The loan portfolio saw notable increases in commercial loans, residential mortgages, and consumer loans, although there were slight declines in residential construction and SBA loans. The company’s total deposits also rose by $167.2 million to $2.3 billion, reflecting a strategic focus on expanding customer relationships and deposit products.

In terms of operational developments, Unity Bancorp converted its remaining debt security issued by Patriot National Bancorp into restricted common stock during the quarter, holding approximately 2.673 million shares valued at $0.75 each. This conversion led to a release of $0.8 million from the reserve for credit losses on securities and a one-time unrealized gain of $0.2 million. Additionally, noninterest income increased by 5.9% year-over-year, primarily due to higher gains on the sale of SBA loans, although this was partially offset by a decline in service and loan fee income.

The company’s allowance for credit losses on loans totaled $30.2 million at the end of the third quarter, up from $26.8 million at the end of 2024, reflecting a proactive approach to managing credit risk amid loan growth. Nonaccrual loans increased to $20.5 million, up from $13.1 million at the end of 2024, indicating a need for continued vigilance in credit quality management. The company maintains a reserve for unfunded loan commitments of $0.6 million, which it believes is adequate to absorb estimated losses.

Looking ahead, Unity Bancorp remains optimistic about its growth trajectory, supported by a strong capital position and a commitment to enhancing its loan and deposit offerings. The company is well-capitalized, exceeding all regulatory capital requirements, which positions it favorably to navigate potential market challenges and capitalize on future opportunities.