UNTY · Unity Bancorp, Inc.

Unity Bancorp's Q1 2026 results showed resilient earnings with net income of $14.3 million despite a sequential decline from Q4 2025's $15.5 million, primarily due to lower net interest income from day count effects and reduced noninterest income after excluding a prior quarter's $1.5 million unrealized gain on Patriot. Net interest margin contracted slightly to 4.53% but remained strong, supported by the bank's asset-sensitive positioning. Provision expense halved to $1.0 million, reflecting loan growth offset by stable credit quality, with allowance at 1.28% of loans. Noninterest expense rose on higher compensation, though partially offset by lower other costs excluding prior one-time reversals. Balance sheet expansion continued with gross loans up 2.2% to $2.60 billion, driven by commercial and construction categories, matching deposit growth of 2.4% to $2.38 billion where uninsured deposits were 21.6%. Nonaccrual assets ticked up to $32.1 million (1.06% of assets), largely from one large Q4 migration. Capital strength improved across all ratios, with CET1 at 14.50% and leverage at 12.93%, bolstered by earnings retention. Liquidity was robust with $229.2 million cash and $410.7 million available funding covering uninsured deposits 124.4x. Capital returns included a 7% dividend hike to $0.16/share and modest 6,616 share repurchases. Named a Piper Sandler top pick, Unity demonstrated disciplined growth amid stable credit metrics.