UNITY BANCORP INC /NJ/
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
UNTY$57.22-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000920427-25-000042
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000920427-25-000060
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 112 current paragraphs.
63 unchanged; 38 reworded; 8 added; 4 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 43 previous and 54 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Current quarter highlights include:
Current report
During the six months ended June 30, 2025, tax-equivalent interest income was $83.4 million, an increase of $7.5 million or 9.9 percent when compared to the same period in the prior year. This increase was mainly driven by the increase in the rates and volume on loans, partially offset by lower rates on securities, FHLB stock and interest-bearing deposits.
Current report
Total interest expense was $27.6 million for the six months ended June 30, 2025, a decrease of $1.1 million or 3.7 percent compared to the same period in 2024. This decrease reflects decreased rates on interest-bearing deposits along with a decreased reliance on borrowed funds.
Current report
There was a $2.0 million release in provision for credit losses on securities for the three and six months ended June 30, 2025, compared to a $0.6 million provision for the same periods in 2024.
Current report
During the quarter ended June 30, 2025, with respect to the debt securities held by Unity issued by Patriot
Current report
National Bancorp, Inc., Unity elected to convert a portion of the principal and past due interest into shares of
Current report
Patriot National Bancorp, Inc. common stock, bringing Unity’s total holdings to 4.4 million shares. Subsequently,
Current report
Unity sold all 4.4 million shares, resulting in $6.5 million in net proceeds and a realized gain of $3.5 million. Unity was also able to release $2.0 million from reserve for credit losses on securities. As of June 30, 2025, Unity holds $2.0 million in par of the modified senior debt position in the AFS portfolio with a carrying value of $1.0 million.
Removed paragraphs (4)
Previous report
First quarter highlights include:
Previous report
There was no provision for credit losses on AFS debt securities for the quarter ended March 31, 2025, as well as in the same period in 2024.
Previous report
There was no provision for credit losses on AFS debt securities for the quarter ended March 31, 2025, as compared to a provision of $0.9 million for the quarter ended December 31, 2024. During the quarter ended March 31, 2025, Unity entered into a modification agreement with the issuer of the troubled AFS debt security. Prior to the modification, Unity held the $5.0 million par of the original senior debt security. As a component of the modification agreement, $2.1 million par of senior debt was converted to common equity of the issuer. The common equity was held as restricted equity as of March 31, 2025. The remaining $2.9 million senior debt also had modified terms, including an extension of the maturity date, an increase in the bond’s coupon, agreement to paid-in-kind interest, early call-rights by the issuer and certain convertible rights. The net carrying value of the aggregate position was $2.0 million as of March 31, 2025.
Previous report
During the quarter ended March 31, 2025, Unity entered into a modification agreement with the issuer of the troubled AFS debt security. Prior to the modification, Unity held the $5.0 million par of the original senior debt security. As a component of the modification agreement, $2.1 million par of senior debt was converted to common equity of the issuer. The common equity was held as restricted equity as of March 31, 2025. The remaining $2.9 million senior debt also had modified terms, including an extension of the maturity date, an increase in the bond’s coupon, agreement to paid-in-kind interest, early call-rights by the issuer, and certain convertible rights. The net carrying value of the aggregate position was $2.0 million as of March 31, 2025.
Reworded paragraphs (38)
Previous wording
Net income totaled $11.6 million, or $1.13 per diluted share for the three months ended March 31, 2025, compared to $9.6 million, or $0.93 per diluted share for the same period in 2024. Return on average assets and return on average common equity for the quarter were 1.83 percent and 15.56 percent, respectively, compared to 1.58 percent and 14.49 percent for the same period in 2024.
Current wording
Net income totaled $16.5 million, or $1.61 per diluted share for the three months ended June 30, 2025, compared to $9.5 million, or $0.93 per diluted share for the same period in 2024. Return on average assets and return on average common equity for the quarter were 2.51 percent and 21.15 percent, respectively, compared to 1.56 percent and 14.07 percent for the same period in 2024. The increase in net income was partially attributable to pre-tax one-time gains of $3.5 million realized on the sale of securities and $2.0 million release for credit losses on securities, each related to securities of Patriot National Bancorp, Inc. held by the Company. Excluding this one-time event, on a non-GAAP basis, net income totaled $12.2 million, or $1.20 per diluted share for the three months ended June 30, 2025, representing return on average assets and return on average common equity of 1.86% and 15.70%, respectively.
Previous wording
During the three months ended March 31, 2025, tax-equivalent net interest income amounted to $27.3 million, an increase of $3.4 million or 14.3 percent when compared to the same period in 2024. The net interest margin increased 37 basis points to 4.46 percent for the three months ended March 31, 2025, compared to 4.09 percent for the same period in 2024.
Current wording
During the three months ended June 30, 2025, tax-equivalent net interest income amounted to $28.6 million, an increase of $5.1 million or 21.9 percent when compared to the same period in 2024. The net interest margin increased 48 basis points to 4.49 percent for the three months ended June 30, 2025, compared to 4.01 percent for the same period in 2024.
Previous wording
During the three months ended March 31, 2025, tax-equivalent interest income was $40.8 million, an increase of $2.9 million or 7.5 percent when compared to the same period in 2024. This increase was mainly driven by increases in the yield of loans and the balance of average loans.
Current wording
During the three months ended June 30, 2025, tax-equivalent interest income was $42.6 million, an increase of $4.6 million or 12.1 percent when compared to the same period in 2024. This increase was mainly driven by increases in the yield of loans and the balance of average loans.
Previous wording
Total interest expense was $13.6 million for the three months ended March 31, 2025, a decrease of $0.5 million or 3.9 percent compared to the same period in 2024. This decrease was driven by the decrease in rate paid on and the average balance of borrowed funds and subordinated debentrues, which was partially offset by an increase in the volume of time deposits.
Current wording
Total interest expense was $14.0 million for the three months ended June 30, 2025, a decrease of $0.5 million or 3.6 percent compared to the same period in 2024. This decrease was driven by the decrease in rate paid on interest bearing deposits and borrowed funds and subordinated debentures, which was partially offset by an increase in the volume of time deposits.
Previous wording
The provision for credit losses for loans was $1.4 million during the three months ended March 31, 2025, compared to $0.6 million for the same period in 2024. The increase was primarily driven by increases in the general reserve calculation due to loan growth.
Current wording
The provision for credit losses for loans was $1.7 and $3.1 million during the three and six months ended June 30, 2025, compared to $0.3 million and $0.9 for the same periods in 2024. The increase was primarily driven by increases in the general reserve calculation due to loan growth.
Previous wording
The provision for credit losses for off-balance sheet exposures totaled a release of $41 thousand for the three months ended March 31, 2025, compared to a $2 thousand provision for the same period in 2024.
Current wording
The provision for credit losses for off-balance sheet exposures totaled $0.1 million for the three and six months ended June 30, 2025, compared to $13 thousand and $15 thousand for the same periods in 2024.
Previous wording
For the quarter ended March 31, 2025, the Company reported income tax expense of $3.8 million for an effective tax rate of 24.8 percent, compared to income tax expense of $3.2 million and an effective tax rate of 25.0 percent for the prior year’s quarter.
Current wording
For the quarter ended June 30, 2025, the Company reported income tax expense of $5.0 million for an effective tax rate of 23.4 percent, compared to income tax expense of $3.1 million and an effective tax rate of 24.7 percent for the prior year’s quarter. For the six months ended June 30, 2025, the Company reported income tax expense of $8.9 million for an effective tax rate of 24.0 percent, compared to an income tax expense of $6.3 million and an effective tax rate of 24.9 percent for the six months ended June 30, 2024.
Previous wording
Total assets increased $113.9 million or 4.3 percent, to $2.8 billion at March 31, 2025, when compared toyear end 2024. This increase was primarily due to increases of $84.5 million in gross loans, $31.2 millions in cash and cash equivalents and $1.1 million in FHLB stock, partially offset by a decrease of $2.9 million in securities.
Current wording
Total assets increased $274.5 million or 10.3 percent, to $2.9 billion at June 30, 2025, when compared to year end 2024. This increase was primarily due to increases of $121.9 million in gross loans, $113.3 million in cash and cash equivalents, $39.4 million in prepaid expenses and other assets and $7.2 million in FHLB stock, partially offset by a decrease of $5.7 million in securities.
Previous wording
Total shareholders’ equity increased $10.6 million, when compared to year end 2024, primarily due to earnings and common stock issuance, partially offset by dividends paid on common stock during the three months ended March 31, 2025.
Current wording
Total shareholders’ equity increased $24.3 million, when compared to year end 2024, primarily due to earnings and an increase in common stock, partially offset by dividends paid on common stock and the repurchase of shares during the six months ended June 30, 2025.
Previous wording
AFS debt securities totaled $90.4 million at March 31, 2025, a decrease of $3.5 million or 3.7 percent, compared to $93.9 million at December 31, 2024. This net decrease was the result of:
Current wording
AFS debt securities totaled $92.5 million at June 30, 2025, a decrease of $1.4 million or 1.5 percent, compared to $93.9 million at December 31, 2024. This net decrease was the result of:
Previous wording
The weighted average life of AFS debt securities, adjusted for prepayments, amounted to 4.8 years and 4.9 years at March 31, 2025 and December 31, 2024, respectively. The effective duration of AFS debt securities amounted to 1.5 and 1.4 years at March 31, 2025 and December 31, 2024.
Current wording
The weighted average life of AFS debt securities, adjusted for prepayments, amounted to 4.6 years and 4.9 years at June 30, 2025 and December 31, 2024, respectively. The effective duration of AFS debt securities amounted to 1.7 and 1.4 years at June 30, 2025 and December 31, 2024, respectively.
Previous wording
HTM debt securities were $40.9 million at March 31, 2025, a decrease of $0.4 million or 0.8 percent, compared to $41.3 million at December 31, 2024. The decrease was due to:
Current wording
HTM debt securities were $36.4 million at June 30, 2025, a decrease of $4.9 million or 11.8 percent, compared to $41.3 million at December 31, 2024. The decrease was due to:
Previous wording
The weighted average life of HTM securities, adjusted for prepayments, amounted to 14.0 years and 14.3 years at March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025 and December 31, 2024, the fair value of HTM securities was $34.5 million and $33.8 million, respectively. The effective duration of HTM securities amounted to 9.2 years and 9.0 years at March 31, 2025 and December 31, 2024, respectively.
Current wording
The weighted average life of HTM securities, adjusted for prepayments, amounted to 14.7 years and 14.3 years at June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, the fair value of HTM securities was $29.7 million and $33.8 million, respectively. The effective duration of HTM securities amounted to 10.9 years and 9.0 years at June 30, 2025 and December 31, 2024, respectively.
Previous wording
Equity securities totaled $10.7 million at March 31, 2025, an increase of $0.8 million or 8.7 percent, compared to $9.9 million at December 31, 2024. This net increase was the result of:
Current wording
Equity securities totaled $10.4 million at June 30, 2025, an increase of $0.6 million or 5.8 percent, compared to $9.9 million at December 31, 2024. This net increase was the result of:
Previous wording
Securities with a carrying value of $14.6 million and $11.5 million at March 31, 2025 and December 31, 2024, respectively, were held at the FHLB or FRB and were pledged for borrowing purposes; however, all securities were unencumbered by borrowings at March 31, 2025 and December 31, 2024.
Current wording
Securities with a carrying value of $60.6 million and $11.5 million at June 30, 2025 and December 31, 2024, respectively, were held at the FHLB or FRB and were pledged for borrowing purposes; however, there were no securities borrowered against at June 30, 2025 and December 31, 2024.
Previous wording
Approximately 65 percent of the total debt security investment portfolio had a fixed rate of interest at March 31, 2025.
Current wording
Approximately 56 percent of the total debt security investment portfolio had a fixed rate of interest at June 30, 2025.
Previous wording
Total loans increased $84.5 million or 3.7 percent to $2.3 billion at March 31, 2025, compared to year end 2024. Commercial, residential mortgage, consumer and loans held for sale increased by $75.2 million, $23.3 million, $1.9 million and $1.8 million, respectively. This was offset by decreases of $17.5 million, $0.2 million and $0.1 million in residential construction, SBA held for investment and SBA PPP, respectively.
Current wording
Total loans increased $121.9 million or 5.4 percent to $2.4 billion at June 30, 2025, compared to year end 2024. Commercial, residential mortgage, consumer and loans held for sale increased by $99.5 million, $35.6 million, $5.9 million and $1.2 million, respectively. This was offset by decreases of $20.0 million and $0.3 million in residential construction and SBA held for investment, respectively.
Previous wording
Average loans increased $128.6 million or 5.9 percent to $2.3 billion the three months ended March 31, 2025 from $2.2 billion for the same period in 2024. The increase in average loans was due to increases in average commercial, residential mortgages and consumer loans, partially offset by decreases in average residential construction, SBA and SBA PPP loans. The yield on the overall loan portfolio increased 24 basis points to 6.70 percent for the three months ended March 31, 2025 when compared to the same period in the prior year.
Current wording
Average loans increased $160.9 million or 7.4 percent to $2.3 billion the six months ended June 30, 2025 from $2.2 billion for the same period in 2024. The increase in average loans was due to increases in average commercial, residential mortgages and consumer loans, partially offset by decreases in average residential construction and SBA loans. The yield on the overall loan portfolio increased 25 basis points to 6.73 percent for the six months ended June 30, 2025 when compared to the same period in the prior year.
Previous wording
SBA loans held for sale, carried at the lower of cost or market, amounted to $11.1 million at March 31, 2025, a decrease of $1.1 million from $12.2 million at December 31, 2024. SBA 7(a) loans held for investment amounted to $36.7 million at March 31, 2025, a decrease of $0.2 million from $36.9 million at December 31, 2024. The yield on SBA loans, which are generally floating and adjust quarterly to the Prime rate, was 7.70 percent for the three months ended March 31, 2025 compared to 9.17 percent for the same period in the prior year. The Company sold $1.2 million of SBA loans during the three months ended March 31, 2025.
Current wording
SBA loans held for sale, carried at the lower of cost or market, amounted to $7.8 million at June 30, 2025, a decrease of $4.4 million from $12.2 million at December 31, 2024. SBA 7(a) loans held for investment amounted to $38.1 million at June 30, 2025, a decrease of $0.2 million from $38.3 million at December 31, 2024. The yield on SBA loans, which are generally floating and adjust quarterly to the Prime rate, was 7.25 percent for the six months ended June 30, 2025 compared to 8.86 percent for the same period in the prior year. The Company sold $2.7 million of SBA loans during the three months ended June 30, 2025.
Previous wording
The guarantee rates on SBA 7(a) loans range from 50 percent to 90 percent, with the majority of the portfolio having a guarantee rate of 75 percent at origination. The guarantee rates are determined by the SBA and can vary from year to year depending on government funding and the goals of the SBA program. Approximately $70.6 million and $72.6 million in SBA loans were sold but serviced by the Bank at March 31, 2025 and December 31, 2024, respectively, and are not included on the Company’s Balance Sheet. There is no relationship or correlation between the guarantee percentages and the level of charge-offs and recoveries on the Company’s SBA 7(a) loans. Charge-offs taken on SBA 7(a) loans effect the unguaranteed portion of the loan. SBA loans are underwritten to the same credit standards irrespective of the guarantee percentage.
Current wording
The guarantee rates on SBA 7(a) loans range from 50 percent to 90 percent, with the majority of the portfolio having a guarantee rate of 75 percent at origination. The guarantee rates are determined by the SBA and can vary from year to year depending on government funding and the goals of the SBA program. Approximately $53.9 million and $72.6 million in SBA loans were sold but serviced by the Bank at June 30, 2025 and December 31, 2024, respectively, and are not included on the Company’s Balance Sheet. There is no relationship or correlation between the guarantee percentages and the level of charge-offs and recoveries on the Company’s SBA 7(a) loans. Charge-offs taken on SBA 7(a) loans effect the unguaranteed portion of the loan. SBA loans are underwritten to the same credit standards irrespective of the guarantee percentage.
Previous wording
Commercial loans are generally made in the Company’s marketplace for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. These loans amounted to $1.5 billion at March 31, 2025, an increase of $75.2 million from year end 2024. The yield on commercial loans was 6.71 percent for the three months ended March 31, 2025, compared to 6.43 percent for the same period in 2024. In most cases, these loans are secured by underlying real estate collateral. SBA 504 program loans, which consist of real estate backed commercial mortgages where the Company has the first mortgage and the SBA has the second mortgage on the property, are included in the Commercial loan portfolio. At March 31, 2025, Commercial Mortgage – Owner Occupied, Commercial Mortgage – Nonowner Occupied and Commercial Construction represent 26.0 percent, 19.7 percent and 5.5 percent of the Company’s loan portfolio, respectively. The Company will generally not exceed a
Current wording
Commercial loans are generally made in the Company’s marketplace for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. These loans amounted to $1.5 billion at June 30, 2025, an increase of $99.5 million from year end 2024. The yield on commercial loans was 6.75 percent for the six months ended June 30, 2025, compared to 6.43 percent for the same period in 2024. In most cases, these loans are secured by underlying real estate collateral. SBA 504 program loans, which consist of real estate backed commercial mortgages where the Company has the first mortgage and the SBA has the second mortgage on the property, are included in the Commercial loan portfolio. At June 30, 2025, Commercial Mortgage – Owner Occupied, Commercial Mortgage – Nonowner Occupied and Commercial Construction represent 26.5 percent, 19.9 percent and 4.3 percent of the Company’s loan portfolio, respectively. The Company will generally not exceed a
Previous wording
Residential mortgage loans consist of loans secured by 1 to 4 family residential properties. These loans amounted to $654.3 million at March 31, 2025, an increase of $23.3 million from year end 2024. Sales of conforming mortgage loans totaled $7.5 million for the three months ended March 31, 2025, compared to sales of $12.2 million in the prior year period. The yield on residential mortgages was 6.22 percent for the three months ended March 31, 2025, compared to 5.90 percent for the same period in 2024. Residential mortgage loans maintained in portfolio are generally to individuals that do not qualify for conventional financing. In extending credit to this category of borrowers, the Bank considers other mitigating factors such as credit history, equity and liquid reserves of the borrower. As a result, the residential mortgage loan portfolio of the Bank includes adjustable rate mortgages with rates that exceed the rates on conventional fixed-rate mortgage loan products but which are not considered high priced mortgages.
Current wording
Residential mortgage loans consist of loans secured by 1 to 4 family residential properties. These loans amounted to $666.6 million at June 30, 2025, an increase of $35.6 million from year end 2024. Sales of conforming mortgage loans totaled $23.6 million for the six months ended June 30, 2025, compared to sales of $24.7 million in the prior year period. The yield on residential mortgages was 6.27 percent for the six months ended June 30, 2025, compared to 5.93 percent for the same period in 2024. Residential mortgage loans maintained in portfolio are generally to individuals that do not qualify for conventional financing. In extending credit to this category of borrowers, the Bank considers other mitigating factors such as credit history, equity and liquid reserves of the borrower. As a result, the residential mortgage loan portfolio of the Bank includes adjustable rate mortgages with rates that exceed the rates on conventional fixed-rate mortgage loan products but which are not considered high priced mortgages.
Previous wording
Consumer loans consist of home equity loans and loans for the purpose of financing the purchase of consumer goods, home improvements and other personal needs, and are generally secured by 1 to 4 family residences. These loans amounted to $78.6 million at March 31, 2025, an increase of $1.9 million from year end 2024. The yield on consumer loans was 7.16 percent for the three months ended March 31, 2025, compared to 7.90 percent for the same period in 2024.
Current wording
Consumer loans consist of home equity loans and loans for the purpose of financing the purchase of consumer goods, home improvements and other personal needs, and are generally secured by 1 to 4 family residences. These loans amounted to $82.6 million at June 30, 2025, an increase of $5.9 million from year end 2024. The yield on consumer loans was 7.17 percent for the six months ended June 30, 2025, compared to 7.88 percent for the same period in 2024.
Previous wording
Residential construction loans consist of short-term loans for the purpose of funding the costs of building a home. These loans amounted to $73.4 million at March 31, 2025, a decrease of $17.5 million from year end 2024. The yield on residential construction loans was 9.46 percent for the three months ended March 31, 2025, compared to 7.86 percent for the same period in 2024.
Current wording
Residential construction loans consist of short-term loans for the purpose of funding the costs of building a home. These loans amounted to $70.9 million at June 30, 2025, a decrease of $20.0 million from year end 2024. The yield on residential construction loans was 9.52 percent for the six months ended June 30, 2025, compared to 8.22 percent for the same period in 2024.
Previous wording
Nonaccrual loans were $16.8 million at March 31, 2025, a $3.7 million increase from $13.1 million at December 31, 2024 and a $0.1 million decrease from $16.9 million at March 31, 2024, respectively. Since year end 2024, nonaccrual loans in the commercial and residential mortgage segments increased, offset by a decrease in nonaccrual loans in the SBA and residential construction segments. In addition, there was $1.1 million in loans past due 90 days or more and still accruing interest at March 31, 2025, compared to $0.8 million at December 31, 2024 and $0.1 million at March 31, 2024.
Current wording
Nonaccrual loans were $15.8 million at June 30, 2025, a $2.7 million increase from $13.1 million at December 31, 2024 and a $3.7 million increase from $12.1 million at June 30, 2024, respectively. Since year end 2024, nonaccrual loans in the residential mortgage, SBA and commercial segments increased, offset by a decrease in nonaccrual loans in the residential construction segment. In addition, there was $2.9 million in loans past due 90 days or more and still accruing interest at June 30, 2025, compared to $0.8 million at December 31, 2024 and $0.4 million at June 30, 2024.
Previous wording
The following table set forth an aging analysis of past due and nonaccrual loans as of March 31, 2025 based off of geographical location:
Current wording
The following table set forth an analysis of nonaccrual loans as of June 30, 2025 based off of geographical location:
Previous wording
The Company also monitors potential problem loans. Potential problem loans are those loans where information about possible credit problems of borrowers causes Management to have doubts as to the ability of such borrowers to comply with loan repayment terms. These loans are categorized by their non-passing risk rating and performing loan status.
Current wording
The Company also monitors potential problem loans. Potential problem loans are those loans where information about possible credit problems of borrowers causes Management to have doubts as to the ability of such borrowers to comply with loan repayment terms. These loans are categorized by their non-passing risk rating and performing loan status. Potential problem loans totaled $12.1 million at June 30, 2025, a decrease of $2.5 million from $14.6 million at December 31, 2024.
Previous wording
The allowance for credit losses totaled $27.7 million at March 31, 2025, compared to $26.8 million at December 31, 2024 and $26.1 million at March 31, 2024, with a resulting allowance to total loan ratio of 1.18 percent at both March 31, 2025 and December 31,2024 and 1.20 percent at March 31, 2024. Net charge-offs amounted to $0.5 million for the three months ended March 31, 2025, compared to net charge-offs of $0.4 million for the same period in 2024.
Current wording
The allowance for credit losses on loans totaled $29.0 million at June 30, 2025, compared to $26.8 million at December 31, 2024 and $26.1 million at June 30, 2024, with a resulting allowance to total loan ratio of 1.22 percent at June 30,2025, compared to 1.18 percent at December 31,2024 and 1.20 percent at June 30, 2024. Net charge-offs amounted to $0.9 million for the six months ended June 30, 2025, compared to net charge-offs of $0.7 million for the same period in 2024.
Previous wording
The Company maintains a reserve for unfunded loan commitments at a level that Management believes is adequate to absorb estimated expected losses. Adjustments to the reserve are made through provision for credit losses and applied to the reserve which is classified in Other liabilities. At March 31, 2025 and December 31, 2024, the commitment reserve totaled $0.6 million.
Current wording
The Company maintains a reserve for unfunded loan commitments at a level that Management believes is adequate to absorb estimated expected losses. Adjustments to the reserve are made through provision for credit losses and applied to the reserve which is classified in Other liabilities. At June 30, 2025 the commitment reserve totaled $0.7 million and $0.6 million at December 31, 2024.
Previous wording
Total deposits increased $75.1 million to $2.2 billion at March 31, 2025 from year end 2024. This increase was due to increases of $47.1 million in time deposits, $29.7 million in interest-bearing demand deposits, $13.6 million in noninterest-bearing demand deposits and $0.3 million in savings deposits, partially offset by a decrease of $15.6 million in brokered deposits. The change in the composition of the portfolio from December 31, 2024 reflects a 7.5 percent increase in time deposits, 9.2 percent increase in interest-bearing demand deposits, 3.1 percent increase in noninterest-bearing demand deposits and a 0.1 percent increase in savings deposits, partially offset by a 7.2 percent decrease in brokered deposits.
Current wording
Total deposits increased $87.1 million to $2.2 billion at June 30, 2025 from year end 2024. This increase was due to increases of $28.6 million in time deposits, $23.8 million in noninterest-bearing demand deposits, $20.1 million in brokered deposits, $14.5 million in savings deposits and $0.1 million in interest-bearing demand deposits. The change in the composition of the portfolio from December 31, 2024 reflects a 9.2 percent increase in brokered deposits, a 5.4 percent increase in noninterest-bearing demand deposits, a 4.6 percent increase in time deposits and a 3.0 percent increase in savings deposits.
Previous wording
As of March 31, 2025, 20.0 percent of total deposits were uninsured or uncollateralized. The Company’s deposit composition as of March 31, 2025, consisted of 20.9 percent in noninterest-bearing demand deposits, 17.4 percent in interest-bearing demand deposits, 22.7 percent in savings deposits and 39.0 percent in time deposits.
Current wording
As of June 30, 2025, 19.5 percent of total deposits were uninsured or uncollateralized. The Company’s deposit composition as of June 30, 2025, consisted of 21.2 percent in noninterest-bearing demand deposits, 16.2 percent in interest-bearing demand deposits, 23.2 percent in savings deposits and 39.4 percent in time deposits.
Previous wording
Borrowed funds and subordinated debentures totaled $253.6 million and $230.8 million at March 31, 2025 and December 31, 2024, respectively, and are broken down in the following table:
Current wording
Borrowed funds and subordinated debentures totaled $387.4 million and $230.8 million at June 30, 2025 and December 31, 2024, respectively, and are broken down in the following table:
Previous wording
In March 2025, the FHLB issued a $220.0 million municipal deposit letter of credit in the name of Unity Bank naming the New Jersey Department of Banking and Insurance as beneficiary, to secure municipal deposits as required under New Jersey law. The FHLB issued an additional $28.0 million municipal deposit letter of credit in the name of Unity Bank naming certain townships in Pennsylvania as beneficiary, to secure municipal deposits as required under Pennsylvania law.
Current wording
In June 2025, the FHLB issued a $205.0 million municipal deposit letter of credit in the name of Unity Bank naming the New Jersey Department of Banking and Insurance as beneficiary, to secure municipal deposits as required under New Jersey law. The FHLB issued an additional $28.0 million municipal deposit letter of credit in the name of Unity Bank naming certain townships in Pennsylvania as beneficiary, to secure municipal deposits as required under Pennsylvania law.
Previous wording
At March 31, 2025, the Company had $276.9 million of additional credit available at the FHLB, $225.3 million of additional credit available at the FRB and $20.0 million of additional credit available from other sources. Pledging additional collateral in the form of 1 to 4 family residential mortgages, commercial loans and investment securities can increase the lines with the FHLB and FRB.
Current wording
At June 30, 2025, the Company had $212.0 million of additional credit available at the FHLB, $225.8 million of additional credit available at the FRB and $20.0 million of additional credit available from other sources. Pledging additional collateral in the form of 1 to 4 family residential mortgages, commercial loans and investment securities can increase the lines with the FHLB and FRB.
Previous wording
For the three months ended March 31, 2025, average FHLB Borrowings were $108.8 million with a weighted average cost of 3.64%.
Current wording
For the six months ended June 30, 2025, average FHLB Borrowings were $108.3 million with a weighted average cost of 3.54%.
Previous wording
On July 24, 2006, Unity (NJ) Statutory Trust II, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., issued $10.0 million of floating rate capital trust pass through securities to investors due on July 24, 2036. The subordinated debentures are redeemable in whole or part. The floating interest rate on the subordinated debentures is the daily compounded SOFR rate with a 0.262 percent spread. The floating interest rate was 6.155 percent at March 31, 2025 and 6.189 percent at December 31, 2024.
Current wording
On July 24, 2006, Unity (NJ) Statutory Trust II, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., issued $10.0 million of floating rate capital trust pass through securities to investors due on July 24, 2036. The subordinated debentures are redeemable in whole or part. The floating interest rate on the subordinated debentures is the daily compounded SOFR rate with a 0.262 percent spread. The floating interest rate was 6.175 percent at June 30, 2025 and 6.189 percent at December 31, 2024.
Previous wording
The principal sources of funds at the Bank are deposits, scheduled amortization and prepayments of investment and loan principal, sales and maturities of investment securities, additional borrowings and funds provided by operations. While scheduled loan payments and maturing investments are relatively predictable sources of funds, deposit inflows and outflows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Consolidated Statement of Cash Flows provides detail on the Company’s sources and uses of cash, as well as an indication of the Company’s ability to maintain an adequate level of liquidity. At March 31, 2025, the balance of cash and cash equivalents was $211.6 million, an increase of $31.2 million from December 31, 2024. A discussion of on- and off-balance sheet liquidity follows.
Current wording
The principal sources of funds at the Bank are deposits, scheduled amortization and prepayments of investment and loan principal, sales and maturities of investment securities, additional borrowings and funds provided by operations. While scheduled loan payments and maturing investments are relatively predictable sources of funds, deposit inflows and outflows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Consolidated Statement of Cash Flows provides detail on the Company’s sources and uses of cash, as well as an indication of the Company’s ability to maintain an adequate level of liquidity. At June 30, 2025, the balance of cash and cash equivalents was $293.7 million, an increase of $113.3 million from December 31, 2024. A discussion of on- and off-balance sheet liquidity follows.
Previous wording
On August 1, 2024, the Board authorized a repurchase plan permitting the repurchase of up to 500 thousand shares, or approximately 5.0% of the Company’s outstanding common stock, in addition to the previously approved repurchase plan authorizing the repurchase of up to 500 thousand shares of common stock. No shares were repurchased during the quarter ended March 31, 2025, leaving 685 thousand shares available for repurchase. For the quarter ended March 31, 2024, a total of 150 thousand shares were repurchased at an average price of $27.14. The timing and amount of additional purchases, if any, will depend upon several factors including the Company’s capital needs, the Company’s liquidity position, the performance of its loan portfolio, the need for additional provisions for credit losses and the market price of the Company’s stock.
Current wording
On August 1, 2024, the Board authorized a repurchase plan permitting the repurchase of up to 500 thousand shares, or approximately 5.0% of the Company’s outstanding common stock, in addition to the previously approved repurchase plan authorizing the repurchase of up to 500 thousand shares of common stock. For the quarter ended June 30, 2025 50 thousand shares were repurchased at a weighted average price of $38.78, leaving 635 thousand shares available for repurchase. For the quarter ended June 30, 2024, a total of 69 thousand shares were repurchased at an average price of $26.77. The timing and amount of additional purchases, if any, will depend upon several factors including the Company’s capital needs, the Company’s liquidity position, the performance of its loan portfolio, the need for additional provisions for credit losses and the market price of the Company’s stock.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The Company’s quarterly non-GAAP reconciliation may be found in the table below.
Current report — wording carried from elsewhere
(A) Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis, assuming a federal tax rate of 21 percent.
Current report — wording carried from elsewhere
(B) The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Potential problem loans totaled $15.3 million at March 31, 2025, an increase of $0.7 million from $14.6 million at December 31, 2024.