Executive Summary

Q3 2025 printed solid core performance with diluted EPS of $1.41 and net income of $14.4M; sequential decline versus Q2 reflects the absence of Q2’s one-time Patriot securities gains, while net interest income and NIM continued to improve .
Unity beat Wall Street on both EPS and S&P-defined revenue: EPS $1.41 vs $1.29 consensus (+9.3%), revenue $32.28M vs $31.38M consensus (+2.9%). Loan growth and a 5 bps NIM expansion drove the upside; estimates were limited (3 EPS, 2 revenue contributors).
Balance sheet growth remained healthy (loans +3.6% QoQ; deposits +3.7% QoQ), with uninsured deposits at 21.6% and robust capital (CET1 14.45%, leverage 12.71%) supporting dividends and organic growth .
Asset quality mixed: nonaccrual loans rose to 0.83% of loans (more residential mortgages, well secured), while ACL/loans remained conservative at 1.23% and net charge-offs were de minimis (annualized) .
Strategic updates: Branch footprint expanded to 22 locations (Madison, NJ); dividend lifted to $0.15 (+7%); further resolution of Patriot position (conversion to restricted common) modestly aided results .

What Went Well and What Went Wrong

What Went Well

Net interest income and NIM improved: NII rose to $29.86M (from $28.56M), NIM to 4.54% (+5 bps QoQ), driven by higher asset yields .
Efficiency and profitability remained strong: efficiency ratio improved to 41.47% (from 42.31%); ROAA 2.11%, ROAE 17.41% .
Management emphasized growth and positioning: “We are proud to expand our footprint… As the Federal Reserve’s recent rate cut aims to stimulate economic activity… Unity is well-positioned to strengthen customer relationships and expand lending initiatives” .

What Went Wrong

Sequential EPS/Net income decline: GAAP EPS fell to $1.41 (from $1.61) as Q2 benefited from a $3.5M one-time realized gain and $2.0M reserve release tied to Patriot; Q3 recorded only a small unrealized gain and reserve release .
Noninterest income normalized: dropped to $2.97M (from $5.82M) as the Q2 securities gain rolled off; core fee categories improved but were smaller in magnitude .
Asset quality ticked up on nonaccruals: nonaccrual loans/loans rose to 0.83% (from 0.66%) mainly from residential mortgages (well secured), warranting continued monitoring .

Financial Results

Headline Results vs Prior Periods and Estimates

Metric	Q3 2024	Q2 2025	Q3 2025 Actual	Q3 2025 Consensus
Revenue (S&P-defined, $USD Millions)	$26.58*	$34.55*	$32.28*	$31.38*
Diluted EPS ($)	$1.07	$1.61	$1.41	$1.29*
Net Income ($USD Millions)	$10.91	$16.49	$14.39	—
Net Interest Income ($USD Millions)	$24.86	$28.56	$29.86	—
Noninterest Income ($USD Millions)	$2.80	$5.82	$2.97	—
Net Interest Margin (%)	4.16	4.49	4.54	—
Efficiency Ratio (%)	44.23	42.31	41.47	—

Values marked with * are from S&P Global; see disclaimer in Estimates Context.

Revenue Mix (Operating)

Metric ($USD Millions)	Q1 2025	Q2 2025	Q3 2025
Net Interest Income	$27.25	$28.56	$29.86
Noninterest Income	$2.10	$5.82	$2.97

Operating KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
ROAA (annualized, %)	1.83	2.51	2.11
ROAE (annualized, %)	15.56	21.15	17.41
Efficiency Ratio (%)	42.89	42.31	41.47
Net Interest Margin (%)	4.46	4.49	4.54
Provision for Credit Losses – Loans ($M)	$1.36	$1.73	$1.41

Balance Sheet & Asset Quality

Metric	Q1 2025	Q2 2025	Q3 2025
Total Assets ($USD Millions)	$2,767.9	$2,928.5	$2,876.4
Total Loans ($USD Millions)	$2,345.1	$2,382.6	$2,468.5
Total Deposits ($USD Millions)	$2,175.4	$2,187.4	$2,267.5
Uninsured/Uncollateralized Deposits (%)	20.0	19.5	21.6
ACL/Loans (%)	1.18	1.22	1.23
Nonaccrual Loans/Loans (%)	0.72	0.66	0.83
CET1 Ratio (%)	13.87	13.96	14.45
Leverage Ratio (%)	12.32	12.50	12.71
Book Value/Share ($)	$30.38	$31.88	$33.26

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance	FY/Quarter	Not provided	Not provided	Maintained
Dividend per common share (quarterly)	Q3 2025	$0.14 (Q2 2025)	$0.15	Raised
Strategic growth cadence	Multi-period	—	Targeting mid-to-high single-digit loan & deposit growth tandem (strategy statement)	New qualitative color
Branch footprint	2025	21 branches (planned Madison)	22 branches (Madison opened)	Expanded

Note: Company did not issue quantitative revenue/margin/expense guidance in Q3 materials .

Earnings Call Themes & Trends

Note: We did not locate a publicly available Q3 2025 call transcript; themes below are drawn from press releases across periods .

Topic	Previous Mentions (Q1–Q2 2025)	Current Period (Q3 2025)	Trend
Net interest margin & funding	NIM improved to 4.46% (Q1) and 4.49% (Q2); cost of funds stable ~2.46%	NIM 4.54%; cost of funds 2.46%	Positive, gradual expansion
Patriot National position	Q1: modified AFS; partial conversion to restricted equity ; Q2: sold 4.4M shares, $3.5M realized gain + $2.0M reserve release	Converted remaining debt to ~2.673M restricted shares; modest unrealized gain and reserve release	De-risking largely completed; smaller Q3 P&L impact vs Q2
Deposit growth & uninsured mix	Deposits +3.6% Q1; uninsured ~20.0%	Deposits +3.7% QoQ; uninsured 21.6%	Growth intact; uninsured mix fluctuating within low-20s
Asset quality	Nonaccrual assets 0.65% of assets (Q1); improved to 0.54% (Q2)	Nonaccrual assets 0.71%; rise in residential mortgages (well secured)	Mixed; slight deterioration QoQ
Capital & capital returns	CET1 ~13.9–14.0%; announced/planned dividend increases	CET1 14.45%; dividend raised to $0.15; no Q3 repurchases	Stronger capital; steady shareholder returns
Branch expansion	Madison, NJ planned (Q2)	Madison opened; 22 branches	Executed expansion
Macro rate environment	—	Management cited Fed rate cut; positioned to deepen relationships and lending	Constructive backdrop

Management Commentary

“We are proud to expand our footprint with the opening of our 22nd branch in Madison, NJ… As the Federal Reserve’s recent rate cut aims to stimulate economic activity amid ongoing uncertainty, Unity is well-positioned to strengthen customer relationships and expand lending initiatives, driving continued momentum and long-term value for our shareholders.” (Press release)
Strategy emphasis: growing loans and deposits “in tandem at a mid-to-high single digit rate” to support growth targets for the remainder of 2025 and beyond (company news release) .

Q&A Highlights

We did not find a publicly available Q3 2025 earnings call transcript; no analyst Q&A content to summarize this quarter (press release-driven disclosure) .

Estimates Context

Q3 2025 results vs S&P Global consensus: EPS $1.41 vs $1.29 (+$0.12; +9.3%); S&P-defined revenue $32.28M vs $31.38M (+$0.90M; +2.9%); contributors: 3 EPS, 2 revenue estimates*.
S&P-reported revenue actuals: Q3’24 $26.58M; Q2’25 $34.55M; Q3’25 $32.28M, showing YoY growth and sequential normalization after Q2’s one-time securities gains*.
Values retrieved from S&P Global.

Key Takeaways for Investors

Core beat: Unity outperformed on EPS and S&P revenue, with NIM expansion and healthy loan growth providing durable tailwinds despite normalization of noninterest income . S&P comparisons indicate a clean beat on both lines*.
Sequential EPS decline was expected after Q2’s one-time securities gains tied to Patriot; Q3 one-time impacts were much smaller, clarifying run-rate earnings power .
Credit watch: the uptick in nonaccruals (0.83% of loans) merits monitoring, though exposures are primarily well-secured residential mortgages and reserves remain solid at 1.23% of loans .
Balance sheet strength supports flexibility: CET1 14.45%, leverage 12.71%, and ample liquidity (cash + contingent funding at 153.5% of uninsured deposits) underpin capital returns and growth .
Shareholder returns remain constructive: quarterly dividend lifted to $0.15 (+7%) with potential for further capital deployment given earnings momentum and capital ratios .
Tactical lens: near-term stock drivers include sustained NIM resilience, loan growth cadence, and stabilization of nonaccruals; any incremental monetization/clarity on Patriot holdings would reduce residual noise .
Medium-term thesis: a community bank with above-peer NIM, improving efficiency, and prudent credit, positioned to compound book value via disciplined organic growth and consistent returns .

Sourcing notes:

Q3 2025 8-K and Exhibit 99.1, including full financial tables and commentary -.
Q2 2025 8-K and Exhibit 99.1 for sequential comps and one-time items -.
Q1 2025 8-K and Exhibit 99.1 for trend context -.
Dividend and strategy news references .

UNITY BANCORP INC /NJ/ (UNTY)·Q3 2025 Earnings Summary