Executive Summary

Q4 2024 delivered record quarterly earnings: net income $11.5M and diluted EPS $1.13, up 5.5% and 5.6% QoQ; ROA 1.83% and ROE 15.77% on expanded NIM to 4.37% (+21 bps QoQ) as funding costs fell and asset yields ticked higher .
Core balance sheet momentum: loans +$43.3M QoQ (+1.95%), deposits +$54.2M (+2.65% QoQ), noninterest-bearing demand +$16.8M (+3.97% QoQ); loan-to-deposit ratio improved to 107.6% (vs. 108.4% in Q3) .
Operating noise: noninterest income fell $0.9M QoQ on lower securities gains and fee income; expenses rose $0.6M QoQ due to a one-time $0.9M SERP valuation adjustment; AFS securities provision of $0.9M tied to a legacy corporate debt position .
Effective tax rate declined to 20.6% (vs. 25.1% in Q3) via a tax strategy; management “anticipates” FY tax rate between 2024 (23.8%) and 2023 (25.1%) levels prospectively—supportive for EPS durability .
Stock context: period-end market price per share rose to $43.61 (+28% QoQ, +47% YoY), and subsequent dividend raised to $0.14 (+8%) for Q1 2025—shareholder return catalyst .

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded 21 bps QoQ to 4.37% as cost of funds fell 20 bps and loan yields increased 4 bps; CEO highlighted a “record year and record quarter” and confidence in 2025 growth and profitability .
Healthy organic growth: loans +$43.3M QoQ and deposits +$54.2M QoQ, including noninterest-bearing deposits +$16.8M QoQ; capital strengthened with CET1 13.90%, Total Capital 15.62% .
Asset quality stabilized: non-accrual assets $15.0M (vs. $15.9M in Q3, $19.2M in FY23), NPLs 0.58% of loans, ACL 1.18% of loans; loan-to-deposit ratio improved to 107.6% .

What Went Wrong

Noninterest income declined $0.9M QoQ to $1.9M on lower securities gains, service/loan fees, and SBA/mortgage gains; SBA sales fell to $0.4M (vs. $0.9M in Q3) .
Noninterest expense rose $0.6M QoQ to $12.6M, driven by a one-time $0.9M SERP valuation adjustment (partially offset by lower advertising, deposit insurance, and other expenses) .
AFS securities provision ($0.9M) related to a $5M par corporate debt holding on non-accrual; carrying value reduced to $2.0M—an ongoing headwind to noninterest results .

Financial Results

Quarterly P&L and Key Ratios

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Total Interest Income ($M)	$37.758	$37.987	$39.550	$40.264
Total Interest Expense ($M)	$13.727	$14.563	$14.694	$13.774
Net Interest Income ($M)	$24.031	$23.424	$24.856	$26.490
Provision for Credit Losses ($M)	$1.811	$0.925	$1.080	$1.300
Noninterest Income ($M)	$2.568	$2.033	$2.803	$1.916
Noninterest Expense ($M)	$11.740	$11.980	$12.012	$12.617
Income Before Taxes ($M)	$13.048	$12.552	$14.567	$14.489
Provision for Income Taxes ($M)	$3.278	$3.098	$3.662	$2.984
Net Income ($M)	$9.770	$9.454	$10.905	$11.505
Diluted EPS ($)	$0.96	$0.93	$1.07	$1.13
Net Interest Margin (%)	4.06%	4.01%	4.16%	4.37%
ROA (annualized, %)	1.59%	1.56%	1.76%	1.83%
ROE (annualized, %)	15.12%	14.07%	15.55%	15.77%
Efficiency Ratio (%)	45.18%	47.10%	44.23%	44.44%
Cost of Funds (%)	3.14%	2.73%	2.71%	2.51%

Note on estimates: Wall Street consensus via S&P Global was unavailable at the time of request; therefore no beat/miss determination is provided.

Balance Sheet Highlights

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Total Assets ($M)	$2,578.507	$2,597.707	$2,635.319	$2,654.017
Total Deposits ($M)	$1,924.140	$2,010.831	$2,046.137	$2,100.313
Total Gross Loans ($M)	$2,172.063	$2,170.535	$2,217.393	$2,260.657
Shareholders’ Equity ($M)	$261.430	$273.395	$284.257	$295.583
Loan-to-Deposit Ratio (%)	112.9%	107.9%	108.4%	107.6%
CET1 Ratio (%)	12.70%	13.31%	13.50%	13.90%
Total Capital Ratio (%)	14.43%	15.05%	15.23%	15.62%

Segment Breakdown – Loan Portfolio

Category	Dec 31, 2024 ($000)	% of Loans	Dec 31, 2023 ($000)	% of Loans
SBA – Held for Sale	12,163	0.5%	18,242	0.8%
SBA – Held for Investment	36,859	1.6%	38,584	1.8%
SBA PPP	1,450	0.1%	2,318	0.1%
Commercial Construction	130,193	5.8%	129,159	6.0%
SBA 504	48,479	2.1%	33,669	1.7%
Commercial & Industrial	147,186	6.5%	128,402	5.9%
Commercial Mortgage – Owner Occupied	577,541	25.6%	502,397	23.1%
Commercial Mortgage – Nonowner Occupied	428,600	19.0%	424,490	19.5%
Other Commercial	79,630	3.5%	59,343	2.7%
Residential Mortgage	630,927	27.9%	631,506	29.1%
Consumer – Home Equity	73,223	3.2%	67,037	3.0%
Consumer – Other	3,488	0.2%	5,639	0.3%
Residential Construction	90,918	4.0%	131,277	6.0%
Total Gross Loans	2,260,657	100.0%	2,172,063	100.0%

KPIs – Deposits, Liquidity, Credit

KPI	Q2 2024	Q3 2024	Q4 2024
Deposit Mix – Noninterest DD (%)	21.0%	20.7%	21.0%
Deposit Mix – Interest-bearing DD (%)	15.0%	15.9%	16.8%
Deposit Mix – Savings (%)	27.5%	27.4%	23.4%
Deposit Mix – Time (%)	36.5%	36.0%	38.8%
Uninsured/Uncollateralized Deposits (%)	18.3%	19.1%	19.3%
Cash & Equivalents ($M)	$197.4	$194.5	$180.4
Available Funding ($M)	~$610.5	~$569.4	~$558.0
Funding Coverage vs. Uninsured Deposits (%)	219.3%	195.9%	182.5%
NPLs / Loans (%)	0.56%	0.59%	0.58%
NPAs / Assets (%)	0.58%	0.60%	0.57%
ACL / Loans (%)	1.20%	1.22%	1.18%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Effective Tax Rate (%)	Forward (FY)	Not provided	“Between 2024 and 2023 full-year levels” → 23.8%–25.1%	Updated
Dividend per Share ($)	Q1 2025	$0.13 (Q4 2024)	$0.14 (+8%)	Raised
Lending Focus	Ongoing	110% L/D threshold achieved enables expansion to non-owner occupied borrowers	Continue balanced loan growth in local SMB/consumer markets	Maintained strategic focus

Earnings Call Themes & Trends

No public earnings call transcript was available for Q4 2024.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Interest Rate Environment & NIM	Q2: NIM 4.01%, rising funding costs; Q3: NIM 4.16%, asset yields up, funding costs down	NIM 4.37%, cost of funds -20 bps QoQ, loan yield +4 bps	Improving
Deposits & Mix	Q2: deposits +$86.7M; Q3: +$42.6M; mix shifting toward time deposits	Deposits +$54.2M QoQ; noninterest DD +$16.8M QoQ	Improving
Loan Growth	Q2: muted 1H, pipelines robust; Q3: +$46.9M gross loans QoQ	+$43.3M QoQ, commercial-led	Improving
Asset Quality	Q2/Q3: NPAs down from FY23; AFS non-accrual security emerged in 2024	NPAs 0.57% of assets; AFS provision $0.9M; carrying value $2.0M	Stable to improving, with AFS drag
Liquidity & Funding	Q2: funding coverage 219%; Q3: 196%	182.5% coverage; cash $180.4M	Moderating as mix evolves
Capital	CET1 13.31% (Q2), 13.50% (Q3)	CET1 13.90%; Total 15.62%	Strengthening
Risk Management	Q3: forward-starting pay-fix receive-float SOFR swap, $20M notional starting Q1’25	Reiterated conservative stance	Protective posture maintained
Sustainability/Community	EV chargers installed; grants to local businesses	EV chargers operational; community fundraising	Ongoing initiatives

Management Commentary

“We achieved both a record year and a record quarter of earnings… For the fourth quarter, we earned $11.5 million in net income, or $1.13 per diluted share, representing a 1.83% ROA and a 15.77% ROE.” – James A. Hughes, President & CEO .
“In the fourth quarter, our net interest margin expanded 21 basis points by lowering our cost of funds 20 basis points and increasing our yield on loans 4 basis points.” .
“Despite [the Fed’s] outlook, we remain confident in our ability to deliver continued growth and profitability in 2025… focusing on growing our core deposit franchise and making loans to consumers and small-to-medium sized businesses in our local communities.” .
Q3 tone emphasized record quarterly earnings and tandem growth of loans and deposits while maintaining strong profitability metrics across interest rate scenarios .

Q&A Highlights

No Q4 2024 earnings call transcript or Q&A session was available in the document set; therefore no analyst Q&A themes or clarifications could be extracted.

Estimates Context

Wall Street consensus EPS and revenue estimates (S&P Global) were unavailable at the time of request; as such, beat/miss analysis vs. estimates cannot be provided. If needed, we can refresh when access is restored to S&P Global data.

Key Takeaways for Investors

Margin tailwind: NIM expansion to 4.37% driven by lower funding costs and slightly higher loan yields suggests continued earnings leverage if deposit mix stabilizes and rate backdrop remains supportive .
Core growth intact: QoQ growth in both loans and deposits with improving L/D ratio and resilient capital supports continued balance sheet expansion without stressing liquidity .
Watch noninterest volatility: Securities gains and fee income softened; AFS impairment remains a recurring drag—monitor trajectory of the non-accrual corporate security carrying value ($2.0M) .
Expense normalization likely: Q4 included a one-time $0.9M SERP valuation; absent this, the run-rate OpEx looks more stable—supportive for efficiency ratio near mid-40s% .
Tax-rate benefit: Lower effective tax rate (20.6% in Q4) and prospective range of ~23.8%–25.1% could provide a durable EPS tailwind if sustained .
Capital return: Dividend increased 8% to $0.14 (Q1 2025), and a share repurchase authorization remains in place—ongoing capital return supports valuation .
Trading lens: Strong Q4 operating metrics and visible capital ratios were accompanied by a sharp improvement in market price per share into period-end; near-term moves likely key off NIM trajectory and credit quality headlines .

UNITY BANCORP INC /NJ/ (UNTY)·Q4 2024 Earnings Summary