Unity Bancorp (UNTY) AI Stock Analysis

• Market Cap: $532.29M
• Dividend Yield: 1.08%
• Average Volume (3M): 44.24K
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.89
• Revenue Growth: 11.38%
• EPS Growth: 36.10%
• Country: US
• Employees: 227
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.41
• Shares Outstanding: 10,039,444
• 10 Day Avg. Volume: 52,142
• 30 Day Avg. Volume: 44,239
• PEG Ratio: 0.22
• Price to Book (P/B): 1.50
• Price to Sales (P/S): 2.75
• P/FCF Ratio: 11.56
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 2.82
• Enterprise Value/Gross Profit: 4.48
• Enterprise Value/Ebitda: 7.53
• 1Y Price Target: $65.00
• Price Target Upside: 22.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 5.78
• Revenue Forecast (FY): $139.83M

• Rating: 71 Outperform
• Price Target: $59.00 ▲(11.32% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is driven primarily by solid financial performance (strong margins/returns and improved leverage), tempered by 2025 revenue and free-cash-flow declines. Valuation is a meaningful positive (low P/E with a dividend), while technical indicators are mixed with slightly negative momentum. A recent dividend increase adds incremental support.

Positive Factors

High and improving profitability

Sustained higher net margins and mid-teens ROE provide a durable earnings buffer versus peers. Improved profitability supports internal capital generation, funds dividends and loan growth, and reduces sensitivity to modest revenue lapses, strengthening the bank’s long-term franchise.

Healthier balance sheet with lower leverage

Meaningfully lower debt-to-equity increases resilience to funding and credit shocks. A de-levered position preserves capital flexibility for lending or buybacks, reduces refinancing risk, and supports regulatory/commercial stability across economic cycles over the coming months.

Shareholder-friendly dividend increase

A board-authorized dividend raise signals management confidence in capital and earnings durability. For a regional bank, sustainable dividends reflect disciplined capital management and bolster investor trust, implying the bank expects ongoing cash generation to support payouts.

Negative Factors

2025 revenue contraction

A material revenue decline reduces operating leverage and limits funds available for reinvestment or provisioning. If revenue headwinds persist, the bank must rely more on margin expansion or cost cuts, which can be difficult to sustain and may constrain durable growth over the next several quarters.

Free cash flow deterioration

A sharp drop in free cash flow tightens the cushion for dividends, loan loss reserves, and strategic investments. With operating cash flow small relative to assets, sustained FCF weakness would reduce flexibility to pursue growth or absorb shocks without altering capital returns or leverage.

Historic leverage volatility

Recurring swings in leverage indicate cyclical balance-sheet management and potential sensitivity to funding or credit cycles. Such volatility raises the risk that adverse conditions could force rapid de-risking, asset sales, or capital actions that impair strategic consistency over months.

Unity Bancorp Business Overview & Revenue Model

Company Description

Unity Bancorp, Inc. operates as the holding company for Unity Bank that provides commercial and retail banking products and services to individuals, small and medium sized businesses, and professional communities. The company offers personal and business checking accounts, time deposits, money market accounts, and regular savings accounts, as well as noninterest and interest-bearing demand deposits. It also provides small business administration loans; commercial loans; and residential mortgage and consumer loans, including residential real estate, home equity lines and loans, and residential construction lines, as well as personal loans. the company offered its services through the Internet and nineteen branch offices located in Bergen, Hunterdon, Middlesex, Somerset, Union, and Warren counties in New Jersey, as well as Northampton County, Pennsylvania. Unity Bancorp, Inc. was incorporated in 1991 and is based in Clinton, New Jersey.

How the Company Makes Money

Unity Bancorp generates revenue primarily through the interest income earned on loans and investments. The bank provides various loan products such as residential mortgages, commercial real estate loans, and consumer loans, which yield interest payments from borrowers. Additionally, the company earns fee-based income from services like account maintenance fees, transaction fees, and other banking services. The bank's deposit accounts, including savings and checking accounts, also play a crucial role in its funding strategy, allowing it to finance loans while maintaining a spread between interest earned and interest paid. Unity Bancorp may also engage in partnerships with local businesses and organizations, enhancing its reach and customer base, which can lead to increased revenue through cross-selling of financial products.

Unity Bancorp Financial Statement Overview

Summary

Strong and improving profitability (net margin ~31% in 2025 vs ~25% in 2024) and solid ROE (~14%–17%) with meaningfully reduced leverage (~0.77 debt-to-equity in 2025). Offsetting this, 2025 shows cooling momentum with revenue down (~-4.9%) and free cash flow declining (~-25%), limiting the score.

Income Statement

Profitability is strong, with net margins consistently high and improving in 2025 (net margin ~31% vs ~25% in 2024) alongside a higher operating margin. Earnings and revenue scaled well from 2020–2024, but 2025 shows a notable revenue pullback (revenue growth ~-4.9%), which is the key near-term concern despite improved margins.

Balance Sheet

The balance sheet looks healthier than it did in 2022–2023, with leverage meaningfully reduced (debt-to-equity improving to ~0.77 in 2025 from ~1.40–1.67 in 2022–2023). Returns on equity remain solid (~14%–17% range). The main weakness is that leverage has been volatile over the cycle (very low in 2021, elevated in 2022–2023), which adds risk if conditions tighten.

Cash Flow

Cash generation is generally steady and well-aligned with earnings, with free cash flow roughly matching net income across years (near ~1.0x). However, free cash flow growth turned negative in 2025 (~-25%), and operating cash flow is relatively small versus the asset base (low operating cash flow to assets), which can limit flexibility if profitability softens.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	188.41M	163.07M	150.72M	108.27M	95.78M
Gross Profit	127.87M	101.99M	99.05M	93.36M	87.86M
EBITDA	75.51M	56.97M	55.38M	54.18M	49.74M
Net Income	57.95M	41.45M	39.71M	38.46M	36.12M
Balance Sheet
Total Assets	2.97B	2.65B	2.58B	2.44B	2.03B
Cash, Cash Equivalents and Short-Term Investments	340.53M	195.97M	286.54M	210.19M	301.30M
Total Debt	266.08M	230.81M	366.75M	398.91M	55.61M
Total Liabilities	2.62B	2.36B	2.32B	2.21B	1.83B
Stockholders Equity	345.63M	295.58M	261.43M	239.23M	205.73M
Cash Flow
Free Cash Flow	44.91M	47.29M	45.95M	41.19M	31.28M
Operating Cash Flow	44.91M	47.99M	46.91M	42.67M	32.53M
Investing Cash Flow	-256.84M	-92.81M	-57.85M	-541.28M	-40.52M
Financing Cash Flow	248.01M	30.49M	90.92M	368.59M	33.49M

Unity Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 53.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNTY, the sentiment is Negative. The current price of 53 is below the 20-day moving average (MA) of 54.13, below the 50-day MA of 53.55, and above the 200-day MA of 49.98, indicating a neutral trend. The MACD of -0.20 indicates Positive momentum. The RSI at 46.22 is Neutral, neither overbought nor oversold. The STOCH value of 56.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UNTY.

Unity Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NRIM	81 Outperform	$531.06M	9.10	21.77%	2.31%	36.60%	92.63%
BHB	74 Outperform	$552.39M	14.04	7.45%	3.92%	4.26%	-16.52%
PGC	73 Outperform	$605.40M	13.10	5.50%	0.70%	9.16%	6.95%
UNTY	71 Outperform	$532.29M	8.95	18.08%	1.08%	11.38%	36.10%
PFIS	69 Neutral	$543.61M	8.23	10.83%	4.97%	39.98%	413.87%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
NFBK	49 Neutral	$565.90M	576.05	5.56%	4.38%	6.08%	52.64%

Unity Bancorp Corporate Events

Unity Bancorp Boosts Quarterly Dividend Amid Strong Performance

Unity Bancorp, Inc. announced on February 26, 2026, that its board approved a 7% increase in the first-quarter cash dividend to $0.16 per common share, payable on March 20, 2026, to shareholders of record as of March 6. Management framed the higher payout as a reflection of strong financial performance, disciplined balance sheet management and a continued focus on capital strength, underscoring the bank’s commitment to delivering consistent shareholder value while supporting sustainable growth in its regional markets.

The most recent analyst rating on (UNTY) stock is a Buy with a $65.00 price target. To see the full list of analyst forecasts on Unity Bancorp stock, see the UNTY Stock Forecast page.

Unity Bancorp Updates Deferred Compensation Plan Interest Terms

On December 18, 2025, Unity Bank, a wholly owned subsidiary of Unity Bancorp, amended its Deferred Compensation Plan to change how interest is credited on benefits paid in ten equal annual installments instead of a lump sum. Under the amendment, interest will now be credited immediately before each annual payment at a variable rate tied to the Prime Rate plus 1.0%, with a floor of 4.0% and a cap of 10.0%, replacing the prior structure where the interest rate was fixed at the time of a participant’s termination of service, while all other terms of the plan remain unchanged, potentially making installment distributions more responsive to interest rate conditions for participants and beneficiaries.

The most recent analyst rating on (UNTY) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on Unity Bancorp stock, see the UNTY Stock Forecast page.