Weakness in Shares Today Seemed Unwarranted; Reiterate OW After Strong 2Q

Research evidence excerpt

Weakness in Shares Today Seemed Unwarranted; Reiterate OW After Strong 2Q

C O M PA N Y N O T E

J u l y 1 4 , 2 0 2 6

Unity Bancorp, Inc. (UNTY) Overweight

CONCLUSION PRICE: US$55.54

UNTY has set quite a high bar for itself over the years with the bank chronically registering TARGET: US$68.00

top tier profitability, and in many cases well surpassing EPS expectations. While 2Q wasn't ~10.5x FY27E EPS

necessarily the impressive quarter that we've come to expect, the bank nevertheless

sustained its 2%+ ROA/16%+ ROTCE and delivered high quality loan and deposit growth Justin Crowley

Sr. Research Analyst, Piper Sandler & Co.along with credit trends that remained benign. While fears of peak NIM/profitability may 212 466-7921, justin.crowley@psc.com

be somewhat valid, this is the case industry-wide and not UNTY-specific. To that end, we

Bader Hijleh, CFA

frankly found ourselves puzzled by the weakness in shares today (closed down 3.2% and Research Analyst, Piper Sandler & Co.

were down 4.8% at the lows). Following results, we are tweaking our 2026E/2027E EPS 203 930-2758, bader.hijleh@psc.com

modestly higher, and reiterate our OW rating with shares trading at under 9x our estimate

Changes Previous Currentnext year for a franchise that has reliably delivered best-in-class profitability and has the

Rating — Overweight

growth potential to outpace any potential NIM erosion. Price Tgt — US$68.00

FY26E EPS US$5.83 US$5.88

• Very strong loan growth, supported by even stronger deposit growth. Loan FY27E EPS US$6.51 US$6.53

balances increased a very healthy 13% (annualized), a pickup from 1Q following Market Cap. (mil) US$554.4

elevated payoffs in that period. Contribution was broad-based including across Book Value/Share US$37.02