The financial sector is booming, including small-cap companies like Unity Bancorp. NASDAQ:UNTYBancorp pens NASDAQ: PLBCand Community Trust Bancorp NASDAQ:CTBI. The 2024 results show that consumers remain healthy, business volumes are improving, and higher, longer-term interest rates provide solid investment returns. The prices of these stocks are rising due to business trends and are likely to continue to rise in 2025.
The stock prices of these banks will continue to rise as the outlook for all three industry segments remains favorable, including cash flow and earnings. The Fed is unlikely to cut interest rates by more than 25 basis points, leaving rates elevated above projections through the end of 2024, resulting in net investment income. The labor market and consumer trends remain healthy, and economic tailwinds are expected to develop to boost consumer and business activity. Trump’s pro-growth agenda is expected to stimulate activity at all levels of the system, which is good news for the banking industry.
Higher rates, resilient consumers and commercial activity boost business
Community Fund Bancorp Today
Bancorp Community Trust
As of 01/15/2025 16:00 Eastern
- 52 week range
- $38.44
▼
$61.67
- Dividend yield
- 3.48%
- P/E ratio
- 12.27
- Target price
- $57.67
All three companies reported strong quarters in calendar year 2024, with revenue and earnings growing. NII was a contributing factor in all cases, and CTBI stood out. It reported a 15% increase in net investment income and outperformed other metrics.
The group’s business was also driven by an improvement in loans and deposits in the retail and commercial segments. The 2025 outlook includes the expectation of improved credit demand and confidence in the ability to continue to generate profitable growth.
Analysts’ forecasts for 2025 are optimistic. These companies are expected to grow revenue and earnings, and estimates are likely cautious. The standout player in 2025 will likely be Plumas Bancorp, the smallest bank on the list, which is projected to grow revenue 15% and expand its margins.
Cash flow and return on capital are growing
Unity Bancorp today
As of 01/15/2025 16:00 Eastern
- 52 week range
- $25.33
▼
$48.44
- Dividend yield
- 1.15%
- P/E ratio
- 11.67
- Target price
- $47.50
Among the most important details is the return of capital. These banks have healthy balance sheets with sufficient loan loss reserves to weather increased volatility in consumer markets. Loan write-offs have increased but remain at normal levels, leaving cash flow intact and able to support a sustainable dividend distribution.
Yields at the start of the first quarter of 2024 range from 1.2% for Unity to over 3.5% for Community Trust Bancorp, but all are attractive. The trade-off with yield is a higher payout ratio, but even the highest ratio, again Community Trust Bancorp, is relatively low at less than 45%. The lowest yield is Unity, but it is also the safest payout. Unity’s payout ratio is less than 15% compared to current projections.
Analysts and institutions like these small banks
Plumas Bancorp today
As of 01/15/2025 16:00 Eastern
- 52 week range
- $32.50
▼
$51.33
- Dividend yield
- 2.32%
- P/E ratio
- 9.77
- Target price
- $52.50
Neither stock has much analyst attention, but the group coverage is enough to paint a bullish picture. There are five research firms covering these stocks, two each for UNTY and PLBC and three for CTBI, and there is some overlap. Covered firms include Stephans, Raymond James and Piper Sandler, which rate them as buys. Price targets are also optimistic, with mid to mid-teens growth forecast for 2025.
As far as institutions are concerned, institutional performance varies from name to name and from quarter to quarter, but in all cases three things are true. Institutions own a significant amount of these shares, ranging from 40% to 60%. They were buying on balance in 2024, and activity was bullish in the third quarter of 2025, coinciding with an uptrend in stock prices. The charts show that these stocks are gaining momentum in the second half of 2024 and are poised for growth in 2024.
Before you consider Plumas Bancorp, you might want to hear this.
MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now, before the broader market takes hold… and Plumas Bancorp wasn’t on the list.
While Plumas Bancorp currently has a Buy rating among analysts, the top-rated analysts rate these five stocks as Outperform Buys.
View five stocks here
Wondering where to start (or end) with AI stocks? These 10 common stocks can help investors build long-term wealth as artificial intelligence continues to advance in the future.
Get this free report