3 Bank Stocks With Recent Dividend Increases Worth Considering
Dividend hikes from Unity Bancorp, Stock Yards Bancorp and Chemung Financial highlight their profitability, capital strength and income appeal.
The U.S. banking industry has performed strongly so far in 2026, with the KBW Nasdaq Bank Index gaining nearly 16%. Healthy loan demand, easing deposit and funding costs, balance-sheet growth, and relatively stable credit quality have supported the sector. Strength in investment banking, trading, wealth management and other fee-generating businesses has also helped boost revenues.
Still, the operating environment remains challenging, given elevated long-term interest rates, persistent inflation, geopolitical and trade-related uncertainties, rising personnel and technology costs, and credit risks in commercial real estate and certain consumer loan categories. Even so, the resilience of the U.S. economy and generally sound banking fundamentals have helped sustain investor confidence in the sector.
Against this backdrop, investors may consider fundamentally strong banks that have recently raised their dividends, as such moves often reflect confidence in earnings, capital strength and cash-flow generation. Unity Bancorp UNTY, Stock Yards Bancorp SYBT and Chemung Financial CHMG announced dividend hikes last week. Their established profitability, solid business models and disciplined capital distribution make them attractive candidates for investors seeking a combination of income and resilience amid an uncertain macroeconomic environment.
The 3 Bank Stocks to Consider
Unity Bancorp: Headquartered in Clinton, NJ, this financial service holding company delivers community-focused commercial banking services, including deposit products, lending solutions and digital banking through its various branches across New Jersey and Pennsylvania’s Lehigh Valley. As of June 30, 2026, the company had $3.2 billion in assets.
On Aug. 20, Unity Bancorp announced a quarterly cash dividend of 17 cents per share on its common stock, marking a hike of 6.3% from the prior-year quarter. The dividend will be paid out on Sept. 17, 2026, to shareholders of record as of Sept. 3.
The company has increased its dividend seven times in the past five years, with an annualized dividend growth rate of 11.2%. UNTY has a dividend yield of 1.08% and a dividend payout ratio of 12%.
UNTY Dividend Yield
Image Source: Zacks Investment Research
The UNTY stock has gained 14.9% year to date. The Zacks Consensus Estimate for UNTY’s 2026 sales indicates a year-over-year increase of 6.1%. Its current-year earnings estimate suggests a year-over-year rise of 48.7%. At present, UNTY carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stock Yards Bancorp: Headquartered in Louisville, KY, this company provides commercial and personal banking, mortgage lending, and wealth management and trust services across markets in Kentucky, Indiana and Ohio. As of June 30, 2026, it had $10.4 billion in assets.
On Aug. 19, SYBT announced a quarterly cash dividend of 33 cents per share, marking an increase of 3.1% from the prior payout. The dividend will be paid out on Oct. 1 to shareholders of record as of Sept. 21.
The company increased its dividend six times in the past five years, with an annualized growth rate of 3.3%. It has a dividend yield of 1.56% and a dividend payout ratio of 25%.
SYBT Dividend Yield
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SYBT’s 2026 sales indicates a year-over-year rise of 14.7%, while that for earnings suggests an 8.2% rise. So far this year, the stock has rallied 26.1%. Currently, SYBT carries a Zacks Rank #3 (Hold).
Chemung Financial: Headquartered in Elmira, NY, Chemung Financial is the holding company for Chemung Canal Trust Company. It provides commercial and consumer banking, mortgage lending, wealth management and trust services across markets in New York and Pennsylvania. As of June 30, 2026, CHMG had $2.8 billion in total assets.
On Aug. 19, CHMG announced a quarterly cash dividend of 36 cents per share, representing a rise of 5.9% from the prior payout. The dividend will be paid out on Oct. 1 to shareholders of record as of Sept. 17.
The company has increased its dividend three times in the past five years, with an annualized dividend growth rate of 2%. CHMG has a dividend yield of 1.64% and a dividend payout ratio of 20%.
CHMG Dividend Yield
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHMG’s 2026 sales indicates a year-over-year rise of 30.5%, while that for earnings suggests 27.4% growth. So far this year, this Zacks Rank #2 stock has rallied 48.2%.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Stock Yards Bancorp, Inc. (SYBT): Free Stock Analysis Report
Chemung Financial Corp (CHMG): Free Stock Analysis Report
Unity Bancorp, Inc. (UNTY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).