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Univest Corporation of Pennsylvania – Univest Bank and Trust Co. - Reports First Quarter Results

Company Release - 4/26/2017 4:30 PM ET

SOUDERTON, Pa., April 26, 2017 (GLOBE NEWSWIRE) -- Univest Corporation of Pennsylvania (“Univest” or “Corporation”) (NASDAQ:UVSP), parent company of Univest Bank and Trust Co. ("Bank") and its insurance, investments and equipment financing subsidiaries, today announced financial results for the quarter ended March 31, 2017. Univest reported net income of $10.9 million or $0.41 diluted earnings per share for the three months ended March 31, 2017, compared to net income of $7.3 million or $0.37 diluted earnings per share for the three months ended March 31, 2016. The financial results for the three months ended March 31, 2016 included $220 thousand of acquisition and integration costs related to the Fox Chase acquisition, or $0.01 of diluted earnings per share, net of tax. There were no acquisition and integration costs during the three months ended March 31, 2017.

Loans
Gross loans and leases increased $56.0 million or 6.8% (annualized) from December 31, 2016. Gross loans and leases increased $1.2 billion or 53.1% from March 31, 2016, including $776.2 million of loans acquired from Fox Chase Bank. Organic loan growth, which excludes the loans acquired from Fox Chase at June 30, 2016, was $382.4 million or 12.9% from March 31, 2016 to March 31, 2017. The growth in loans in 2017 compared to December 31, 2016 was primarily in commercial real estate, commercial business and residential real estate loans.

Deposits
Total deposits increased $108.4 million or 13.3% (annualized) from December 31, 2016. Deposits increased $1.0 billion from March 31, 2016 primarily due to $738.3 million of deposits acquired from Fox Chase. Organic deposit growth, which excludes the Fox Chase deposits at June 30, 2016, was $293.3 million or 9.5% from March 31, 2016. The growth in deposits in 2017 compared to December 31, 2016 was primarily due to increases in public funds and commercial customer deposits.

Net Interest Income and Margin
Net interest income of $34.3 million for the first quarter of 2017 was consistent with the fourth quarter of 2016 and increased $10.8 million, or 45.7%, from the same period in 2016. Net interest margin, on a tax-equivalent basis, for the first quarter of 2017 was 3.80%, compared to 3.81% for the fourth quarter of 2016. The favorable impact of purchase accounting accretion was 8 basis points ($764 thousand) for the quarter ended March 31, 2017 compared to 20 basis points ($1.8 million) for the quarter ended December 31, 2016. Excluding the impact of purchase accounting accretion, net interest margin was 3.72% for the quarter ended March 31, 2017 compared to 3.61% for the quarter ended December 31, 2016 and net interest income increased $1.2 million, or 3.6%, for the first quarter of 2017 compared to the fourth quarter of 2016. The improvement in net interest margin, excluding purchase accounting accretion, is primarily due to the increase in interest rates during the fourth quarter of 2016 which increased loan yields at a greater pace than rates on deposits and an improvement in mortgage backed security yields due to a slowdown in payment speeds. A detailed analysis comparing net interest margin and net interest income for the quarter ended March 31, 2017 and the quarter ended December 31, 2016 is included in the attached exhibits.

Noninterest Income
Noninterest income for the quarter ended March 31, 2017 was $15.0 million, an increase of $1.1 million or 8.2% from the first quarter of 2016. Service charges on deposits increased $245 thousand or 24.5% for the quarter mostly due to fees on deposit accounts acquired from Fox Chase. Investment advisory commission and fee income increased $510 thousand or 19.1% from the first quarter of 2016 primarily due to a combination of both increased new customer relationships and favorable market performance during 2016 and the first quarter of 2017. Bank owned life insurance (BOLI) income increased $313 thousand or 66.6% for the quarter primarily due to policies acquired from Fox Chase and increased income of $105 thousand on non-qualified annuities. Other income increased $311 thousand or 15.5% for the quarter mainly due to an increase in other service fee income of $156 thousand and net gains on sales of other real estate owned of $114 thousand. These increases were partially offset by modest decreases in insurance and mortgage banking income. Insurance commission and fee income decreased $148 thousand for the quarter ended March 31, 2017, primarily due to a decrease in contingent commission income of $340 thousand, which was $1.0 million for the quarter ended March 31, 2017 compared to $1.3 million for the quarter ended March 31, 2016. The net gain on mortgage banking decreased $105 thousand for the quarter ended March 31, 2017 primarily due to a decrease in mortgage volume. 

Noninterest Expense
Noninterest expense for the quarter ended March 31, 2017 was $32.0 million, an increase of $5.1 million or 18.9%, compared to the first quarter of 2016. Salaries and benefit expense increased $2.5 million for the quarter, primarily attributable to higher staffing levels resulting from the Fox Chase acquisition, additional staff hired to support revenue generation across all business lines and the expansion into Lancaster County. Premises and equipment expenses increased $782 thousand for the quarter, primarily due to higher premises expense related to Fox Chase locations and expansion into Philadelphia, Lancaster County and the Lehigh Valley. Data processing expense increased $777 thousand for the quarter due to increased investments in computer software and our outsourced data processing solution as well as the addition of Fox Chase processing expense. Other expense increased $1.1 million for the quarter primarily due to inclusion of Fox Chase related expenses and an increase of $416 thousand related to Bank shares tax as a result of a statutory rate increase in 2017 and the Corporation’s growth primarily due to the Fox Chase acquisition.

Asset Quality and Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $19.9 million at March 31, 2017, compared to $17.9 million at December 31, 2016. Nonperforming assets were $27.3 million at March 31, 2017, compared to $27.1 million at December 31, 2016. Net loan and lease charge-offs were $416 thousand during the first quarter of 2017. The provision for loan and lease losses was $2.4 million for the first quarter of 2017. The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding covered loans acquired in the Fox Chase and Valley Green Bank acquisitions which were recorded at fair value as of the acquisition date, was 0.74% at March 31, 2017, compared to 0.73% at December 31, 2016 and 0.86% at March 31, 2016.

Tax Provision
The effective income tax rate for the quarter ended March 31, 2017 was 26.5%, compared to 27.8% for the quarter ended March 31, 2016. During the quarter, the Corporation recognized a $288 thousand discrete tax benefit related to the vesting of restricted stock and exercise of stock options, which provided a tax deduction greater than previously recorded.  This change is in accordance with Accounting Standard Update 2016-9 which was implemented by the Corporation in the fourth quarter of 2016 and requires the tax impact of such equity related activities to be recorded as an adjustment to income in the period incurred, rather than an adjustment to equity.  Excluding this discrete benefit, the effective income tax rate for the quarter was 28.5%, which reflects the Corporation’s level of tax exempt income for the period relative to the overall level of taxable income.

Dividend
On February 22, 2017, Univest declared a quarterly cash dividend of $0.20 per share, payable on April 3, 2017. This represented a 3.09% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Conference Call
Univest will host a conference call to discuss first quarter 2017 results on Thursday, April 27, 2017 at 9:00 a.m. EDT. Participants may preregister at http://dpregister.com/10105249. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through May 27, 2017 by dialing 1-877-344-7529; using Conference ID: 10105249.

About Univest Corporation of Pennsylvania  
Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has approximately $4.3 billion in assets and $3.3 billion in assets under management and supervision through its Wealth Management lines of business. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices in southeastern Pennsylvania extending to the Lehigh Valley and Lancaster, as well as in New Jersey and Maryland and online at www.univest.net

This press release of Univest Corporation of Pennsylvania and the reports Univest Corporation of Pennsylvania files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial services industry and, specifically, the financial operations, markets and products of Univest Corporation of Pennsylvania. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Corporation of Pennsylvania’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce net interest margins; (3) changes in prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which Univest Corporation of Pennsylvania is engaged; (6) technological issues which may adversely affect Univest Corporation of Pennsylvania’s financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Corporation of Pennsylvania files with the Securities and Exchange Commission. Univest Corporation of Pennsylvania undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
March 31, 2017
(Dollars in thousands)          
           
Balance Sheet (Period End) 03/31/17 12/31/16 09/30/16 06/30/16 03/31/16
Assets $  4,273,931  $  4,230,528  $  4,140,444  $  3,107,617  $  2,824,777 
Investment securities    464,639     468,518     484,213     286,980     329,357 
Loans held for sale    1,110     5,890     3,844     4,657     3,818 
Loans and leases held for investment, gross   3,341,916   3,285,886    3,190,361    2,345,037    2,183,256 
Allowance for loan and lease losses    19,528     17,499     16,899     17,153     16,452 
Loans and leases held for investment, net  3,322,388   3,268,387   3,173,462   2,327,884    2,166,804 
Total deposits  3,365,951   3,257,567   3,178,509   2,377,084    2,334,361 
Noninterest-bearing deposits    947,495     918,337     874,581     689,916     559,827 
NOW, money market and savings  1,865,280   1,713,041   1,652,696   1,326,976    1,391,626 
Time deposits    553,176     626,189     651,232     360,192     382,908 
Borrowings    355,580     417,780     398,341     309,666     75,265 
Shareholders' equity    511,880     505,209     509,249     369,160     367,003 
           
           
Balance Sheet (Average) For the three months ended,
  03/31/17 12/31/16 09/30/16 06/30/16 03/31/16
Assets $4,230,428  $4,134,976  $4,147,468  $2,854,561  $2,834,557 
Investment securities     470,300     473,890     503,790     302,492     342,218 
Loans and leases, gross  3,306,877   3,208,171   3,164,273   2,239,674    2,177,091 
Deposits  3,290,285   3,237,778   3,177,060   2,340,959    2,351,816 
Shareholders' equity    509,055     507,832     506,464     368,466     364,092 
           
           
Asset Quality Data (Period End)           
  03/31/17 12/31/16 09/30/16 06/30/16 03/31/16
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases $  19,856  $  17,916  $  15,050  $  13,265  $  13,482 
Accruing loans and leases 90 days or more past due    919     987     1,128     748     693 
Accruing troubled debt restructured loans and leases    2,818     3,252     3,286     4,413     4,279 
Other real estate owned    3,712     4,969     6,041     3,131     3,073 
Nonperforming assets    27,305     27,124     25,505     21,557     21,527 
Allowance for loan and lease losses    19,528     17,499     16,899     17,153     16,452 
Nonaccrual loans and leases / Loans and leases held for investment  0.59%  0.55%  0.47%  0.57%  0.62%
Nonperforming loans and leases / Loans and leases held for investment  0.71%  0.67%  0.61%  0.79%  0.85%
Allowance for loan and lease losses / Loans and leases held for investment   0.58%  0.53%  0.53%  0.73%  0.75%
Allowance for loan and lease losses / Loans and leases held for investment (excluding acquired loans at period-end)  0.74%  0.73%  0.77%  0.82%  0.86%
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment  98.35%  97.67%  112.29%  129.31%  122.03%
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 82.77%  78.98%  86.82%  93.09%  89.15%
Acquired credit impaired loans $  6,616  $  7,352  $  14,575  $  942  $  1,267 
           
  For the three months ended,
  03/31/17 12/31/16 09/30/16 06/30/16 03/31/16
Net loan and lease charge-offs $  416  $  1,650  $  1,669  $  129  $  1,502 
Net loan and lease charge-offs (annualized)/Average loans and leases  0.05%  0.20%  0.21%  0.02%  0.28%
           

 

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
March 31, 2017
(Dollars in thousands, except per share data)          
  For the three months ended,
For the period: 03/31/17 12/31/16 09/30/16 06/30/16 03/31/16
Interest income $  38,396 $  38,056 $  36,705  $  26,112 $  25,734
Interest expense    4,113    3,884    3,836     2,451    2,211
Net interest income    34,283    34,172    32,869     23,661    23,523
Provision for loan and lease losses    2,445    2,250    1,415     830    326
Net interest income after provision    31,838    31,922    31,454     22,831    23,197
Noninterest income:          
Trust fee income    1,907    1,921    1,958     1,997    1,865
Service charges on deposit accounts    1,243    1,293    1,344     1,056    998
Investment advisory commission and fee income    3,181    3,072    2,905     2,776    2,671
Insurance commission and fee income    4,410    3,275    3,267     3,503    4,558
Bank owned life insurance income    783    1,215    711     535    470
Net gain on sales of investment securities    15    31    30     413    44
Net gain on mortgage banking activities    1,113    1,092    2,006     1,711    1,218
Other income    2,318    2,095    1,916     2,010    2,007
Total noninterest income    14,970    13,994    14,137     14,001    13,831
Noninterest expense:          
Salaries and benefits    16,657    16,546    16,710     14,080    14,182
Commissions    2,050    2,618    2,485     2,363    1,895
Premises and equipment    3,658    3,929    3,476     2,846    2,876
Data processing    2,058    2,001    2,169     1,530    1,281
Professional fees    1,239    1,258    1,322     947    1,020
Marketing and advertising    379    619    345     513    538
Deposit insurance premiums    402    521    327     418    447
Intangible expenses    759    2,917    854     991    766
Acquisition-related costs    -     101    8,784     1,158    214
Integration costs    -     269    5,365     27    6
Restructuring charges (recoveries)    -     1,816    (85)    -     - 
Other expense    4,828    5,835    5,314     4,673    3,714
Total noninterest expense    32,030    38,430    47,066     29,546    26,939
Income before taxes    14,778    7,486    (1,475)    7,286    10,089
Income tax expense (benefit)    3,922    568    (1,533)    2,046    2,800
Net income $  10,856 $  6,918 $  58  $  5,240 $  7,289
Per common share data:          
Book value per share $  19.21 $  19.00 $  19.17  $  18.88 $  18.73
Net income per share:          
Basic $  0.41 $  0.26 $  -   $  0.27 $  0.37
Diluted $  0.41 $  0.26 $  -   $  0.27 $  0.37
Dividends declared per share $  0.20 $  0.20 $  0.20  $  0.20 $  0.20
Weighted average shares outstanding    26,630,698    26,577,948    26,554,626     19,603,310    19,578,438
Period end shares outstanding    26,645,520    26,589,353    26,558,412     19,557,958    19,592,798
           

 

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
March 31, 2017
              
              
              
     For the three months ended,
Profitability Ratios (annualized)  03/31/17 12/31/16 09/30/16 06/30/16 03/31/16
              
Return on average assets   1.04%  0.67%  0.01%  0.74%  1.03%
Return on average assets, excluding integration and acquisition-related costs and restructuring charges (1), (2) 1.04%  0.78%  0.88%  0.90%  1.07%
Return on average shareholders' equity  8.65%  5.42%  0.05%  5.72%  8.05%
Return on average shareholders' equity, excluding integration and acquisition-related costs and restructuring charges (1), (2) 8.65%  6.37%  7.24%  6.99%  8.29%
Return on average tangible common equity, excluding integration and acquisition-related costs and restructuring charges (1), (2), (5) 13.48%  9.95%  11.32%  10.31%  12.33%
Net interest margin (FTE)   3.80%  3.81%  3.68%  3.93%  3.91%
Efficiency ratio (3)    62.70%  76.48%  96.45%  75.22%  69.23%
Efficiency ratio, excluding integration and acquisition-related costs and restructuring charges (1), (3), (4)  62.70%  72.13%  67.63%  72.20%  68.67%
              
Capitalization Ratios            
              
Dividends declared to net income   49.02%  76.76% N/M  74.64%  53.62%
Shareholders' equity to assets (Period End)  11.98%  11.94%  12.30%  11.88%  12.99%
Tangible common equity to tangible assets (5)  8.06%  7.97%  8.24%  8.39%  9.17%
Tangible book value per share (5)  $  12.38  $  12.13  $  12.28  $  12.82  $  12.66 
Tangible book value per share - Core (5), (6) $  12.56  $  12.32  $  12.21  $  12.72  $  12.62 
              
Regulatory Capital Ratios  (Period End)           
Tier 1 leverage ratio    8.75%  8.84%  8.80%  9.90%  9.93%
Common equity tier 1 risk-based capital ratio  9.41%  9.42%  9.58%  10.24%  10.81%
Tier 1 risk-based capital ratio   9.41%  9.42%  9.58%  10.24%  10.81%
Total risk-based capital ratio   12.45%  12.44%  12.64%  12.77%  13.47%
              
(1)This consolidated selected financial data schedule contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The management of Univest Corporation of Pennsylvania uses these non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation.  See below table for additional information.
              
 (a) Integration and acquisition-related costs and restructuring charges$  -   $  2,186  $  14,064  $  1,185  $  220 
 Tax effect on integration and acquisition-related  costs and restructuring charges   -      969     4,910     22     2 
 (b) Integration and acquisition-related costs and restructuring charges, net of tax $  -   $  1,217  $  9,154  $  1,163  $  218 
           
(2)Net income in this ratio excludes integration and acquisition-related costs and restructuring charges, net of tax. See (1)(b) above.
(3)Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.
(4)Noninterest expense in this ratio excludes integration and acquisition-related costs and restructuring charges. See (1)(a) above.
(5)Tangible equity represents total shareholders' equity less goodwill and other intangible assets, but includes servicing rights which were $6,502 at March 31, 2017, $6,485 at December 31, 2016, $6,167 at September 30, 2016, $5,896 at June 30, 2016 and $5,839 at March 31, 2016.
(6)Tangible equity as defined in (5), excluding the impact of accumulated other comprehensive (loss) income on available-for-sale investment securities, net (($4,726) at March 31, 2017, ($4,989) at December 31, 2016, $1,789 at September 30, 2016, $1,907 at June 30, 2016 and $821 at March 31, 2016), divided by total shares outstanding.
N/MNot meaningful           
              

 

Univest Corporation of Pennsylvania 
  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential  
  For the Three Months Ended,   
Tax Equivalent BasisMarch 31, 2017 December 31, 2016 
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$  8,592 $16  0.76%$  10,235 $  10  0.39%
U.S. government obligations   34,038    106  1.26    33,341    98  1.17 
Obligations of state and political subdivisions   85,854    922  4.36    90,499    921  4.05 
Other debt and equity securities   350,408    1,582  1.83    350,050    1,337  1.52 
Federal funds sold and other earning assets (1)   25,909    358  5.60    20,578    217  4.20 
Total interest-earning deposits, investments, federal funds sold and other earning assets   504,801    2,984  2.40    504,703    2,583  2.04 
         
Commercial, financial, and agricultural loans   721,050    7,841  4.41    683,746    7,247  4.22 
Real estate—commercial and construction loans   1,460,029    15,740  4.37    1,411,104    16,391  4.62 
Real estate—residential loans   738,211    8,236  4.52    723,193    8,097  4.45 
Loans to individuals   29,575    400  5.49    30,796    432  5.58 
Municipal loans and leases   279,379    3,120  4.53    282,297    3,178  4.48 
Lease financings   78,633    1,483  7.65    77,035    1,555  8.03 
Gross loans and leases   3,306,877    36,820  4.52    3,208,171    36,900  4.58 
    Total interest-earning assets   3,811,678    39,804  4.24    3,712,874    39,483  4.23 
Cash and due from banks   41,942       42,946    
Reserve for loan and lease losses   (18,200)      (16,921)   
Premises and equipment, net   64,507       63,712    
Other assets   330,501       332,365    
Total assets$  4,230,428    $  4,134,976    
         
Liabilities:        
Interest-bearing checking deposits$  426,373 $105  0.10 $  402,247 $  89  0.09 
Money market savings   531,658    563  0.43    472,461    450  0.38 
Regular savings   807,802    349  0.18    792,778    327  0.16 
Time deposits   591,813    1,174  0.80    647,665    1,277  0.78 
Total time and interest-bearing deposits   2,357,646    2,191  0.38    2,315,151    2,143  0.37 
         
Short-term borrowings   150,155    262  0.71    128,498    149  0.46 
Long-term debt   148,031    399  1.09    121,895    331  1.08 
Subordinated notes (2)   94,116    1,261  5.43    94,055    1,261  5.33 
Total borrowings   392,302    1,922  1.99    344,448    1,741  2.01 
Total interest-bearing liabilities   2,749,948    4,113  0.61    2,659,599    3,884  0.58 
Noninterest-bearing deposits   932,639       922,627    
Accrued expenses and other liabilities   38,786       44,918    
Total liabilities   3,721,373       3,627,144    
         
Shareholders' Equity:        
Common stock   144,559       144,559    
Additional paid-in capital   230,104       230,037    
Retained earnings and other equity   134,392       133,236    
Total shareholders' equity   509,055       507,832    
Total liabilities and shareholders' equity$  4,230,428    $  4,134,976    
Net interest income $  35,691   $  35,599  
         
Net interest spread    3.63     3.65 
Effect of net interest-free funding sources    0.17     0.16 
Net interest margin    3.80%   3.81%
Ratio of average interest-earning assets to average interest-bearing liabilities  138.61%    139.60%   
         
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost.   
(2)  The interest rate on subordinated notes is calculated on a 30/360 day basis with a weighted average note rate of 5.05% for both the three months ended March 31, 2017 and December 31, 2016. The balance is net of debt issuance costs which are amortized to interest expense. 
         
Notes: For rate calculation purposes, average loan and lease categories include unearned discount.   
  Nonaccrual loans and leases have been included in the average loan and lease balances.      
  Loans held for sale have been included in the average loan balances.      
  Tax-equivalent amounts for the three months ended March 31, 2017 and December 31, 2016 have been calculated using the Corporation’s federal applicable rate of 35.0%.  
         

 

Univest Corporation of Pennsylvania 
  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential  
  For the Three Months Ended March 31,   
Tax Equivalent Basis 2017   2016  
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$  8,592 $16  0.76%$  19,619 $  28  0.57%
U.S. government obligations   34,038    106  1.26    82,488    250  1.22 
Obligations of state and political subdivisions   85,854    922  4.36    101,061    1,129  4.49 
Other debt and equity securities   350,408    1,582  1.83    158,669    1,024  2.60 
Federal funds sold and other earning assets (1)   25,909    358  5.60    14,821    132  3.58 
Total interest-earning deposits, investments, federal funds sold and other earning assets   504,801    2,984  2.40    376,658    2,563  2.74 
         
Commercial, financial, and agricultural loans   721,050    7,841  4.41    411,999    4,014  3.92 
Real estate—commercial and construction loans   1,460,029    15,740  4.37    887,118    9,919  4.50 
Real estate—residential loans   738,211    8,236  4.52    541,976    5,976  4.43 
Loans to individuals   29,575    400  5.49    29,478    399  5.44 
Municipal loans and leases   279,379    3,120  4.53    231,498    2,625  4.56 
Lease financings   78,633    1,483  7.65    75,022    1,542  8.27 
Gross loans and leases   3,306,877    36,820  4.52    2,177,091    24,475  4.52 
    Total interest-earning assets   3,811,678    39,804  4.24    2,553,749    27,038  4.26 
Cash and due from banks   41,942       31,665    
Reserve for loan and lease losses   (18,200)      (17,771)   
Premises and equipment, net   64,507       42,873    
Other assets   330,501       224,041    
Total assets$  4,230,428    $  2,834,557    
         
Liabilities:        
Interest-bearing checking deposits$  426,373 $105  0.10 $  402,160 $  84  0.08 
Money market savings   531,658    563  0.43    361,788    340  0.38 
Regular savings   807,802    349  0.18    626,894    174  0.11 
Time deposits   591,813    1,174  0.80    418,547    935  0.90 
Total time and interest-bearing deposits   2,357,646    2,191  0.38    1,809,389    1,533  0.34 
         
Short-term borrowings   150,155    262  0.71    27,388    3  0.04 
Long-term debt   148,031    399  1.09    -     -   -  
Subordinated notes (2)   94,116    1,261  5.43    49,394    675  5.50 
Total borrowings   392,302    1,922  1.99    76,782    678  3.55 
Total interest-bearing liabilities   2,749,948    4,113  0.61    1,886,171    2,211  0.47 
Noninterest-bearing deposits   932,639       542,427    
Accrued expenses and other liabilities   38,786       41,867    
Total liabilities   3,721,373       2,470,465    
         
Shareholders' Equity:        
Common stock   144,559       110,271    
Additional paid-in capital   230,104       120,824    
Retained earnings and other equity   134,392       132,997    
Total shareholders' equity   509,055       364,092    
Total liabilities and shareholders' equity$  4,230,428    $  2,834,557    
Net interest income $  35,691   $  24,827  
         
Net interest spread    3.63     3.79 
Effect of net interest-free funding sources    0.17     0.12 
Net interest margin    3.80%   3.91%
Ratio of average interest-earning assets to average interest-bearing liabilities  138.61%    135.39%   
         
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost.   
(2)  The interest rate on subordinated notes is calculated on a 30/360 day basis with a weighted average note rate of 5.05% and 5.10% for the three months ended March 31, 2017 and 2016, respectively. The balance is net of debt issuance costs which are amortized to interest expense. 
         
Notes: For rate calculation purposes, average loan and lease categories include unearned discount.   
  Nonaccrual loans and leases have been included in the average loan and lease balances.      
  Loans held for sale have been included in the average loan balances.      
  Tax-equivalent amounts for the three months ended March 31, 2017 and 2016 have been calculated using the Corporation’s federal applicable rate of 35.0%.   
         


CONTACT:
Roger Deacon
UNIVEST CORPORATION OF PENNSYLVANIA
Chief Financial Officer
215-721-2455, DeaconR@univest.net 

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Source: Univest Corporation of Pennsylvania
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