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Univest Corporation of Pennsylvania - Univest Bank and Trust Co. - Reports Second Quarter Earnings

Company Release - 7/27/2016 2:00 PM ET

SOUDERTON, Pa., July 27, 2016 (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 June 30, 2016. Univest reported net income of $5.2 million or $0.27 diluted earnings per share for the quarter ended June 30, 2016, compared to net income of $6.5 million or $0.33 diluted earnings per share for the quarter ended June 30, 2015. Net income for the six months ended June 30, 2016 was $12.5 million or $0.64 diluted earnings per share, consistent with net income of $12.6 million or $0.64 diluted earnings per share for the comparable period in the prior year. The financial results for the quarter and six months ended June 30, 2016 included $1.2 million and $1.4 million, net of tax, respectively, of acquisition-related and integration costs associated with the merger with Fox Chase Bancorp (Fox Chase), or $0.06 and $0.07, respectively, of diluted earnings per share. The quarter and six months ended June 30, 2015 included $1.2 million and $2.4 million, net of tax, respectively, of integration and acquisition-related costs and restructuring charges, or $0.05 and $0.12, respectively, of diluted earnings per share. The second quarter and year-to-date financial results do not include the financial results of Fox Chase, which Univest acquired on July 1, 2016.  

Loans
Gross loans and leases grew $166.0 million or 7.6% from December 31, 2015 and $237.2 million or 11.3% from June 30, 2015. Gross loans and leases also grew $161.8 million or 7.4% from March 31, 2016. The growth in loans was primarily in commercial business, commercial real estate and residential real estate loans. Loan growth in the quarter resulted from new and existing customer relationships and the addition of new lenders due to continued market disruption created by other bank acquisitions. Additionally, during the second quarter we hired a lending team from Lancaster County and during the third quarter we will integrate the Fox Chase Bank lending team. 

Deposits
Total deposits declined $17.3 million or 0.7% from December 31, 2015. Declines in public fund time deposits were partially offset by growth in savings deposits and non-interest bearing demand deposits. Deposits grew $114.1 million or 5.0% from June 30, 2015, primarily due to growth in both non-interest bearing and interest-bearing demand deposits and savings deposits, partially offset by a decrease in time deposits. During the quarter, interest-bearing consumer demand deposits of approximately $92.4 million were transferred to noninterest-bearing deposits due to a product consolidation for existing customers.

Net Interest Income and Margin
Net interest income of $23.5 million for the second quarter of 2016 and $46.9 million for the six months ended June 30, 2016 remained consistent with the same periods in 2015. The net interest margin on a tax-equivalent basis for the second quarter of 2016 was 3.92%, compared to 3.90% for the first quarter of 2016 and 4.03% for the second quarter of 2015. Increases in net interest income from the comparable periods in the prior year, due to loan growth, were partially offset by reductions in loan rates and a decrease in the net accretion of acquisition accounting fair value adjustments related to the Valley Green Bank acquisition (the favorable impact of the acquisition accounting adjustments was three basis points for both the three and six months ended June 30, 2016 compared to 13 basis points for both the three and six months ended June 30, 2015). Also, included in interest expense are $289 thousand of amortized bridge loan fees and interest expense related to the Fox Chase merger incurred in the second quarter of 2016. The bridge loan was paid off on July 1, 2016 in conjunction with the closing of the merger.

Noninterest Income
Noninterest income for the quarter ended June 30, 2016 was $14.1 million, an increase of $768 thousand or 5.8% from the second quarter of 2015. Noninterest income for the six months ended June 30, 2016 was $28.1 million, an increase of $1.3 million or 4.8% from the comparable period in the prior year. Insurance commission and fee income increased $481 thousand or 6.3% for the six months ended June 30, 2016, primarily due to an increase in contingent commission income and commercial premiums received in the first quarter of 2016. Bank owned life insurance (BOLI) income increased $324 thousand for the quarter and $441 thousand for the six months ended June 30, 2016 mainly due to the purchase of policies totaling $8.0 million during the third quarter of 2015 and the transfer of policies totaling $9.8 million during 2015 to a higher yielding account structure. The net gain on mortgage banking activities increased $344 thousand for the quarter and $304 thousand for the six months ended June 30, 2016, mainly due to an increase in mortgage volume during the second quarter of 2016. Funded first mortgage volume for the quarter increased $7.4 million or 13.0% compared to the same period in 2015.   

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2016 was $29.5 million, an increase of $2.7 million or 10.1%, compared to the second quarter of 2015. Noninterest expense for the six months ended June 30, 2016 was $56.5 million, an increase of $2.2 million or 4.1% from the comparable period in the prior year. Salaries and benefit expense increased $2.1 million for the quarter and $3.0 million for the six months ended June 30, 2016, primarily attributable to additional staff hired to support revenue generation across all business lines including the expansion into Lancaster County. Premises and equipment expenses increased $464 thousand for the quarter and $401 thousand for the six months ended June 30, 2016, mainly due to increased investments in computer equipment and software. Noninterest expense for the quarter and six months ended June 30, 2016 included $1.2 million and $1.4 million, respectively, of acquisition-related and integration costs associated with the merger with Fox Chase. Noninterest expense for the quarter and six months ended June 30, 2015 included $1.8 million and $3.6 million, respectively, of integration and acquisition-related costs and restructuring charges.

Asset Quality and Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $13.3 million at June 30, 2016, compared to $14.2 million at December 31, 2015 and $17.7 million at June 30, 2015. Net loan and lease charge-offs were $129 thousand during the second quarter of 2016, compared to $2.5 million for the second quarter of 2015. Non-accrual loans and leases as a percentage of total loans and leases held for investment was 0.57% at June 30, 2016, compared to 0.65% at December 31, 2015 and 0.84% at June 30, 2015. The provision for loan and lease losses was $830 thousand for the second quarter of 2016, compared to $1.1 million for the second quarter of 2015.

The allowance for loan and lease losses as a percentage of loans and leases held for investment was 0.73% at June 30, 2016, compared to 0.81% at December 31, 2015 and 0.93% at June 30, 2015. The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding loans acquired in the Valley Green Bank acquisition which were recorded at fair value as of the acquisition date, was 0.82% at June 30, 2016, compared to 0.94% at December 31, 2015 and 1.12% at June 30, 2015. The allowance for loan and lease losses to nonaccrual loans and leases held for investment equaled 129.3% at June 30, 2016, compared to 124.3% at December 31, 2015 and 143.1% at June 30, 2015.

Capital
Univest remains well-capitalized at June 30, 2016. Total risk-based capital at June 30, 2016 was 12.32%, well in excess of the regulatory minimum for well-capitalized status of 10%.

Dividend
On May 25, 2016, Univest declared a quarterly cash dividend of $0.20 per share, payable on July 1, 2016. This represented a 3.80% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Merger with Fox Chase Bancorp
On July 1, 2016, Univest completed its previously announced merger with Fox Chase, complementing and expanding the Corporation’s presence in Bucks, Chester, Philadelphia and Montgomery counties in Pennsylvania and into Atlantic and Cape May counties in New Jersey.

Conference Call
Univest will host a conference call to discuss second quarter results on Thursday, July 28, 2016 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10089539. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through August 28, 2016 by dialing 1-877-344-7529; using Conference ID: 10089539.

About Univest Corporation of Pennsylvania
Subsequent to the merger with Fox Chase Bancorp, Inc., Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has approximately $4.0 billion in assets and $3.2 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 - 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 
June 30, 2016 
(Dollars in thousands)               
                
Balance Sheet (Period End) 06/30/16 03/31/16 12/31/15 09/30/15 06/30/15     
Assets $3,107,617  $2,824,777  $2,879,451  $2,851,568  $2,780,578      
Investment securities  286,980   329,357   370,760   374,558   374,711      
Loans held for sale  4,657   3,818   4,680   9,151   8,831      
Loans and leases held for investment, gross  2,345,037   2,183,256   2,179,013   2,097,807   2,107,857      
Allowance for loan and lease losses  17,153   16,452   17,628   18,620   19,602      
Loans and leases held for investment, net  2,327,884   2,166,804   2,161,385   2,079,187   2,088,255      
Total deposits  2,377,084   2,334,361   2,394,360   2,372,865   2,263,025      
Noninterest-bearing deposits  689,916   559,827   541,460   519,767   519,026      
NOW, money market and savings  1,326,976   1,391,626   1,398,494   1,361,827   1,288,318      
Time deposits  360,192   382,908   454,406   491,271   455,681      
Borrowings  309,666   75,265   73,588   70,531   110,480      
Shareholders' equity  369,160   367,003   361,574   359,109   356,186      
                
                
Balance Sheet (Average) For the three months ended, For the six months ended, 
  06/30/16 03/31/16 12/31/15 09/30/15 06/30/15 06/30/16 06/30/15 
Assets $2,854,561  $2,834,557  $2,866,848  $2,804,578  $2,739,968  $2,844,277  $2,715,874  
Investment securities  302,492   342,218   370,163   368,837   375,887   322,355   378,433  
Loans and leases, gross  2,239,674   2,177,091   2,132,922   2,098,007   2,067,120   2,208,382   2,045,598  
Deposits  2,340,959   2,351,816   2,393,655   2,325,049   2,242,217   2,346,387   2,240,035  
Shareholders' equity  368,466   364,092   360,521   357,150   359,154   366,280   360,631  
                
                
Asset Quality Data (Period End)                
  06/30/16 03/31/16 12/31/15 09/30/15 06/30/15     
Nonaccrual loans and leases, including nonaccrual troubled debt restructured               
loans and leases and nonaccrual loans held for sale $13,265  $13,482  $14,183  $20,838  $17,697      
Accruing loans and leases 90 days or more past due  748   693   379   428   287      
Accruing troubled debt restructured loans and leases  4,413   4,279   5,245   4,789   6,099      
Other real estate owned  3,131   3,073   1,276   955   955      
Nonperforming assets  21,557   21,527   21,083   27,010   25,038      
Allowance for loan and lease losses  17,153   16,452   17,628   18,620   19,602      
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual  0.57%  0.62%  0.65%  0.99%  0.84%     
loans held for sale               
Nonperforming loans and leases / Loans and leases held for investment and nonaccrual  0.79%  0.85%  0.91%  1.24%  1.14%     
loans held for sale               
Allowance for loan and lease losses / Loans and leases held for investment  0.73%  0.75%  0.81%  0.89%  0.93%     
Allowance for loan and lease losses / Loans and leases held for investment  0.82%  0.86%  0.94%  1.06%  1.12%     
(excluding acquired loans at period-end)               
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment  129.31%  122.03%  124.29%  110.58%  143.11%     
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 93.09%  89.15%  89.00%  84.43%  97.60%     
Acquired credit impaired loans $942  $1,267  $1,253  $1,379  $1,876      
                
  For the three months ended, For the six months ended, 
  06/30/16 03/31/16 12/31/15 09/30/15 06/30/15 06/30/16 06/30/15 
Net loan and lease charge-offs $129  $1,502  $1,909  $1,652  $2,473  $1,631  $3,275  
Net loan and lease charge-offs (annualized)/Average loans and leases  0.02%  0.28%  0.36%  0.31%  0.48%  0.15%  0.32% 
                


Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data 
June 30, 2016 
(Dollars in thousands, except per share data)               
  For the three months ended, For the six months ended, 
For the period: 06/30/16 03/31/16 12/31/15 09/30/15 06/30/15 06/30/16 06/30/15 
Interest income $25,994  $25,609  $25,623  $25,585  $25,513  $51,603  $50,251  
Interest expense  2,451   2,211   2,278   2,220   2,133   4,662   3,567  
Net interest income  23,543   23,398   23,345   23,365   23,380   46,941   46,684  
Provision for loan and lease losses  830   326   917   670   1,141   1,156   2,215  
Net interest income after provision  22,713   23,072   22,428   22,695   22,239   45,785   44,469  
Noninterest income:               
Trust fee income  1,997   1,865   2,030   1,904   2,154   3,862   3,974  
Service charges on deposit accounts  1,056   998   1,059   1,069   1,039   2,054   2,102  
Investment advisory commission and fee income  2,759   2,669   2,583   2,687   2,740   5,428   5,503  
Insurance commission and fee income  3,503   4,558   3,073   3,232   3,434   8,061   7,580  
Bank owned life insurance income  535   470   425   306   211   1,005   564  
Net gain on sales of investment securities  413   44   697   296   181   457   272  
Net gain on mortgage banking activities  1,711   1,218   1,090   1,123   1,367   2,929   2,625  
Other income  2,145   2,134   2,355   2,238   2,225   4,279   4,162  
Total noninterest income  14,119   13,956   13,312   12,855   13,351   28,075   26,782  
Noninterest expense:               
Salaries and benefits  14,080   14,182   12,828   11,970   11,957   28,262   25,271  
Commissions  2,363   1,895   1,894   2,174   2,155   4,258   3,969  
Premises and equipment  4,207   3,984   3,897   3,924   3,743   8,191   7,790  
Professional fees  947   1,020   870   1,096   1,066   1,967   1,873  
Intangible expenses  996   770   178   710   893   1,766   1,679  
Acquisition-related costs  1,158   214   540   -   41   1,372   507  
Integration costs  27   6   6   -   110   33   1,484  
Restructuring charges  -   -   -   -   1,642   -   1,642  
Other expense  5,768   4,868   5,816   5,369   5,225   10,636   10,028  
Total noninterest expense  29,546   26,939   26,029   25,243   26,832   56,485   54,243  
Income before taxes  7,286   10,089   9,711   10,307   8,758   17,375   17,008  
Income taxes  2,046   2,800   2,553   2,779   2,292   4,846   4,426  
Net income $5,240  $7,289  $7,158  $7,528  $6,466  $12,529  $12,582  
Per common share data:               
Book value per share $18.88  $18.73  $18.51  $18.41  $18.21  $18.88  $18.21  
Net income per share:               
Basic $0.27  $0.37  $0.37  $0.39  $0.33  $0.64  $0.64  
Diluted $0.27  $0.37  $0.37  $0.39  $0.33  $0.64  $0.64  
Dividends declared per share $0.20  $0.20  $0.20  $0.20  $0.20  $0.40  $0.40  
Weighted average shares outstanding  19,603,310   19,578,438   19,525,701   19,506,609   19,675,002   19,590,873   19,812,359  
Period end shares outstanding  19,557,958   19,592,798   19,530,930   19,502,613   19,559,941   19,557,958   19,559,941  
                
                


Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
June 30, 2016
                  
                  
                  
     For the three months ended, For the six months ended,
Profitability Ratios (annualized)  06/30/16 03/31/16 12/31/15 09/30/15 06/30/15 06/30/16 06/30/15
                  
Return on average assets   0.74%  1.03%  0.99%  1.06%  0.95%  0.89%  0.93%
Return on average assets, excluding integration  0.90%  1.07%  1.06%  1.06%  1.12%  0.98%  1.11%
and acquisition-related costs and restructuring charges (1), (2)            
Return on average shareholders' equity  5.72%  8.05%  7.88%  8.36%  7.22%  6.88%  7.04%
Return on average shareholders' equity, excluding 6.99%  8.29%  8.42%  8.36%  8.52%  7.64%  8.36%
integration and acquisition-related costs and              
restructuring charges (1), (2)               
Return on average tangible common equity, excluding 10.56%  12.63%  12.92%  12.91%  13.12%  11.58%  12.80%
integration and acquisition-related costs and              
restructuring charges (1), (2)               
Net interest margin (FTE)   3.92%  3.90%  3.80%  3.89%  4.03%  3.91%  4.07%
Efficiency ratio (3)    75.22%  69.23%  68.10%  66.96%  70.29%  72.24%  70.99%
Efficiency ratio, excluding integration and  72.20%  68.67%  66.67%  66.96%  65.60%  70.44%  66.23%
acquisition-related costs and restructuring charges (1), (3), (4)            
                  
Capitalization Ratios                
                  
Dividends declared to net income   74.64%  53.62%  54.08%  51.79%  60.49%  62.41%  62.80%
Shareholders' equity to assets (Period End)  11.88%  12.99%  12.56%  12.59%  12.81%  11.88%  12.81%
Tangible common equity to tangible assets  8.21%  8.97%  8.58%  8.56%  8.67%  8.21%  8.67%
                  
                  
Regulatory Capital Ratios  (Period End)               
Tier 1 leverage ratio    9.90%  9.93%  9.69%  9.75%  9.89%  9.90%  9.89%
Common equity tier 1 risk-based capital ratio  9.87%  10.81%  10.65%  10.85%  10.77%  9.87%  10.77%
Tier 1 risk-based capital ratio   9.87%  10.81%  10.65%  10.85%  10.77%  9.87%  10.77%
Total risk-based capital ratio   12.32%  13.47%  13.35%  13.69%  13.65%  12.32%  13.65%
                  
                  
 (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$1,185  $220  $546  $-  $1,793  $1,405  $3,633 
 restructuring charges             
 Tax effect on integration and acquisition-related 22   2   49   -   628   24   1,270 
 costs and restructuring charges             
 (b) Integration and acquisition-related costs and$1,163  $218  $497  $-  $1,165  $1,381  $2,363 
 restructuring charges, net of tax             
                  
 (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.      
                  


  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential   
  For the Three Months Ended June 30,    
Tax Equivalent Basis  2016     2015    
 AverageIncome/Average
 AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$7,654 $9 0.47%$17,767 $11 0.25% 
U.S. government obligations 57,776  176 1.23  129,482  351 1.09  
Obligations of state and political subdivisions 101,241  1,092 4.34  109,449  1,354 4.96  
Other debt and equity securities 143,475  1,012 2.84  136,956  753 2.21  
Federal funds sold 973  2 0.83  825  - -  
Total interest-earning deposits, investments and federal funds sold 311,119  2,291 2.96  394,479  2,469 2.51  
          
Commercial, financial, and agricultural loans 436,189  4,132 3.81  434,251  4,483 4.14  
Real estate—commercial and construction loans 898,494  10,106 4.52  846,318  9,913 4.70  
Real estate—residential loans 557,733  6,141 4.43  482,796  5,619 4.67  
Loans to individuals 30,301  408 5.42  29,149  389 5.35  
Municipal loans and leases 241,507  2,723 4.53  204,931  2,431 4.76  
Lease financings 75,450  1,524 8.12  69,675  1,535 8.84  
Gross loans and leases 2,239,674  25,034 4.50  2,067,120  24,370 4.73  
Total interest-earning assets 2,550,793  27,325 4.31  2,461,599  26,839 4.37  
Cash and due from banks 32,647     32,624     
Reserve for loan and lease losses (16,789)    (21,373)    
Premises and equipment, net 43,990     40,433     
Other assets 243,920     226,685     
Total assets$2,854,561    $2,739,968     
          
Liabilities:         
Interest-bearing checking deposits$351,011 $75 0.09 $370,449 $67 0.07  
Money market savings 337,250  322 0.38  344,523  259 0.30  
Regular savings 644,199  199 0.12  581,765  136 0.09  
Time deposits 374,936  862 0.92  445,255  983 0.89  
Total time and interest-bearing deposits 1,707,396  1,458 0.34  1,741,992  1,445 0.33  
          
Short-term borrowings 53,874  320 2.39  45,525  13 0.11  
Subordinated notes (1) 49,431  673 5.48  49,286  675 5.49  
Total borrowings 103,305  993 3.87  94,811  688 2.91  
Total interest-bearing liabilities 1,810,701  2,451 0.54  1,836,803  2,133 0.47  
Noninterest-bearing deposits 633,563     500,225     
Accrued expenses and other liabilities 41,831     43,786     
Total liabilities 2,486,095     2,380,814     
          
Shareholders' Equity:         
Common stock 110,271     110,271     
Additional paid-in capital 121,070     120,294     
Retained earnings and other equity 137,125     128,589     
Total shareholders' equity 368,466     359,154     
Total liabilities and shareholders' equity$2,854,561    $2,739,968     
Net interest income $24,874    $24,706    
          
Net interest spread  3.77   3.90  
Effect of net interest-free funding sources  0.15   0.13  
Net interest margin  3.92% 4.03% 
Ratio of average interest-earning assets to average interest-bearing liabilities 140.87%    134.02%    
          
(1)  The interest rate on subordinated notes is calculated on a 30/360 day basis at a rate of 5.10%. 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 June 30, 2016 and 2015 have been calculated    
using the Corporation’s federal applicable rate of 35.0%.        
          


  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential   
  For the Six Months Ended June 30,    
Tax Equivalent Basis20162015  
 AverageIncome/Average
 AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$13,637 $37 0.55%$13,474 $16 0.24% 
U.S. government obligations 70,132  426 1.22  134,694  730 1.09  
Obligations of state and political subdivisions 101,151  2,221 4.42  107,048  2,676 5.04  
Other debt and equity securities 151,072  2,036 2.71  136,691  1,408 2.08  
Federal funds sold 3,456  9 0.52  3,692  2 0.11  
Total interest-earning deposits, investments and federal funds sold 339,448  4,729 2.80  395,599  4,832 2.46  
          
Commercial, financial, and agricultural loans 424,094  8,146 3.86  428,566  8,732 4.11  
Real estate—commercial and construction loans 892,806  20,025 4.51  834,178  19,544 4.72  
Real estate—residential loans 549,855  12,117 4.43  477,996  11,003 4.64  
Loans to individuals 29,889  807 5.43  29,881  796 5.37  
Municipal loans and leases 236,503  5,348 4.55  204,468  4,868 4.80  
Lease financings 75,235  3,066 8.20  70,509  3,118 8.92  
Gross loans and leases 2,208,382  49,509 4.51  2,045,598  48,061 4.74  
Total interest-earning assets 2,547,830  54,238 4.28  2,441,197  52,893 4.37  
Cash and due from banks 32,156     31,420     
Reserve for loan and lease losses (17,280)    (21,231)    
Premises and equipment, net 43,431     40,500     
Other assets 238,140     223,988     
Total assets$2,844,277    $2,715,874     
          
Liabilities:         
Interest-bearing checking deposits$376,586 $159 0.08 $358,234 $114 0.06  
Money market savings 349,519  662 0.38  359,936  538 0.30  
Regular savings 635,546  373 0.12  572,453  258 0.09  
Time deposits 396,741  1,797 0.91  453,270  1,952 0.87  
Total time and interest-bearing deposits 1,758,392  2,991 0.34  1,743,893  2,862 0.33  
          
Short-term borrowings 40,631  323 1.60  46,178  23 0.10  
Subordinated notes (1) 49,412  1,348 5.49  25,324  682 5.43  
Total borrowings 90,043  1,671 3.73  71,502  705 1.99  
Total interest-bearing liabilities 1,848,435  4,662 0.51  1,815,395  3,567 0.40  
Noninterest-bearing deposits 587,995     496,142     
Accrued expenses and other liabilities 41,567     43,706     
Total liabilities 2,477,997     2,355,243     
          
Shareholders' Equity:         
Common stock 110,271     110,271     
Additional paid-in capital 120,947     120,227     
Retained earnings and other equity 135,062     130,133     
Total shareholders' equity 366,280     360,631     
Total liabilities and shareholders' equity$2,844,277    $2,715,874     
Net interest income $49,576    $49,326    
          
Net interest spread  3.77   3.97  
Effect of net interest-free funding sources  0.14   0.10  
Net interest margin  3.91%    4.07% 
Ratio of average interest-earning assets to average interest-bearing liabilities 137.84%    134.47%    
          
(1)  The interest rate on subordinated notes is calculated on a 30/360 day basis at a rate of 5.10%. 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 six months ended June 30, 2016 and 2015 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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