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

Company Release - 10/26/2016 4:40 PM ET

SOUDERTON, Pa., Oct. 26, 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 third quarter ended September 30, 2016. Univest reported net income of $58 thousand or $0.00 diluted earnings per share for the three months ended September 30, 2016, compared to net income of $7.5 million or $0.39 diluted earnings per share for the three months ended September 30, 2015. Net income for the nine months ended September 30, 2016 was $12.6 million or $0.57 diluted earnings per share, compared to net income of $20.1 million or $1.02 diluted earnings per share for the comparable period in the prior year.

The financial results for the three and nine months ended September 30, 2016 included $9.2 million and $10.6 million, net of tax, respectively, of acquisition and integration related costs associated with the acquisition of Fox Chase Bancorp (“Fox Chase”), or a total of $0.35 and $0.48, respectively, of diluted earnings per share. The nine months ended September 30, 2015 included $2.4 million, net of tax, of integration and acquisition-related costs and restructuring charges incurred during the first and second quarters, or $0.12 of diluted earnings per share. The current quarter is the first reporting period reflecting financial results inclusive of Fox Chase which Univest acquired on July 1, 2016. On September 12, 2016, Univest completed the Fox Chase system conversion, moving all operations to Univest and providing all Univest and Fox Chase customers with access to an expanded financial center and ATM network.

Loans

Gross loans and leases increased $1.0 billion from December 31, 2015 and $1.1 billion from September 30, 2015, including $776.3 million of loans acquired from Fox Chase Bank. Organic loan growth, which excludes the loans acquired from Fox Chase at June 30, 2016, was $69.1 million, or 2.2% (not annualized), for the three months ended September 30, 2016. The growth in loans was primarily in commercial business, commercial real estate and residential real estate loans. Loan growth in 2016 resulted from new and existing customer relationships and Univest’s strategic move to expand its presence and hire a lending team in Lancaster County to seize opportunities as a result of market disruption caused by other bank acquisitions. Loan growth also resulted from opportunities brought by Univest’s new lending talent in its core market and through the acquisition of Fox Chase.

Deposits

Total deposits increased $784.1 million from December 31, 2015 and $805.6 million from September 30, 2015, 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 $63.2 million, or 2.0% (not annualized), for the three months ended September 30, 2016 which is primarily due to an increase in public funds deposits.

Borrowings

Total borrowings increased $324.8 million from December 31, 2015 and $327.8 million from September 30, 2015, primarily due to long-term borrowings acquired from Fox Chase which consisted of $90.0 million principal amount of Federal Home Loan bank borrowings and borrowed funds obtained from other commercial banks, the issuance by the Corporation of $45.0 million in subordinated notes on July 1, 2016 and an increase of $187.2 million in short-term borrowings.

Net Interest Income and Margin

Net interest income increased $9.4 million to $32.9 million for the third quarter of 2016 from the same period in 2015. Net interest income increased $9.6 million for the nine months ended September 30, 2016 from the same period in the prior year. The net interest margin on a tax-equivalent basis for the third quarter of 2016 was 3.68%, compared to 3.93% for the second quarter of 2016 and 3.89% for the third quarter of 2015. The increase in net interest income and decrease in net interest margin during the third quarter of 2016 was mainly due to the impact of the Fox Chase acquisition, which included a full quarter of average net interest-earning assets acquired. The favorable impact of acquisition accounting fair value adjustments was 7 basis points for the quarter ended September 30, 2016 compared to 8 basis points for the quarter ended September 30, 2015.  A detailed analysis comparing net interest margin and net interest income for the quarter ended September 30, 2016 and the quarter ended June 30, 2106 is included in the attached exhibits.

Noninterest Income

Noninterest income for the quarter ended September 30, 2016 was $14.1 million, an increase of $1.4 million or 11.0% from the third quarter of 2015. Noninterest income for the nine months ended September 30, 2016 was $42.0 million, an increase of $2.7 million or 7.0% from the comparable period in the prior year. Service charges on deposits increased $275 thousand or 25.7% for the quarter and $227 thousand or 7.2% for the nine months ended September 30, 2016, mostly due to fees on deposit accounts acquired from Fox Chase. Insurance commission and fee income increased $516 thousand or 4.8% for the nine months ended September 30, 2016, primarily due to an increase in contingent commission income and growth in the group life and health and commercial product lines premiums. Bank owned life insurance (BOLI) income increased $405 thousand for the quarter and $846 thousand for the nine months ended September 30, 2016 mainly due to $26.1 million of policies acquired from Fox Chase which generated $208 thousand of income during the third quarter of 2016, the purchase of policies totaling $8.0 million during the third quarter of 2015, and the transfer of policies totaling $9.8 million during the second and fourth quarters of 2015 to a higher yielding account structure. The net gain on mortgage banking activities increased $883 thousand for the quarter and $1.2 million for the nine months ended September 30, 2016, mainly due to increases in mortgage volume during the second and third quarters of 2016. Mortgage volume closings increased $32.8 million, or 65.5%, for the three months ended September 30, 2016 and $33.4 million, or 21.7% for the nine months ended September 30, 2016, compared to the same periods in 2015.

Noninterest Expense

Noninterest expense for the quarter ended September 30, 2016 was $47.1 million, an increase of $21.8 million or 86.5%, compared to the third quarter of 2015. Noninterest expense for the nine months ended September 30, 2016 was $103.6 million, an increase of $24.1 million or 30.3% from the comparable period in the prior year.  Acquisition and integration costs related to the Fox Chase merger were $14.1 million for the three months ended September 30, 2016 and $15.6 million for the nine months ended September 30, 2016.  Acquisition, integration and restructuring costs related to the Valley Green merger were $3.6 million for the nine months ended September 30, 2015. Salaries and benefit expense increased $4.7 million for the quarter and $7.7 million for the nine months ended September 30, 2016, 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. Commission expense increased $311 thousand for the quarter and $600 thousand for the nine months ended September 30, 2016, mostly due to commissions paid on increased mortgage banking and insurance revenue. Premises and equipment expenses increased $545 thousand for the quarter and $365 thousand for the nine months ended September 30, 2016, primarily due to higher premises expense related to Fox Chase locations. Data processing expense increased $954 thousand for the quarter and $1.6 million for the nine months ended September 30, 2016 due to increased investments in computer software as well as a full quarter of Fox Chase processing expense.

Asset Quality and Provision for Loan and Lease Losses

Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $15.1 million at September 30, 2016, compared to $14.2 million at December 31, 2015 and $20.8 million at September 30, 2015. Net loan and lease charge-offs were $1.7 million during the third quarter of 2016 and $3.3 million for the nine months ended September 30, 2016. The provision for loan and lease losses was $1.4 million for the third quarter of 2016 and $2.6 million for the nine months ended September 30, 2016.

The allowance for loan and lease losses as a percentage of loans and leases held for investment was 0.53% at September 30, 2016, compared to 0.81% at December 31, 2015 and 0.89% at September 30, 2015. The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding loans acquired in the Fox Chase and Valley Green Bank acquisitions which were recorded at fair value as of the acquisition date, was 0.77% at September 30, 2016, compared to 0.94% at December 31, 2015.

Dividend

On August 19, 2016, Univest declared a quarterly cash dividend of $0.20 per share, payable on October 3, 2016. This represented a 3.45% 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 second quarter results on Thursday, October 27, 2016 at 9:00 a.m. EDT. Participants may preregister at http://dpregister.com/10094672. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through November 27, 2016 by dialing 1-877-344-7529; using Conference ID: 10094672.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has approximately $4.1 billion in assets and $3.0 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
September 30, 2016
(Dollars in thousands)              
               
Balance Sheet (Period End) 09/30/16 06/30/16 03/31/16 12/31/15 09/30/15    
Assets $  4,140,444  $  3,107,617  $  2,824,777  $  2,879,451  $  2,851,568     
Investment securities    484,213     286,980     329,357     370,760     374,558     
Loans held for sale    3,844     4,657     3,818     4,680     9,151     
Loans and leases held for investment, gross    3,190,361     2,345,037     2,183,256     2,179,013     2,097,807     
Allowance for loan and lease losses    16,899     17,153     16,452     17,628     18,620     
Loans and leases held for investment, net    3,173,462     2,327,884     2,166,804     2,161,385     2,079,187     
Total deposits    3,178,509     2,377,084     2,334,361     2,394,360     2,372,865     
Noninterest-bearing deposits    874,581     689,916     559,827     541,460     519,767     
NOW, money market and savings    1,652,696     1,326,976     1,391,626     1,398,494     1,361,827     
Time deposits    651,232     360,192     382,908     454,406     491,271     
Borrowings    398,341     309,666     75,265     73,588     70,531     
Shareholders' equity    509,249     369,160     367,003     361,574     359,109     
               
               
Balance Sheet (Average) For the three months ended, For the nine months ended,
  09/30/16 06/30/16 03/31/16 12/31/15 09/30/15 09/30/16 09/30/15
Assets $  4,147,468  $  2,854,561  $  2,834,557  $  2,866,848  $  2,804,578  $  3,281,469  $  2,745,767 
Investment securities     503,790     302,492     342,218     370,163     368,837     383,275     375,200 
Loans and leases, gross    3,164,273     2,239,674     2,177,091     2,132,922     2,098,007     2,529,339     2,063,259 
Deposits    3,177,060     2,340,959     2,351,816     2,393,655     2,325,049     2,625,299     2,268,685 
Shareholders' equity    506,464     368,466     364,092     360,521     357,150     413,348     359,457 
               
               
Asset Quality Data (Period End)               
  09/30/16 06/30/16 03/31/16 12/31/15 09/30/15    
Nonaccrual loans and leases, including nonaccrual troubled debt restructured              
  loans and leases and nonaccrual loans held for sale $  15,050  $  13,265  $  13,482  $  14,183  $  20,838     
Accruing loans and leases 90 days or more past due    1,128     748     693     379     428     
Accruing troubled debt restructured loans and leases    3,286     4,413     4,279     5,245     4,789     
Other real estate owned    6,041     3,131     3,073     1,276     955     
Nonperforming assets    25,505     21,557     21,527     21,083     27,010     
Allowance for loan and lease losses    16,899     17,153     16,452     17,628     18,620     
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual   0.47%  0.57%  0.62%  0.65%  0.99%    
  loans held for sale              
Nonperforming loans and leases / Loans and leases held for investment and nonaccrual   0.61%  0.79%  0.85%  0.91%  1.24%    
  loans held for sale              
Allowance for loan and lease losses / Loans and leases held for investment   0.53%  0.73%  0.75%  0.81%  0.89%    
Allowance for loan and lease losses / Loans and leases held for investment  0.77%  0.82%  0.86%  0.94%  1.06%    
  (excluding acquired loans at period-end)              
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment  112.29%  129.31%  122.03%  124.29%  110.58%    
Allowance for loan and lease losses / Nonperforming loans and leases held for investment    86.82%  93.09%  89.15%  89.00%  84.43%    
Acquired credit impaired loans $  14,575  $  942  $  1,267  $  1,253  $  1,379     
               
  For the three months ended, For the nine months ended,
  09/30/16 06/30/16 03/31/16 12/31/15 09/30/15 09/30/16 09/30/15
Net loan and lease charge-offs $  1,669  $  129  $  1,502  $  1,909  $  1,652  $  3,300  $  4,927 
Net loan and lease charge-offs (annualized)/Average loans and leases  0.21%  0.02%  0.28%  0.36%  0.31%  0.17%  0.32%
               

 

  
Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data 
September 30, 2016 
(Dollars in thousands, except per share data)               
  For the three months ended, For the nine months ended, 
For the period: 09/30/16 06/30/16 03/31/16 12/31/15 09/30/15 09/30/16 09/30/15 
Interest income $  36,705  $  26,112  $  25,734  $  25,747  $  25,704  $  88,551  $  76,236  
Interest expense    3,836     2,451     2,211     2,278     2,220     8,498     5,787  
Net interest income    32,869     23,661     23,523     23,469     23,484     80,053     70,449  
Provision for loan and lease losses    1,415     830     326     917     670     2,571     2,885  
Net interest income after provision    31,454     22,831     23,197     22,552     22,814     77,482     67,564  
Noninterest income:               
Trust fee income    1,958     1,997     1,865     2,030     1,904     5,820     5,878  
Service charges on deposit accounts    1,344     1,056     998     1,059     1,069     3,398     3,171  
Investment advisory commission and fee income      2,864     2,759     2,669     2,583     2,687     8,292     8,190  
Insurance commission and fee income    3,267     3,503     4,558     3,073     3,232     11,328     10,812  
Bank owned life insurance income    711     535     470     425     306     1,716     870  
Net gain on sales of investment securities    30     413     44     697     296     487     568  
Net gain on mortgage banking activities    2,006     1,711     1,218     1,090     1,123     4,935     3,748  
Other income    1,957     2,027     2,009     2,231     2,119     5,993     6,000  
Total noninterest income    14,137     14,001     13,831     13,188     12,736     41,969     39,237  
Noninterest expense:               
Salaries and benefits    16,710     14,080     14,182     12,828     11,970     44,972     37,241  
Commissions    2,485     2,363     1,895     1,894     2,174     6,743     6,143  
Premises and equipment    3,424     2,841     2,872     2,817     2,879     9,137     8,772  
Data processing    2,169     1,530     1,281     1,244     1,215     4,980     3,416  
Professional fees    1,322     947     1,020     870     1,096     3,289     2,969  
Intangible expenses    906     996     770     178     710     2,672     2,389  
Acquisition-related costs    8,784     1,158     214     540     -      10,156     507  
Integration costs    5,365     27     6     6     -      5,398     1,484  
Restructuring charges    (85)    -      -      -      -      (85)    1,642  
Other expense    5,986     5,604     4,699     5,652     5,199     16,289     14,923  
Total noninterest expense    47,066     29,546     26,939     26,029     25,243     103,551     79,486  
Income before taxes    (1,475)    7,286     10,089     9,711     10,307     15,900     27,315  
Income taxes    (1,533)    2,046     2,800     2,553     2,779     3,313     7,205  
Net income $  58  $  5,240  $  7,289  $  7,158  $  7,528  $  12,587  $  20,110  
Per common share data:               
Book value per share $  19.17  $  18.88  $  18.73  $  18.51  $  18.41  $  19.17  $  18.41  
Net income per share:               
Basic $  -   $  0.27  $  0.37  $  0.37  $  0.39  $  0.58  $  1.02  
Diluted $  -   $  0.27  $  0.37  $  0.37  $  0.39  $  0.57  $  1.02  
Dividends declared per share $  0.20  $  0.20  $  0.20  $  0.20  $  0.20  $  0.60  $  0.60  
Weighted average shares outstanding    26,555,626     19,603,310     19,578,438     19,525,701     19,506,609     21,929,403     19,709,322  
Period end shares outstanding    26,558,412     19,557,958     19,592,798     19,530,930     19,502,613     26,558,412     19,502,613  
                

 

 
Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
September 30, 2016
                  
                  
                  
     For the three months ended, For the nine months ended,
Profitability Ratios (annualized)  09/30/16 06/30/16 03/31/16 12/31/15 09/30/15 09/30/16 09/30/15
                  
Return on average assets   0.01%  0.74%  1.03%  0.99%  1.06%  0.51%  0.98%
Return on average assets, excluding integration   0.88%  0.90%  1.07%  1.06%  1.06%  0.94%  1.09%
  and acquisition-related costs and restructuring charges (1), (2)                
Return on average shareholders' equity  0.05%  5.72%  8.05%  7.88%  8.36%  4.07%  7.48%
Return on average shareholders' equity, excluding 7.24%  6.99%  8.29%  8.42%  8.36%  7.47%  8.36%
  integration and acquisition-related costs and              
  restructuring charges (1), (2)               
Return on average tangible common equity, excluding 11.54%  10.56%  12.63%  12.92%  12.91%  11.57%  12.84%
  integration and acquisition-related costs and              
  restructuring charges (1), (2)               
Net interest margin (FTE)   3.68%  3.93%  3.91%  3.80%  3.89%  3.82%  4.02%
Efficiency ratio (3)    96.45%  75.22%  69.23%  68.10%  66.96%  81.54%  69.66%
Efficiency ratio, excluding integration and  67.63%  72.20%  68.67%  66.67%  66.96%  69.36%  66.47%
  acquisition-related costs and restructuring charges (1), (3), (4)                
                  
Capitalization Ratios                
                  
Dividends declared to net income   N/M   74.64%  53.62%  54.08%  51.79%  104.27%  58.68%
Shareholders' equity to assets (Period End)  12.30%  11.88%  12.99%  12.56%  12.59%  12.30%  12.59%
Tangible common equity to tangible assets  8.10%  8.21%  8.97%  8.58%  8.56%  8.10%  8.56%
                  
                  
Regulatory Capital Ratios  (Period End)               
Tier 1 leverage ratio    8.80%  9.90%  9.93%  9.69%  9.75%  8.80%  9.75%
Common equity tier 1 risk-based capital ratio  9.58%  10.24%  10.81%  10.65%  10.85%  9.58%  10.85%
Tier 1 risk-based capital ratio   9.58%  10.24%  10.81%  10.65%  10.85%  9.58%  10.85%
Total risk-based capital ratio   12.64%  12.77%  13.47%  13.35%  13.69%  12.64%  13.69%
                  
                  
 (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 $  14,064  $  1,185  $  220  $  546  $  -   $  15,469  $  3,633 
               
 Tax effect on integration and acquisition-related costs and restructuring charges   4,910     22     2     49     -      4,934     1,270 
               
 (b) Integration and acquisition-related costs and restructuring charges, net of tax $  9,154  $  1,163  $  218  $  497  $  -   $  10,535  $  2,363 
               
                  
 (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. 
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 BasisSeptember 30, 2016 June 30, 2016 
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$16,248 $14    0.34% $  7,654 $  9    0.47% 
U.S. government obligations   43,622    125    1.14     57,776    176    1.23  
Obligations of state and political subdivisions   96,581    1,030    4.24     101,241    1,092    4.34  
Other debt and equity securities   363,587    1,358    1.49     143,475    1,012    2.84  
Federal funds sold and other earning assets (1)   18,987    321    6.73     11,018    121    4.42  
Total interest-earning deposits, investments, federal funds sold and other earning assets     539,025    2,848    2.10     321,164    2,410    3.02  
         
Commercial, financial, and agricultural loans   674,569    6,571    3.88     436,189    4,132    3.81  
Real estate—commercial and construction loans   1,382,947    15,816    4.55     898,494    10,106    4.52  
Real estate—residential loans   710,814    7,887    4.41     557,733    6,141    4.43  
Loans to individuals   31,416    415    5.26     30,301    408    5.42  
Municipal loans and leases   288,391    3,030    4.18     241,507    2,723    4.53  
Lease financings   76,136    1,547    8.08     75,450    1,524    8.12  
Gross loans and leases   3,164,273    35,266    4.43     2,239,674    25,034    4.50  
Total interest-earning assets   3,703,298    38,114    4.09     2,560,838    27,444    4.31  
Cash and due from banks   40,835       32,647    
Reserve for loan and lease losses   (17,110)      (16,789)   
Premises and equipment, net   61,361       43,990    
Other assets   359,084       233,875    
Total assets$  4,147,468    $  2,854,561    
         
Liabilities:        
Interest-bearing checking deposits$389,079 $114    0.12  $  351,011 $  75    0.09  
Money market savings   483,579    428    0.35     337,250    322    0.38  
Regular savings   793,644    352    0.18     644,199    199    0.12  
Time deposits   606,561    1,187    0.78     374,936    862    0.92  
Total time and interest-bearing deposits   2,272,863    2,081    0.36     1,707,396    1,458    0.34  
         
Short-term borrowings   229,282    276    0.48     53,874    320    2.39  
Long-term debt (2)   93,188    218    0.93     -     -     -   
Subordinated notes (3)   94,035    1,261    5.33     49,431    673    5.48  
Total borrowings   416,505    1,755    1.68     103,305    993    3.87  
Total interest-bearing liabilities   2,689,368    3,836    0.57     1,810,701    2,451    0.54  
Noninterest-bearing deposits   904,197       633,563    
Accrued expenses and other liabilities   47,439       41,831    
Total liabilities   3,641,004       2,486,095    
         
Shareholders' Equity:        
Common stock   144,559       110,271    
Additional paid-in capital   229,319       121,070    
Retained earnings and other equity   132,586       137,125    
Total shareholders' equity   506,464       368,466    
Total liabilities and shareholders' equity$  4,147,468    $  2,854,561    
Net interest income $  34,278    $  24,993   
         
Net interest spread     3.52       3.77  
Effect of net interest-free funding sources     0.16       0.16  
Net interest margin     3.68%        3.93% 
             
Ratio of average interest-earning assets to average interest-bearing liabilities 137.70%    141.43%   
         
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost.   
(2) The average interest rate on long-term debt includes the net accretion of acquisition accounting fair value adjustments.  
(3) 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 September 30, 2016 and June 30, 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 September 30, 2016 and June 30, 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 September 30,
 
Tax Equivalent Basis  2016  
   2015  
 
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$16,248 $14    0.34% $  50,514 $  21    0.16% 
U.S. government obligations   43,622    125    1.14     119,712    345    1.14  
Obligations of state and political subdivisions   96,581    1,030    4.24     109,300    1,335    4.85  
Other debt and equity securities   363,587    1,358    1.49     139,825    859    2.44  
Federal funds sold and other earning assets (1)   18,987    321    6.73     8,998    119    5.25  
Total interest-earning deposits, investments, federal funds sold and other earning assets     539,025    2,848    2.10     428,349    2,679    2.48  
         
Commercial, financial, and agricultural loans   674,569    6,571    3.88     423,912    4,219    3.95  
Real estate—commercial and construction loans   1,382,947    15,816    4.55     857,181    9,942    4.60  
Real estate—residential loans   710,814    7,887    4.41     509,599    5,786    4.50  
Loans to individuals   31,416    415    5.26     28,957    388    5.32  
Municipal loans and leases   288,391    3,030    4.18     205,302    2,450    4.73  
Lease financings   76,136    1,547    8.08     73,056    1,555    8.44  
Gross loans and leases   3,164,273    35,266    4.43     2,098,007    24,340    4.60  
Total interest-earning assets   3,703,298    38,114    4.09     2,526,356    27,019    4.24  
Cash and due from banks   40,835       35,419    
Reserve for loan and lease losses   (17,110)      (20,494)   
Premises and equipment, net   61,361       40,852    
Other assets   359,084       222,445    
Total assets$  4,147,468    $  2,804,578    
         
Liabilities:        
Interest-bearing checking deposits$389,079 $114    0.12  $  375,362 $  77    0.08  
Money market savings   483,579    428    0.35     361,530    318    0.35  
Regular savings   793,644    352    0.18     590,331    134    0.09  
Time deposits   606,561    1,187    0.78     463,524    1,014    0.87  
Total time and interest-bearing deposits   2,272,863    2,081    0.36     1,790,747    1,543    0.34  
         
Short-term borrowings   229,282    276    0.48     30,520    10    0.13  
Long-term debt (2)   93,188    218    0.93     -     -     -   
Subordinated notes (3)   94,035    1,261    5.33     49,321    667    5.37  
Total borrowings   416,505    1,755    1.68     79,841    677    3.36  
Total interest-bearing liabilities   2,689,368    3,836    0.57     1,870,588    2,220    0.47  
Noninterest-bearing deposits   904,197       534,302    
Accrued expenses and other liabilities   47,439       42,538    
Total liabilities   3,641,004       2,447,428    
         
Shareholders' Equity:        
Common stock   144,559       110,271    
Additional paid-in capital   229,319       120,770    
Retained earnings and other equity   132,586       126,109    
Total shareholders' equity   506,464       357,150    
Total liabilities and shareholders' equity$  4,147,468    $  2,804,578    
Net interest income $  34,278    $  24,799   
         
Net interest spread     3.52       3.77  
Effect of net interest-free funding sources     0.16       0.12  
Net interest margin     3.68%        3.89% 
             
Ratio of average interest-earning assets to average interest-bearing liabilities 137.70%    135.06%   
         
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost.   
(2) The average interest rate on long-term debt includes the net accretion of acquisition accounting fair value adjustments.