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Univest Corporation of Pennsylvania - Univest Bank and Trust Co. - Reports Fourth Quarter and Year End Results

(Fourth Quarter Annualized Loan Growth of 12%)

Company Release - 1/25/2017 4:33 PM ET

SOUDERTON, Pa., Jan. 25, 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 fourth quarter and year ended December 31, 2016. Univest reported net income of $6.9 million or $0.26 diluted earnings per share for the three months ended December 31, 2016, compared to net income of $7.2 million or $0.37 diluted earnings per share for the three months ended December 31, 2015. Net income for the year ended December 31, 2016 was $19.5 million or $0.84 diluted earnings per share, compared to net income of $27.3 million or $1.39 diluted earnings per share for the prior year.

The financial results for the fourth quarter and year ended December 31, 2016 included acquisition and integration costs related to the Fox Chase acquisition plus restructuring costs related to facility closures and staffing rationalization of $1.2 million and $11.8 million, net of tax, or $0.05 and $0.51, of diluted earnings per share, respectively. The results for the fourth quarter and year ended December 31, 2016 also included $1.2 million, net of tax, or $0.05 and $0.05, of diluted earnings per share, respectively, related to the Corporation’s agreement to settle its future obligations related to its acquisition of Girard Partners, Inc.

The financial results for the fourth quarter and year ended December 31, 2015 included acquisition, integration and restructuring costs related to the Fox Chase acquisition, the Valley Green acquisition and its new financial center model of $497 thousand and $2.9 million, net of tax, or $0.03 and $0.15, of diluted earnings per share, respectively.

Loans

Gross loans and leases increased $95.5 million or 12.0% (annualized) from September 30, 2016. Gross loans and leases increased $1.1 billion from December 31, 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 $330.6 million, or 11.2%, for the year ended December 31, 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 personnel in its core market and through the acquisition of Fox Chase.

Deposits

Total deposits increased $79.1 million or 10.0% (annualized) from September 30, 2016. Deposits increased $863.2 million from December 31, 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 $124.9 million or 4.0% for the year ended December 31, 2016.

Borrowings

Total borrowings increased $344.2 million from December 31, 2015, primarily due to long-term borrowings acquired from Fox Chase which consisted of $105.0 million of Federal Home Loan bank borrowings and commercial bank borrowings, the issuance by the Corporation of $45.0 million in subordinated notes on July 1, 2016 and an increase of $172.0 million in short-term borrowings.

Net Interest Income and Margin

Net interest income increased $10.7 million to $34.2 million for the fourth quarter of 2016 from the same period in 2015. Net interest income increased $20.3 million to $114.2 million for the year ended December 31, 2016 from the prior year. The increase in net interest income during the fourth quarter and year of 2016 was mainly due to the impact of the Fox Chase acquisition, which occurred on July 1, 2016.

Net interest income increased $1.3 million to $34.2 million for the fourth quarter of 2016 from the third quarter of 2016. The net interest margin on a tax-equivalent basis for the fourth quarter of 2016 was 3.81% compared to 3.68% for the third quarter of 2016. The favorable impact of purchase accounting accretion was 20 basis points for the quarter ended December 31, 2016 compared to 7 basis points for the quarter ended September 30, 2016. The increase in the favorable impact of purchase accounting accretion is primarily due to the Corporation’s ability to exit three purchased credit impaired commercial real estate loan relationships which totaled $7.1 million during the quarter. A detailed analysis comparing net interest margin and net interest income for the quarter ended December 31, 2016 and the quarter ended September 30, 2016 is included in the attached exhibits.

Noninterest Income

Noninterest income for the quarter ended December 31, 2016 was $14.0 million, an increase of $806 thousand or 6.1% from the fourth quarter of 2015. Noninterest income for the year ended December 31, 2016 was $56.0 million, an increase of $3.5 million or 6.7% from the prior year. Service charges on deposits increased $234 thousand or 22.1% for the quarter and $461 thousand or 10.9% for the year ended December 31, 2016 mostly due to fees on deposit accounts acquired from Fox Chase. Investment advisory commission and fee income increased $482 thousand or 18.7% for the quarter and $584 thousand or 5.4% for the year ended December 31, 2016 due to an increase in assets under management during 2016. This increase was primarily due to a combination of both increased new customer relationships and improvement in market performance during the second half of 2016. Insurance commission and fee income increased $202 thousand or 6.6% for the quarter and $718 thousand or 5.2% for the year ended December 31, 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 $790 thousand for the quarter and $1.6 million for the year ended December 31, 2016 primarily due to proceeds from bank owned life insurance death benefits of $450 thousand recognized in the fourth quarter of 2016 as well as $26.1 million of policies acquired from Fox Chase, the purchase of $8.0 million and the transfer of $9.8 million of policies to a higher yielding account structure during 2015. The net gain on mortgage banking increased $1.2 million or 24.5% for the year ended December 31, 2016, mainly due to an increase in mortgage volume during 2016. Mortgage loan closings increased $48.7 million, or 23.3% for the year ended December 31, 2016 compared to the same period in 2015. The net gain on mortgage banking activities decreased $914 thousand to $1.1 million for the quarter as compared to the third quarter of 2016 and was the same amount as the fourth quarter 2015. The link quarter decrease is due to seasonal slowdown in mortgage activity during the fourth quarter. These favorable increases were partially offset by a decline in the net gain on sales of investment securities for the quarter and year ended December 31, 2016 of $666 thousand and $747 thousand, respectively, compared to the same periods in 2015.

Noninterest Expense

Noninterest expense for the quarter ended December 31, 2016 was $38.4 million, an increase of $12.4 million or 47.6%, compared to the fourth quarter of 2015. Noninterest expense for the year ended December 31, 2016 was $142.0 million, an increase of $36.5 million or 34.6% from the prior year. Acquisition and integration costs related to the Fox Chase acquisition and restructuring costs related to facility closures and staffing rationalization totaled $2.2 million for the quarter and $17.7 million for the year ended December 31, 2016. Acquisition, integration and restructuring costs related to the Fox Chase acquisition, the Valley Green acquisition and new financial center model were $546 thousand for the quarter and $4.2 million for the year ended December 31, 2015.

Salaries and benefit expense increased $3.7 million for the quarter and $11.4 million for the year ended December 31, 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. Salaries and benefit expense decreased $164 thousand for the quarter as compared to the quarter ended September 30, 2016.  Included in salaries and benefit expense for the quarter is the cost of a pension settlement of $1.4 million as the Corporation offered lump sum payouts to former employees in its noncontributory retirement plan. This amount was recorded as a reclassification with the accumulated other comprehensive income component of equity and had no impact on the Corporation’s reported equity. This pension distribution was partially offset by the Corporation’s modification of its paid time off policy which resulted in a non-cash reduction in expense of $1.3 million during the quarter. Commission expense increased $724 thousand for the quarter and $1.3 million for the year ended December 31, 2016, primarily due to commissions paid on increased mortgage banking activities, investment advisor fees and insurance revenues. Premises and equipment expenses increased $1.1 million for the quarter and $1.4 million for the year ended December 31, 2016, 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 $757 thousand for the quarter and $2.3 million for the year ended December 31, 2016 due to increased investments in computer software as well as six months of Fox Chase processing expense. Intangible expenses increased $2.8 million for the quarter and $3.1 million for the year ended December 31, 2016 as the Corporation reached an agreement to settle its future obligation related to its acquisition of Girard Partners, Inc.

Asset Quality and Provision for Loan and Lease Losses

Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $17.9 million at December 31, 2016, compared to $15.1 million at September 30, 2016 and $14.2 million at December 31, 2015. Net loan and lease charge-offs were $1.7 million during the fourth quarter of 2016 and $5.0 million for the year ended December 31, 2016. The provision for loan and lease losses was $2.3 million for the fourth quarter of 2016 and $4.8 million for the year ended December 31, 2016.

The allowance for loan and lease losses as a percentage of loans and leases held for investment was 0.53% at December 31, 2016, compared to 0.53% at September 30, 2016 and 0.81% at December 31, 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 0.73% at December 31, 2016, compared to 0.77% at September 30, 2016 and 0.94% at December 31, 2015.

Tax Provision

The effective income tax rate for the year ended December 31, 2016 was 16.6%, compared to 26.4% for the year ended December 31, 2015.  These rates reflect the Corporation’s levels of tax exempt income for both periods relative to the overall level of taxable income.  

Dividend

On November 23, 2016, Univest declared a quarterly cash dividend of $0.20 per share, payable on January 2, 2017. This represented a 2.59% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Termination of Shareholder Rights Plan

Finally, following a periodic review of corporate governance practices, and taking into account comments received as part of an ongoing dialogue with shareholders, the Corporation’s Board of Directors voted to terminate the Corporation’s shareholder rights plan, originally adopted in September 2011, effective January 25, 2017.  The shareholders’ rights plan will terminate automatically as a result of the Board’s action, and shareholders do not have to take any action as a result of the termination. 

Conference Call

Univest will host a conference call to discuss fourth quarter and year end 2016 results on Thursday, January 26, 2017 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10099225. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through February 26, 2017 by dialing 1-877-344-7529; using Conference ID: 10099225.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has approximately $4.2 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, 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 
December 31, 2016 
(Dollars in thousands)               
                
Balance Sheet (Period End) 12/31/16 09/30/16 06/30/16 03/31/16 12/31/15     
Assets $  4,230,528  $  4,140,444  $  3,107,617  $  2,824,777  $  2,879,451      
Investment securities    468,518     484,213     286,980     329,357     370,760      
Loans held for sale    5,890     3,844     4,657     3,818     4,680      
Loans and leases held for investment, gross  3,285,886   3,190,361    2,345,037   2,183,256   2,179,013      
Allowance for loan and lease losses    17,499     16,899     17,153     16,452     17,628      
Loans and leases held for investment, net   3,268,387    3,173,462   2,327,884   2,166,804    2,161,385      
Total deposits  3,257,567   3,178,509   2,377,084   2,334,361   2,394,360      
Noninterest-bearing deposits    918,337     874,581     689,916     559,827     541,460      
NOW, money market and savings    1,713,041     1,652,696     1,326,976     1,391,626     1,398,494      
Time deposits    626,189     651,232     360,192     382,908     454,406      
Borrowings    417,780     398,341     309,666     75,265     73,588      
Shareholders' equity    505,209     509,249     369,160     367,003     361,574      
                
                
Balance Sheet (Average) For the three months ended, For the twelve months ended, 
  12/31/16 09/30/16 06/30/16 03/31/16 12/31/15 12/31/16 12/31/15 
Assets $  4,134,976  $  4,147,468  $  2,854,561  $  2,834,557  $  2,866,848  $  3,496,012  $  2,776,283  
Investment securities     473,890     503,790     302,492     342,218     370,163     406,053     373,930  
Loans and leases, gross  3,208,171   3,164,273   2,239,674   2,177,091   2,132,922   2,699,973   2,080,817  
Deposits  3,237,778   3,177,060   2,340,959   2,351,816   2,393,655   2,779,255    2,300,184  
Shareholders' equity    507,832     506,464     368,466     364,092     360,521     437,098     359,725  
                
                
Asset Quality Data (Period End)                
  12/31/16 09/30/16 06/30/16 03/31/16 12/31/15     
Nonaccrual loans and leases, including nonaccrual troubled debt restructured               
  loans and leases and nonaccrual loans held for sale $  17,916  $  15,050  $  13,265  $  13,482  $  14,183      
Accruing loans and leases 90 days or more past due    987     1,128     748     693     379      
Accruing troubled debt restructured loans and leases    3,252     3,286     4,413     4,279     5,245      
Other real estate owned    4,969     6,041     3,131     3,073     1,276      
Nonperforming assets    27,124     25,505     21,557     21,527     21,083      
Allowance for loan and lease losses    17,499     16,899     17,153     16,452     17,628      
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual   0.55%  0.47%  0.57%  0.62%  0.65%     
  loans held for sale                         
Nonperforming loans and leases / Loans and leases held for investment and    0.67%  0.61%  0.79%  0.85%  0.91%     
  nonaccrual loans held for sale                         
Allowance for loan and lease losses / Loans and leases held for investment   0.53%  0.53%  0.73%  0.75%  0.81%     
Allowance for loan and lease losses / Loans and leases held for investment  0.73%  0.77%  0.82%  0.86%  0.94%     
  (excluding acquired loans at period-end)                         
Allowance for loan and lease losses / Nonaccrual loans and leases held for                         
  investment  97.67%  112.29%  129.31%  122.03%  124.29%     
Allowance for loan and lease losses / Nonperforming loans and leases held for                        
  investment 78.98%  86.82%  93.09%  89.15%  89.00%     
Acquired credit impaired loans $  7,352  $  14,575  $  942  $  1,267  $  1,253      
                
  For the three months ended, For the twelve months ended, 
  12/31/16 09/30/16 06/30/16 03/31/16 12/31/15 12/31/16 12/31/15 
Net loan and lease charge-offs $  1,650  $  1,669  $  129  $  1,502  $  1,909  $  4,950  $  6,836  
Net loan and lease charge-offs (annualized)/Average loans and leases  0.20%  0.21%  0.02%  0.28%  0.36%  0.18%  0.33% 
                

 

Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data 
December 31, 2016 
(Dollars in thousands, except per share data)               
  For the three months ended, For the twelve months ended, 
For the period: 12/31/16 09/30/16 06/30/16 03/31/16 12/31/15 12/31/16 12/31/15 
Interest income $  38,056 $  36,705  $  26,112 $  25,734 $  25,747 $  126,607 $  101,983 
Interest expense    3,884    3,836     2,451    2,211    2,278    12,382    8,065 
  Net interest income    34,172    32,869     23,661    23,523    23,469    114,225    93,918 
Provision for loan and lease losses    2,250    1,415     830    326    917    4,821    3,802 
Net interest income after provision     31,922    31,454     22,831    23,197    22,552    109,404    90,116 
Noninterest income:                       
  Trust fee income    1,921    1,958     1,997    1,865    2,030    7,741    7,908 
  Service charges on deposit accounts    1,293    1,344     1,056    998    1,059    4,691    4,230 
  Investment advisory commission and fee income    3,065    2,864     2,759    2,669    2,583    11,357    10,773 
  Insurance commission and fee income    3,275    3,267     3,503    4,558    3,073    14,603    13,885 
  Bank owned life insurance income    1,215    711     535    470    425    2,931    1,295 
  Net gain on sales of investment securities    31    30     413    44    697    518    1,265 
  Net gain on mortgage banking activities    1,092    2,006     1,711    1,218    1,090    6,027    4,838 
  Other income    2,102    1,957     2,027    2,009    2,231    8,095    8,231 
Total noninterest income    13,994    14,137     14,001    13,831    13,188    55,963    52,425 
Noninterest expense:                       
Salaries and benefits    16,546    16,710     14,080    14,182    12,828    61,518    50,069 
Commissions    2,618    2,485     2,363    1,895    1,894    9,361    8,037 
Premises and equipment    3,884    3,424     2,841    2,872    2,817    13,021    11,589 
Data processing    2,001    2,169     1,530    1,281    1,244    6,981    4,660 
Professional fees    1,258    1,322     947    1,020    870    4,547    3,839 
Marketing and advertising    619    345     513    538    759    2,015    2,253 
Deposit insurance premiums    521    327     418    447    463    1,713    1,730 
Intangible expenses    2,962    906     996    770    178    5,634    2,567 
Acquisition-related costs    101    8,784     1,158    214    540    10,257    1,047 
Integration costs    269    5,365     27    6    6    5,667    1,490 
Restructuring charges (recoveries)    1,816    (85)    -     -     -     1,731    1,642 
Other expense    5,835    5,314     4,673    3,714    4,430    19,536    16,592 
Total noninterest expense    38,430    47,066     29,546    26,939    26,029    141,981    105,515 
Income before taxes    7,486    (1,475)    7,286    10,089    9,711    23,386    37,026 
Income tax expense (benefit)    568    (1,533)    2,046    2,800    2,553    3,881    9,758 
Net income $  6,918 $  58  $  5,240 $  7,289 $  7,158 $  19,505 $  27,268 
Per common share data:                       
Book value per share $  19.00 $  19.17  $  18.88 $  18.73 $  18.51 $  19.00 $  18.51 
Net income per share:                       
  Basic $  0.26 $  -   $  0.27 $  0.37 $  0.37 $  0.85 $  1.39 
  Diluted $  0.26 $  -   $  0.27 $  0.37 $  0.37 $  0.84 $  1.39 
Dividends declared per share $  0.20 $  0.20  $  0.20 $  0.20 $  0.20 $  0.80 $  0.80 
Weighted average shares outstanding    26,577,948    26,554,626     19,603,310    19,578,438    19,525,701    23,097,638    19,663,039 
Period end shares outstanding    26,589,353    26,558,412     19,557,958    19,592,798    19,530,930    26,589,353    19,530,930 
                

 

Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data 
December 31, 2016 
                   
                   
                   
     For the three months ended, For the twelve months ended, 
Profitability Ratios (annualized)  12/31/16 09/30/16 06/30/16 03/31/16 12/31/15 12/31/16 12/31/15 
                   
Return on average assets   0.67%  0.01%  0.74%  1.03%  0.99%  0.56%  0.98% 
Return on average assets, excluding integration  0.78%  0.88%  0.90%  1.07%  1.06%  0.89%  1.09% 
  and acquisition-related costs and restructuring charges (1), (2)             
Return on average shareholders' equity  5.42%  0.05%  5.72%  8.05%  7.88%  4.46%  7.58% 
Return on average shareholders' equity, excluding 6.37%  7.24%  6.99%  8.29%  8.42%  7.15%  8.38% 
  integration and acquisition-related costs and               
  restructuring charges (1), (2)                
Return on average tangible common equity, excluding 9.95%  11.32%  10.31%  12.33%  12.61%  10.93%  12.56% 
  integration and acquisition-related costs and               
  restructuring charges (1), (2), (5)                
Net interest margin (FTE)   3.81%  3.68%  3.93%  3.91%  3.80%  3.82%  3.96% 
Efficiency ratio (3)    76.48%  96.45%  75.22%  69.23%  68.10%  80.11%  69.27% 
Efficiency ratio, excluding integration and  72.13%  67.63%  72.20%  68.67%  66.67%  70.15%  66.52% 
  acquisition-related costs and restructuring charges (1), (3), (4)             
                   
Capitalization Ratios                 
                   
Dividends declared to net income   76.76%  N/M   74.64%  53.62%  54.08%  94.51%  57.35% 
Shareholders' equity to assets (Period End)  11.94%  12.30%  11.88%  12.99%  12.56%  11.94%  12.56% 
Tangible common equity to tangible assets (5)  7.97%  8.24%  8.39%  9.17%  8.77%  7.97%  8.77% 
Tangible book value per share (5)  $12.13  $12.28  $12.82  $12.66  $12.40  $12.13  $ 12.40  
Tangible book value per share - Core (5), (6) $12.32  $12.21  $12.72  $12.62  $12.43  $12.32  $12.43  
                   
Regulatory Capital Ratios  (Period End)                
Tier 1 leverage ratio    8.84%  8.80%  9.90%  9.93%  9.69%  8.84%  9.69% 
Common equity tier 1 risk-based capital ratio  9.41%  9.58%  10.24%  10.81%  10.65%  9.41%  10.65% 
Tier 1 risk-based capital ratio   9.41%  9.58%  10.24%  10.81%  10.65%  9.41%  10.65% 
Total risk-based capital ratio   12.43%  12.64%  12.77%  13.47%  13.35%  12.43%  13.35% 
                   
                   
(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$2,186  $14,064  $1,185  $220  $546  $17,655  $ 4,179  
       restructuring charges               
 Tax effect on integration and acquisition-related 969   4,910   22    2    49   5,904   1,319  
       costs and restructuring charges              
 (b) Integration and acquisition-related costs and$  1,217  $9,154  $1,163  $218  $497  $11,751  $2,860  
       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.     
(5)Tangible equity represents total shareholders' equity less goodwill and other intangible assets, but includes mortgage servicing rights which were $6,485 at December 31, 2016, $6,167 at September 30, 2016, $5,896 at June 30, 2016, $5,839 at March 31, 2016 and $5,877 at December 31, 2015.
(6)Tangible equity as defined in (5), excluding the impact of accumulated other comprehensive (loss) income on available-for-sale investment securities, net (($4,989) at December 31, 2016, $1,789 at September 30, 2016, $1,907 at June 30, 2016, $821 at March 31, 2016, and ($592) at December 31, 2015), 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 BasisDecember 31, 2016  September 30, 2016  
 AverageIncome/Average  AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate  BalanceExpenseRate  
Assets:          
Interest-earning deposits with other banks$  10,235 $10  0.39% $  16,248 $  14  0.34% 
U.S. government obligations   33,341    98  1.17     43,622    125  1.14  
Obligations of state and political subdivisions   90,499    921  4.05     96,581    1,030  4.24  
Other debt and equity securities   350,050    1,337  1.52     363,587    1,358  1.49  
Federal funds sold and other earning assets (1)   20,578    217  4.20     18,987    321  6.73  
Total interest-earning deposits, investments, federal funds sold and other earning assets   504,703    2,583  2.04     539,025    2,848  2.10  
                 
Commercial, financial, and agricultural loans   683,746    7,247  4.22     674,569    6,571  3.88  
Real estate—commercial and construction loans   1,411,104    16,391  4.62     1,382,947    15,816  4.55  
Real estate—residential loans   723,193    8,097  4.45     710,814    7,887  4.41  
Loans to individuals   30,796    432  5.58     31,416    415  5.26  
Municipal loans and leases   282,297    3,178  4.48     288,391    3,030  4.18  
Lease financings   77,035    1,555  8.03     76,136    1,547  8.08  
  Gross loans and leases   3,208,171    36,900  4.58     3,164,273    35,266  4.43  
Total interest-earning assets   3,712,874    39,483  4.23     3,703,298    38,114  4.09  
Cash and due from banks   42,946        40,835     
Reserve for loan and lease losses   (16,921)       (17,110)    
Premises and equipment, net   63,712        61,361     
Other assets   332,365        359,084     
  Total assets$  4,134,976     $  4,147,468     
                 
Liabilities:                
Interest-bearing checking deposits$  402,247 $89  0.09  $  389,079 $  114  0.12  
Money market savings   472,461    450  0.38     483,579    428  0.35  
Regular savings   792,778    327  0.16     793,644    352  0.18  
Time deposits   647,665    1,277  0.78     606,561    1,187  0.78  
  Total time and interest-bearing deposits   2,315,151    2,143  0.37     2,272,863    2,081  0.36  
                 
Short-term borrowings   128,498    149  0.46     201,832    259  0.51  
Long-term debt   121,895    331  1.08     120,638    235  0.77  
Subordinated notes (2)   94,055    1,261  5.33     94,035    1,261  5.33  
  Total borrowings   344,448    1,741  2.01     416,505    1,755  1.68  
  Total interest-bearing liabilities   2,659,599    3,884  0.58     2,689,368    3,836  0.57  
Noninterest-bearing deposits   922,627        904,197     
Accrued expenses and other liabilities   44,918        47,439     
  Total liabilities   3,627,144        3,641,004     
                 
Shareholders' Equity:                
Common stock   144,559        144,559     
Additional paid-in capital   230,037        229,319     
Retained earnings and other equity   133,236        132,586     
  Total shareholders' equity   507,832        506,464     
  Total liabilities and shareholders' equity$  4,134,976     $  4,147,468     
Net interest income $  35,599    $  34,278   
           
Net interest spread    3.65      3.52  
Effect of net interest-free funding sources    0.16      0.16  
Net interest margin    3.81%   3.68% 
         
Ratio of average interest-earning assets to average interest-bearing liabilities  139.60%     137.70%    
           
(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 December 31, 2016 and September 30, 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 December 31, 2016 and September 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 December 31,   
Tax Equivalent Basis  2016     2015  
 AverageIncome/Average  AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate  BalanceExpenseRate 
Assets:         
Interest-earning deposits with other banks$  10,235 $10  0.39% $  75,782 $  58  0.30%
U.S. government obligations   33,341    98  1.17     105,635    300  1.13 
Obligations of state and political subdivisions   90,499    921  4.05     105,415    1,292  4.86 
Other debt and equity securities   350,050    1,337  1.52     159,113    1,029  2.57 
Federal funds sold and other earning assets (1)   20,578    217  4.20     8,983    123  5.43 
Total interest-earning deposits, investments, federal funds sold and other earning assets   504,703    2,583  2.04     454,928    2,802  2.44 
          
Commercial, financial, and agricultural loans   683,746    7,247  4.22     409,184    3,950  3.83 
Real estate—commercial and construction loans   1,411,104    16,391  4.62     870,620    9,822  4.48 
Real estate—residential loans   723,193    8,097  4.45     530,550    5,967  4.46 
Loans to individuals   30,796    432  5.58     29,900    403  5.35 
Municipal loans and leases   282,297    3,178  4.48     218,585    2,572  4.67 
Lease financings   77,035    1,555  8.03     74,083    1,567  8.39 
  Gross loans and leases   3,208,171    36,900  4.58     2,132,922    24,281  4.52 
Total interest-earning assets   3,712,874    39,483  4.23     2,587,850    27,083  4.15 
Cash and due from banks   42,946        33,787    
Reserve for loan and lease losses   (16,921)       (18,858)   
Premises and equipment, net   63,712        41,699    
Other assets   332,365        222,370    
  Total assets$  4,134,976     $  2,866,848    
          
Liabilities:         
Interest-bearing checking deposits$  402,247 $89  0.09  $  386,243 $  79  0.08 
Money market savings   472,461    450  0.38     391,891    348  0.35 
Regular savings   792,778    327  0.16     595,019    141  0.09 
Time deposits   647,665    1,277  0.78     477,524    1,034  0.86 
  Total time and interest-bearing deposits   2,315,151    2,143  0.37     1,850,677    1,602  0.34 
          
Short-term borrowings   128,498    149  0.46     21,189    2  0.04 
Long-term debt   121,895    331  1.08     -     -   -  
Subordinated notes (2)   94,055    1,261  5.33     49,358    674  5.42 
  Total borrowings   344,448    1,741  2.01     70,547    676  3.80 
  Total interest-bearing liabilities   2,659,599    3,884  0.58     1,921,224    2,278  0.47 
Noninterest-bearing deposits   922,627        542,978    
Accrued expenses and other liabilities   44,918        42,125    
  Total liabilities   3,627,144        2,506,327    
          
Shareholders' Equity:         
Common stock   144,559        110,271    
Additional paid-in capital   230,037        121,028    
Retained earnings and other equity   133,236        129,222    
  Total shareholders' equity   507,832        360,521    
  Total liabilities and shareholders' equity$  4,134,976     $  2,866,848    
Net interest income $  35,599    $  24,805  
          
Net interest spread    3.65      3.68 
Effect of net interest-free funding sources    0.16      0.12 
Net interest margin    3.81%   3.80%
        
Ratio of average interest-earning assets to average interest-bearing liabilities  139.60%     134.70%   
          
(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 December 31, 2016 and 2015, 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 December 30, 2016 and 2015 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 Twelve Months Ended December 30,    
Tax Equivalent Basis  2016     2015   
 AverageIncome/Average  AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate  BalanceExpenseRate  
Assets:          
Interest-earning deposits with other banks$  13,438 $61  0.45% $  38,515 $  95  0.25% 
U.S. government obligations   54,220    649  1.20     123,593    1,375  1.11  
Obligations of state and political subdivisions   97,325    4,172  4.29     107,204    5,303  4.95  
Other debt and equity securities   254,508    4,731  1.86     143,133    3,296  2.30  
Federal funds sold and other earning assets (1)   16,370    790  4.83     9,936    525  5.28  
Total interest-earning deposits, investments, federal funds sold and other earning assets   435,861    10,403  2.39     422,381    10,594  2.51  
           
Commercial, financial, and agricultural loans   552,322    21,964  3.98     422,507    16,901  4.00  
Real estate—commercial and construction loans   1,146,293    52,232  4.56     849,161    39,275  4.63  
Real estate—residential loans   633,886    28,101  4.43     499,208    22,789  4.57  
Loans to individuals   30,501    1,654  5.42     29,653    1,587  5.35  
Municipal loans and leases   261,057    11,556  4.43     208,236    9,890  4.75  
Lease financings   75,914    6,168  8.12     72,052    6,240  8.66  
  Gross loans and leases   2,699,973    121,675  4.51     2,080,817    96,682  4.65  
Total interest-earning assets   3,135,834    132,078  4.21     2,503,198    107,276  4.29  
Cash and due from banks   37,050        33,025     
Reserve for loan and lease losses   (17,147)       (20,447)    
Premises and equipment, net   53,036        40,891     
Other assets   287,239        219,616     
  Total assets$  3,496,012     $  2,776,283     
           
Liabilities:          
Interest-bearing checking deposits$  386,176 $362  0.09% $  369,611 $  269  0.07  
Money market savings   414,121    1,540  0.37     368,392    1,205  0.33  
Regular savings   714,809    1,052  0.15     582,647    533  0.09  
Time deposits   512,557    4,261  0.83     461,968    4,000  0.87  
  Total time and interest-bearing deposits   2,027,663    7,215  0.36     1,782,618    6,007  0.34  
           
Short-term borrowings   103,238    748  0.72     35,932    35  0.10  
Long-term debt   60,965    549  0.90     -     -   -   
Subordinated notes (2)   71,851    3,870  5.39     37,431    2,023  5.40  
  Total borrowings   236,054    5,167  2.19     73,363    2,058  2.81  
  Total interest-bearing liabilities   2,263,717    12,382  0.55     1,855,981    8,065  0.43  
Noninterest-bearing deposits   751,592        517,566     
Accrued expenses and other liabilities   43,605        43,011     
  Total liabilities   3,058,914        2,416,558     
           
Shareholders' Equity:          
Common stock   127,509        110,271     
Additional paid-in capital   175,609        120,565     
Retained earnings and other equity   133,980        128,889     
  Total shareholders' equity   437,098        359,725     
  Total liabilities and shareholders' equity$  3,496,012     $  2,776,283     
Net interest income $  119,696    $  99,211   
           
Net interest spread    3.66      3.86  
Effect of net interest-free funding sources    0.16      0.10  
Net interest margin    3.82%     3.96% 
           
Ratio of average interest-earning assets to average interest-bearing liabilities  138.53%     134.87%    
           
(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 5.07% and 5.10% for the twelve months ended December 31, 2016 and 2015, 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 twelve months ended December 31, 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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