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

Company Release - 7/26/2017 4:15 PM ET

SOUDERTON, Pa., July 26, 2017 (GLOBE NEWSWIRE) -- Univest Corporation of Pennsylvania (“Univest” or the “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, 2017 of $11.8 million, or $0.44 diluted earnings per share, compared to net income of $5.2 million, or $0.27 diluted earnings per share, for the three months ended June 30, 2016. Net income for the six months ended June 30, 2017 was $22.6 million, or $0.85 diluted earnings per share, compared to net income of $12.5 million, or $0.64 diluted earnings per share, for the comparable period in the prior year. The financial results for the three and six months ended June 30, 2017 included a tax-free bank owned life insurance (“BOLI”) death benefit claim of $889 thousand, which represents $0.03 diluted earnings per share in each period. The financial results for the three and six months ended June 30, 2016 included acquisition and integration costs related to the acquisition of Fox Chase Bancorp (“Fox Chase”) of $1.2 million and $1.4 million, or $0.06 and $0.07 of diluted earnings per share net of tax, respectively. There were no acquisition and integration costs during the six months ended June 30, 2017.

Loans
Gross loans and leases increased $168.3 million, or 20.1% (annualized), from March 31, 2017 and $224.3 million, or 13.7% (annualized), from December 31, 2016. Gross loans and leases increased $1.2 billion, or 49.7%, from June 30, 2016, primarily due to the $776.2 million of loans acquired from Fox Chase. Organic loan growth, which excludes the loans acquired from Fox Chase at June 30, 2016, was $388.9 million, representing an increase of 12.5% from June 30, 2016 to June 30, 2017. The growth in loans in 2017 was primarily in commercial real estate, commercial business and residential real estate loans.

Deposits
Total deposits decreased $17.9 million, or 2.1% (annualized), from March 31, 2017 primarily due to a seasonal decrease in public funds deposits partially offset by increases in commercial customer deposits. Deposits increased $90.5 million, or 5.6% (annualized), from December 31, 2016 primarily due to growth in commercial customer deposits. Deposits grew $971.0 million, or 40.8%, from June 30, 2016 primarily due to $738.3 million of deposits acquired from Fox Chase. Organic deposits, which excludes the Fox Chase deposits at June 30, 2016, increased $232.7 million, or 7.5%, from June 30, 2016.

Net Interest Income and Margin
Net interest income of $35.3 million for the second quarter of 2017 increased $1.0 million, or 3.0%, from the first quarter of 2017 and increased $11.6 million, or 49.2%, from the second quarter of 2016. Net interest income of $69.6 million increased $22.4 million, or 47.5%, for the six months ended June 30, 2017 from the same period in the prior year. Net interest margin, on a tax-equivalent basis, was 3.76% for the second quarter of 2017, compared to 3.80% for the first quarter of 2017 and 3.81% for the fourth quarter of 2016. The favorable impact of purchase accounting accretion was 8 basis points ($742 thousand) for the quarter ended June 30, 2017 compared to 8 basis points ($764 thousand) for the quarter ended March 31, 2017 and 20 basis points ($1.8 million) for the quarter ended December 31, 2016. Excluding the impact of purchase accounting accretion, net interest margin was 3.68% for the quarter ended June 30, 2017 compared to 3.72% for the quarter ended March 31, 2017 and 3.61% for the quarter ended December 31, 2016. The increase in net interest income of $1.0 million for the second quarter of 2017 as compared to the first quarter of 2017 was due to a $106 million, or 11.1% (annualized), increase in average interest earning assets which was slightly offset by the decrease in net interest margin due to higher deposit and borrowing costs. A detailed analysis comparing net interest margin and net interest income for the quarter ended June 30, 2017 as compared to the quarter ended March 31, 2017 is included in the attached exhibits.

Noninterest Income
Noninterest income for the quarter ended June 30, 2017 was $16.0 million, an increase of $2.0 million, or 14.3%, from the second quarter of 2016. Noninterest income for the six months ended June 30, 2017 was $31.0 million, an increase of $3.1 million, or 11.3%, from the comparable period in the prior year. Service charges on deposits increased $257 thousand, or 24.3%, for the quarter and $502 thousand, or 24.4%, for the six months ended June 30, 2017, mostly due to fees on deposit accounts acquired from Fox Chase. Investment advisory commission and fee income increased $557 thousand, or 20.1%, for the quarter and $1.1 million, or 19.6%, for the six months ended June 30, 2017 primarily due to a combination of increased new customer relationships and favorable market performance during 2016 and the first half of 2017. BOLI income increased $1.1 million for the quarter and $1.4 million for the six months ended June 30, 2017, primarily due to proceeds from BOLI death benefits of $889 thousand recognized in the second quarter of 2017 and policies acquired from Fox Chase. Other income increased $529 thousand, or 26.3%, for the quarter and $840 thousand, or 20.9%, for the six months ended June 30, 2017, mainly due to an increase in other service fee income of $314 thousand for the quarter and $470 thousand for the six months ended June 30, 2017 and net gains on sales of other real estate owned of $121 thousand for the quarter and $235 thousand for the six months ended June 30, 2017. These increases were partially offset by a decrease in the net gain on sale of securities of $392 thousand for the quarter and $421 thousand for the six months ended June 30, 2017. In addition, the net gain on mortgage banking decreased $174 thousand, or 10.2%, for the quarter and $279 thousand, or 9.5%, for the six months ended June 30, 2017 primarily due to a decrease in mortgage volume.

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2017 was $32.5 million, an increase of $3.0 million, or 10.2%, compared to the second quarter of 2016. Noninterest expense for the six months ended June 30, 2017 was $64.6 million, an increase of $8.1 million, or 14.3%, from the comparable period in the prior year. Salaries and benefit expense increased $2.3 million for the quarter and $4.7 million for the six months ended June 30, 2017, primarily attributable to higher staffing levels resulting from the Fox Chase acquisition, additional staff hired to support revenue generation across all business lines and the expansion into Lancaster County. Premises and equipment expenses increased $869 thousand for the quarter and $1.7 million for the six months ended June 30, 2017, 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 $551 thousand for the quarter and $1.3 million for the six months ended June 30, 2017 due to increased investments in computer software and our outsourced data processing solution as well as the addition of Fox Chase processing expense. Other expense increased $732 thousand for the quarter and $1.8 million for the six months ended June 30, 2017 primarily due to inclusion of Fox Chase-related expenses and an increase of $289 thousand for the quarter and $705 thousand for the six months ended June 30, 2017 related to Bank shares tax as a result of a statutory rate increase in 2017 and the Corporation's growth primarily due to the Fox Chase acquisition. These increases were partially offset by acquisition and integration costs during 2016 related to the Fox Chase acquisition totaling $1.2 million for the quarter and $1.4 million for the six months ended June 30, 2016. There were no acquisition or integration costs during the three or six months ended June 30, 2017. In addition, intangible expense decreased $545 thousand for the quarter and $552 thousand for the six months ended June 30, 2017 as a result of the settlement of the Girard Partners Inc. acquisition earn-out in the fourth quarter of 2016 and the conclusion of the earn-out period for the Sterner Insurance Associates acquisition, which resulted in a reversal of a prior accrual of $303 thousand during the second quarter of 2017.

Asset Quality and Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $20.2 million at June 30, 2017, compared to $17.9 million at December 31, 2016. Nonperforming assets were $34.4 million at June 30, 2017, compared to $27.1 million at December 31, 2016. During the second quarter of 2017, incremental balances of $8.8 million related to one borrower were classified as troubled debt restructurings as the related loans were granted amortization period extensions. Net loan and lease charge-offs were $1.4 million during the second quarter of 2017 and $1.8 million for the six months ended June 30, 2017. The provision for loan and lease losses was $2.8 million for the second quarter of 2017 and $5.2 million for the six months ended June 30, 2017. The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding covered loans acquired in the Fox Chase and Valley Green Bank acquisitions, which were recorded at fair value as of the acquisition date, was 0.73% at June 30, 2017, compared to 0.74% at March 31, 2017 and 0.73% at December 31, 2016.

Tax Provision  
The effective income tax rate was 26.4% for the quarter ended June 30, 2017, compared to 28.1% for the quarter ended June 30, 2016 and was 26.4% for the six months ended June 30, 2017, compared to 27.9% for the six months ended June 30, 2016. The effective income tax rate during the quarter and six months ended June 30, 2017 was impacted by the previously discussed BOLI death benefit of $889 thousand and by the adoption of ASU 2016-9. Excluding these two items, the effective income tax rate was 28.5% for the quarter and six months ended June 30, 2017, which reflects the impact of the Corporation's level of tax exempt income for the period relative to the overall level of taxable income.

Dividend
On May 22, 2017, Univest declared a quarterly cash dividend of $0.20 per share, payable on July 3, 2017. This represented a 2.64% 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 2017 results on Thursday, July 27, 2017 at 9:00 a.m. ET. Participants may preregister at http://dpregister.com/10109976. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through August 27, 2017 by dialing 1-877-344-7529; using Conference ID: 10109976.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., has approximately $4.5 billion in assets and $3.4 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2017. 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) competitive pressures among financial institutions; (2) changes in the interest rate environment; (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, 2017 
(Dollars in thousands)               
                
Balance Sheet (Period End) 06/30/17 03/31/17 12/31/16 09/30/16 06/30/16     
Assets $4,453,527  $4,273,931  $4,230,528  $4,140,444  $3,107,617      
Investment securities  469,307   464,639   468,518   484,213   286,980      
Loans held for sale  2,259   1,110   5,890   3,844   4,657      
Loans and leases held for investment, gross  3,510,170   3,341,916   3,285,886   3,190,361   2,345,037      
Allowance for loan and lease losses  20,910   19,528   17,499   16,899   17,153      
Loans and leases held for investment, net  3,489,260   3,322,388   3,268,387   3,173,462   2,327,884      
Total deposits  3,348,080   3,365,951   3,257,567   3,178,509   2,377,084      
Noninterest-bearing deposits  963,790   947,495   918,337   874,581   689,916      
NOW, money market and savings  1,837,452   1,865,280   1,713,041   1,652,696   1,326,976      
Time deposits  546,838   553,176   626,189   651,232   360,192      
Borrowings  542,545   355,580   417,780   398,341   309,666      
Shareholders' equity  521,306   511,880   505,209   509,249   369,160      
                
                
Balance Sheet (Average) For the three months ended, For the six months ended, 
  06/30/17 03/31/17 12/31/16 09/30/16 06/30/16 06/30/17 06/30/16 
Assets $4,333,689  $4,230,428  $4,134,976  $4,147,468  $2,854,561  $4,282,343  $2,844,277  
Investment securities  468,601   470,300   473,890   503,790   302,492   469,446   322,355  
Loans and leases, gross  3,401,325   3,306,877   3,208,171   3,164,273   2,239,674   3,354,361   2,208,382  
Deposits  3,346,409   3,290,285   3,237,778   3,177,060   2,340,959   3,318,502   2,346,387  
Shareholders' equity  517,697   509,055   507,832   506,464   368,466   513,399   366,280  
                
                
Asset Quality Data (Period End)                
  06/30/17 03/31/17 12/31/16 09/30/16 06/30/16     
Nonaccrual loans and leases, including  nonaccrual troubled debt restructured               
loans and leases $20,174  $19,856  $17,916  $15,050  $13,265      
Accruing loans and leases 90 days or more past due  572   919   987   1,128   748      
Accruing troubled debt restructured loans and leases  11,470   2,818   3,252   3,286   4,413      
Total nonperforming loans and leases  32,216   23,593   22,155   19,464   18,426      
Other real estate owned  2,202   3,712   4,969   6,041   3,131      
Total nonperforming assets  34,418   27,305   27,124   25,505   21,557      
Nonaccrual loans and leases / Loans and leases held for investment  0.57%  0.59%  0.55%  0.47%  0.57%     
Nonperforming loans and leases / Loans and leases held for investment  0.92%  0.71%  0.67%  0.61%  0.79%     
Nonperforming assets / Total assets  0.77%  0.64%  0.64%  0.62%  0.69%     
                
Allowance for loan and lease losses  20,910   19,528   17,499   16,899   17,153      
Allowance for loan and lease losses/ Loans and leases held for investment  0.60%  0.58%  0.53%  0.53%  0.73%     
Allowance for loan and lease losses / Loans and leases held for investment  0.73%  0.74%  0.73%  0.77%  0.82%     
(excluding acquired loans at period-end)               
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment  103.65%  98.35%  97.67%  112.29%  129.31%     
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 64.91%  82.77%  78.98%  86.82%  93.09%     
Acquired credit impaired loans $6,485  $6,616  $7,352  $14,575  $942      
                
  For the three months ended, For the six months ended, 
  06/30/17 03/31/17 12/31/16 09/30/16 06/30/16 06/30/17 06/30/16 
Net loan and lease charge-offs $1,384  $416  $1,650  $1,669  $129  $1,800  $1,631  
Net loan and lease charge-offs (annualized)/Average loans and leases  0.16%  0.05%  0.20%  0.21%  0.02%  0.11%  0.15% 

 

Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data 
June 30, 2017 
(Dollars in thousands, except per share data)               
  For the three months ended, For the six months ended, 
For the period: 06/30/17 03/31/17 12/31/16 09/30/16 06/30/16 06/30/17 06/30/16 
Interest income $40,030 $38,396 $38,056 $36,705  $26,112 $78,426 $51,846 
Interest expense  4,730  4,113  3,884  3,836   2,451  8,843  4,662 
Net interest income  35,300  34,283  34,172  32,869   23,661  69,583  47,184 
Provision for loan and lease losses  2,766  2,445  2,250  1,415   830  5,211  1,156 
Net interest income after provision  32,534  31,838  31,922  31,454   22,831  64,372  46,028 
Noninterest income:               
Trust fee income  2,016  1,907  1,921  1,958   1,997  3,923  3,862 
Service charges on deposit accounts  1,313  1,243  1,293  1,344   1,056  2,556  2,054 
Investment advisory commission and fee income  3,333  3,181  3,072  2,905   2,776  6,514  5,447 
Insurance commission and fee income  3,628  4,410  3,275  3,267   3,503  8,038  8,061 
Bank owned life insurance income  1,622  783  1,215  711   535  2,405  1,005 
Net gain on sales of investment securities  21  15  31  30   413  36  457 
Net gain on mortgage banking activities  1,537  1,113  1,092  2,006   1,711  2,650  2,929 
Other income  2,539  2,318  2,095  1,916   2,010  4,857  4,017 
Total noninterest income  16,009  14,970  13,994  14,137   14,001  30,979  27,832 
Noninterest expense:               
Salaries and benefits  16,353  16,657  16,546  16,710   14,080  33,010  28,262 
Commissions  2,374  2,050  2,618  2,485   2,363  4,424  4,258 
Premises and equipment  3,715  3,658  3,929  3,476   2,846  7,373  5,722 
Data processing  2,081  2,058  2,001  2,169   1,530  4,139  2,811 
Professional fees  1,248  1,239  1,258  1,322   947  2,487  1,967 
Marketing and advertising  475  379  619  345   513  854  1,051 
Deposit insurance premiums  451  402  521  327   418  853  865 
Intangible expenses  446  759  2,917  854   991  1,205  1,757 
Acquisition-related costs  -  -  101  8,784   1,158  -  1,372 
Integration costs  -  -  269  5,365   27  -  33 
Restructuring charges (recoveries)  -  -  1,816  (85)  -  -  - 
Other expense  5,405  4,828  5,835  5,314   4,673  10,233  8,387 
Total noninterest expense  32,548  32,030  38,430  47,066   29,546  64,578  56,485 
Income (loss) before taxes  15,995  14,778  7,486  (1,475)  7,286  30,773  17,375 
Income tax expense (benefit)  4,217  3,922  568  (1,533)  2,046  8,139  4,846 
Net income $11,778 $10,856 $6,918 $58  $5,240 $22,634 $12,529 
Per common share data:               
Book value per share $19.55 $19.21 $19.00 $19.17  $18.88 $19.55 $18.88 
Net income per share:               
Basic $0.44 $0.41 $0.26 $-  $0.27 $0.85 $0.64 
Diluted $0.44 $0.41 $0.26 $-  $0.27 $0.85 $0.64 
Dividends declared per share $0.20 $0.20 $0.20 $0.20  $0.20 $0.40 $0.40 
Weighted average shares outstanding  26,661,784  26,630,698  26,577,948  26,554,626   19,603,310  26,646,327  19,590,873 
Period end shares outstanding  26,667,991  26,645,520  26,589,353  26,558,412   19,557,958  26,667,991  19,557,958 

 

Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data 
June 30, 2017 
                   
     For the three months ended, For the six months ended, 
Profitability Ratios (annualized)  06/30/17 03/31/17 12/31/16 09/30/16 06/30/16 06/30/17 06/30/16 
                   
Return on average assets   1.09%  1.04%  0.67%  0.01%  0.74%  1.07%  0.89% 
Return on average assets, excluding integration 1.09%  1.04%  0.78%  0.88%  0.90%  1.07%  0.98% 
and acquisition-related costs and restructuring charges (1), (2)             
Return on average shareholders' equity  9.13%  8.65%  5.42%  0.05%  5.72%  8.89%  6.88% 
Return on average shareholders' equity, excluding 9.13%  8.65%  6.37%  7.24%  6.99%  8.89%  7.64% 
integration and acquisition-related costs and               
restructuring charges (1), (2)                
Return on average tangible common equity, excluding 14.06%  13.48%  9.95%  11.32%  10.31%  13.77%  11.31% 
integration and acquisition-related costs and               
restructuring charges (1), (2), (5)                
Net interest margin (FTE)   3.76%  3.80%  3.81%  3.68%  3.93%  3.78%  3.92% 
Efficiency ratio (3)    60.74%  62.70%  76.48%  96.45%  75.22%  61.70%  72.24% 
Efficiency ratio, excluding integration and  60.74%  62.70%  72.13%  67.63%  72.20%  61.70%  70.44% 
acquisition-related costs and restructuring charges (1), (3), (4)             
                   
Capitalization Ratios                 
                   
Dividends declared to net income   45.25%  49.02%  76.76%  N/M  74.64%  47.06%  62.41% 
Shareholders' equity to assets (Period End)  11.71%  11.98%  11.94%  12.30%  11.88%  11.71%  11.88% 
Tangible common equity to tangible assets (5)  7.96%  8.06%  7.97%  8.24%  8.39%  7.96%  8.39% 
Tangible book value per share (5)  $12.75  $12.38  $12.13  $12.28  $12.82  $12.75  $12.82  
Tangible book value per share - Core (5), (6) $12.87  $12.56  $12.32  $12.21  $12.72  $12.87  $12.72  
                   
Regulatory Capital Ratios  (Period End)                
Tier 1 leverage ratio    8.74%  8.75%  8.84%  8.80%  9.90%  8.74%  9.90% 
Common equity tier 1 risk-based capital ratio  9.21%  9.41%  9.42%  9.58%  10.24%  9.21%  10.24% 
Tier 1 risk-based capital ratio   9.21%  9.41%  9.42%  9.58%  10.24%  9.21%  10.24% 
Total risk-based capital ratio   12.15%  12.44%  12.44%  12.64%  12.77%  12.15%  12.77% 
                   
                   
(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  $-  $1,405  
 restructuring charges              
 Tax effect on integration and acquisition-related -   -   969   4,910   22   -   24  
 costs and restructuring charges              
 (b) Integration and acquisition-related costs and$-  $-  $1,217  $9,154  $1,163  $-  $1,381  
 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 servicing rights which were $6,548 at June 30, 2017, $6,502 at March 31, 2017, $6,485 at December 31, 2016, $6,167 at September 30, 2016 and $5,896 at June 30, 2016.     
(6)Tangible equity as defined in (5), excluding the impact of accumulated other comprehensive (loss) income on available-for-sale investment securities, net (($3,028) at June 30, 2017, ($4,726) at March 31, 2017, ($4,989) at December 31, 2016, $1,789 at September 30, 2016 and $1,907 at June 30, 2016), divided by total shares outstanding.    
N/MNot meaningful                

 

Univest Corporation of Pennsylvania  
  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential   
  For the Three Months Ended,    
Tax Equivalent BasisJune 30, 2017 March 31, 2017  
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$17,951 $390.87%$8,592 $160.76% 
U.S. government obligations 33,453  1131.35  34,038  1061.26  
Obligations of state and political subdivisions 83,356  8864.26  85,854  9224.36  
Other debt and equity securities 351,792  1,7201.96  350,408  1,5821.83  
Federal funds sold and other earning assets 29,860  3965.32  25,909  3585.60  
Total interest-earning deposits, investments,
federal funds sold and other earning assets
 516,412  3,1542.45  504,801  2,9842.40  
          
Commercial, financial, and agricultural loans 761,544  8,1724.30  721,050  7,8414.41  
Real estate—commercial and construction loans 1,501,258  16,6294.44  1,460,029  15,7404.37  
Real estate—residential loans 750,149  8,4794.53  738,211  8,2364.52  
Loans to individuals 27,850  4065.85  29,575  4005.49  
Municipal loans and leases 283,129  3,1854.51  279,379  3,1204.53  
Lease financings 77,395  1,4167.34  78,633  1,4837.65  
Gross loans and leases 3,401,325  38,2874.51  3,306,877  36,8204.52  
Total interest-earning assets 3,917,737  41,4414.24  3,811,678  39,8044.24  
Cash and due from banks 43,804     41,942     
Reserve for loan and lease losses (20,474)    (18,200)    
Premises and equipment, net 65,690     64,507     
Other assets 326,932     330,501     
Total assets$4,333,689    $4,230,428     
          
Liabilities:         
Interest-bearing checking deposits$445,830 $1180.11 $426,373 $1050.10  
Money market savings 560,350  6940.50  531,658  5630.43  
Regular savings 835,495  4460.21  807,802  3490.18  
Time deposits 547,115  1,2030.88  591,813  1,1740.80  
Total time and interest-bearing deposits 2,388,790  2,4610.41  2,357,646  2,1910.38  
          
Short-term borrowings 139,146  3250.94  150,155  2620.71  
Long-term debt 200,207  6831.37  148,031  3991.09  
Subordinated notes 94,176  1,2615.37  94,116  1,2615.43  
Total borrowings 433,529  2,2692.10  392,302  1,9221.99  
Total interest-bearing liabilities 2,822,319  4,7300.67  2,749,948  4,1130.61  
Noninterest-bearing deposits 957,619     932,639     
Accrued expenses and other liabilities 36,054     38,786     
Total liabilities 3,815,992     3,721,373     
          
Shareholders' Equity:         
Common stock 144,559     144,559     
Additional paid-in capital 230,683     230,104     
Retained earnings and other equity 142,455     134,392     
Total shareholders' equity 517,697     509,055     
Total liabilities and shareholders' equity$4,333,689    $4,230,428     
Net interest income $36,711   $35,691   
          
Net interest spread  3.57   3.63  
Effect of net interest-free funding sources  0.19   0.17  
Net interest margin  3.76% 3.80% 
         
Ratio of average interest-earning assets to average
interest-bearing liabilities
 138.81%    138.61%    
          
Note 1: In the above schedule, the interest income and net interest income analysis contains tax-equivalent financial information
and measures determined by methods other than in accordance with U.S. GAAP. This financial information and measures 
should not be considered a substitute for GAAP basis financial information and measures. Management believes the presentation
of the non-GAAP financial information and measures provide useful information that is essential to a proper understanding of
the financial results of the Corporation.
Note 2:  For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting   
adjustments and 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, 2017 and March 31, 2017 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 June 30,    
Tax Equivalent Basis  2017    2016   
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$17,951 $390.87%$7,654 $90.47% 
U.S. government obligations 33,453  1131.35  57,776  1761.23  
Obligations of state and political subdivisions 83,356  8864.26  101,241  1,0924.34  
Other debt and equity securities 351,792  1,7201.96  143,475  1,0122.84  
Federal funds sold and other earning assets 29,860  3965.32  11,018  1204.38  
Total interest-earning deposits, investments,
federal funds sold and other earning assets
 516,412  3,1542.45  321,164  2,4093.02  
          
Commercial, financial, and agricultural loans 761,544  8,1724.30  436,189  4,1323.81  
Real estate—commercial and construction loans 1,501,258  16,6294.44  898,494  10,1064.52  
Real estate—residential loans 750,149  8,4794.53  557,733  6,1414.43  
Loans to individuals 27,850  4065.85  30,301  4085.42  
Municipal loans and leases 283,129  3,1854.51  241,507  2,7234.53  
Lease financings 77,395  1,4167.34  75,450  1,5248.12  
Gross loans and leases 3,401,325  38,2874.51  2,239,674  25,0344.50  
Total interest-earning assets 3,917,737  41,4414.24  2,560,838  27,4434.31  
Cash and due from banks 43,804     32,647     
Reserve for loan and lease losses (20,474)    (16,789)    
Premises and equipment, net 65,690     43,990     
Other assets 326,932     233,875     
Total assets$4,333,689    $2,854,561     
          
Liabilities:         
Interest-bearing checking deposits$445,830 $1180.11 $351,011 $750.09  
Money market savings 560,350  6940.50  337,250  3220.38  
Regular savings 835,495  4460.21  644,199  1990.12  
Time deposits 547,115  1,2030.88  374,936  8620.92  
Total time and interest-bearing deposits 2,388,790  2,4610.41  1,707,396  1,4580.34  
          
Short-term borrowings 139,146  3250.94  53,874  3202.39  
Long-term debt 200,207  6831.37  -  --  
Subordinated notes 94,176  1,2615.37  49,431  6735.48  
Total borrowings 433,529  2,2692.10  103,305  9933.87  
Total interest-bearing liabilities 2,822,319  4,7300.67  1,810,701  2,4510.54  
Noninterest-bearing deposits 957,619     633,563     
Accrued expenses and other liabilities 36,054     41,831     
Total liabilities 3,815,992     2,486,095     
          
Shareholders' Equity:         
Common stock 144,559     110,271     
Additional paid-in capital 230,683     121,070     
Retained earnings and other equity 142,455     137,125     
Total shareholders' equity 517,697     368,466     
Total liabilities and shareholders' equity$4,333,689    $2,854,561     
Net interest income $36,711   $24,992   
          
Net interest spread  3.57   3.77  
Effect of net interest-free funding sources  0.19   0.16  
Net interest margin  3.76% 3.93% 
Ratio of average interest-earning assets to average
interest-bearing liabilities
 138.81%    141.43%    
          
Note 1: In the above schedule, the interest income and net interest income analysis contains tax-equivalent financial information   
and measures determined by methods other than in accordance with U.S. GAAP. This financial information and measures   
should not be considered a substitute for GAAP basis financial information and measures. Management believes the presentation   
of the non-GAAP financial information and measures provide useful information that is essential to a proper understanding of   
the financial results of the Corporation.   
          
Note 2: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting   
adjustments and 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, 2017 and 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 Six Months Ended June 30,   
Tax Equivalent Basis  2017    2016   
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$  13,297 $55  0.83%$  13,637 $  37  0.55% 
U.S. government obligations   33,744    219  1.31    70,132    426  1.22  
Obligations of state and political subdivisions   84,598    1,808  4.31    101,151    2,221  4.42  
Other debt and equity securities   351,104    3,302  1.90    151,072    2,036  2.71  
Federal funds sold and other earning assets   27,896    754  5.45    12,919    252  3.92  
Total interest-earning deposits, investments,
federal funds sold and other earning assets
   510,639    6,138  2.42    348,911    4,972  2.87  
          
Commercial, financial, and agricultural loans   741,409  16,0134.36  424,094  8,1463.86  
Real estate—commercial and construction loans 1,480,757  32,3694.41  892,806  20,025  4.51  
Real estate—residential loans   744,213  16,7154.53  549,855  12,1174.43  
Loans to individuals   28,707    806  5.66    29,889    807  5.43  
Municipal loans and leases   281,264    6,305  4.52    236,503    5,348  4.55  
Lease financings   78,011    2,899  7.49    75,235    3,066  8.20  
  Gross loans and leases 3,354,361  75,1074.52  2,208,382  49,509  4.51  
Total interest-earning assets 3,865,000  81,2454.24  2,557,293  54,4814.28  
Cash and due from banks   42,878       32,156     
Reserve for loan and lease losses   (19,344)      (17,280)    
Premises and equipment, net   65,102       43,431     
Other assets   328,707       228,677     
  Total assets$4,282,343    $2,844,277     
          
Liabilities:         
Interest-bearing checking deposits$  436,155 $223  0.10 $  376,586 $  159  0.08  
Money market savings   546,083    1,257  0.46    349,519    662  0.38  
Regular savings   821,725    795  0.20    635,546    373  0.12  
Time deposits   569,341    2,377  0.84    396,741    1,797  0.91  
  Total time and interest-bearing deposits 2,373,304  4,652  0.40  1,758,392    2,991  0.34  
          
Short-term borrowings   144,620    587  0.82    40,631    323  1.60  
Long-term debt   174,263    1,082  1.25    -     -   -   
Subordinated notes   94,146    2,522  5.40    49,412    1,348  5.49  
  Total borrowings   413,029    4,191  2.05    90,043    1,671  3.73  
  Total interest-bearing liabilities 2,786,333  8,8430.64  1,848,435    4,662  0.51  
Noninterest-bearing deposits   945,198       587,995     
Accrued expenses and other liabilities   37,413       41,567     
  Total liabilities 3,768,944     2,477,997     
          
Shareholders' Equity:         
Common stock   144,559       110,271     
Additional paid-in capital   230,395       120,947     
Retained earnings and other equity   138,445       135,062     
  Total shareholders' equity   513,399       366,280     
  Total liabilities and shareholders' equity$4,282,343    $2,844,277     
Net interest income $72,402   $49,819   
          
Net interest spread    3.60     3.77  
Effect of net interest-free funding sources    0.18     0.15  
Net interest margin    3.78%    3.92% 
Ratio of average interest-earning assets to average
interest-bearing liabilities 
 138.71%    138.35%    
          
Note 1:  In the above schedule, the interest income and net interest income analysis contains tax-equivalent financial information   
  and measures determined by methods other than in accordance with U.S. GAAP. This financial information and measures    
  should not be considered a substitute for GAAP basis financial information and measures. Management believes the presentation  
  of the non-GAAP financial information and measures provide useful information that is essential to a proper understanding of    
  the financial results of the Corporation.         
          
Note 2: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting    
adjustments and 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, 2017 and 2016 have been calculated      
using the Corporation’s federal applicable rate of 35.0%.        
          
CONTACT:
Roger Deacon
UNIVEST CORPORATION OF PENNSYLVANIA
Chief Financial Officer
215-721-2455, DeaconR@univest.net

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Source: Univest Corporation of Pennsylvania
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