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Univest Corporation of Pennsylvania Reports Third Quarter Results

Company Release - 10/25/2017 4:15 PM ET

SOUDERTON, Pa., Oct. 25, 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 September 30, 2017 of $11.2 million, or $0.42 diluted earnings per share, compared to net income of $58 thousand, or $0.00 diluted earnings per share, for the three months ended September 30, 2016. Net income for the nine months ended September 30, 2017 was $33.8 million, or $1.27 diluted earnings per share, compared to net income of $12.6 million, or $0.57 diluted earnings per share, for the comparable period in the prior year. The financial results for the nine months ended September 30, 2017 included a tax-free bank owned life insurance ("BOLI") death benefit claim of $889 thousand recognized in the second quarter of 2017, which represents $0.03 diluted earnings per share. The financial results for the three and nine months ended September 30, 2016 included acquisition and integration costs related to the acquisition of Fox Chase Bancorp ("Fox Chase") of $9.2 million and $10.6 million, or $0.35 and $0.48 of diluted earnings per share net of tax, respectively. There were no acquisition and integration costs during the nine months ended September 30, 2017.

Loans
Gross loans and leases increased $201.3 million, or 8.2% (annualized), from December 31, 2016 and $296.8 million, or 9.3%, from September 30, 2016. Gross loans and leases decreased $23.0 million, or 2.6% (annualized), from June 30, 2017 primarily due to significant line of credit pay downs and payoffs during the quarter. Average loans and leases increased $65.9 million, or 7.8% (annualized), during the third quarter of 2017 from the second quarter of 2017. The growth in loans in 2017 was primarily in commercial real estate, commercial business and residential real estate loans.

Deposits
Total deposits increased $170.5 million, or 20.4% (annualized), from June 30, 2017 primarily due to a seasonal increase in public funds deposits of $193.2 million. Total deposits increased $261.0 million, or 10.7% (annualized), from December 31, 2016 and $340.1 million, or 10.7%, from September 30, 2016 primarily due to an increase in commercial customer and public funds deposits.  

Net Interest Income and Margin
Net interest income of $36.9 million for the third quarter of 2017 increased $1.6 million, or 4.5%, from the second quarter of 2017 and increased $4.0 million, or 12.2%, from the third quarter of 2016. Net interest income of $106.5 million for the nine months ended September 30, 2017 increased $26.4 million, or 33.0%, from the same period in the prior year. Net interest margin, on a tax-equivalent basis, was 3.80% for the third quarter of 2017, compared to 3.76% for the second quarter of 2017 and 3.68% for the third quarter of 2016. The favorable impact of purchase accounting accretion was 11 basis points ($1.1 million) for the quarter ended September 30, 2017 compared to 8 basis points ($742 thousand) for the quarter ended June 30, 2017 and 7 basis points ($645 thousand) for the quarter ended September 30, 2016. Excluding the impact of purchase accounting accretion, the net interest margin, on a tax-equivalent basis, was 3.69% for the quarter ended September 30, 2017 compared to 3.68% for the quarter ended June 30, 2017 and 3.61% for the quarter ended September 30, 2016. The increase in net interest income of $1.6 million for the third quarter of 2017 as compared to the second quarter of 2017 was primarily due to the $65.9 million, or 7.8% (annualized), increase in average gross loans as increases in loan yields were offset by higher funding costs. The increase in the favorable impact of purchase accounting accretion during the third quarter of 2017 was primarily due to the Corporation’s ability to recognize incremental proceeds of $493 thousand, or 5 basis points to net interest margin, related to the payoff of a $4.8 million purchased credit impaired commercial real estate loan.

Noninterest Income
Noninterest income for the quarter ended September 30, 2017 was $14.1 million, consistent with the third quarter of 2016. Noninterest income for the nine months ended September 30, 2017 was $45.1 million, an increase of $3.1 million, or 7.4%, from the comparable period in the prior year. Service charges on deposits increased $529 thousand, or 15.6%, for the nine months ended September 30, 2017, mostly due to fees on deposit accounts acquired from Fox Chase. Investment advisory commission and fee income increased $550 thousand, or 18.9%, for the quarter and $1.6 million, or 19.4%, for the nine months ended September 30, 2017 primarily due to new customer relationships and favorable market performance during 2017. BOLI income increased $1.4 million for the nine months ended September 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 $294 thousand, or 15.3%, for the quarter and $1.1 million, or 19.1%, for the nine months ended September 30, 2017, mainly due to an increase in other service fee income of $158 thousand for the quarter and $628 thousand for the nine months ended September 30, 2017 and an increase in net gains on sales of other real estate owned of $280 thousand for the nine months ended September 30, 2017 compared to the prior year. These increases were partially offset by decreases in the net gain on sale of securities of $23 thousand for the quarter and $444 thousand for the nine months ended September 30, 2017. In addition, the net gain on mortgage banking decreased $1.1 million, or 54.7%, for the quarter and $1.4 million, or 27.9%, for the nine months ended September 30, 2017 primarily due to a decrease in mortgage refinance volume and a shortage of housing supply.

Noninterest Expense
Noninterest expense for the quarter ended September 30, 2017 was $32.7 million, a decrease of $14.4 million, or 30.5%, compared to the third quarter of 2016. Noninterest expense for the nine months ended September 30, 2017 was $97.3 million, a decrease of $6.3 million, or 6.1%, from the comparable period in the prior year. Acquisition and integration costs during 2016 related to the Fox Chase acquisition were $14.1 million for the quarter and $15.6 million for the nine months ended September 30, 2016. There were no acquisition or integration costs during the three or nine months ended September 30, 2017. In addition, intangible expense decreased $164 thousand for the quarter and $716 thousand for the nine months ended September 30, 2017 primarily 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.

These decreases were partially offset by the following increases in non-interest expense for the nine months ended September 30, 2017. Salaries and benefit expense increased $4.9 million for the nine months ended September 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 $1.7 million for the nine months ended September 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 $1.3 million for the nine months ended September 30, 2017 due to increased investments in customer relationship management software and outsourced data processing solutions as well as the addition of Fox Chase processing expense. Other expense increased $1.6 million for the nine months ended September 30, 2017 primarily due to inclusion of Fox Chase-related expenses and an increase of $963 thousand for the nine months ended September 30, 2017 primarily related to Bank shares tax as a result of a statutory rate increase in 2017 and the Corporation's growth following the Fox Chase acquisition.

Asset Quality and Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $15.9 million at September 30, 2017, compared to $20.2 million at June 30, 2017 and $17.9 million at December 31, 2016. Nonperforming assets were $30.8 million at September 30, 2017, compared to $34.4 million at June 30, 2017 and $27.1 million at December 31, 2016. Net loan and lease charge-offs were $3.1 million during the third quarter of 2017 and $4.9 million for the nine months ended September 30, 2017. The provision for loan and lease losses was $2.7 million for the third quarter of 2017 and $7.9 million for the nine months ended September 30, 2017. During the third quarter of 2017, the Corporation charged-off $2.8 million related to $5.0 million of software leases under a vendor referral program. The provision for loan losses related to this program was $1.9 million during the quarter ended September 30, 2017 as the Corporation had an allowance for loan and lease loss reserve of $886 thousand related to this program at June 30, 2017. Total provision for loan and lease losses for this program was $2.8 million during the nine months ended September 30, 2017. Excluding this program, net loan and lease charge-offs were $292 thousand and the provision for loan and lease losses was $781 thousand for the quarter ended September 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 0.71% at September 30, 2017, compared to 0.73% at June 30, 2017 and 0.73% at December 31, 2016.

Tax Provision  
The effective income tax rate was 28.3% for the quarter ended September 30, 2017 and was 27.1% for the nine months ended September 30, 2017. The effective income tax rate during the nine months ended September 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 29.1% for the nine months ended September 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 August 28, 2017, Univest declared a quarterly cash dividend of $0.20 per share, payable on October 2, 2017. This represented a 2.50% 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 third quarter 2017 results on Thursday, October 26, 2017 at 9:00 a.m. EDT. Participants may preregister at http://dpregister.com/10113034. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through November 26, 2017 by dialing 1-877-344-7529; using Conference ID: 10113034.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., has approximately $4.4 billion in assets and $3.5 billion in assets under management and supervision through its Wealth Management lines of business at September 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 that 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 (Unaudited) 
September 30, 2017 
(Dollars in thousands)               
                
Balance Sheet (Period End) 09/30/17 06/30/17 03/31/17 12/31/16 09/30/16     
Assets $  4,417,363  $  4,453,527  $  4,273,931  $  4,230,528  $  4,140,444      
Investment securities    443,822     469,307     464,639     468,518     484,213      
Loans held for sale    2,228     2,259     1,110     5,890     3,844      
Loans and leases held for investment, gross    3,487,164     3,510,170     3,341,916     3,285,886     3,190,361      
Allowance for loan and lease losses    20,543     20,910     19,528     17,499     16,899      
Loans and leases held for investment, net    3,466,621     3,489,260     3,322,388     3,268,387     3,173,462      
Total deposits    3,518,590     3,348,080     3,365,951     3,257,567     3,178,509      
Noninterest-bearing deposits    987,881     963,790     947,495     918,337     874,581      
NOW, money market and savings    1,959,549     1,837,452     1,865,280     1,713,041     1,652,696      
Time deposits    571,160     546,838     553,176     626,189     651,232      
Borrowings    332,529     542,545     355,580     417,780     398,341      
Shareholders' equity    528,798     521,306     511,880     505,209     509,249      
                
                
Balance Sheet (Average) For the three months ended, For the nine months ended, 
  09/30/17 06/30/17 03/31/17 12/31/16 09/30/16 09/30/17 09/30/16 
Assets $  4,416,332  $  4,333,689  $  4,230,428  $  4,134,976  $  4,147,468  $  4,327,490  $  3,281,469  
Investment securities     459,862     468,601     470,300     473,890     503,790     466,216     383,275  
Loans and leases, gross    3,467,235     3,401,325     3,306,877     3,208,171     3,164,273     3,392,400     2,529,339  
Deposits    3,480,318     3,346,409     3,290,285     3,237,778     3,177,060     3,373,033     2,625,299  
Shareholders' equity    527,032     517,697     509,055     507,832     506,464     517,994     413,348  
                
                
Asset Quality Data (Period End)                
  09/30/17 06/30/17 03/31/17 12/31/16 09/30/16     
Nonaccrual loans and leases, including nonaccrual troubled debt restructured               
  loans and leases $  15,949  $  20,174  $  19,856  $  17,916  $  15,050      
Accruing loans and leases 90 days or more past due    1,595     572     919     987     1,128      
Accruing troubled debt restructured loans and leases    11,468     11,470     2,818     3,252     3,286      
Total nonperforming loans and leases    29,012     32,216     23,593     22,155     19,464      
Other real estate owned    1,763     2,202     3,712     4,969     6,041      
Total nonperforming assets    30,775     34,418     27,305     27,124     25,505      
Nonaccrual loans and leases / Loans and leases held for investment  0.46%  0.57%  0.59%  0.55%  0.47%     
Nonperforming loans and leases / Loans and leases held for investment  0.83%  0.92%  0.71%  0.67%  0.61%     
Nonperforming assets / Total assets  0.70%  0.77%  0.64%  0.64%  0.62%     
                
Allowance for loan and lease losses    20,543     20,910     19,528     17,499     16,899      
Allowance for loan and lease losses / Loans and leases held for investment   0.59%  0.60%  0.58%  0.53%  0.53%     
Allowance for loan and lease losses / Loans and leases held for investment  0.71%  0.73%  0.74%  0.73%  0.77%     
  (excluding acquired loans at period-end)               
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment  128.80%  103.65%  98.35%  97.67%  112.29%     
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 70.81%  64.91%  82.77%  78.98%  86.82%     
Acquired credit impaired loans $  1,622  $  6,485  $  6,616  $  7,352  $  14,575      
                
  For the three months ended, For the nine months ended, 
  09/30/17 06/30/17 03/31/17 12/31/16 09/30/16 09/30/17 09/30/16 
Net loan and lease charge-offs $  3,056  $  1,384  $  416  $  1,650  $  1,669  $  4,856  $  3,300  
Net loan and lease charge-offs (annualized)/Average loans and leases  0.35%  0.16%  0.05%  0.20%  0.21%  0.19%  0.17% 
                

 

Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data (Unaudited) 
September 30, 2017 
(Dollars in thousands, except per share data)               
  For the three months ended, For the nine months ended, 
For the period: 09/30/17 06/30/17 03/31/17 12/31/16 09/30/16 09/30/17 09/30/16 
Interest income $  42,172 $  40,030 $  38,396 $  38,056 $  36,705  $  120,598 $  88,551  
Interest expense    5,285    4,730    4,113    3,884    3,836     14,128    8,498  
  Net interest income    36,887    35,300    34,283    34,172    32,869     106,470    80,053  
Provision for loan and lease losses    2,689    2,766    2,445    2,250    1,415     7,900    2,571  
Net interest income after provision     34,198    32,534    31,838    31,922    31,454     98,570    77,482  
Noninterest income:               
  Trust fee income    1,924    2,016    1,907    1,921    1,958     5,847    5,820  
  Service charges on deposit accounts    1,371    1,313    1,243    1,293    1,344     3,927    3,398  
  Investment advisory commission and fee income    3,455    3,333    3,181    3,072    2,905     9,969    8,352  
  Insurance commission and fee income    3,492    3,628    4,410    3,275    3,267     11,530    11,328  
  Bank owned life insurance income    742    1,622    783    1,215    711     3,147    1,716  
  Net gain on sales of investment securities    7    21    15    31    30     43    487  
  Net gain on mortgage banking activities    908    1,537    1,113    1,092    2,006     3,558    4,935  
  Other income    2,210    2,539    2,318    2,095    1,916     7,067    5,933  
Total noninterest income    14,109    16,009    14,970    13,994    14,137     45,088    41,969  
Noninterest expense:               
Salaries and benefits    16,909    16,353    16,657    16,546    16,710     49,919    44,972  
Commissions    2,244    2,374    2,050    2,618    2,485     6,668    6,743  
Premises and equipment    3,542    3,715    3,658    3,929    3,476     10,915    9,198  
Data processing    2,118    2,081    2,058    2,001    2,169     6,257    4,980  
Professional fees    1,447    1,248    1,239    1,258    1,322     3,934    3,289  
Marketing and advertising    271    475    379    619    345     1,125    1,396  
Deposit insurance premiums    409    451    402    521    327     1,262    1,192  
Intangible expenses    690    446    759    2,917    854     1,895    2,611  
Acquisition-related costs    -     -     -     101    8,784     -     10,156  
Integration costs    -     -     -     269    5,365     -     5,398  
Restructuring charges (recoveries)    -     -     -     1,816    (85)    -     (85) 
Other expense    5,065    5,405    4,828    5,835    5,314     15,298    13,701  
Total noninterest expense    32,695    32,548    32,030    38,430    47,066     97,273    103,551  
Income (loss) before taxes    15,612    15,995    14,778    7,486    (1,475)    46,385    15,900  
Income tax expense (benefit)    4,416    4,217    3,922    568    (1,533)    12,555    3,313  
Net income $  11,196 $  11,778 $  10,856 $  6,918 $  58  $  33,830 $  12,587  
Per common share data:               
Book value per share $  19.83 $  19.55 $  19.21 $  19.00 $  19.17  $  19.83 $  19.17  
Net income per share:               
  Basic $  0.42 $  0.44 $  0.41 $  0.26 $  -   $  1.27 $  0.58  
  Diluted $  0.42 $  0.44 $  0.41 $  0.26 $  -   $  1.27 $  0.57  
Dividends declared per share $  0.20 $  0.20 $  0.20 $  0.20 $  0.20  $  0.60 $  0.60  
Weighted average shares outstanding    26,666,460    26,661,784    26,630,698    26,577,948    26,554,626     26,653,111    21,929,403  
Period end shares outstanding    26,671,336    26,667,991    26,645,520    26,589,353    26,558,412     26,671,336    26,558,412  
                

 

Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data (Unaudited) 
September 30, 2017 
                   
     For the three months ended, For the nine months ended, 
Profitability Ratios (annualized)  09/30/17 06/30/17 03/31/17 12/31/16 09/30/16 09/30/17 09/30/16 
                   
Return on average assets   1.01%  1.09%  1.04%  0.67%  0.01%  1.05%  0.51% 
Return on average assets, excluding integration  1.01%  1.09%  1.04%  0.78%  0.88%  1.05%  0.94% 
  and acquisition-related costs and restructuring charges (1), (2)             
Return on average shareholders' equity  8.43%  9.13%  8.65%  5.42%  0.05%  8.73%  4.07% 
Return on average shareholders' equity, excluding 8.43%  9.13%  8.65%  6.37%  7.24%  8.73%  7.47% 
  integration and acquisition-related costs and               
  restructuring charges (1), (2)                
Return on average tangible common equity, excluding 12.83%  14.06%  13.48%  9.95%  11.32%  13.45%  11.31% 
  integration and acquisition-related costs and               
  restructuring charges (1), (2), (5)                
Net interest margin (FTE)   3.80%  3.76%  3.80%  3.81%  3.68%  3.78%  3.82% 
Efficiency ratio (3)    61.94%  60.74%  62.70%  76.48%  96.45%  61.78%  81.54% 
Efficiency ratio, excluding integration and  61.94%  60.74%  62.70%  72.13%  67.63%  61.78%  69.36% 
  acquisition-related costs and restructuring charges (1), (3), (4)             
                   
Capitalization Ratios                 
                   
Dividends declared to net income   47.62%  45.25%  49.02%  76.76%  N/M   47.25%  104.27% 
Shareholders' equity to assets (Period End)  11.97%  11.71%  11.98%  11.94%  12.30%  11.97%  12.30% 
Tangible common equity to tangible assets (5)  8.22%  7.96%  8.06%  7.97%  8.24%  8.22%  8.24% 
Tangible book value per share (5)  $  13.06  $  12.75  $  12.38  $  12.13  $  12.28  $  13.06  $  12.28  
Tangible book value per share - Core (5), (6) $  13.14  $  12.87  $  12.56  $  12.32  $  12.21  $  13.14  $  12.21  
                   
Regulatory Capital Ratios  (Period End)                
Tier 1 leverage ratio    8.74%  8.74%  8.75%  8.84%  8.80%  8.74%  8.80% 
Common equity tier 1 risk-based capital ratio  9.50%  9.21%  9.41%  9.42%  9.58%  9.50%  9.58% 
Tier 1 risk-based capital ratio   9.50%  9.21%  9.41%  9.42%  9.58%  9.50%  9.58% 
Total risk-based capital ratio   12.46%  12.15%  12.44%  12.44%  12.64%  12.46%  12.64% 
                   
                   
(1)This consolidated selected financial data schedule contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The management of Univest Corporation of Pennsylvania uses these non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation.  See below table for additional information.     
                   
 (a) Integration and acquisition-related costs and restructuring charges $  -   $  -   $  -   $  2,186  $  14,064  $  -   $  15,469  
 Tax effect on integration and acquisition-related costs and restructuring charges   -      -      -      969     4,910     -      4,934  
 (b) Integration and acquisition-related costs and restructuring charges, net of tax $  -   $  -   $  -   $  1,217  $  9,154  $  -   $  10,535  
                   
(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 $6,556 at September 30, 2017, $6,548 at June 30, 2017, $6,502 at March 31, 2017, $6,485 at December 31, 2016 and $6,167 at September 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 (($2,364) at September 30, 2017, ($3,028) at June 30, 2017, ($4,726) at March 31, 2017, ($4,989) at December 31, 2016 and $1,789 at September 30, 2016), divided by total shares outstanding.    
N/MNot meaningful                
                   

 

Univest Corporation of Pennsylvania  
Average Balances and Interest Rates (Unaudited)  
  For the Three Months Ended ,    
Tax Equivalent BasisSeptember 30, 2017 June 30, 2017  
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$  43,941 $133  1.20%$  17,951 $  39  0.87% 
U.S. government obligations   31,126    110  1.40    33,453    113  1.35  
Obligations of state and political subdivisions   81,114    846  4.14    83,356    886  4.26  
Other debt and equity securities   347,622    1,745  1.99    351,792    1,720  1.96  
Federal funds sold and other earning assets   28,063    375  5.30    29,860    396  5.32  
Total interest-earning deposits, investments, federal funds sold and other earning assets   531,866    3,209  2.39    516,412    3,154  2.45  
          
Commercial, financial, and agricultural loans   762,418    8,656  4.50    761,544    8,172  4.30  
Real estate—commercial and construction loans   1,549,799    17,999  4.61    1,501,258    16,629  4.44  
Real estate—residential loans   770,839    8,751  4.50    750,149    8,479  4.53  
Loans to individuals   27,509    416  6.00    27,850    406  5.85  
Municipal loans and leases   281,509    3,208  4.52    283,129    3,185  4.51  
Lease financings   75,161    1,331  7.03    77,395    1,416  7.34  
  Gross loans and leases   3,467,235    40,361  4.62    3,401,325    38,287  4.51  
Total interest-earning assets   3,999,101    43,570  4.32    3,917,737    41,441  4.24  
Cash and due from banks   46,969       43,804     
Reserve for loan and lease losses   (21,425)      (20,474)    
Premises and equipment, net   65,025       65,690     
Other assets   326,662       326,932     
  Total assets$  4,416,332    $  4,333,689     
          
Liabilities:         
Interest-bearing checking deposits$  438,956 $132  0.12 $  445,830 $  118  0.11  
Money market savings   587,590    919  0.62    560,350    694  0.50  
Regular savings   904,528    646  0.28    835,495    446  0.21  
Time deposits   557,757    1,371  0.98    547,115    1,203  0.88  
  Total time and interest-bearing deposits   2,488,831    3,068  0.49    2,388,790    2,461  0.41  
          
Short-term borrowings   72,719    169  0.92    139,146    325  0.94  
Long-term debt   207,057    794  1.52    200,207    683  1.37  
Subordinated notes   94,238    1,254  5.28    94,176    1,261  5.37  
  Total borrowings   374,014    2,217  2.35    433,529    2,269  2.10  
  Total interest-bearing liabilities   2,862,845    5,285  0.73    2,822,319    4,730  0.67  
Noninterest-bearing deposits   991,487       957,619     
Accrued expenses and other liabilities   34,968       36,054     
  Total liabilities   3,889,300       3,815,992     
          
Shareholders' Equity:         
Common stock   144,559       144,559     
Additional paid-in capital   231,575       230,683     
Retained earnings and other equity   150,898       142,455     
  Total shareholders' equity   527,032       517,697     
  Total liabilities and shareholders' equity$  4,416,332    $  4,333,689     
Net interest income $  38,285   $  36,711   
          
Net interest spread    3.59     3.57  
Effect of net interest-free funding sources    0.21     0.19  
Net interest margin    3.80%   3.76% 
Ratio of average interest-earning assets to average interest-bearing liabilities  139.69%    138.81%    
          
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 September 30, 2017 and June 30, 2017 have been calculated    
using the Corporation’s federal applicable rate of 35.0%.        
          

 

Univest Corporation of Pennsylvania  
Average Balances and Interest Rates (Unaudited)  
  For the Three Months Ended September 30,    
Tax Equivalent Basis  2017    2016   
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$  43,941 $133  1.20%$  16,248 $  14  0.34% 
U.S. government obligations   31,126    110  1.40    43,622    125  1.14  
Obligations of state and political subdivisions   81,114    846  4.14    96,581    1,030  4.24  
Other debt and equity securities   347,622    1,745  1.99    363,587    1,358  1.49  
Federal funds sold and other earning assets   28,063    375  5.30    18,987    321  6.73  
Total interest-earning deposits, investments, federal funds sold and other earning assets   531,866    3,209  2.39    539,025    2,848  2.10  
          
Commercial, financial, and agricultural loans   762,418    8,656  4.50    674,569    6,571  3.88  
Real estate—commercial and construction loans   1,549,799    17,999  4.61    1,382,947    15,816  4.55  
Real estate—residential loans   770,839    8,751  4.50    710,814    7,887  4.41  
Loans to individuals   27,509    416  6.00    31,416    415  5.26  
Municipal loans and leases   281,509    3,208  4.52    288,391    3,030  4.18  
Lease financings   75,161    1,331  7.03    76,136    1,547  8.08  
  Gross loans and leases   3,467,235    40,361  4.62    3,164,273    35,266  4.43  
Total interest-earning assets   3,999,101    43,570  4.32    3,703,298    38,114  4.09  
Cash and due from banks   46,969       40,835     
Reserve for loan and lease losses   (21,425)      (17,110)    
Premises and equipment, net   65,025       61,361     
Other assets   326,662       359,084     
  Total assets$  4,416,332    $  4,147,468     
          
Liabilities:         
Interest-bearing checking deposits$  438,956 $132  0.12 $  389,079 $  114  0.12  
Money market savings   587,590    919  0.62    483,579    428  0.35  
Regular savings   904,528    646  0.28    793,644    352  0.18  
Time deposits   557,757    1,371  0.98    606,561    1,187  0.78  
  Total time and interest-bearing deposits   2,488,831    3,068  0.49    2,272,863    2,081  0.36  
          
Short-term borrowings   72,719    169  0.92    229,282    276  0.48  
Long-term debt   207,057    794  1.52    93,188    218  0.93  
Subordinated notes   94,238    1,254  5.28    94,035    1,261  5.33  
  Total borrowings   374,014    2,217  2.35    416,505    1,755  1.68  
  Total interest-bearing liabilities   2,862,845    5,285  0.73    2,689,368    3,836  0.57  
Noninterest-bearing deposits   991,487       904,197     
Accrued expenses and other liabilities   34,968       47,439     
  Total liabilities   3,889,300       3,641,004     
          
Shareholders' Equity:         
Common stock   144,559       144,559     
Additional paid-in capital   231,575       229,319     
Retained earnings and other equity   150,898       132,586     
  Total shareholders' equity   527,032       506,464     
  Total liabilities and shareholders' equity$  4,416,332    $  4,147,468     
Net interest income $  38,285   $  34,278   
          
Net interest spread    3.59     3.52  
Effect of net interest-free funding sources    0.21     0.16  
Net interest margin    3.80%   3.68% 
Ratio of average interest-earning assets to average interest-bearing liabilities  139.69%    137.70%    
          
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 September 30, 2017 and 2016 have been calculated     
using the Corporation’s federal applicable rate of 35.0%.        
          

 

Univest Corporation of Pennsylvania  
Average Balances and Interest Rates (Unaudited)  
  For the Nine Months Ended September 30,   
Tax Equivalent Basis  2017    2016   
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$  23,624 $188  1.06%$  14,514 $  51  0.47% 
U.S. government obligations   32,862    329  1.34    61,231    551  1.20  
Obligations of state and political subdivisions   83,424    2,654  4.25    99,617    3,251  4.36  
Other debt and equity securities   349,930    5,047  1.93    222,427    3,394  2.04  
Federal funds sold and other earning assets   27,952    1,129  5.40    14,956    573  5.12  
Total interest-earning deposits, investments, federal funds sold and other earning assets   517,792    9,347  2.41    412,745    7,820  2.53  
          
Commercial, financial, and agricultural loans   748,489    24,669  4.41    508,195    14,717  3.87  
Real estate—commercial and construction loans   1,504,024    50,368  4.48    1,057,379    35,841  4.53  
Real estate—residential loans   753,186    25,466  4.52    603,900    20,004  4.42  
Loans to individuals   28,304    1,222  5.77    30,402    1,222  5.37  
Municipal loans and leases   281,347    9,513  4.52    253,925    8,378  4.41  
Lease financings   77,050    4,230  7.34    75,538    4,613  8.16  
  Gross loans and leases   3,392,400    115,468  4.55    2,529,339    84,775  4.48  
Total interest-earning assets   3,910,192    124,815  4.27    2,942,084    92,595  4.20  
Cash and due from banks   44,257       35,070     
Reserve for loan and lease losses   (20,045)      (17,223)    
Premises and equipment, net   65,076       49,451     
Other assets   328,010       272,087     
  Total assets$  4,327,490    $  3,281,469     
          
Liabilities:         
Interest-bearing checking deposits$  437,099 $355  0.11 $  380,780 $  273  0.10  
Money market savings   560,071    2,177  0.52    394,532    1,090  0.37  
Regular savings   849,629    1,441  0.23    688,630    725  0.14  
Time deposits   565,437    3,747  0.89    467,192    2,984  0.85  
  Total time and interest-bearing deposits   2,412,236    7,720  0.43    1,931,134    5,072  0.35  
          
Short-term borrowings   120,390    756  0.84    103,974    599  0.77  
Long-term debt   185,315    1,876  1.35    31,290    218  0.93  
Subordinated notes   94,177    3,776  5.36    64,395    2,609  5.41  
  Total borrowings   399,882    6,408  2.14    199,659    3,426  2.29  
  Total interest-bearing liabilities   2,812,118    14,128  0.67    2,130,793    8,498  0.53  
Noninterest-bearing deposits   960,797       694,165     
Accrued expenses and other liabilities   36,581       43,163     
  Total liabilities   3,809,496       2,868,121     
          
Shareholders' Equity:         
Common stock   144,559       121,784     
Additional paid-in capital   230,793       157,334     
Retained earnings and other equity   142,642       134,230     
  Total shareholders' equity   517,994       413,348     
  Total liabilities and shareholders' equity$  4,327,490    $  3,281,469     
Net interest income $  110,687   $  84,097   
          
Net interest spread    3.60     3.67  
Effect of net interest-free funding sources    0.18     0.15  
Net interest margin    3.78%    3.82% 
Ratio of average interest-earning assets to average interest-bearing liabilities  139.05%    138.07%    
          
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 nine months ended September 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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