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Univest Corporation of Pennsylvania Reports Fourth Quarter and Year End Results

(Annual Loan Growth for 2017 of 10.2%)

Company Release - 1/24/2018 4:30 PM ET

SOUDERTON, Pa., Jan. 24, 2018 (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 fourth quarter and year ended December 31, 2017. Univest reported net income of $10.3 million, or $0.37 diluted earnings per share for the three months ended December 31, 2017, compared to net income of $6.9 million, or $0.26 diluted earnings per share, for the three months ended December 31, 2016. Net income for the year ended December 31, 2017 was $44.1 million, or $1.64 diluted earnings per share, compared to net income of $19.5 million, or $0.84 diluted earnings per share for the year ended December 31, 2016.

The financial results for the quarter and year ended December 31, 2017 included a revaluation of the Corporation’s net deferred tax asset associated with the passage of the Tax Cuts and Jobs Act of 2017 (“TCJA”). The revaluation, which is recorded as additional income tax expense, was $1.1 million, or $0.04, of diluted earnings per share for each period. The financial results for the year ended December 31, 2017 also included a tax-free bank owned life insurance ("BOLI") death benefit of $889 thousand recognized in the second quarter of 2017, which represents $0.03 diluted earnings per share for the year ended December 31, 2017.

The financial results for the fourth quarter and year ended December 31, 2016 included acquisition and integration costs related to the acquisition of Fox Chase Bancorp ("Fox Chase") 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. There were no acquisition, integration costs or restructuring costs during the year ended December 31, 2017. 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.

Additionally, on December 6, 2017, the Corporation completed its public offering of 2,645,000 shares of common stock at a price of $28.25 per share which resulted in an increase in shareholders' equity of $70.5 million.

Loans
Gross loans and leases increased $334.2 million, or 10.2%, from December 31, 2016 and $132.9 million, or 15.2% (annualized), from September 30, 2017. The growth in loans in the fourth quarter and year ended 2017 was primarily in commercial real estate, commercial business and residential real estate loans.

Deposits
Total deposits increased $297.4 million, or 9.1%, from December 31, 2016 and increased $36.3 million, or 4.1% (annualized), from September 30, 2017. Noninterest bearing deposits increased $121.7 million, or 13.3%, from December 31, 2016. The growth in deposits in 2017 was primarily due to increases in commercial and public funds deposits partially offset by a decrease in consumer deposits.

Shareholders’ Equity
Shareholders’ equity increased $98.2 million from December 31, 2016 primarily due to the previously mentioned public offering which raised $70.5 million and net income of $44.1 million, partially offset by dividends declared to shareholders of $21.8 million. Tangible book value per share, as defined in the attached exhibits, increased to $14.44 per share at December 31, 2017 from $12.13 at December 31, 2016.

Net Interest Income and Margin
Net interest income of $143.2 million for the year ended December 31, 2017 increased $29.0 million, or 25.3%, from the prior year. Net interest income of $36.7 million for the fourth quarter of 2017 decreased $181 thousand, or 0.5%, from the third quarter of 2017 and increased $2.5 million, or 7.4%, from the fourth quarter of 2016. Net interest margin, on a tax-equivalent basis, was 3.76% for the fourth quarter of 2017, compared to 3.80% for the third quarter of 2017 and 3.81% for the fourth quarter of 2016. The favorable impact of purchase accounting accretion was 4 basis points ($449 thousand) for the quarter ended December 31, 2017 compared to 11 basis points ($1.1 million) for the quarter ended September 30, 2017 and 20 basis points ($1.8 million) for the quarter ended December 31, 2016. Excluding the impact of purchase accounting accretion, the net interest margin, on a tax-equivalent basis, was 3.72% for the quarter ended December 31, 2017 compared to 3.69% for the quarter ended September 30, 2017 and 3.61% for the quarter ended December 31, 2016.  

Noninterest Income
Noninterest income for the year ended December 31, 2017 was $59.2 million, an increase of $3.3 million, or 5.9%, from the prior year. Noninterest income for the quarter ended December 31, 2017 was $14.2 million, a decrease of $158 thousand, or 1.1%, from the fourth quarter of 2016. Trust fee income increased $314 thousand, or 4.1%, for the year ended December 31, 2017 primarily due to an increase in trust assets under management during 2017. Service charges on deposits increased $791 thousand, or 16.9%, for the year ended December 31, 2017 primarily due to fees on deposit accounts acquired from Fox Chase. Investment advisory commission and fee income increased $2.0 million, or 17.8%, for the year ended December 31, 2017 primarily due to new customer relationships and favorable market performance during 2017. Insurance commission and fee income increased $185 thousand, or 1.3%, for the year ended December 31, 2017. Insurance contingent commission income was $1.1 million for the year ended December 31, 2017, a decrease of $363 thousand from the year ended December 31, 2016.  Excluding the decrease in contingent commission income, insurance commission and fee income increased $548 thousand or 4.2%. BOLI income increased $1.1 million for the year ended December 31, 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. BOLI death benefits of $450 thousand were recognized in the fourth quarter of 2016. Other income increased $1.4 million, or 17.1%, for the year ended December 31, 2017, mainly due to an increase in service fee income of $820 thousand, an increase in swap fee income of $308 thousand and an increase in net gains on sales of other real estate owned of $524 thousand partially offset by the loss on the sale of a closed Fox Chase branch of $309 thousand.

These increases in noninterest income were partially offset by a decrease in the net gain on sale of securities of $470 thousand for the year ended December 31, 2017. In addition, the net gain on mortgage banking decreased $2.0 million, or 33.3%, for the year ended December 31, 2017 primarily due to a decrease in mortgage refinance volume and a shortage of housing supply.

Noninterest Expense
Noninterest expense for the year ended December 31, 2017 was $130.7 million, a decrease of $11.3 million, or 7.9%, from the prior year. Noninterest expense for the quarter ended December 31, 2017 was $33.4 million, a decrease of $5.0 million, or 13.0%, compared to the fourth quarter of 2016. Included in the fourth quarter 2017 other expense is $279 thousand of expense associated with an unauthorized mortgage loan disbursement.

Acquisition and integration costs related to the Fox Chase acquisition and restructuring costs were $17.7 million for the year and $2.2 million for the quarter ended December 31, 2016. There were no acquisition, integration costs or restructuring costs during the year ended December 31, 2017. In addition, intangible expense decreased $2.2 million for the quarter and $2.9 million for the year ended December 31, 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 year ended December 31, 2017. Salaries, benefits and commissions increased $5.0 million for the year ended December 31, 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 $1.4 million for the year ended December 31, 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 $1.5 million for the year ended December 31, 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 $1.2 million for the year ended December 31, 2017 primarily due to an increase of $1.1 million related to Bank shares tax as a result of a statutory rate increase in 2017 and the Bank’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 $14.5 million at December 31, 2017, compared to $15.9 million at September 30, 2017 and $17.9 million at December 31, 2016. Nonperforming assets were $28.6 million at December 31, 2017, compared to $30.8 million at September 30, 2017 and $27.1 million at December 31, 2016. Net loan and lease charge-offs were $980 thousand during the fourth quarter of 2017 and $5.8 million for the year ended December 31, 2017. The provision for loan and lease losses was $2.0 million for the fourth quarter of 2017 and $9.9 million for the year ended December 31, 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 0.70% at December 31, 2017, compared to 0.71% at September 30, 2017 and 0.73% at December 31, 2016.

Tax Provision  
The effective income tax rate was 28.7% for the year and 33.5% for the quarter ended December 31, 2017, respectively. The effective income tax rate was impacted by the previously discussed revaluation adjustment of the deferred tax asset of $1.1 million in the fourth quarter, the BOLI death benefit of $889 thousand in the second quarter and by the adoption of ASU 2016-9. Excluding these items, the effective tax rate was 28.5% for the year ended December 31, 2017.

Dividend
On December 4, 2017, Univest declared a quarterly cash dividend of $0.20 per share, payable on January 2, 2018. This represented a 2.87% 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 fourth quarter and year end 2017 results on Thursday, January 25, 2018 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10115792. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through February 25, 2018 by dialing 1-877-344-7529; using Conference ID: 10115792.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., has approximately $4.6 billion in assets and $3.5 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 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) 
December 31, 2017 
  
(Dollars in thousands)               
                
Balance Sheet (Period End) 12/31/17 09/30/17 06/30/17 03/31/17 12/31/16     
Assets $  4,560,367  $  4,417,363  $  4,453,527  $  4,273,931  $  4,230,528      
Investment securities    454,082     443,822     469,307     464,639     468,518      
Loans held for sale    1,642     2,228     2,259     1,110     5,890      
Loans and leases held for investment, gross    3,620,067     3,487,164     3,510,170     3,341,916     3,285,886      
Allowance for loan and lease losses    21,555     20,543     20,910     19,528     17,499      
Loans and leases held for investment, net    3,598,512     3,466,621     3,489,260     3,322,388     3,268,387      
Total deposits    3,554,919     3,518,590     3,348,080     3,365,951     3,257,567      
Noninterest-bearing deposits    1,040,026     987,881     963,790     947,495     918,337      
NOW, money market and savings    1,940,144     1,959,549     1,837,452     1,865,280     1,713,041      
Time deposits    574,749     571,160     546,838     553,176     626,189      
Borrowings    355,590     332,529     542,545     355,580     417,780      
Shareholders' equity    603,374     528,798     521,306     511,880     505,209      
                
                
Balance Sheet (Average) For the three months ended, For the twelve months ended, 
  12/31/17 09/30/17 06/30/17 03/31/17 12/31/16 12/31/17 12/31/16 
Assets $  4,442,743  $  4,416,332  $  4,333,689  $  4,230,428  $  4,134,976  $  4,356,540  $  3,496,012  
Investment securities     456,045     459,862     468,601     470,300     473,890     463,652     406,053  
Loans and leases, gross    3,505,260     3,467,235     3,401,325     3,306,877     3,208,171     3,420,847     2,699,973  
Deposits    3,508,676     3,480,318     3,346,409     3,290,285     3,237,778     3,407,223     2,779,255  
Shareholders' equity    554,071     527,032     517,697     509,055     507,832     527,087     437,098  
                
                
Asset Quality Data (Period End)                
  12/31/17 09/30/17 06/30/17 03/31/17 12/31/16     
Nonaccrual loans and leases, including nonaccrual troubled debt restructured               
  loans and leases $  14,517  $  15,949  $  20,174  $  19,856  $  17,916      
Accruing loans and leases 90 days or more past due    761     1,595     572     919     987      
Accruing troubled debt restructured loans and leases    11,435     11,468     11,470     2,818     3,252      
Total nonperforming loans and leases    26,713     29,012     32,216     23,593     22,155      
Other real estate owned    1,843     1,763     2,202     3,712     4,969      
Total nonperforming assets    28,556     30,775     34,418     27,305     27,124      
Nonaccrual loans and leases / Loans and leases held for investment  0.40%  0.46%  0.57%  0.59%  0.55%     
Nonperforming loans and leases / Loans and leases held for investment  0.74%  0.83%  0.92%  0.71%  0.67%     
Nonperforming assets / Total assets  0.63%  0.70%  0.77%  0.64%  0.64%     
                
Allowance for loan and lease losses    21,555     20,543     20,910     19,528     17,499      
Allowance for loan and lease losses / Loans and leases held for investment   0.60%  0.59%  0.60%  0.58%  0.53%     
Allowance for loan and lease losses / Loans and leases held for investment  0.70%  0.71%  0.73%  0.74%  0.73%     
  (excluding acquired loans at period-end)               
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment  148.48%  128.80%  103.65%  98.35%  97.67%     
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 80.69%  70.81%  64.91%  82.77%  78.98%     
Acquired credit impaired loans $  1,583  $  1,622  $  6,485  $  6,616  $  7,352      
                
  For the three months ended, For the twelve months ended, 
  12/31/17 09/30/17 06/30/17 03/31/17 12/31/16 12/31/17 12/31/16 
Net loan and lease charge-offs $  980  $  3,056  $  1,384  $  416  $  1,650  $  5,836  $  4,950  
Net loan and lease charge-offs (annualized)/Average loans and leases  0.11%  0.35%  0.16%  0.05%  0.20%  0.17%  0.18% 
                

 

  
Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data (Unaudited) 
December 31, 2017 
(Dollars in thousands, except per share data)               
  For the three months ended, For the twelve months ended, 
For the period: 12/31/17 09/30/17 06/30/17 03/31/17 12/31/16 12/31/17 12/31/16 
Interest income $  42,417 $  42,172 $  40,030 $  38,396 $  38,056 $  163,015 $  126,607 
Interest expense    5,711    5,285    4,730    4,113    3,884    19,839    12,382 
  Net interest income    36,706    36,887    35,300    34,283    34,172    143,176    114,225 
Provision for loan and lease losses    1,992    2,689    2,766    2,445    2,250    9,892    4,821 
Net interest income after provision     34,714    34,198    32,534    31,838    31,922    133,284    109,404 
Noninterest income:               
  Trust fee income    2,208    1,924    2,016    1,907    1,921    8,055    7,741 
  Service charges on deposit accounts    1,555    1,371    1,313    1,243    1,293    5,482    4,691 
  Investment advisory commission and fee income    3,485    3,455    3,333    3,181    3,072    13,454    11,424 
  Insurance commission and fee income    3,258    3,492    3,628    4,410    3,275    14,788    14,603 
  Bank owned life insurance income    841    742    1,622    783    1,215    3,988    2,931 
  Net gain on sales of investment securities    5    7    21    15    31    48    518 
  Net gain on mortgage banking activities    465    908    1,537    1,113    1,092    4,023    6,027 
  Other income    2,335    2,210    2,539    2,318    2,095    9,402    8,028 
Total noninterest income    14,152    14,109    16,009    14,970    13,994    59,240    55,963 
Noninterest expense:               
Salaries, benefits and commissions    19,321    19,153    18,727    18,707    19,164    75,908    70,879 
Premises and equipment    3,636    3,542    3,715    3,658    3,929    14,551    13,127 
Data processing    2,243    2,118    2,081    2,058    2,001    8,500    6,981 
Professional fees    1,391    1,447    1,248    1,239    1,258    5,325    4,547 
Marketing and advertising    360    271    475    379    619    1,485    2,015 
Deposit insurance premiums    374    409    451    402    521    1,636    1,713 
Intangible expenses    687    690    446    759    2,917    2,582    5,528 
Acquisition-related costs    -     -     -     -     101    -     10,257 
Integration costs    -     -     -     -     269    -     5,667 
Restructuring charges    -     -     -     -     1,816    -     1,731 
Other expense    5,428    5,065    5,405    4,828    5,835    20,726    19,536 
Total noninterest expense    33,440    32,695    32,548    32,030    38,430    130,713    141,981 
Income before taxes    15,426    15,612    15,995    14,778    7,486    61,811    23,386 
Income tax expense     5,162    4,416    4,217    3,922    568    17,717    3,881 
Net income $  10,264 $  11,196 $  11,778 $  10,856 $  6,918 $  44,094 $  19,505 
Per common share data:               
Book value per share $  20.57 $  19.83 $  19.55 $  19.21 $  19.00 $  20.57 $  19.00 
Net income per share:               
  Basic $  0.37 $  0.42 $  0.44 $  0.41 $  0.26 $  1.64 $  0.85 
  Diluted $  0.37 $  0.42 $  0.44 $  0.41 $  0.26 $  1.64 $  0.84 
Dividends declared per share $  0.20 $  0.20 $  0.20 $  0.20 $  0.20 $  0.80 $  0.80 
Weighted average shares outstanding    27,481,309    26,666,460    26,661,784    26,630,698    26,577,948    26,861,863    23,097,638 
Period end shares outstanding    29,334,859    26,671,336    26,667,991    26,645,520    26,589,353    29,334,859    26,589,353 
                

 

  
Univest Corporation of Pennsylvania 
Consolidated Selected Financial Data (Unaudited) 
December 31, 2017 
                   
     For the three months ended, For the twelve months ended, 
Profitability Ratios (annualized)  12/31/17 09/30/17 06/30/17 03/31/17 12/31/16 12/31/17 12/31/16 
                   
Return on average assets   0.92%  1.01%  1.09%  1.04%  0.67%  1.01%  0.56% 
Return on average assets, excluding integration and acquisition-related costs and restructuring charges (1), (2) 0.92%  1.01%  1.09%  1.04%  0.78%  1.01%  0.89% 
Return on average shareholders' equity  7.35%  8.43%  9.13%  8.65%  5.42%  8.37%  4.46% 
Return on average shareholders' equity, excluding integration and acquisition-related costs and restructuring charges (1), (2) 7.35%  8.43%  9.13%  8.65%  6.37%  8.37%  7.15% 
Return on average tangible common equity, excluding integration and acquisition-related costs and restructuring charges (1), (2), (5) 10.89%  12.83%  14.06%  13.48%  9.95%  12.75%  10.93% 
Net interest margin (FTE)   3.76%  3.80%  3.76%  3.80%  3.81%  3.78%  3.82% 
Efficiency ratio (3)    63.43%  61.94%  60.74%  62.70%  76.48%  62.19%  80.11% 
Efficiency ratio, excluding integration and acquisition-related costs and restructuring charges (1), (3), (4)  63.43%  61.94%  60.74%  62.70%  72.13%  62.19%  70.15% 
                   
Capitalization Ratios                 
                   
Dividends declared to net income   57.1%  47.6%  45.3%  49.0%  76.8%  49.6%  94.5% 
Shareholders' equity to assets (Period End)  13.23%  11.97%  11.71%  11.98%  11.94%  13.23%  11.94% 
Tangible common equity to tangible assets (5)  9.67%  8.22%  7.96%  8.06%  7.97%  9.67%  7.97% 
Tangible book value per share (5)  $  14.44  $  13.06  $  12.75  $  12.38  $  12.13  $  14.44  $  12.13  
Tangible book value per share - Core (5), (6) $  14.57  $  13.14  $  12.87  $  12.56  $  12.32  $  14.57  $  12.32  
                   
Regulatory Capital Ratios  (Period End)                
Tier 1 leverage ratio    10.48%  8.74%  8.74%  8.75%  8.84%  10.48%  8.84% 
Common equity tier 1 risk-based capital ratio  11.09%  9.51%  9.21%  9.41%  9.42%  11.09%  9.42% 
Tier 1 risk-based capital ratio   11.09%  9.51%  9.21%  9.41%  9.42%  11.09%  9.42% 
Total risk-based capital ratio   13.98%  12.47%  12.15%  12.44%  12.44%  13.98%  12.44% 
                   
                   
(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  $  -   $  17,655  
 Tax effect on integration and acquisition-related costs and restructuring charges   -      -      -      -      969     -      5,904  
                
 (b) Integration and acquisition-related costs and restructuring charges, net of tax $  -   $  -   $  -   $  -   $  1,217  $  -   $11,751  
                
                   
(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 $6,573 at December 31, 2017, $6,556 at September 30, 2017, $6,548 at June 30, 2017, $6,502 at March 31, 2017 and $6,485 at December 31, 2016.     
(6)Tangible equity as defined in (5), excluding the impact of accumulated other comprehensive (loss) income on available-for-sale investment securities, net (($4,061) at December 31, 2017, ($2,364) at September 30, 2017, ($3,028) at June 30, 2017, ($4,726) at March 31, 2017 and ($4,989) at December 31, 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 BasisDecember 31, 2017 September 30, 2017  
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$  33,557 $92  1.09%$  43,941 $  133  1.20% 
U.S. government obligations   24,039    94  1.55    31,126    110  1.40  
Obligations of state and political subdivisions   79,708    844  4.20    81,114    846  4.14  
Other debt and equity securities   352,298    1,873  2.11    347,622    1,745  1.99  
Federal funds sold and other earning assets   27,719    371  5.31    28,063    375  5.30  
Total interest-earning deposits, investments, federal funds sold and other earning assets   517,321    3,274  2.51    531,866    3,209  2.39  
          
Commercial, financial, and agricultural loans   752,750    8,608  4.54    762,418    8,656  4.50  
Real estate—commercial and construction loans   1,566,944    17,798  4.51    1,549,799    17,999  4.61  
Real estate—residential loans   802,013    9,097  4.50    770,839    8,751  4.50  
Loans to individuals   27,299    414  6.02    27,509    416  6.00  
Municipal loans and leases   285,821    3,343  4.64    281,509    3,208  4.52  
Lease financings   70,433    1,303  7.34    75,161    1,331  7.03  
  Gross loans and leases   3,505,260    40,563  4.59    3,467,235    40,361  4.62  
Total interest-earning assets   4,022,581    43,837  4.32    3,999,101    43,570  4.32  
Cash and due from banks   44,922       46,969     
Reserve for loan and lease losses   (20,734)      (21,425)    
Premises and equipment, net   63,119       65,025     
Other assets   332,855       326,662     
  Total assets$  4,442,743    $  4,416,332     
          
Liabilities:         
Interest-bearing checking deposits$  439,397 $172  0.16 $  438,956 $  132  0.12  
Money market savings   649,861    1,213  0.74    587,590    919  0.62  
Regular savings   841,223    648  0.31    904,528    646  0.28  
Time deposits   567,982    1,524  1.06    557,757    1,371  0.98  
  Total time and interest-bearing deposits   2,498,463    3,557  0.56    2,488,831    3,068  0.49  
          
Short-term borrowings   61,524    148  0.95    72,719    169  0.92  
Long-term debt   188,466    745  1.57    207,057    794  1.52  
Subordinated notes   94,298    1,261  5.31    94,238    1,254  5.28  
  Total borrowings   344,288    2,154  2.48    374,014    2,217  2.35  
  Total interest-bearing liabilities   2,842,751    5,711  0.80    2,862,845    5,285  0.73  
Noninterest-bearing deposits   1,010,213       991,487     
Accrued expenses and other liabilities   35,708       34,968     
  Total liabilities   3,888,672       3,889,300     
          
Shareholders' Equity:         
Common stock   148,546       144,559     
Additional paid-in capital   249,778       231,575     
Retained earnings and other equity   155,747       150,898     
  Total shareholders' equity   554,071       527,032     
  Total liabilities and shareholders' equity$  4,442,743    $  4,416,332     
Net interest income $  38,126   $  38,285   
          
Net interest spread    3.52     3.59  
Effect of net interest-free funding sources    0.24     0.21  
Net interest margin    3.76%   3.80% 
Ratio of average interest-earning assets to average interest-bearing liabilities  141.50%    139.69%    
          
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 December 31, 2017 and September 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 December 31,    
Tax Equivalent Basis  2017    2016   
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$  33,557 $92  1.09%$  10,235 $  10  0.39% 
U.S. government obligations   24,039    94  1.55    33,341    98  1.17  
Obligations of state and political subdivisions   79,708    844  4.20    90,499    921  4.05  
Other debt and equity securities   352,298    1,873  2.11    350,050    1,337  1.52  
Federal funds sold and other earning assets   27,719    371  5.31    20,578    217  4.20  
Total interest-earning deposits, investments, federal funds sold and other earning assets   517,321    3,274  2.51    504,703    2,583  2.04  
          
Commercial, financial, and agricultural loans   752,750    8,608  4.54    683,746    7,247  4.22  
Real estate—commercial and construction loans   1,566,944    17,798  4.51    1,411,104    16,391  4.62  
Real estate—residential loans   802,013    9,097  4.50    723,193    8,097  4.45  
Loans to individuals   27,299    414  6.02    30,796    432  5.58  
Municipal loans and leases   285,821    3,343  4.64    282,297    3,178  4.48  
Lease financings   70,433    1,303  7.34    77,035    1,555  8.03  
  Gross loans and leases   3,505,260    40,563  4.59    3,208,171    36,900  4.58  
Total interest-earning assets   4,022,581    43,837  4.32    3,712,874    39,483  4.23  
Cash and due from banks   44,922       42,946     
Reserve for loan and lease losses   (20,734)      (16,921)    
Premises and equipment, net   63,119       63,712     
Other assets   332,855       332,365     
  Total assets$  4,442,743    $  4,134,976     
          
Liabilities:         
Interest-bearing checking deposits$  439,397 $172  0.16 $  402,247 $  89  0.09  
Money market savings   649,861    1,213  0.74    472,461    450  0.38  
Regular savings   841,223    648  0.31    792,778    327  0.16  
Time deposits   567,982    1,524  1.06    647,665    1,277  0.78  
  Total time and interest-bearing deposits   2,498,463    3,557  0.56    2,315,151    2,143  0.37  
          
Short-term borrowings   61,524    148  0.95    128,498    149  0.46  
Long-term debt   188,466    745  1.57    121,895    331  1.08  
Subordinated notes   94,298    1,261  5.31    94,055    1,261  5.33  
  Total borrowings   344,288    2,154  2.48    344,448    1,741  2.01  
  Total interest-bearing liabilities   2,842,751    5,711  0.80    2,659,599    3,884  0.58  
Noninterest-bearing deposits   1,010,213       922,627     
Accrued expenses and other liabilities   35,708       44,918     
  Total liabilities   3,888,672       3,627,144     
          
Shareholders' Equity:         
Common stock   148,546       144,559     
Additional paid-in capital   249,778       230,037     
Retained earnings and other equity   155,747       133,236     
  Total shareholders' equity   554,071       507,832     
  Total liabilities and shareholders' equity$  4,442,743    $  4,134,976     
Net interest income $  38,126   $  35,599   
          
Net interest spread    3.52     3.65  
Effect of net interest-free funding sources    0.24     0.16  
Net interest margin    3.76%   3.81% 
Ratio of average interest-earning assets to average interest-bearing liabilities  141.50%    139.60%    
          
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 December 31, 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 Twelve Months Ended December 31,   
Tax Equivalent Basis  2017    2016   
 AverageIncome/Average AverageIncome/Average  
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate  
Assets:         
Interest-earning deposits with other banks$  26,128 $280  1.07%$  13,438 $  61  0.45% 
U.S. government obligations   30,638    423  1.38    54,220    649  1.20  
Obligations of state and political subdivisions   82,487    3,498  4.24    97,325    4,172  4.29  
Other debt and equity securities   350,527    6,920  1.97    254,508    4,731  1.86  
Federal funds sold and other earning assets   27,893    1,500  5.38    16,370    790  4.83  
Total interest-earning deposits, investments, federal funds sold and other earning assets   517,673    12,621  2.44    435,861    10,403  2.39  
          
Commercial, financial, and agricultural loans   749,563    33,278  4.44    552,322    21,964  3.98  
Real estate—commercial and construction loans   1,519,883    68,166  4.48    1,146,293    52,232  4.56  
Real estate—residential loans   765,493    34,563  4.52    633,886    28,101  4.43  
Loans to individuals   28,050    1,636  5.83    30,501    1,654  5.42  
Municipal loans and leases   282,475    12,856  4.55    261,057    11,556  4.43  
Lease financings   75,383    5,533  7.34    75,914    6,168  8.12  
  Gross loans and leases   3,420,847    156,032  4.56    2,699,973    121,675  4.51  
Total interest-earning assets   3,938,520    168,653  4.28    3,135,834    132,078  4.21  
Cash and due from banks   44,424       37,050     
Reserve for loan and lease losses   (20,219)      (17,147)    
Premises and equipment, net   64,583       53,036     
Other assets   329,232       287,239     
  Total assets$  4,356,540    $  3,496,012     
          
Liabilities:         
Interest-bearing checking deposits$  437,678 $527  0.12 $  386,176 $  362  0.09  
Money market savings   582,703    3,390  0.58    414,121    1,540  0.37  
Regular savings   847,510    2,089  0.25    714,809    1,052  0.15  
Time deposits   566,079    5,271  0.93    512,557    4,261  0.83  
  Total time and interest-bearing deposits   2,433,970    11,277  0.46    2,027,663    7,215  0.36  
          
Short-term borrowings   105,552    904  0.86    103,238    748  0.72  
Long-term debt   186,109    2,621  1.41    60,965    549  0.90  
Subordinated notes   94,208    5,037  5.35    71,851    3,870  5.39  
  Total borrowings   385,869    8,562  2.22    236,054    5,167  2.19  
  Total interest-bearing liabilities   2,819,839    19,839  0.70    2,263,717    12,382  0.55  
Noninterest-bearing deposits   973,253       751,592     
Accrued expenses and other liabilities   36,361       43,605     
  Total liabilities   3,829,453       3,058,914     
          
Shareholders' Equity:         
Common stock   145,564       127,509     
Additional paid-in capital   235,578       175,609     
Retained earnings and other equity   145,945       133,980     
  Total shareholders' equity   527,087       437,098     
  Total liabilities and shareholders' equity$  4,356,540    $  3,496,012     
Net interest income $  148,814   $  119,696   
          
Net interest spread    3.58     3.66  
Effect of net interest-free funding sources    0.20     0.16  
Net interest margin    3.78%    3.82% 
Ratio of average interest-earning assets to average interest-bearing liabilities  139.67%    138.53%    
          
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 twelve months ended December 31, 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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