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Univest Financial Corporation Reports Year End and Fourth Quarter Results

Loan Growth for 2018 of 10.7%

Company Release - 1/23/2019 4:30 PM ET

SOUDERTON, Pa., Jan. 23, 2019 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the “Corporation”) (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income of $50.5 million, or $1.72 diluted earnings per share, for the year ended December 31, 2018, compared to net income of $44.1 million, or $1.64 diluted earnings per share, for the year ended December 31, 2017. Net income for the quarter ended December 31, 2018 was $18.4 million, or $0.63 diluted earnings per share, compared to net income of $10.3 million, or $0.37 diluted earnings per share, for the quarter ended December 31, 2017.

The financial results for the quarter ended December 31, 2018 included a loan recovery of $1.8 million (after-tax recovery of $1.5 million), which represented $0.05 diluted earnings per share. This recovery relates to a loan the Corporation previously charged-off in the amount of $12.7 million (after-tax charge of $10.1 million), or $0.34 diluted earnings per share, in the second quarter of 2018 related to fraudulent activities by employees of the borrower. Total impact of this loss for the year ended December 31, 2018 was $10.9 million (after-tax charge of $8.6 million), or $0.29 diluted earnings per share.

In addition, the financial results for the year ended December 31, 2018 included tax-free bank owned life insurance ("BOLI") death benefit claims of $446 thousand during the second quarter of 2018, which represented $0.02 diluted earnings per share, offset by restructuring costs related to financial center closures of $451 thousand, net of tax, or $0.02 of diluted earnings per share, recognized in the first quarter of 2018. There were no restructuring costs during the year ended December 31, 2017.  The financial results for the quarter and year ended December 31, 2018 also included a reduction in the Corporation's statutory federal income tax rate from 35% to 21% effective January 1, 2018 in accordance with the Tax Cuts and Jobs Act of 2017 (“TCJA”).

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 TCJA. The revaluation, which was recorded as additional income tax expense, was $1.1 million, or $0.04 of diluted earnings per share for the quarter and year ended December 31, 2017. The financial results for the year ended December 31, 2017 included a tax-free BOLI death benefit claim of $889 thousand recognized in the second quarter of 2017, which represented $0.03 diluted earnings per share. 

Loans
Gross loans and leases increased $386.5 million, or 10.7%, from December 31, 2017 and $140.4 million, or 14.5% (annualized), from September 30, 2018. The growth in loans in the fourth quarter and year ended 2018 was primarily in commercial real estate, commercial business and residential real estate loans.

Deposits
Total deposits increased $331.0 million, or 9.3%, from December 31, 2017 primarily due to increases in commercial, public funds and consumer time deposits. Total deposits increased $65.9 million, or 6.9%, from September 30, 2018 primarily due to increases in commercial and consumer deposits partially offset by a seasonal decrease in public funds deposits

Net Interest Income and Margin
Net interest income of $158.1 million for the year ended December 31, 2018 increased $14.9 million, or 10.4%, from the prior year. The increase in net interest income for the year ended December 31, 2018 compared to the prior year was primarily due to the previously described increase in loans. Net interest margin, on a tax-equivalent basis, was 3.72% for the year ended December 31, 2018 compared to 3.78% for the year ended December 31, 2017. The favorable impact of purchase accounting accretion was 2 basis points ($1.0 million) for the year ended December 31, 2018 compared to 8 basis points ($3.0 million) for the year ended December 31, 2017. Excluding the impact of purchase accounting accretion, the net interest margin, on a tax-equivalent basis, was 3.70% for both the years ended December 31, 2018 and 2017. Net interest margin, on a tax-equivalent basis, in 2017 was calculated using a 35% federal tax rate as compared to a 21% federal tax rate for 2018. Assuming a 21% federal tax rate and excluding purchase accounting, net interest margin, on a tax-equivalent basis, was 3.63% for the year ended December 31, 2017.

Net interest margin, on a tax-equivalent basis, was 3.72% for the fourth quarter of 2018, compared to 3.71% for the third quarter of 2018 and 3.76% for the fourth quarter of 2017. The favorable impact of purchase accounting accretion was 1 basis point ($200 thousand) for the quarter ended December 31, 2018 compared to 3 basis points ($343 thousand) for the quarter ended September 30, 2018 and 4 basis points ($449 thousand) for the quarter ended December 31, 2017. Excluding the impact of purchase accounting accretion, the net interest margin, on a tax-equivalent basis, was 3.71% for the quarter ended December 31, 2018 compared to 3.68% for the quarter ended September 30, 2018 and 3.72% for the quarter ended December 31, 2017. Net interest margin, on a tax-equivalent basis, assuming a 21% federal tax rate and excluding purchase accounting, was 3.64% for the quarter ended December 31, 2017.

Noninterest Income
Noninterest income for the year ended December 31, 2018 was $60.2 million, an increase of $933 thousand, or 1.6%, from the prior year. Noninterest income for the quarter ended December 31, 2018 was $14.4 million, an increase of $264 thousand, or 1.9%, from the fourth quarter of 2017.

Investment advisory commission and fee income increased $1.6 million, or 12.2%, for the year ended December 31, 2018, primarily due to new customer relationships and favorable market performance for the majority of 2018. Insurance commission and fee income increased $870 thousand, or 5.9%, for the year ended December 31, 2018, primarily due to an increase in group life and health premiums and an increase in contingent commission income of $374 thousand, which is largely recognized in the first quarter of the year. Other service fee income increased $676 thousand, or 7.8%, for the year ended December 31, 2018, primarily due to increases in debit card interchange income, mortgage servicing fees and human resource and payroll consulting services within the insurance line of business. Service charges on deposit accounts increased $150 thousand, or 2.7%, for the year ended December 31, 2018, primarily due to increased fee income on cash management accounts.

BOLI income decreased $814 thousand for the year ended December 31, 2018 primarily due to proceeds from the previously mentioned BOLI death benefits of $446 thousand in 2018 as compared to $889 thousand in 2017 and a decrease in value of our non-qualified annuity portfolio of $109 thousand in 2018 compared to an increase of $343 thousand in 2017. The value of the non-qualified annuity portfolio declined $287 thousand in the fourth quarter of 2018. The net gain on mortgage banking decreased $898 thousand, or 22.3%, for the year ended December 31, 2018, primarily due to a decrease in refinance mortgage volume, a shortage of housing supply and the Bank retaining, on balance-sheet, a higher percentage of its mortgage originations. Such on balance-sheet loans are predominantly hybrid adjustable rate mortgages. Other income decreased $484 thousand, or 64.9%, for the year ended December 31, 2018, which was primarily due to a net loss of $355 thousand related to valuations and sales of other real estate owned and sales of closed branches as compared to a net loss of $31 thousand of such assets in the prior year.

Noninterest Expense
Noninterest expense for the year ended December 31, 2018 was $137.2 million, an increase of $6.5 million, or 5.0%, from the prior year. Noninterest expense for the quarter ended December 31, 2018 was $33.4 million, a decrease of $44 thousand, or 0.1%, compared to the fourth quarter of 2017.

Salaries, benefits and commissions increased $4.6 million, or 6.1%, for the year ended December 31, 2018, primarily attributable to additional staff hired to support revenue generation across all business lines, expansion of our financial center footprint in Lancaster County and annual merit increases. Salaries, benefits and commissions increased only $236 thousand, or 1.2%, for the quarter ended December 31, 2018, as the fourth quarter included a $496 thousand reduction related to vesting of performance based restricted stock and executive bonus as certain performance metrics were not achieved for the measurement period. Data processing expense increased $514 thousand, or 6.0%, for the year ended December 31, 2018 primarily due to increased investments in customer relationship management software, internal infrastructure improvements and outsourced data processing solutions. Marketing and advertising expense increased $315 thousand for the year ended December 31, 2018 primarily related to deposit product campaigns and expenses related to rebranding our wealth management division during the fourth quarter of 2018. Other expense increased $804 thousand for the year ended December 31, 2018 primarily due to increases in Bank shares tax, loan processing expenses and increased corporate development expenses. Restructuring costs related to financial center closures and staffing rationalization were $571 thousand during the first quarter of 2018. There were no restructuring costs during the year ended December 31, 2017. Excluding restructuring costs, noninterest expense for the year increased $6.0 million, or 4.6%, from the comparable period in 2017.

Asset Quality and Provision for Loan and Lease Losses
Nonperforming assets were $28.1 million at December 31, 2018, compared to $31.0 million at September 30, 2018 and $28.6 million at December 31, 2017. During 2018, one commercial real estate loan in the amount of $12.3 million was placed on non-accrual status during the first quarter of 2018; the loan has a principal balance of $11.5 million as of December 31, 2018 due to paydowns during 2018. This increase was offset by $10.3 million in troubled debt restructured commercial real estate loans for another borrower being returned to performing status during the first quarter of 2018 as the borrower was in compliance with the modified terms of the restructuring for the required time period.

Net loan and lease recoveries were $1.9 million during the fourth quarter of 2018, which includes a $1.8 million recovery related to the previously discussed commercial loan charge-off. The provision for loan and lease losses was $103 thousand for the fourth quarter of 2018. For the year ended December 31, 2018, net loan and lease charge-offs of $12.5 million and the provision for loan and lease losses of $20.3 million include the previously discussed $10.9 million commercial loan net charge-off.

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 0.81% at December 31, 2018, compared to 0.79% at September 30, 2018 and 0.70% at December 31, 2017.

Tax Provision  
The effective income tax rate was 16.7% for the year and 17.6% for the quarter ended December 31, 2018, respectively. The effective income tax rate was 28.7% for the year and 33.5% for the quarter ended December 31, 2017, respectively. As previously discussed, the Corporation's statutory federal tax rate was reduced to 21% effective January 1, 2018 in accordance with the TCJA. The Corporation's effective income tax rate for the year ended December 31, 2018 was favorably impacted by discrete tax benefits and proceeds from BOLI death benefits. Excluding these items, the effective tax rate was 18.3% for the year ended December 31, 2018.

Dividend
On December 3, 2018, Univest declared a quarterly cash dividend of $0.20 per share, payable on January 2, 2019. This represented a 3.65% 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 2018 results on Thursday, January 24, 2019 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10127550. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through February 24, 2019 by dialing 1-877-344-7529; using Conference ID: 10127550.

About Univest Financial Corporation

Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $5.0 billion in assets and $3.3 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 2018. 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 Financial Corporation and the reports Univest Financial Corporation 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 Financial Corporation. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Financial Corporation’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 Financial Corporation is engaged; (6) technological issues that may adversely affect Univest Financial Corporation financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Financial Corporation files with the Securities and Exchange Commission. Univest Financial Corporation undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
December 31, 2018
(Dollars in thousands)              
               
Balance Sheet (Period End) 12/31/18 09/30/18 06/30/18 03/31/18 12/31/17    
Assets $4,984,347  $4,801,998  $4,749,181  $4,613,959  $4,554,862     
Investment securities  473,306   447,339   446,933   462,252   454,082     
Loans held for sale  1,754   106   1,778   687   1,642     
Loans and leases held for investment, gross  4,006,574   3,866,169   3,818,398   3,689,888   3,620,067     
Allowance for loan and lease losses  29,364   27,371   25,652   23,410   21,555     
Loans and leases held for investment, net  3,977,210   3,838,798   3,792,746   3,666,478   3,598,512     
Total deposits  3,885,933   3,820,048   3,620,786   3,497,293   3,554,919     
Noninterest-bearing deposits  1,055,919   1,047,081   1,055,479   1,002,021   1,040,026     
NOW, money market and savings  2,159,937   2,101,484   1,970,912   1,974,769   1,940,144     
Time deposits  670,077   671,483   594,395   520,503   574,749     
Borrowings  429,672   326,709   481,862   466,510   355,590     
Shareholders' equity  624,133   614,242   605,294   606,719   603,374     
               
               
Balance Sheet (Average) For the three months ended, For the twelve months ended,
  12/31/18 09/30/18 06/30/18 03/31/18 12/31/17 12/31/18 12/31/17
Assets $4,890,519  $4,817,321  $4,682,827  $4,555,977  $4,442,743  $4,737,772  $4,356,540 
Investment securities  464,684   453,422   450,375   457,926   456,045   456,612   463,652 
Loans and leases, gross  3,894,298   3,832,295   3,743,195   3,634,510   3,505,260   3,776,940   3,420,847 
Deposits  3,938,378   3,792,627   3,563,956   3,484,044   3,508,676   3,696,264   3,407,223 
Shareholders' equity  619,204   611,803   611,667   605,973   554,071   612,197   527,087 
               
               
Asset Quality Data (Period End)               
  12/31/18 09/30/18 06/30/18 03/31/18 12/31/17    
Nonaccrual loans and leases, including nonaccrual troubled debt restructured              
loans and leases $26,208  $27,559  $30,148  $27,694  $14,517     
Accruing loans and leases 90 days or more past due  192   1,224   150   2,295   761     
Accruing troubled debt restructured loans and leases  542   766   790   1,032   11,435     
Total nonperforming loans and leases  26,942   29,549   31,088   31,021   26,713     
Other real estate owned  1,187   1,433   1,742   1,843   1,843     
Total nonperforming assets  28,129   30,982   32,830   32,864   28,556     
Nonaccrual loans and leases / Loans and leases held for investment  0.65%  0.71%  0.79%  0.75%  0.40%    
Nonperforming loans and leases / Loans and leases held for investment  0.67%  0.76%  0.81%  0.84%  0.74%    
Nonperforming assets / Total assets  0.56%  0.65%  0.69%  0.71%  0.63%    
               
Allowance for loan and lease losses  29,364   27,371   25,652   23,410   21,555     
Allowance for loan and lease losses / Loans and leases held for investment  0.73%  0.71%  0.67%  0.63%  0.60%    
Allowance for loan and lease losses / Loans and leases held for investment  0.81%  0.79%  0.76%  0.73%  0.70%    
(excluding acquired loans at period-end)              
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment  112.04%  99.32%  85.09%  84.53%  148.48%    
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 108.99%  92.63%  82.51%  75.47%  80.69%    
Acquired credit impaired loans $695  $900  $998  $1,525  $1,583     
               
  For the three months ended, For the twelve months ended,
  12/31/18 09/30/18 06/30/18 03/31/18 12/31/17 12/31/18 12/31/17
Net loan and lease (recoveries) charge-offs $(1,890) $1,026  $13,167  $198  $980  $12,501  $5,836 
Net loan and lease (recoveries) charge-offs (annualized)/Average loans and leases  (0.19%)  0.11%  1.41%  0.02%  0.11%  0.33%  0.17%
               

 

 
Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
December 31, 2018
(Dollars in thousands, except per share data)              
  For the three months ended, For the twelve months ended,
For the period: 12/31/18 09/30/18 06/30/18 03/31/18 12/31/17 12/31/18 12/31/17
Interest income $51,239 $49,255 $46,460  $43,534 $42,417 $190,488 $163,015
Interest expense  9,862  8,832  7,470   6,262  5,711  32,426  19,839
Net interest income  41,377  40,423  38,990   37,272  36,706  158,062  143,176
Provision for loan and lease losses  103  2,745  15,409   2,053  1,992  20,310  9,892
Net interest income after provision  41,274  37,678  23,581   35,219  34,714  137,752  133,284
Noninterest income:              
Trust fee income  1,882  1,960  2,044   1,996  2,208  7,882  8,055
Service charges on deposit accounts  1,516  1,454  1,335   1,327  1,555  5,632  5,482
Investment advisory commission and fee income  3,852  3,785  3,778   3,683  3,485  15,098  13,454
Insurance commission and fee income  3,415  3,643  3,712   4,888  3,258  15,658  14,788
Other service fee income  2,448  2,284  2,431   2,169  2,301  9,332  8,656
Bank owned life insurance income  430  865  1,210   669  841  3,174  3,988
Net gain on sales of investment securities  -  -  -   10  5  10  48
Net gain on mortgage banking activities  713  754  942   716  465  3,125  4,023
Other income (loss)  160  116  (138)  124  34  262  746
Total noninterest income  14,416  14,861  15,314   15,582  14,152  60,173  59,240
Noninterest expense:              
Salaries, benefits and commissions  19,576  20,321  20,065   20,647  19,340  80,609  75,992
Premises and equipment  3,469  3,557  3,600   3,780  3,636  14,406  14,551
Data processing  2,352  2,339  2,091   2,232  2,243  9,014  8,500
Professional fees  1,335  1,370  1,331   1,355  1,391  5,391  5,325
Marketing and advertising  432  461  526   381  360  1,800  1,485
Deposit insurance premiums  449  544  452   391  374  1,836  1,636
Intangible expenses  481  479  594   612  687  2,166  2,582
Restructuring charges  -  -  -   571  -  571  -
Other expense  5,302  5,300  5,688   5,156  5,409  21,446  20,642
Total noninterest expense  33,396  34,371  34,347   35,125  33,440  137,239  130,713
Income before taxes  22,294  18,168  4,548   15,676  15,426  60,686  61,811
Income tax expense  3,922  3,204  191   2,826  5,162  10,143  17,717
Net income $18,372 $14,964 $4,357  $12,850 $10,264 $50,543 $44,094
Per common share data:              
Book value per share $21.32 $20.89 $20.58  $20.64 $20.57 $21.32 $20.57
Net income per share:              
Basic $0.63 $0.51 $0.15  $0.44 $0.37 $1.72 $1.64
Diluted $0.63 $0.51 $0.15  $0.44 $0.37 $1.72 $1.64
Dividends declared per share $0.20 $0.20 $0.20  $0.20 $0.20 $0.80 $0.80
Weighted average shares outstanding  29,319,664  29,402,405  29,403,946   29,354,887  27,481,309  29,370,217  26,861,863
Period end shares outstanding  29,270,852  29,407,076  29,406,450   29,391,934  29,334,859  29,270,852  29,334,859
               

 

 
Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
December 31, 2018
               
               
               
  For the three months ended, For the twelve months ended,
Profitability Ratios (annualized)12/31/18 09/30/18 06/30/18 03/31/18 12/31/17 12/31/18 12/31/17
               
Return on average assets 1.49%  1.23%  0.37%  1.14%  0.92%  1.07%  1.01%
Return on average assets, excluding restructuring charges (1), (2) 1.49%  1.23%  0.37%  1.18%  0.92%  1.08%  1.01%
Return on average shareholders' equity 11.77%  9.70%  2.86%  8.60%  7.35%  8.26%  8.37%
Return on average shareholders' equity, excluding 11.77%  9.70%  2.86%  8.90%  7.35%  8.33%  8.37%
restructuring charges (1), (2)             
Return on average tangible common equity, excluding 16.52%  13.70%  4.04%  12.65%  10.89%  11.77%  12.75%
restructuring charges (1), (2), (5)             
Net interest margin (FTE) 3.72%  3.71%  3.73%  3.72%  3.76%  3.72%  3.78%
Efficiency ratio (3) 59.0%  61.2%  62.1%  65.4%  63.4%  61.9%  62.2%
Efficiency ratio, excluding restructuring charges (1), (3), (4) 59.0%  61.2%  62.1%  64.3%  63.4%  61.6%  62.2%
               
Capitalization Ratios             
               
Dividends declared to net income 31.9%  39.3%  135.0%  45.7%  57.1%  46.5%  49.6%
Shareholders' equity to assets (Period End) 12.52%  12.79%  12.75%  13.15%  13.25%  12.52%  13.25%
Tangible common equity to tangible assets (5) 9.29%  9.43%  9.33%  9.64%  9.68%  9.29%  9.68%
Tangible book value per share (5)$15.25  $14.83  $14.51  $14.54  $14.44  $15.25  $14.44 
Tangible book value per share - Core (5), (6)$15.63  $15.26  $14.91  $14.90  $14.57  $15.63  $14.57 
               
Regulatory Capital Ratios  (Period End)              
Tier 1 leverage ratio 10.13%  10.07%  10.19%  10.47%  10.48%  10.13%  10.48%
Common equity tier 1 risk-based capital ratio 10.88%  10.99%  10.89%  11.16%  11.11%  10.88%  11.11%
Tier 1 risk-based capital ratio 10.88%  10.99%  10.89%  11.16%  11.11%  10.88%  11.11%
Total risk-based capital ratio 13.70%  13.87%  13.76%  14.04%  14.00%  13.70%  14.00%
               
               
(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 Financial Corporation 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) Restructuring charges$-  $-  $-  $571  $-  $571  $- 
 Tax effect on restructuring charges -   -   -   120   -   120   - 
 (b) Restructuring charges, net of tax$-  $-  $-  $451  $-  $451  $- 
               
               
(2) Net income in this ratio excludes 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 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 $6,768 at December 31, 2018, $6,715 at September 30, 2018, $6,650 at June 30, 2018, $6,605 at March 31, 2018 and $6,573 at December 31, 2017.
(6) Tangible equity as defined in (5), excluding the impact of accumulated other comprehensive (loss) income on available-for-sale investment securities, net (($11,221) at December 31, 2018, ($12,873) at September 30, 2018, ($11,987) at June 30, 2018, ($10,477) at March 31, 2018 and ($4,061) at December 31, 2017), divided by total shares outstanding.
               

 

  
Univest Financial Corporation 
Average Balances and Interest Rates (Unaudited) 
  For the Three Months Ended,  
Tax Equivalent BasisDecember 31, 2018 September 30, 2018 
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$89,784 $4802.12%$80,678 $3981.96%
U.S. government obligations 22,307  891.58  22,331  901.60 
Obligations of state and political subdivisions 65,134  5533.37  68,703  5813.36 
Other debt and equity securities 377,243  2,4942.62  362,388  2,2582.47 
Federal funds sold and other earning assets 30,175  4686.15  31,107  4846.17 
Total interest-earning deposits, investments, federal funds sold and other earning assets 584,643  4,0842.77  565,207  3,8112.68 
         
Commercial, financial, and agricultural loans 782,666  10,3225.23  796,593  10,1845.07 
Real estate—commercial and construction loans 1,766,543  21,3094.79  1,729,538  20,5274.71 
Real estate—residential loans 910,620  11,1024.84  880,589  10,4474.71 
Loans to individuals 31,902  5116.35  32,057  4996.18 
Municipal loans and leases 323,904  3,1603.87  316,149  3,0373.81 
Lease financings 78,663  1,4077.10  77,369  1,4097.23 
Gross loans and leases 3,894,298  47,8114.87  3,832,295  46,1034.77 
Total interest-earning assets 4,478,941  51,8954.60  4,397,502  49,9144.50 
Cash and due from banks 47,429     48,737    
Reserve for loan and lease losses (28,499)    (26,099)   
Premises and equipment, net 60,448     60,622    
Other assets 332,200     336,559    
Total assets$4,890,519    $4,817,321    
         
Liabilities:        
Interest-bearing checking deposits$491,749 $7080.57%$465,992 $5410.46%
Money market savings 889,165  3,3721.50  813,769  2,6641.30 
Regular savings 768,825  6370.33  787,383  5810.29 
Time deposits 676,256  2,9581.74  633,552  2,4921.56 
Total time and interest-bearing deposits 2,825,995  7,6751.08  2,700,696  6,2780.92 
         
Short-term borrowings 56,215  2331.64  129,365  5841.79 
Long-term debt 140,597  6941.96  148,323  7091.90 
Subordinated notes 94,542  1,2605.29  94,480  1,2615.30 
Total borrowings 291,354  2,1872.98  372,168  2,5542.72 
Total interest-bearing liabilities 3,117,349  9,8621.26  3,072,864  8,8321.14 
Noninterest-bearing deposits 1,112,383     1,091,931    
Accrued expenses and other liabilities 41,583     40,723    
Total liabilities 4,271,315     4,205,518    
         
Shareholders' Equity:        
Common stock 157,784     157,784    
Additional paid-in capital 292,342     291,499    
Retained earnings and other equity 169,078     162,520    
Total shareholders' equity 619,204     611,803    
Total liabilities and shareholders' equity$4,890,519    $4,817,321    
Net interest income $42,033   $41,082  
         
Net interest spread  3.34   3.36 
Effect of net interest-free funding sources  0.38   0.35 
Net interest margin  3.72%  3.71%
Ratio of average interest-earning assets to average interest-bearing liabilities 143.68%    143.11%   
         
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, 2018 and September 30, 2018 have been calculated 
       using the Corporation’s federal applicable rate of 21.0%. 
         

 

  
Univest Financial Corporation 
Average Balances and Interest Rates (Unaudited) 
 For the Three Months Ended December 31,
 
Tax Equivalent Basis2018  2017  
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$89,784 $4802.12%$33,557 $921.09%
U.S. government obligations 22,307  891.58  24,039  941.55 
Obligations of state and political subdivisions 65,134  5533.37  79,708  8444.20 
Other debt and equity securities 377,243  2,4942.62  352,298  1,8732.11 
Federal funds sold and other earning assets 30,175  4686.15  27,719  3715.31 
Total interest-earning deposits, investments, federal funds sold and other earning assets 584,643  4,0842.77  517,321  3,2742.51 
         
Commercial, financial, and agricultural loans 782,666  10,3225.23  752,750  8,6084.54 
Real estate—commercial and construction loans 1,766,543  21,3094.79  1,566,944  17,7984.51 
Real estate—residential loans 910,620  11,1024.84  802,013  9,0974.50 
Loans to individuals 31,902  5116.35  27,299  4146.02 
Municipal loans and leases 323,904  3,1603.87  285,821  3,3434.64 
Lease financings 78,663  1,4077.10  70,433  1,3037.34 
Gross loans and leases 3,894,298  47,8114.87  3,505,260  40,5634.59 
Total interest-earning assets 4,478,941  51,8954.60  4,022,581  43,8374.32 
Cash and due from banks 47,429     44,922    
Reserve for loan and lease losses (28,499)    (20,734)   
Premises and equipment, net 60,448     63,119    
Other assets 332,200     332,855    
Total assets$4,890,519    $4,442,743    
         
Liabilities:        
Interest-bearing checking deposits$491,749 $7080.57%$439,397 $1720.16%
Money market savings 889,165  3,3721.50  649,861  1,2130.74 
Regular savings 768,825  6370.33  841,223  6480.31 
Time deposits 676,256  2,9581.74  567,982  1,5241.06 
Total time and interest-bearing deposits 2,825,995  7,6751.08  2,498,463  3,5570.56 
         
Short-term borrowings 56,215  2331.64  61,524  1480.95 
Long-term debt 140,597  6941.96  188,466  7451.57 
Subordinated notes 94,542  1,2605.29  94,298  1,2615.31 
Total borrowings 291,354  2,1872.98  344,288  2,1542.48 
Total interest-bearing liabilities 3,117,349  9,8621.26  2,842,751  5,7110.80 
Noninterest-bearing deposits 1,112,383     1,010,213    
Accrued expenses and other liabilities 41,583     35,708    
Total liabilities 4,271,315     3,888,672    
         
Shareholders' Equity:        
Common stock 157,784     148,546    
Additional paid-in capital 292,342     249,778    
Retained earnings and other equity 169,078     155,747    
Total shareholders' equity 619,204     554,071    
Total liabilities and shareholders' equity$4,890,519    $4,442,743    
Net interest income $42,033   $38,126  
         
Net interest spread  3.34   3.52 
Effect of net interest-free funding sources  0.38   0.24 
Net interest margin  3.72%  3.76%
Ratio of average interest-earning assets to average interest-bearing liabilities 143.68%    141.50%   
         
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, 2018 and 2017 have been calculated 
      using the Corporation’s federal applicable rate of 21.0% and 35.0%, respectively. 
         

 

  
Univest Financial Corporation 
Average Balances and Interest Rates (Unaudited) 
  For the Twelve Months Ended December 31,  
Tax Equivalent Basis2018  2017  
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$56,984 $1,1011.93%$26,128 $2801.07%
U.S. government obligations 22,930  3641.59  30,638  4231.38 
Obligations of state and political subdivisions 69,842  2,3303.34  82,487  3,4984.24 
Other debt and equity securities 363,840  9,0242.48  350,527  6,9201.97 
Federal funds sold and other earning assets 30,786  1,9656.38  27,893  1,5005.38 
Total interest-earning deposits, investments, federal funds sold and other earning assets 544,382  14,7842.72  517,673  12,6212.44 
         
Commercial, financial, and agricultural loans 793,028  39,1564.94  749,563  33,2784.44 
Real estate—commercial and construction loans 1,689,983  78,4984.64  1,519,883  68,1664.48 
Real estate—residential loans 870,846  41,2704.74  765,493  34,5634.52 
Loans to individuals 30,242  1,8666.17  28,050  1,6365.83 
Municipal loans and leases 316,280  12,0493.81  282,475  12,8564.55 
Lease financings 76,561  5,5147.20  75,383  5,5337.34 
Gross loans and leases 3,776,940  178,3534.72  3,420,847  156,0324.56 
Total interest-earning assets 4,321,322  193,1374.47  3,938,520  168,6534.28 
Cash and due from banks 45,979     44,424    
Reserve for loan and lease losses (25,154)    (20,219)   
Premises and equipment, net 61,006     64,583    
Other assets 334,619     329,232    
Total assets$4,737,772    $4,356,540    
         
Liabilities:        
Interest-bearing checking deposits$461,676 $1,9240.42%$437,678 $5270.12%
Money market savings 764,777  9,1371.19  582,703  3,3900.58 
Regular savings 798,332  2,3570.30  847,510  2,0890.25 
Time deposits 601,674  8,7681.46  566,079  5,2710.93 
Total time and interest-bearing deposits 2,626,459  22,1860.84  2,433,970  11,2770.46 
         
Short-term borrowings 144,312  2,4201.68  105,552  9040.86 
Long-term debt 150,032  2,7771.85  186,109  2,6211.41 
Subordinated notes 94,451  5,0435.34  94,208  5,0375.35 
Total borrowings 388,795  10,2402.63  385,869  8,5622.22 
Total interest-bearing liabilities 3,015,254  32,4261.08  2,819,839  19,8390.70 
Noninterest-bearing deposits 1,069,805     973,253    
Accrued expenses and other liabilities 40,516     36,361    
Total liabilities 4,125,575     3,829,453    
         
Shareholders' Equity:        
Common stock 157,784     145,564    
Additional paid-in capital 291,148     235,578    
Retained earnings and other equity 163,265     145,945    
Total shareholders' equity 612,197     527,087    
Total liabilities and shareholders' equity$4,737,772    $4,356,540    
Net interest income $160,711   $148,814  
         
Net interest spread  3.39   3.58 
Effect of net interest-free funding sources  0.33   0.20 
Net interest margin  3.72%  3.78%
Ratio of average interest-earning assets to average interest-bearing liabilities 143.32%    139.67%   
         
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, 2018 and 2017 have been calculated
 
      using the Corporation’s federal applicable rate of 21.0% and 35.0%, respectively.
 
         
CONTACT:
Roger Deacon
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2455, DeaconR@univest.net 

Univest Corporation

Source: Univest Financial Corporation
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