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Univest Financial Corporation Reports Second Quarter Results

Company Release - 7/24/2019 4:15 PM ET

SOUDERTON, Pa., July 24, 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 for the quarter ended June 30, 2019 of $16.5 million, or $0.56 diluted earnings per share, compared to net income of $4.4 million, or $0.15 diluted earnings per share, for the quarter ended June 30, 2018. Net income for the six months ended June 30, 2019 was $32.5 million, or $1.11 diluted earnings per share, compared to net income of $17.2 million, or $0.58 diluted earnings per share, for the six months ended June 30, 2018.

The financial results for the three and six months ended June 30, 2018 included a pre-tax charge to the provision for loan and lease losses of $12.7 million (after-tax charge of $10.1 million), which represented $0.34 diluted earnings per share in each period, related to fraudulent activities by employees of a borrower. In addition, the three and six months ended June 30, 2018 included a tax-free bank owned life insurance (BOLI) death benefit of $446 thousand, which represented $0.02 diluted earnings per share for each period. The six months ended June 30, 2018 included restructuring costs related to financial center closures of $451 thousand, net of tax, recognized in the first quarter of 2018, which represented $0.02 diluted earnings per share.

Loans
Gross loans and leases increased $100.0 million, or 9.8% (annualized), from March 31, 2019 and $161.3 million, or 8.1% (annualized), from December 31, 2018 and $349.5 million, or 9.2%, from June 30, 2018 primarily due to growth in commercial real estate and residential real estate loans.

Deposits
Total deposits increased $119.0 million, or 11.9% (annualized), from March 31, 2019 and $236.2 million, or 12.2% (annualized), from December 31, 2018 and $501.3 million, or 13.8%, from June 30, 2018. The growth in deposits from March 31, 2019 and December 31, 2018 was primarily due to increases in commercial, public funds and consumer deposits. The growth in deposits from June 30, 2018 was primarily due to increases in commercial and public funds deposits.

Net Interest Income and Margin
Net interest income of $84.2 million for the six months ended June 30, 2019 increased $7.9 million, or 10.4%, from the six months ended June 30, 2018. The increase in net interest income for the six months ended June 30, 2019 compared to the same period in 2018 was primarily due to the growth in loans during the last year.

Net interest margin, on a tax-equivalent basis, was 3.67% for the second quarter of 2019, compared to 3.75% for the first quarter of 2019 and 3.73% for the second quarter of 2018. The favorable impact of purchase accounting accretion was one basis point for the quarters ended June 30, 2019 and March 31, 2019 and three basis points for the quarter ended June 30, 2018. Excluding the impact of purchase accounting accretion, the net interest margin, on a tax-equivalent basis, was 3.66% for the quarter ended June 30, 2019 compared to 3.74% for the quarter ended March 31, 2019 and 3.70% for the quarter ended June 30, 2018. During the quarter ended June 30, 2019, excess liquidity reduced net interest margin by approximately 5 basis points. This excess liquidity was primarily driven by strong deposit balance growth throughout the quarter.

Noninterest Income
Noninterest income for the quarter ended June 30, 2019 was $16.4 million, an increase of $1.0 million, or 6.8%, from the second quarter of 2018. Noninterest income for the six months ended June 30, 2019 was $32.7 million, an increase of $1.8 million, or 5.7%, from the comparable period in the prior year.

Investment advisory commission and fee income increased $277 thousand, or 7.3%, for the quarter and $383 thousand, or 5.1%, for the six months ended June 30, 2019, primarily due to new customer relationships. Insurance commission and fee income increased $229 thousand, or 6.2%, for the quarter and $485 thousand, or 5.6%, for the six months ended June 30, 2019, primarily due to an increase in premiums for commercial lines and group life and health and an increase in contingent commission income of $120 thousand for the six months ended June 30, 2019. Service charges on deposit accounts increased $112 thousand, or 8.4%, for the quarter and $220 thousand, or 8.3%, for the six months ended June 30, 2019, primarily due to increased fee income on commercial cash management accounts. Other service fee income increased $159 thousand, or 6.5%, for the quarter and $257 thousand, or 5.6%, for the six months ended June 30, 2019, primarily due to increases in debit card interchange income.

Other income increased $861 thousand for the quarter and $1.1 million for the six months ended June 30, 2019. Fees on risk participation agreements increased $284 thousand for the quarter and $543 thousand for the six months ended June 30, 2019 driven by increased customer activity. Gain on sale of small business administration (SBA) loans increased $259 thousand for the quarter and $313 thousand for the six months ended June 30, 2019 related to increased SBA loan sale activity. Net loss on valuations and sales of other real estate owned was $55 thousand for the six months ended June 30, 2019 compared to $482 thousand for the three and six months ended June 30, 2018.

These increases were partially offset by a decrease in BOLI income of $467 thousand, or 38.6%, for the quarter and $184 thousand, or 9.8%, for the six months ended June 30, 2019. These decreases were primarily due to proceeds from BOLI death benefits of $446 thousand recognized in the second quarter of 2018. The net gain on mortgage banking activities decreased $146 thousand, or 15.5%, for the quarter and $379 thousand, or 22.9% for the six months ended June 30, 2019, primarily due to contraction in margins to remain price competitive.

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2019 was $36.8 million, an increase of $2.4 million, or 7.1%, compared to the second quarter of 2018. Noninterest expense for the six months ended June 30, 2019 was $72.3 million, an increase of $2.9 million, or 4.1%, from the comparable period in the prior year.

Salaries, benefits and commissions increased $2.0 million, or 10.1%, for the quarter and $2.9 million, or 7.2%, for the six months ended June 30, 2019, primarily attributable to additional staff hired to support revenue generation across all business lines, expansion of our commercial lending groups and annual merit increases. During the first quarter of 2019, Univest hired a team of eight commercial lenders and support staff to focus on increasing Univest’s presence in Western Lancaster and York Counties. During the second quarter of 2019, a team of three commercial lenders was hired to help expand Univest’s presence in the New Jersey suburbs of Philadelphia.  Data processing expense increased $536 thousand, or 25.6%, for the quarter and $818 thousand, or 18.9%, for the six months ended June 30, 2019, primarily due to continued investments in customer relationship management software, internal infrastructure improvements and outsourced data processing solutions. 

These increases were partially offset by a decrease in intangibles expense of $177 thousand, or 29.8%, for the quarter and $363 thousand, or 30.1%, for the six months ended June 30, 2019 due to run-off of the intangible assets. In addition, restructuring costs related to financial center closures and staffing rationalization were $571 thousand during the first quarter of 2018. Excluding restructuring costs, noninterest expense for six months ended June 30, 2019 increased $3.4 million, or 5.0%, from the comparable period in 2018.

Asset Quality and Provision for Loan and Lease Losses
Nonperforming assets were $27.1 million at June 30, 2019, compared to $28.1 million at December 31, 2018 and $32.8 million at June 30, 2018.

Net loan and lease charge-offs were $1.1 million during the second quarter of 2019 and $1.5 million for the six months ended June 30, 2019. The provision for loan and lease losses was $2.1 million for the second quarter of 2019 and $4.8 million for the six months ended June 30, 2019. Net loan and lease charge-offs were $13.2 million during the second quarter of 2018 and $13.4 million for the six months ended June 30, 2018. The provision for loan and lease losses was $15.4 million for the second quarter of 2018 and $17.5 million for the six months ended June 30, 2018. Both net loan and lease charge-offs and the provision for loan and lease losses during 2018 included the previously discussed $12.7 million commercial loan 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 0.85% at June 30, 2019, compared to 0.81% at December 31, 2018 and 0.76% at June 30, 2018.

Tax Provision  
The effective income tax rate was 18.2% for the quarter June 30, 2019 compared to an effective income tax rate of 4.2% for the quarter ended June 30, 2018. The effective income tax rate was 18.0% for the six months ended June 30, 2019 compared to an effective income tax rate of 14.9% for the six months ended June 30, 2018. The Corporation's effective income tax rate for the six months ended June 30, 2019 was favorably impacted by discrete tax benefits. Excluding these items, the effective tax rate was 18.3% for the six months ended June 30, 2019.

Dividend
On May 20, 2019, Univest declared a quarterly cash dividend of $0.20 per share, payable on July 1, 2019. This represented a 3.06% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Conference Call
Univest will host a conference call to discuss second quarter 2019 results on Thursday, July 25, 2019 at 9:00 a.m. EDT. Participants may preregister at http://dpregister.com/10133126. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through August 25, 2019 by dialing 1-877-344-7529; using Conference ID: 10133126.

About Univest Financial Corporation

Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $5.2 billion in assets and $3.7 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2019. 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 and the reports Univest 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. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest’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 is engaged; (6) technological issues that may adversely affect Univest financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission. Univest 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)
June 30, 2019
(Dollars in thousands)                            
                             
Balance Sheet (Period End) 06/30/19
 03/31/19
 12/31/18
 09/30/18
 06/30/18
        
Assets $5,154,298  $5,035,527  $4,984,347  $4,801,998  $4,749,181         
Investment securities  468,833   466,883   473,306   447,339   446,933         
Loans held for sale  1,498   921   1,754   106   1,778         
Loans and leases held for investment, gross  4,167,904   4,067,879   4,006,574   3,866,169   3,818,398         
Allowance for loan and lease losses  32,600   31,602   29,364   27,371   25,652         
Loans and leases held for investment, net  4,135,304   4,036,277   3,977,210   3,838,798   3,792,746         
Total deposits  4,122,110   4,003,153   3,885,933   3,820,048   3,620,786         
Noninterest-bearing deposits  1,166,301   1,103,674   1,055,919   1,047,081   1,055,479         
NOW, money market and savings  2,246,372   2,260,795   2,159,937   2,101,484   1,970,912         
Time deposits  709,437   638,684   670,077   671,483   594,395         
Borrowings    304,241     313,083     429,672     326,709     481,862         
Shareholders' equity    651,670     637,606     624,133     614,242     605,294         
                             
                             
Balance Sheet (Average) For the three months ended, For the six months ended,
  06/30/19 03/31/19 12/31/18 09/30/18 06/30/18 06/30/19 06/30/18
Assets $  5,170,448  $  5,004,253  $  4,890,519  $  4,817,321  $  4,682,827  $  5,087,810  $  4,619,714 
Investment securities     471,422     470,196     464,684     453,422     450,375     470,812     454,130 
Loans and leases, gross    4,123,069     4,017,362     3,894,298     3,832,295     3,743,195     4,070,508     3,689,152 
Deposits    4,145,411     3,931,199     3,938,378     3,792,627     3,563,956     4,038,897     3,524,221 
Shareholders' equity    645,538     631,574     619,204     611,803     611,667     638,595     608,835 
               
               
Asset Quality Data (Period End)               
  06/30/19 03/31/19 12/31/18 09/30/18 06/30/18    
Nonaccrual loans and leases, including nonaccrual troubled debt restructured              
loans and leases $  25,147  $  25,952  $  26,208  $  27,559  $  30,148     
Accruing loans and leases 90 days or more past due    1,379     636     192     1,224     150     
Accruing troubled debt restructured loans and leases    55     270     542     766     790     
Total nonperforming loans and leases    26,581     26,858     26,942     29,549     31,088     
Other real estate owned    540     540     1,187     1,433     1,742     
Total nonperforming assets    27,121     27,398     28,129     30,982     32,830     
Nonaccrual loans and leases / Loans and leases held for investment  0.60%  0.64%  0.65%  0.71%  0.79%    
Nonperforming loans and leases / Loans and leases held for investment  0.64%  0.66%  0.67%  0.76%  0.81%    
Nonperforming assets / Total assets  0.53%  0.54%  0.56%  0.65%  0.69%    
               
Allowance for loan and lease losses    32,600     31,602     29,364     27,371     25,652     
Allowance for loan and lease losses / Loans and leases held for investment   0.78%  0.78%  0.73%  0.71%  0.67%    
Allowance for loan and lease losses / Loans and leases held for investment  0.85%  0.85%  0.81%  0.79%  0.76%    
(excluding acquired loans at period-end)              
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment  129.64%  121.77%  112.04%  99.32%  85.09%    
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 122.64%  117.66%  108.99%  92.63%  82.51%    
Acquired credit impaired loans $  569  $  693  $  695  $  900  $  998     
               
  For the three months ended, For the six months ended,
  06/30/19 03/31/19 12/31/18 09/30/18 06/30/18 06/30/19 06/30/18
Net loan and lease charge-offs (recoveries) $  1,078  $  447  $  (1,890) $  1,026  $  13,167  $  1,525  $  13,365 
Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases  0.10%  0.05%  (0.19%)  0.11%  1.41%  0.08%  0.73%
               
               

 

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2019
(Dollars in thousands, except per share data)              
  For the three months ended, For the six months ended,
For the period: 06/30/19 03/31/19 12/31/18 09/30/18 06/30/18 06/30/19 06/30/18
Interest income $54,060 $52,364 $51,239 $49,255 $46,460  $106,424 $89,994 
Interest expense  11,425  10,841  9,862  8,832  7,470   22,266  13,732 
Net interest income  42,635  41,523  41,377  40,423  38,990   84,158  76,262 
Provision for loan and lease losses  2,076  2,685  103  2,745  15,409   4,761  17,462 
Net interest income after provision  40,559  38,838  41,274  37,678  23,581   79,397  58,800 
Noninterest income:              
Trust fee income  2,054  1,887  1,882  1,960  2,044   3,941  4,040 
Service charges on deposit accounts  1,447  1,435  1,516  1,454  1,335   2,882  2,662 
Investment advisory commission and fee income  4,055  3,789  3,852  3,785  3,778   7,844  7,461 
Insurance commission and fee income  3,941  5,144  3,415  3,643  3,712   9,085  8,600 
Other service fee income  2,590  2,267  2,448  2,284  2,431   4,857  4,600 
Bank owned life insurance income  743  952  430  865  1,210   1,695  1,879 
Net gain on sales of investment securities  7  1  -  -  -   8  10 
Net gain on mortgage banking activities  796  483  713  754  942   1,279  1,658 
Other income (loss)  723  339  160  116  (138)  1,062  (14)
Total noninterest income  16,356  16,297  14,416  14,861  15,314   32,653  30,896 
Noninterest expense:              
Salaries, benefits and commissions  22,089  21,564  19,576  20,321  20,065   43,653  40,712 
Net occupancy  2,601  2,611  2,455  2,515  2,533   5,212  5,290 
Equipment  1,065  990  1,014  1,042  1,067   2,055  2,090 
Data processing  2,627  2,514  2,352  2,339  2,091   5,141  4,323 
Professional fees  1,307  1,264  1,335  1,370  1,331   2,571  2,686 
Marketing and advertising  622  316  432  461  526   938  907 
Deposit insurance premiums  430  452  449  544  452   882  843 
Intangible expenses  417  426  481  479  594   843  1,206 
Restructuring charges  -  -  -  -  -   -  571 
Other expense  5,620  5,420  5,302  5,300  5,688   11,040  10,844 
Total noninterest expense  36,778  35,557  33,396  34,371  34,347   72,335  69,472 
Income before taxes  20,137  19,578  22,294  18,168  4,548   39,715  20,224 
Income tax expense  3,669  3,499  3,922  3,204  191   7,168  3,017 
Net income $16,468 $16,079 $18,372 $14,964 $4,357  $32,547 $17,207 
Net income per share:              
Basic $0.56 $0.55 $0.63 $0.51 $0.15  $1.11 $0.59 
Diluted $0.56 $0.55 $0.63 $0.51 $0.15  $1.11 $0.58 
Dividends declared per share $0.20 $0.20 $0.20 $0.20 $0.20  $0.40 $0.40 
Weighted average shares outstanding  29,287,754  29,277,339  29,319,664  29,402,405  29,403,946   29,282,575  29,379,552 
Period end shares outstanding  29,294,942  29,272,502  29,270,852  29,407,076  29,406,450   29,294,942  29,406,450 
               
               

 

Univest Financial Corporation 
Consolidated Selected Financial Data (Unaudited) 
June 30, 2019 
                
  For the three months ended, For the six months ended, 
Profitability Ratios (annualized)06/30/19 03/31/19 12/31/18 09/30/18 06/30/18 06/30/19 06/30/18 
                              
Return on average assets 1.28%  1.30%  1.49%  1.23%  0.37%  1.29%  0.75% 
Return on average assets, excluding restructuring charges (1), (2) 1.28%  1.30%  1.49%  1.23%  0.37%  1.29%  0.77% 
Return on average shareholders' equity 10.23%  10.32%  11.77%  9.70%  2.86%  10.28%  5.70% 
Return on average shareholders' equity, excluding 10.23%  10.32%  11.77%  9.70%  2.86%  10.28%  5.85% 
restructuring charges (1), (2)                            
Return on average tangible common equity, excluding 14.10%  14.36%  16.52%  13.70%  4.04%  14.23%  8.29% 
restructuring charges (1), (2)                            
Net interest margin (FTE) 3.67%  3.75%  3.72%  3.71%  3.73%  3.71%  3.72% 
Efficiency ratio (3) 61.5%  60.5%  59.0%  61.2%  62.1%  61.0%  63.7% 
Efficiency ratio, excluding restructuring charges (1), (3), (4) 61.5%  60.5%  59.0%  61.2%  62.1%  61.0%  63.2% 
                              
Capitalization Ratios                            
                              
Dividends declared to net income 35.6%  36.4%  31.9%  39.3%  135.0%  36.0%  68.3% 
Shareholders' equity to assets (Period End) 12.64%  12.66%  12.52%  12.79%  12.75%  12.64%  12.75% 
Tangible common equity to tangible assets (1) 9.54%  9.47%  9.29%  9.43%  9.33%  9.54%  9.33% 
Common equity book value per share$22.25  $21.78  $21.32  $20.89  $20.58  $22.25  $20.58  
Tangible common equity book value per share  (1)$16.20  $15.72  $15.25  $14.83  $14.51  $16.20  $14.51  
                              
Regulatory Capital Ratios  (Period End)                             
Tier 1 leverage ratio 10.01%  10.10%  10.13%  10.07%  10.19%  10.01%  10.19% 
Common equity tier 1 risk-based capital ratio 10.99%  10.93%  10.88%  10.99%  10.89%  10.99%  10.89% 
Tier 1 risk-based capital ratio 10.99%  10.93%  10.88%  10.99%  10.89%  10.99%  10.89% 
Total risk-based capital ratio 13.79%  13.77%  13.70%  13.87%  13.76%  13.79%  13.76% 
                              
                              
(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$-  $-  $-  $-  $-  $-  $571  
 Tax effect on restructuring charges -   -   -   -   -   -   (120) 
 (b) Restructuring charges, net of tax$-  $-  $-  $-  $-  $-  $451  
                
 (c) Shareholders' equity$651,670  $637,606  $624,133  $614,242  $605,294  $651,670  $605,294  
 Goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559) 
 Other intangibles (i) (4,396)  (4,805)  (5,222)  (5,690)  (6,159)  (4,396)  (6,159) 
 (d) Tangible common equity$474,715  $460,242  $446,352  $435,993  $426,576  $474,715  $426,576  
                
 (e) Total assets$5,154,298  $5,035,527  $4,984,347  $4,801,998  $4,749,181  $5,154,298  $4,749,181  
 Goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559) 
 Other intangibles (i) (4,396)  (4,805)  (5,222)  (5,690)  (6,159)  (4,396)  (6,159) 
 (f) Tangible assets$4,977,343  $4,858,163  $4,806,566  $4,623,749  $4,570,463  $4,977,343  $4,570,463  
                
 (g) Average shareholders' equity$645,538  $631,574  $619,204  $611,803  $611,667  $638,595  $608,835  
 Average goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559) 
 Average other intangibles (i) (4,615)  (5,031)  (5,473)  (5,947)  (6,468)  (4,821)  (6,764) 
 (h) Average tangible common equity$468,364  $453,984  $441,172  $433,297  $432,640  $461,215  $429,512  
                
 (i) Amount does not include servicing rights              
                
(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.           
                
                

 

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
  For the Three Months Ended,   
Tax Equivalent BasisJune 30, 2019  March 31, 2019
 AverageIncome/Average  AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate  BalanceExpenseRate 
Assets:            
Interest-earning deposits with other banks$102,623 $5692.22% $42,566  $2692.56%
U.S. government obligations 17,315  731.69   20,039   821.66 
Obligations of state and political subdivisions 59,267  5073.43   64,167   5463.45 
Other debt and equity securities 394,840  2,5722.61   385,990   2,6312.76 
Federal Home Loan Bank, Federal Reserve Bank and other stock 31,938  5356.72   32,360   5867.34 
Total interest-earning deposits, investments and other interest-earning assets 605,983  4,2562.82   545,122   4,1143.06 
             
Commercial, financial, and agricultural loans 820,009  10,5895.18   811,071   10,7585.38 
Real estate—commercial and construction loans 1,912,248  23,1104.85   1,822,276   21,5594.80 
Real estate—residential loans 941,712  11,4834.89   938,299   11,4124.93 
Loans to individuals 31,939  5106.40   32,524   5186.46 
Municipal loans and leases 335,399  3,3053.95   332,299   3,2213.93 
Lease financings 81,762  1,4597.16   80,893   1,4357.19 
Gross loans and leases 4,123,069  50,4564.91   4,017,362   48,9034.94 
Total interest-earning assets 4,729,052  54,7124.64   4,562,484   53,0174.71 
Cash and due from banks 46,868      44,714     
Reserve for loan and lease losses (31,847)     (30,111)    
Premises and equipment, net 58,873      59,179     
Operating lease right-of-use assets 35,821      37,129     
Other assets 331,681      330,858     
Total assets$5,170,448     $5,004,253     
             
Liabilities:            
Interest-bearing checking deposits$457,231 $4570.40% $478,927  $7140.60%
Money market savings 982,440  4,2341.73   918,487   3,7481.65 
Regular savings 818,523  1,0130.50   789,033   8140.42 
Time deposits 688,897  3,4071.98   655,303   2,9271.81 
Total time and interest-bearing deposits 2,947,091  9,1111.24   2,841,750   8,2031.17 
             
Short-term borrowings 48,312  2171.80   117,664   6382.20 
Long-term debt 159,572  8362.10   145,299   7392.06 
Subordinated notes 94,663  1,2615.34   94,603   1,2615.41 
Total borrowings 302,547  2,3143.07   357,566   2,6382.99 
Total interest-bearing liabilities 3,249,638  11,4251.41   3,199,316   10,8411.37 
Noninterest-bearing deposits 1,198,320      1,089,449     
Operating lease liabilities 38,873      40,090     
Accrued expenses and other liabilities 38,079      43,824     
Total liabilities 4,524,910      4,372,679     
             
Shareholders' Equity:            
Common stock 157,784      157,784     
Additional paid-in capital 293,496      292,746     
Retained earnings and other equity 194,258      181,044     
Total shareholders' equity 645,538      631,574     
Total liabilities and shareholders' equity$5,170,448     $5,004,253     
Net interest income $43,287       $42,176  
             
Net interest spread  3.23       3.34 
Effect of net interest-free funding sources  0.44       0.41 
Net interest margin  3.67%      3.75%
Ratio of average interest-earning assets to average interest-bearing liabilities 145.53%     142.61%    
             
Note 1:  For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and unearned discount. Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the three months ended June 30, 2019 and March 31, 2019 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 June 30,   
Tax Equivalent Basis  2019     2018  
 AverageIncome/Average  AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate  BalanceExpenseRate 
Assets:            
Interest-earning deposits with other banks$102,623 $5692.22% $37,254  $1481.59%
U.S. government obligations 17,315  731.69   23,183   911.57 
Obligations of state and political subdivisions 59,267  5073.43   71,092   6033.40 
Other debt and equity securities 394,840  2,5722.61   356,100   2,1772.45 
Federal Home Loan Bank, Federal Reserve Bank and other stock 31,938  5356.72   32,788   5096.23 
Total interest-earning deposits, investments and other interest-earning assets 605,983  4,2562.82   520,417   3,5282.72 
             
Commercial, financial, and agricultural loans 820,009  10,5895.18   810,610   9,7504.82 
Real estate—commercial and construction loans 1,912,248  23,1104.85   1,661,198   19,0444.60 
Real estate—residential loans 941,712  11,4834.89   853,769   10,0464.72 
Loans to individuals 31,939  5106.40   28,985   4446.14 
Municipal loans and leases 335,399  3,3053.95   313,181   2,9613.79 
Lease financings 81,762  1,4597.16   75,452   1,3537.19 
Gross loans and leases 4,123,069  50,4564.91   3,743,195   43,5984.67 
Total interest-earning assets 4,729,052  54,7124.64   4,263,612   47,1264.43 
Cash and due from banks 46,868      45,158     
Reserve for loan and lease losses (31,847)     (23,914)    
Premises and equipment, net 58,873      61,234     
Operating lease right-of-use assets 35,821      -     
Other assets 331,681      336,737     
Total assets$5,170,448     $4,682,827     
             
Liabilities:            
Interest-bearing checking deposits$457,231 $4570.40% $463,156  $3830.33%
Money market savings 982,440  4,2341.73   694,734   1,7581.01 
Regular savings 818,523  1,0130.50   803,586   5820.29 
Time deposits 688,897  3,4071.98   553,579   1,8191.32 
Total time and interest-bearing deposits 2,947,091  9,1111.24   2,515,055   4,5420.72 
             
Short-term borrowings 48,312  2171.80   217,327   9581.77 
Long-term debt 159,572  8362.10   155,628   7091.83 
Subordinated notes 94,663  1,2615.34   94,420   1,2615.36 
Total borrowings 302,547  2,3143.07   467,375   2,9282.51 
Total interest-bearing liabilities 3,249,638  11,4251.41   2,982,430   7,4701.00 
Noninterest-bearing deposits 1,198,320      1,048,901     
Operating lease liabilities 38,873      -     
Accrued expenses and other liabilities 38,079      39,829     
Total liabilities 4,524,910      4,071,160     
             
Shareholders' Equity:            
Common stock 157,784      157,784     
Additional paid-in capital 293,496      290,517     
Retained earnings and other equity 194,258      163,366     
Total shareholders' equity 645,538      611,667     
Total liabilities and shareholders' equity$5,170,448     $4,682,827     
Net interest income $43,287       $39,656  
             
Net interest spread