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Univest Financial Corporation Reports Third Quarter Results

Company Release - 10/23/2019 4:15 PM ET

SOUDERTON, Pa., Oct. 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 for the quarter ended September 30, 2019 of $17.7 million, or $0.60 diluted earnings per share, compared to net income of $15.0 million, or $0.51 diluted earnings per share, for the quarter ended September 30, 2018. Net income for the nine months ended September 30, 2019 was $50.2 million, or $1.71 diluted earnings per share, compared to net income of $32.2 million, or $1.09 diluted earnings per share, for the nine months ended September 30, 2018.

One-Time Items
The financial results for the three and nine months ended September 30, 2019 included a Federal Deposit Insurance Corporation (FDIC) small bank assessment credit of $988 thousand (after tax benefit of $781 thousand), which represented a favorable impact to earnings per share in each period of $0.03. The FDIC notified the Bank during September 2019 that the required deposit insurance fund reserve ratio was met at June 30, 2019, triggering the application of small bank credits. The Bank's total FDIC small bank assessment credit was $1.1 million, with the remaining credit of $114 thousand expected to be applied to the fourth quarter of 2019. 

The financial results for the nine months ended September 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) in the second quarter of 2018, which represented $0.34 diluted earnings per share, related to fraudulent activities by employees of a borrower. In addition, the nine months ended September 30, 2018 included a tax-free bank owned life insurance (BOLI) death benefit of $446 thousand during the second quarter of 2018, which represented $0.02 diluted earnings per share. The nine months ended September 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 $84.0 million, or 8.1% (annualized), from June 30, 2019 and $245.4 million, or 8.2% (annualized), from December 31, 2018 and $385.8 million, or 10.0%, from September 30, 2018 primarily due to growth in commercial real estate, commercial business and residential real estate loans.

Deposits
Total deposits increased $215.9 million, or 20.9% (annualized), from June 30, 2019 primarily due to an increase in public funds deposits of $311.3 million partially offset by decreases in commercial and consumer deposits. The growth in public funds during the quarter resulted from seasonal increases and new customer relationships. Total deposits increased $452.1 million, or 15.5% (annualized), from December 31, 2018 and $517.9 million, or 13.6%, from September 30, 2018, primarily due to the previously discussed increase in public funds deposits as well as increases in commercial and consumer deposits.

Net Interest Income and Margin
Net interest income of $42.6 million for the quarter ended September 30, 2019 increased $2.2 million, or 5.5%, from the third quarter of 2018. Net interest income of $126.8 million for the nine months ended September 30, 2019 increased $10.1 million, or 8.7%, from the nine months ended September 30, 2018. The increase in net interest income for the quarter and nine months ended September 30, 2019 compared to the same periods in 2018 was primarily due to the growth in loans during the last year.

Net interest margin, on a tax-equivalent basis, was 3.52% for the third quarter of 2019, compared to 3.67% for the second quarter of 2019 and 3.71% for the third quarter of 2018. Purchase accounting accretion had no impact on the quarter ended September 30, 2019 compared to a favorable impact of one basis point for the quarter ended June 30, 2019 and three basis points for the quarter ended September 30, 2018.  Excess liquidity reduced net interest margin by approximately 13 basis points for the quarter ended September 30, 2019, compared to 5 basis points for the quarter ended June 30, 2019 and 3 basis points for the quarter ended September 30, 2018. This excess liquidity was primarily driven by strong deposit balance growth. Excluding purchase accounting accretion and the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, was 3.65% for the quarter ended September 30, 2019 and 3.71% for the quarters ended June 30, 2019 and September 30, 2018.

Noninterest Income
Noninterest income for the quarter ended September 30, 2019 was $16.6 million, an increase of $1.7 million, or 11.7%, from the third quarter of 2018. Noninterest income for the nine months ended September 30, 2019 was $49.3 million, an increase of $3.5 million, or 7.6%, from the comparable period in the prior year.

The net gain on mortgage banking activities increased $875 thousand for the quarter and $496 thousand for the nine months ended September 30, 2019, primarily due to an increase in mortgage volume partially offset by contraction in margins to remain price competitive. Investment advisory commission and fee income increased $247 thousand, or 6.5%, for the quarter and $630 thousand, or 5.6%, for the nine months ended September 30, 2019, primarily due to new customer relationships. Insurance commission and fee income increased $234 thousand, or 6.4%, for the quarter and $719 thousand, or 5.9%, for the nine months ended September 30, 2019, primarily due to an increase in contingent commission income of $203 thousand for the quarter and $323 thousand for the nine months ended September 30, 2019 as well as an increase in premiums for commercial lines and group life and health for the nine months ended September 30, 2019. Service charges on deposit accounts increased $59 thousand, or 4.1%, for the quarter and $279 thousand, or 6.8%, for the nine months ended September 30, 2019, primarily due to increased fee income on commercial cash management accounts.

Other income increased $428 thousand for the quarter and $1.5 million for the nine months ended September 30, 2019. Fees on risk participation agreements increased $137 thousand for the quarter and $681 thousand for the nine months ended September 30, 2019 driven by increased customer activity. Gain on sale of small business administration (SBA) loans increased $55 thousand for the quarter and $368 thousand for the nine months ended September 30, 2019 related to increased SBA loan sale activity. Net loss on valuations and sales of other real estate owned was $28 thousand for the nine months ended September 30, 2019 compared to $507 thousand for the nine months ended September 30, 2018.

These increases were partially offset by a decrease in BOLI income of $306 thousand, or 11.2%, for the nine months ended September 30, 2019 primarily due to proceeds from BOLI death benefits of $446 thousand recognized in the second quarter of 2018.

Noninterest Expense
Noninterest expense for the quarter ended September 30, 2019 was $36.3 million, an increase of $1.9 million, or 5.5%, compared to the third quarter of 2018. Noninterest expense for the nine months ended September 30, 2019 was $108.6 million, an increase of $4.8 million, or 4.6%, from the comparable period in the prior year.

Salaries, benefits and commissions increased $2.5 million, or 12.1%, for the quarter and $5.4 million, or 8.9%, for the nine months ended September 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 $285 thousand, or 12.2%, for the quarter and $1.1 million, or 16.6%, for the nine months ended September 30, 2019, primarily due to continued investments in customer relationship management software and internal infrastructure improvements as well as outsourced data processing solutions for the nine months ended September 30, 2019.

These increases were partially offset by a decrease in deposit insurance premiums of $988 thousand for the quarter and $949 thousand for the nine months ended September 30, 2019 due to the previously discussed FDIC small bank assessment credit of $988 thousand which was recognized during the third quarter of 2019. Intangible expense decreased by $101 thousand, or 21.1%, for the quarter and $464 thousand, or 27.5%, for the nine months ended September 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 and the FDIC small bank assessment credit, noninterest expense for the nine months ended September 30, 2019 increased $6.3 million, or 6.1%.

Asset Quality and Provision for Loan and Lease Losses
Nonperforming assets were $40.4 million at September 30, 2019, compared to $28.1 million at December 31, 2018 and $31.0 million at September 30, 2018. The increase in nonperforming assets at September 30, 2019 was primarily due to one commercial banking relationship, totaling $11.6 million, which was placed on non-accrual status during the third quarter of 2019.

Net loan and lease charge-offs were $468 thousand during the third quarter of 2019 and $2.0 million for the nine months ended September 30, 2019. The provision for loan and lease losses was $1.5 million for the third quarter of 2019 and $6.3 million for the nine months ended September 30, 2019. Net loan and lease charge-offs were $1.0 million during the third quarter of 2018 and $14.4 million for the nine months ended September 30, 2018. The provision for loan and lease losses was $2.7 million for the third quarter of 2018 and $20.2 million for the nine months ended September 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 during the second quarter of 2018.

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 September 30, 2019, 0.81% at December 31, 2018 and 0.79% at September 30, 2018.

Tax Provision  
The effective income tax rate was 17.6% for the quarter ended September 30, 2019, consistent with the effective income tax rate for the quarter ended September 30, 2018. The effective income tax rate was 17.9% for the nine months ended September 30, 2019 compared to an effective income tax rate of 16.2% for the nine months ended September 30, 2018. The Corporation's effective income tax rate for the nine months ended September 30, 2019 was favorably impacted by discrete tax benefits. Excluding these items, the effective tax rate was 18.3% for the nine months ended September 30, 2019.

Dividend
On August 26, 2019, Univest declared a quarterly cash dividend of $0.20 per share, payable on October 1, 2019. This represented a 3.21% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Conference Call
Univest will host a conference call to discuss third quarter 2019 results on Thursday, October 24, 2019 at 9:00 a.m. EDT. Participants may preregister at http://dpregister.com/10135540. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through November 24, 2019 by dialing 1-877-344-7529; using Conference ID: 10135540.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $5.4 billion in assets and $3.6 billion in assets under management and supervision through its Wealth Management lines of business at September 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 primarily 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)
September 30, 2019
(Dollars in thousands)              
               
Balance Sheet (Period End) 09/30/19 06/30/19 03/31/19 12/31/18 09/30/18    
Assets $5,353,611  $5,154,298  $5,035,527  $4,984,347  $4,801,998     
Investment securities  448,447   468,833   466,883   473,306   447,339     
Loans held for sale  2,893   1,498   921   1,754   106     
Loans and leases held for investment, gross  4,251,933   4,167,904   4,067,879   4,006,574   3,866,169     
Allowance for loan and lease losses  33,662   32,600   31,602   29,364   27,371     
Loans and leases held for investment, net  4,218,271   4,135,304   4,036,277   3,977,210   3,838,798     
Total deposits  4,337,991   4,122,110   4,003,153   3,885,933   3,820,048     
Noninterest-bearing deposits  1,198,425   1,166,301   1,103,674   1,055,919   1,047,081     
NOW, money market and savings  2,421,466   2,246,372   2,260,795   2,159,937   2,101,484     
Time deposits  718,100   709,437   638,684   670,077   671,483     
Borrowings  273,855   304,241   313,083   429,672   326,709     
Shareholders' equity  664,299   651,670   637,606   624,133   614,242     
               
               
Balance Sheet (Average) For the three months ended, For the nine months ended,
  09/30/19 06/30/19 03/31/19 12/31/18 09/30/18 09/30/19 09/30/18
Assets $5,317,867  $5,170,448  $5,004,253  $4,890,519  $4,817,321  $5,165,339  $4,686,296 
Investment securities  460,099   471,422   470,196   464,684   453,422   467,202   453,892 
Loans and leases, gross  4,170,485   4,123,069   4,017,362   3,894,298   3,832,295   4,104,198   3,737,391 
Deposits  4,288,170   4,145,411   3,931,199   3,938,378   3,792,627   4,122,902   3,614,673 
Shareholders' equity  659,523   645,538   631,574   619,204   611,803   645,647   609,836 
               
               
Asset Quality Data (Period End)               
  09/30/19 06/30/19 03/31/19 12/31/18 09/30/18    
Nonaccrual loans and leases, including nonaccrual troubled debt restructured              
  loans and leases $37,368  $25,147  $25,952  $26,208  $27,559     
Accruing loans and leases 90 days or more past due  2,488   1,379   636   192   1,224     
Accruing troubled debt restructured loans and leases  54   55   270   542   766     
Total nonperforming loans and leases  39,910   26,581   26,858   26,942   29,549     
Other real estate owned  495   540   540   1,187   1,433     
Total nonperforming assets  40,405   27,121   27,398   28,129   30,982     
Nonaccrual loans and leases / Loans and leases held for investment  0.88%  0.60%  0.64%  0.65%  0.71%    
Nonperforming loans and leases / Loans and leases held for investment  0.94%  0.64%  0.66%  0.67%  0.76%    
Nonperforming assets / Total assets  0.75%  0.53%  0.54%  0.56%  0.65%    
               
Allowance for loan and lease losses  33,662   32,600   31,602   29,364   27,371     
Allowance for loan and lease losses / Loans and leases held for investment  0.79%  0.78%  0.78%  0.73%  0.71%    
Allowance for loan and lease losses / Loans and leases held for investment  0.85%  0.85%  0.85%  0.81%  0.79%    
  (excluding acquired loans at period-end)              
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment 90.08%  129.64%  121.77%  112.04%  99.32%    
Allowance for loan and lease losses / Nonperforming loans and leases held for investment  84.34%  122.64%  117.66%  108.99%  92.63%    
Acquired credit impaired loans $568  $569  $693  $695  $900     
               
  For the three months ended, For the nine months ended,
  09/30/19 06/30/19 03/31/19 12/31/18 09/30/18 09/30/19 09/30/18
Net loan and lease charge-offs (recoveries) $468  $1,078  $447  $(1,890) $1,026  $1,993  $14,391 
Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases  0.04%  0.10%  0.05%  (0.19%)  0.11%  0.06%  0.51%



Univest Financial Corporation 
Consolidated Selected Financial Data (Unaudited) 
September 30, 2019 
(Dollars in thousands, except per share data)              
 For the three months ended, For the nine months ended, 
For the period:09/30/19 06/30/19 03/31/19 12/31/18 09/30/18 09/30/19 09/30/18 
Interest income$54,300  $54,060 $52,364 $51,239 $49,255 $160,724 $139,249 
Interest expense 11,655   11,425  10,841  9,862  8,832  33,921  22,564 
  Net interest income 42,645   42,635  41,523  41,377  40,423  126,803  116,685 
Provision for loan and lease losses 1,530   2,076  2,685  103  2,745  6,291  20,207 
Net interest income after provision 41,115   40,559  38,838  41,274  37,678  120,512  96,478 
Noninterest income:              
  Trust fee income 1,973   2,054  1,887  1,882  1,960  5,914  6,000 
  Service charges on deposit accounts 1,513   1,447  1,435  1,516  1,454  4,395  4,116 
  Investment advisory commission and fee income 4,032   4,055  3,789  3,852  3,785  11,876  11,246 
  Insurance commission and fee income 3,877   3,941  5,144  3,415  3,643  12,962  12,243 
  Other service fee income 2,255   2,590  2,267  2,448  2,284  7,112  6,884 
  Bank owned life insurance income 743   743  952  430  865  2,438  2,744 
  Net gain on sales of investment securities 33   7  1  -  -  41  10 
  Net gain on mortgage banking activities 1,629   796  483  713  754  2,908  2,412 
  Other income 544   723  339  160  116  1,606  102 
Total noninterest income 16,599   16,356  16,297  14,416  14,861  49,252  45,757 
Noninterest expense:              
Salaries, benefits and commissions 22,785   22,089  21,564  19,576  20,321  66,438  61,033 
Net occupancy 2,475   2,601  2,611  2,455  2,515  7,687  7,805 
Equipment 1,088   1,065  990  1,014  1,042  3,143  3,132 
Data processing 2,624   2,627  2,514  2,352  2,339  7,765  6,662 
Professional fees 1,517   1,307  1,264  1,335  1,370  4,088  4,056 
Marketing and advertising 558   786  540  655  646  1,884  1,987 
Deposit insurance premiums (444)  430  452  449  544  438  1,387 
Intangible expenses 378   417  426  481  479  1,221  1,685 
Restructuring charges -   -  -  -  -  -  571 
Other expense 5,289   5,456  5,196  5,079  5,115  15,941  15,525 
Total noninterest expense 36,270   36,778  35,557  33,396  34,371  108,605  103,843 
Income before taxes 21,444   20,137  19,578  22,294  18,168  61,159  38,392 
Income tax expense 3,782   3,669  3,499  3,922  3,204  10,950  6,221 
Net income$17,662  $16,468 $16,079 $18,372 $14,964 $50,209 $32,171 
Net income per share:              
  Basic$0.60  $0.56 $0.55 $0.63 $0.51 $1.71 $1.10 
  Diluted$0.60  $0.56 $0.55 $0.63 $0.51 $1.71 $1.09 
Dividends declared per share$0.20  $0.20 $0.20 $0.20 $0.20 $0.60 $0.60 
Weighted average shares outstanding 29,305,524   29,287,754  29,277,339  29,319,664  29,402,405  29,290,309  29,387,253 
Period end shares outstanding 29,312,534   29,294,942  29,272,502  29,270,852  29,407,076  29,312,534  29,407,076 



 
Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
September 30, 2019
               
               
               
  For the three months ended, For the nine months ended,
Profitability Ratios (annualized)09/30/19 06/30/19 03/31/19 12/31/18 09/30/18 09/30/19 09/30/18
               
Return on average assets 1.32%  1.28%  1.30%  1.49%  1.23%  1.30%  0.92%
Return on average assets, excluding restructuring charges (1), (2) 1.32%  1.28%  1.30%  1.49%  1.23%  1.30%  0.93%
Return on average shareholders' equity 10.62%  10.23%  10.32%  11.77%  9.70%  10.40%  7.05%
Return on average shareholders' equity, excluding 10.62%  10.23%  10.32%  11.77%  9.70%  10.40%  7.15%
  restructuring charges (1), (2)             
Return on average tangible common equity, excluding 14.52%  14.10%  14.36%  16.52%  13.70%  14.33%  10.12%
  restructuring charges (1), (2)             
Net interest margin (FTE) 3.52%  3.67%  3.75%  3.72%  3.71%  3.64%  3.72%
Efficiency ratio (3) 60.4%  61.5%  60.5%  59.0%  61.2%  60.8%  62.9%
Efficiency ratio, excluding restructuring charges (1), (3), (4) 60.4%  61.5%  60.5%  59.0%  61.2%  60.8%  62.5%
               
Capitalization Ratios             
               
Dividends declared to net income 33.2%  35.6%  36.4%  31.9%  39.3%  35.0%  54.8%
Shareholders' equity to assets (Period End) 12.41%  12.64%  12.66%  12.52%  12.79%  12.41%  12.79%
Tangible common equity to tangible assets (1) 9.42%  9.54%  9.47%  9.29%  9.43%  9.42%  9.43%
Common equity book value per share$22.66  $22.25  $21.78  $21.32  $20.89  $22.66  $20.89 
Tangible common equity book value per share (1)$16.64  $16.20  $15.72  $15.25  $14.83  $16.64  $14.83 
               
Regulatory Capital Ratios (Period End)              
Tier 1 leverage ratio 9.97%  10.01%  10.10%  10.13%  10.07%  9.97%  10.07%
Common equity tier 1 risk-based capital ratio 11.03%  10.99%  10.93%  10.88%  10.99%  11.03%  10.99%
Tier 1 risk-based capital ratio 11.03%  10.99%  10.93%  10.88%  10.99%  11.03%  10.99%
Total risk-based capital ratio 13.81%  13.79%  13.77%  13.70%  13.87%  13.81%  13.87%
               
               
(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$664,299  $651,670  $637,606  $624,133  $614,242  $664,299  $614,242 
 Goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)
 Other intangibles (i) (4,026)  (4,396)  (4,805)  (5,222)  (5,690)  (4,026)  (5,690)
 (d) Tangible common equity$487,714  $474,715  $460,242  $446,352  $435,993  $487,714  $435,993 
               
 (e) Total assets$5,353,611  $5,154,298  $5,035,527  $4,984,347  $4,801,998  $5,353,611  $4,801,998 
 Goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)
 Other intangibles (i) (4,026)  (4,396)  (4,805)  (5,222)  (5,690)  (4,026)  (5,690)
 (f) Tangible assets$5,177,026  $4,977,343  $4,858,163  $4,806,566  $4,623,749  $5,177,026  $4,623,749 
               
 (g) Average shareholders' equity$659,523  $645,538  $631,574  $619,204  $611,803  $645,647  $609,836 
 Average goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)  (172,559)
 Average other intangibles (i) (4,234)  (4,615)  (5,031)  (5,473)  (5,947)  (4,624)  (6,488)
 (h) Average tangible common equity$482,730  $468,364  $453,984  $441,172  $433,297  $468,464  $430,789 
               
 (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 BasisSeptember 30, 2019 June 30, 2019 
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$213,623 $1,1782.19%$102,623 $5692.22%
U.S. government obligations 14,154  621.74  17,315  731.69 
Obligations of state and political subdivisions 42,465  3162.95  59,267  5073.43 
Other debt and equity securities 403,480  2,5192.48  394,840  2,5722.61 
Federal Home Loan Bank, Federal Reserve Bank and other stock 30,857  5196.67  31,938  5356.72 
Total interest-earning deposits, investments and other interest-earning assets 704,579  4,5942.59  605,983  4,2562.82 
         
Commercial, financial, and agricultural loans 800,006  9,9524.94  820,009  10,5895.18 
Real estate—commercial and construction loans 1,966,593  23,4394.73  1,912,248  23,1104.85 
Real estate—residential loans 956,224  11,5704.80  941,712  11,4834.89 
Loans to individuals 31,504  4906.17  31,939  5106.40 
Municipal loans and leases 333,734  3,4134.06  335,399  3,3053.95 
Lease financings 82,424  1,4827.13  81,762  1,4597.16 
  Gross loans and leases 4,170,485  50,3464.79  4,123,069  50,4564.91 
Total interest-earning assets 4,875,064  54,9404.47  4,729,052  54,7124.64 
Cash and due from banks 53,019     46,868    
Reserve for loan and lease losses (33,152)    (31,847)   
Premises and equipment, net 57,881     58,873    
Operating lease right-of-use assets 35,238     35,821    
Other assets 329,817     331,681    
  Total assets$5,317,867    $5,170,448    
         
Liabilities:        
Interest-bearing checking deposits$497,185 $6780.54%$457,231 $4570.40%
Money market savings 1,004,806  4,1121.62  982,440  4,2341.73 
Regular savings 805,632  9630.47  818,523  1,0130.50 
Time deposits 715,520  3,6812.04  688,897  3,4071.98 
  Total time and interest-bearing deposits 3,023,143  9,4341.24  2,947,091  9,1111.24 
         
Short-term borrowings 32,375  941.15  48,312  2171.80 
Long-term debt 167,338  8662.05  159,572  8362.10 
Subordinated notes 94,724  1,2615.28  94,663  1,2615.34 
  Total borrowings 294,437  2,2212.99  302,547  2,3143.07 
  Total interest-bearing liabilities 3,317,580  11,6551.39  3,249,638  11,4251.41 
Noninterest-bearing deposits 1,265,027     1,198,320    
Operating lease liabilities 38,364     38,873    
Accrued expenses and other liabilities 37,373     38,079    
  Total liabilities 4,658,344     4,524,910    
         
Shareholders' Equity:        
Common stock 157,784     157,784    
Additional paid-in capital 294,138     293,496    
Retained earnings and other equity 207,601     194,258    
  Total shareholders' equity 659,523     645,538    
  Total liabilities and shareholders' equity$5,317,867    $5,170,448    
Net interest income $43,285   $43,287  
         
Net interest spread  3.08   3.23 
Effect of net interest-free funding sources  0.44   0.44 
Net interest margin  3.52%  3.67%
Ratio of average interest-earning assets to average interest-bearing liabilities 146.95%    145.53%   
         
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 September 30, 2019 and June 30, 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 September 30,   
Tax Equivalent Basis  2019    2018  
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$213,623 $1,1782.19%$80,678 $3981.96%
U.S. government obligations 14,154  621.74  22,331  901.60 
Obligations of state and political subdivisions 42,465  3162.95  68,703  5813.36 
Other debt and equity securities 403,480  2,5192.48  362,388  2,2582.47 
Federal Home Loan Bank, Federal Reserve Bank and other stock 30,857  5196.67  31,107  4846.17 
Total interest-earning deposits, investments and other interest-earning assets 704,579  4,5942.59  565,207  3,8112.68 
         
Commercial, financial, and agricultural loans 800,006  9,9524.94  796,593  10,1845.07 
Real estate—commercial and construction loans 1,966,593  23,4394.73  1,729,538  20,5274.71 
Real estate—residential loans 956,224  11,5704.80  880,589  10,4474.71 
Loans to individuals 31,504  4906.17  32,057  4996.18 
Municipal loans and leases 333,734  3,4134.06  316,149  3,0373.81 
Lease financings 82,424  1,4827.13  77,369  1,4097.23 
  Gross loans and leases 4,170,485  50,3464.79  3,832,295  46,1034.77 
Total interest-earning assets 4,875,064  54,9404.47  4,397,502  49,9144.50 
Cash and due from banks 53,019     48,737    
Reserve for loan and lease losses (33,152)    (26,099)   
Premises and equipment, net 57,881     60,622    
Operating lease right-of-use assets 35,238     -    
Other assets 329,817     336,559    
  Total assets$5,317,867    $4,817,321    
         
Liabilities:        
Interest-bearing checking deposits$497,185 $6780.54%$465,992 $5410.46%
Money market savings 1,004,806  4,1121.62  813,769  2,6641.30 
Regular savings 805,632  9630.47  787,383  5810.29 
Time deposits 715,520  3,6812.04  633,552  2,4921.56 
  Total time and interest-bearing deposits 3,023,143  9,4341.24  2,700,696  6,2780.92 
         
Short-term borrowings 32,375  941.15  129,365  5841.79 
Long-term debt 167,338  8662.05  148,323  7091.90 
Subordinated notes 94,724  1,2615.28  94,480  1,2615.30 
  Total borrowings 294,437  2,2212.99  372,168  2,5542.72 
  Total interest-bearing liabilities 3,317,580  11,6551.39  3,072,864  8,8321.14 
Noninterest-bearing deposits 1,265,027     1,091,931    
Operating lease liabilities 38,364     -    
Accrued expenses and other liabilities 37,373     40,723    
  Total liabilities 4,658,344     4,205,518    
         
Shareholders' Equity:        
Common stock 157,784     157,784    
Additional paid-in capital 294,138     291,499    
Retained earnings and other equity 207,601     162,520    
  Total shareholders' equity 659,523     611,803    
  Total liabilities and shareholders' equity$5,317,867    $4,817,321    
Net interest income $43,285   $41,082  
         
Net interest spread  3.08   3.36 
Effect of net interest-free funding sources  0.44   0.35 
Net interest margin  3.52%  3.71%
Ratio of average interest-earning assets to average interest-bearing liabilities 146.95%    143.11%   
         
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 September 30, 2019 and 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 Nine Months Ended September 30,  
Tax Equivalent Basis  2019    2018  
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$120,231 $2,0162.24%$45,931 $6221.81%
U.S. government obligations 17,148  2171.69  23,139  2751.59 
Obligations of state and political subdivisions 55,220  1,3693.31  71,429  1,7773.33 
Other debt and equity securities 394,834  7,7222.61  359,324  6,5302.43 
Federal Home Loan Bank, Federal Reserve Bank and other stock 31,713  1,6406.91  30,992  1,4976.46 
Total interest-earning deposits, investments and other interest-earning assets 619,146  12,9642.80  530,815  10,7012.70 
         
Commercial, financial, and agricultural loans 810,321  31,2995.16  796,520  28,8344.84 
Real estate—commercial and construction loans 1,900,901  68,1084.79  1,664,183  57,1894.59 
Real estate—residential loans 945,477  34,4654.87  857,442  30,1684.70 
Loans to individuals 31,985  1,5186.35  29,683  1,3566.11 
Municipal loans and leases 333,816  9,9393.98  313,710  8,8903.79 
Lease financings 81,698  4,3767.16  75,853  4,1067.24 
  Gross loans and leases 4,104,198  149,7054.88  3,737,391  130,5434.67 
Total interest-earning assets 4,723,344  162,6694.60  4,268,206  141,2444.42 
Cash and due from banks 48,231     45,490    
Reserve for loan and lease losses (31,714)    (24,027)   
Premises and equipment, net 58,640     61,194    
Operating lease right-of-use assets 36,056     -    
Other assets 330,782     335,433    
  Total assets$5,165,339    $4,686,296    
         
Liabilities:        
Interest-bearing checking deposits$477,848 $1,8490.52%$451,542 $1,2160.36%
Money market savings 968,894  12,0941.67  722,859  5,7651.07 
Regular savings 804,457  2,7900.46  808,276  1,7200.28 
Time deposits 686,794  10,0151.95  576,540  5,8101.35 
  Total time and interest-bearing deposits 2,937,993  26,7481.22  2,559,217  14,5110.76 
         
Short-term borrowings 65,804  9491.93  174,002  2,1871.68 
Long-term debt 157,484  2,4412.07  153,211  2,0831.82 
Subordinated notes 94,664  3,7835.34  94,420  3,7835.36 
  Total borrowings 317,952  7,1733.02  421,633  8,0532.55 
  Total interest-bearing liabilities 3,255,945  33,9211.39  2,980,850  22,5641.01 
Noninterest-bearing deposits 1,184,909     1,055,456    
Operating lease liabilities 39,103     -    
Accrued expenses and other liabilities 39,735     40,154    
  Total liabilities 4,519,692     4,076,460    
         
Shareholders' Equity:        
Common stock 157,784     157,784    
Additional paid-in capital 293,465     290,746    
Retained earnings and other equity 194,398     161,306    
  Total shareholders' equity 645,647     609,836    
  Total liabilities and shareholders' equity$5,165,339    $4,686,296    
Net interest income $128,748   $118,680  
         
Net interest spread  3.21   3.41 
Effect of net interest-free funding sources  0.43   0.31 
Net interest margin  3.64%  3.72%
Ratio of average interest-earning assets to average interest-bearing liabilities 145.07%    143.19%   
         
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 nine months ended September 30, 2019 and 2018 have been calculated
  using the Corporation’s federal applicable rate of 21.0%. 
CONTACT:   Brian J. Richardson 
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2446, richardsonb@univest.net 

Univest Corporation

Source: Univest Financial Corporation
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