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Univest Financial Corporation Reports Third Quarter Results

/EIN News/ -- 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 Basis September 30, 2019   June 30, 2019  
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $ 213,623   $ 1,178 2.19 % $ 102,623   $ 569 2.22 %
U.S. government obligations   14,154     62 1.74     17,315     73 1.69  
Obligations of state and political subdivisions   42,465     316 2.95     59,267     507 3.43  
Other debt and equity securities   403,480     2,519 2.48     394,840     2,572 2.61  
Federal Home Loan Bank, Federal Reserve Bank and other stock   30,857     519 6.67     31,938     535 6.72  
Total interest-earning deposits, investments and other interest-earning assets   704,579     4,594 2.59     605,983     4,256 2.82  
                 
Commercial, financial, and agricultural loans   800,006     9,952 4.94     820,009     10,589 5.18  
Real estate—commercial and construction loans   1,966,593     23,439 4.73     1,912,248     23,110 4.85  
Real estate—residential loans   956,224     11,570 4.80     941,712     11,483 4.89  
Loans to individuals   31,504     490 6.17     31,939     510 6.40  
Municipal loans and leases   333,734     3,413 4.06     335,399     3,305 3.95  
Lease financings   82,424     1,482 7.13     81,762     1,459 7.16  
  Gross loans and leases   4,170,485     50,346 4.79     4,123,069     50,456 4.91  
Total interest-earning assets   4,875,064     54,940 4.47     4,729,052     54,712 4.64  
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   $ 678 0.54 % $ 457,231   $ 457 0.40 %
Money market savings   1,004,806     4,112 1.62     982,440     4,234 1.73  
Regular savings   805,632     963 0.47     818,523     1,013 0.50  
Time deposits   715,520     3,681 2.04     688,897     3,407 1.98  
  Total time and interest-bearing deposits   3,023,143     9,434 1.24     2,947,091     9,111 1.24  
                 
Short-term borrowings   32,375     94 1.15     48,312     217 1.80  
Long-term debt   167,338     866 2.05     159,572     836 2.10  
Subordinated notes   94,724     1,261 5.28     94,663     1,261 5.34  
  Total borrowings   294,437     2,221 2.99     302,547     2,314 3.07  
  Total interest-bearing liabilities   3,317,580     11,655 1.39     3,249,638     11,425 1.41  
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    
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $ 213,623   $ 1,178 2.19 % $ 80,678   $ 398 1.96 %
U.S. government obligations   14,154     62 1.74     22,331     90 1.60  
Obligations of state and political subdivisions   42,465     316 2.95     68,703     581 3.36  
Other debt and equity securities   403,480     2,519 2.48     362,388     2,258 2.47  
Federal Home Loan Bank, Federal Reserve Bank and other stock   30,857     519 6.67     31,107     484 6.17  
Total interest-earning deposits, investments and other interest-earning assets   704,579     4,594 2.59     565,207     3,811 2.68  
                 
Commercial, financial, and agricultural loans   800,006     9,952 4.94     796,593     10,184 5.07  
Real estate—commercial and construction loans   1,966,593     23,439 4.73     1,729,538     20,527 4.71  
Real estate—residential loans   956,224     11,570 4.80     880,589     10,447 4.71  
Loans to individuals   31,504     490 6.17     32,057     499 6.18  
Municipal loans and leases   333,734     3,413 4.06     316,149     3,037 3.81  
Lease financings   82,424     1,482 7.13     77,369     1,409 7.23  
  Gross loans and leases   4,170,485     50,346 4.79     3,832,295     46,103 4.77  
Total interest-earning assets   4,875,064     54,940 4.47     4,397,502     49,914 4.50  
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   $ 678 0.54 % $ 465,992   $ 541 0.46 %
Money market savings   1,004,806     4,112 1.62     813,769     2,664 1.30  
Regular savings   805,632     963 0.47     787,383     581 0.29  
Time deposits   715,520     3,681 2.04     633,552     2,492 1.56  
  Total time and interest-bearing deposits   3,023,143     9,434 1.24     2,700,696     6,278 0.92  
                 
Short-term borrowings   32,375     94 1.15     129,365     584 1.79  
Long-term debt   167,338     866 2.05     148,323     709 1.90  
Subordinated notes   94,724     1,261 5.28     94,480     1,261 5.30  
  Total borrowings   294,437     2,221 2.99     372,168     2,554 2.72  
  Total interest-bearing liabilities   3,317,580     11,655 1.39     3,072,864     8,832 1.14  
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    
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $ 120,231   $ 2,016 2.24 % $ 45,931   $ 622 1.81 %
U.S. government obligations   17,148     217 1.69     23,139     275 1.59  
Obligations of state and political subdivisions   55,220     1,369 3.31     71,429     1,777 3.33  
Other debt and equity securities   394,834     7,722 2.61     359,324     6,530 2.43  
Federal Home Loan Bank, Federal Reserve Bank and other stock   31,713     1,640 6.91     30,992     1,497 6.46  
Total interest-earning deposits, investments and other interest-earning assets   619,146     12,964 2.80     530,815     10,701 2.70  
                 
Commercial, financial, and agricultural loans   810,321     31,299 5.16     796,520     28,834 4.84  
Real estate—commercial and construction loans   1,900,901     68,108 4.79     1,664,183     57,189 4.59  
Real estate—residential loans   945,477     34,465 4.87     857,442     30,168 4.70  
Loans to individuals   31,985     1,518 6.35     29,683     1,356 6.11  
Municipal loans and leases   333,816     9,939 3.98     313,710     8,890 3.79  
Lease financings   81,698     4,376 7.16     75,853     4,106 7.24  
  Gross loans and leases   4,104,198     149,705 4.88     3,737,391     130,543 4.67  
Total interest-earning assets   4,723,344     162,669 4.60     4,268,206     141,244 4.42  
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   $ 1,849 0.52 % $ 451,542   $ 1,216 0.36 %
Money market savings   968,894     12,094 1.67     722,859     5,765 1.07  
Regular savings   804,457     2,790 0.46     808,276     1,720 0.28  
Time deposits   686,794     10,015 1.95     576,540     5,810 1.35  
  Total time and interest-bearing deposits   2,937,993     26,748 1.22     2,559,217     14,511 0.76  
                 
Short-term borrowings   65,804     949 1.93     174,002     2,187 1.68  
Long-term debt   157,484     2,441 2.07     153,211     2,083 1.82  
Subordinated notes   94,664     3,783 5.34     94,420     3,783 5.36  
  Total borrowings   317,952     7,173 3.02     421,633     8,053 2.55  
  Total interest-bearing liabilities   3,255,945     33,921 1.39     2,980,850     22,564 1.01  
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 

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