Univest Financial Corporation Reports Second Quarter Results


SOUDERTON, Pa., July 24, 2024 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. (the "Bank") and its insurance, investments and equipment financing subsidiaries, announced net income for the quarter ended June 30, 2024 was $18.1 million, or $0.62 diluted earnings per share, compared to net income of $16.8 million, or $0.57 diluted earnings per share, for the quarter ended June 30, 2023.

One-Time Items
The financial results for the quarter included tax-free bank owned life insurance ("BOLI") death benefit claims of $171 thousand, which represented $0.01 diluted earnings per share. The financial results for the second quarter of 2023 included a $1.3 million ($1.1 million after-tax), or $0.04 diluted earnings per share, restructuring charge associated with expense management strategies deployed in response to macroeconomic headwinds. Excluding these one-time items, diluted earnings per share was $0.61 for the quarters ended June 30, 2024 and June 30, 2023.

Loans
Gross loans and leases increased $105.8 million, or 1.6% (6.4% annualized), from March 31, 2024, and $117.6 million, or 1.8% (3.6% annualized), from December 31, 2023, primarily due to increases in commercial, commercial real estate and residential mortgage loans, partially offset by a decrease in construction loans.

Deposits and Liquidity
Total deposits increased $90.0 million, or 1.4% (5.6% annualized), from March 31, 2024, primarily due to increases in commercial and consumer deposits, partially offset by decreases in brokered and public funds deposits. Total deposits increased $119.5 million, or 1.9% (3.8% annualized), from December 31, 2023, primarily due to increases in commercial, consumer and brokered deposits, partially offset by a seasonal decrease in public funds deposits. Noninterest-bearing deposits represented 21.5% of total deposits at June 30, 2024, down from 21.9% at March 31, 2024. At June 30, 2024, unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, represented 22.1% of total deposits, down from 22.3% at March 31, 2024.

As of June 30, 2024, the Corporation reported on balance sheet cash and cash equivalents totaling $190.9 million. The Corporation and its subsidiaries had committed borrowing capacity of $3.6 billion at June 30, 2024, of which $2.3 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $459.0 million at June 30, 2024. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

Net Interest Income and Margin
Net interest income of $51.0 million for the second quarter of 2024 decreased $3.3 million, or 6.1%, from the second quarter of 2023 and $440 thousand, or 0.9%, from the first quarter of 2024. The decreases in net interest income for both comparison periods reflects the continued pressure on the cost of deposits due to the shift of balances from lower to higher cost deposit products which has exceeded the increase in interest income from asset yield expansion and the increase in average interest-earning assets. However, we continue to see indicators of stabilization in cost of funds and funding mix.

Net interest margin, on a tax-equivalent basis, was 2.84% for the second quarter of 2024, compared to 2.88% for the first quarter of 2024 and 3.14% for the second quarter of 2023. Excess liquidity reduced net interest margin by approximately two basis points for the quarter ended June 30, 2024 compared to approximately three basis points for the quarter ended March 31, 2024. Excess liquidity had no impact on net interest margin for the quarter ended June 30, 2023.

Noninterest Income
Noninterest income for the quarter ended June 30, 2024 was $21.0 million, an increase of $1.1 million, or 5.8%, from the comparable period in the prior year.

Net gain on mortgage banking activities increased $671 thousand, or 64.6%, for the quarter ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to increased salable volume. Investment advisory commission and fee income increased $530 thousand, or 11.3%, for the quarter ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to increased assets under management driven by market appreciation and new customer relationships. Bank owned life insurance income increased $297 thousand, or 37.6%, for the quarter ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to the previously discussed death benefit claims. Service charges on deposit accounts increased $257 thousand, or 14.9%, for the quarter ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to increased treasury management income.

Other service fee income decreased $274 thousand, or 8.3%, for the quarter ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to reduced servicing fees resulting from the sale of the mortgage servicing rights in the first quarter of 2024 associated with $591.1 million of serviced loans.

Other income decreased $477 thousand, or 39.0%, for the quarter ended June 30, 2024 compared to the three months ended June 30, 2023. Fees on risk participation agreements for interest rate swaps decreased $710 thousand due to reduced customer demand. Additionally, the second quarter of 2023 included a loss of $250 thousand on the sale of an interest in a shared national credit.

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2024 was $48.7 million, a decrease of $1.1 million, or 2.2%, from the comparable period in the prior year.

As previously discussed, the second quarter of 2023 included restructuring charges of $1.3 million. Excluding restructuring charges, noninterest expense for the quarter ended June 30, 2024 increased $239 thousand, or 0.5%, from the comparable period in the prior year, which reflects the benefit of the various expense management strategies deployed during 2023.

Salaries, benefits and commissions increased $312 thousand, or 1.0%, for the quarter ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to decreased capitalized compensation driven by lower loan production, partially offset by decreased salary expense due to staff reductions over the last twelve months.

Tax Provision
The effective income tax rate was 19.9% for the quarter ended June 30, 2024, compared to an effective tax rate of 19.8% for the quarter ended June 30, 2023. The effective tax rates for the three months ended June 30, 2024 and 2023 reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases. Additionally, the effective tax rate for the three months ended June 30, 2024 was favorably impacted by proceeds from BOLI death benefits. Excluding these BOLI death benefits, the effective tax rate was 20.0% for the three months ended June 30, 2024.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $36.6 million at June 30, 2024, compared to $40.0 million at March 31, 2024 and $34.5 million at June 30, 2023. The decrease in nonperforming assets from March 31, 2024 was primarily due to pay-downs of $2.2 million on two nonaccrual construction loans to one borrower.

Net loan and lease charge-offs were $809 thousand for the three months ended June 30, 2024 compared to $1.4 million and $512 thousand for the three months ended March 31, 2024 and June 30, 2023, respectively.

The provision for credit losses was $707 thousand for the three months ended June 30, 2024 compared to $1.4 million and $3.4 million for the three months ended March 31, 2024 and June 30, 2023, respectively. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.28% at June 30, 2024 and June 30, 2023, and 1.30% at March 31, 2024.

Dividend and Share Repurchases
On July 24, 2024, Univest declared a quarterly cash dividend of $0.21 per share to be paid on August 21, 2024 to shareholders of record as of August 7, 2024. During the quarter ended June 30, 2024, the Corporation repurchased 190,808 shares of common stock at an average price of $20.93 per share. Including brokerage fees and excise tax, the average price per share was $21.17. As of June 30, 2024, 696,374 shares are available for repurchase under the Share Repurchase Plan.

Conference Call
Univest will host a conference call to discuss second quarter 2024 results on Thursday, July 25, 2024 at 9:00 a.m. EST. Participants may preregister at https://www.netroadshow.com/events/login?show=962df298&confId=68082. The general public can access the call by dialing 1-833-470-1428; using Access Code 117459. A replay of the conference call will be available through September 23, 2024 by dialing 1-866-813-9403; using Access Code 310450.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.9 billion in assets and $5.0 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2024. 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 and online at www.univest.net.

This press release and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, business, prospects and strategies of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future financial condition, results of operations, business, prospects or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) inflation and/or changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and/or lead to higher operating costs and higher costs we pay to retain and attract deposits; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or credit loss provisions; (4) changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; (5) our ability to access cost-effective funding; (6) changes in economic conditions nationally and in our market; (7) economic assumptions or changes in our methodology, either of which may impact our allowance for credit losses calculation; (8) legislative, regulatory, accounting or tax changes; (9) monetary and fiscal policies of the U.S. government, including the policies of the Board of Governors of the Federal Reserve System; (10) technological issues that may adversely affect our operations or those of our customers; (11) a failure or breach in our operational or security systems or infrastructure, including cyberattacks; (12) changes in the securities markets; (13) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (14) our ability to enter into new markets successfully and capitalize on growth opportunities and/or (15) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

(UVSP - ER)

 
 
Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2024
(Dollars in thousands)             
              
Balance Sheet (Period End)06/30/24 03/31/24 12/31/23 09/30/23 06/30/23    
ASSETS             
Cash and due from banks$66,808  $49,318  $72,815  $68,900  $80,795     
Interest-earning deposits with other banks 124,103   152,288   176,984   221,441   59,616     
Cash and cash equivalents 190,911   201,606   249,799   290,341   140,411     
Investment securities held-to-maturity 140,112   143,474   145,777   149,451   153,509     
Investment securities available for sale, net of allowance for credit losses 342,776   350,819   351,553   334,538   356,164     
Investments in equity securities 2,995   3,355   3,293   4,054   3,443     
Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost 37,438   37,394   40,499   42,417   42,811     
Loans held for sale 28,176   13,188   11,637   16,473   29,526     
Loans and leases held for investment 6,684,837   6,579,086   6,567,214   6,574,958   6,462,238     
Less: Allowance for credit losses, loans and leases (85,745)  (85,632)  (85,387)  (83,837)  (82,709)    
Net loans and leases held for investment 6,599,092   6,493,454   6,481,827   6,491,121   6,379,529     
Premises and equipment, net 48,174   48,739   51,441   51,287   52,058     
Operating lease right-of-use assets 29,985   30,702   31,795   31,053   30,237     
Goodwill 175,510   175,510   175,510   175,510   175,510     
Other intangibles, net of accumulated amortization 7,701   7,473   10,950   11,079   10,923     
Bank owned life insurance 137,823   137,896   131,344   130,522   129,715     
Accrued interest and other assets 114,753   102,958   95,203   100,220   96,314     
Total assets$7,855,446  $7,746,568  $7,780,628  $7,828,066  $7,600,150     
              
LIABILITIES             
Noninterest-bearing deposits$1,397,308  $1,401,806  $1,468,320  $1,432,559  $1,582,767     
Interest-bearing deposits: 5,098,014   5,003,552   4,907,461   5,006,606   4,404,635     
Total deposits 6,495,322   6,405,358   6,375,781   6,439,165   5,987,402     
Short-term borrowings 11,781   4,816   6,306   14,676   244,666     
Long-term debt 250,000   250,000   310,000   320,000   320,000     
Subordinated notes 149,011   148,886   148,761   148,636   148,510     
Operating lease liabilities 33,015   33,744   34,851   34,017   33,428     
Accrued expenses and other liabilities 62,180   60,095   65,721   64,374   60,922     
Total liabilities 7,001,309   6,902,899   6,941,420   7,020,868   6,794,928     
              
SHAREHOLDERS' EQUITY             
Common stock, $5 par value: 48,000,000 shares authorized and 31,556,799 shares issued 157,784   157,784   157,784   157,784   157,784     
Additional paid-in capital 300,166   298,914   301,066   300,171   299,212     
Retained earnings 500,482   488,790   474,691   464,634   453,806     
Accumulated other comprehensive loss, net of tax benefit (54,124)  (54,740)  (50,646)  (71,586)  (61,034)    
Treasury stock, at cost (50,171)  (47,079)  (43,687)  (43,805)  (44,546)    
Total shareholders’ equity 854,137   843,669   839,208   807,198   805,222     
Total liabilities and shareholders’ equity$7,855,446  $7,746,568  $7,780,628  $7,828,066  $7,600,150     
              
              
 For the three months ended, For the six months ended,
Balance Sheet (Average)06/30/24 03/31/24 12/31/23 09/30/23 06/30/23 06/30/24 06/30/23
Assets$7,721,540  $7,696,575  $7,865,634  $7,693,983  $7,440,798  $7,709,058  $7,330,616 
Investment securities, net of allowance for credit losses 493,140   500,983   489,587   506,341   518,995   497,061   517,446 
Loans and leases, gross 6,640,536   6,577,365   6,594,233   6,537,169   6,372,342   6,608,950   6,269,190 
Deposits 6,353,752   6,303,854   6,470,141   6,222,710   5,844,582   6,328,804   5,839,526 
Shareholders' equity 844,572   842,546   814,941   811,515   806,709   843,559   797,980 


 
Univest Financial Corporation
Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
June 30, 2024
(Dollars in thousands)             
              
Summary of Major Loan and Lease Categories (Period End)06/30/24 03/31/24 12/31/23 09/30/23 06/30/23    
Commercial, financial and agricultural$1,055,332  $1,014,568  $989,723  $1,050,004  $1,039,265     
Real estate-commercial 3,373,889   3,283,729   3,302,798   3,275,140   3,221,993     
Real estate-construction 313,229   379,995   394,462   427,561   413,404     
Real estate-residential secured for business purpose 532,628   524,196   517,002   516,471   517,521     
Real estate-residential secured for personal purpose 952,665   922,412   909,015   861,122   832,632     
Real estate-home equity secured for personal purpose 179,150   177,446   179,282   176,855   175,090     
Loans to individuals 26,430   27,200   27,749   27,331   25,544     
Lease financings 251,514   249,540   247,183   240,474   236,789     
Total loans and leases held for investment, net of deferred income 6,684,837   6,579,086   6,567,214   6,574,958   6,462,238     
Less: Allowance for credit losses, loans and leases (85,745)  (85,632)  (85,387)  (83,837)  (82,709)    
Net loans and leases held for investment$6,599,092  $6,493,454  $6,481,827  $6,491,121  $6,379,529     
              
              
Asset Quality Data (Period End) 06/30/24 03/31/24 12/31/23 09/30/23 06/30/23    
Nonaccrual loans and leases, including nonaccrual loans held for sale*$16,200  $20,363  $20,527  $18,085  $15,087     
Accruing loans and leases 90 days or more past due 205   268   534   2,135   55     
Total nonperforming loans and leases 16,405   20,631   21,061   20,220   15,142     
Other real estate owned 20,007   19,220   19,032   19,916   19,345     
Repossessed assets 149   167   -   -   -     
Total nonperforming assets$36,561  $40,018  $40,093  $40,136  $34,487     
Nonaccrual loans and leases / Loans and leases held for investment 0.24%  0.31%  0.31%  0.28%  0.23%    
Nonperforming loans and leases / Loans and leases held for investment 0.25%  0.31%  0.32%  0.31%  0.23%    
Nonperforming assets / Total assets 0.47%  0.52%  0.52%  0.51%  0.45%    
              
Allowance for credit losses, loans and leases$85,745  $85,632  $85,387  $83,837  $82,709     
Allowance for credit losses, loans and leases / Loans and leases held for investment 1.28%  1.30%  1.30%  1.28%  1.28%    
Allowance for credit losses, loans and leases / Nonaccrual loans and leases 529.29%  420.53%  415.97%  463.57%  548.21%    
Allowance for credit losses, loans and leases / Nonperforming loans and leases 522.68%  415.06%  405.43%  414.62%  546.22%    
*Includes a $5.8 million loan held for sale at September 30, 2023.             
              
 For the three months ended, For the six months ended,
 06/30/24 03/31/24 12/31/23 09/30/23 06/30/23 06/30/24 06/30/23
Net loan and lease charge-offs$809  $1,406  $1,074  $969  $512  $2,215  $3,354 
Net loan and lease charge-offs (annualized)/Average loans and leases 0.05%  0.09%  0.06%  0.06%  0.03%  0.07%  0.11%


 
Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2024
(Dollars in thousands, except per share data)             
 For the three months ended, For the six months ended,
For the period:06/30/24 03/31/24 12/31/23 09/30/23 06/30/23 06/30/24 06/30/23
Interest income$99,832  $98,609  $101,232  $97,106  $90,139  $198,441  $173,392 
Interest expense 48,805   47,142   48,472   43,516   35,809   95,947   59,745 
     Net interest income 51,027   51,467   52,760   53,590   54,330   102,494   113,647 
Provision for credit losses 707   1,432   1,931   2,024   3,428   2,139   6,815 
Net interest income after provision for credit losses 50,320   50,035   50,829   51,566   50,902   100,355   106,832 
Noninterest income:             
     Trust fee income 2,008   2,108   1,943   1,910   1,924   4,116   3,879 
     Service charges on deposit accounts 1,982   1,871   1,960   1,816   1,725   3,853   3,272 
     Investment advisory commission and fee income 5,238   5,194   4,561   4,843   4,708   10,432   9,460 
     Insurance commission and fee income 5,167   7,201   4,596   4,852   5,108   12,368   11,595 
     Other service fee income 3,044   6,415   2,967   3,020   3,318   9,459   6,394 
     Bank owned life insurance income 1,086   842   823   806   789   1,928   1,556 
     Net gain on mortgage banking activities 1,710   939   809   1,216   1,039   2,649   1,664 
     Other income 745   1,025   961   228   1,222   1,770   1,693 
Total noninterest income 20,980   25,595   18,620   18,691   19,833   46,575   39,513 
Noninterest expense:             
Salaries, benefits and commissions 30,187   31,338   29,321   29,978   29,875   61,525   60,889 
Net occupancy 2,679   2,872   2,751   2,594   2,614   5,551   5,341 
Equipment 1,088   1,111   1,066   1,087   986   2,199   1,979 
Data processing 4,161   4,495   4,444   4,189   4,137   8,656   8,166 
Professional fees 1,466   1,688   1,768   1,763   1,669   3,154   3,610 
Marketing and advertising 715   416   632   555   622   1,131   993 
Deposit insurance premiums 1,098   1,135   1,350   1,258   1,116   2,233   2,217 
Intangible expenses 188   187   212   220   253   375   506 
Restructuring charges -   -   189   -   1,330   -   1,330 
Other expense 7,126   6,832   7,313   7,344   7,197   13,958   14,297 
Total noninterest expense 48,708   50,074   49,046   48,988   49,799   98,782   99,328 
Income before taxes 22,592   25,556   20,403   21,269   20,936   48,148   47,017 
Income tax expense 4,485   5,251   4,149   4,253   4,136   9,736   9,183 
Net income$18,107  $20,305  $16,254  $17,016  $16,800  $38,412  $37,834 
Net income per share:             
     Basic$0.62  $0.69  $0.55  $0.58  $0.57  $1.31  $1.29 
     Diluted$0.62  $0.69  $0.55  $0.58  $0.57  $1.30  $1.28 
Dividends declared per share$0.21  $0.21  $0.21  $0.21  $0.21  $0.42  $0.42 
Weighted average shares outstanding 29,246,977   29,413,999   29,500,147   29,479,066   29,439,392   29,330,488   29,376,179 
Period end shares outstanding 29,190,640   29,337,919   29,511,721   29,508,128   29,471,124   29,190,640   29,471,124 


 
Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2024
              
              
 For the three months ended, For the six months ended,
Profitability Ratios (annualized)06/30/24 03/31/24 12/31/23 09/30/23 06/30/23 06/30/24 06/30/23
              
Return on average assets 0.94%  1.06%  0.82%  0.88%  0.91%  1.00%  1.04%
Return on average assets, excluding restructuring 0.94%  1.06%  0.83%  0.88%  0.96%  1.00%  1.07%
charges (1)             
Return on average shareholders' equity 8.62%  9.69%  7.91%  8.32%  8.35%  9.16%  9.56%
Return on average shareholders' equity, excluding 8.62%  9.69%  7.99%  8.32%  8.88%  9.16%  9.83%
restructuring charges (1)             
Return on average tangible common equity (1)(3) 11.01%  12.38%  10.23%  10.77%  10.85%  11.69%  12.45%
Return on average tangible common equity, excluding 11.01%  12.38%  10.32%  10.77%  11.52%  11.69%  12.79%
restructuring charges (1)(3)             
Net interest margin (FTE) 2.84%  2.88%  2.84%  2.96%  3.14%  2.86%  3.35%
Efficiency ratio (2) 67.1%  64.6%  68.3%  67.3%  66.7%  65.8%  64.4%
Efficiency ratio, excluding restructuring charges (1)(2) 67.1%  64.6%  68.0%  67.3%  64.9%  65.8%  63.5%
              
Capitalization Ratios             
              
Dividends declared to net income 33.9%  30.5%  38.1%  36.4%  36.8%  32.1%  32.6%
Shareholders' equity to assets (Period End) 10.87%  10.89%  10.79%  10.31%  10.59%  10.87%  10.59%
Tangible common equity to tangible assets (1) 8.81%  8.80%  8.70%  8.22%  8.45%  8.81%  8.45%
Common equity book value per share$29.26  $28.76  $28.44  $27.36  $27.32  $29.26  $27.32 
Tangible common equity book value per share (1)$23.17  $22.70  $22.41  $21.32  $21.27  $23.17  $21.27 
              
Regulatory Capital Ratios (Period End)              
Tier 1 leverage ratio 9.74%  9.65%  9.36%  9.43%  9.59%  9.74%  9.59%
Common equity tier 1 risk-based capital ratio 10.72%  10.71%  10.58%  10.32%  10.26%  10.72%  10.26%
Tier 1 risk-based capital ratio 10.72%  10.71%  10.58%  10.32%  10.26%  10.72%  10.26%
Total risk-based capital ratio 14.09%  14.11%  13.90%  13.58%  13.54%  14.09%  13.54%
              
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included below.
(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.
(3) Net income before amortization of intangibles to average tangible common equity.


 
Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
  For the Three Months Ended,
Tax Equivalent BasisJune 30, 2024 March 31, 2024
 AverageIncome/Average AverageIncome/Average
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate
Assets:         
Interest-earning deposits with other banks$84,546 $1,108 5.27% $120,845 $1,609 5.36%
Obligations of state and political subdivisions* 1,269  7 2.22   1,951  12 2.47 
Other debt and equity securities 491,871  3,741 3.06   499,032  3,647 2.94 
Federal Home Loan Bank, Federal Reserve Bank and other stock 37,286  700 7.55   39,115  724 7.44 
Total interest-earning deposits, investments and other interest-earning assets 614,972  5,556 3.63   660,943  5,992 3.65 
          
Commercial, financial, and agricultural loans 983,615  17,447 7.13   934,649  16,523 7.11 
Real estate—commercial and construction loans 3,549,206  50,577 5.73   3,575,142  50,641 5.70 
Real estate—residential loans 1,660,489  20,413 4.94   1,618,188  19,555 4.86 
Loans to individuals 26,821  542 8.13   27,315  548 8.07 
Municipal loans and leases * 230,495  2,476 4.32   232,380  2,464 4.26 
Lease financings 189,910  3,105 6.58   189,691  3,169 6.72 
Gross loans and leases 6,640,536  94,560 5.73   6,577,365  92,900 5.68 
Total interest-earning assets 7,255,508  100,116 5.55   7,238,308  98,892 5.49 
Cash and due from banks 56,387      54,870    
Allowance for credit losses, loans and leases (86,293)     (86,495)   
Premises and equipment, net 48,725      50,592    
Operating lease right-of-use assets 30,344      31,121    
Other assets 416,869      408,179    
Total assets$7,721,540     $7,696,575    
          
Liabilities:         
Interest-bearing checking deposits$1,094,150 $7,311 2.69% $1,180,696 $8,218 2.80%
Money market savings 1,692,759  19,131 4.55   1,705,291  19,220 4.53 
Regular savings 759,960  929 0.49   769,926  905 0.47 
Time deposits 1,422,113  16,134 4.56   1,238,878  13,630 4.42 
Total time and interest-bearing deposits 4,968,982  43,505 3.52   4,894,791  41,973 3.45 
          
Short-term borrowings 29,506  242 2.30   10,127  5 0.20 
Long-term debt 250,000  2,777 4.47   292,486  2,883 3.96 
Subordinated notes 148,943  2,281 6.16   148,818  2,281 6.16 
Total borrowings 428,449  5,300 4.98   451,431  5,169 4.61 
Total interest-bearing liabilities 5,397,431  48,805 3.64   5,346,222  47,142 3.55 
Noninterest-bearing deposits 1,384,770      1,409,063    
Operating lease liabilities 33,382      34,166    
Accrued expenses and other liabilities 61,385      64,578    
Total liabilities 6,876,968      6,854,029    
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,782,201  2.89   6,755,285  2.81 
          
Shareholders' Equity:         
Common stock 157,784      157,784    
Additional paid-in capital 299,426      300,679    
Retained earnings and other equity 387,362      384,083    
Total shareholders' equity 844,572      842,546    
Total liabilities and shareholders' equity$7,721,540     $7,696,575    
Net interest income $51,311     $51,750   
          
Net interest spread  1.91    1.94 
Effect of net interest-free funding sources  0.93    0.94 
Net interest margin  2.84%   2.88%
Ratio of average interest-earning assets to average interest-bearing liabilities 134.43%     135.39%   
          
* Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of $698 thousand and $453 thousand for the three months ended June 30, 2024 and March 31,
2024, respectively.
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, 2024 and March 31, 2024 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  2024   2023
 AverageIncome/Average AverageIncome/Average
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate
Assets:         
Interest-earning deposits with other banks$84,546 $1,108 5.27% $46,897 $512 4.38%
Obligations of state and political subdivisions* 1,269  7 2.22   2,284  15 2.63 
Other debt and equity securities 491,871  3,741 3.06   516,711  3,512 2.73 
Federal Home Loan Bank, Federal Reserve Bank and other stock 37,286  700 7.55   43,783  781 7.15 
Total interest-earning deposits, investments and other interest-earning assets 614,972  5,556 3.63   609,675  4,820 3.17 
          
Commercial, financial, and agricultural loans 983,615  17,447 7.13   1,005,499  16,919 6.75 
Real estate—commercial and construction loans 3,549,206  50,577 5.73   3,445,431  45,960 5.35 
Real estate—residential loans 1,660,489  20,413 4.94   1,483,478  17,216 4.65 
Loans to individuals 26,821  542 8.13   26,794  479 7.17 
Municipal loans and leases* 230,495  2,476 4.32   234,940  2,388 4.08 
Lease financings 189,910  3,105 6.58   176,200  2,659 6.05 
Gross loans and leases 6,640,536  94,560 5.73   6,372,342  85,621 5.39 
Total interest-earning assets 7,255,508  100,116 5.55   6,982,017  90,441 5.20 
Cash and due from banks 56,387      58,675    
Allowance for credit losses, loans and leases (86,293)     (81,641)   
Premises and equipment, net 48,725      52,540    
Operating lease right-of-use assets 30,344      31,200    
Other assets 416,869      398,007    
Total assets$7,721,540     $7,440,798    
          
Liabilities:         
Interest-bearing checking deposits$1,094,150 $7,311 2.69% $1,011,889 $5,392 2.14%
Money market savings 1,692,759  19,131 4.55   1,460,899  14,089 3.87 
Regular savings 759,960  929 0.49   888,680  845 0.38 
Time deposits 1,422,113  16,134 4.56   823,665  7,141 3.48 
Total time and interest-bearing deposits 4,968,982  43,505 3.52   4,185,133  27,467 2.63 
          
Short-term borrowings 29,506  242 2.30   255,090  3,249 5.11 
Long-term debt 250,000  2,777 4.47   301,593  2,811 3.74 
Subordinated notes 148,943  2,281 6.16   148,443  2,282 6.17 
Total borrowings 428,449  5,300 4.98   705,126  8,342 4.75 
Total interest-bearing liabilities 5,397,431  48,805 3.64   4,890,259  35,809 2.94 
Noninterest-bearing deposits 1,384,770      1,659,449    
Operating lease liabilities 33,382      34,415    
Accrued expenses and other liabilities 61,385      49,966    
Total liabilities 6,876,968      6,634,089    
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,782,201  2.89   6,549,708  2.19 
          
Shareholders' Equity:         
Common stock 157,784      157,784    
Additional paid-in capital 299,426      298,788    
Retained earnings and other equity 387,362      350,137    
Total shareholders' equity 844,572      806,709    
Total liabilities and shareholders' equity$7,721,540     $7,440,798    
Net interest income $51,311     $54,632   
          
Net interest spread  1.91    2.26 
Effect of net interest-free funding sources  0.93    0.88 
Net interest margin  2.84%   3.14%
Ratio of average interest-earning assets to average interest-bearing liabilities 134.43%     142.77%   
          
* Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.  
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of $698 thousand and $668 thousand for the three months ended 
June 30, 2024 and 2023, respectively.
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, 2024 and 2023 have 
been calculated using the Corporation’s federal applicable rate of 21.0%.


Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
  For the Six Months Ended June 30,
Tax Equivalent Basis  2024   2023
 AverageIncome/Average AverageIncome/Average
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate
Assets:         
Interest-earning deposits with other banks$102,696 $2,717 5.32% $47,364 $991 4.22%
Obligations of state and political subdivisions* 1,610  19 2.37   2,285  32 2.82 
Other debt and equity securities 495,451  7,388 3.00   515,161  7,007 2.74 
Federal Home Loan Bank, Federal Reserve Bank and other stock 38,201  1,424 7.50   39,287  1,390 7.13 
Total interest-earning deposits, investments and other interest-earning assets 637,958  11,548 3.64   604,097  9,420 3.14 
          
Commercial, financial, and agricultural loans 959,132  33,970 7.12   998,726  32,457 6.55 
Real estate—commercial and construction loans 3,562,174  101,218 5.71   3,394,100  88,381 5.25 
Real estate—residential loans 1,639,339  39,968 4.90   1,446,093  32,946 4.59 
Loans to individuals 27,068  1,090 8.10   27,023  928 6.93 
Municipal loans and leases* 231,437  4,940 4.29   232,461  4,729 4.10 
Lease financings 189,800  6,274 6.65   170,787  5,200 6.14 
Gross loans and leases 6,608,950  187,460 5.70   6,269,190  164,641 5.30 
Total interest-earning assets 7,246,908  199,008 5.52   6,873,287  174,061 5.11 
Cash and due from banks 55,628      58,356    
Allowance for credit losses, loans and leases (86,394)     (80,813)   
Premises and equipment, net 49,659      52,064    
Operating lease right-of-use assets 30,733      31,251    
Other assets 412,524      396,471    
Total assets$7,709,058     $7,330,616    
          
Liabilities:         
Interest-bearing checking deposits$1,137,423 $15,529 2.75% $935,316 $8,556 1.84%
Money market savings 1,699,025  38,351 4.54   1,474,936  25,170 3.44 
Regular savings 764,943  1,834 0.48   936,930  1,514 0.33 
Time deposits 1,330,496  29,764 4.50   695,697  10,563 3.06 
Total time and interest-bearing deposits 4,931,887  85,478 3.49   4,042,879  45,803 2.28 
          
Short-term borrowings 19,816  247 2.51   247,745  5,977 4.87 
Long-term debt 271,243  5,660 4.20   207,431  3,402 3.31 
Subordinated notes 148,881  4,562 6.16   148,381  4,563 6.20 
Total borrowings 439,940  10,469 4.79   603,557  13,942 4.66 
Total interest-bearing liabilities 5,371,827  95,947 3.59   4,646,436  59,745 2.59 
Noninterest-bearing deposits 1,396,917      1,796,647    
Operating lease liabilities 33,774      34,427    
Accrued expenses and other liabilities 62,981      55,126    
Total liabilities 6,865,499      6,532,636    
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,768,744  2.85   6,443,083  1.87 
          
Shareholders' Equity:         
Common stock 157,784      157,784    
Additional paid-in capital 300,052      299,537    
Retained earnings and other equity 385,723      340,659    
Total shareholders' equity 843,559      797,980    
Total liabilities and shareholders' equity$7,709,058     $7,330,616    
Net interest income $103,061     $114,316   
          
Net interest spread  1.93    2.52 
Effect of net interest-free funding sources  0.93    0.83 
Net interest margin  2.86%   3.35%
Ratio of average interest-earning assets to average interest-bearing liabilities 134.91%     147.93%   
          
* Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of $1.2 million and $1.1 million for the six months ended 
June 30, 2024 and 2023, respectively.
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 six months ended June 30, 2024 and 2023 have 
been calculated using the Corporation’s federal applicable rate of 21.0%.


 
Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
June 30, 2024
     
(Dollars in thousands)    
Industry DescriptionTotal Outstanding Balance  % of Commercial Loan Portfolio 
CRE - Retail$463,491  8.8%
Animal Production 375,487  7.1 
CRE - Multi-family 325,585  6.2 
CRE - Office 298,039  5.6 
CRE - 1-4 Family Residential Investment 296,044  5.6 
CRE - Industrial / Warehouse 251,100  4.8 
Hotels & Motels (Accommodation) 191,217  3.6 
Education 173,353  3.3 
Specialty Trade Contractors 171,939  3.3 
Nursing and Residential Care Facilities 148,501  2.8 
Motor Vehicle and Parts Dealers 129,299  2.5 
Homebuilding (tract developers, remodelers) 125,566  2.4 
Merchant Wholesalers, Durable Goods 122,533  2.3 
Repair and Maintenance 119,142  2.3 
CRE - Mixed-Use - Residential 113,672  2.2 
Crop Production 103,513  2.0 
Wood Product Manufacturing 88,586  1.7 
Rental and Leasing Services 82,505  1.6 
Real Estate Lenders, Secondary Market Financing 82,330  1.6 
Religious Organizations, Advocacy Groups 74,855  1.4 
Personal and Laundry Services 72,545  1.4 
Fabricated Metal Product Manufacturing 72,314  1.4 
CRE - Mixed-Use - Commercial 71,697  1.4 
Merchant Wholesalers, Nondurable Goods 71,029  1.3 
Amusement, Gambling, and Recreation Industries 69,393  1.3 
Private Equity & Special Purpose Entities (except 52592) 69,086  1.3 
Food Services and Drinking Places 67,600  1.3 
Administrative and Support Services 67,470  1.3 
Miniwarehouse / Self-Storage 65,136  1.2 
Food Manufacturing 58,430  1.1 
Truck Transportation 54,629  1.0 
Industries with >$50 million in outstandings$4,476,086  84.9%
Industries with <$50 million in outstandings$798,992  15.1%
Total Commercial Loans$5,275,078  100.0%
     
     
Consumer Loans and Lease FinancingsTotal Outstanding Balance   
Real Estate-Residential Secured for Personal Purpose 952,665    
Real Estate-Home Equity Secured for Personal Purpose 179,150    
Loans to Individuals 26,430    
Lease Financings 251,514    
Total - Consumer Loans and Lease Financings$1,409,759    
     
Total$6,684,837    


 
Univest Financial Corporation
Non-GAAP Reconciliation
June 30, 2024
 
Non-GAAP to GAAP Reconciliation
Management uses 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 the table below for additional information on non-GAAP measures used throughout this earnings release.
              
 As of or for the three months ended, As of or for the six months ended,
(Dollars in thousands)06/30/24 03/31/24 12/31/23 09/30/23 06/30/23 06/30/24 06/30/23
Restructuring charges (a)$-  $-  $189  $-  $1,330  $-  $1,330 
Tax effect of restructuring charges -   -   (40)  -   (279)  -   (279)
Restructuring charges, net of tax$-  $-  $149  $-  $1,051  $-  $1,051 
              
Net income$18,107  $20,305  $16,254  $17,016  $16,800  $38,412  $37,834 
Amortization of intangibles, net of tax 149   148   167   174   200   296   400 
Net income before amortization of intangibles$18,256  $20,453  $16,421  $17,190  $17,000  $38,708  $38,234 
              
Shareholders' equity$854,137  $843,669  $839,208  $807,198  $805,222  $854,137  $805,222 
Goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
Other intangibles (b) (2,157)  (2,273)  (2,405)  (2,558)  (2,767)  (2,157)  (2,767)
Tangible common equity$676,470  $665,886  $661,293  $629,130  $626,945  $676,470  $626,945 
              
Total assets$7,855,446  $7,746,568  $7,780,628  $7,828,066  $7,600,150  $7,855,446  $7,600,150 
Goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
Other intangibles (b) (2,157)  (2,273)  (2,405)  (2,558)  (2,767)  (2,157)  (2,767)
Tangible assets$7,677,779  $7,568,785  $7,602,713  $7,649,998  $7,421,873  $7,677,779  $7,421,873 
              
Average shareholders' equity$844,572  $842,546  $814,941  $811,515  $806,709  $843,559  $797,980 
Average goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
Average other intangibles (b) (2,222)  (2,318)  (2,477)  (2,680)  (2,924)  (2,271)  (3,030)
Average tangible common equity$666,840  $664,718  $636,954  $633,325  $628,275  $665,778  $619,440 
              
(a) Associated with branch optimization and headcount rationlization expense management strategies
(b) Amount does not include mortgage servicing rights
              



 

Coordonnées