• Univest Financial Corporation Reports Second Quarter Results

    Источник: Nasdaq GlobeNewswire / 26 июл 2023 16:15:01   America/New_York

    SOUDERTON, Pa., July 26, 2023 (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, 2023 was $16.8 million, or $0.57 diluted earnings per share, compared to net income of $13.2 million, or $0.45 diluted earnings per share, for the quarter ended June 30, 2022.

    One-Time Items
    The financial results for the quarter included a $1.3 million ($1.1 million after-tax), or $0.04 diluted earnings per share, restructuring charge associated with the Corporation's financial service center optimization and expense management strategies deployed in response to macroeconomic headwinds. These strategies will result in a net reduction of three locations and a headcount rationalization, primarily concentrated within certain commercial real estate and residential mortgage lending teams. Estimated annualized cost savings from these initiatives is approximately $5.4 million. The financial results for the quarter also included a $250 thousand ($198 thousand after-tax) loss associated with the planned sale of a $19.7 million interest in a shared national credit.

    Loans
    Gross loans and leases increased $222.4 million, or 3.6% (14.4% annualized), from March 31, 2023 and $339.0 million, or 5.5% (11.0% annualized), from December 31, 2022. The increase in both periods was primarily due to increases in commercial real estate, construction, residential mortgage loans, and lease financings.

    Deposits and Liquidity
    Total deposits increased $152.7 million, or 2.6% (10.5% annualized), from March 31, 2023, primarily due to increases in brokered deposits partially offset by decreases in commercial and consumer deposits and public funds. Total deposits increased $73.9 million, or 1.2% (2.4% annualized), from December 31, 2022, primarily due to increases in public funds and brokered deposits partially offset by decreases in commercial and consumer deposits. Noninterest-bearing deposits represented 26.4% of total deposits at June 30, 2023, down from 30.8% at March 31, 2023. At June 30, 2023, unprotected deposits, which excludes insured accounts, internal accounts, and collateralized trust accounts, represented 23.3% of total deposits, down from 27.2% at March 31, 2023.

    The Corporation and its subsidiaries had committed borrowing capacity of $3.2 billion at June 30, 2023, of which $2.0 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $410.0 million at June 30, 2023, of which $285.0 million was unused. 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 $54.3 million for the three months ended June 30, 2023 decreased   $5.0 million, or 8.4%, from the three months ended March 31, 2023, and increased $2.9 million, or 5.6%, from the three months ended June 30, 2022. The decrease in net interest income for the three months ended June 30, 2023 compared to the prior quarter was due to an increase in cost of funds, including long-term borrowings as well as the continued increase in deposit cost of funds, both of which outpaced the impact of higher asset yields and loan growth during the quarter. The increase in net interest income for the three months ended June 30, 2023 compared to the same period of 2022 was largely due to an increase in average loan balances and asset yields, offset by increases in the average balance of interest bearing liabilities and the cost of funds.

    Net interest margin, on a tax-equivalent basis, was 3.14% for the second quarter of 2023, compared to 3.58% for the first quarter of 2023 and 3.19% for the second quarter of 2022. Excess liquidity reduced net interest margin by approximately 23 basis points for the quarter ended June 30, 2022.

    Noninterest Income
    Noninterest income for the quarter ended June 30, 2023 was $19.8 million, an increase of $835 thousand, or 4.4%, compared to the second quarter of 2022.

    Insurance commission and fee income increased $479 thousand, or 10.3%, for the quarter ended June 30, 2023, primarily due to an increase in premiums for commercial lines. Other income increased $481 thousand, or 64.9%, for the quarter ended June 30, 2023, primarily due to $292 thousand of other real estate owned ("OREO") income related to a commercial real estate loan transferred to OREO during the second quarter of 2022 and an increase of $232 thousand in fees on risk participation agreements for interest rate swaps. These increases were offset by a loss of $250 thousand on the planned sale of an interest in a shared national credit, as previously discussed.

    Noninterest Expense
    Noninterest expense for the quarter ended June 30, 2023 was $49.8 million, an increase of $2.4 million, or 5.1%, compared to the second quarter of 2022. Excluding restructuring charges, expenses increased $1.1 million, or 2.3%.

    Salaries, benefits and commissions increased $742 thousand, or 2.5%, for the quarter ended June 30, 2023. This increase reflects our expansion into Maryland and Western Pennsylvania and annual merit increases offset by a reduction in incentive compensation. Data processing expenses increased $429 thousand, or 11.6%, for the quarter ended June 30, 2023, primarily due to our investments in technology in recent years and general price increases incurred in the second half of 2022. Restructuring charges increased $1.3 million, as previously discussed. Other expense increased $757 thousand, or 11.8%, for the quarter ended June 30, 2023, primarily due to increases in retirement plan costs of $410 thousand, which is driven by the current interest rate environment. Professional fees decreased $1.2 million, or 41.3%, for the quarter ended June 30, 2023, primarily due to consultant fees incurred in the second quarter of 2022 related to our digital transformation initiative.

    Tax Provision
    The effective income tax rate was 19.8% for the quarters ended June 30, 2023 and 2022. The effective tax rates for the three months ended June 30, 2023 and 2022 reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases.

    Asset Quality and Provision for Credit Losses
    Nonperforming assets were $34.5 million at June 30, 2023, compared to $32.4 million at March 31, 2023 and $34.7 million at June 30, 2022. During the quarter, a $5.8 million construction loan was placed on nonaccrual status and a $2.5 million nonaccrual commercial loan was paid off. Based on the value of the underlying collateral, an individual reserve was not recorded for the $5.8 million construction loan as of June 30, 2023.

    Net loan and lease charge-offs were $512 thousand for the three months ended June 30, 2023 compared to $2.8 million and $1.7 million for the three months ended March 31, 2023 and June 30, 2022, respectively.

    The provision for credit losses was $3.4 million for the three months ended June 30, 2023 compared to $3.4 million and $6.7 million for the three months ended March 31, 2023 and June 30, 2022, 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, 2023 and March 31, 2023, and 1.27% at June 30, 2022.

    Dividend
    On July 26, 2023, Univest declared a quarterly cash dividend of $0.21 per share to be paid on August 23, 2023 to shareholders of record as of August 9, 2023.

    Conference Call
    Univest will host a conference call to discuss second quarter 2023 results on Thursday, July 27, 2023 at 9:00 a.m. EST. Participants may preregister at https://conferencingportals.com/event/QPDnglhR. The general public can access the call by dialing 1-888-330-2398; using Conference ID 38917. A replay of the conference call will be available through August 26, 2023 by dialing 1-800-700-2030; using Conference ID 38917.

    About Univest Financial Corporation
    Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.6 billion in assets and $4.5 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2023. 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; (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) changes in economic conditions nationally and in our market; (6) economic assumptions that may impact our allowance for credit losses calculation; (7) legislative, regulatory, accounting or tax changes; (8) technological issues that may adversely affect our operations or those of our customers; (9) changes in the securities markets; (10) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (11) potential recessionary conditions and/or (12) 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, 2023
    (Dollars in thousands)              
                   
    Balance Sheet (Period End) 06/30/23 03/31/23 12/31/22 09/30/22 06/30/22    
    ASSETS              
    Cash and due from banks $80,795  $71,215  $84,176  $65,859  $59,590     
    Interest-earning deposits with other banks  59,616   67,109   68,623   47,451   35,187     
    Cash and cash equivalents  140,411   138,324   152,799   113,310   94,777     
    Investment securities held-to-maturity  153,509   151,347   154,727   159,170   159,808     
    Investment securities available for sale, net of allowance for credit losses  356,164   367,656   350,256   347,479   351,382     
    Investments in equity securities  3,443   3,105   2,579   2,994   2,934     
    Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost  42,811   43,792   33,841   29,475   29,116     
    Loans held for sale  29,526   5,425   5,037   9,087   8,352     
    Loans and leases held for investment  6,462,238   6,239,804   6,123,230   5,849,259   5,661,777     
    Less: Allowance for credit losses, loans and leases  (82,709)  (80,034)  (79,004)  (74,929)  (72,011)    
    Net loans and leases held for investment  6,379,529   6,159,770   6,044,226   5,774,330   5,589,766     
    Premises and equipment, net  52,058   52,334   50,939   50,533   50,080     
    Operating lease right-of-use assets  30,237   31,663   30,059   30,654   30,929     
    Goodwill  175,510   175,510   175,510   175,510   175,510     
    Other intangibles, net of accumulated amortization  10,923   11,044   11,384   11,650   11,728     
    Bank owned life insurance  129,715   128,926   120,297   120,035   120,103     
    Accrued interest and other assets  96,314   90,095   90,362   83,170   76,328     
    Total assets $7,600,150  $7,358,991  $7,222,016  $6,907,397  $6,700,813     
                   
    LIABILITIES              
    Noninterest-bearing deposits $1,582,767  $1,799,225  $2,047,263  $1,968,422  $2,062,538     
    Interest-bearing deposits:  4,404,635   4,035,432   3,866,263   3,818,554   3,500,510     
    Total deposits  5,987,402   5,834,657   5,913,526   5,786,976   5,563,048     
    Short-term borrowings  244,666   271,881   197,141   80,711   97,606     
    Long-term debt  320,000   220,000   95,000   95,000   95,000     
    Subordinated notes  148,510   148,385   148,260   99,107   99,030     
    Operating lease liabilities  33,428   34,846   33,153   33,718   33,951     
    Accrued expenses and other liabilities  60,922   50,726   58,436   57,698   48,253     
    Total liabilities  6,794,928   6,560,495   6,445,516   6,153,210   5,936,888     
                   
    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  299,212   298,167   300,808   299,791   298,800     
    Retained earnings  453,806   443,493   428,637   410,942   396,295     
    Accumulated other comprehensive loss, net of tax benefit  (61,034)  (55,550)  (62,104)  (64,985)  (42,781)    
    Treasury stock, at cost  (44,546)  (45,398)  (48,625)  (49,345)  (46,173)    
    Total shareholders’ equity  805,222   798,496   776,500   754,187   763,925     
    Total liabilities and shareholders’ equity $7,600,150  $7,358,991  $7,222,016  $6,907,397  $6,700,813     
                   
                   
      For the three months ended, For the six months ended,
    Balance Sheet (Average) 06/30/23 03/31/23 12/31/22 09/30/22 06/30/22 06/30/23 06/30/22
    Assets $7,440,798  $7,219,211  $7,019,381  $6,797,466  $6,962,401  $7,330,616 $7,004,954
    Investment securities, net of allowance for credit losses  518,995   515,880   505,717   517,335   515,741   517,446  518,917
    Loans and leases, gross  6,372,342   6,164,890   5,979,581   5,752,119   5,520,580   6,269,190  5,433,125
    Deposits  5,844,582   5,834,415   5,837,823   5,645,291   5,903,173   5,839,526  5,943,769
    Shareholders' equity  806,709   789,153   767,192   773,099   771,410   797,980  772,876
                               


    Univest Financial Corporation
    Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
    June 30, 2023
    (Dollars in thousands)              
                   
    Summary of Major Loan and Lease Categories (Period End) 06/30/23 03/31/23 12/31/22 09/30/22 06/30/22    
    Commercial, financial and agricultural $1,039,265  $1,032,753  $1,088,928  $1,054,940  $1,033,712     
    Real estate-commercial  3,221,993   3,128,210   3,027,955   2,936,204   2,870,286     
    Real estate-construction  413,404   376,569   381,811   329,915   319,449     
    Real estate-residential secured for business purpose  517,521   498,505   478,254   443,837   419,652     
    Real estate-residential secured for personal purpose  832,632   779,557   730,395   685,771   629,144     
    Real estate-home equity secured for personal purpose  175,090   172,073   176,699   175,843   168,536     
    Loans to individuals  25,544   28,656   27,873   26,679   27,061     
    Lease financings  236,789   223,481   211,315   196,070   193,937     
    Total loans and leases held for investment, net of deferred income  6,462,238   6,239,804   6,123,230   5,849,259   5,661,777     
    Less: Allowance for credit losses, loans and leases  (82,709)  (80,034)  (79,004)  (74,929)  (72,011)    
    Net loans and leases held for investment $6,379,529  $6,159,770  $6,044,226  $5,774,330  $5,589,766     
                   
                   
    Asset Quality Data (Period End)  06/30/23 03/31/23 12/31/22 09/30/22 06/30/22    
    Nonaccrual loans and leases $15,087  $11,362  $13,353  $13,620  $13,355     
    Accruing loans and leases 90 days or more past due  55   1,996   875   416   2,784     
    Total nonperforming loans and leases  15,142   13,358   14,228   14,036   16,139     
    Other real estate owned  19,345   19,000   19,258   18,960   18,604     
    Total nonperforming assets $34,487  $32,358  $33,486  $32,996  $34,743     
    Nonaccrual loans and leases / Loans and leases held for investment  0.23%  0.18%  0.22%  0.23%  0.24%    
    Nonperforming loans and leases / Loans and leases held for investment  0.23%  0.21%  0.23%  0.24%  0.29%    
    Nonperforming assets / Total assets  0.45%  0.44%  0.46%  0.48%  0.52%    
                   
    Allowance for credit losses, loans and leases $82,709  $80,034  $79,004  $74,929  $72,011     
    Allowance for credit losses, loans and leases / Loans and leases held for investment  1.28%  1.28%  1.29%  1.28%  1.27%    
    Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment  548.21%  704.40%  591.66%  550.14%  539.21%    
    Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment  546.22%  599.15%  555.27%  533.83%  446.19%    
                   
      For the three months ended, For the six months ended,
      06/30/23 03/31/23 12/31/22 09/30/22 06/30/22 06/30/23 06/30/22
    Net loan and lease charge-offs $512  $2,842  $908  $1,196  $1,715  $3,354  $1,791 
    Net loan and lease charge-offs (annualized)/Average loans and leases  0.03%  0.19%  0.06%  0.08%  0.12%  0.11%  0.07%
                   


    Univest Financial Corporation 
    Consolidated Selected Financial Data (Unaudited) 
    June 30, 2023 
    (Dollars in thousands, except per share data)               
      For the three months ended, For the six months ended, 
    For the period: 06/30/23 03/31/23 12/31/22 09/30/22 06/30/22 06/30/23 06/30/22 
    Interest income $90,139 $83,253 $77,401 $66,877 $56,717 $173,392 $107,915 
    Interest expense  35,809  23,936  15,485  8,627  5,246  59,745  9,784 
    Net interest income  54,330  59,317  61,916  58,250  51,471  113,647  98,131 
    Provision for credit losses  3,428  3,387  5,416  3,558  6,674  6,815  3,224 
    Net interest income after provision for credit losses  50,902  55,930  56,500  54,692  44,797  106,832  94,907 
    Noninterest income:               
    Trust fee income  1,924  1,955  1,808  1,835  1,998  3,879  4,100 
    Service charges on deposit accounts  1,725  1,547  1,575  1,522  1,574  3,272  3,078 
    Investment advisory commission and fee income  4,708  4,752  5,585  4,199  4,812  9,460  9,964 
    Insurance commission and fee income  5,108  6,487  4,424  4,442  4,629  11,595  10,199 
    Other service fee income  3,318  3,076  3,236  3,124  3,309  6,394  6,065 
    Bank owned life insurance income  789  767  1,230  1,153  705  1,556  1,404 
    Net gain on sales of investment securities  -  -  -  -  -  -  30 
    Net gain on mortgage banking activities  1,039  625  436  817  1,230  1,664  3,159 
    Other income  1,222  471  2,164  867  741  1,693  1,469 
    Total noninterest income  19,833  19,680  20,458  17,959  18,998  39,513  39,468 
    Noninterest expense:               
    Salaries, benefits and commissions  29,875  31,014  29,028  29,400  29,133  60,889  57,378 
    Net occupancy  2,614  2,727  2,551  2,504  2,422  5,341  5,138 
    Equipment  986  993  977  968  977  1,979  1,959 
    Data processing  4,137  4,029  4,039  3,901  3,708  8,166  7,275 
    Professional fees  1,669  1,941  1,829  2,521  2,844  3,610  4,982 
    Marketing and advertising  622  371  739  605  693  993  1,118 
    Deposit insurance premiums  1,116  1,101  708  662  812  2,217  1,705 
    Intangible expenses  253  253  301  309  342  506  683 
    Restructuring charges  1,330  -  184  -  -  1,330  - 
    Other expense  7,197  7,100  6,970  5,795  6,440  14,297  12,545 
    Total noninterest expense  49,799  49,529  47,326  46,665  47,371  99,328  92,783 
    Income before taxes  20,936  26,081  29,632  25,986  16,424  47,017  41,592 
    Income tax expense  4,136  5,047  5,796  5,185  3,258  9,183  8,109 
    Net income $16,800 $21,034 $23,836 $20,801 $13,166 $37,834 $33,483 
    Net income per share:               
    Basic $0.57 $0.72 $0.82 $0.71 $0.45 $1.29 $1.14 
    Diluted $0.57 $0.71 $0.81 $0.71 $0.45 $1.28 $1.13 
    Dividends declared per share $0.21 $0.21 $0.21 $0.21 $0.21 $0.42 $0.41 
    Weighted average shares outstanding  29,439,392  29,312,265  29,251,293  29,290,829  29,490,154  29,376,179  29,516,166 
    Period end shares outstanding  29,471,124  29,427,696  29,271,915  29,242,451  29,365,775  29,471,124  29,365,775 
                    


    Univest Financial Corporation
    Consolidated Selected Financial Data (Unaudited)
    June 30, 2023
                      
         For the three months ended, For the six months ended,
    Profitability Ratios (annualized)  06/30/23 03/31/23 12/31/22 09/30/22 06/30/22 06/30/23 06/30/22
                      
    Return on average assets   0.91%  1.18%  1.35%  1.21%  0.76%  1.04%  0.96%
    Return on average assets, excluding restructuring charges (1)  0.96%  1.18%  1.36%  1.21%  0.76%  1.07%  0.96%
    Return on average shareholders' equity  8.35%  10.81%  12.33%  10.67%  6.85%  9.56%  8.74%
    Return on average shareholders' equity, excluding restructuring charges (1)  8.88%  10.81%  12.40%  10.67%  6.85%  9.83%  8.74%
    Return on average tangible common equity (1)(3)  10.85%  14.11%  16.23%  14.06%  9.10%  12.45%  11.56%
    Return on average tangible common equity, excluding restructuring charges (1)(3)  11.52%  14.11%  16.33%  14.06%  9.10%  12.79%  11.56%
    Net interest margin (FTE)   3.14%  3.58%  3.76%  3.67%  3.19%  3.35%  3.04%
    Efficiency ratio (2)    66.7%  62.2%  56.9%  60.6%  66.6%  64.4%  66.8%
    Efficiency ratio, excluding restructuring charges (1)(2)  64.9%  62.2%  56.7%  60.6%  66.6%  63.5%  66.8%
                      
    Capitalization Ratios                
                      
    Dividends declared to net income   36.8%  29.2%  25.8%  29.6%  47.1%  32.6%  36.2%
    Shareholders' equity to assets (Period End)  10.59%  10.85%  10.75%  10.92%  11.40%  10.59%  11.40%
    Tangible common equity to tangible assets (1)  8.45%  8.63%  8.49%  8.55%  8.97%  8.45%  8.97%
    Common equity book value per share $27.32  $27.13  $26.53  $25.79  $26.01  $27.32  $26.01 
    Tangible common equity book value per share (1) $21.27  $21.07  $20.42  $19.67  $19.91  $21.27  $19.91 
                      
    Regulatory Capital Ratios (Period End)               
    Tier 1 leverage ratio    9.59%  9.71%  9.81%  9.87%  9.45%  9.59%  9.45%
    Common equity tier 1 risk-based capital ratio  10.26%  10.43%  10.37%  10.51%  10.62%  10.26%  10.62%
    Tier 1 risk-based capital ratio   10.26%  10.43%  10.37%  10.51%  10.62%  10.26%  10.62%
    Total risk-based capital ratio   13.54%  13.78%  13.67%  13.10%  13.23%  13.54%  13.23%
                      
    (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, 2023 March 31, 2023 
     AverageIncome/Average AverageIncome/Average 
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
    Assets:        
    Interest-earning deposits with other banks$46,897 $5124.38%$47,835 $4794.06%
    Obligations of state and political subdivisions* 2,284  152.63  2,286  173.02 
    Other debt and equity securities 516,711  3,5122.73  513,594  3,4952.76 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 43,783  7817.15  34,742  6097.11 
    Total interest-earning deposits, investments and other interest-earning assets 609,675  4,8203.17  598,457  4,6003.12 
             
    Commercial, financial, and agricultural loans 1,005,499  16,9196.75  991,876  15,5386.35 
    Real estate—commercial and construction loans 3,445,431  45,9605.35  3,342,199  42,4215.15 
    Real estate—residential loans 1,483,478  17,2164.65  1,408,292  15,7304.53 
    Loans to individuals 26,794  4797.17  27,254  4496.68 
    Municipal loans and leases * 234,940  2,3884.08  229,955  2,3414.13 
    Lease financings 176,200  2,6596.05  165,314  2,5416.23 
    Gross loans and leases 6,372,342  85,6215.39  6,164,890  79,0205.20 
    Total interest-earning assets 6,982,017  90,4415.20  6,763,347  83,6205.01 
    Cash and due from banks 58,675     58,035    
    Allowance for credit losses, loans and leases (81,641)    (79,977)   
    Premises and equipment, net 52,540     51,583    
    Operating lease right-of-use assets 31,200     31,303    
    Other assets 398,007     394,920    
    Total assets$7,440,798    $7,219,211    
             
    Liabilities:        
    Interest-bearing checking deposits$1,011,889 $5,3922.14%$857,891 $3,1641.50%
    Money market savings 1,460,899  14,0893.87  1,489,129  11,0813.02 
    Regular savings 888,680  8450.38  985,716  6690.28 
    Time deposits 823,665  7,1413.48  566,308  3,4222.45 
    Total time and interest-bearing deposits 4,185,133  27,4672.63  3,899,044  18,3361.91 
             
    Short-term borrowings 255,090  3,2495.11  240,318  2,7284.60 
    Long-term debt 301,593  2,8113.74  112,222  5912.14 
    Subordinated notes 148,443  2,2826.17  148,319  2,2816.24 
    Total borrowings 705,126  8,3424.75  500,859  5,6004.53 
    Total interest-bearing liabilities 4,890,259  35,8092.94  4,399,903  23,9362.21 
    Noninterest-bearing deposits 1,659,449     1,935,371    
    Operating lease liabilities 34,415     34,438    
    Accrued expenses and other liabilities 49,966     60,346    
    Total liabilities 6,634,089     6,430,058    
    Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,549,708  2.19  6,335,274  1.53 
             
    Shareholders' Equity:        
    Common stock 157,784     157,784    
    Additional paid-in capital 298,788     300,293    
    Retained earnings and other equity 350,137     331,076    
    Total shareholders' equity 806,709     789,153    
    Total liabilities and shareholders' equity$7,440,798    $7,219,211    
    Net interest income $54,632   $59,684  
             
    Net interest spread  2.26   2.80 
    Effect of net interest-free funding sources  0.88   0.78 
    Net interest margin  3.14%  3.58%
    Ratio of average interest-earning assets to average interest-bearing liabilities 142.77%    153.72%   
             
    * 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 $668 thousand and $465 thousand for the three months ended June 30, 2023 and March 31, 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, 2023 and March 31, 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 Three Months Ended June 30,   
    Tax Equivalent Basis  2023    2022  
     AverageIncome/Average AverageIncome/Average 
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
    Assets:        
    Interest-earning deposits with other banks$46,897 $5124.38%$474,260 $8240.70%
    U.S. government obligations -  --  2,000  112.21 
    Obligations of state and political subdivisions* 2,284  152.63  2,302  172.96 
    Other debt and equity securities 516,711  3,5122.73  511,439  2,7272.14 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 43,783  7817.15  26,221  3445.26 
    Total interest-earning deposits, investments and other interest-earning assets 609,675  4,8203.17  1,016,222  3,9231.55 
             
    Commercial, financial, and agricultural loans 1,005,499  16,9196.75  945,490  9,1923.90 
    Real estate—commercial and construction loans 3,445,431  45,9605.35  3,004,509  28,5273.81 
    Real estate—residential loans 1,483,478  17,2164.65  1,166,201  10,7583.70 
    Loans to individuals 26,794  4797.17  26,782  3054.57 
    Municipal loans and leases* 234,940  2,3884.08  235,922  2,4044.09 
    Lease financings 176,200  2,6596.05  141,676  2,1055.96 
    Gross loans and leases 6,372,342  85,6215.39  5,520,580  53,2913.87 
    Total interest-earning assets 6,982,017  90,4415.20  6,536,802  57,2143.51 
    Cash and due from banks 58,675     55,634    
    Allowance for credit losses, loans and leases (81,641)    (68,426)   
    Premises and equipment, net 52,540     50,266    
    Operating lease right-of-use assets 31,200     30,222    
    Other assets 398,007     357,903    
    Total assets$7,440,798    $6,962,401    
             
    Liabilities:        
    Interest-bearing checking deposits$1,011,889 $5,3922.14%$851,324 $5700.27%
    Money market savings 1,460,899  14,0893.87  1,405,536  1,5520.44 
    Regular savings 888,680  8450.38  1,070,480  2370.09 
    Time deposits 823,665  7,1413.48  452,989  1,2271.09 
    Total time and interest-bearing deposits 4,185,133  27,4672.63  3,780,329  3,5860.38 
             
    Short-term borrowings 255,090  3,2495.11  17,253  110.26 
    Long-term debt 301,593  2,8113.74  95,000  3211.36 
    Subordinated notes 148,443  2,2826.17  98,988  1,3285.38 
    Total borrowings 705,126  8,3424.75  211,241  1,6603.15 
    Total interest-bearing liabilities 4,890,259  35,8092.94  3,991,570  5,2460.53 
    Noninterest-bearing deposits 1,659,449     2,122,844    
    Operating lease liabilities 34,415     33,300    
    Accrued expenses and other liabilities 49,966     43,277    
    Total liabilities 6,634,089     6,190,991    
    Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,549,708  2.19  6,114,414  0.34 
             
    Shareholders' Equity:        
    Common stock 157,784     157,784    
    Additional paid-in capital 298,788     298,241    
    Retained earnings and other equity 350,137     315,385    
    Total shareholders' equity 806,709     771,410    
    Total liabilities and shareholders' equity$7,440,798    $6,962,401    
    Net interest income $54,632   $51,968  
             
    Net interest spread  2.26   2.98 
    Effect of net interest-free funding sources  0.88   0.21 
    Net interest margin  3.14%  3.19%
    Ratio of average interest-earning assets to average interest-bearing liabilities 142.77%    163.77%   
             
    * 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 $668 thousand and $618 thousand for the three months ended June 30, 2023 and 2022, 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, 2023 and 2022 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  2023    2022  
     AverageIncome/Average AverageIncome/Average 
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
    Assets:        
    Interest-earning deposits with other banks$47,364 $9914.22%$603,002 $1,1810.39%
    U.S. government obligations -  --  3,602  372.07 
    Obligations of state and political subdivisions* 2,285  322.82  2,317  363.13 
    Other debt and equity securities 515,161  7,0072.74  512,998  5,0661.99 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 39,287  1,3907.13  26,665  6995.29 
    Total interest-earning deposits, investments and other interest-earning assets 604,097  9,4203.14  1,148,584  7,0191.23 
             
    Commercial, financial, and agricultural loans 998,726  32,4576.55  932,795  17,3543.75 
    Real estate—commercial and construction loans 3,394,100  88,3815.25  2,954,831  54,3473.71 
    Real estate—residential loans 1,446,093  32,9464.59  1,141,416  20,6403.65 
    Loans to individuals 27,023  9286.93  26,293  5434.16 
    Municipal loans and leases* 232,461  4,7294.10  239,197  4,8384.08 
    Lease financings 170,787  5,2006.14  138,593  4,1806.08 
    Gross loans and leases 6,269,190  164,6415.30  5,433,125  101,9023.78 
    Total interest-earning assets 6,873,287  174,0615.11  6,581,709  108,9213.34 
    Cash and due from banks 58,356     54,671    
    Allowance for credit losses, loans and leases (80,813)    (70,237)   
    Premises and equipment, net 52,064     52,097    
    Operating lease right-of-use assets 31,251     30,308    
    Other assets 396,471     356,406    
    Total assets$7,330,616    $7,004,954    
             
    Liabilities:        
    Interest-bearing checking deposits$935,316 $8,5561.84%$866,310 $1,0130.24%
    Money market savings 1,474,936  25,1703.44  1,473,680  2,4560.34 
    Regular savings 936,930  1,5140.33  1,046,150  4750.09 
    Time deposits 695,697  10,5633.06  463,232  2,5331.10 
    Total time and interest-bearing deposits 4,042,879  45,8032.28  3,849,372  6,4770.34 
             
    Short-term borrowings 247,745  5,9774.87  17,443  130.15 
    Long-term debt 207,431  3,4023.31  95,000  6381.35 
    Subordinated notes 148,381  4,5636.20  98,950  2,6565.41 
    Total borrowings 603,557  13,9424.66  211,393  3,3073.15 
    Total interest-bearing liabilities 4,646,436  59,7452.59  4,060,765  9,7840.49 
    Noninterest-bearing deposits 1,796,647     2,094,397    
    Operating lease liabilities 34,427     33,375    
    Accrued expenses and other liabilities 55,126     43,541    
    Total liabilities 6,532,636     6,232,078    
    Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,443,083  1.87  6,155,162  0.32 
             
    Shareholders' Equity:        
    Common stock 157,784     157,784    
    Additional paid-in capital 299,537     298,606    
    Retained earnings and other equity 340,659     316,486    
    Total shareholders' equity 797,980     772,876    
    Total liabilities and shareholders' equity$7,330,616    $7,004,954    
    Net interest income $114,316   $99,137  
             
    Net interest spread  2.52   2.85 
    Effect of net interest-free funding sources  0.83   0.19 
    Net interest margin  3.35%  3.04%
    Ratio of average interest-earning assets to average interest-bearing liabilities 147.93%    162.08%   
             
    * 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 $1.1 million and $754 thousand for the six months ended June 30, 2023 and 2022, 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, 2023 and 2022 have been calculated using the Corporation’s federal applicable rate of 21.0%. 
             


    Univest Financial Corporation
    Loan Portfolio Overview (Unaudited)
    June 30, 2023
         
    (Dollars in thousands)    
    Industry DescriptionTotal Outstanding Balance  % of Commercial Loan Portfolio 
    CRE - Retail$468,650 9.0%
    Animal Production 350,654 6.8 
    CRE - Multi-family 306,508 5.9 
    CRE - Office 303,848 5.9 
    CRE - 1-4 Family Residential Investment 282,613 5.4 
    CRE - Industrial / Warehouse 226,781 4.4 
    Hotels & Motels (Accommodation) 191,824 3.7 
    Nursing and Residential Care Facilities 174,408 3.4 
    Specialty Trade Contractors 170,316 3.3 
    Education 155,108 3.0 
    Homebuilding (tract developers, remodelers) 151,225 2.9 
    Merchant Wholesalers, Durable Goods 132,533 2.6 
    Motor Vehicle and Parts Dealers 120,027 2.3 
    CRE - Mixed-Use - Residential 110,604 2.1 
    Crop Production 98,772 1.9 
    Administrative and Support Services 88,027 1.7 
    Rental and Leasing Services 86,872 1.7 
    Wood Product Manufacturing 81,867 1.6 
    Repair and Maintenance 81,038 1.6 
    Real Estate Lenders, Secondary Market Financing 79,265 1.5 
    CRE - Mixed-Use - Commercial 77,981 1.5 
    Religious Organizations, Advocacy Groups 74,106 1.4 
    Amusement, Gambling, and Recreation Industries 71,243 1.4 
    Fabricated Metal Product Manufacturing 70,147 1.4 
    Merchant Wholesalers, Nondurable Goods 68,736 1.3 
    Personal and Laundry Services 67,717 1.3 
    Miniwarehouse / Self-Storage 63,917 1.2 
    Food Services and Drinking Places 63,769 1.2 
    Private Equity & Special Purpose Entities (except 52592) 61,598 1.2 
    Food Manufacturing 57,748 1.1 
    Truck Transportation 54,135 1.0 
    Industries with >$50 million in outstandings$4,392,037 84.6%
    Industries with <$50 million in outstandings$800,146 15.4%
    Total Commercial Loans$5,192,183 100.0%
         
         
    Consumer Loans and Lease FinancingsTotal Outstanding Balance   
    Real Estate-Residential Secured for Personal Purpose$832,632   
    Real Estate-Home Equity Secured for Personal Purpose 175,090   
    Loans to Individuals 25,544   
    Lease Financings 236,789   
    Total - Consumer Loans and Lease Financings$1,270,055   
         
    Total$6,462,238   
         


    Univest Financial Corporation
    Non-GAAP Reconciliation
    June 30, 2023
                     
    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)06/30/23 03/31/23 12/31/22 09/30/22 06/30/22 06/30/23 06/30/22
    Restructuring charges (a)  $1,330  $-  $184  $-  $-  $1,330  $- 
    Tax effect of restructuring charges   (279)  -   (39)  -   -   (279)  - 
    Restructuring charges, net of tax  $1,051  $-  $145  $-  $-  $1,051  $- 
                     
    Net income$16,800  $21,034  $23,836  $20,801  $13,166  $37,834  $33,483 
    Amortization of intangibles, net of tax 200   200   238   244   270   400   540 
    Net income before amortization of intangibles$17,000  $21,234  $24,074  $21,045  $13,436  $38,234  $34,023 
                     
    Shareholders' equity$805,222  $798,496  $776,500  $754,187  $763,925  $805,222  $763,925 
    Goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
    Other intangibles (b)  (2,767)  (3,054)  (3,251)  (3,485)  (3,678)  (2,767)  (3,678)
    Tangible common equity$626,945  $619,932  $597,739  $575,192  $584,737  $626,945  $584,737 
                     
    Total assets$7,600,150  $7,358,991  $7,222,016  $6,907,397  $6,700,813  $7,600,150  $6,700,813 
    Goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
    Other intangibles (b)  (2,767)  (3,054)  (3,251)  (3,485)  (3,678)  (2,767)  (3,678)
    Tangible assets$7,421,873  $7,180,427  $7,043,255  $6,728,402  $6,521,625  $7,421,873  $6,521,625 
                     
    Average shareholders' equity$806,709  $789,153  $767,192  $773,099  $771,410  $797,980  $772,876 
    Average goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
    Average other intangibles (b)  (2,924)  (3,137)  (3,355)  (3,550)  (3,791)  (3,030)  (3,940)
    Average tangible common equity$628,275  $610,506  $588,327  $594,039  $592,109  $619,440  $593,426 
                     
                     
    (a) Associated with branch optimization and headcount rationlization expense management strategies        
    (b) Amount does not include mortgage servicing rights             

     


    CONTACT: 
Brian J. Richardson
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2446, richardsonb@univest.net

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