• Univest Financial Corporation Reports First Quarter Results

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

    SOUDERTON, Pa., April 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 March 31, 2023 was $21.0 million, or $0.71 diluted earnings per share, compared to net income of $20.3 million, or $0.68 diluted earnings per share, for the quarter ended March 31, 2022.

    Loans
    Gross loans and leases increased $116.6 million, or 1.9% (7.6% annualized), from December 31, 2022, primarily due to increases in commercial real estate, residential mortgage loans, and lease financings. Gross loans and leases increased $839.0 million, or 15.5%, from March 31, 2022, primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings.

    Deposits and Liquidity
    Total deposits decreased $78.9 million, or 1.3% (5.2% annualized), from December 31, 2022, primarily due to decreases in commercial and consumer deposits partially offset by increases in public funds and brokered deposits. Total deposits decreased $213.3 million, or 3.5%, from March 31, 2022, primarily due to decreases in commercial and consumer deposits partially offset by increases in public funds and brokered deposits. While we experienced certain expected outflows during the quarter, we saw net deposit inflows of $81.1 million during the month of March. Noninterest-bearing deposits represented 30.8% of total deposits at March 31, 2023, down from 34.6% at December 31, 2022. At March 31, 2023, uninsured deposits, adjusted to exclude internal accounts and collateralized trust and public funds deposit accounts, represented 27.2% of total deposits.

    The Corporation and its subsidiaries had committed borrowing capacity of $3.1 billion at March 31, 2023, of which $1.9 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $410.0 million at March 31, 2023, of which $320.0 million was available. 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availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.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 $59.3 million for the first quarter of 2023 increased $12.7 million, or 27.1%, from the first quarter of 2022 and decreased $2.6 million, or 4.2%, from the fourth quarter of 2022. The increase in net interest income for the first quarter of 2023 compared to the first quarter of 2022 was largely due to significant loan balance growth and an increase in asset yields, offset by increases in the average balance of borrowings and the cost of funds.

    Net interest margin, on a tax-equivalent basis, was 3.58% for the first quarter of 2023, compared to 3.76% for the fourth quarter of 2022 and 2.89% for the first quarter of 2022. Excess liquidity had no impact on net interest margin for the quarter ended March 31, 2023. Excess liquidity reduced net interest margin by approximately one basis point for the quarter ended December 31, 2022 and 33 basis points for the quarter ended March 31, 2022. Excluding the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, was 3.77% for the quarter ended December 31, 2022 and 3.22% for the quarter ended March 31, 2022.

    Noninterest Income
    Noninterest income for the quarter ended March 31, 2023 was $19.7 million, a decrease of $790 thousand, or 3.9%, from the comparable period in the prior year.

    Net gain on mortgage banking activities decreased $1.3 million, or 67.6%, for the quarter primarily due to a decrease in loan sales and a contraction of gain on sale margins due to the higher interest rate environment in 2023. Investment advisory commission and fee income decreased $400 thousand, or 7.8%, for the quarter ended March 31, 2023, primarily driven by reduced assets under management and supervision due to market volatility.

    Insurance commission and fee income increased $917 thousand, or 16.5%, for the quarter ended March 31, 2023, primarily due to increases in premiums for group life and health and commercial lines and an increase in contingent commission income of $651 thousand, which was $1.8 million and $1.2 million for the quarters ended March 31, 2023 and 2022, respectively. Contingent income is largely recognized in the first quarter of the year.

    Noninterest Expense
    Noninterest expense for the quarter ended March 31, 2023 was $49.5 million, an increase of $4.1 million, or 9.1%, from the comparable period in the prior year.

    Salaries, benefits and commissions increased $2.8 million, or 9.8%, for the quarter ended March 31, 2023. This increase reflects our expansion into Maryland and Western Pennsylvania and annual merit increases. Additionally, capitalized compensation decreased by $480 thousand due to reduced loan production.

    Data processing expenses increased $462 thousand, or 13.0%, for the quarter ended March 31, 2023, primarily due to our investments in technology in recent years and general price increases incurred in the second half of 2022. Other expense increased $1.0 million, or 16.3%, for the quarter ended March 31, 2023, primarily due to increases in retirement plan costs of $407 thousand, which was primarily driven by the current interest rate environment, and Bank Shares tax expense of $110 thousand driven by year over year growth of the Bank's Shareholders' Equity.

    Tax Provision
    The effective income tax rate was 19.4% for the quarter ended March 31, 2023, compared to an effective income tax rate of 19.3% for the quarter ended March 31, 2022, which were favorably impacted by 7 and 8 basis points, respectively, of discrete tax benefits resulting from equity compensation awards vesting in the respective quarters. Additionally, the effective tax rates for the three months ended March 31, 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 $32.4 million at March 31, 2023, compared to $33.5 million at December 31, 2022 and $31.4 million at March 31, 2022.

    Net loan and lease charge-offs were $2.8 million during the first quarter of 2023 compared to $76 thousand for the quarter ended March 31, 2022. During the first quarter of 2023, $2.4 million of charge-offs were recorded against two existing nonaccrual commercial loans to one borrower. As of December 31, 2022, the allowance for credit losses included a $2.1 million specific reserve for this relationship.

    The provision for credit losses was $3.4 million for the first quarter of 2023 compared to a reversal of provision for credit losses of $3.5 million for the quarter ended March 31, 2022. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.28% at March 31, 2023 compared to 1.29% at December 31, 2022 and 1.26% at March 31, 2022.

    Dividend
    On April 26, 2023, Univest declared a quarterly cash dividend of $0.21 per share to be paid on May 24, 2023 to shareholders of record as of May 10, 2023.

    Conference Call
    Univest will host a conference call to discuss first quarter 2023 results on Thursday, April 27, 2023 at 9:00 a.m. EST. Participants may preregister at https://www.netroadshow.com/events/login?show=c7437c5e&confId=49225. The general public can access the call by dialing 1-833-470-1428; using Access Code 409762. A replay of the conference call will be available through May 27, 2023 by dialing 1-866-813-9403; using Access Code: 839460.

    About Univest Financial Corporation
    Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.4 billion in assets and $4.3 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 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, 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 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, including 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 continuing effects resulting from the COVID-19 pandemic on our business and results of operation; (11) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (12) potential recessionary conditions and/or (13) 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)
    March 31, 2023
    (Dollars in thousands)          
               
    Balance Sheet (Period End) 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
    ASSETS          
    Cash and due from banks $71,215  $84,176  $65,859  $59,590  $57,307 
    Interest-earning deposits with other banks  67,109   68,623   47,451   35,187   716,474 
    Cash and cash equivalents  138,324   152,799   113,310   94,777   773,781 
    Investment securities held-to-maturity  151,347   154,727   159,170   159,808   166,339 
    Investment securities available for sale, net of allowance for credit losses  367,656   350,256   347,479   351,382   349,994 
    Investments in equity securities  3,105   2,579   2,994   2,934   2,569 
    Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost  43,792   33,841   29,475   29,116   26,330 
    Loans held for sale  5,425   5,037   9,087   8,352   14,521 
    Loans and leases held for investment  6,239,804   6,123,230   5,849,259   5,661,777   5,400,786 
    Less: Allowance for credit losses, loans and leases  (80,034)  (79,004)  (74,929)  (72,011)  (68,286)
    Net loans and leases held for investment  6,159,770 - 6,044,226   5,774,330   5,589,766   5,332,500 
    Premises and equipment, net  52,334   50,939   50,533   50,080   50,429 
    Operating lease right-of-use assets  31,663   30,059   30,654   30,929   30,498 
    Goodwill  175,510   175,510   175,510   175,510   175,510 
    Other intangibles, net of accumulated amortization  11,044   11,384   11,650   11,728   11,784 
    Bank owned life insurance  128,926   120,297   120,035   120,103   119,398 
    Accrued interest and other assets  90,095   90,362   83,170   76,328   54,087 
    Total assets $7,358,991  $7,222,016  $6,907,397  $6,700,813  $7,107,740 
               
    LIABILITIES          
    Noninterest-bearing deposits $1,799,225  $2,047,263  $1,968,422  $2,062,538  $2,136,467 
    Interest-bearing deposits:  4,035,432   3,866,263   3,818,554   3,500,510   3,911,465 
    Total deposits  5,834,657   5,913,526   5,786,976   5,563,048   6,047,932 
    Short-term borrowings  271,881   197,141   80,711   97,606   18,976 
    Long-term debt  220,000   95,000   95,000   95,000   95,000 
    Subordinated notes  148,385   148,260   99,107   99,030   98,952 
    Operating lease liabilities  34,846   33,153   33,718   33,951   33,566 
    Accrued expenses and other liabilities  50,726   58,436   57,698   48,253   39,459 
    Total liabilities  6,560,495   6,445,516   6,153,210   5,936,888   6,333,885 
               
    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  298,167   300,808   299,791   298,800   297,945 
    Retained earnings  443,493   428,637   410,942   396,295   389,332 
    Accumulated other comprehensive loss, net of tax benefit  (55,550)  (62,104)  (64,985)  (42,781)  (31,909)
    Treasury stock, at cost  (45,398)  (48,625)  (49,345)  (46,173)  (39,297)
    Total shareholders’ equity  798,496   776,500   754,187   763,925   773,855 
    Total liabilities and shareholders’ equity $7,358,991  $7,222,016  $6,907,397  $6,700,813  $7,107,740 
               
               
      For the three months ended,
    Balance Sheet (Average) 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
    Assets $7,219,211  $7,019,381  $6,797,466  $6,962,401  $7,047,980 
    Investment securities, net of allowance for credit losses  515,880   505,717   517,335   515,741   522,128 
    Loans and leases, gross  6,164,890   5,979,581   5,752,119   5,520,580   5,344,698 
    Deposits  5,834,415   5,837,823   5,645,291   5,903,173   5,984,815 
    Shareholders' equity  789,153   767,192   773,099   771,410   774,358 
               


    Univest Financial Corporation
    Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
    March 31, 2023
    (Dollars in thousands)          
               
    Summary of Major Loan and Lease Categories (Period End) 03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
    Commercial, financial and agricultural $1,032,753  $1,088,928  $1,054,940  $1,033,712  $942,783 
    Real estate-commercial  3,128,210   3,027,955   2,936,204   2,870,286   2,816,737 
    Real estate-construction  376,569   381,811   329,915   319,449   285,083 
    Real estate-residential secured for business purpose  498,505   478,254   443,837   419,652   412,486 
    Real estate-residential secured for personal purpose  779,557   730,395   685,771   629,144   568,735 
    Real estate-home equity secured for personal purpose  172,073   176,699   175,843   168,536   160,134 
    Loans to individuals  28,656   27,873   26,679   27,061   26,249 
    Lease financings  223,481   211,315   196,070   193,937   188,579 
    Total loans and leases held for investment, net of deferred income  6,239,804   6,123,230   5,849,259   5,661,777   5,400,786 
    Less: Allowance for credit losses, loans and leases  (80,034)  (79,004)  (74,929)  (72,011)  (68,286)
    Net loans and leases held for investment $6,159,770  $6,044,226  $5,774,330  $5,589,766  $5,332,500 
               
               
    Asset Quality Data (Period End)  03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
    Nonaccrual loans and leases $11,362  $13,353  $13,620  $13,355  $30,876 
    Accruing loans and leases 90 days or more past due  1,996   875   416   2,784   274 
    Total nonperforming loans and leases  13,358   14,228   14,036   16,189   31,201 
    Other real estate owned  19,000   19,258   18,960   18,604   279 
    Total nonperforming assets $32,358  $33,486  $32,996  $34,793  $31,480 
    Nonaccrual loans and leases / Loans and leases held for investment  0.18%  0.22%  0.23%  0.24%  0.57%
    Nonperforming loans and leases / Loans and leases held for investment  0.21%  0.23%  0.24%  0.29%  0.58%
    Nonperforming assets / Total assets  0.44%  0.46%  0.48%  0.52%  0.44%
               
    Allowance for credit losses, loans and leases $80,034  $79,004  $74,929  $72,011  $68,286 
    Allowance for credit losses, loans and leases / Loans and leases held for investment  1.28%  1.29%  1.28%  1.27%  1.26%
    Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment  704.40%  591.66%  550.14%  539.21%  221.16%
    Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment  599.15%  555.27%  533.83%  446.19%  219.22%
               
      For the three months ended,
      03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
    Net loan and lease charge-offs $2,842  $908  $1,196  $1,715  $76 
    Net loan and lease charge-offs (annualized)/Average loans and leases  0.19%  0.06%  0.08%  0.12%  0.01%
               


    Univest Financial Corporation
    Consolidated Selected Financial Data (Unaudited)
    March 31, 2023
    (Dollars in thousands, except per share data)         
     For the three months ended,
    For the period:03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
    Interest income$83,253  $77,401  $66,877  $56,717  $51,198 
    Interest expense 23,936   15,485   8,627   5,246   4,538 
    Net interest income 59,317   61,916   58,250   51,471   46,660 
    Provison (reversal of provision) for credit losses 3,387   5,416   3,558   6,674   (3,450)
    Net interest income after provision for credit losses 55,930   56,500   54,692   44,797   50,110 
    Noninterest income:         
    Trust fee income 1,955   1,808   1,835   1,998   2,102 
    Service charges on deposit accounts 1,547   1,575   1,522   1,574   1,504 
    Investment advisory commission and fee income 4,752   5,585   4,199   4,812   5,152 
    Insurance commission and fee income 6,487   4,424   4,442   4,629   5,570 
    Other service fee income 3,076   3,236   3,124   3,309   2,756 
    Bank owned life insurance income 767   1,230   1,153   705   699 
    Net gain on sales of investment securities -   -   -   -   30 
    Net gain on mortgage banking activities 625   436   817   1,230   1,929 
    Other income 471   2,164   867   741   728 
    Total noninterest income 19,680   20,458   17,959   18,998   20,470 
    Noninterest expense:         
    Salaries, benefits and commissions 31,014   29,028   29,400   29,133   28,245 
    Net occupancy 2,727   2,551   2,504   2,422   2,716 
    Equipment 993   977   968   977   982 
    Data processing 4,029   4,039   3,901   3,708   3,567 
    Professional fees 1,941   1,829   2,521   2,844   2,138 
    Marketing and advertising 371   739   605   693   425 
    Deposit insurance premiums 1,101   708   662   812   893 
    Intangible expenses 253   301   309   342   341 
    Restructuring charges -   184   -   -   - 
    Other expense 7,100   6,970   5,795   6,440   6,105 
    Total noninterest expense 49,529   47,326   46,665   47,371   45,412 
    Income before taxes 26,081   29,632   25,986   16,424   25,168 
    Income tax expense 5,047   5,796   5,185   3,258   4,851 
    Net income$21,034  $23,836  $20,801  $13,166  $20,317 
    Net income per share:         
    Basic$0.72  $0.82  $0.71  $0.45  $0.69 
    Diluted$0.71  $0.81  $0.71  $0.45  $0.68 
    Dividends declared per share$0.21  $0.21  $0.21  $0.21  $0.20 
    Weighted average shares outstanding 29,312,265   29,251,293   29,290,829   29,490,154   29,542,467 
    Period end shares outstanding 29,427,696   29,271,915   29,242,451   29,365,775   29,636,425 
              


    Univest Financial Corporation
    Consolidated Selected Financial Data (Unaudited)
    March 31, 2023
              
              
              
     For the three months ended,
    Profitability Ratios (annualized)03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
              
    Return on average assets 1.18%  1.35%  1.21%  0.76%  1.17%
    Return on average assets, excluding restructuring charges (1) 1.18%  1.36%  1.21%  0.76%  1.17%
    Return on average shareholders' equity 10.81%  12.33%  10.67%  6.85%  10.64%
    Return on average shareholders' equity, excluding restructuring charges (1) 10.81%  12.40%  10.67%  6.85%  10.64%
    Return on average tangible common equity (1)(3) 14.11%  16.23%  14.06%  9.10%  14.04%
    Return on average tangible common equity, excluding restructuring charges (1)(3) 14.11%  16.33%  14.06%  9.10%  14.04%
    Net interest margin (FTE) 3.58%  3.76%  3.67%  3.19%  2.89%
    Efficiency ratio (2) 62.2%  56.9%  60.6%  66.6%  67.0%
    Efficiency ratio, excluding restructuring charges (1)(2) 62.2%  56.7%  60.6%  66.6%  67.0%
              
    Capitalization Ratios         
              
    Dividends declared to net income 29.2%  25.8%  29.6%  47.1%  29.1%
    Shareholders' equity to assets (Period End) 10.85%  10.75%  10.92%  11.40%  10.89%
    Tangible common equity to tangible assets (1) 8.63%  8.49%  8.55%  8.97%  8.58%
    Common equity book value per share$27.13  $26.53  $25.79  $26.01  $26.11 
    Tangible common equity book value per share (1)$21.07  $20.42  $19.67  $19.91  $20.06 
              
    Regulatory Capital Ratios (Period End)          
    Tier 1 leverage ratio 9.71%  9.81%  9.87%  9.45%  9.35%
    Common equity tier 1 risk-based capital ratio 10.43%  10.37%  10.51%  10.62%  11.07%
    Tier 1 risk-based capital ratio 10.43%  10.37%  10.51%  10.62%  11.07%
    Total risk-based capital ratio 13.78%  13.67%  13.10%  13.23%  13.73%
              

    (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 BasisMarch 31, 2023 December 31, 2022
     AverageIncome/Average AverageIncome/Average
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate
    Assets:         
    Interest-earning deposits with other banks$47,835 $479 4.06% $57,059 $487 3.39%
    Obligations of state and political subdivisions* 2,286  17 3.02   2,266  17 2.98 
    Other debt and equity securities 513,594  3,495 2.76   503,451  3,316 2.61 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 34,742  609 7.11   29,401  493 6.65 
    Total interest-earning deposits, investments and other interest-earning assets 598,457  4,600 3.12   592,177  4,313 2.89 
              
    Commercial, financial, and agricultural loans 991,876  15,538 6.35   1,007,121  14,471 5.70 
    Real estate—commercial and construction loans 3,342,199  42,421 5.15   3,223,822  39,459 4.86 
    Real estate—residential loans 1,408,292  15,730 4.53   1,335,220  14,340 4.26 
    Loans to individuals 27,254  449 6.68   26,772  401 5.94 
    Municipal loans and leases * 229,955  2,341 4.13   233,684  2,433 4.13 
    Lease financings 165,314  2,541 6.23   152,962  2,416 6.27 
    Gross loans and leases 6,164,890  79,020 5.20   5,979,581  73,520 4.88 
    Total interest-earning assets 6,763,347  83,620 5.01   6,571,758  77,833 4.70 
    Cash and due from banks 58,035      56,428    
    Allowance for credit losses, loans and leases (79,977)     (75,390)   
    Premises and equipment, net 51,583      50,803    
    Operating lease right-of-use assets 31,303      30,413    
    Other assets 394,920      385,369    
    Total assets$7,219,211     $7,019,381    
              
    Liabilities:         
    Interest-bearing checking deposits$857,891 $3,164 1.50% $924,012 $2,746 1.18%
    Money market savings 1,489,129  11,081 3.02   1,365,502  7,670 2.23 
    Regular savings 985,716  669 0.28   1,045,261  492 0.19 
    Time deposits 566,308  3,422 2.45   433,010  1,586 1.45 
    Total time and interest-bearing deposits 3,899,044  18,336 1.91   3,767,785  12,494 1.32 
              
    Short-term borrowings 240,318  2,728 4.60   101,126  852 3.34 
    Long-term debt 112,222  591 2.14   95,000  324 1.35 
    Subordinated notes 148,319  2,281 6.24   124,250  1,815 5.80 
    Total borrowings 500,859  5,600 4.53   320,376  2,991 3.70 
    Total interest-bearing liabilities 4,399,903  23,936 2.21   4,088,161  15,485 1.50 
    Noninterest-bearing deposits 1,935,371      2,070,038    
    Operating lease liabilities 34,438      33,492    
    Accrued expenses and other liabilities 60,346      60,498    
    Total liabilities 6,430,058      6,252,189    
    Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,335,274  1.53   6,158,199  1.00 
              
    Shareholders' Equity:         
    Common stock 157,784      157,784    
    Additional paid-in capital 300,293      300,121    
    Retained earnings and other equity 331,076      309,287    
    Total shareholders' equity 789,153      767,192    
    Total liabilities and shareholders' equity$7,219,211     $7,019,381    
    Net interest income $59,684     $62,348   
              
    Net interest spread  2.80    3.20 
    Effect of net interest-free funding sources  0.78    0.56 
    Net interest margin  3.58%   3.76%
                  
    Ratio of average interest-earning assets to average interest-bearing liabilities 153.72%     160.75%   


    * 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 $465 thousand and $516 thousand for the three months ended March 31, 2023 and December 31, 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 March 31, 2023 and December 31, 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 Three Months Ended March 31,
    Tax Equivalent Basis2023
     2022
     AverageIncome/Average AverageIncome/Average
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate
    Assets:         
    Interest-earning deposits with other banks$47,835 $479 4.06% $733,173 $357 0.20%
    U.S. government obligations -  - -   5,222  26 2.02 
    Obligations of state and political subdivisions* 2,286  17 3.02   2,332  19 3.30 
    Other debt and equity securities 513,594  3,495 2.76   514,574  2,339 1.84 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 34,742  609 7.11   27,115  355 5.31 
    Total interest-earning deposits, investments and other interest-earning assets 598,457  4,600 3.12   1,282,416  3,096 0.98 
              
    Commercial, financial, and agricultural loans 991,876  15,538 6.35   919,957  8,162 3.60 
    Real estate—commercial and construction loans 3,342,199  42,421 5.15   2,904,602  25,820 3.61 
    Real estate—residential loans 1,408,292  15,730 4.53   1,116,356  9,882 3.59 
    Loans to individuals 27,254  449 6.68   25,799  238 3.74 
    Municipal loans and leases* 229,955  2,341 4.13   242,508  2,434 4.07 
    Lease financings 165,314  2,541 6.23   135,476  2,075 6.21 
    Gross loans and leases 6,164,890  79,020 5.20   5,344,698  48,611 3.69 
    Total interest-earning assets 6,763,347  83,620 5.01   6,627,114  51,707 3.16 
    Cash and due from banks 58,035      53,698    
    Allowance for credit losses, loans and leases (79,977)     (72,067)   
    Premises and equipment, net 51,583      53,948    
    Operating lease right-of-use assets 31,303      30,394    
    Other assets 394,920      354,893    
    Total assets$7,219,211     $7,047,980    
              
    Liabilities:         
    Interest-bearing checking deposits$857,891 $3,164 1.50% $881,462 $443 0.20%
    Money market savings 1,489,129  11,081 3.02   1,542,581  904 0.24 
    Regular savings 985,716  669 0.28   1,021,550  238 0.09 
    Time deposits 566,308  3,422 2.45   473,589  1,306 1.12 
    Total time and interest-bearing deposits 3,899,044  18,336 1.91   3,919,182  2,891 0.30 
              
    Short-term borrowings 240,318  2,728 4.60   17,636  2 0.05 
    Long-term debt 112,222  591 2.14   95,000  317 1.35 
    Subordinated notes 148,319  2,281 6.24   98,911  1,328 5.45 
    Total borrowings 500,859  5,600 4.53   211,547  1,647 3.16 
    Total interest-bearing liabilities 4,399,903  23,936 2.21   4,130,729  4,538 0.45 
    Noninterest-bearing deposits 1,935,371      2,065,633    
    Operating lease liabilities 34,438      33,452    
    Accrued expenses and other liabilities 60,346      43,808    
    Total liabilities 6,430,058      6,273,622    
    Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") 6,335,274  1.53   6,196,362  0.30 
              
    Shareholders' Equity:         
    Common stock 157,784      157,784    
    Additional paid-in capital 300,293      298,975    
    Retained earnings and other equity 331,076      317,599    
    Total shareholders' equity 789,153      774,358    
    Total liabilities and shareholders' equity$7,219,211     $7,047,980    
    Net interest income $59,684     $47,169   
              
    Net interest spread  2.80    2.71 
    Effect of net interest-free funding sources  0.78    0.18 
    Net interest margin  3.58%   2.89%
                  
    Ratio of average interest-earning assets to average interest-bearing liabilities 153.72%     160.43%   

     

    * 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 $465 thousand and $136 thousand for the three months ended March 31, 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 March 31, 2023 and 2022 have been calculated using the Corporation’s federal applicable rate of 21.0%.
       


    Univest Financial Corporation
    Loan Portfolio Overview (Unaudited)
    March 31, 2023
         
    (Dollars in thousands)    
    Industry DescriptionTotal Outstanding Balance % of Commercial Loan Portfolio
    CRE - Retail 443,932  8.8%
    Animal Production 341,832  6.8 
    CRE - Office 308,583  6.1 
    CRE - Multi-family 294,816  5.8 
    CRE - 1-4 Family Residential Investment 269,295  5.3 
    Hotels & Motels (Accommodation) 207,019  4.1 
    CRE - Industrial / Warehouse 199,372  4.0 
    Nursing and Residential Care Facilities 165,160  3.3 
    Homebuilding (tract developers, remodelers) 156,753  3.1 
    Education 155,441  3.1 
    Specialty Trade Contractors 149,939  3.0 
    Merchant Wholesalers, Durable Goods 128,837  2.6 
    Motor Vehicle and Parts Dealers 123,448  2.5 
    CRE - Mixed-Use - Residential 111,124  2.2 
    Crop Production 93,487  1.9 
    Administrative and Support Services 85,589  1.7 
    Rental and Leasing Services 79,800  1.6 
    Wood Product Manufacturing 78,939  1.6 
    CRE - Mixed-Use - Commercial 78,628  1.6 
    Real Estate Lenders, Secondary Market Financing 76,798  1.5 
    Religious Organizations, Advocacy Groups 74,590  1.5 
    Fabricated Metal Product Manufacturing 70,896  1.4 
    Merchant Wholesalers, Nondurable Goods 68,129  1.3 
    Food Services and Drinking Places 66,605  1.3 
    Food Manufacturing 66,425  1.3 
    Personal and Laundry Services 64,434  1.3 
    Amusement, Gambling, and Recreation Industries 61,295  1.2 
    Repair and Maintenance 56,749  1.1 
    Miniwarehouse / Self-Storage 56,336  1.1 
    Private Equity & Special Purpose Entities (excluding Trusts, Estates and Agency Accounts) 54,918  1.1 
    Truck Transportation 52,263  1.0 
    Industries with >$50 million in outstandings$4,241,432  84.2%
    Industries with <$50 million in outstandings$794,605  15.8%
    Total Commercial Loans$5,036,037  100.0%
         
         
    Consumer Loans and Lease FinancingsTotal Outstanding Balance   
    Real Estate-Residential Secured for Personal Purpose$779,557    
    Real Estate-Home Equity Secured for Personal Purpose 172,073    
    Loans to Individuals 28,656    
    Lease Financings 223,481    
    Total - Consumer Loans and Lease Financings$1,203,767    
         
    Total$6,239,462    
         

    Univest Financial Corporation
    Non-GAAP Reconciliation
    March 31, 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,
    (Dollars in thousands)03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
    Restructuring charges (a)$-  $184  $-  $-  $- 
    Tax effect of restructuring charges -   (39)  -   -   - 
    Restructuring charges, net of tax$-  $145  $-  $-  $- 
              
    Net income$21,034  $23,836  $20,801  $13,166  $20,317 
    Amortization of intangibles, net of tax 200   238   244   270   269 
    Net income before amortization of intangibles$21,234  $24,074  $21,045  $13,436  $20,586 
              
    Shareholders' equity$798,496  $776,500  $754,187  $763,925  $773,855 
    Goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
    Other intangibles (b) (3,054)  (3,251)  (3,485)  (3,678)  (3,936)
    Tangible common equity$619,932  $597,739  $575,192  $584,737  $594,409 
              
    Total assets$7,358,991  $7,222,016  $6,907,397  $6,700,813  $7,107,740 
    Goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
    Other intangibles (b) (3,054)  (3,251)  (3,485)  (3,678)  (3,936)
    Tangible assets$7,180,427  $7,043,255  $6,728,402  $6,521,625  $6,928,294 
              
    Average shareholders' equity$789,153  $767,192  $773,099  $771,410  $774,358 
    Average goodwill (175,510)  (175,510)  (175,510)  (175,510)  (175,510)
    Average other intangibles (b) (3,137)  (3,355)  (3,550)  (3,791)  (4,090)
    Average tangible common equity$610,506  $588,327  $594,039  $592,109  $594,758 
              

    (a) Associated with the consolidation of 2 financial centers
    (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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