(Loan Growth of 19.6% (annualized) for the second quarter 2022 (excluding PPP loans1))
SOUDERTON, Pa., July 27, 2022 (GLOBE NEWSWIRE) — Univest Financial Corporation (�Univest or the “Corporation”) (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income for the quarter ended June 30, 2022 was $13.2 million, or $0.45 diluted earnings per share, compared to net income of $20.9 million, or $0.71 diluted earnings per share, for the quarter ended June 30, 2021. Net income for the six months ended June 30, 2022 was $33.5 million, or $1.13 diluted earnings per share, compared to net income of $53.5 million, or $1.81 diluted earnings per share, for the six months ended June 30, 2021.
Loans
Gross loans and leases, excluding Paycheck Protection Program (“PPP”) loans1, increased $265.9 million, or 19.6% (annualized), from March 31, 2022, $378.2 million, or 14.4% (annualized), from December 31, 2021 and $582.0 million, or 11.5%, from June 30, 2021 primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings. As of June 30, 2022, $5.4 million in PPP loans remained outstanding.
Deposits
Total deposits decreased $484.9 million, or 32.0% (annualized), from March 31, 2022 and $492.1 million, or 16.2% (annualized), from December 31, 2021 primarily due to a seasonal decrease in public funds deposits as well as decreases in commercial and consumer deposits. Total deposits increased $244.3 million, or 4.6%, from June 30, 2021, primarily due to increases in commercial, consumer and public funds deposits.
Net Interest Income and Margin
Net interest income of $51.5 million for the three months ended June 30, 2022 increased $4.8 million, or 10.3%, from the three months ended March 31, 2022, and $4.7 million, or 10.1%, from the three months ended June 30, 2021. The increase in net interest income for the three months ended June 30, 2022 compared to the same period of 2021 was due to an increase in the average balance of loans and investments, increased asset yields and a decrease in the cost of interest-bearing liabilities, partially offset by an increase in the average balance of interest-bearing liabilities and a decrease in PPP loan income.
Net interest income of $98.1 million for the six months ended June 30, 2022 increased $6.0 million, or 6.5%, from the six months ended June 30, 2021. The increase in net interest income for the six months ended June 30, 2022 compared to the same period of 2021 was due to loan and investment average balance growth outpacing declines in asset yields and a decrease in the cost of interest-bearing liabilities, offset by an increase in the average balance of interest-bearing liabilities and a decrease in PPP loan income.
Net interest margin, on a tax-equivalent basis, was 3.19% for the second quarter of 2022, compared to 2.89% for the first quarter of 2022 and 3.15% for the second quarter of 2021. Excess liquidity reduced net interest margin by approximately 23 basis points for the quarter ended June 30, 2022 compared to 33 basis points for the quarter ended March 31, 2022 and ten basis points for the quarter ended June 30, 2021. During the quarter ended June 30, 2022, our excess liquidity diminished and we returned to a pre-pandemic liquidity level at the end of the quarter. PPP loans had a favorable impact on net interest margin of one basis point for the quarter ended June 30, 2022 compared to three basis points for the quarter ended March 31, 2022 and eleven basis points for the quarter ended June 30, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.41% for the quarter ended June 30, 2022 compared to 3.19% for the quarter ended March 31, 2022 and 3.14% for the quarter ended June 30, 2021.
During the second quarter, the Bank entered into a 4-year $250 million interest rate swap (representing approximately 13% of the Bank’s variable rate loans), whereby the Bank receives a fixed rate of 5.99% and pays a variable rate equal to the Prime Rate. During the second quarter of 2022, the swap contributed $707 thousand to net interest income and four basis points to net interest margin.
Net interest margin, on a tax-equivalent basis, was 3.04% for the six months ended June 30, 2022, compared to 3.14% for the six months ended June 30, 2021. Excess liquidity reduced net interest margin by approximately 28 basis points for the six months ended June 30, 2022 compared to ten basis points for the six months ended June 30, 2021. PPP loans had a favorable impact on net interest margin of two basis points for the six months ended June 30, 2022 compared to seven basis points for the six months ended June 30, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.30% for the six months ended June 30, 2022 compared to 3.17% for the six months ended June 30, 2021.
Noninterest Income
Noninterest income for the quarter ended June 30, 2022 was $19.0 million, a decrease of $1.2 million, or 6.1%, compared to the second quarter of 2021. Noninterest income for the six months ended June 30, 2022 was $39.5 million, a decrease of $4.0 million, or 9.2%, from the comparable period in the prior year.
Net gain on mortgage banking activities decreased $2.2 million, or 64.5%, for the quarter and $6.2 million, or 66.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to a decrease in loan sales and a contraction of margins. Bank owned life insurance (“BOLI”) decreased $915 thousand, or 56.5%, for the quarter and $933 thousand, or 39.9%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to a death benefit claim of $893 thousand in the second quarter of 2021.
Insurance commission and fee income increased $790 thousand, or 20.6%, for the quarter and $1.4 million, or 16.0%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to incremental revenue attributable to the insurance agency the Corporation acquired in the fourth quarter of 2021. Investment advisory commission and fee income increased $254 thousand, or 5.6%, for the quarter and $709 thousand, or 7.7%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to new customer relationships and appreciation of assets under management, as a majority of investment advisory fees are billed based on the prior quarter-end assets under management balance.
Other service fee income increased $561 thousand, or 20.4%, for the quarter and $1.1 million, or 22.8%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. Mortgage servicing fees increased $357 thousand for the quarter and $619 thousand for the six months ended June 30, 2022 driven by reduced amortization as a result of a decrease in prepayment speeds. Interchange fee income increased $115 thousand for the quarter and $291 thousand for the six months ended June 30, 2022 due to increased customer activity.
Noninterest Expense
Noninterest expense for the quarter ended June 30, 2022 was $47.4 million, an increase of $6.1 million, or 14.7%, compared to the second quarter of 2021. Noninterest expense for the six months ended June 30, 2022 was $92.8 million, an increase of $12.0 million, or 14.8%, from the comparable period in the prior year. The results for the three and six months ended June 30, 2022 include approximately $1.4 million and $2.1 million, respectively, in expenses related to our digital transformation initiative, a comprehensive digital platform which will blend our core operating systems together and allow Univest to seamlessly sell existing products and services, digitally, across an expanded footprint.
Salaries, benefits and commissions increased $3.7 million, or 14.7%, for the quarter and $7.2 million, or 14.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. These increases reflect our continued investment in revenue producing staff across all business lines, including the acquisition of the Paul I. Schaeffer insurance agency, and annual merit increases. Additionally, during the three and six months ended June 30, 2022, we incurred $353 thousand and $740 thousand, respectively, of short-term incremental guaranties related to the hiring of new producers in our mortgage banking line of business. Finally, during the six months ended June 30, 2021 salaries, benefits and commissions expense was benefited by $616 thousand of incremental capitalized compensation related to the origination of PPP loans.
Professional fees increased $829 thousand, or 41.1%, for the quarter and $1.2 million, or 32.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. The increase for the three months ended June 30, 2022 was primarily attributable to $1.2 million of consultant fees spent related to the previously discussed digital transformation initiative, as compared to our $230 thousand investment in our Diversity, Equity and Inclusion training initiatives for the three months ended June 30, 2021. The increase for the six months ended June 30, 2022 was primarily attributable to $1.9 million of consultant fees spent related to the previously discussed digital transformation initiative, as compared to our $506 thousand investment in our Diversity, Equity and Inclusion training initiatives for the six months ended June 30, 2021. Deposit insurance premiums increased $199 thousand, or 32.5%, for the quarter and $456 thousand, or 36.5%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, driven by an increased assessment base.
Data processing expenses increased $644 thousand, or 21.0%, for the quarter and $1.2 million, or 19.0%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to continued investments in our end-to-end loan origination solution for loans below $1.0 million, customer relationship management software, internal infrastructure improvements, outsourced data processing solutions, and $155 thousand and $258 thousand in support of the previously discussed digital transformation initiative for the respective periods.
Other expense increased $676 thousand, or 11.7%, for the quarter and $1.7 million, or 15.3%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. Recruiting costs increased $138 thousand and $420 thousand for the three and six months ended June 30, 2022, respectively, due to increased hiring activity, including the entry into our two new expansions markets. Travel and entertainment expenses increased $309 thousand and $574 thousand for the three and six months ended June 30, 2022, respectively, as related activities have largely returned to pre-pandemic levels. Additionally, the six months ended June 30, 2022 includes incurred costs of $330 thousand as a result of a customer who was defrauded.
Tax Provision
The effective income tax rate was 19.8% for the quarter ended June 30, 2022, compared to an effective income tax rate of 19.0% for the quarter ended June 30, 2021. The effective income tax rate was 19.5% for the six months ended June 30, 2022, compared to an effective income tax rate of 19.2% for the six months ended June 30, 2021.The effective tax rate for the three and six months ended June 30, 2022 and 2021 reflects 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 $34.8 million at June 30, 2022, compared to $31.5 million at March 31, 2022 and $38.5 million at June 30, 2021. During the quarter, a nonaccrual commercial real estate loan was transferred to other real estate owned (“OREO”) with a carrying value of $18.3 million.
Net loan and lease charge-offs were $1.7 million and $1.8 million for the three and six months ended June 30, 2022, respectively. Net loan and lease charge-offs were $243 thousand and $531 thousand for the three and six months ended June 30, 2021, respectively. During the second quarter of 2022, a $1.7 million charge-off was recorded against an existing nonaccrual commercial real estate loan.
The provision for credit losses was $6.7 million for the second quarter of 2022 primarily driven by a $5.5 million increase (after-tax charge of $4.3 million), or $0.15 diluted earnings per share, in reserves due to loan growth, a specific reserve of $1.1 million related to a commercial real estate loan that was placed on nonaccrual status during the second quarter and an incremental provision of $736 thousand related to the previously mentioned $1.7 million charge-off. The reversal of provision for credit losses was $59 thousand for the second quarter of 2021 driven by a $2.7 million increase (after-tax charge of $2.1 million), or $0.07 diluted earnings per share, in reserves due to loan growth outpaced by favorable changes in economic-related assumptions within the Corporations CECL model.
The provision for credit losses was $3.2 million for the six months ended June 30, 2022 primarily driven by a $6.8 million increase (after-tax charge of $5.4 million), or $0.18 diluted earnings per share, in reserves due to loan growth and specific reserves of $2.8 million on two nonaccrual commercial real estate properties. These increases were partially offset by $7.3 million (after-tax benefit of $5.8 million), or $0.19 diluted earnings per share, of changes in economic-related assumptions within the Corporations CECL model. Additionally, reserves on unfunded commitments and investment securities increased $990 thousand during the six months ended June 30, 2022. The reversal of provision for credit losses was $11.3 million for the comparable period in the prior year, of which $15.8 million (after-tax benefit of $12.5 million), or $0.42 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporations CECL model, partially offset by a reserve increase attributable to loan growth.
The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.27% at June 30, 2022, compared to 1.26% at March 31, 2022, and 1.34% at June 30, 2021. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans1, was 1.27% at June 30, 2022 compared to 1.27% at March 31, 2022 and 1.41% at June 30, 2021.
Share Repurchases
As previously announced, the Corporation began to repurchase its common stock on the open market. During the second quarter of 2022, the Corporation repurchased 300,000 shares at an average price of $25.23, for an aggregate cost of $7.6 million. As of June 30, 2022, the Corporation has 379,174 shares remaining to repurchase under the current approved plan.
Dividend
On July 27, 2022, Univest declared a quarterly cash dividend of $0.21 per share to be paid on August 24, 2022 to shareholders of record as of August 10, 2022.
Conference Call
Univest will host a conference call to discuss second quarter 2022 results on Thursday, July 28, 2022 at 9:00 a.m. EST. Participants may preregister at https://ige.netroadshow.com/registration/q4inc/11282/univest-financial-corporation-to-hold-second-quarter-2022-earnings-call/. The general public can access the call by dialing 1-844-200-6205; using Access Code 571585. A replay of the conference call will be available through August 27, 2022 by dialing 1-866-813-9403; using Access Code: 134898.
1Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included within this document.
About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $6.7 billion in assets and $4.1 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2022. 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 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 results, business 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 economic conditions nationally and in our market; (5) economic assumptions that may impact our allowance for credit losses calculation; (6) legislative, regulatory or tax changes; (7) technological issues that may adversely affect our operations or those of our customers; (8) changes in the securities markets; (9) the current or anticipated impact of military conflict, terrorism or other geopolitical events; or (10) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.
Additionally, it is difficult to predict the continued effects of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: (1) demand for our products and services may decline; (2) if economic conditions worsen, loan delinquencies, problem assets, and foreclosures may increase and our allowance for credit losses may have to be increased; (3) collateral for loans, especially real estate, may decline in value; (4) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (5) a material decrease in net income or a net loss over several quarters could result in the elimination of or a decrease in the rate of our quarterly cash dividend; (6) our wealth management revenues may decline with market turmoil; and (7) our cyber security risks may increase as the result of an increase in the number of employees working remotely. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.
(UVSP – ER)
| Univest Financial Corporation | ||||||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | ||||||||||||||||||||||||||
| June 30, 2022 | ||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
| Balance Sheet (Period End) | 06/30/22 | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | |||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||
| Cash and due from banks | $ | 59,590 | $ | 57,307 | $ | 49,202 | $ | 67,517 | $ | 50,358 | ||||||||||||||||
| Interest-earning deposits with other banks | 35,187 | 716,474 | 840,948 | 834,840 | 153,091 | |||||||||||||||||||||
| Cash and cash equivalents | 94,777 | 773,781 | 890,150 | 902,357 | 203,449 | |||||||||||||||||||||
| Investment securities held-to-maturity | 159,808 | 166,339 | 176,983 | 112,643 | 119,692 | |||||||||||||||||||||
| Investment securities available for sale, net of allowance for credit losses | 351,382 | 349,994 | 317,007 | 277,773 | 274,862 | |||||||||||||||||||||
| Investments in equity securities | 2,934 | 2,569 | 2,999 | 2,961 | 2,872 | |||||||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost | 29,116 | 26,330 | 28,186 | 28,679 | 25,228 | |||||||||||||||||||||
| Loans held for sale | 8,352 | 14,521 | 21,600 | 29,093 | 27,322 | |||||||||||||||||||||
| Loans and leases held for investment | 5,661,777 | 5,400,786 | 5,310,017 | 5,252,045 | 5,327,313 | |||||||||||||||||||||
| Less: Allowance for credit losses, loans and leases | (72,011 | ) | (68,286 | ) | (71,924 | ) | (70,146 | ) | (71,355 | ) | ||||||||||||||||
| Net loans and leases held for investment | 5,589,766 | 5,332,500 | 5,238,093 | 5,181,899 | 5,255,958 | |||||||||||||||||||||
| Premises and equipment, net | 50,080 | 50,429 | 56,882 | 55,354 | 56,067 | |||||||||||||||||||||
| Operating lease right-of-use assets | 30,929 | 30,498 | 30,407 | 31,570 | 33,688 | |||||||||||||||||||||
| Goodwill | 175,510 | 175,510 | 175,510 | 172,559 | 172,559 | |||||||||||||||||||||
| Other intangibles, net of accumulated amortization | 11,728 | 11,784 | 11,848 | 9,359 | 9,396 | |||||||||||||||||||||
| Bank owned life insurance | 120,103 | 119,398 | 118,699 | 117,981 | 117,765 | |||||||||||||||||||||
| Accrued interest and other assets | 76,328 | 54,087 | 54,057 | 57,624 | 57,447 | |||||||||||||||||||||
| Total assets | $ | 6,700,813 | $ | 7,107,740 | $ | 7,122,421 | $ | 6,979,852 | $ | 6,356,305 | ||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 2,062,538 | $ | 2,136,467 | $ | 2,065,423 | $ | 1,861,007 | $ | 1,872,031 | ||||||||||||||||
| Interest-bearing deposits: | 3,500,510 | 3,911,465 | 3,989,701 | 4,077,147 | 3,446,673 | |||||||||||||||||||||
| Total deposits | 5,563,048 | 6,047,932 | 6,055,124 | 5,938,154 | 5,318,704 | |||||||||||||||||||||
| Short-term borrowings | 97,606 | 18,976 | 20,106 | 14,101 | 25,251 | |||||||||||||||||||||
| Long-term debt | 95,000 | 95,000 | 95,000 | 95,000 | 95,000 | |||||||||||||||||||||
| Subordinated notes | 99,030 | 98,952 | 98,874 | 98,797 | 98,719 | |||||||||||||||||||||
| Operating lease liabilities | 33,951 | 33,566 | 33,453 | 34,641 | 37,131 | |||||||||||||||||||||
| Accrued expenses and other liabilities | 48,253 | 39,459 | 46,070 | 43,136 | 41,502 | |||||||||||||||||||||
| Total liabilities | 5,936,888 | 6,333,885 | 6,348,627 | 6,223,829 | 5,616,307 | |||||||||||||||||||||
| SHAREHOLDER’S 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 | 298,800 | 297,945 | 299,181 | 298,033 | 297,208 | |||||||||||||||||||||
| Retained earnings | 396,295 | 389,332 | 375,124 | 363,607 | 348,579 | |||||||||||||||||||||
| Accumulated other comprehensive loss, net of tax benefit | (42,781 | ) | (31,909 | ) | (16,353 | ) | (20,073 | ) | (19,545 | ) | ||||||||||||||||
| Treasury stock, at cost | (46,173 | ) | (39,297 | ) | (41,942 | ) | (43,328 | ) | (44,028 | ) | ||||||||||||||||
| Total shareholders equity | 763,925 | 773,855 | 773,794 | 756,023 | 739,998 | |||||||||||||||||||||
| Total liabilities and shareholders equity | $ | 6,700,813 | $ | 7,107,740 | $ | 7,122,421 | $ | 6,979,852 | $ | 6,356,305 | ||||||||||||||||
| For the three months ended, | For the six months ended, | |||||||||||||||||||||||||
| Balance Sheet (Average) | 06/30/22 | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 06/30/22 | 06/30/21 | |||||||||||||||||||
| Assets | $ | 6,962,401 | $ | 7,047,980 | $ | 7,088,289 | $ | 6,698,177 | $ | 6,443,629 | 7,004,954 | $ | 6,413,712 | |||||||||||||
| Investment securities, net of allowance for credit losses | 515,741 | 522,128 | 469,588 | 395,280 | 385,694 | 518,917 | 380,063 | |||||||||||||||||||
| Loans and leases, gross | 5,520,580 | 5,344,698 | 5,255,279 | 5,320,411 | 5,389,110 | 5,433,125 | 5,357,678 | |||||||||||||||||||
| Deposits | 5,903,173 | 5,984,815 | 6,041,798 | 5,666,725 | 5,351,089 | 5,943,769 | 5,323,770 | |||||||||||||||||||
| Shareholders’ equity | 771,410 | 774,358 | 762,334 | 746,185 | 728,750 | 772,876 | 714,324 | |||||||||||||||||||
| Univest Financial Corporation | ||||||||||||||||||||||||||||
| Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited) | ||||||||||||||||||||||||||||
| June 30, 2022 | ||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||
| Summary of Major Loan and Lease Categories (Period End) | 06/30/22 | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | |||||||||||||||||||||||
| Commercial, financial and agricultural | $ | 1,028,354 | $ | 932,485 | $ | 956,396 | $ | 927,015 | $ | 920,621 | ||||||||||||||||||
| Paycheck Protection Program | 5,358 | 10,298 | 31,748 | 85,601 | 252,849 | |||||||||||||||||||||||
| Real estate-commercial | 2,870,286 | 2,816,737 | 2,718,535 | 2,669,898 | 2,600,919 | |||||||||||||||||||||||
| Real estate-construction | 319,449 | 285,083 | 283,918 | 260,874 | 274,529 | |||||||||||||||||||||||
| Real estate-residential secured for business purpose | 419,652 | 412,486 | 409,900 | 412,001 | 407,664 | |||||||||||||||||||||||
| Real estate-residential secured for personal purpose | 629,144 | 568,735 | 540,566 | 535,705 | 513,330 | |||||||||||||||||||||||
| Real estate-home equity secured for personal purpose | 168,536 | 160,134 | 158,909 | 159,029 | 160,018 | |||||||||||||||||||||||
| Loans to individuals | 27,061 | 26,249 | 25,504 | 26,458 | 25,845 | |||||||||||||||||||||||
| Lease financings | 193,937 | 188,579 | 184,541 | 175,464 | 171,538 | |||||||||||||||||||||||
| Total loans and leases held for investment, net of deferred income | 5,661,777 | 5,400,786 | 5,310,017 | 5,252,045 | 5,327,313 | |||||||||||||||||||||||
| Less: Allowance for credit losses, loans and leases | (72,011 | ) | (68,286 | ) | (71,924 | ) | (70,146 | ) | (71,355 | ) | ||||||||||||||||||
| Net loans and leases held for investment | $ | 5,589,766 | $ | 5,332,500 | $ | 5,238,093 | $ | 5,181,899 | $ | 5,255,958 | ||||||||||||||||||
| Asset Quality Data (Period End) | 06/30/22 | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | |||||||||||||||||||||||
| Nonaccrual loans and leases, including nonaccrual troubled debt restructured | ||||||||||||||||||||||||||||
| loans and leases | $ | 13,355 | $ | 30,876 | $ | 33,210 | $ | 34,528 | $ | 37,466 | ||||||||||||||||||
| Accruing loans and leases 90 days or more past due | 2,784 | 274 | 498 | 2,204 | 750 | |||||||||||||||||||||||
| Accruing troubled debt restructured loans and leases | 50 | 51 | 51 | 51 | 52 | |||||||||||||||||||||||
| Total nonperforming loans and leases | 16,189 | 31,201 | 33,759 | 36,783 | 38,268 | |||||||||||||||||||||||
| Other real estate owned | 18,604 | 279 | 279 | 279 | 279 | |||||||||||||||||||||||
| Total nonperforming assets | $ | 34,793 | $ | 31,480 | $ | 34,038 | $ | 37,062 | $ | 38,547 | ||||||||||||||||||
| Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale | 0.24 | % | 0.57 | % | 0.63 | % | 0.66 | % | 0.70 | % | ||||||||||||||||||
| Nonperforming loans and leases / Loans and leases held for investment | 0.29 | % | 0.58 | % | 0.64 | % | 0.70 | % | 0.72 | % | ||||||||||||||||||
| Nonperforming assets / Total assets | 0.52 | % | 0.44 | % | 0.48 | % | 0.53 | % | 0.61 | % | ||||||||||||||||||
| Allowance for credit losses, loans and leases | $ | 72,011 | $ | 68,286 | $ | 71,924 | $ | 70,146 | $ | 71,355 | ||||||||||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment | 1.27 | % | 1.26 | % | 1.35 | % | 1.34 | % | 1.34 | % | ||||||||||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1) | 1.27 | % | 1.27 | % | 1.36 | % | 1.36 | % | 1.41 | % | ||||||||||||||||||
| Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment | 539.21 | % | 221.16 | % | 216.57 | % | 203.16 | % | 212.97 | % | ||||||||||||||||||
| Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment | 444.81 | % | 218.86 | % | 213.05 | % | 190.70 | % | 208.00 | % | ||||||||||||||||||
| For the three months ended, | For the six months ended, | |||||||||||||||||||||||||||
| 06/30/22 | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 06/30/22 | 06/30/21 | ||||||||||||||||||||||
| Net loan and lease charge-offs (recoveries) | $ | 1,715 | $ | 76 | $ | (243 | ) | $ | (75 | ) | $ | 243 | $ | 1,791 | $ | 531 | ||||||||||||
| Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases | 0.12 | % | 0.01 | % | (0.02 | %) | (0.01 | %) | 0.02 | % | 0.07 | % | 0.02 | % | ||||||||||||||
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document. | ||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||||||
| June 30, 2022 | |||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||
| For the three months ended, | For the six months ended, | ||||||||||||||||||||||||
| For the period: | 06/30/22 | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 06/30/22 | 06/30/21 | ||||||||||||||||||
| Interest income | $ | 56,717 | $ | 51,198 | $ | 52,262 | $ | 53,571 | $ | 52,441 | $ | 107,915 | $ | 103,898 | |||||||||||
| Interest expense | 5,246 | 4,538 | 4,737 | 4,884 | 5,684 | 9,784 | 11,727 | ||||||||||||||||||
| Net interest income | 51,471 | 46,660 | 47,525 | 48,687 | 46,757 | 98,131 | 92,171 | ||||||||||||||||||
| Provison (reversal of provision) for credit losses | 6,674 | (3,450 | ) | 1,392 | (182 | ) | (59 | ) | 3,224 | (11,342 | ) | ||||||||||||||
| Net interest income after provision for credit losses | 44,797 | 50,110 | 46,133 | 48,869 | 46,816 | 94,907 | 103,513 | ||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||
| Trust fee income | 1,998 | 2,102 | 2,086 | 2,126 | 2,157 | 4,100 | 4,191 | ||||||||||||||||||
| Service charges on deposit accounts | 1,574 | 1,504 | 1,486 | 1,422 | 1,314 | 3,078 | 2,596 | ||||||||||||||||||
| Investment advisory commission and fee income | 4,812 | 5,152 | 4,885 | 4,796 | 4,558 | 9,964 | 9,255 | ||||||||||||||||||
| Insurance commission and fee income | 4,629 | 5,570 | 3,726 | 3,837 | 3,839 | 10,199 | 8,794 | ||||||||||||||||||
| Other service fee income | 3,309 | 2,756 | 2,759 | 2,576 | 2,748 | 6,065 | 4,940 | ||||||||||||||||||
| Bank owned life insurance income | 705 | 699 | 719 | 925 | 1,620 | 1,404 | 2,337 | ||||||||||||||||||
| Net gain on sales of investment securities | – | 30 | 5 | 21 | 54 | 30 | 119 | ||||||||||||||||||
| Net gain on mortgage banking activities | 1,230 | 1,929 | 2,518 | 3,224 | 3,461 | 3,159 | 9,399 | ||||||||||||||||||
| Other income | 741 | 728 | 1,008 | 1,625 | 479 | 1,469 | 1,849 | ||||||||||||||||||
| Total noninterest income | 18,998 | 20,470 | 19,192 | 20,552 | 20,230 | 39,468 | 43,480 | ||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||
| Salaries, benefits and commissions | 29,133 | 28,245 | 27,374 | 26,641 | 25,396 | 57,378 | 50,176 | ||||||||||||||||||
| Net occupancy | 2,422 | 2,716 | 2,477 | 2,525 | 2,656 | 5,138 | 5,395 | ||||||||||||||||||
| Equipment | 977 | 982 | 985 | 1,000 | 968 | 1,959 | 1,914 | ||||||||||||||||||
| Data processing | 3,708 | 3,567 | 3,355 | 3,274 | 3,064 | 7,275 | 6,114 | ||||||||||||||||||
| Professional fees | 2,844 | 2,138 | 1,750 | 2,174 | 2,015 | 4,982 | 3,763 | ||||||||||||||||||
| Marketing and advertising | 693 | 425 | 683 | 539 | 561 | 1,118 | 841 | ||||||||||||||||||
| Deposit insurance premiums | 812 | 893 | 698 | 765 | 613 | 1,705 | 1,249 | ||||||||||||||||||
| Intangible expenses | 342 | 341 | 267 | 214 | 249 | 683 | 498 | ||||||||||||||||||
| Other expense | 6,440 | 6,105 | 5,746 | 6,116 | 5,764 | 12,545 | 10,876 | ||||||||||||||||||
| Total noninterest expense | 47,371 | 45,412 | 43,335 | 43,248 | 41,286 | 92,783 | 80,826 | ||||||||||||||||||
| Income before taxes | 16,424 | 25,168 | 21,990 | 26,173 | 25,760 | 41,592 | 66,167 | ||||||||||||||||||
| Income tax expense | 3,258 | 4,851 | 4,578 | 5,262 | 4,885 | 8,109 | 12,689 | ||||||||||||||||||
| Net income | $ | 13,166 | $ | 20,317 | $ | 17,412 | $ | 20,911 | $ | 20,875 | $ | 33,483 | $ | 53,478 | |||||||||||
| Net income per share: | |||||||||||||||||||||||||
| Basic | $ | 0.45 | $ | 0.69 | $ | 0.59 | $ | 0.71 | $ | 0.71 | $ | 1.14 | $ | 1.82 | |||||||||||
| Diluted | $ | 0.45 | $ | 0.68 | $ | 0.59 | $ | 0.71 | $ | 0.71 | $ | 1.13 | $ | 1.81 | |||||||||||
| Dividends declared per share | $ | 0.21 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.41 | $ | 0.40 | |||||||||||
| Weighted average shares outstanding | 29,490,154 | 29,542,467 | 29,471,304 | 29,420,256 | 29,389,525 | 29,516,166 | 29,359,198 | ||||||||||||||||||
| Period end shares outstanding | 29,365,775 | 29,636,425 | 29,500,542 | 29,438,402 | 29,411,731 | 29,365,775 | 29,411,731 | ||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||||||||||||
| June 30, 2022 | |||||||||||||||||||||||||||||||
| For the three months ended, | For the six months ended, | ||||||||||||||||||||||||||||||
| Profitability Ratios (annualized) | 06/30/22 | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 06/30/22 | 06/30/21 | ||||||||||||||||||||||||
| Return on average assets | 0.76 | % | 1.17 | % | 0.97 | % | 1.24 | % | 1.30 | % | 0.96 | % | 1.68 | % | |||||||||||||||||
| Return on average shareholders’ equity | 6.85 | % | 10.64 | % | 9.06 | % | 11.12 | % | 11.49 | % | 8.74 | % | 15.10 | % | |||||||||||||||||
| Return on average tangible common equity (1)(3) | 9.10 | % | 14.04 | % | 11.93 | % | 14.63 | % | 15.26 | % | 11.56 | % | 20.14 | % | |||||||||||||||||
| Net interest margin (FTE) | 3.19 | % | 2.89 | % | 2.86 | % | 3.11 | % | 3.15 | % | 3.04 | % | 3.14 | % | |||||||||||||||||
| Efficiency ratio (2) | 66.6 | % | 67.0 | % | 64.3 | % | 61.8 | % | 60.7 | % | 66.8 | % | 58.8 | % | |||||||||||||||||
| Capitalization Ratios | |||||||||||||||||||||||||||||||
| Dividends declared to net income | 47.1 | % | 29.1 | % | 33.9 | % | 28.1 | % | 28.2 | % | 36.2 | % | 22.0 | % | |||||||||||||||||
| Shareholders’ equity to assets (Period End) | 11.40 | % | 10.89 | % | 10.86 | % | 10.83 | % | 11.64 | % | 11.40 | % | 11.64 | % | |||||||||||||||||
| Tangible common equity to tangible assets (1) | 8.97 | % | 8.58 | % | 8.56 | % | 8.55 | % | 9.15 | % | 8.97 | % | 9.15 | % | |||||||||||||||||
| Common equity book value per share | $ | 26.01 | $ | 26.11 | $ | 26.23 | $ | 25.68 | $ | 25.16 | $ | 26.01 | $ | 25.16 | |||||||||||||||||
| Tangible common equity book value per share (1) | $ | 19.91 | $ | 20.06 | $ | 20.14 | $ | 19.75 | $ | 19.22 | $ | 19.91 | $ | 19.22 | |||||||||||||||||
| Regulatory Capital Ratios (Period End) | |||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 9.45 | % | 9.35 | % | 9.13 | % | 9.53 | % | 9.64 | % | 9.45 | % | 9.64 | % | |||||||||||||||||
| Common equity tier 1 risk-based capital ratio | 10.62 | % | 11.07 | % | 11.08 | % | 11.15 | % | 11.04 | % | 10.62 | % | 11.04 | % | |||||||||||||||||
| Tier 1 risk-based capital ratio | 10.62 | % | 11.07 | % | 11.08 | % | 11.15 | % | 11.04 | % | 10.62 | % | 11.04 | % | |||||||||||||||||
| Total risk-based capital ratio | 13.23 | % | 13.73 | % | 13.77 | % | 13.87 | % | 13.82 | % | 13.23 | % | 13.82 | % | |||||||||||||||||
| (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 Basis | June 30, 2022 | March 31, 2022 | ||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | |||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||
| Assets: | ||||||||||||||
| Interest-earning deposits with other banks | $ | 474,260 | $ | 824 | 0.70 | % | $ | 733,173 | $ | 357 | 0.20 | % | ||
| U.S. government obligations | 2,000 | 11 | 2.21 | 5,222 | 26 | 2.02 | ||||||||
| Obligations of state and political subdivisions* | 2,302 | 17 | 2.96 | 2,332 | 19 | 3.30 | ||||||||
| Other debt and equity securities | 511,439 | 2,727 | 2.14 | 514,574 | 2,339 | 1.84 | ||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 26,221 | 344 | 5.26 | 27,115 | 355 | 5.31 | ||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 1,016,222 | 3,923 | 1.55 | 1,282,416 | 3,096 | 0.98 | ||||||||
| Commercial, financial, and agricultural loans | 937,846 | 9,037 | 3.86 | 901,555 | 7,571 | 3.41 | ||||||||
| Paycheck Protection Program loans | 7,644 | 155 | 8.13 | 18,402 | 591 | 13.02 | ||||||||
| Real estatecommercial and construction loans | 3,004,509 | 28,527 | 3.81 | 2,904,602 | 25,820 | 3.61 | ||||||||
| Real estateresidential loans | 1,166,201 | 10,758 | 3.70 | 1,116,356 | 9,882 | 3.59 | ||||||||
| Loans to individuals | 26,782 | 305 | 4.57 | 25,799 | 238 | 3.74 | ||||||||
| Municipal loans and leases * | 235,922 | 2,404 | 4.09 | 242,508 | 2,434 | 4.07 | ||||||||
| Lease financings | 141,676 | 2,105 | 5.96 | 135,476 | 2,075 | 6.21 | ||||||||
| Gross loans and leases | 5,520,580 | 53,291 | 3.87 | 5,344,698 | 48,611 | 3.69 | ||||||||
| Total interest-earning assets | 6,536,802 | 57,214 | 3.51 | 6,627,114 | 51,707 | 3.16 | ||||||||
| Cash and due from banks | 55,634 | 53,698 | ||||||||||||
| Allowance for credit losses, loans and leases | (68,426 | ) | (72,067 | ) | ||||||||||
| Premises and equipment, net | 50,266 | 53,948 | ||||||||||||
| Operating lease right-of-use assets | 30,222 | 30,394 | ||||||||||||
| Other assets | 357,903 | 354,893 | ||||||||||||
| Total assets | $ | 6,962,401 | $ | 7,047,980 | ||||||||||
| Liabilities: | ||||||||||||||
| Interest-bearing checking deposits | $ | 851,324 | $ | 570 | 0.27 | % | $ | 881,462 | $ | 443 | 0.20 | % | ||
| Money market savings | 1,405,536 | 1,552 | 0.44 | 1,542,581 | 904 | 0.24 | ||||||||
| Regular savings | 1,070,480 | 237 | 0.09 | 1,021,550 | 238 | 0.09 | ||||||||
| Time deposits | 452,989 | 1,227 | 1.09 | 473,589 | 1,306 | 1.12 | ||||||||
| Total time and interest-bearing deposits | 3,780,329 | 3,586 | 0.38 | 3,919,182 | 2,891 | 0.30 | ||||||||
| Short-term borrowings | 17,253 | 11 | 0.26 | 17,636 | 2 | 0.05 | ||||||||
| Long-term debt | 95,000 | 321 | 1.36 | 95,000 | 317 | 1.35 | ||||||||
| Subordinated notes | 98,988 | 1,328 | 5.38 | 98,911 | 1,328 | 5.45 | ||||||||
| Total borrowings | 211,241 | 1,660 | 3.15 | 211,547 | 1,647 | 3.16 | ||||||||
| Total interest-bearing liabilities | 3,991,570 | 5,246 | 0.53 | 4,130,729 | 4,538 | 0.45 | ||||||||
| Noninterest-bearing deposits | 2,122,844 | 2,065,633 | ||||||||||||
| Operating lease liabilities | 33,300 | 33,452 | ||||||||||||
| Accrued expenses and other liabilities | 43,277 | 43,808 | ||||||||||||
| Total liabilities | 6,190,991 | 6,273,622 | ||||||||||||
| Shareholders’ Equity: | ||||||||||||||
| Common stock | 157,784 | 157,784 | ||||||||||||
| Additional paid-in capital | 298,241 | 298,975 | ||||||||||||
| Retained earnings and other equity | 315,385 | 317,599 | ||||||||||||
| Total shareholders’ equity | 771,410 | 774,358 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 6,962,401 | $ | 7,047,980 | ||||||||||
| Net interest income | $ | 51,968 | $ | 47,169 | ||||||||||
| Net interest spread | 2.98 | 2.71 | ||||||||||||
| Effect of net interest-free funding sources | 0.21 | 0.18 | ||||||||||||
| Net interest margin | 3.19 | % | 2.89 | % | ||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 163.77 | % | 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 of $(618) thousand and $(136) thousand for the three months ended June 30, 2022 and March 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 June 30, 2022 and March 31, 2022 have been calculated using the Corporations 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 | 2022 | 2021 | ||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | |||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||
| Assets: | ||||||||||||||
| Interest-earning deposits with other banks | $ | 474,260 | $ | 824 | 0.70 | % | $ | 215,349 | $ | 46 | 0.09 | % | ||
| U.S. government obligations | 2,000 | 11 | 2.21 | 6,999 | 35 | 2.01 | ||||||||
| Obligations of state and political subdivisions* | 2,302 | 17 | 2.96 | 6,070 | 58 | 3.83 | ||||||||
| Other debt and equity securities | 511,439 | 2,727 | 2.14 | 372,625 | 1,364 | 1.47 | ||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 26,221 | 344 | 5.26 | 25,872 | 360 | 5.58 | ||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 1,016,222 | 3,923 | 1.55 | 626,915 | 1,863 | 1.19 | ||||||||
| Commercial, financial, and agricultural loans | 937,846 | 9,037 | 3.86 | 826,464 | 6,910 | 3.35 | ||||||||
| Paycheck Protection Program loans | 7,644 | 155 | 8.13 | 408,928 | 4,778 | 4.69 | ||||||||
| Real estatecommercial and construction loans | 3,004,509 | 28,527 | 3.81 | 2,701,137 | 24,931 | 3.70 | ||||||||
| Real estateresidential loans | 1,166,201 | 10,758 | 3.70 | 1,065,065 | 9,836 | 3.70 | ||||||||
| Loans to individuals | 26,782 | 305 | 4.57 | 25,284 | 251 | 3.98 | ||||||||
| Municipal loans and leases* | 235,922 | 2,404 | 4.09 | 251,311 | 2,598 | 4.15 | ||||||||
| Lease financings | 141,676 | 2,105 | 5.96 | 110,921 | 1,819 | 6.58 | ||||||||
| Gross loans and leases | 5,520,580 | 53,291 | 3.87 | 5,389,110 | 51,123 | 3.80 | ||||||||
| Total interest-earning assets | 6,536,802 | 57,214 | 3.51 | 6,016,025 | 52,986 | 3.53 | ||||||||
| Cash and due from banks | 55,634 | 52,948 | ||||||||||||
| Allowance for credit losses, loans and leases | (68,426 | ) | (73,052 | ) | ||||||||||
| Premises and equipment, net | 50,266 | 55,903 | ||||||||||||
| Operating lease right-of-use assets | 30,222 | 33,992 | ||||||||||||
| Other assets | 357,903 | 357,813 | ||||||||||||
| Total assets | $ | 6,962,401 | $ | 6,443,629 | ||||||||||
| Liabilities: | ||||||||||||||
| Interest-bearing checking deposits | $ | 851,324 | $ | 570 | 0.27 | % | $ | 786,931 | $ | 487 | 0.25 | % | ||
| Money market savings | 1,405,536 | 1,552 | 0.44 | 1,219,375 | 831 | 0.27 | ||||||||
| Regular savings | 1,070,480 | 237 | 0.09 | 978,807 | 282 | 0.12 | ||||||||
| Time deposits | 452,989 | 1,227 | 1.09 | 485,060 | 1,559 | 1.29 | ||||||||
| Total time and interest-bearing deposits | 3,780,329 | 3,586 | 0.38 | 3,470,173 | 3,159 | 0.37 | ||||||||
| Short-term borrowings | 17,253 | 11 | 0.26 | 19,109 | 3 | 0.06 | ||||||||
| Long-term debt | 95,000 | 321 | 1.36 | 95,000 | 321 | 1.36 | ||||||||
| Subordinated notes | 98,988 | 1,328 | 5.38 | 172,016 | 2,201 | 5.13 | ||||||||
| Total borrowings | 211,241 | 1,660 | 3.15 | 286,125 | 2,525 | 3.54 | ||||||||
| Total interest-bearing liabilities | 3,991,570 | 5,246 | 0.53 | 3,756,298 | 5,684 | 0.61 | ||||||||
| Noninterest-bearing deposits | 2,122,844 | 1,880,916 | ||||||||||||
| Operating lease liabilities | 33,300 | 37,426 | ||||||||||||
| Accrued expenses and other liabilities | 43,277 | 40,239 | ||||||||||||
| Total liabilities | 6,190,991 | 5,714,879 | ||||||||||||
| Shareholders’ Equity: | ||||||||||||||
| Common stock | 157,784 | 157,784 | ||||||||||||
| Additional paid-in capital | 298,241 | 296,599 | ||||||||||||
| Retained earnings and other equity | 315,385 | 274,367 | ||||||||||||
| Total shareholders’ equity | 771,410 | 728,750 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 6,962,401 | $ | 6,443,629 | ||||||||||
| Net interest income | $ | 51,968 | $ | 47,302 | ||||||||||
| Net interest spread | 2.98 | 2.92 | ||||||||||||
| Effect of net interest-free funding sources | 0.21 | 0.23 | ||||||||||||
| Net interest margin | 3.19 | % | 3.15 | % | ||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 163.77 | % | 160.16 | % | ||||||||||
| * 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) fees of $(618)thousand and $2.7 million for the three months ended June 30, 2022 and 2021, 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, 2022 and 2021 have been calculated using the Corporations 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 | 2022 | 2021 | ||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | |||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||
| Assets: | ||||||||||||||
| Interest-earning deposits with other banks | $ | 603,002 | $ | 1,181 | 0.39 | % | $ | 226,387 | $ | 102 | 0.09 | % | ||
| U.S. government obligations | 3,602 | 37 | 2.07 | 6,999 | 71 | 2.05 | ||||||||
| Obligations of state and political subdivisions* | 2,317 | 36 | 3.13 | 8,792 | 163 | 3.74 | ||||||||
| Other debt and equity securities | 512,998 | 5,066 | 1.99 | 364,272 | 2,631 | 1.46 | ||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 26,665 | 699 | 5.29 | 26,119 | 708 | 5.47 | ||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 1,148,584 | 7,019 | 1.23 | 632,569 | 3,675 | 1.17 | ||||||||
| Commercial, financial, and agricultural loans | 919,801 | 16,608 | 3.64 | 804,458 | 13,708 | 3.44 | ||||||||
| Paycheck Protection Program loans | 12,994 | 746 | 11.58 | 457,663 | 9,302 | 4.10 | ||||||||
| Real estatecommercial and construction loans | 2,954,831 | 54,347 | 3.71 | 2,661,778 | 49,389 | 3.74 | ||||||||
| Real estateresidential loans | 1,141,416 | 20,640 | 3.65 | 1,051,110 | 19,709 | 3.78 | ||||||||
| Loans to individuals | 26,293 | 543 | 4.16 | 25,862 | 516 | 4.02 | ||||||||
| Municipal loans and leases* | 239,197 | 4,838 | 4.08 | 248,490 | 5,128 | 4.16 | ||||||||
| Lease financings | 138,593 | 4,180 | 6.08 | 108,317 | 3,556 | 6.62 | ||||||||
| Gross loans and leases | 5,433,125 | 101,902 | 3.78 | 5,357,678 | 101,308 | 3.81 | ||||||||
| Total interest-earning assets | 6,581,709 | 108,921 | 3.34 | 5,990,247 | 104,983 | 3.53 | ||||||||
| Cash and due from banks | 54,671 | 54,123 | ||||||||||||
| Allowance for credit losses, loans and leases | (70,237 | ) | (78,125 | ) | ||||||||||
| Premises and equipment, net | 52,097 | 55,865 | ||||||||||||
| Operating lease right-of-use assets | 30,308 | 34,013 | ||||||||||||
| Other assets | 356,406 | 357,589 | ||||||||||||
| Total assets | $ | 7,004,954 | $ | 6,413,712 | ||||||||||
| Liabilities: | ||||||||||||||
| Interest-bearing checking deposits | $ | 866,310 | $ | 1,013 | 0.24 | % | $ | 802,350 | $ | 977 | 0.25 | % | ||
| Money market savings | 1,473,680 | 2,456 | 0.34 | 1,231,457 | 1,684 | 0.28 | ||||||||
| Regular savings | 1,046,150 | 475 | 0.09 | 969,073 | 580 | 0.12 | ||||||||
| Time deposits | 463,232 | 2,533 | 1.10 | 505,318 | 3,318 | 1.32 | ||||||||
| Total time and interest-bearing deposits | 3,849,372 | 6,477 | 0.34 | 3,508,198 | 6,559 | 0.38 | ||||||||
| Short-term borrowings | 17,443 | 13 | 0.15 | 18,506 | 5 | 0.05 | ||||||||
| Long-term debt | 95,000 | 638 | 1.35 | 98,149 | 669 | 1.37 | ||||||||
| Subordinated notes | 98,950 | 2,656 | 5.41 | 177,647 | 4,494 | 5.10 | ||||||||
| Total borrowings | 211,393 | 3,307 | 3.15 | 294,302 | 5,168 | 3.54 | ||||||||
| Total interest-bearing liabilities | 4,060,765 | 9,784 | 0.49 | 3,802,500 | 11,727 | 0.62 | ||||||||
| Noninterest-bearing deposits | 2,094,397 | 1,815,572 | ||||||||||||
| Operating lease liabilities | 33,375 | 37,419 | ||||||||||||
| Accrued expenses and other liabilities | 43,541 | 43,897 | ||||||||||||
| Total liabilities | 6,232,078 | 5,699,388 | ||||||||||||
| Shareholders’ Equity: | ||||||||||||||
| Common stock | 157,784 | 157,784 | ||||||||||||
| Additional paid-in capital | 298,606 | 296,369 | ||||||||||||
| Retained earnings and other equity | 316,486 | 260,171 | ||||||||||||
| Total shareholders’ equity | 772,876 | 714,324 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,004,954 | $ | 6,413,712 | ||||||||||
| Net interest income | $ | 99,137 | $ | 93,256 | ||||||||||
| Net interest spread | 2.85 | 2.91 | ||||||||||||
| Effect of net interest-free funding sources | 0.19 | 0.23 | ||||||||||||
| Net interest margin | 3.04 | % | 3.14 | % | ||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 162.08 | % | 157.53 | % | ||||||||||
| * 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) fees of $(754) thousand and $5.0 million for the six months ended June 30, 2022 and 2021, 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, 2022 and 2021 have been calculated using the Corporations federal applicable rate of 21.0%. | ||||||||||||||
| Univest Financial Corporation | ||||
| Loan Portfolio Overview (Unaudited) | ||||
| As of June 30, 2022 | ||||
| (Dollars in thousands) | ||||
| Industry Description | Total Outstanding Balance (excl PPP) | % of Commercial Loan Portfolio | ||
| CRE – Retail | 379,935 | 8.2 | % | |
| Animal Production | 315,801 | 6.8 | ||
| CRE – Multi-family | 262,182 | 5.7 | ||
| CRE – 1-4 Family Residential Investment | 240,887 | 5.2 | ||
| CRE – Office | 215,847 | 4.7 | ||
| Hotels & Motels (Accommodation) | 188,811 | 4.1 | ||
| CRE – Industrial / Warehouse | 185,241 | 4.0 | ||
| Education | 161,151 | 3.5 | ||
| Nursing and Residential Care Facilities | 154,034 | 3.3 | ||
| Specialty Trade Contractors | 143,724 | 3.1 | ||
| Homebuilding (tract developers, remodelers) | 118,877 | 2.6 | ||
| Motor Vehicle and Parts Dealers | 112,372 | 2.4 | ||
| CRE – Medical Office | 108,978 | 2.3 | ||
| CRE – Mixed-Use – Residential | 106,228 | 2.3 | ||
| Merchant Wholesalers, Durable Goods | 100,825 | 2.2 | ||
| Crop Production | 88,786 | 1.9 | ||
| Food Manufacturing | 85,953 | 1.9 | ||
| Administrative and Support Services | 75,587 | 1.6 | ||
| Rental and Leasing Services | 72,560 | 1.6 | ||
| Wood Product Manufacturing | 71,961 | 1.6 | ||
| Food Services and Drinking Places | 69,209 | 1.5 | ||
| Merchant Wholesalers, Nondurable Goods | 66,568 | 1.4 | ||
| Fabricated Metal Product Manufacturing | 63,016 | 1.4 | ||
| Personal and Laundry Services | 60,774 | 1.3 | ||
| Religious Organizations, Advocacy Groups | 58,409 | 1.3 | ||
| Miniwarehouse / Self-Storage | 54,761 | 1.2 | ||
| Repair and Maintenance | 53,472 | 1.2 | ||
| CRE – Mixed-Use – Commercial | 52,080 | 1.1 | ||
| Private Equity & Special Purpose Entities | 51,853 | 1.1 | ||
| Truck Transportation | 51,191 | 1.1 | ||
| Industries with >$50 million in outstandings | 3,771,073 | 81.3 | % | |
| Industries with <$50 million in outstandings | 866,668 | 18.7 | % | |
| Total Commercial Loans | 4,637,741 | 100.0 | % | |
| Consumer Loans and Lease Financings | Total Outstanding Balance | |||
| Real Estate-Residential Secured for Personal Purpose | 629,144 | |||
| Real Estate-Home Equity Secured for Personal Purpose | 168,536 | |||
| Loans to Individuals | 27,061 | |||
| Lease Financings | 193,937 | |||
| Total – Consumer Loans and Lease Financings | 1,018,678 | |||
| Total | 5,656,419 | |||
| Univest Financial Corporation | ||||||||||||||||||||||||||||||
| Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||
| June 30, 2022 | ||||||||||||||||||||||||||||||
| 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. | ||||||||||||||||||||||||||||||
| For the three months ended, | For the six months ended, | |||||||||||||||||||||||||||||
| (Dollars in thousands) | 06/30/22 | 03/31/22 | 12/31/21 | 09/30/21 | 06/30/21 | 06/30/22 | 06/30/21 | |||||||||||||||||||||||
| Net income | $ | 13,166 | $ | 20,317 | $ | 17,412 | $ | 20,911 | $ | 20,875 | $ | 33,483 | $ | 53,478 | ||||||||||||||||
| Amortization of intangibles, net of tax | 270 | 269 | 211 | 169 | 197 | 540 | 393 | |||||||||||||||||||||||
| Net income before amortization of intangibles | $ | 13,436 | $ | 20,586 | $ | 17,623 | $ | 21,080 | $ | 21,072 | $ | 34,023 | $ | 53,871 | ||||||||||||||||
| Shareholders’ equity | $ | 763,925 | $ | 773,855 | $ | 773,794 | $ | 756,023 | $ | 739,998 | $ | 763,925 | $ | 739,998 | ||||||||||||||||
| Goodwill | (175,510 | ) | (175,510 | ) | (175,510 | ) | (172,559 | ) | (172,559 | ) | (175,510 | ) | (172,559 | ) | ||||||||||||||||
| Other intangibles (a) | (3,678 | ) | (3,936 | ) | (4,210 | ) | (1,922 | ) | (2,073 | ) | (3,678 | ) | (2,073 | ) | ||||||||||||||||
| Tangible common equity | $ | 584,737 | $ | 594,409 | $ | 594,074 | $ | 581,542 | $ | 565,366 | $ | 584,737 | $ | 565,366 | ||||||||||||||||
| Total assets | $ | 6,700,813 | $ | 7,107,740 | $ | 7,122,421 | $ | 6,979,852 | $ | 6,356,305 | $ | 6,700,813 | $ | 6,356,305 | ||||||||||||||||
| Goodwill | (175,510 | ) | (175,510 | ) | (175,510 | ) | (172,559 | ) | (172,559 | ) | (175,510 | ) | (172,559 | ) | ||||||||||||||||
| Other intangibles (a) | (3,678 | ) | (3,936 | ) | (4,210 | ) | (1,922 | ) | (2,073 | ) | (3,678 | ) | (2,073 | ) | ||||||||||||||||
| Tangible assets | $ | 6,521,625 | $ | 6,928,294 | $ | 6,942,701 | $ | 6,805,371 | $ | 6,181,673 | $ | 6,521,625 | $ | 6,181,673 | ||||||||||||||||
| Average shareholders’ equity | $ | 771,410 | $ | 774,358 | $ | 762,334 | $ | 746,185 | $ | 728,750 | $ | 772,876 | $ | 714,324 | ||||||||||||||||
| Average goodwill | (175,510 | ) | (175,510 | ) | (173,553 | ) | (172,559 | ) | (172,559 | ) | (175,510 | ) | (172,559 | ) | ||||||||||||||||
| Average other intangibles (a) | (3,791 | ) | (4,090 | ) | (2,696 | ) | (1,983 | ) | (2,209 | ) | (3,940 | ) | (2,336 | ) | ||||||||||||||||
| Average tangible common equity | $ | 592,109 | $ | 594,758 | $ | 586,085 | $ | 571,643 | $ | 553,982 | $ | 593,426 | $ | 539,429 | ||||||||||||||||
| Loans and leases held for investment, gross | $ | 5,661,777 | $ | 5,400,786 | $ | 5,310,017 | $ | 5,252,045 | $ | 5,327,313 | $ | 5,661,777 | $ | 5,327,313 | ||||||||||||||||
| Paycheck Protection Program (“PPP”) loans | (5,358 | ) | (10,298 | ) | (31,748 | ) | (85,601 | ) | (252,849 | ) | (5,358 | ) | (252,849 | ) | ||||||||||||||||
| Gross loans and leases excluding PPP loans | $ | 5,656,419 | $ | 5,390,488 | $ | 5,278,269 | $ | 5,166,444 | $ | 5,074,464 | $ | 5,656,419 | $ | 5,074,464 | ||||||||||||||||
| Allowance for credit losses, loans and leases | $ | 72,011 | $ | 68,286 | $ | 71,924 | $ | 70,146 | $ | 71,355 | $ | 72,011 | $ | 71,355 | ||||||||||||||||
| Gross loans and leases excluding PPP loans | 5,656,419 | 5,390,488 | 5,278,269 | 5,166,444 | 5,074,464 | 5,656,419 | 5,074,464 | |||||||||||||||||||||||
| Allowance for credit losses, loans and leases as a percentage of gross loans and leases excluding PPP loans | 1.27 | % | 1.27 | % | 1.36 | % | 1.36 | % | 1.41 | % | 1.27 | % | 1.41 | % | ||||||||||||||||
| (a) Amount does not include mortgage servicing rights | ||||||||||||||||||||||||||||||
CONTACT: CONTACT: Brian J. Richardson UNIVEST FINANCIAL CORPORATION Chief Financial Officer 215-721-2446, richardsonb@univest.net
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