• Univest Financial Corporation Reports Third Quarter Results

    المصدر: Nasdaq GlobeNewswire / 26 أكتوبر 2022 15:15:01   America/Chicago

    SOUDERTON, Pa., Oct. 26, 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, announced net income for the quarter ended September 30, 2022 was $20.8 million, or $0.71 diluted earnings per share, compared to net income of $20.9 million, or $0.71 diluted earnings per share, for the quarter ended September 30, 2021.

    One-Time Items
    The financial results for the three and nine months ended September 30, 2022 included tax-free bank owned life insurance ("BOLI") death benefit claims of $446 thousand, which represented $0.02 diluted earnings per share for both periods.

    Loans
    Gross loans and leases, excluding Paycheck Protection Program ("PPP") loans1, increased $190.6 million, or 13.5% (annualized), from June 30, 2022, $568.8 million, or 14.4% (annualized), from December 31, 2021 and $680.6 million, or 13.2%, from September 30, 2021 primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings.

    Deposits
    Total deposits increased $223.9 million, or 16.1% (annualized), from June 30, 2022, primarily due to increases in public funds deposits partially offset by decreases in commercial deposits. Total deposits decreased $268.1 million, or 5.9% (annualized), from December 31, 2021, primarily due to decreases in commercial and consumer deposits. Total deposits decreased $151.2 million, or 2.5%, from September 30, 2021, primarily due to a decrease in public funds deposits.

    Net Interest Income and Margin
    Net interest income of $58.3 million for the three months ended September 30, 2022 increased $6.8 million, or 13.2%, from the three months ended June 30, 2022, and $9.6 million, or 19.6%, from the three months ended September 30, 2021. The increase in net interest income for the three months ended September 30, 2022 compared to the same period of 2021 and the prior quarter was largely due to significant loan growth, the rapid increase in interest rates and the asset sensitivity position of the Corporation's balance sheet.

    Net interest margin, on a tax-equivalent basis, was 3.67% for the third quarter of 2022, compared to 3.19% for the second quarter of 2022 and 3.11% for the third quarter of 2021. Excess liquidity reduced net interest margin by approximately one basis point for the quarter ended September 30, 2022 compared to 23 basis points for the quarter ended June 30, 2022 and 27 basis points for the quarter ended September 30, 2021. PPP loans had no impact on net interest margin for the quarter ended September 30, 2022 compared to one basis point for the quarter ended June 30, 2022 and 20 basis points for the quarter ended September 30, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.68% for the quarter ended September 30, 2022 compared to 3.41% for the quarter ended June 30, 2022 and 3.18% for the quarter ended September 30, 2021.

    Noninterest Income
    Noninterest income for the quarter ended September 30, 2022 was $18.0 million, a decrease of $2.6 million, or 12.6%, compared to the third quarter of 2021.

    Net gain on mortgage banking activities decreased $2.4 million, or 74.7%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year, primarily due to a decrease in loan sales and a contraction of margins. BOLI increased $228 thousand, or 24.6%, for the quarter compared to the comparable period in the prior year, primarily due to death benefit claims of $446 thousand in the third quarter of 2022. Investment advisory commission and fee income decreased $597 thousand, or 12.4%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year, primarily due to reduced assets under management, which was driven by market performance.

    Other income decreased $758 thousand, or 46.6%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year. Gains on the sale of Small Business Administration loans decreased $520 thousand for the quarter due to decreased sale activity. Fees on risk participation agreements for interest rate swaps decreased $171 thousand for the quarter driven by a decrease in customer demand due to the current interest rate environment.

    Insurance commission and fee income increased $605 thousand, or 15.8%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year, primarily due to incremental revenue attributable to the acquisition of the Paul I. Sheaffer insurance agency in the fourth quarter of 2021.

    Other service fee income increased $548 thousand, or 21.3%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year. Mortgage servicing fees increased $336 thousand for the quarter driven by reduced amortization as a result of a decrease in prepayment speeds.

    Noninterest Expense
    Noninterest expense for the quarter ended September 30, 2022 was $46.7 million, an increase of $3.4 million, or 7.9%, compared to the third quarter of 2021. The results for the three months ended September 30, 2022 included approximately $1.2 million 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 $2.8 million, or 10.4%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year. This increase reflects the insurance acquisition in the fourth quarter of 2021, our expansion into Maryland and Western PA, and annual merit increases.

    Professional fees increased $347 thousand, or 16.0%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year. The increase for the three months ended September 30, 2022 was primarily due to $1.0 million in consultant fees attributable to the previously discussed digital transformation initiative, as compared to our $585 thousand investment in our Diversity, Equity and Inclusion program, training initiatives and treasury management product enhancements for the three months ended September 30, 2021.

    Data processing expenses increased $627 thousand, or 19.2%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year, primarily due to continued investments in technology including $180 thousand in support of the previously discussed digital transformation initiative for the respective period.

    Tax Provision
    The effective income tax rate was 19.7% for the nine months ended September 30, 2022, compared to an effective income tax rate of 19.4% for the nine months ended September 30, 2021. The effective tax rate for the nine months ended September 30, 2022 and 2021 reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases. Additionally, the effective tax rate for the nine months ended September 30, 2022 was favorably impacted by discrete tax benefits and proceeds from BOLI death benefits. Excluding these items, the effective tax rate was 20.1% for the nine months ended September 30, 2022.

    Asset Quality and Provision for Credit Losses
    Nonperforming assets were $33.0 million at September 30, 2022, compared to $34.8 million at June 30, 2022 and $37.1 million at September 30, 2021.

    Net loan and lease charge-offs were $1.2 million and $1.7 million for the three months ended September 30, 2022 and June 30, 2022, respectively, compared to net loan and lease recoveries of $75 thousand for the three months ended September 30, 2021. Net loan and lease charge-offs were $3.0 million and $456 thousand for the nine months ended September 30, 2022 and September 30, 2021, respectively.

    The provision for credit losses was $3.6 million for the third quarter of 2022 compared to a provision for credit losses of $6.7 million for the second quarter of 2022 and a reversal of provision of $182 thousand for the third quarter of 2021. The provision for credit losses was $6.8 million for the nine months ended September 30, 2022 compared to a reversal of provision for credit losses of $11.5 million for the comparable period in the prior year. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.28% at September 30, 2022 compared to 1.27% at June 30, 2022 and 1.34% at September 30, 2021.

    Share Repurchases
    During the three months ended September 30, 2022, the Corporation repurchased 150,000 shares at an average price of $25.41, for an aggregate cost of $3.8 million. During the nine months ended September 30, 2022, the Corporation repurchased 450,000 shares at an average price of $25.29, for an aggregate cost of $11.4 million. As of September 30, 2022, the Corporation has 229,174 shares remaining to repurchase under the program that was approved on May 27, 2015. On October 26, 2022, the Corporation’s Board of Directors approved an increase of 1,000,000 in the shares available for repurchase under the Corporation’s share repurchase program.

    Dividend
    On October 26, 2022, Univest declared a quarterly cash dividend of $0.21 per share to be paid on November 23, 2022 to shareholders of record as of November 9, 2022.

    Conference Call
    Univest will host a conference call to discuss third quarter 2022 results on Thursday, October 27, 2022 at 9:00 a.m. EDT. Participants may preregister at https://www.netroadshow.com/events/login?show=7205620b&confId=42951. The general public can access the call by dialing 1-844-200-6205; using Access Code 478630. A replay of the conference call will be available through November 24, 2022 by dialing 1-866-813-9403; using Access Code: 211821.

    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 $6.9 billion in assets and $4.0 billion in assets under management and supervision through its Wealth Management lines of business at September 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 continuing effects resulting from the COVID-19 pandemic on our business and results of operation; (10) the current or anticipated impact of military conflict, terrorism or other geopolitical events; and/or (11) 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)
    September 30, 2022
    (Dollars in thousands)              
                   
    Balance Sheet (Period End) 09/30/22 06/30/22 03/31/22 12/31/21 09/30/21    
    ASSETS              
    Cash and due from banks $65,859  $59,590  $57,307  $49,202  $67,517     
    Interest-earning deposits with other banks  47,451   35,187   716,474   840,948   834,840     
    Cash and cash equivalents  113,310   94,777   773,781   890,150   902,357     
    Investment securities held-to-maturity  159,170   159,808   166,339   176,983   112,643     
    Investment securities available for sale, net of allowance for credit losses  347,479   351,382   349,994   317,007   277,773     
    Investments in equity securities  2,994   2,934   2,569   2,999   2,961     
    Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost  29,475   29,116   26,330   28,186   28,679     
    Loans held for sale  9,087   8,352   14,521   21,600   29,093     
    Loans and leases held for investment  5,849,259   5,661,777   5,400,786   5,310,017   5,252,045     
    Less: Allowance for credit losses, loans and leases  (74,929)  (72,011)  (68,286)  (71,924)  (70,146)    
    Net loans and leases held for investment  5,774,330   5,589,766   5,332,500   5,238,093   5,181,899     
    Premises and equipment, net  50,533   50,080   50,429   56,882   55,354     
    Operating lease right-of-use assets  30,654   30,929   30,498   30,407   31,570     
    Goodwill  175,510   175,510   175,510   175,510   172,559     
    Other intangibles, net of accumulated amortization  11,650   11,728   11,784   11,848   9,359     
    Bank owned life insurance  120,035   120,103   119,398   118,699   117,981     
    Accrued interest and other assets  83,170   76,328   54,087   54,057   57,624     
    Total assets $6,907,397  $6,700,813  $7,107,740  $7,122,421  $6,979,852     
                   
    LIABILITIES              
    Noninterest-bearing deposits $1,968,422  $2,062,538  $2,136,467  $2,065,423  $1,861,007     
    Interest-bearing deposits:  3,818,554   3,500,510   3,911,465   3,989,701   4,077,147     
    Total deposits  5,786,976   5,563,048   6,047,932   6,055,124   5,938,154     
    Short-term borrowings  80,711   97,606   18,976   20,106   14,101     
    Long-term debt  95,000   95,000   95,000   95,000   95,000     
    Subordinated notes  99,107   99,030   98,952   98,874   98,797     
    Operating lease liabilities  33,718   33,951   33,566   33,453   34,641     
    Accrued expenses and other liabilities  57,698   48,253   39,459   46,070   43,136     
    Total liabilities  6,153,210   5,936,888   6,333,885   6,348,627   6,223,829     
                   
    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  299,791   298,800   297,945   299,181   298,033     
    Retained earnings  410,942   396,295   389,332   375,124   363,607     
    Accumulated other comprehensive loss, net of tax benefit  (64,985)  (42,781)  (31,909)  (16,353)  (20,073)    
    Treasury stock, at cost  (49,345)  (46,173)  (39,297)  (41,942)  (43,328)    
    Total shareholders’ equity  754,187   763,925   773,855   773,794   756,023     
    Total liabilities and shareholders’ equity $6,907,397  $6,700,813  $7,107,740  $7,122,421  $6,979,852     
                   
                   
      For the three months ended, For the nine months ended,
    Balance Sheet (Average) 09/30/22 06/30/22 03/31/22 12/31/21 09/30/21 09/30/22 09/30/21
    Assets $6,797,466  $6,962,401  $7,047,980  $7,088,289  $6,698,177  $6,935,031 $6,509,576
    Investment securities, net of allowance for credit losses  517,335   515,741   522,128   469,588   395,280   518,383  385,192
    Loans and leases, gross  5,752,119   5,520,580   5,344,698   5,255,279   5,320,411   5,540,624  5,345,119
    Deposits  5,645,291   5,903,173   5,984,815   6,041,798   5,666,725   5,843,182  5,439,345
    Shareholders' equity  773,099   771,410   774,358   762,334   746,185   772,951  725,061


     
    Univest Financial Corporation
    Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
    September 30, 2022
    (Dollars in thousands)              
                   
    Summary of Major Loan and Lease Categories (Period End) 09/30/22 06/30/22 03/31/22 12/31/21 09/30/21    
    Commercial, financial and agricultural $1,052,733  $1,028,354  $932,485  $956,396  $927,015     
    Paycheck Protection Program  2,207   5,358   10,298   31,748   85,601     
    Real estate-commercial  2,936,204   2,870,286   2,816,737   2,718,535   2,669,898     
    Real estate-construction  329,915   319,449   285,083   283,918   260,874     
    Real estate-residential secured for business purpose  443,837   419,652   412,486   409,900   412,001     
    Real estate-residential secured for personal purpose  685,771   629,144   568,735   540,566   535,705     
    Real estate-home equity secured for personal purpose  175,843   168,536   160,134   158,909   159,029     
    Loans to individuals  26,679   27,061   26,249   25,504   26,458     
    Lease financings  196,070   193,937   188,579   184,541   175,464     
    Total loans and leases held for investment, net of deferred income  5,849,259   5,661,777   5,400,786   5,310,017   5,252,045     
    Less: Allowance for credit losses, loans and leases  (74,929)  (72,011)  (68,286)  (71,924)  (70,146)    
    Net loans and leases held for investment $5,774,330  $5,589,766  $5,332,500  $5,238,093  $5,181,899     
                   
                   
    Asset Quality Data (Period End) 09/30/22 06/30/22 03/31/22 12/31/21 09/30/21    
    Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases $13,620  $13,355  $30,876  $33,210  $34,528     
    Accruing loans and leases 90 days or more past due  416   2,784   274   498   2,204     
    Accruing troubled debt restructured loans and leases  50   50   51   51   51     
    Total nonperforming loans and leases  14,086   16,189   31,201   33,759   36,783     
    Other real estate owned  18,960   18,604   279   279   279     
    Total nonperforming assets $33,046  $34,793  $31,480  $34,038  $37,062     
    Nonaccrual loans and leases / Loans and leases held for investment  0.23%  0.24%  0.57%  0.63%  0.66%    
    Nonperforming loans and leases / Loans and leases held for investment  0.24%  0.29%  0.58%  0.64%  0.70%    
    Nonperforming assets / Total assets  0.48%  0.52%  0.44%  0.48%  0.53%    
                   
    Allowance for credit losses, loans and leases $74,929  $72,011  $68,286  $71,924  $70,146     
    Allowance for credit losses, loans and leases / Loans and leases held for investment  1.28%  1.27%  1.26%  1.35%  1.34%    
    Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1)  1.28%  1.27%  1.27%  1.36%  1.36%    
    Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment  550.14%  539.21%  221.16%  216.57%  203.16%    
    Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment  531.94%  444.81%  218.86%  213.05%  190.70%    
                   
      For the three months ended, For the nine months ended,
      09/30/22 06/30/22 03/31/22 12/31/21 09/30/21 09/30/22 09/30/21
    Net loan and lease charge-offs (recoveries) $1,196  $1,715  $76  $(243) $(75) $2,987  $456 
    Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases  0.08%  0.12%  0.01%  (0.02%)  (0.01%)  0.07%  0.01%
                   
    (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)
    September 30, 2022
    (Dollars in thousands, except per share data)              
      For the three months ended, For the nine months ended,
    For the period: 09/30/22 06/30/22 03/31/22 12/31/21 09/30/21 09/30/22 09/30/21
    Interest income $66,877 $56,717 $51,198  $52,262 $53,571  $174,792 $157,469 
    Interest expense  8,627  5,246  4,538   4,737  4,884   18,411  16,611 
    Net interest income  58,250  51,471  46,660   47,525  48,687   156,381  140,858 
    Provision (reversal of provision) for credit losses  3,558  6,674  (3,450)  1,392  (182)  6,782  (11,524)
    Net interest income after provision for credit losses  54,692  44,797  50,110   46,133  48,869   149,599  152,382 
    Noninterest income:              
    Trust fee income  1,835  1,998  2,102   2,086  2,126   5,935  6,317 
    Service charges on deposit accounts  1,522  1,574  1,504   1,486  1,422   4,600  4,018 
    Investment advisory commission and fee income  4,199  4,812  5,152   4,885  4,796   14,163  14,051 
    Insurance commission and fee income  4,442  4,629  5,570   3,726  3,837   14,641  12,631 
    Other service fee income  3,124  3,309  2,756   2,759  2,576   9,189  7,516 
    Bank owned life insurance income  1,153  705  699   719  925   2,557  3,262 
    Net gain on sales of investment securities  -  -  30   5  21   30  140 
    Net gain on mortgage banking activities  817  1,230  1,929   2,518  3,224   3,976  12,623 
    Other income  867  741  728   1,008  1,625   2,336  3,474 
    Total noninterest income  17,959  18,998  20,470   19,192  20,552   57,427  64,032 
    Noninterest expense:              
    Salaries, benefits and commissions  29,400  29,133  28,245   27,374  26,641   86,778  76,817 
    Net occupancy  2,504  2,422  2,716   2,477  2,525   7,642  7,920 
    Equipment  968  977  982   985  1,000   2,927  2,914 
    Data processing  3,901  3,708  3,567   3,355  3,274   11,176  9,388 
    Professional fees  2,521  2,844  2,138   1,750  2,174   7,503  5,937 
    Marketing and advertising  605  693  425   683  539   1,723  1,380 
    Deposit insurance premiums  662  812  893   698  765   2,367  2,014 
    Intangible expenses  309  342  341   267  214   992  712 
    Other expense  5,795  6,440  6,105   5,746  6,116   18,340  16,992 
    Total noninterest expense  46,665  47,371  45,412   43,335  43,248   139,448  124,074 
    Income before taxes  25,986  16,424  25,168   21,990  26,173   67,578  92,340 
    Income tax expense  5,185  3,258  4,851   4,578  5,262   13,294  17,951 
    Net income $20,801 $13,166 $20,317  $17,412 $20,911  $54,284 $74,389 
    Net income per share:              
    Basic $0.71 $0.45 $0.69  $0.59 $0.71  $1.85 $2.53 
    Diluted $0.71 $0.45 $0.68  $0.59 $0.71  $1.84 $2.52 
    Dividends declared per share $0.21 $0.21 $0.20  $0.20 $0.20  $0.62 $0.60 
    Weighted average shares outstanding  29,290,829  29,490,154  29,542,467   29,471,304  29,420,256   29,440,228  29,379,774 
    Period end shares outstanding  29,242,451  29,365,775  29,636,425   29,500,542  29,438,402   29,242,451  29,438,402 
                   


    Univest Financial Corporation
    Consolidated Selected Financial Data (Unaudited)
    September 30, 2022
                   
                   
                   
      For the three months ended, For the nine months ended,
    Profitability Ratios (annualized) 09/30/22 06/30/22 03/31/22 12/31/21 09/30/21 09/30/22 09/30/21
                   
    Return on average assets  1.21%  0.76%  1.17%  0.97%  1.24%  1.05%  1.53%
    Return on average shareholders' equity  10.67%  6.85%  10.64%  9.06%  11.12%  9.39%  13.72%
    Return on average tangible common equity (1)(3)  14.06%  9.10%  14.04%  11.93%  14.63%  12.40%  18.21%
    Net interest margin (FTE)  3.67%  3.19%  2.89%  2.86%  3.11%  3.25%  3.13%
    Efficiency ratio (2)  60.6%  66.6%  67.0%  64.3%  61.8%  64.6%  59.8%
                   
    Capitalization Ratios              
                   
    Dividends declared to net income  29.7%  47.1%  29.1%  33.9%  28.1%  33.7%  23.7%
    Shareholders' equity to assets (Period End)  10.92%  11.40%  10.89%  10.86%  10.83%  10.92%  10.83%
    Tangible common equity to tangible assets (1)  8.55%  8.97%  8.58%  8.56%  8.55%  8.55%  8.55%
    Common equity book value per share $25.79  $26.01  $26.11  $26.23  $25.68  $25.79  $25.68 
    Tangible common equity book value per share (1) $19.67  $19.91  $20.06  $20.14  $19.75  $19.67  $19.75 
                   
    Regulatory Capital Ratios (Period End)               
    Tier 1 leverage ratio  9.87%  9.45%  9.35%  9.13%  9.53%  9.87%  9.53%
    Common equity tier 1 risk-based capital ratio  10.51%  10.62%  11.07%  11.08%  11.15%  10.51%  11.15%
    Tier 1 risk-based capital ratio  10.51%  10.62%  11.07%  11.08%  11.15%  10.51%  11.15%
    Total risk-based capital ratio  13.10%  13.23%  13.73%  13.77%  13.87%  13.10%  13.87%
                   
    (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 BasisSeptember 30, 2022 June 30, 2022 
     AverageIncome/Average AverageIncome/Average 
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
    Assets:        
    Interest-earning deposits with other banks$49,476 $2522.02%$474,260 $8240.70%
    U.S. government obligations 565  32.11  2,000  112.21 
    Obligations of state and political subdivisions* 2,308  183.09  2,302  172.96 
    Other debt and equity securities 514,462  3,0102.32  511,439  2,7272.14 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 28,368  4356.08  26,221  3445.26 
    Total interest-earning deposits, investments and other interest-earning assets 595,179  3,7182.48  1,016,222  3,9231.55 
             
    Commercial, financial, and agricultural loans 977,549  11,9964.87  937,846  9,0373.86 
    Paycheck Protection Program loans 3,754  404.23  7,644  1558.13 
    Real estate—commercial and construction loans 3,105,821  34,1004.36  3,004,509  28,5273.81 
    Real estate—residential loans 1,256,509  12,4923.94  1,166,201  10,7583.70 
    Loans to individuals 27,197  3815.56  26,782  3054.57 
    Municipal loans and leases * 235,433  2,4324.10  235,922  2,4044.09 
    Lease financings 145,856  2,1955.97  141,676  2,1055.96 
    Gross loans and leases 5,752,119  63,6364.39  5,520,580  53,2913.87 
    Total interest-earning assets 6,347,298  67,3544.21  6,536,802  57,2143.51 
    Cash and due from banks 62,930     55,634    
    Allowance for credit losses, loans and leases (72,355)    (68,426)   
    Premises and equipment, net 50,476     50,266    
    Operating lease right-of-use assets 30,740     30,222    
    Other assets 378,377     357,903    
    Total assets$6,797,466    $6,962,401    
             
    Liabilities:        
    Interest-bearing checking deposits$881,395 $1,2510.56%$851,324 $5700.27%
    Money market savings 1,246,795  3,7091.18  1,405,536  1,5520.44 
    Regular savings 1,086,191  3020.11  1,070,480  2370.09 
    Time deposits 416,539  1,1891.13  452,989  1,2271.09 
    Total time and interest-bearing deposits 3,630,920  6,4510.70  3,780,329  3,5860.38 
             
    Short-term borrowings 104,453  5241.99  17,253  110.26 
    Long-term debt 95,000  3241.35  95,000  3211.36 
    Subordinated notes 99,065  1,3285.32  98,988  1,3285.38 
    Total borrowings 298,518  2,1762.89  211,241  1,6603.15 
    Total interest-bearing liabilities 3,929,438  8,6270.87  3,991,570  5,2460.53 
    Noninterest-bearing deposits 2,014,371     2,122,844    
    Operating lease liabilities 33,786     33,300    
    Accrued expenses and other liabilities 46,772     43,277    
    Total liabilities 6,024,367     6,190,991    
             
    Shareholders' Equity:        
    Common stock 157,784     157,784    
    Additional paid-in capital 299,135     298,241    
    Retained earnings and other equity 316,180     315,385    
    Total shareholders' equity 773,099     771,410    
    Total liabilities and shareholders' equity$6,797,466    $6,962,401    
    Net interest income   $58,727   $51,968  
             
    Net interest spread  3.34   2.98 
    Effect of net interest-free funding sources  0.33   0.21 
    Net interest margin  3.67%  3.19%
    Ratio of average interest-earning assets to average interest-bearing liabilities 161.53%    163.77%   
             
    * Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.   
    Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
    Net interest income includes net deferred costs of $(498) thousand and $(618) thousand for the three months ended September 30, 2022 and June 30, 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 September 30, 2022 and June 30, 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 September 30,   
    Tax Equivalent Basis  2022    2021   
     AverageIncome/Average AverageIncome/Average 
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
    Assets:        
    Interest-earning deposits with other banks$49,476 $2522.02%$530,191 $1890.14%
    U.S. government obligations 565  32.11  6,999  362.04 
    Obligations of state and political subdivisions* 2,308  183.09  2,992  243.18 
    Other debt and equity securities 514,462  3,0102.32  385,289  1,5161.56 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 28,368  4356.08  26,713  3344.96 
    Total interest-earning deposits, investments and other interest-earning assets 595,179  3,7182.48  952,184  2,0990.87 
             
    Commercial, financial, and agricultural loans 977,549  11,9964.87  880,986  7,4123.34 
    Paycheck Protection Program loans 3,754  404.23  162,611  4,16210.15 
    Real estate—commercial and construction loans 3,105,821  34,1004.36  2,784,398  25,6343.65 
    Real estate—residential loans 1,256,509  12,4923.94  1,100,799  10,1713.67 
    Loans to individuals 27,197  3815.56  26,048  2533.85 
    Municipal loans and leases* 235,433  2,4324.10  247,603  2,5044.01 
    Lease financings 145,856  2,1955.97  117,966  1,8566.24 
    Gross loans and leases 5,752,119  63,6364.39  5,320,411  51,9923.88 
    Total interest-earning assets 6,347,298  67,3544.21  6,272,595  54,0913.42 
    Cash and due from banks 62,930     59,642    
    Allowance for credit losses, loans and leases (72,355)    (72,606)   
    Premises and equipment, net 50,476     55,685    
    Operating lease right-of-use assets 30,740     31,998    
    Other assets 378,377     350,863    
    Total assets$6,797,466    $6,698,177    
             
    Liabilities:        
    Interest-bearing checking deposits$881,395 $1,2510.56%$857,098 $5370.25%
    Money market savings 1,246,795  3,7091.18  1,382,832  9220.26 
    Regular savings 1,086,191  3020.11  998,568  2810.11 
    Time deposits 416,539  1,1891.13  496,702  1,4901.19 
    Total time and interest-bearing deposits 3,630,920  6,4510.70  3,735,200  3,2300.34 
             
    Short-term borrowings 104,453  5241.99  15,116  20.05 
    Long-term debt 95,000  3241.35  95,000  3241.35 
    Subordinated notes 99,065  1,3285.32  98,754  1,3285.34 
    Total borrowings 298,518  2,1762.89  208,870  1,6543.14 
    Total interest-bearing liabilities 3,929,438  8,6270.87  3,944,070  4,8840.49 
    Noninterest-bearing deposits 2,014,371     1,931,525    
    Operating lease liabilities 33,786     35,094    
    Accrued expenses and other liabilities 46,772     41,303    
    Total liabilities 6,024,367     5,951,992    
             
    Shareholders' Equity:        
    Common stock 157,784     157,784    
    Additional paid-in capital 299,135     297,482    
    Retained earnings and other equity 316,180     290,919    
    Total shareholders' equity 773,099     746,185    
    Total liabilities and shareholders' equity$6,797,466    $6,698,177    
    Net interest income   $58,727   $49,207  
             
    Net interest spread  3.34   2.93 
    Effect of net interest-free funding sources  0.33   0.18 
    Net interest margin  3.67%  3.11%
    Ratio of average interest-earning assets to average interest-bearing liabilities 161.53%    159.04%   
             
    * 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 $(498) thousand and $3.0 million for the three months ended September 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 September 30, 2022 and 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%. 
             


    Univest Financial Corporation 
    Average Balances and Interest Rates (Unaudited) 
      For the Nine Months Ended September 30,  
    Tax Equivalent Basis20222021 
     AverageIncome/Average AverageIncome/Average 
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
    Assets:        
    Interest-earning deposits with other banks$416,466 $1,4330.46%$328,768 $2910.12%
    U.S. government obligations 2,578  402.07  6,999  1072.04 
    Obligations of state and political subdivisions* 2,314  543.12  6,838  1873.66 
    Other debt and equity securities 513,491  8,0762.10  371,355  4,1471.49 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 27,239  1,1345.57  26,319  1,0425.29 
    Total interest-earning deposits, investments and other interest-earning assets 962,088  10,7371.49  740,279  5,7741.04 
             
    Commercial, financial, and agricultural loans 939,261  28,6044.07  830,248  21,1203.40 
    Paycheck Protection Program loans 9,880  78610.64  358,231  13,4645.03 
    Real estate—commercial and construction loans 3,005,714  88,4473.93  2,703,100  75,0233.71 
    Real estate—residential loans 1,180,202  33,1323.75  1,067,855  29,8803.74 
    Loans to individuals 26,598  9244.64  25,925  7693.97 
    Municipal loans and leases* 237,928  7,2704.09  248,191  7,6324.11 
    Lease financings 141,041  6,3756.04  111,569  5,4126.49 
    Gross loans and leases 5,540,624  165,5383.99  5,345,119  153,3003.83 
    Total interest-earning assets 6,502,712  176,2753.62  6,085,398  159,0743.49 
    Cash and due from banks 57,455     55,983    
    Allowance for credit losses, loans and leases (70,950)    (76,265)   
    Premises and equipment, net 51,551     55,803    
    Operating lease right-of-use assets 30,453     33,334    
    Other assets 363,810     355,323    
    Total assets$6,935,031    $6,509,576    
             
    Liabilities:        
    Interest-bearing checking deposits$871,393 $2,2640.35%$820,800 $1,5140.25%
    Money market savings 1,397,220  6,1650.59  1,282,470  2,6060.27 
    Regular savings 1,059,644  7770.10  979,013  8610.12 
    Time deposits 447,497  3,7221.11  502,414  4,8081.28 
    Total time and interest-bearing deposits 3,775,754  12,9280.46  3,584,697  9,7890.37 
             
    Short-term borrowings 46,765  5371.54  17,363  70.05 
    Long-term debt 95,000  9621.35  97,088  9931.37 
    Subordinated notes 98,989  3,9845.38  151,060  5,8225.15 
    Total borrowings 240,754  5,4833.04  265,511  6,8223.44 
    Total interest-bearing liabilities 4,016,508  18,4110.61  3,850,208  16,6110.58 
    Noninterest-bearing deposits 2,067,428     1,854,648    
    Operating lease liabilities 33,514     36,636    
    Accrued expenses and other liabilities 44,630     43,023    
    Total liabilities 6,162,080     5,784,515    
             
    Shareholders' Equity:        
    Common stock 157,784     157,784    
    Additional paid-in capital 298,784     296,744    
    Retained earnings and other equity 316,383     270,533    
    Total shareholders' equity 772,951     725,061    
    Total liabilities and shareholders' equity$6,935,031    $6,509,576    
    Net interest income   $157,864   $142,463  
             
    Net interest spread  3.01   2.91 
    Effect of net interest-free funding sources  0.24   0.22 
    Net interest margin  3.25%  3.13%
    Ratio of average interest-earning assets to average interest-bearing liabilities 161.90%    158.05%   
             
    * 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 $(1.3) million and $8.0 million for the nine months ended September 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 nine months ended September 30, 2022 and 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%.
      


    Univest Financial Corporation 
    Loan Portfolio Overview (Unaudited) 
    September 30, 2022 
           
    (Dollars in thousands)      
    Industry Description Total Outstanding Balance
    (excl PPP)    		 % of Commercial Loan
    Portfolio    		  
    CRE - Retail$378,087 7.9% 
    Animal Production 332,130 7.0  
    CRE - Multi-family 263,698 5.5  
    CRE - 1-4 Family Residential Investment 249,149 5.2  
    CRE - Office 201,659 4.2  
    CRE - Industrial / Warehouse 185,952 3.9  
    Hotels & Motels (Accommodation) 170,627 3.6  
    Nursing and Residential Care Facilities 168,576 3.5  
    Education 155,122 3.3  
    Specialty Trade Contractors 147,227 3.1  
    Homebuilding (tract developers, remodelers) 133,902 2.8  
    Motor Vehicle and Parts Dealers 113,639 2.4  
    Merchant Wholesalers, Durable Goods 108,825 2.3  
    CRE - Medical Office 105,744 2.2  
    CRE - Mixed-Use - Residential 105,702 2.2  
    Crop Production 91,597 1.9  
    CRE - Mixed-Use - Commercial 85,172 1.8  
    Food Manufacturing 84,131 1.8  
    Wood Product Manufacturing 75,768 1.6  
    Rental and Leasing Services 74,514 1.6  
    Administrative and Support Services 73,558 1.5  
    Religious Organizations, Advocacy Groups 73,091 1.5  
    Merchant Wholesalers, Nondurable Goods 70,679 1.5  
    Food Services and Drinking Places 70,498 1.5  
    Personal and Laundry Services 60,651 1.3  
    Fabricated Metal Product Manufacturing 56,640 1.2  
    Repair and Maintenance 56,623 1.2  
    Miniwarehouse / Self-Storage 56,279 1.2  
    Truck Transportation 50,969 1.1  
    Industries with >$50 million in outstandings$3,800,209 79.8% 
    Industries with <$50 million in outstandings$962,480 20.2% 
    Total Commercial Loans$4,762,689 100.0% 
           
           
    Consumer Loans and Lease Financings Total Outstanding Balance    
    Real Estate-Residential Secured for Personal Purpose$685,771    
    Real Estate-Home Equity Secured for Personal Purpose 175,843    
    Loans to Individuals 26,679    
    Lease Financings 196,070    
    Total - Consumer Loans and Lease Financings$1,084,363    
           
    Total$5,847,052    
           


    Univest Financial Corporation
    Non-GAAP Reconciliation
    September 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.
                   
      As of or for the three months ended, As of or for the nine months ended,
    (Dollars in thousands)09/30/22 06/30/22 03/31/22 12/31/21 09/30/21 09/30/22 09/30/21
    Net income$20,801  $13,166  $20,317  $17,412  $20,911  $54,284  $74,389 
    Amortization of intangibles, net of tax 244   270   269   211   169   784   562 
    Net income before amortization of intangibles$21,045  $13,436  $20,586  $17,623  $21,080  $55,068  $74,951 
                   
    Shareholders' equity$754,187  $763,925  $773,855  $773,794  $756,023  $754,187  $756,023 
    Goodwill (175,510)  (175,510)  (175,510)  (175,510)  (172,559)  (175,510)  (172,559)
    Other intangibles (a)  (3,485)  (3,678)  (3,936)  (4,210)  (1,922)  (3,485)  (1,922)
    Tangible common equity$575,192  $584,737  $594,409  $594,074  $581,542  $575,192  $581,542 
                   
    Total assets$6,907,397  $6,700,813  $7,107,740  $7,122,421  $6,979,852  $6,907,397  $6,979,852 
    Goodwill (175,510)  (175,510)  (175,510)  (175,510)  (172,559)  (175,510)  (172,559)
    Other intangibles (a)  (3,485)  (3,678)  (3,936)  (4,210)  (1,922)  (3,485)  (1,922)
    Tangible assets$6,728,402  $6,521,625  $6,928,294  $6,942,701  $6,805,371  $6,728,402  $6,805,371 
                   
    Average shareholders' equity$773,099  $771,410  $774,358  $762,334  $746,185  $772,951  $725,061 
    Average goodwill (175,510)  (175,510)  (175,510)  (173,553)  (172,559)  (175,510)  (172,559)
    Average other intangibles (a)  (3,550)  (3,791)  (4,090)  (2,696)  (1,983)  (3,808)  (2,217)
    Average tangible common equity$594,039  $592,109  $594,758  $586,085  $571,643  $593,633  $550,285 
                   
    Loans and leases held for investment, gross$5,849,259  $5,661,777  $5,400,786  $5,310,017  $5,252,045  $5,849,259  $5,252,045 
    Paycheck Protection Program ("PPP") loans  (2,207)  (5,358)  (10,298)  (31,748)  (85,601)  (2,207)  (85,601)
    Gross loans and leases excluding PPP loans$5,847,052  $5,656,419  $5,390,488  $5,278,269  $5,166,444  $5,847,052  $5,166,444 
                   
    (a) 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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