Attached files
| file | filename |
|---|---|
| 8-K - 8-K - UNIVEST FINANCIAL Corp | uvsp8kearningsdirector042617.htm |
Exhibit 99.1
NEWS |  |
CONTACT: Roger Deacon
UNIVEST CORPORATION OF PENNSYLVANIA
Chief Financial Officer
215-721-2455, DeaconR@univest.net
FOR IMMEDIATE RELEASE
UNIVEST CORPORATION OF PENNSYLVANIA - UNIVEST
BANK AND TRUST CO. - REPORTS FIRST QUARTER RESULTS
SOUDERTON, Pa., April 26, 2017 - Univest Corporation of Pennsylvania (“Univest” or "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. ("Bank") and its insurance, investments and equipment financing subsidiaries, today announced financial results for the quarter ended March 31, 2017. Univest reported net income of $10.9 million or $0.41 diluted earnings per share for the three months ended March 31, 2017, compared to net income of $7.3 million or $0.37 diluted earnings per share for the three months ended March 31, 2016. The financial results for the three months ended March 31, 2016 included $220 thousand of acquisition and integration costs related to the Fox Chase acquisition, or $0.01 of diluted earnings per share, net of tax. There were no acquisition and integration costs during the three months ended March 31, 2017.
Loans
Gross loans and leases increased $56.0 million or 6.8% (annualized) from December 31, 2016. Gross loans and leases increased $1.2 billion or 53.1% from March 31, 2016, including $776.2 million of loans acquired from Fox Chase Bank. Organic loan growth, which excludes the loans acquired from Fox Chase at June 30, 2016, was $382.4 million or 12.9% from March 31, 2016 to March 31, 2017. The growth in loans in 2017 compared to December 31, 2016 was primarily in commercial real estate, commercial business and residential real estate loans.
Deposits
Total deposits increased $108.4 million or 13.3% (annualized) from December 31, 2016. Deposits increased $1.0 billion from March 31, 2016 primarily due to $738.3 million of deposits acquired from Fox Chase. Organic deposit growth, which excludes the Fox Chase deposits at June 30, 2016, was $293.3 million or
9.5% from March 31, 2016. The growth in deposits in 2017 compared to December 31, 2016 was primarily due to increases in public funds and commercial customer deposits.
Net Interest Income and Margin
Net interest income of $34.3 million for the first quarter of 2017 was consistent with the fourth quarter of 2016 and increased $10.8 million, or 45.7%, from the same period in 2016. Net interest margin, on a tax-equivalent basis, for the first quarter of 2017 was 3.80%, compared to 3.81% for the fourth quarter of 2016. The favorable impact of purchase accounting accretion was 8 basis points ($764 thousand) for the quarter ended March 31, 2017 compared to 20 basis points ($1.8 million) for the quarter ended December 31, 2016. Excluding the impact of purchase accounting accretion, net interest margin was 3.72% for the quarter ended March 31, 2017 compared to 3.61% for the quarter ended December 31, 2016 and net interest income increased $1.2 million, or 3.6%, for the first quarter of 2017 compared to the fourth quarter of 2016. The improvement in net interest margin, excluding purchase accounting accretion, is primarily due to the increase in interest rates during the fourth quarter of 2016 which increased loan yields at a greater pace than rates on deposits and an improvement in mortgage backed security yields due to a slowdown in payment speeds. A detailed analysis comparing net interest margin and net interest income for the quarter ended March 31, 2017 and the quarter ended December 31, 2016 is included in the attached exhibits.
Noninterest Income
Noninterest income for the quarter ended March 31, 2017 was $15.0 million, an increase of $1.1 million or 8.2% from the first quarter of 2016. Service charges on deposits increased $245 thousand or 24.5% for the quarter mostly due to fees on deposit accounts acquired from Fox Chase. Investment advisory commission and fee income increased $510 thousand or 19.1% from the first quarter of 2016 primarily due to a combination of both increased new customer relationships and favorable market performance during 2016 and the first quarter of 2017. Bank owned life insurance (BOLI) income increased $313 thousand or 66.6% for the quarter primarily due to policies acquired from Fox Chase and increased income of $105 thousand on non-qualified annuities. Other income increased $311 thousand or 15.5% for the quarter mainly due to an increase in other service fee income of $156 thousand and net gains on sales of other real estate owned of $114 thousand. These increases were partially offset by modest decreases in insurance and mortgage banking income. Insurance commission and fee income decreased $148 thousand for the quarter ended March 31, 2017, primarily due to a decrease in contingent commission income of $340 thousand, which was $1.0 million for the quarter ended March 31, 2017 compared to $1.3 million for the quarter ended March 31, 2016. The net gain on mortgage banking decreased $105 thousand for the quarter ended March 31, 2017 primarily due to a decrease in mortgage volume.
Noninterest Expense
Noninterest expense for the quarter ended March 31, 2017 was $32.0 million, an increase of $5.1 million or 18.9%, compared to the first quarter of 2016. Salaries and benefit expense increased $2.5 million for the quarter, primarily attributable to higher staffing levels resulting from the Fox Chase acquisition, additional staff hired to support revenue generation across all business lines and the expansion into Lancaster County. Premises and equipment expenses increased $782 thousand for the quarter, primarily due to higher premises expense related to Fox Chase locations and expansion into Philadelphia, Lancaster County and the Lehigh Valley. Data processing expense increased $777 thousand for the quarter due to increased investments in computer software and our outsourced data processing solution as well as the addition of Fox Chase processing expense. Other expense increased $1.1 million for the quarter primarily due to inclusion of Fox Chase related expenses and an increase of $416 thousand related to Bank shares tax as a result of a statutory rate increase in 2017 and the Corporation's growth primarily due to the Fox Chase acquisition.
Asset Quality and Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $19.9 million at March 31, 2017, compared to $17.9 million at December 31, 2016. Nonperforming assets were $27.3 million at March 31, 2017, compared to $27.1 million at December 31, 2016. Net loan and lease charge-offs were $416 thousand during the first quarter of 2017. The provision for loan and lease losses was $2.4 million for the first quarter of 2017. The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding covered loans acquired in the Fox Chase and Valley Green Bank acquisitions which were recorded at fair value as of the acquisition date, was 0.74% at March 31, 2017, compared to 0.73% at December 31, 2016 and 0.86% at March 31, 2016.
Tax Provision
The effective income tax rate for the quarter ended March 31, 2017 was 26.5%, compared to 27.8% for the quarter ended March 31, 2016. During the quarter, the Corporation recognized a $288 thousand discrete tax benefit related to the vesting of restricted stock and exercise of stock options, which provided a tax deduction greater than previously recorded. This change is in accordance with Accounting Standard Update 2016-9 which was implemented by the Corporation in the fourth quarter 2016 and requires the tax impact of such equity related activities to be recorded as an adjustment to income in the period incurred; rather than an adjustment to equity. Excluding this discrete benefit, the effective income tax rate for the quarter was 28.5%, which reflects the Corporation's level of tax exempt income for the period relative to the overall level of taxable income.
Dividend
On February 22, 2017, Univest declared a quarterly cash dividend of $0.20 per share, payable on April 3, 2017. This represented a 3.09% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.
Conference Call
Univest will host a conference call to discuss first quarter 2017 results on Thursday, April 27, 2017 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10105249. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through May 27, 2017 by dialing 1-877-344-7529; using Conference ID: 10105249.
About Univest Corporation of Pennsylvania
Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has approximately $4.3 billion in assets and $3.3 billion in assets under management and supervision through its Wealth Management lines of business. 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 in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices in southeastern Pennsylvania extending to the Lehigh Valley and Lancaster, as well as in New Jersey and Maryland and online at www.univest.net.
# # #
This press release of Univest Corporation of Pennsylvania and the reports Univest Corporation of Pennsylvania files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial services industry and, specifically, the financial operations, markets and products of Univest Corporation of Pennsylvania. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Corporation of Pennsylvania’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce net interest margins; (3) changes in prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which Univest Corporation of Pennsylvania is engaged; (6) technological issues which may adversely affect Univest Corporation of Pennsylvania’s financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Corporation of Pennsylvania files with the Securities and Exchange Commission. Univest Corporation of Pennsylvania undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.
Univest Corporation of Pennsylvania | |||||||||||||||||||
Consolidated Selected Financial Data | |||||||||||||||||||
March 31, 2017 | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Balance Sheet (Period End) | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||
Assets | $ | 4,273,931 | $ | 4,230,528 | $ | 4,140,444 | $ | 3,107,617 | $ | 2,824,777 | |||||||||
Investment securities | 464,639 | 468,518 | 484,213 | 286,980 | 329,357 | ||||||||||||||
Loans held for sale | 1,110 | 5,890 | 3,844 | 4,657 | 3,818 | ||||||||||||||
Loans and leases held for investment, gross | 3,341,916 | 3,285,886 | 3,190,361 | 2,345,037 | 2,183,256 | ||||||||||||||
Allowance for loan and lease losses | 19,528 | 17,499 | 16,899 | 17,153 | 16,452 | ||||||||||||||
Loans and leases held for investment, net | 3,322,388 | 3,268,387 | 3,173,462 | 2,327,884 | 2,166,804 | ||||||||||||||
Total deposits | 3,365,951 | 3,257,567 | 3,178,509 | 2,377,084 | 2,334,361 | ||||||||||||||
Noninterest-bearing deposits | 947,495 | 918,337 | 874,581 | 689,916 | 559,827 | ||||||||||||||
NOW, money market and savings | 1,865,280 | 1,713,041 | 1,652,696 | 1,326,976 | 1,391,626 | ||||||||||||||
Time deposits | 553,176 | 626,189 | 651,232 | 360,192 | 382,908 | ||||||||||||||
Borrowings | 355,580 | 417,780 | 398,341 | 309,666 | 75,265 | ||||||||||||||
Shareholders' equity | 511,880 | 505,209 | 509,249 | 369,160 | 367,003 | ||||||||||||||
Balance Sheet (Average) | For the three months ended, | ||||||||||||||||||
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
Assets | $ | 4,230,428 | $ | 4,134,976 | $ | 4,147,468 | $ | 2,854,561 | $ | 2,834,557 | |||||||||
Investment securities | 470,300 | 473,890 | 503,790 | 302,492 | 342,218 | ||||||||||||||
Loans and leases, gross | 3,306,877 | 3,208,171 | 3,164,273 | 2,239,674 | 2,177,091 | ||||||||||||||
Deposits | 3,290,285 | 3,237,778 | 3,177,060 | 2,340,959 | 2,351,816 | ||||||||||||||
Shareholders' equity | 509,055 | 507,832 | 506,464 | 368,466 | 364,092 | ||||||||||||||
Asset Quality Data (Period End) | |||||||||||||||||||
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases | $ | 19,856 | $ | 17,916 | $ | 15,050 | $ | 13,265 | $ | 13,482 | |||||||||
Accruing loans and leases 90 days or more past due | 919 | 987 | 1,128 | 748 | 693 | ||||||||||||||
Accruing troubled debt restructured loans and leases | 2,818 | 3,252 | 3,286 | 4,413 | 4,279 | ||||||||||||||
Other real estate owned | 3,712 | 4,969 | 6,041 | 3,131 | 3,073 | ||||||||||||||
Nonperforming assets | 27,305 | 27,124 | 25,505 | 21,557 | 21,527 | ||||||||||||||
Allowance for loan and lease losses | 19,528 | 17,499 | 16,899 | 17,153 | 16,452 | ||||||||||||||
Nonaccrual loans and leases / Loans and leases held for investment | 0.59 | % | 0.55 | % | 0.47 | % | 0.57 | % | 0.62 | % | |||||||||
Nonperforming loans and leases / Loans and leases held for investment | 0.71 | % | 0.67 | % | 0.61 | % | 0.79 | % | 0.85 | % | |||||||||
Allowance for loan and lease losses / Loans and leases held for investment | 0.58 | % | 0.53 | % | 0.53 | % | 0.73 | % | 0.75 | % | |||||||||
Allowance for loan and lease losses/Loans and leases held for investment (excluding acquired loans at period-end) | 0.74 | % | 0.73 | % | 0.77 | % | 0.82 | % | 0.86 | % | |||||||||
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment | 98.35 | % | 97.67 | % | 112.29 | % | 129.31 | % | 122.03 | % | |||||||||
Allowance for loan and lease losses / Nonperforming loans and leases held for investment | 82.77 | % | 78.98 | % | 86.82 | % | 93.09 | % | 89.15 | % | |||||||||
Acquired credit impaired loans | $ | 6,616 | $ | 7,352 | $ | 14,575 | $ | 942 | $ | 1,267 | |||||||||
For the three months ended, | |||||||||||||||||||
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
Net loan and lease charge-offs | $ | 416 | $ | 1,650 | $ | 1,669 | $ | 129 | $ | 1,502 | |||||||||
Net loan and lease charge-offs (annualized)/Average loans and leases | 0.05 | % | 0.20 | % | 0.21 | % | 0.02 | % | 0.28 | % | |||||||||
Univest Corporation of Pennsylvania | |||||||||||||||||||
Consolidated Selected Financial Data | |||||||||||||||||||
March 31, 2017 | |||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
For the three months ended, | |||||||||||||||||||
For the period: | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||
Interest income | $ | 38,396 | $ | 38,056 | $ | 36,705 | $ | 26,112 | $ | 25,734 | |||||||||
Interest expense | 4,113 | 3,884 | 3,836 | 2,451 | 2,211 | ||||||||||||||
Net interest income | 34,283 | 34,172 | 32,869 | 23,661 | 23,523 | ||||||||||||||
Provision for loan and lease losses | 2,445 | 2,250 | 1,415 | 830 | 326 | ||||||||||||||
Net interest income after provision | 31,838 | 31,922 | 31,454 | 22,831 | 23,197 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Trust fee income | 1,907 | 1,921 | 1,958 | 1,997 | 1,865 | ||||||||||||||
Service charges on deposit accounts | 1,243 | 1,293 | 1,344 | 1,056 | 998 | ||||||||||||||
Investment advisory commission and fee income | 3,181 | 3,072 | 2,905 | 2,776 | 2,671 | ||||||||||||||
Insurance commission and fee income | 4,410 | 3,275 | 3,267 | 3,503 | 4,558 | ||||||||||||||
Bank owned life insurance income | 783 | 1,215 | 711 | 535 | 470 | ||||||||||||||
Net gain on sales of investment securities | 15 | 31 | 30 | 413 | 44 | ||||||||||||||
Net gain on mortgage banking activities | 1,113 | 1,092 | 2,006 | 1,711 | 1,218 | ||||||||||||||
Other income | 2,318 | 2,095 | 1,916 | 2,010 | 2,007 | ||||||||||||||
Total noninterest income | 14,970 | 13,994 | 14,137 | 14,001 | 13,831 | ||||||||||||||
Noninterest expense: | |||||||||||||||||||
Salaries and benefits | 16,657 | 16,546 | 16,710 | 14,080 | 14,182 | ||||||||||||||
Commissions | 2,050 | 2,618 | 2,485 | 2,363 | 1,895 | ||||||||||||||
Premises and equipment | 3,658 | 3,929 | 3,476 | 2,846 | 2,876 | ||||||||||||||
Data processing | 2,058 | 2,001 | 2,169 | 1,530 | 1,281 | ||||||||||||||
Professional fees | 1,239 | 1,258 | 1,322 | 947 | 1,020 | ||||||||||||||
Marketing and advertising | 379 | 619 | 345 | 513 | 538 | ||||||||||||||
Deposit insurance premiums | 402 | 521 | 327 | 418 | 447 | ||||||||||||||
Intangible expense | 759 | 2,917 | 854 | 991 | 766 | ||||||||||||||
Acquisition-related costs | — | 101 | 8,784 | 1,158 | 214 | ||||||||||||||
Integration costs | — | 269 | 5,365 | 27 | 6 | ||||||||||||||
Restructuring charges (recoveries) | — | 1,816 | (85 | ) | — | — | |||||||||||||
Other expense | 4,828 | 5,835 | 5,314 | 4,673 | 3,714 | ||||||||||||||
Total noninterest expense | 32,030 | 38,430 | 47,066 | 29,546 | 26,939 | ||||||||||||||
Income before taxes | 14,778 | 7,486 | (1,475 | ) | 7,286 | 10,089 | |||||||||||||
Income tax expense (benefit) | 3,922 | 568 | (1,533 | ) | 2,046 | 2,800 | |||||||||||||
Net income | $ | 10,856 | $ | 6,918 | $ | 58 | $ | 5,240 | $ | 7,289 | |||||||||
Per common share data: | |||||||||||||||||||
Book value per share | $ | 19.21 | $ | 19.00 | $ | 19.17 | $ | 18.88 | $ | 18.73 | |||||||||
Net income per share: | |||||||||||||||||||
Basic | $ | 0.41 | $ | 0.26 | $ | — | $ | 0.27 | $ | 0.37 | |||||||||
Diluted | $ | 0.41 | $ | 0.26 | $ | — | $ | 0.27 | $ | 0.37 | |||||||||
Dividends declared per share | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | |||||||||
Weighted average shares outstanding | 26,630,698 | 26,577,948 | 26,554,626 | 19,603,310 | 19,578,438 | ||||||||||||||
Period end shares outstanding | 26,645,520 | 26,589,353 | 26,558,412 | 19,557,958 | 19,592,798 | ||||||||||||||
Univest Corporation of Pennsylvania | |||||||||||||||||||
Consolidated Selected Financial Data | |||||||||||||||||||
March 31, 2017 | |||||||||||||||||||
For the three months ended, | |||||||||||||||||||
Profitability Ratios (annualized) | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||
Return on average assets | 1.04 | % | 0.67 | % | 0.01 | % | 0.74 | % | 1.03 | % | |||||||||
Return on average assets, excluding integration and acquisition-related costs and restructuring charges (1), (2) | 1.04 | % | 0.78 | % | 0.88 | % | 0.90 | % | 1.07 | % | |||||||||
Return on average shareholders' equity | 8.65 | % | 5.42 | % | 0.05 | % | 5.72 | % | 8.05 | % | |||||||||
Return on average shareholder's equity, excluding integration and acquisition-related costs and restructuring charges (1), (2) | 8.65 | % | 6.37 | % | 7.24 | % | 6.99 | % | 8.29 | % | |||||||||
Return on average tangible common equity, excluding integration and acquisition-related costs and restructuring charges (1), (2), (5) | 13.48 | % | 9.95 | % | 11.32 | % | 10.31 | % | 12.33 | % | |||||||||
Net interest margin (FTE) | 3.80 | % | 3.81 | % | 3.68 | % | 3.93 | % | 3.91 | % | |||||||||
Efficiency ratio (3) | 62.70 | % | 76.48 | % | 96.45 | % | 75.22 | % | 69.23 | % | |||||||||
Efficiency ratio, excluding integration and acquisition-related costs and restructuring charges (1), (3), (4) | 62.70 | % | 72.13 | % | 67.63 | % | 72.20 | % | 68.67 | % | |||||||||
Capitalization Ratios | |||||||||||||||||||
Dividends declared to net income | 49.02 | % | 76.76 | % | N/M | 74.64 | % | 53.62 | % | ||||||||||
Shareholders' equity to assets (Period End) | 11.98 | % | 11.94 | % | 12.30 | % | 11.88 | % | 12.99 | % | |||||||||
Tangible common equity to tangible assets (5) | 8.06 | % | 7.97 | % | 8.24 | % | 8.39 | % | 9.17 | % | |||||||||
Tangible book value per share (5) | $ | 12.38 | $ | 12.13 | $ | 12.28 | $ | 12.82 | $ | 12.66 | |||||||||
Tangible book value per share - Core (5), (6) | $ | 12.56 | $ | 12.32 | $ | 12.21 | $ | 12.72 | $ | 12.62 | |||||||||
Regulatory Capital Ratios (Period End) | |||||||||||||||||||
Tier 1 leverage ratio | 8.75 | % | 8.84 | % | 8.80 | % | 9.90 | % | 9.93 | % | |||||||||
Common equity tier 1 risk-based capital ratio | 9.41 | % | 9.42 | % | 9.58 | % | 10.24 | % | 10.81 | % | |||||||||
Tier 1 risk-based capital ratio | 9.41 | % | 9.42 | % | 9.58 | % | 10.24 | % | 10.81 | % | |||||||||
Total risk-based capital ratio | 12.45 | % | 12.44 | % | 12.64 | % | 12.77 | % | 13.47 | % | |||||||||
(1) This consolidated selected financial data schedule contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The management of Univest Corporation of Pennsylvania uses these 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 below table for additional information. | |||||||||||||||||||
(a) Integration and acquisition-related costs and restructuring charges | $ | — | $ | 2,186 | $ | 14,064 | $ | 1,185 | $ | 220 | |||||||||
Tax effect on integration and acquisition-related cost and restructuring charges | — | 969 | 4,910 | 22 | 2 | ||||||||||||||
(b) Integration and acquisition-related costs and restructuring charges, net of tax | $ | — | $ | 1,217 | $ | 9,154 | $ | 1,163 | $ | 218 | |||||||||
(2) Net income in this ratio excludes integration and acquisition-related costs and restructuring charges, net of tax. See (1)(b) above. | |||||||||||||||||||
(3) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income. | |||||||||||||||||||
(4) Noninterest expense in this ratio excludes integration and acquisition-related costs and restructuring charges. See (1)(a) above. | |||||||||||||||||||
(5) Tangible equity represents total shareholders' equity less goodwill and other intangible assets, but includes servicing rights which were $6,502 at March 31, 2017, $6,485 at December 31, 2016, $6,167 at September 30, 2016, $5,896 at June 30, 2016 and $5,839 at March 31, 2016. | |||||||||||||||||||
(6) Tangible equity as defined in (5), excluding the impact of accumulated other comprehensive (loss) income on available-for-sale investment securities, net (($4,726) at March 31, 2017, ($4,989) at December 31, 2016, $1,789 at September 30, 2016, $1,907 at June 30, 2016 and $821 at March 31, 2016), divided by total shares outstanding. | |||||||||||||||||||
N/M Not Meaningful | |||||||||||||||||||
Univest Corporation of Pennsylvania | |||||||||||||||||||||||
Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential | |||||||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||||||
Tax Equivalent Basis | March 31, 2017 | December 31, 2016 | |||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||
(Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||
Assets: | |||||||||||||||||||||||
Interest-earning deposits with other banks | $ | 8,592 | $ | 16 | 0.76 | % | $ | 10,235 | $ | 10 | 0.39 | % | |||||||||||
U.S. government obligations | 34,038 | 106 | 1.26 | 33,341 | 98 | 1.17 | |||||||||||||||||
Obligations of state and political subdivisions | 85,854 | 922 | 4.36 | 90,499 | 921 | 4.05 | |||||||||||||||||
Other debt and equity securities | 350,408 | 1,582 | 1.83 | 350,050 | 1,337 | 1.52 | |||||||||||||||||
Federal funds sold and other earning assets (1) | 25,909 | 358 | 5.60 | 20,578 | 217 | 4.20 | |||||||||||||||||
Total interest-earning deposits, investments, federal funds sold and other earning assets | 504,801 | 2,984 | 2.40 | 504,703 | 2,583 | 2.04 | |||||||||||||||||
Commercial, financial, and agricultural loans | 721,050 | 7,841 | 4.41 | 683,746 | 7,247 | 4.22 | |||||||||||||||||
Real estate—commercial and construction loans | 1,460,029 | 15,740 | 4.37 | 1,411,104 | 16,391 | 4.62 | |||||||||||||||||
Real estate—residential loans | 738,211 | 8,236 | 4.52 | 723,193 | 8,097 | 4.45 | |||||||||||||||||
Loans to individuals | 29,575 | 400 | 5.49 | 30,796 | 432 | 5.58 | |||||||||||||||||
Municipal loans and leases | 279,379 | 3,120 | 4.53 | 282,297 | 3,178 | 4.48 | |||||||||||||||||
Lease financings | 78,633 | 1,483 | 7.65 | 77,035 | 1,555 | 8.03 | |||||||||||||||||
Gross loans and leases | 3,306,877 | 36,820 | 4.52 | 3,208,171 | 36,900 | 4.58 | |||||||||||||||||
Total interest-earning assets | 3,811,678 | 39,804 | 4.24 | 3,712,874 | 39,483 | 4.23 | |||||||||||||||||
Cash and due from banks | 41,942 | 42,946 | |||||||||||||||||||||
Reserve for loan and lease losses | (18,200 | ) | (16,921 | ) | |||||||||||||||||||
Premises and equipment, net | 64,507 | 63,712 | |||||||||||||||||||||
Other assets | 330,501 | 332,365 | |||||||||||||||||||||
Total assets | $ | 4,230,428 | $ | 4,134,976 | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest-bearing checking deposits | $ | 426,373 | $ | 105 | 0.10 | $ | 402,247 | $ | 89 | 0.09 | |||||||||||||
Money market savings | 531,658 | 563 | 0.43 | 472,461 | 450 | 0.38 | |||||||||||||||||
Regular savings | 807,802 | 349 | 0.18 | 792,778 | 327 | 0.16 | |||||||||||||||||
Time deposits | 591,813 | 1,174 | 0.80 | 647,665 | 1,277 | 0.78 | |||||||||||||||||
Total time and interest-bearing deposits | 2,357,646 | 2,191 | 0.38 | 2,315,151 | 2,143 | 0.37 | |||||||||||||||||
Short-term borrowings | 150,155 | 262 | 0.71 | 128,498 | 149 | 0.46 | |||||||||||||||||
Long-term debt | 148,031 | 399 | 1.09 | 121,895 | 331 | 1.08 | |||||||||||||||||
Subordinated notes (2) | 94,116 | 1,261 | 5.43 | 94,055 | 1,261 | 5.33 | |||||||||||||||||
Total borrowings | 392,302 | 1,922 | 1.99 | 344,448 | 1,741 | 2.01 | |||||||||||||||||
Total interest-bearing liabilities | 2,749,948 | 4,113 | 0.61 | 2,659,599 | 3,884 | 0.58 | |||||||||||||||||
Noninterest-bearing deposits | 932,639 | 922,627 | |||||||||||||||||||||
Accrued expenses and other liabilities | 38,786 | 44,918 | |||||||||||||||||||||
Total liabilities | 3,721,373 | 3,627,144 | |||||||||||||||||||||
Shareholders' Equity: | |||||||||||||||||||||||
Common stock | 144,559 | 144,559 | |||||||||||||||||||||
Additional paid-in capital | 230,104 | 230,037 | |||||||||||||||||||||
Retained earnings and other equity | 134,392 | 133,236 | |||||||||||||||||||||
Total shareholders' equity | 509,055 | 507,832 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 4,230,428 | $ | 4,134,976 | |||||||||||||||||||
Net interest income | $ | 35,691 | $ | 35,599 | |||||||||||||||||||
Net interest spread | 3.63 | 3.65 | |||||||||||||||||||||
Effect of net interest-free funding sources | 0.17 | 0.16 | |||||||||||||||||||||
Net interest margin | 3.80 | % | 3.81 | % | |||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 138.61 | % | 139.60 | % | |||||||||||||||||||
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost. | |||||||||||||||||||||||
(2) The interest rate on subordinated notes is calculated on a 30/360 day basis with a weighted average note rate of 5.05% for both the three months ended March 31, 2017 and December 31, 2016. The balance is net of debt issuance costs which are amortized to interest expense. | |||||||||||||||||||||||
Notes: For rate calculation purposes, average loan and lease categories include unearned discount. | |||||||||||||||||||||||
Nonaccrual loans and leases have been included in the average loan and lease balances. | |||||||||||||||||||||||
Loans held for sale have been included in the average loan balances. | |||||||||||||||||||||||
Tax-equivalent amounts for the three months ended March 31, 2017 and December 31, 2016 have been calculated using the Corporation’s federal applicable rate of 35.0%. | |||||||||||||||||||||||
Univest Corporation of Pennsylvania | |||||||||||||||||||||||
Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential | |||||||||||||||||||||||
For the Three Months Ended March 31, | |||||||||||||||||||||||
Tax Equivalent Basis | 2017 | 2016 | |||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||
(Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||
Assets: | |||||||||||||||||||||||
Interest-earning deposits with other banks | $ | 8,592 | $ | 16 | 0.76 | % | $ | 19,619 | $ | 28 | 0.57 | % | |||||||||||
U.S. government obligations | 34,038 | 106 | 1.26 | 82,488 | 250 | 1.22 | |||||||||||||||||
Obligations of state and political subdivisions | 85,854 | 922 | 4.36 | 101,061 | 1,129 | 4.49 | |||||||||||||||||
Other debt and equity securities | 350,408 | 1,582 | 1.83 | 158,669 | 1,024 | 2.60 | |||||||||||||||||
Federal funds sold and other earning assets (1) | 25,909 | 358 | 5.60 | 14,821 | 132 | 3.58 | |||||||||||||||||
Total interest-earning deposits, investments, federal funds sold and other earning assets | 504,801 | 2,984 | 2.40 | 376,658 | 2,563 | 2.74 | |||||||||||||||||
Commercial, financial, and agricultural loans | 721,050 | 7,841 | 4.41 | 411,999 | 4,014 | 3.92 | |||||||||||||||||
Real estate—commercial and construction loans | 1,460,029 | 15,740 | 4.37 | 887,118 | 9,919 | 4.50 | |||||||||||||||||
Real estate—residential loans | 738,211 | 8,236 | 4.52 | 541,976 | 5,976 | 4.43 | |||||||||||||||||
Loans to individuals | 29,575 | 400 | 5.49 | 29,478 | 399 | 5.44 | |||||||||||||||||
Municipal loans and leases | 279,379 | 3,120 | 4.53 | 231,498 | 2,625 | 4.56 | |||||||||||||||||
Lease financings | 78,633 | 1,483 | 7.65 | 75,022 | 1,542 | 8.27 | |||||||||||||||||
Gross loans and leases | 3,306,877 | 36,820 | 4.52 | 2,177,091 | 24,475 | 4.52 | |||||||||||||||||
Total interest-earning assets | 3,811,678 | 39,804 | 4.24 | 2,553,749 | 27,038 | 4.26 | |||||||||||||||||
Cash and due from banks | 41,942 | 31,665 | |||||||||||||||||||||
Reserve for loan and lease losses | (18,200 | ) | (17,771 | ) | |||||||||||||||||||
Premises and equipment, net | 64,507 | 42,873 | |||||||||||||||||||||
Other assets | 330,501 | 224,041 | |||||||||||||||||||||
Total assets | $ | 4,230,428 | $ | 2,834,557 | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest-bearing checking deposits | $ | 426,373 | $ | 105 | 0.10 | $ | 402,160 | $ | 84 | 0.08 | |||||||||||||
Money market savings | 531,658 | 563 | 0.43 | 361,788 | 340 | 0.38 | |||||||||||||||||
Regular savings | 807,802 | 349 | 0.18 | 626,894 | 174 | 0.11 | |||||||||||||||||
Time deposits | 591,813 | 1,174 | 0.80 | 418,547 | 935 | 0.90 | |||||||||||||||||
Total time and interest-bearing deposits | 2,357,646 | 2,191 | 0.38 | 1,809,389 | 1,533 | 0.34 | |||||||||||||||||
Short-term borrowings | 150,155 | 262 | 0.71 | 27,388 | 3 | 0.04 | |||||||||||||||||
Long-term debt | 148,031 | 399 | 1.09 | — | — | — | |||||||||||||||||
Subordinated notes (2) | 94,116 | 1,261 | 5.43 | 49,394 | 675 | 5.50 | |||||||||||||||||
Total borrowings | 392,302 | 1,922 | 1.99 | 76,782 | 678 | 3.55 | |||||||||||||||||
Total interest-bearing liabilities | 2,749,948 | 4,113 | 0.61 | 1,886,171 | 2,211 | 0.47 | |||||||||||||||||
Noninterest-bearing deposits | 932,639 | 542,427 | |||||||||||||||||||||
Accrued expenses and other liabilities | 38,786 | 41,867 | |||||||||||||||||||||
Total liabilities | 3,721,373 | 2,470,465 | |||||||||||||||||||||
Shareholders' Equity: | |||||||||||||||||||||||
Common stock | 144,559 | 110,271 | |||||||||||||||||||||
Additional paid-in capital | 230,104 | 120,824 | |||||||||||||||||||||
Retained earnings and other equity | 134,392 | 132,997 | |||||||||||||||||||||
Total shareholders' equity | 509,055 | 364,092 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 4,230,428 | $ | 2,834,557 | |||||||||||||||||||
Net interest income | $ | 35,691 | $ | 24,827 | |||||||||||||||||||
Net interest spread | 3.63 | 3.79 | |||||||||||||||||||||
Effect of net interest-free funding sources | 0.17 | 0.12 | |||||||||||||||||||||
Net interest margin | 3.80 | % | 3.91 | % | |||||||||||||||||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 138.61 | % | 135.39 | % | |||||||||||||||||||
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost. | |||||||||||||||||||||||
(2) The interest rate on subordinated notes is calculated on a 30/360 day basis with a weighted average note rate of 5.05% and 5.10% for the three months ended March 31, 2017 and 2016, respectively. The balance is net of debt issuance costs which are amortized to interest expense. | |||||||||||||||||||||||
Notes: For rate calculation purposes, average loan and lease categories include unearned discount. | |||||||||||||||||||||||
Nonaccrual loans and leases have been included in the average loan and lease balances. | |||||||||||||||||||||||
Loans held for sale have been included in the average loan balances. | |||||||||||||||||||||||
Tax-equivalent amounts for the three months ended March 31, 2017 and 2016 have been calculated using the Corporation’s federal applicable rate of 35.0%. | |||||||||||||||||||||||