Attached files
| file | filename |
|---|---|
| 8-K - 8-K - UNIVEST FINANCIAL Corp | uvsp-20201028.htm |
Exhibit 99.1
| NEWS |  | ||||
CONTACT: Brian J. Richardson
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2446, richardsonb@univest.net
FOR IMMEDIATE RELEASE
UNIVEST FINANCIAL CORPORATION REPORTS THIRD QUARTER RESULTS
SOUDERTON, Pa., October 28, 2020 - 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 September 30, 2020 of $18.1 million, or $0.62 diluted earnings per share, compared to net income of $17.7 million, or $0.60 diluted earnings per share, for the quarter ended September 30, 2019. Net income for the nine months ended September 30, 2020 was $21.0 million, or $0.72 diluted earnings per share, compared to net income of $50.2 million, or $1.71 diluted earnings per share, for the nine months ended September 30, 2019.
Pre-tax pre-provision income1 for the quarter ended September 30, 2020 was $27.1 million, an increase of $4.2 million, or 18.1%, from the third quarter of 2019. Pre-tax pre-provision income1 for the nine months ended September 30, 2020 was $74.8 million, an increase of $7.3 million, or 10.9%, from the comparable period in the prior year.
On October 19, 2020, the Corporation announced Univest Bank and Trust Co.’s plan to optimize its financial service center footprint with the consolidation or relocation of eight locations. The plan is being executed in two phases with the first being completed on January 29, 2021 and the second being completed on June 30, 2021. The pre-tax one-time costs associated with this plan are estimated to be $1.7 million, which will primarily be recognized in the fourth quarter of 2020. The estimated pre-tax annualized savings will be approximately $2.4 million.
1 Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included within this document.
COVID-19
As a result of the impact of COVID-19, we have taken various actions to support our customers and the communities we collectively serve, including modifying outstanding loans and leases and waiving certain deposit service charges. Loans and leases that were modified via principal and/or interest deferrals were done so in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and have not been categorized as troubled debt restructurings. These loans and leases have a combined principal balance of approximately $191.0 million as of October 16, 2020, which represents approximately 4.1% of the loan portfolio, excluding Paycheck Protection Program ("PPP") loans. For more information on these loans, including a breakdown of such loans by type, please see the "Loan Portfolio Overview" table within this document.
CECL
The Corporation adopted Accounting Standard Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”) effective January 1, 2020. During the quarter ended September 30, 2020, the Corporation recorded provision for credit losses of $3.9 million, of which $280 thousand (after-tax charge of $221 thousand), or $0.01 diluted earnings per share, was attributable to changes in economic assumptions within the Corporation’s CECL model, which were predominately driven by COVID-19. During the nine months ended September 30, 2020, the Corporation recorded CECL related charges of $49.5 million, of which $40.5 million (after-tax charge of $32.0 million), or $1.10 diluted earnings per share, was attributable to changes in economic assumptions within the CECL model.
Loans
Gross loans and leases, excluding PPP loans, increased $257.4 million, or 23.1% (annualized), from June 30, 2020 primarily due to increases in commercial and commercial real estate loans. During the nine months ended September 30, 2020, gross loans and leases, excluding PPP loans, increased $323.4 million, or 9.8% (annualized), primarily due to increases in commercial real estate loans, partially offset by a decrease in commercial loans. Since September 30, 2019, gross loans and leases, excluding PPP loans, have increased $458.3 million, or 10.8%, primarily due to increases in commercial real estate loans.
Deposits
Total deposits increased $342.3 million, or 28.1% (annualized), from June 30, 2020 primarily due to increases in public funds deposits, and $851.5 million, or 26.0% (annualized), from December 31, 2019 primarily due to increases in commercial and consumer deposits. Total deposits increased $873.6 million, or 20.1%, from September 30, 2019 primarily due to increases in commercial and consumer deposits
offset by a decrease in public funds. Deposits at September 30, 2020 were elevated by the PPP loans originated during the year.
Net Interest Income and Margin
Net interest income of $43.9 million for the three months ended September 30, 2020 increased $336 thousand, or 0.8%, from the three months ended June 30, 2020, and $1.2 million, or 2.8%, from the three months ended September 30, 2019. Net interest income of $129.8 million for the nine months ended September 30, 2020 increased $3.0 million, or 2.4%, from the nine months ended September 30, 2019. The increase in net interest income for the three and nine months ended September 30, 2020 compared to the same period of 2019 was primarily due to lower deposit and borrowing costs and growth in loans partially offset by a decrease in yield on loans.
Net interest margin, on a tax-equivalent basis, was 3.02% for the third quarter of 2020, compared to 3.18% for the second quarter of 2020 and 3.52% for the third quarter of 2019. Excess liquidity reduced net interest margin by approximately eighteen basis points for the quarter ended September 30, 2020 compared to sixteen basis points for the quarter ended June 30, 2020 and thirteen basis points for the quarter ended September 30, 2019. This excess liquidity was primarily driven by strong deposit balance growth over the last year. PPP loans reduced net interest margin by ten basis points for the quarter ended September 30, 2020 compared to nine basis points for the quarter ended June 30, 2020. Excluding the impact of excess liquidity and the impact of PPP loans, the net interest margin, on a tax-equivalent basis, was 3.30% for the quarter ended September 30, 2020, 3.43% for the quarter ended June 30, 2020 and 3.65% for the quarter ended September 30, 2019.
Noninterest Income
Noninterest income for the quarter ended September 30, 2020 was $21.8 million, an increase of $5.2 million, or 31.4%, from the third quarter of 2019. Noninterest income for the nine months ended September 30, 2020 was $58.2 million, an increase of $8.9 million, or 18.1%, from the comparable period in the prior year.
Net gain on mortgage banking activities increased $4.2 million, or 259.7%, for the quarter and $9.2 million, or 316.7%, for the nine months ended September 30, 2020 from the comparable periods in the prior year, due to an increase in volume and expansion of margins. Net gain on sales of investment securities for the nine months ended September 30, 2020 increased $776 thousand from the comparable period in the prior year primarily due to a $652 thousand gain on the sale of $58.3 million of agency backed mortgage backed securities in the first quarter of 2020.
Other income increased $1.6 million, or 299.1%, for the quarter ended September 30, 2020 and $2.4 million, or 150.1%, for the nine months ended September 30, 2020 from the comparable periods in the prior year. Fees on risk participation agreements for interest rate swaps increased $2.2 million for the quarter ended September 30, 2020 and $3.4 million for the nine months ended September 30, 2020 from the comparable periods in the prior year, driven by increased customer activity due to the current rate environment. Net gains or losses related to valuations and sales of other real estate owned decreased $323 thousand for the quarter ended September 30, 2020 and $268 thousand for the nine months ended September 30, 2020 from the comparable periods in the prior year, primarily due to a $300 thousand valuation adjustment on other real estate owned for a property that is under agreement of sale and is expected to be sold in the fourth quarter of 2020. Gain on sale of small business administration (SBA) loans decreased $52 thousand for the quarter ended September 30, 2020 and $346 thousand for the nine months ended September 30, 2020 from the comparable periods in the prior year due to decreased SBA loan sale activity. Equity securities measured at fair value decreased $21 thousand for the quarter and $333 thousand for the nine months ended September 30, 2020.
Service charges on deposit accounts decreased $326 thousand, or 21.5%, for the quarter ended September 30, 2020 and $921 thousand, or 21.0%, for the nine months ended September 30, 2020 from the comparable periods in the prior year due to the waiving of certain deposit service charges for customers in response to COVID-19 during the second quarter of 2020 and a decline in customer activity in the third quarter of 2020.
Other service fee income decreased $1.7 million, or 23.4%, for the nine months ended September 30, 2020 from the comparable period in the prior year. Mortgage servicing right amortization increased $1.1 million for the nine months ended September 30, 2020 from the comparable period in the prior year driven by the decline in interest rates and their impact on prepayment activity. Additionally, valuation allowance adjustments of $206 thousand during the nine months ended September 30, 2020 were recorded against mortgage servicing right assets due to declines in fair value. Interchange income decreased $320 thousand for the nine months ended September 30, 2020 from the comparable period in the prior year due to decreased customer transaction activity.
Noninterest Expense
Noninterest expense for the quarter ended September 30, 2020 was $38.5 million, an increase of $2.3 million, or 6.2%, compared to the third quarter of 2019. Noninterest expense for the nine months ended September 30, 2020 was $113.3 million, an increase of $4.7 million, or 4.3% from the comparable period in the prior year.
Salaries, benefits and commissions increased $1.3 million, or 5.7%, for the quarter ended September 30, 2020 and increased $3.2 million, or 4.9%, for the nine months ended September 30, 2020 from the comparable periods in the prior year. The increase was attributable to additional staff hired, primarily during 2019, to support revenue generation across all business lines, expansion of our commercial lending groups in the first and second quarters of 2019, annual merit increases and increased variable compensation due to strong mortgage banking activity. Deposit insurance premiums increased $1.2 million, or 259.2%, for the quarter ended September 30, 2020 and increased $1.4 million, or 316.9%, for the nine months ended September 30, 2020 from the comparable periods in the prior year primarily due to an FDIC small bank assessment credit of $988 thousand, which was recognized during the third quarter of 2019 and an increased assessment base for 2020 due to asset growth.
Asset Quality and Provision for Credit Losses
Nonperforming assets were $41.9 million at September 30, 2020, compared to $39.3 million at December 31, 2019 and $40.4 million at September 30, 2019. Other real estate owned includes a $8.1 million property, which transferred to other real estate owned during the second quarter of 2020. The property is under an agreement of sale and is expected to be sold during the fourth quarter of 2020.
Net loan and lease recoveries were $35 thousand during the third quarter of 2020 compared to net loan and lease charge-offs of $4.0 million for the nine months ended September 30, 2020. The provision for credit losses was $3.9 million for the third quarter of 2020, due to a reserve increase of $5.6 million related to loans and leases, offset by a decrease of $1.5 million of reserves related to unfunded commitments and a decrease of $163 thousand of reserves related to investment securities. The provision for credit losses was $49.5 million for the nine months ended September 30, 2020, of which $47.6 million related to loans and leases, $1.5 million related to reserves for unfunded commitments, and $393 thousand related to investment securities.
Net loan and lease charge-offs were $468 thousand during the third quarter of 2019 and $2.0 million for the nine months ended September 30, 2019. The provision for loan and lease losses was $1.5 million for the third quarter of 2019 and $6.3 million for the nine months ended September 30, 2019.
The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, was 1.76% at September 30, 2020, compared to 1.74% at June 30, 2020, 0.81% at December 31, 2019 and 0.79% at September 30, 2019. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans, was 1.95%2 at September 30, 2020, compared to 1.94%2 at June 30, 2020.
2 Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included within this document.
Tax Provision
The effective income tax rate was 16.7% for the nine months ended September 30, 2020 compared to an effective income tax rate of 17.9% for the nine months ended September 30, 2019. The Corporation's effective income tax rate reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases.
Dividend
On August 24, 2020, Univest declared a quarterly cash dividend of $0.20 per share, payable on October 1, 2020. This represented a 5.56% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.
It is the Corporation's intention to change the timing of future dividend declarations and payments. Historically, the next dividend would have been declared in December and paid in early January. Under the new timing, the Corporation anticipates that the dividend would be declared in January, in conjunction with the fourth quarter 2020 earnings release, and paid in February. The Corporation also anticipates that future dividends would then be declared in conjunction with quarterly earnings releases and paid in the following month. It is important to note that this change is not anticipated to impact the number of potential dividends paid in a year. There were four dividend payments in 2020 and there would be potentially four payments in each subsequent years subject to declaration by the Corporation's Board of Directors.
Conference Call
Univest will host a conference call to discuss third quarter 2020 results on Thursday, October 29, 2020 at 9:00 a.m. EST. Participants may preregister at https://dpregister.com/sreg/10148562/da483081a6. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through November 29, 2020 by dialing 1-877-344-7529; using Conference ID: 10148562.
About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $6.4 billion in assets and $3.8 billion in assets under management and supervision through its Wealth Management lines of business at September 30, 2020. 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 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 and the reports Univest 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. 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 to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) competitive pressures among financial institutions; (2) changes in the interest rate environment; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and credit loss provisions; (4) general economic conditions; (5) legislative or regulatory
changes that may adversely affect the businesses in which Univest is engaged; (6) technological issues that may adversely affect Univest financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.
Additionally, it is difficult to predict the full impact of the COVID-19 outbreak 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 and whether the gradual reopening of businesses will result in a meaningful increase in economic activity. 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 the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase; (3) collateral for loans, especially real estate, may decline in value; (4) our allowance for loan losses may have to be increased if borrowers experience financial difficulties; (5) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (6) as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities; (7) a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend; (8) our wealth management revenues may decline with continuing market turmoil; (9) litigation, regulatory enforcement risk and reputation risk regarding our participation in the Paycheck Protection Program and the risk that the Small Business Administration may not fund some or all PPP loan guarantees; (10) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (11) Federal Deposit Insurance Corporation premiums may increase if the agency experience additional resolution costs; and (12) further and sustained decline in our stock price or other triggering event could result in an impairment charge being recorded. 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) | |||||||||||||||||||||||||||||||||||||||||
| September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Balance Sheet (Period End) | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | ||||||||||||||||||||||||||||||||||||
| Assets | $ | 6,382,831 | $ | 6,125,312 | $ | 5,464,768 | $ | 5,380,924 | $ | 5,353,611 | |||||||||||||||||||||||||||||||
| Investment securities, net of allowance for credit losses | 368,830 | 397,852 | 423,521 | 441,599 | 448,447 | ||||||||||||||||||||||||||||||||||||
| Loans held for sale | 14,465 | 31,082 | 11,417 | 5,504 | 2,893 | ||||||||||||||||||||||||||||||||||||
| Loans and leases held for investment, gross | 5,211,856 | 4,951,809 | 4,448,825 | 4,386,836 | 4,251,933 | ||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | 91,870 | 86,217 | 68,216 | 35,331 | 33,662 | ||||||||||||||||||||||||||||||||||||
| Loans and leases held for investment, net | 5,119,986 | 4,865,592 | 4,380,609 | 4,351,505 | 4,218,271 | ||||||||||||||||||||||||||||||||||||
| Total deposits | 5,211,603 | 4,869,329 | 4,407,303 | 4,360,075 | 4,337,991 | ||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,714,505 | 1,725,819 | 1,318,270 | 1,279,681 | 1,198,425 | ||||||||||||||||||||||||||||||||||||
| NOW, money market and savings | 2,940,879 | 2,623,025 | 2,452,021 | 2,474,384 | 2,421,466 | ||||||||||||||||||||||||||||||||||||
| Time deposits | 556,219 | 520,485 | 637,012 | 606,010 | 718,100 | ||||||||||||||||||||||||||||||||||||
| Borrowings | 416,104 | 515,722 | 323,363 | 263,596 | 273,855 | ||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 669,107 | 654,873 | 651,551 | 675,122 | 664,299 | ||||||||||||||||||||||||||||||||||||
| Balance Sheet (Average) | For the three months ended, | For the nine months ended, | |||||||||||||||||||||||||||||||||||||||
| 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | 9/30/2020 | 9/30/2019 | |||||||||||||||||||||||||||||||||||
| Assets | $ | 6,265,605 | $ | 6,000,790 | $ | 5,409,561 | $ | 5,400,591 | $ | 5,317,867 | $ | 5,892,918 | $ | 5,165,339 | |||||||||||||||||||||||||||
| Investment securities, net of allowance for credit losses | 385,221 | 411,957 | 441,900 | 445,932 | 460,099 | 412,924 | 467,202 | ||||||||||||||||||||||||||||||||||
| Loans and leases, gross | 5,070,037 | 4,836,858 | 4,388,584 | 4,280,430 | 4,170,485 | 4,766,274 | 4,104,198 | ||||||||||||||||||||||||||||||||||
| Deposits | 5,030,398 | 4,794,669 | 4,349,984 | 4,374,586 | 4,288,170 | 4,726,132 | 4,122,902 | ||||||||||||||||||||||||||||||||||
| Shareholders' equity | 661,947 | 660,950 | 673,460 | 672,647 | 659,523 | 665,439 | 645,647 | ||||||||||||||||||||||||||||||||||
| Asset Quality Data (Period End) | |||||||||||||||||||||||||||||||||||||||||
| 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | |||||||||||||||||||||||||||||||||||||
| Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases | $ | 30,019 | $ | 26,141 | $ | 36,626 | $ | 38,578 | $ | 37,368 | |||||||||||||||||||||||||||||||
| Accruing loans and leases 90 days or more past due | 3,573 | 1,193 | 1,777 | 143 | 2,488 | ||||||||||||||||||||||||||||||||||||
| Accruing troubled debt restructured loans and leases | 53 | 53 | 54 | 54 | 54 | ||||||||||||||||||||||||||||||||||||
| Total nonperforming loans and leases | 33,645 | 27,387 | 38,457 | 38,775 | 39,910 | ||||||||||||||||||||||||||||||||||||
| Other real estate owned | 8,270 | 8,642 | 516 | 516 | 495 | ||||||||||||||||||||||||||||||||||||
| Total nonperforming assets | $ | 41,915 | $ | 36,029 | $ | 38,973 | $ | 39,291 | $ | 40,405 | |||||||||||||||||||||||||||||||
| Nonaccrual loans and leases / Loans and leases held for investment | 0.58 | % | 0.53 | % | 0.82 | % | 0.88 | % | 0.88 | % | |||||||||||||||||||||||||||||||
| Nonperforming loans and leases / Loans and leases held for investment | 0.65 | % | 0.55 | % | 0.86 | % | 0.88 | % | 0.94 | % | |||||||||||||||||||||||||||||||
| Nonperforming assets / Total assets | 0.66 | % | 0.59 | % | 0.71 | % | 0.73 | % | 0.75 | % | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | $ | 91,870 | $ | 86,217 | $ | 68,216 | $ | 35,331 | $ | 33,662 | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment | 1.76 | % | 1.74 | % | 1.53 | % | 0.81 | % | 0.79 | % | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1) | 1.95 | % | 1.94 | % | 1.53 | % | 0.81 | % | 0.79 | % | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment | 306.04 | % | 329.82 | % | 186.25 | % | 91.58 | % | 90.08 | % | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment | 273.06 | % | 314.81 | % | 177.38 | % | 91.12 | % | 84.34 | % | |||||||||||||||||||||||||||||||
| For the three months ended, | For the nine months ended, | ||||||||||||||||||||||||||||||||||||||||
| 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | 9/30/2020 | 9/30/2019 | |||||||||||||||||||||||||||||||||||
| Net loan and lease (recoveries) charge-offs | $ | (35) | $ | 3,576 | $ | 489 | $ | 558 | $ | 468 | $ | 4,030 | $ | 1,993 | |||||||||||||||||||||||||||
| Net loan and lease (recoveries) charge-offs (annualized)/Average loans and leases | — | % | 0.30 | % | 0.04 | % | 0.05 | % | 0.04 | % | 0.11 | % | 0.06 | % | |||||||||||||||||||||||||||
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included within this document. | |||||||||||||||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||
| For the three months ended, | For the nine months ended, | ||||||||||||||||||||||||||||||||||||||||
| For the period: | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | 9/30/2020 | 9/30/2019 | ||||||||||||||||||||||||||||||||||
| Interest income | $ | 50,612 | $ | 49,980 | $ | 52,019 | $ | 53,369 | $ | 54,300 | $ | 152,611 | $ | 160,724 | |||||||||||||||||||||||||||
| Interest expense | 6,758 | 6,462 | 9,551 | 10,940 | 11,655 | 22,771 | 33,921 | ||||||||||||||||||||||||||||||||||
| Net interest income | 43,854 | 43,518 | 42,468 | 42,429 | 42,645 | 129,840 | 126,803 | ||||||||||||||||||||||||||||||||||
| Provision for credit losses | 3,935 | 23,737 | 21,843 | 2,225 | 1,533 | 49,515 | 6,286 | ||||||||||||||||||||||||||||||||||
| Net interest income after provision | 39,919 | 19,781 | 20,625 | 40,204 | 41,112 | 80,325 | 120,517 | ||||||||||||||||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||||||||||||||||
| Trust fee income | 1,915 | 1,924 | 1,890 | 1,912 | 1,973 | 5,729 | 5,914 | ||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 1,187 | 890 | 1,397 | 1,551 | 1,513 | 3,474 | 4,395 | ||||||||||||||||||||||||||||||||||
| Investment advisory commission and fee income | 4,005 | 3,540 | 4,255 | 4,064 | 4,032 | 11,800 | 11,876 | ||||||||||||||||||||||||||||||||||
| Insurance commission and fee income | 3,776 | 4,067 | 4,732 | 3,609 | 3,877 | 12,575 | 12,962 | ||||||||||||||||||||||||||||||||||
| Other service fee income | 2,093 | 1,488 | 1,870 | 2,229 | 2,255 | 5,451 | 7,112 | ||||||||||||||||||||||||||||||||||
| Bank owned life insurance income | 741 | 732 | 734 | 741 | 743 | 2,207 | 2,438 | ||||||||||||||||||||||||||||||||||
| Net gain on sales of investment securities | 57 | 65 | 695 | 13 | 33 | 817 | 41 | ||||||||||||||||||||||||||||||||||
| Net gain on mortgage banking activities | 5,860 | 3,515 | 2,744 | 1,038 | 1,629 | 12,119 | 2,908 | ||||||||||||||||||||||||||||||||||
| Other income | 2,171 | 1,779 | 67 | 1,013 | 544 | 4,017 | 1,606 | ||||||||||||||||||||||||||||||||||
| Total noninterest income | 21,805 | 18,000 | 18,384 | 16,170 | 16,599 | 58,189 | 49,252 | ||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||||||||
| Salaries, benefits and commissions | 24,059 | 21,700 | 23,836 | 21,933 | 22,758 | 69,595 | 66,356 | ||||||||||||||||||||||||||||||||||
| Net occupancy | 2,609 | 2,478 | 2,574 | 2,534 | 2,475 | 7,661 | 7,687 | ||||||||||||||||||||||||||||||||||
| Equipment | 972 | 923 | 995 | 1,027 | 1,088 | 2,890 | 3,143 | ||||||||||||||||||||||||||||||||||
| Data processing | 2,862 | 2,750 | 2,760 | 2,685 | 2,624 | 8,372 | 7,765 | ||||||||||||||||||||||||||||||||||
| Professional fees | 1,321 | 1,264 | 1,317 | 1,475 | 1,517 | 3,902 | 4,088 | ||||||||||||||||||||||||||||||||||
| Marketing and advertising | 463 | 535 | 402 | 710 | 558 | 1,400 | 1,884 | ||||||||||||||||||||||||||||||||||
| Deposit insurance premiums | 707 | 615 | 504 | 342 | (444) | 1,826 | 438 | ||||||||||||||||||||||||||||||||||
| Intangible expenses | 283 | 321 | 330 | 374 | 378 | 934 | 1,221 | ||||||||||||||||||||||||||||||||||
| Other expense | 5,251 | 5,374 | 6,059 | 6,400 | 5,313 | 16,684 | 16,028 | ||||||||||||||||||||||||||||||||||
| Total noninterest expense | 38,527 | 35,960 | 38,777 | 37,480 | 36,267 | 113,264 | 108,610 | ||||||||||||||||||||||||||||||||||
| Income before taxes | 23,197 | 1,821 | 232 | 18,894 | 21,444 | 25,250 | 61,159 | ||||||||||||||||||||||||||||||||||
| Income tax (benefit) expense | 5,078 | (264) | (606) | 3,384 | 3,782 | 4,208 | 10,950 | ||||||||||||||||||||||||||||||||||
| Net income | $ | 18,119 | $ | 2,085 | $ | 838 | $ | 15,510 | $ | 17,662 | $ | 21,042 | $ | 50,209 | |||||||||||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.62 | $ | 0.07 | $ | 0.03 | $ | 0.53 | $ | 0.60 | $ | 0.72 | $ | 1.71 | |||||||||||||||||||||||||||
| Diluted | $ | 0.62 | $ | 0.07 | $ | 0.03 | $ | 0.53 | $ | 0.60 | $ | 0.72 | $ | 1.71 | |||||||||||||||||||||||||||
| Dividends declared per share | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.60 | $ | 0.60 | |||||||||||||||||||||||||||
| Weighted average shares outstanding | 29,226,627 | 29,187,197 | 29,286,200 | 29,327,169 | 29,305,524 | 29,233,317 | 29,290,309 | ||||||||||||||||||||||||||||||||||
| Period end shares outstanding | 29,241,302 | 29,201,985 | 29,164,782 | 29,334,629 | 29,312,534 | 29,241,302 | 29,312,534 | ||||||||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
| For the three months ended, | For the nine months ended, | ||||||||||||||||||||||||||||||||||||||||
| Profitability Ratios (annualized) | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | 9/30/2020 | 9/30/2019 | ||||||||||||||||||||||||||||||||||
| Return on average assets | 1.15 | % | 0.14 | % | 0.06 | % | 1.14 | % | 1.32 | % | 0.48 | % | 1.30 | % | |||||||||||||||||||||||||||
| Return on average shareholders' equity | 10.89 | % | 1.27 | % | 0.50 | % | 9.15 | % | 10.62 | % | 4.22 | % | 10.40 | % | |||||||||||||||||||||||||||
| Return on average tangible common equity (1) | 14.82 | % | 1.73 | % | 0.68 | % | 12.40 | % | 14.52 | % | 5.74 | % | 14.33 | % | |||||||||||||||||||||||||||
| Net interest margin (FTE) | 3.02 | % | 3.18 | % | 3.48 | % | 3.44 | % | 3.52 | % | 3.21 | % | 3.64 | % | |||||||||||||||||||||||||||
| Efficiency ratio (2) | 58.0 | % | 57.7 | % | 62.8 | % | 63.0 | % | 60.4 | % | 59.5 | % | 60.8 | % | |||||||||||||||||||||||||||
| Capitalization Ratios | |||||||||||||||||||||||||||||||||||||||||
| Dividends declared to net income | 32.3 | % | 278.7 | % | 699.9 | % | 37.8 | % | 33.2 | % | 83.3 | % | 35.0 | % | |||||||||||||||||||||||||||
| Shareholders' equity to assets (Period End) | 10.48 | % | 10.69 | % | 11.92 | % | 12.55 | % | 12.41 | % | 10.48 | % | 12.41 | % | |||||||||||||||||||||||||||
| Tangible common equity to tangible assets (1) | 7.96 | % | 8.06 | % | 8.99 | % | 9.59 | % | 9.42 | % | 7.96 | % | 9.42 | % | |||||||||||||||||||||||||||
| Common equity book value per share | $ | 22.88 | $ | 22.43 | $ | 22.34 | $ | 23.01 | $ | 22.66 | $ | 22.88 | $ | 22.66 | |||||||||||||||||||||||||||
| Tangible common equity book value per share (1) | $ | 16.89 | $ | 16.41 | $ | 16.31 | $ | 17.01 | $ | 16.64 | $ | 16.89 | $ | 16.64 | |||||||||||||||||||||||||||
| Regulatory Capital Ratios (Period End) | |||||||||||||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 8.97 | % | 9.15 | % | 9.90 | % | 10.02 | % | 9.97 | % | 8.97 | % | 9.97 | % | |||||||||||||||||||||||||||
| Common equity tier 1 risk-based capital ratio | 10.52 | % | 10.73 | % | 10.79 | % | 11.03 | % | 11.03 | % | 10.52 | % | 11.03 | % | |||||||||||||||||||||||||||
| Tier 1 risk-based capital ratio | 10.52 | % | 10.73 | % | 10.79 | % | 11.03 | % | 11.03 | % | 10.52 | % | 11.03 | % | |||||||||||||||||||||||||||
| Total risk-based capital ratio | 15.35 | % | 13.72 | % | 13.65 | % | 13.78 | % | 13.81 | % | 15.35 | % | 13.81 | % | |||||||||||||||||||||||||||
| (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. | |||||||||||||||||||||||||||||||||||||||||
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 nine months ended, | ||||||||||||||||||||||||||||||||||||||||
| 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | 9/30/2019 | 9/30/2020 | 9/30/2019 | |||||||||||||||||||||||||||||||||||
| Shareholders' equity | $ | 669,107 | $ | 654,873 | $ | 651,551 | $ | 675,122 | $ | 664,299 | $ | 669,107 | $ | 664,299 | |||||||||||||||||||||||||||
| Goodwill | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | ||||||||||||||||||||||||||||||||||
| Other intangibles (a) | (2,736) | (3,017) | (3,333) | (3,658) | (4,026) | (2,736) | (4,026) | ||||||||||||||||||||||||||||||||||
| Tangible common equity | $ | 493,812 | $ | 479,297 | $ | 475,659 | $ | 498,905 | $ | 487,714 | $ | 493,812 | $ | 487,714 | |||||||||||||||||||||||||||
| Total assets | $ | 6,382,831 | $ | 6,125,312 | $ | 5,464,768 | $ | 5,380,924 | $ | 5,353,611 | $ | 6,382,831 | $ | 5,353,611 | |||||||||||||||||||||||||||
| Goodwill | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | ||||||||||||||||||||||||||||||||||
| Other intangibles | (2,736) | (3,017) | (3,333) | (3,658) | (4,026) | (2,736) | (4,026) | ||||||||||||||||||||||||||||||||||
| Tangible assets | $ | 6,207,536 | $ | 5,949,736 | $ | 5,288,876 | $ | 5,204,707 | $ | 5,177,026 | $ | 6,207,536 | $ | 5,177,026 | |||||||||||||||||||||||||||
| Average shareholders' equity | $ | 661,947 | $ | 660,950 | $ | 673,460 | $ | 672,647 | $ | 659,523 | $ | 665,439 | $ | 645,647 | |||||||||||||||||||||||||||
| Average goodwill | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | ||||||||||||||||||||||||||||||||||
| Average other intangibles (a) | (2,889) | (3,185) | (3,506) | (3,853) | (4,234) | (3,193) | (4,624) | ||||||||||||||||||||||||||||||||||
| Average tangible common equity | $ | 486,499 | $ | 485,206 | $ | 497,395 | $ | 496,235 | $ | 482,730 | $ | 489,687 | $ | 468,464 | |||||||||||||||||||||||||||
| Net income before taxes | $ | 23,197 | $ | 1,821 | $ | 232 | $ | 18,894 | $ | 21,444 | $ | 25,250 | $ | 61,159 | |||||||||||||||||||||||||||
| Provision for credit losses | 3,935 | 23,737 | 21,843 | 2,225 | 1,533 | 49,515 | 6,286 | ||||||||||||||||||||||||||||||||||
| Pre-tax pre-provision income | $ | 27,132 | $ | 25,558 | $ | 22,075 | $ | 21,119 | $ | 22,977 | $ | 74,765 | $ | 67,445 | |||||||||||||||||||||||||||
| Loans and lease held for investment, gross | $ | 5,211,856 | $ | 4,951,809 | $ | 4,448,825 | $ | 4,386,836 | $ | 4,251,933 | $ | 5,211,856 | $ | 4,251,933 | |||||||||||||||||||||||||||
| Paycheck Protection Program ("PPP") loans | (501,580) | (498,978) | — | — | — | (501,580) | — | ||||||||||||||||||||||||||||||||||
| Gross loans and leases excluding PPP loans | $ | 4,710,276 | $ | 4,452,831 | $ | 4,448,825 | $ | 4,386,836 | $ | 4,251,933 | $ | 4,710,276 | $ | 4,251,933 | |||||||||||||||||||||||||||
| (a) Amount does not include servicing rights | |||||||||||||||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||||||||||||
| Average Balances and Interest Rates (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended, | |||||||||||||||||||||||||||||||||||||||||
| Tax Equivalent Basis | September 30, 2020 | June 30, 2020 | |||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Interest-earning deposits with other banks | $ | 368,181 | $ | 100 | 0.11 | % | $ | 313,668 | $ | 67 | 0.09 | % | |||||||||||||||||||||||||||||
| U.S. government obligations | 6,998 | 36 | 2.05 | 7,236 | 36 | 2.00 | |||||||||||||||||||||||||||||||||||
| Obligations of state and political subdivisions | 18,004 | 167 | 3.69 | 26,546 | 240 | 3.64 | |||||||||||||||||||||||||||||||||||
| Other debt and equity securities | 360,219 | 1,610 | 1.78 | 378,175 | 2,182 | 2.32 | |||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 28,651 | 419 | 5.82 | 28,977 | 362 | 5.02 | |||||||||||||||||||||||||||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 782,053 | 2,332 | 1.19 | 754,602 | 2,887 | 1.54 | |||||||||||||||||||||||||||||||||||
| Commercial, financial, and agricultural loans | 807,376 | 7,330 | 3.61 | 816,976 | 7,330 | 3.61 | |||||||||||||||||||||||||||||||||||
| Paycheck Protection Program loans | 500,549 | 2,811 | 2.23 | 370,669 | 2,128 | 2.31 | |||||||||||||||||||||||||||||||||||
| Real estate—commercial and construction loans | 2,358,971 | 23,547 | 3.97 | 2,232,827 | 23,110 | 4.16 | |||||||||||||||||||||||||||||||||||
| Real estate—residential loans | 1,009,407 | 10,380 | 4.09 | 1,004,671 | 10,270 | 4.11 | |||||||||||||||||||||||||||||||||||
| Loans to individuals | 28,663 | 309 | 4.29 | 29,079 | 327 | 4.52 | |||||||||||||||||||||||||||||||||||
| Municipal loans and leases | 267,364 | 2,839 | 4.22 | 291,433 | 2,977 | 4.11 | |||||||||||||||||||||||||||||||||||
| Lease financings | 97,707 | 1,662 | 6.77 | 91,203 | 1,592 | 7.02 | |||||||||||||||||||||||||||||||||||
| Gross loans and leases | 5,070,037 | 48,878 | 3.84 | 4,836,858 | 47,734 | 3.97 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 5,852,090 | 51,210 | 3.48 | 5,591,460 | 50,621 | 3.64 | |||||||||||||||||||||||||||||||||||
| Cash and due from banks | 56,715 | 46,970 | |||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | (87,046) | (69,292) | |||||||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 55,755 | 55,750 | |||||||||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 33,875 | 34,419 | |||||||||||||||||||||||||||||||||||||||
| Other assets | 354,216 | 341,483 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 6,265,605 | $ | 6,000,790 | |||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing checking deposits | $ | 725,580 | $ | 468 | 0.26 | % | $ | 617,927 | $ | 372 | 0.24 | % | |||||||||||||||||||||||||||||
| Money market savings | 1,116,628 | 897 | 0.32 | 1,063,463 | 853 | 0.32 | |||||||||||||||||||||||||||||||||||
| Regular savings | 901,716 | 449 | 0.20 | 872,422 | 475 | 0.22 | |||||||||||||||||||||||||||||||||||
| Time deposits | 525,656 | 2,214 | 1.68 | 577,462 | 2,672 | 1.86 | |||||||||||||||||||||||||||||||||||
| Total time and interest-bearing deposits | 3,269,580 | 4,028 | 0.49 | 3,131,274 | 4,372 | 0.56 | |||||||||||||||||||||||||||||||||||
| Short-term borrowings | 130,359 | 97 | 0.30 | 161,365 | 122 | 0.30 | |||||||||||||||||||||||||||||||||||
| Long-term debt | 208,776 | 742 | 1.41 | 210,040 | 762 | 1.46 | |||||||||||||||||||||||||||||||||||
| Subordinated notes | 155,945 | 1,891 | 4.82 | 94,890 | 1,206 | 5.11 | |||||||||||||||||||||||||||||||||||
| Total borrowings | 495,080 | 2,730 | 2.19 | 466,295 | 2,090 | 1.80 | |||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,764,660 | 6,758 | 0.71 | 3,597,569 | 6,462 | 0.72 | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,760,818 | 1,663,395 | |||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities | 37,170 | 37,680 | |||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 41,010 | 41,196 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 5,603,658 | 5,339,840 | |||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||||||||||||||||||||||
| Common stock | 157,784 | 157,784 | |||||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | 296,272 | 295,681 | |||||||||||||||||||||||||||||||||||||||
| Retained earnings and other equity | 207,891 | 207,485 | |||||||||||||||||||||||||||||||||||||||
| Total shareholders' equity | 661,947 | 660,950 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,265,605 | $ | 6,000,790 | |||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 44,452 | $ | 44,159 | |||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.77 | 2.92 | |||||||||||||||||||||||||||||||||||||||
| Effect of net interest-free funding sources | 0.25 | 0.26 | |||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.02 | % | 3.18 | % | |||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 155.45 | % | 155.42 | % | |||||||||||||||||||||||||||||||||||||
| Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustment. | |||||||||||||||||||||||||||||||||||||||||
| 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, 2020 and June 30, 2020 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 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Interest-earning deposits with other banks | $ | 368,181 | $ | 100 | 0.11 | % | $ | 213,623 | $ | 1,178 | 2.19 | % | |||||||||||||||||||||||||||||
| U.S. government obligations | 6,998 | 36 | 2.05 | 14,154 | 62 | 1.74 | |||||||||||||||||||||||||||||||||||
| Obligations of state and political subdivisions | 18,004 | 167 | 3.69 | 42,465 | 316 | 2.95 | |||||||||||||||||||||||||||||||||||
| Other debt and equity securities | 360,219 | 1,610 | 1.78 | 403,480 | 2,519 | 2.48 | |||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 28,651 | 419 | 5.82 | 30,857 | 519 | 6.67 | |||||||||||||||||||||||||||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 782,053 | 2,332 | 1.19 | 704,579 | 4,594 | 2.59 | |||||||||||||||||||||||||||||||||||
| Commercial, financial, and agricultural loans | 807,376 | 7,330 | 3.61 | 800,006 | 9,952 | 4.94 | |||||||||||||||||||||||||||||||||||
| Paycheck Protection Program loans | 500,549 | 2,811 | 2.23 | — | — | — | |||||||||||||||||||||||||||||||||||
| Real estate—commercial and construction loans | 2,358,971 | 23,547 | 3.97 | 1,966,593 | 23,439 | 4.73 | |||||||||||||||||||||||||||||||||||
| Real estate—residential loans | 1,009,407 | 10,380 | 4.09 | 956,224 | 11,570 | 4.80 | |||||||||||||||||||||||||||||||||||
| Loans to individuals | 28,663 | 309 | 4.29 | 31,504 | 490 | 6.17 | |||||||||||||||||||||||||||||||||||
| Municipal loans and leases | 267,364 | 2,839 | 4.22 | 333,734 | 3,413 | 4.06 | |||||||||||||||||||||||||||||||||||
| Lease financings | 97,707 | 1,662 | 6.77 | 82,424 | 1,482 | 7.13 | |||||||||||||||||||||||||||||||||||
| Gross loans and leases | 5,070,037 | 48,878 | 3.84 | 4,170,485 | 50,346 | 4.79 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 5,852,090 | 51,210 | 3.48 | 4,875,064 | 54,940 | 4.47 | |||||||||||||||||||||||||||||||||||
| Cash and due from banks | 56,715 | 53,019 | |||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | (87,046) | (33,152) | |||||||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 55,755 | 57,881 | |||||||||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 33,875 | 35,238 | |||||||||||||||||||||||||||||||||||||||
| Other assets | 354,216 | 329,817 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 6,265,605 | $ | 5,317,867 | |||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing checking deposits | $ | 725,580 | $ | 468 | 0.26 | % | $ | 497,185 | $ | 678 | 0.54 | % | |||||||||||||||||||||||||||||
| Money market savings | 1,116,628 | 897 | 0.32 | 1,004,806 | 4,112 | 1.62 | |||||||||||||||||||||||||||||||||||
| Regular savings | 901,716 | 449 | 0.20 | 805,632 | 963 | 0.47 | |||||||||||||||||||||||||||||||||||
| Time deposits | 525,656 | 2,214 | 1.68 | 715,520 | 3,681 | 2.04 | |||||||||||||||||||||||||||||||||||
| Total time and interest-bearing deposits | 3,269,580 | 4,028 | 0.49 | 3,023,143 | 9,434 | 1.24 | |||||||||||||||||||||||||||||||||||
| Short-term borrowings | 130,359 | 97 | 0.30 | 32,375 | 94 | 1.15 | |||||||||||||||||||||||||||||||||||
| Long-term debt | 208,776 | 742 | 1.41 | 167,338 | 866 | 2.05 | |||||||||||||||||||||||||||||||||||
| Subordinated notes | 155,945 | 1,891 | 4.82 | 94,724 | 1,261 | 5.28 | |||||||||||||||||||||||||||||||||||
| Total borrowings | 495,080 | 2,730 | 2.19 | 294,437 | 2,221 | 2.99 | |||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,764,660 | 6,758 | 0.71 | 3,317,580 | 11,655 | 1.39 | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,760,818 | 1,265,027 | |||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities | 37,170 | 38,364 | |||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 41,010 | 37,373 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 5,603,658 | 4,658,344 | |||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||||||||||||||||||||||
| Common stock | 157,784 | 157,784 | |||||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | 296,272 | 294,138 | |||||||||||||||||||||||||||||||||||||||
| Retained earnings and other equity | 207,891 | 207,601 | |||||||||||||||||||||||||||||||||||||||
| Total shareholders' equity | 661,947 | 659,523 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,265,605 | $ | 5,317,867 | |||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 44,452 | $ | 43,285 | |||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.77 | 3.08 | |||||||||||||||||||||||||||||||||||||||
| Effect of net interest-free funding sources | 0.25 | 0.44 | |||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.02 | % | 3.52 | % | |||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 155.45 | % | 146.95 | % | |||||||||||||||||||||||||||||||||||||
| Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. | |||||||||||||||||||||||||||||||||||||||||
| 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, 2020 and 2019 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 Basis | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Interest-earning deposits with other banks | $ | 267,023 | $ | 492 | 0.25 | % | $ | 120,231 | $ | 2,016 | 2.24 | % | |||||||||||||||||||||||||||||
| U.S. government obligations | 7,176 | 109 | 2.03 | 17,148 | 217 | 1.69 | |||||||||||||||||||||||||||||||||||
| Obligations of state and political subdivisions | 26,019 | 696 | 3.57 | 55,220 | 1,369 | 3.31 | |||||||||||||||||||||||||||||||||||
| Other debt and equity securities | 379,729 | 6,460 | 2.27 | 394,834 | 7,722 | 2.61 | |||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 29,689 | 1,308 | 5.88 | 31,713 | 1,640 | 6.91 | |||||||||||||||||||||||||||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 709,636 | 9,065 | 1.71 | 619,146 | 12,964 | 2.80 | |||||||||||||||||||||||||||||||||||
| Commercial, financial, and agricultural loans | 815,178 | 23,291 | 3.82 | 810,321 | 31,299 | 5.16 | |||||||||||||||||||||||||||||||||||
| Paycheck Protection Program loans | 291,173 | 4,939 | 2.27 | — | — | — | |||||||||||||||||||||||||||||||||||
| Real estate—commercial and construction loans | 2,244,143 | 70,574 | 4.20 | 1,900,901 | 68,108 | 4.79 | |||||||||||||||||||||||||||||||||||
| Real estate—residential loans | 1,001,904 | 31,702 | 4.23 | 945,477 | 34,465 | 4.87 | |||||||||||||||||||||||||||||||||||
| Loans to individuals | 29,251 | 1,043 | 4.76 | 31,985 | 1,518 | 6.35 | |||||||||||||||||||||||||||||||||||
| Municipal loans and leases | 291,845 | 9,081 | 4.16 | 333,816 | 9,939 | 3.98 | |||||||||||||||||||||||||||||||||||
| Lease financings | 92,780 | 4,808 | 6.92 | 81,698 | 4,376 | 7.16 | |||||||||||||||||||||||||||||||||||
| Gross loans and leases | 4,766,274 | 145,438 | 4.08 | 4,104,198 | 149,705 | 4.88 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 5,475,910 | 154,503 | 3.77 | 4,723,344 | 162,669 | 4.60 | |||||||||||||||||||||||||||||||||||
| Cash and due from banks | 51,544 | 48,231 | |||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | (66,977) | (31,714) | |||||||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 55,967 | 58,640 | |||||||||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 34,278 | 36,056 | |||||||||||||||||||||||||||||||||||||||
| Other assets | 342,196 | 330,782 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 5,892,918 | $ | 5,165,339 | |||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing checking deposits | $ | 642,935 | $ | 1,636 | 0.34 | % | $ | 477,848 | $ | 1,849 | 0.52 | % | |||||||||||||||||||||||||||||
| Money market savings | 1,079,279 | 4,653 | 0.58 | 968,894 | 12,094 | 1.67 | |||||||||||||||||||||||||||||||||||
| Regular savings | 863,772 | 1,716 | 0.27 | 804,457 | 2,790 | 0.46 | |||||||||||||||||||||||||||||||||||
| Time deposits | 568,517 | 7,801 | 1.83 | 686,794 | 10,015 | 1.95 | |||||||||||||||||||||||||||||||||||
| Total time and interest-bearing deposits | 3,154,503 | 15,806 | 0.67 | 2,937,993 | 26,748 | 1.22 | |||||||||||||||||||||||||||||||||||
| Short-term borrowings | 110,689 | 325 | 0.39 | 65,804 | 949 | 1.93 | |||||||||||||||||||||||||||||||||||
| Long-term debt | 196,053 | 2,268 | 1.55 | 157,484 | 2,441 | 2.07 | |||||||||||||||||||||||||||||||||||
| Subordinated notes | 115,376 | 4,372 | 5.06 | 94,664 | 3,783 | 5.34 | |||||||||||||||||||||||||||||||||||
| Total borrowings | 422,118 | 6,965 | 2.20 | 317,952 | 7,173 | 3.02 | |||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,576,621 | 22,771 | 0.85 | 3,255,945 | 33,921 | 1.39 | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,571,629 | 1,184,909 | |||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities | 37,538 | 39,103 | |||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 41,691 | 39,735 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 5,227,479 | 4,519,692 | |||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||||||||||||||||||||||
| Common stock | 157,784 | 157,784 | |||||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | 295,759 | 293,465 | |||||||||||||||||||||||||||||||||||||||
| Retained earnings and other equity | 211,896 | 194,398 | |||||||||||||||||||||||||||||||||||||||
| Total shareholders' equity | 665,439 | 645,647 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 5,892,918 | $ | 5,165,339 | |||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 131,732 | $ | 128,748 | |||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.92 | 3.21 | |||||||||||||||||||||||||||||||||||||||
| Effect of net interest-free funding sources | 0.29 | 0.43 | |||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.21 | % | 3.64 | % | |||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 153.10 | % | 145.07 | % | |||||||||||||||||||||||||||||||||||||
| Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. | |||||||||||||||||||||||||||||||||||||||||
| 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, 2020 and 2019 have been calculated using the Corporation’s federal applicable rate of 21.0%. | |||||||||||||||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||||||
| Loan Portfolio Overview (Unaudited) | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | As of September 30, 2020 | As of October 16, 2020 | |||||||||||||||||||||||||||||||||
| Industry Description | Total Outstanding Balance (excl PPP) | % of Commercial Loan Portfolio | PPP $ (1) | % of Portfolio with PPP Loans (2) | $ Balance of Modified Loans (3) | Modified Loans as a % of Portfolio (3) (4) | |||||||||||||||||||||||||||||
| CRE - Retail | $ | 295,654 | 7.6 | % | $ | 239 | — | % | $ | 45,121 | 15.3 | % | |||||||||||||||||||||||
| Animal Production | 252,752 | 6.5 | 706 | 2.0 | 135 | 0.1 | |||||||||||||||||||||||||||||
| CRE - Office | 240,521 | 6.2 | — | — | 1,702 | 0.7 | |||||||||||||||||||||||||||||
| CRE - 1-4 Family Residential Investment | 237,378 | 6.1 | 1,282 | 0.2 | 212 | 0.1 | |||||||||||||||||||||||||||||
| CRE - Multi-family | 204,488 | 5.3 | — | — | 1,281 | 0.6 | |||||||||||||||||||||||||||||
| Real Estate Lenders, Secondary Market Financing | 189,743 | 4.9 | 4,318 | 27.8 | — | — | |||||||||||||||||||||||||||||
| Hotels & Motels (Accommodation) | 175,894 | 4.5 | 2,407 | 49.6 | 56,288 | 32.0 | |||||||||||||||||||||||||||||
| Nursing and Residential Care Facilities | 160,238 | 4.1 | 7,935 | 26.4 | — | — | |||||||||||||||||||||||||||||
| CRE - Industrial / Warehouse | 158,356 | 4.1 | 139 | 3.8 | — | — | |||||||||||||||||||||||||||||
| CRE - Mixed-Use - Residential | 111,613 | 2.9 | — | — | 15,440 | 13.8 | |||||||||||||||||||||||||||||
| Specialty Trade Contractors | 111,201 | 2.9 | 67,508 | 14.3 | — | — | |||||||||||||||||||||||||||||
| Professional, Scientific, and Technical Services | 93,463 | 2.4 | 70,163 | 29.4 | 63 | 0.1 | |||||||||||||||||||||||||||||
| CRE - Medical Office | 88,557 | 2.3 | — | — | 9,864 | 11.1 | |||||||||||||||||||||||||||||
| Homebuilding (tract developers, remodelers) | 85,177 | 2.2 | 15,049 | 5.2 | — | — | |||||||||||||||||||||||||||||
| Education | 77,676 | 2.0 | 15,577 | 26.7 | 1,071 | 1.4 | |||||||||||||||||||||||||||||
| Merchant Wholesalers, Durable Goods | 73,251 | 1.9 | 20,726 | 22.9 | — | — | |||||||||||||||||||||||||||||
| Fabricated Metal Product Manufacturing | 65,549 | 1.7 | 12,860 | 3.5 | — | — | |||||||||||||||||||||||||||||
| Crop Production | 62,689 | 1.6 | 289 | 0.5 | — | — | |||||||||||||||||||||||||||||
| Motor Vehicle and Parts Dealers | 61,306 | 1.6 | 11,623 | 2.9 | — | — | |||||||||||||||||||||||||||||
| Food Services and Drinking Places | 59,261 | 1.5 | 15,998 | 25.7 | 1,298 | 2.2 | |||||||||||||||||||||||||||||
| Administrative and Support Services | 55,217 | 1.4 | 28,943 | 32.9 | — | — | |||||||||||||||||||||||||||||
| Industries with >$50 million in outstandings | $ | 2,859,984 | 73.7 | % | $ | 275,762 | 11.1 | % | $ | 132,475 | 4.6 | % | |||||||||||||||||||||||
| Industries with <$50 million in outstandings | $ | 1,015,850 | 26.3 | % | $ | 225,818 | 17.3 | % | $ | 33,566 | 3.3 | % | |||||||||||||||||||||||
| Total Commercial Loans | $ | 3,875,834 | 100.0 | % | $ | 501,580 | 12.7 | % | $ | 166,041 | 4.3 | % | |||||||||||||||||||||||
| Consumer Loans and Lease Financings | Total Outstanding Balance | PPP $ (1) | $ Balance of Modified Loans (3) | Modified Loans as a % of Portfolio (3) (4) | |||||||||||||||||||||||||||||||
| Real Estate-Residential Secured for Personal Purpose | $ | 474,688 | — | $ | 22,937 | 4.8 | % | ||||||||||||||||||||||||||||
| Real Estate-Home Equity Secured for Personal Purpose | 172,448 | — | 1,633 | 0.9 | |||||||||||||||||||||||||||||||
| Loans to Individuals | 27,771 | — | 184 | 0.7 | |||||||||||||||||||||||||||||||
| Lease Financings | 159,535 | — | 232 | 0.1 | |||||||||||||||||||||||||||||||
| Total Consumer Loans and Lease Financings | $ | 834,442 | $ | — | $ | 24,986 | 3.0 | % | |||||||||||||||||||||||||||
| Total | $ | 4,710,276 | $ | 501,580 | $ | 191,027 | 4.1 | % | |||||||||||||||||||||||||||
(1) Includes ($9.5) million of net deferred fees.
(2) Represents weighted average percent of the portfolio which received a PPP loan.
(3) Loan modifications referenced above were made in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and therefore were not classified as TDRs as of October 16, 2020.
(4) Balance of modified loans as of October 16, 2020 as a percentage of portfolio loans at September 30, 2020.