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| 8-K - 8-K - UNIVEST FINANCIAL Corp | uvsp-20210728.htm |
Exhibit 99.1
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CONTACT: Brian J. Richardson
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2446, richardsonb@univest.net
FOR IMMEDIATE RELEASE
UNIVEST FINANCIAL CORPORATION
REPORTS SECOND QUARTER RESULTS
(Loan Growth (excluding PPP loans1) for last twelve months of 14.0%)
SOUDERTON, Pa., July 28, 2021 - Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income for the quarter ended June 30, 2021 was $20.9 million, or $0.71 diluted earnings per share, compared to net income of $2.1 million, or $0.07 diluted earnings per share, for the quarter ended June 30, 2020. Net income for the six months ended June 30, 2021 was $53.5 million, or $1.81 diluted earnings per share, compared to net income of $2.9 million, or $0.10 diluted earnings per share, for the six months ended June 30, 2020.
Pre-tax pre-provision income1 for the quarter ended June 30, 2021 was $25.7 million, an increase of $143 thousand, or 0.6%, from the second quarter of 2020. Pre-tax pre-provision income1 for the six months ended June 30, 2021 was $54.8 million, an increase of $7.2 million, or 15.1%, from the comparable period in the prior year.
One-Time Items
The financial results for the three and six months ended June 30, 2021 included a tax-free bank owned life insurance ("BOLI") death benefit claim of $893 thousand, which represents $0.03 diluted earnings per share.
Paycheck Protection Program
On December 27, 2020, the Consolidated Appropriations Act, 2021, was signed into law, which provides new COVID-19 relief funds, additional funding under the Paycheck Protection Program (the "PPP") and
1 Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.
the establishment of PPP Second Draw Loans. The Small Business Administration (the "SBA") announced it was taking certain steps under the PPP to further promote equitable relief for smaller businesses. Under this program, we successfully originated 1,226 PPP loans and secured funding of approximately $169.5 million for our customers.
As of June 30, 2021, $252.8 million in PPP loan originations remain outstanding. During the quarter, we recorded income of $4.8 million within net interest income related to these loans, of which $3.7 million was the result of forgiveness and pay downs of PPP loans totaling $282.3 million. During the six months ended June 30, 2021, we recorded income of $9.3 million within net interest income related to these loans, of which $7.1 million was the result of forgiveness and pay downs of PPP loans totaling $402.0 million. As of June 30, 2021, we have $6.4 million of net deferred fees on our balance sheet, which represents approximately 35.2% of the initial deferred fee amount.
Loans
Gross loans and leases, excluding PPP loans2, increased $187.9 million, or 15.4% (annualized), from March 31, 2021, $251.4 million or 10.4% (annualized) from December 31, 2020 and $621.6 million, or 14.0%, from June 30, 2020 due to increases in commercial, construction, residential mortgage loans and lease financings.
Deposits
Total deposits increased $7.1 million, or 0.5% (annualized), from March 31, 2021 and $76.0 million, or 2.9% (annualized), from December 31, 2020 primarily due to increases in commercial and consumer deposits offset by a decrease in brokered deposits and a seasonal decrease in public funds deposits. Total deposits increased $449.4 million, or 9.2%, from June 30, 2020, primarily due to increases in commercial, consumer and public funds deposits.
Net Interest Income and Margin
Net interest income of $46.8 million for the three months ended June 30, 2021 increased $1.3 million, or 3.0%, from the three months ended March 31, 2021, and $3.2 million, or 7.4%, from the three months ended June 30, 2020. Net interest income of $92.2 million for the six months ended June 30, 2021 increased $6.2 million, or 7.2%, from the six months ended June 30, 2020. The increase in net interest income for the six months ended June 30, 2021 compared to the same period of 2020 was primarily due to an increase in PPP loan income of $7.2 million and lower deposit costs offset by a decrease in yield on loans and investment securities.
2 Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.
Net interest margin, on a tax-equivalent basis, was 3.15% for the second quarter of 2021, compared to 3.12% for the first quarter of 2021 and 3.18% for the second quarter of 2020. Excess liquidity reduced net interest margin by approximately ten basis points for the quarter ended June 30, 2021 compared to eleven basis points for the quarter ended March 31, 2021 and sixteen basis points for the quarter ended June 30, 2020. This excess liquidity was primarily driven by strong deposit balance growth during the last fifteen months, which was partially attributable to the various stimulus initiatives associated with the COVID-19 pandemic. As PPP loans are forgiven, the associated deferred fees are recognized in earnings, thus attaining yields in excess of 2020 run rates. PPP loans had a favorable impact on net interest margin of eleven basis points for the quarter ended June 30, 2021 compared to four basis points for the quarter ended March 31, 2021 and an unfavorable impact of nine basis points for the quarter ended June 30, 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.14% for the quarter ended June 30, 2021 compared to 3.19% for the quarter ended March 31, 2021 and 3.43% for the quarter ended June 30, 2020.
Noninterest Income
Noninterest income for the quarter ended June 30, 2021 was $20.2 million, an increase of $2.2 million, or 12.4%, compared to the second quarter of 2020. Noninterest income for the six months ended June 30, 2021 was $43.5 million, an increase of $7.1 million, or 19.5%, from the comparable period in the prior year.
Net gain on mortgage banking activities decreased $54 thousand, or 1.5%, for the quarter and increased $3.1 million, or 50.2% for the six months ended June 30, 2021 compared to the comparable periods in the prior year. The increase for the six months ended June 30, 2021 was primarily due to an increase in volume and expansion of margins. Investment advisory commission and fee income increased $1.0 million, or 28.8%, for the quarter and $1.5 million, or 18.7%, for the six months ended June 30, 2021 compared to the comparable periods in the prior year, due to increased assets under management driven by favorable market conditions and new customer relationships. BOLI income increased $888 thousand, or 121.3%, for the quarter and $871 thousand, or 59.4%, for the six months ended June 30, 2021 primarily due to proceeds from BOLI death benefits of $893 thousand as previously discussed.
Other service fee income increased $1.3 million, or 84.7%, for the quarter and $1.6 million, or 47.1%, for the six months ended June 30, 2021 compared to the comparable periods in the prior year. Mortgage servicing fees increased $599 thousand for the quarter and $692 thousand for the six months ended June 30, 2021 driven by an increase in retained servicing associated with elevated mortgage volume over the past fifteen months. Interchange fee income increased $494 thousand for the quarter and $672 thousand for the six months ended June 30, 2021 due to increased customer activity as the markets we operate in continue to re-open.
Other income decreased $1.3 million, or 73.1%, for the quarter due to a decrease of $1.4 million in fees on risk participation agreements for interest rate swaps driven by a decrease in customer demand.
Noninterest Expense
Noninterest expense for the quarter ended June 30, 2021 was $41.3 million, an increase of $5.3 million, or 14.8%, compared to the second quarter of 2020. Noninterest expense for the six months ended June 30, 2021 was $80.8 million, an increase of $6.1 million, or 8.1%, from the comparable period in the prior year.
Salaries, benefits and commissions increased $3.7 million, or 17.0%, for the quarter and $4.6 million, or 10.2%, for the six months ended June 30, 2021 from the comparable periods in the prior year. These increases reflect our continued investment in staff to support revenue generation across all business lines and annual merit increases. Variable compensation expenses increased $1.0 million and $1.7 million for the three and six months ended June 30, 2021, respectively, from the comparable periods in the prior year, due to increased profitability, specifically in our mortgage banking and wealth management lines of business. Additionally, capitalized compensation related to PPP origination activity was $1.2 million and $664 thousand lower in the three and six months ended June 30, 2021, respectively, from the comparable periods in the prior year.
Data processing expenses increased $314 thousand, or 11.4%, for the quarter and $604 thousand, or 11.0%, for the six months ended June 30, 2021 primarily due to continued investments in our end-to-end loan origination solution for loans below $1.0 million, customer relationship management software, internal infrastructure improvements and outsourced data processing solutions. Professional fees increased $751 thousand, or 59.4%, for the quarter and $1.2 million, or 45.8%, for the six months ended June 30, 2021, primarily attributable to increased consultant fees in support of our Diversity, Equity and Inclusion, training initiatives and treasury management product enhancements. During the first six months of 2021, we have spent $781 thousand on these initiatives and we expect to incur approximately $650 thousand of additional expenses related to these initiatives in the second half of the year. These expenses are not expected to re-occur in subsequent periods.
Other expense increased $390 thousand, or 7.3%, for the quarter primarily attributable to an increase in interchange fee expense and travel and entertainment expenses, which are beginning to normalize as the markets we operate in continue to re-open. Other expense decreased $557 thousand, or 4.9%, for the six months ended June 30, 2021 primarily due to a $656 thousand charge related to the extinguishment of long-term debt that occurred in the first quarter of 2020.
Asset Quality and Provision for Credit Losses
Nonperforming assets were $38.5 million at June 30, 2021, compared to $38.2 million at March 31, 2021 and $36.0 million at June 30, 2020.
Net loan and lease charge-offs were $243 thousand during the second quarter of 2021 compared to $3.6 million for the three months ended June 30, 2020. The reversal of provision for credit losses was $59 thousand for the second quarter of 2021, of which $2.8 million (after-tax benefit of $2.2 million), or $0.08 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model, partially offset by a reserve increase attributable to loan growth. The provision for credit losses was $23.7 million for the comparable period in the prior year, of which $19.9 million (after-tax charge of $15.7 million), or $0.54 diluted earnings per share, was attributable to adverse changes in economic-related assumptions, which were predominately driven by COVID-19.
Net loan and lease charge-offs were $531 thousand for the six months ended June 30, 2021 compared to $4.1 million for the same period in the prior year. The reversal of provision for credit losses was $11.3 million for the six months ended June 30, 2021, of which $15.8 million (after-tax benefit of $12.5 million), or $0.42 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model partially offset by a reserve increase attributable to loan growth. The provision for credit losses was $45.6 million for the comparable period in the prior year, of which $40.2 million (after-tax charge of $31.8 million), or $1.09 diluted earnings per share, was attributable to adverse changes in economic-related assumptions.
The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.34% at June 30, 2021, compared to 1.32% at March 31, 2021, and 1.74% at June 30, 2020. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans3, was 1.41% at June 30, 2021 compared to 1.46% at March 31, 2021 and 1.94% at June 30, 2020.
Tax Provision
The effective income tax rate was 19.0% for the quarter ended June 30, 2021, compared to an effective income tax rate of (14.5%) for the quarter ended June 30, 2020. The effective income tax rate was 19.2% for the six months ended June 30, 2021 compared to an effective income tax rate of (42.4%) for the six months ended June 30, 2020. The effective tax rate for the three and six months ended June 30, 2021 and 2020 reflects the level of pre-tax income and the benefits of tax-exempt income from investments in
3 Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.
municipal securities and loans and leases.
Dividend
On July 28, 2021, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on August 25, 2021 to shareholders of record as of August 11, 2021.
Conference Call
Univest will host a conference call to discuss second quarter 2021 results on Thursday, July 29, 2021 at 9:00 a.m. EST. Participants may preregister at https://dpregister.com/sreg/10158232/ea90430528. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through August 29, 2021 by dialing 1-877-344-7529; using Conference ID: 10158232.
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 $4.5 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2021. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices and online at www.univest.net.
# # #
This press release of Univest and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, business and capital management strategies, 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 those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) changes in interest rates; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and credit loss provisions; (4) general economic conditions in our market; (5) economic conditions nationally that may impact the assumptions used to calculate our allowance for credit losses; (6) legislative, regulatory or tax changes that may adversely affect the businesses in which Univest is engaged; (7) technological issues that may adversely affect Univest financial operations or customers; (8) changes in the securities markets or (9) 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 continued 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 remain open, and higher 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 credit 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) a material decrease in net income or a net loss over several quarters could result in the elimination of or a decrease in the rate of our quarterly cash dividend; (7) our wealth management revenues may decline with continuing market turmoil; (8) 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; (9) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (10) Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs; and (11) 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) | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Balance Sheet (Period End) | 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | ||||||||||||||||||||||||||||||||||||
| Assets | $ | 6,356,305 | $ | 6,416,665 | $ | 6,336,496 | $ | 6,382,831 | $ | 6,125,312 | |||||||||||||||||||||||||||||||
| Investment securities, net of allowance for credit losses | 397,426 | 377,506 | 373,176 | 368,830 | 397,852 | ||||||||||||||||||||||||||||||||||||
| Loans held for sale | 27,322 | 22,636 | 37,039 | 14,465 | 31,082 | ||||||||||||||||||||||||||||||||||||
| Loans and leases held for investment, gross | 5,327,313 | 5,415,006 | 5,306,841 | 5,211,856 | 4,951,809 | ||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | 71,355 | 71,497 | 83,044 | 91,870 | 86,217 | ||||||||||||||||||||||||||||||||||||
| Loans and leases held for investment, net | 5,255,958 | 5,343,509 | 5,223,797 | 5,119,986 | 4,865,592 | ||||||||||||||||||||||||||||||||||||
| Total deposits | 5,318,704 | 5,311,592 | 5,242,715 | 5,211,603 | 4,869,329 | ||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,872,031 | 1,857,547 | 1,690,663 | 1,714,505 | 1,725,819 | ||||||||||||||||||||||||||||||||||||
| NOW, money market and savings | 2,954,450 | 2,979,834 | 2,988,277 | 2,940,879 | 2,623,025 | ||||||||||||||||||||||||||||||||||||
| Time deposits | 492,223 | 474,211 | 563,775 | 556,219 | 520,485 | ||||||||||||||||||||||||||||||||||||
| Borrowings | 218,970 | 295,293 | 311,421 | 416,104 | 515,722 | ||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 739,998 | 722,455 | 692,472 | 669,107 | 654,873 | ||||||||||||||||||||||||||||||||||||
| Balance Sheet (Average) | For the three months ended, | For the six months ended, | |||||||||||||||||||||||||||||||||||||||
| 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 6/30/2021 | 6/30/2020 | |||||||||||||||||||||||||||||||||||
| Assets | $ | 6,443,629 | $ | 6,383,463 | $ | 6,353,519 | $ | 6,265,605 | $ | 6,000,790 | $ | 6,413,712 | $ | 5,704,527 | |||||||||||||||||||||||||||
| Investment securities, net of allowance for credit losses | 385,694 | 374,369 | 369,511 | 385,221 | 411,957 | 380,063 | 426,928 | ||||||||||||||||||||||||||||||||||
| Loans and leases, gross | 5,389,110 | 5,325,897 | 5,253,720 | 5,070,037 | 4,836,858 | 5,357,678 | 4,612,720 | ||||||||||||||||||||||||||||||||||
| Deposits | 5,351,089 | 5,296,147 | 5,222,452 | 5,030,398 | 4,794,669 | 5,323,770 | 4,572,326 | ||||||||||||||||||||||||||||||||||
| Shareholders' equity | 728,750 | 699,736 | 676,426 | 661,947 | 660,950 | 714,324 | 667,205 | ||||||||||||||||||||||||||||||||||
| Asset Quality Data (Period End) | |||||||||||||||||||||||||||||||||||||||||
| 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | |||||||||||||||||||||||||||||||||||||
| Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases and nonaccrual loans held for sale | $ | 37,466 | $ | 29,996 | $ | 31,692 | $ | 30,019 | $ | 26,141 | |||||||||||||||||||||||||||||||
| Accruing loans and leases 90 days or more past due | 750 | 664 | 1,392 | 3,573 | 1,193 | ||||||||||||||||||||||||||||||||||||
| Accruing troubled debt restructured loans and leases | 52 | 52 | 53 | 53 | 53 | ||||||||||||||||||||||||||||||||||||
| Total nonperforming loans and leases | 38,268 | 30,712 | 33,137 | 33,645 | 27,387 | ||||||||||||||||||||||||||||||||||||
| Other real estate owned | 279 | 7,481 | 7,355 | 8,270 | 8,642 | ||||||||||||||||||||||||||||||||||||
| Total nonperforming assets | $ | 38,547 | $ | 38,193 | $ | 40,492 | $ | 41,915 | $ | 36,029 | |||||||||||||||||||||||||||||||
| Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale | 0.70 | % | 0.55 | % | 0.60 | % | 0.58 | % | 0.53 | % | |||||||||||||||||||||||||||||||
| Nonperforming loans and leases / Loans and leases held for investment | 0.72 | % | 0.57 | % | 0.62 | % | 0.65 | % | 0.55 | % | |||||||||||||||||||||||||||||||
| Nonperforming assets / Total assets | 0.61 | % | 0.60 | % | 0.64 | % | 0.66 | % | 0.59 | % | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | $ | 71,355 | $ | 71,497 | $ | 83,044 | $ | 91,870 | $ | 86,217 | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment | 1.34 | % | 1.32 | % | 1.56 | % | 1.76 | % | 1.74 | % | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1) | 1.41 | % | 1.46 | % | 1.72 | % | 1.95 | % | 1.94 | % | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment | 212.97 | % | 238.36 | % | 262.03 | % | 306.04 | % | 329.82 | % | |||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment | 208.00 | % | 232.80 | % | 250.61 | % | 273.06 | % | 314.81 | % | |||||||||||||||||||||||||||||||
| For the three months ended, | For the six months ended, | ||||||||||||||||||||||||||||||||||||||||
| 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 6/30/2021 | 6/30/2020 | |||||||||||||||||||||||||||||||||||
| Net loan and lease charge-offs (recoveries) | $ | 243 | $ | 288 | $ | 618 | $ | (35) | $ | 3,576 | $ | 531 | $ | 4,065 | |||||||||||||||||||||||||||
| Net loan and lease charge-offs (annualized)/Average loans and leases | 0.02 | % | 0.02 | % | 0.05 | % | — | % | 0.30 | % | 0.02 | % | 0.18 | % | |||||||||||||||||||||||||||
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document. | |||||||||||||||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||
| For the three months ended, | For the six months ended, | ||||||||||||||||||||||||||||||||||||||||
| For the period: | 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 6/30/2021 | 6/30/2020 | ||||||||||||||||||||||||||||||||||
| Interest income | $ | 52,441 | $ | 51,457 | $ | 51,334 | $ | 50,612 | $ | 49,980 | $ | 103,898 | $ | 101,999 | |||||||||||||||||||||||||||
| Interest expense | 5,684 | 6,043 | 6,813 | 6,758 | 6,462 | 11,727 | 16,013 | ||||||||||||||||||||||||||||||||||
| Net interest income | 46,757 | 45,414 | 44,521 | 43,854 | 43,518 | 92,171 | 85,986 | ||||||||||||||||||||||||||||||||||
| (Reversal of provision) provision for credit losses | (59) | (11,283) | (8,721) | 3,935 | 23,737 | (11,342) | 45,580 | ||||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | 46,816 | 56,697 | 53,242 | 39,919 | 19,781 | 103,513 | 40,406 | ||||||||||||||||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||||||||||||||||
| Trust fee income | 2,157 | 2,034 | 1,974 | 1,915 | 1,924 | 4,191 | 3,814 | ||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 1,314 | 1,282 | 1,371 | 1,187 | 890 | 2,596 | 2,287 | ||||||||||||||||||||||||||||||||||
| Investment advisory commission and fee income | 4,558 | 4,697 | 4,144 | 4,005 | 3,540 | 9,255 | 7,795 | ||||||||||||||||||||||||||||||||||
| Insurance commission and fee income | 3,839 | 4,955 | 3,512 | 3,776 | 4,067 | 8,794 | 8,799 | ||||||||||||||||||||||||||||||||||
| Other service fee income | 2,748 | 2,192 | 2,092 | 2,093 | 1,488 | 4,940 | 3,358 | ||||||||||||||||||||||||||||||||||
| Bank owned life insurance income | 1,620 | 717 | 733 | 741 | 732 | 2,337 | 1,466 | ||||||||||||||||||||||||||||||||||
| Net gain on sales of investment securities | 54 | 65 | 54 | 57 | 65 | 119 | 760 | ||||||||||||||||||||||||||||||||||
| Net gain on mortgage banking activities | 3,461 | 5,938 | 4,323 | 5,860 | 3,515 | 9,399 | 6,259 | ||||||||||||||||||||||||||||||||||
| Other income | 479 | 1,370 | 1,936 | 2,171 | 1,779 | 1,849 | 1,846 | ||||||||||||||||||||||||||||||||||
| Total noninterest income | 20,230 | 23,250 | 20,139 | 21,805 | 18,000 | 43,480 | 36,384 | ||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||||||||
| Salaries, benefits and commissions | 25,396 | 24,780 | 23,613 | 24,059 | 21,700 | 50,176 | 45,536 | ||||||||||||||||||||||||||||||||||
| Net occupancy | 2,656 | 2,739 | 2,697 | 2,609 | 2,478 | 5,395 | 5,052 | ||||||||||||||||||||||||||||||||||
| Equipment | 968 | 946 | 951 | 972 | 923 | 1,914 | 1,918 | ||||||||||||||||||||||||||||||||||
| Data processing | 3,064 | 3,050 | 2,961 | 2,862 | 2,750 | 6,114 | 5,510 | ||||||||||||||||||||||||||||||||||
| Professional fees | 2,015 | 1,748 | 1,436 | 1,321 | 1,264 | 3,763 | 2,581 | ||||||||||||||||||||||||||||||||||
| Marketing and advertising | 561 | 280 | 575 | 463 | 535 | 841 | 937 | ||||||||||||||||||||||||||||||||||
| Deposit insurance premiums | 613 | 636 | 765 | 707 | 615 | 1,249 | 1,119 | ||||||||||||||||||||||||||||||||||
| Intangible expenses | 249 | 249 | 282 | 283 | 321 | 498 | 651 | ||||||||||||||||||||||||||||||||||
| Restructuring charges | — | — | 1,439 | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Other expense | 5,764 | 5,112 | 7,015 | 5,251 | 5,374 | 10,876 | 11,433 | ||||||||||||||||||||||||||||||||||
| Total noninterest expense | 41,286 | 39,540 | 41,734 | 38,527 | 35,960 | 80,826 | 74,737 | ||||||||||||||||||||||||||||||||||
| Income before taxes | 25,760 | 40,407 | 31,647 | 23,197 | 1,821 | 66,167 | 2,053 | ||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 4,885 | 7,804 | 5,773 | 5,078 | (264) | 12,689 | (870) | ||||||||||||||||||||||||||||||||||
| Net income | $ | 20,875 | $ | 32,603 | $ | 25,874 | $ | 18,119 | $ | 2,085 | $ | 53,478 | $ | 2,923 | |||||||||||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.71 | $ | 1.11 | $ | 0.88 | $ | 0.62 | $ | 0.07 | $ | 1.82 | $ | 0.10 | |||||||||||||||||||||||||||
| Diluted | $ | 0.71 | $ | 1.11 | $ | 0.88 | $ | 0.62 | $ | 0.07 | $ | 1.81 | $ | 0.10 | |||||||||||||||||||||||||||
| Dividends declared per share (1) | $ | 0.20 | $ | 0.20 | $ | — | $ | 0.20 | $ | 0.20 | $ | 0.40 | $ | 0.40 | |||||||||||||||||||||||||||
| Weighted average shares outstanding | 29,389,525 | 29,327,432 | 29,274,915 | 29,226,627 | 29,187,197 | 29,359,198 | 29,236,698 | ||||||||||||||||||||||||||||||||||
| Period end shares outstanding | 29,411,731 | 29,379,575 | 29,295,052 | 29,241,302 | 29,201,985 | 29,411,731 | 29,201,985 | ||||||||||||||||||||||||||||||||||
| (1) As announced in the September 30, 2020 Earnings Release, the Corporation changed the timing of future dividend declarations and payments. | |||||||||||||||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
| For the three months ended, | For the six months ended, | ||||||||||||||||||||||||||||||||||||||||
| Profitability Ratios (annualized) | 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 6/30/2021 | 6/30/2020 | ||||||||||||||||||||||||||||||||||
| Return on average assets | 1.30 | % | 2.07 | % | 1.62 | % | 1.15 | % | 0.14 | % | 1.68 | % | 0.10 | % | |||||||||||||||||||||||||||
| Return on average assets, excluding restructuring charges (1) | 1.30 | % | 2.07 | % | 1.69 | % | 1.15 | % | 0.14 | % | 1.68 | % | 0.10 | % | |||||||||||||||||||||||||||
| Return on average shareholders' equity | 11.49 | % | 18.90 | % | 15.22 | % | 10.89 | % | 1.27 | % | 15.10 | % | 0.88 | % | |||||||||||||||||||||||||||
| Return on average shareholders' equity, excluding restructuring charges (1) | 11.49 | % | 18.90 | % | 15.89 | % | 10.89 | % | 1.27 | % | 15.10 | % | 0.88 | % | |||||||||||||||||||||||||||
| Return on average tangible common equity (1) | 15.11 | % | 25.20 | % | 20.54 | % | 14.82 | % | 1.73 | % | 19.99 | % | 1.20 | % | |||||||||||||||||||||||||||
| Return on average tangible common equity, excluding restructuring charges (1) | 15.11 | % | 25.20 | % | 21.44 | % | 14.82 | % | 1.73 | % | 19.99 | % | 1.20 | % | |||||||||||||||||||||||||||
| Net interest margin (FTE) | 3.15 | % | 3.12 | % | 3.02 | % | 3.02 | % | 3.18 | % | 3.14 | % | 3.32 | % | |||||||||||||||||||||||||||
| Efficiency ratio (2) | 60.7 | % | 57.0 | % | 63.8 | % | 58.0 | % | 57.7 | % | 58.8 | % | 60.2 | % | |||||||||||||||||||||||||||
| Efficiency ratio, excluding restructuring charges (1) (2) | 60.7 | % | 57.0 | % | 61.6 | % | 58.0 | % | 57.7 | % | 58.8 | % | 60.2 | % | |||||||||||||||||||||||||||
| Capitalization Ratios | |||||||||||||||||||||||||||||||||||||||||
| Dividends declared to net income (3) | 28.2 | % | 18.0 | % | — | % | 32.3 | % | 278.7 | % | 22.0 | % | 399.5 | % | |||||||||||||||||||||||||||
| Shareholders' equity to assets (Period End) | 11.64 | % | 11.26 | % | 10.93 | % | 10.48 | % | 10.69 | % | 11.64 | % | 10.69 | % | |||||||||||||||||||||||||||
| Tangible common equity to tangible assets (1) | 9.15 | % | 8.77 | % | 8.40 | % | 7.95 | % | 8.05 | % | 9.15 | % | 8.05 | % | |||||||||||||||||||||||||||
| Common equity book value per share | $ | 25.16 | $ | 24.59 | $ | 23.64 | $ | 22.88 | $ | 22.43 | $ | 25.16 | $ | 22.43 | |||||||||||||||||||||||||||
| Tangible common equity book value per share (1) | $ | 19.22 | $ | 18.64 | $ | 17.66 | $ | 16.88 | $ | 16.41 | $ | 19.22 | $ | 16.41 | |||||||||||||||||||||||||||
| Regulatory Capital Ratios (Period End) | |||||||||||||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 9.64 | % | 9.45 | % | 9.08 | % | 8.97 | % | 9.15 | % | 9.64 | % | 9.15 | % | |||||||||||||||||||||||||||
| Common equity tier 1 risk-based capital ratio | 11.04 | % | 11.08 | % | 10.76 | % | 10.52 | % | 10.73 | % | 11.04 | % | 10.73 | % | |||||||||||||||||||||||||||
| Tier 1 risk-based capital ratio | 11.04 | % | 11.08 | % | 10.76 | % | 10.52 | % | 10.73 | % | 11.04 | % | 10.73 | % | |||||||||||||||||||||||||||
| Total risk-based capital ratio | 13.82 | % | 15.13 | % | 15.31 | % | 15.35 | % | 13.72 | % | 13.82 | % | 13.72 | % | |||||||||||||||||||||||||||
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document. | |||||||||||||||||||||||||||||||||||||||||
| (2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income. | |||||||||||||||||||||||||||||||||||||||||
| (3) As announced in the September 30, 2020 Earnings Release, the Corporation changed the timing of future dividend declarations and payments. | |||||||||||||||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||||||||||||
| Average Balances and Interest Rates (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended, | |||||||||||||||||||||||||||||||||||||||||
| Tax Equivalent Basis | June 30, 2021 | March 31, 2021 | |||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Interest-earning deposits with other banks | $ | 215,349 | $ | 46 | 0.09 | % | $ | 237,548 | $ | 56 | 0.10 | % | |||||||||||||||||||||||||||||
| U.S. government obligations | 6,999 | 35 | 2.01 | 6,998 | 36 | 2.09 | |||||||||||||||||||||||||||||||||||
| Obligations of state and political subdivisions | 6,070 | 58 | 3.83 | 11,544 | 105 | 3.69 | |||||||||||||||||||||||||||||||||||
| Other debt and equity securities | 372,625 | 1,364 | 1.47 | 355,827 | 1,267 | 1.44 | |||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 25,872 | 360 | 5.58 | 26,368 | 348 | 5.35 | |||||||||||||||||||||||||||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 626,915 | 1,863 | 1.19 | 638,285 | 1,812 | 1.15 | |||||||||||||||||||||||||||||||||||
| Commercial, financial, and agricultural loans | 826,464 | 6,910 | 3.35 | 782,208 | 6,798 | 3.52 | |||||||||||||||||||||||||||||||||||
| Paycheck Protection Program loans | 408,928 | 4,778 | 4.69 | 506,939 | 4,524 | 3.62 | |||||||||||||||||||||||||||||||||||
| Real estate—commercial and construction loans | 2,701,137 | 24,931 | 3.70 | 2,621,981 | 24,458 | 3.78 | |||||||||||||||||||||||||||||||||||
| Real estate—residential loans | 1,065,065 | 9,836 | 3.70 | 1,037,000 | 9,873 | 3.86 | |||||||||||||||||||||||||||||||||||
| Loans to individuals | 25,284 | 251 | 3.98 | 26,447 | 265 | 4.05 | |||||||||||||||||||||||||||||||||||
| Municipal loans and leases | 251,311 | 2,598 | 4.15 | 245,638 | 2,530 | 4.18 | |||||||||||||||||||||||||||||||||||
| Lease financings | 110,921 | 1,819 | 6.58 | 105,684 | 1,737 | 6.67 | |||||||||||||||||||||||||||||||||||
| Gross loans and leases | 5,389,110 | 51,123 | 3.80 | 5,325,897 | 50,185 | 3.82 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 6,016,025 | 52,986 | 3.53 | 5,964,182 | 51,997 | 3.54 | |||||||||||||||||||||||||||||||||||
| Cash and due from banks | 52,948 | 55,311 | |||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | (73,052) | (83,254) | |||||||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 55,903 | 55,826 | |||||||||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 33,992 | 34,033 | |||||||||||||||||||||||||||||||||||||||
| Other assets | 357,813 | 357,365 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 6,443,629 | $ | 6,383,463 | |||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing checking deposits | $ | 786,931 | $ | 487 | 0.25 | % | $ | 817,940 | $ | 490 | 0.24 | % | |||||||||||||||||||||||||||||
| Money market savings | 1,219,375 | 831 | 0.27 | 1,243,673 | 853 | 0.28 | |||||||||||||||||||||||||||||||||||
| Regular savings | 978,807 | 282 | 0.12 | 959,232 | 298 | 0.13 | |||||||||||||||||||||||||||||||||||
| Time deposits | 485,060 | 1,559 | 1.29 | 525,800 | 1,759 | 1.36 | |||||||||||||||||||||||||||||||||||
| Total time and interest-bearing deposits | 3,470,173 | 3,159 | 0.37 | 3,546,645 | 3,400 | 0.39 | |||||||||||||||||||||||||||||||||||
| Short-term borrowings | 19,109 | 3 | 0.06 | 17,894 | 2 | 0.05 | |||||||||||||||||||||||||||||||||||
| Long-term debt | 95,000 | 321 | 1.36 | 101,333 | 348 | 1.39 | |||||||||||||||||||||||||||||||||||
| Subordinated notes | 172,016 | 2,201 | 5.13 | 183,340 | 2,293 | 5.07 | |||||||||||||||||||||||||||||||||||
| Total borrowings | 286,125 | 2,525 | 3.54 | 302,567 | 2,643 | 3.54 | |||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,756,298 | 5,684 | 0.61 | 3,849,212 | 6,043 | 0.64 | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,880,916 | 1,749,502 | |||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities | 37,426 | 37,415 | |||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 40,239 | 47,598 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 5,714,879 | 5,683,727 | |||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||||||||||||||||||||||
| Common stock | 157,784 | 157,784 | |||||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | 296,599 | 296,136 | |||||||||||||||||||||||||||||||||||||||
| Retained earnings and other equity | 274,367 | 245,816 | |||||||||||||||||||||||||||||||||||||||
| Total shareholders' equity | 728,750 | 699,736 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,443,629 | $ | 6,383,463 | |||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 47,302 | $ | 45,954 | |||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.92 | 2.90 | |||||||||||||||||||||||||||||||||||||||
| Effect of net interest-free funding sources | 0.23 | 0.22 | |||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.15 | % | 3.12 | % | |||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 160.16 | % | 154.95 | % | |||||||||||||||||||||||||||||||||||||
| 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 June 30, 2021 and March 31, 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%. | |||||||||||||||||||||||||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||||||||||||
| Average Balances and Interest Rates (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| Tax Equivalent Basis | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Interest-earning deposits with other banks | $ | 215,349 | $ | 46 | 0.09 | % | $ | 313,668 | $ | 67 | 0.09 | % | |||||||||||||||||||||||||||||
| U.S. government obligations | 6,999 | 35 | 2.01 | 7,236 | 36 | 2.00 | |||||||||||||||||||||||||||||||||||
| Obligations of state and political subdivisions | 6,070 | 58 | 3.83 | 26,546 | 240 | 3.64 | |||||||||||||||||||||||||||||||||||
| Other debt and equity securities | 372,625 | 1,364 | 1.47 | 378,175 | 2,182 | 2.32 | |||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 25,872 | 360 | 5.58 | 28,977 | 362 | 5.02 | |||||||||||||||||||||||||||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 626,915 | 1,863 | 1.19 | 754,602 | 2,887 | 1.54 | |||||||||||||||||||||||||||||||||||
| Commercial, financial, and agricultural loans | 826,464 | 6,910 | 3.35 | 816,976 | 7,330 | 3.61 | |||||||||||||||||||||||||||||||||||
| Paycheck Protection Program loans | 408,928 | 4,778 | 4.69 | 370,669 | 2,128 | 2.31 | |||||||||||||||||||||||||||||||||||
| Real estate—commercial and construction loans | 2,701,137 | 24,931 | 3.70 | 2,232,827 | 23,110 | 4.16 | |||||||||||||||||||||||||||||||||||
| Real estate—residential loans | 1,065,065 | 9,836 | 3.70 | 1,004,671 | 10,270 | 4.11 | |||||||||||||||||||||||||||||||||||
| Loans to individuals | 25,284 | 251 | 3.98 | 29,079 | 327 | 4.52 | |||||||||||||||||||||||||||||||||||
| Municipal loans and leases | 251,311 | 2,598 | 4.15 | 291,433 | 2,977 | 4.11 | |||||||||||||||||||||||||||||||||||
| Lease financings | 110,921 | 1,819 | 6.58 | 91,203 | 1,592 | 7.02 | |||||||||||||||||||||||||||||||||||
| Gross loans and leases | 5,389,110 | 51,123 | 3.80 | 4,836,858 | 47,734 | 3.97 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 6,016,025 | 52,986 | 3.53 | 5,591,460 | 50,621 | 3.64 | |||||||||||||||||||||||||||||||||||
| Cash and due from banks | 52,948 | 46,970 | |||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | (73,052) | (69,292) | |||||||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 55,903 | 55,750 | |||||||||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 33,992 | 34,419 | |||||||||||||||||||||||||||||||||||||||
| Other assets | 357,813 | 341,483 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 6,443,629 | $ | 6,000,790 | |||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing checking deposits | $ | 786,931 | $ | 487 | 0.25 | % | $ | 617,927 | $ | 372 | 0.24 | % | |||||||||||||||||||||||||||||
| Money market savings | 1,219,375 | 831 | 0.27 | 1,063,463 | 853 | 0.32 | |||||||||||||||||||||||||||||||||||
| Regular savings | 978,807 | 282 | 0.12 | 872,422 | 475 | 0.22 | |||||||||||||||||||||||||||||||||||
| Time deposits | 485,060 | 1,559 | 1.29 | 577,462 | 2,672 | 1.86 | |||||||||||||||||||||||||||||||||||
| Total time and interest-bearing deposits | 3,470,173 | 3,159 | 0.37 | 3,131,274 | 4,372 | 0.56 | |||||||||||||||||||||||||||||||||||
| Short-term borrowings | 19,109 | 3 | 0.06 | 161,365 | 122 | 0.30 | |||||||||||||||||||||||||||||||||||
| Long-term debt | 95,000 | 321 | 1.36 | 210,040 | 762 | 1.46 | |||||||||||||||||||||||||||||||||||
| Subordinated notes | 172,016 | 2,201 | 5.13 | 94,890 | 1,206 | 5.11 | |||||||||||||||||||||||||||||||||||
| Total borrowings | 286,125 | 2,525 | 3.54 | 466,295 | 2,090 | 1.80 | |||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,756,298 | 5,684 | 0.61 | 3,597,569 | 6,462 | 0.72 | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,880,916 | 1,663,395 | |||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities | 37,426 | 37,680 | |||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 40,239 | 41,196 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 5,714,879 | 5,339,840 | |||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||||||||||||||||||||||
| Common stock | 157,784 | 157,784 | |||||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | 296,599 | 295,681 | |||||||||||||||||||||||||||||||||||||||
| Retained earnings and other equity | 274,367 | 207,485 | |||||||||||||||||||||||||||||||||||||||
| Total shareholders' equity | 728,750 | 660,950 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,443,629 | $ | 6,000,790 | |||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 47,302 | $ | 44,159 | |||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.92 | 2.92 | |||||||||||||||||||||||||||||||||||||||
| Effect of net interest-free funding sources | 0.23 | 0.26 | |||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.15 | % | 3.18 | % | |||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 160.16 | % | 155.42 | % | |||||||||||||||||||||||||||||||||||||
| 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 June 30, 2021 and 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 Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| Tax Equivalent Basis | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Interest-earning deposits with other banks | $ | 226,387 | $ | 102 | 0.09 | % | $ | 215,888 | $ | 392 | 0.37 | % | |||||||||||||||||||||||||||||
| U.S. government obligations | 6,999 | 71 | 2.05 | 7,267 | 73 | 2.02 | |||||||||||||||||||||||||||||||||||
| Obligations of state and political subdivisions | 8,792 | 163 | 3.74 | 30,070 | 529 | 3.54 | |||||||||||||||||||||||||||||||||||
| Other debt and equity securities | 364,272 | 2,631 | 1.46 | 389,591 | 4,850 | 2.50 | |||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 26,119 | 708 | 5.47 | 30,214 | 889 | 5.92 | |||||||||||||||||||||||||||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 632,569 | 3,675 | 1.17 | 673,030 | 6,733 | 2.01 | |||||||||||||||||||||||||||||||||||
| Commercial, financial, and agricultural loans | 804,458 | 13,708 | 3.44 | 819,121 | 15,961 | 3.92 | |||||||||||||||||||||||||||||||||||
| Paycheck Protection Program loans | 457,663 | 9,302 | 4.10 | 185,334 | 2,128 | 2.31 | |||||||||||||||||||||||||||||||||||
| Real estate—commercial and construction loans | 2,661,778 | 49,389 | 3.74 | 2,186,098 | 47,027 | 4.33 | |||||||||||||||||||||||||||||||||||
| Real estate—residential loans | 1,051,110 | 19,709 | 3.78 | 998,111 | 21,322 | 4.30 | |||||||||||||||||||||||||||||||||||
| Loans to individuals | 25,862 | 516 | 4.02 | 29,548 | 734 | 5.00 | |||||||||||||||||||||||||||||||||||
| Municipal loans and leases | 248,490 | 5,128 | 4.16 | 304,219 | 6,242 | 4.13 | |||||||||||||||||||||||||||||||||||
| Lease financings | 108,317 | 3,556 | 6.62 | 90,289 | 3,146 | 7.01 | |||||||||||||||||||||||||||||||||||
| Gross loans and leases | 5,357,678 | 101,308 | 3.81 | 4,612,720 | 96,560 | 4.21 | |||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 5,990,247 | 104,983 | 3.53 | 5,285,750 | 103,293 | 3.93 | |||||||||||||||||||||||||||||||||||
| Cash and due from banks | 54,123 | 48,931 | |||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | (78,125) | (56,832) | |||||||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 55,865 | 56,074 | |||||||||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 34,013 | 34,482 | |||||||||||||||||||||||||||||||||||||||
| Other assets | 357,589 | 336,122 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 6,413,712 | $ | 5,704,527 | |||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing checking deposits | $ | 802,350 | $ | 977 | 0.25 | % | $ | 601,159 | $ | 1,168 | 0.39 | % | |||||||||||||||||||||||||||||
| Money market savings | 1,231,457 | 1,684 | 0.28 | 1,060,399 | 3,756 | 0.71 | |||||||||||||||||||||||||||||||||||
| Regular savings | 969,073 | 580 | 0.12 | 844,591 | 1,267 | 0.30 | |||||||||||||||||||||||||||||||||||
| Time deposits | 505,318 | 3,318 | 1.32 | 590,183 | 5,587 | 1.90 | |||||||||||||||||||||||||||||||||||
| Total time and interest-bearing deposits | 3,508,198 | 6,559 | 0.38 | 3,096,332 | 11,778 | 0.76 | |||||||||||||||||||||||||||||||||||
| Short-term borrowings | 18,506 | 5 | 0.05 | 100,745 | 228 | 0.46 | |||||||||||||||||||||||||||||||||||
| Long-term debt | 98,149 | 669 | 1.37 | 189,623 | 1,526 | 1.62 | |||||||||||||||||||||||||||||||||||
| Subordinated notes | 177,647 | 4,494 | 5.10 | 94,868 | 2,481 | 5.26 | |||||||||||||||||||||||||||||||||||
| Total borrowings | 294,302 | 5,168 | 3.54 | 385,236 | 4,235 | 2.21 | |||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,802,500 | 11,727 | 0.62 | 3,481,568 | 16,013 | 0.92 | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,815,572 | 1,475,994 | |||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities | 37,419 | 37,724 | |||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 43,897 | 42,036 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 5,699,388 | 5,037,322 | |||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||||||||||||||||||||||
| Common stock | 157,784 | 157,784 | |||||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | 296,369 | 295,500 | |||||||||||||||||||||||||||||||||||||||
| Retained earnings and other equity | 260,171 | 213,921 | |||||||||||||||||||||||||||||||||||||||
| Total shareholders' equity | 714,324 | 667,205 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,413,712 | $ | 5,704,527 | |||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 93,256 | $ | 87,280 | |||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.91 | 3.01 | |||||||||||||||||||||||||||||||||||||||
| Effect of net interest-free funding sources | 0.23 | 0.31 | |||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.14 | % | 3.32 | % | |||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 157.53 | % | 151.82 | ||||||||||||||||||||||||||||||||||||||
| 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 six months ended June 30, 2021 and 2020 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 June 30, 2021 | ||||||||||||||||||||||
| Industry Description | Total Outstanding Balance (excl PPP) | % of Commercial Loan Portfolio | $ Balance of Modified Loans (1) | Modified Loans as a % of Portfolio (excl PPP) (1) | |||||||||||||||||||
| CRE - Retail | $ | 365,096 | 8.7 | % | $ | — | — | % | |||||||||||||||
| Animal Production | 281,368 | 6.7 | — | — | |||||||||||||||||||
| CRE - 1-4 Family Residential Investment | 250,694 | 6.0 | 605 | 0.2 | |||||||||||||||||||
| CRE - Office | 249,692 | 5.9 | — | — | |||||||||||||||||||
| CRE - Industrial / Warehouse | 217,874 | 5.2 | — | — | |||||||||||||||||||
| CRE - Multi-family | 206,766 | 4.9 | — | — | |||||||||||||||||||
| Hotels & Motels (Accommodation) | 170,730 | 4.1 | 26,036 | 15.2 | |||||||||||||||||||
| Nursing and Residential Care Facilities | 158,292 | 3.8 | — | — | |||||||||||||||||||
| Education | 152,983 | 3.6 | — | — | |||||||||||||||||||
| CRE - Mixed-Use - Residential | 122,489 | 2.9 | 3,268 | 2.7 | |||||||||||||||||||
| Specialty Trade Contractors | 121,303 | 2.9 | 36 | — | |||||||||||||||||||
| Real Estate Lenders, Secondary Market Financing | 103,796 | 2.5 | — | — | |||||||||||||||||||
| CRE - Medical Office | 96,075 | 2.3 | — | — | |||||||||||||||||||
| Homebuilding (tract developers, remodelers) | 89,915 | 2.1 | — | — | |||||||||||||||||||
| Private Equity & Special Purpose Entities | 87,111 | 2.1 | — | — | |||||||||||||||||||
| Merchant Wholesalers, Durable Goods | 78,944 | 1.9 | — | — | |||||||||||||||||||
| Crop Production | 72,558 | 1.7 | — | — | |||||||||||||||||||
| Motor Vehicle and Parts Dealers | 67,371 | 1.6 | — | — | |||||||||||||||||||
| Rental and Leasing Services | 63,142 | 1.5 | — | — | |||||||||||||||||||
| Wood Product Manufacturing | 63,095 | 1.5 | — | ||||||||||||||||||||
| Fabricated Metal Product Manufacturing | 59,398 | 1.4 | — | — | |||||||||||||||||||
| Merchant Wholesalers, Nondurable Goods | 53,783 | 1.3 | — | — | |||||||||||||||||||
| Food Services and Drinking Places | 51,356 | 1.2 | 3,233 | 6.3 | |||||||||||||||||||
| Administrative and Support Services | 50,296 | 1.1 | 101 | 0.2 | |||||||||||||||||||
| Industries with >$50 million in outstandings | $ | 3,234,127 | 76.9 | % | $ | 33,279 | 1.0 | % | |||||||||||||||
| Industries with <$50 million in outstandings | $ | 969,606 | 23.1 | % | $ | 18,272 | 1.9 | % | |||||||||||||||
| Total Commercial Loans | $ | 4,203,733 | 100.0 | % | $ | 51,551 | 1.2 | % | |||||||||||||||
| Consumer Loans and Lease Financings | Total Outstanding Balance | $ Balance of Modified Loans (1) | Modified Loans as a % of Portfolio (excl PPP) (1) | ||||||||||||||||||||
| Real Estate-Residential Secured for Personal Purpose | $ | 513,330 | $ | 2,429 | 0.5 | % | |||||||||||||||||
| Real Estate-Home Equity Secured for Personal Purpose | 160,018 | — | — | ||||||||||||||||||||
| Loans to Individuals | 25,845 | — | — | ||||||||||||||||||||
| Lease Financings | 171,538 | 215 | 0.1 | ||||||||||||||||||||
| Total Consumer Loans and Lease Financings | $ | 870,731 | $ | 2,644 | 0.3 | % | |||||||||||||||||
| Total | $ | 5,074,464 | $ | 54,195 | 1.1 | % | |||||||||||||||||
(1) Loan modifications referenced above were made in accordance with Section 4013 of the CARES Act, the Consolidated Appropriations Act, 2021 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 June 30, 2021.
| Univest Financial Corporation | ||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Management uses non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release. | ||||||||||||||||||||||||||||||||||||||||||||
| For the three months ended, | For the six months ended, | |||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 6/30/2021 | 3/31/2021 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 6/30/2021 | 6/30/2020 | |||||||||||||||||||||||||||||||||||||
| Restructuring charges (a) | $ | — | $ | — | $ | 1,439 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
| Tax effect of restructuring charges | — | — | (302) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Restructuring charges, net of tax | $ | — | $ | — | $ | 1,137 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
| Shareholders' equity | $ | 739,998 | $ | 722,455 | $ | 692,472 | $ | 669,107 | $ | 654,873 | $ | 739,998 | $ | 654,873 | ||||||||||||||||||||||||||||||
| Goodwill | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | |||||||||||||||||||||||||||||||||||||
| Other intangibles (b) | (2,073) | (2,326) | (2,580) | (2,866) | (3,147) | (2,073) | (3,147) | |||||||||||||||||||||||||||||||||||||
| Tangible common equity | $ | 565,366 | $ | 547,570 | $ | 517,333 | $ | 493,682 | $ | 479,167 | $ | 565,366 | $ | 479,167 | ||||||||||||||||||||||||||||||
| Total assets | $ | 6,356,305 | $ | 6,416,665 | $ | 6,336,496 | $ | 6,382,831 | $ | 6,125,312 | $ | 6,356,305 | $ | 6,125,312 | ||||||||||||||||||||||||||||||
| Goodwill | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | |||||||||||||||||||||||||||||||||||||
| Other intangibles (b) | (2,073) | (2,326) | (2,580) | (2,866) | (3,147) | (2,073) | (3,147) | |||||||||||||||||||||||||||||||||||||
| Tangible assets | $ | 6,181,673 | $ | 6,241,780 | $ | 6,161,357 | $ | 6,207,406 | $ | 5,949,606 | $ | 6,181,673 | $ | 5,949,606 | ||||||||||||||||||||||||||||||
| Average shareholders' equity | $ | 728,750 | $ | 699,736 | $ | 676,426 | $ | 661,947 | $ | 660,950 | $ | 714,324 | $ | 667,205 | ||||||||||||||||||||||||||||||
| Average goodwill | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | (172,559) | |||||||||||||||||||||||||||||||||||||
| Average other intangibles (b) | (2,209) | (2,464) | (2,734) | (3,019) | (3,321) | (2,336) | (3,490) | |||||||||||||||||||||||||||||||||||||
| Average tangible common equity | $ | 553,982 | $ | 524,713 | $ | 501,133 | $ | 486,369 | $ | 485,070 | $ | 539,429 | $ | 491,156 | ||||||||||||||||||||||||||||||
| Net income before taxes | $ | 25,760 | $ | 40,407 | $ | 31,647 | $ | 23,197 | $ | 1,821 | $ | 66,167 | $ | 2,053 | ||||||||||||||||||||||||||||||
| Provision for credit losses | (59) | (11,283) | (8,721) | 3,935 | 23,737 | (11,342) | 45,580 | |||||||||||||||||||||||||||||||||||||
| Pre-tax pre-provision income | $ | 25,701 | $ | 29,124 | $ | 22,926 | $ | 27,132 | $ | 25,558 | $ | 54,825 | $ | 47,633 | ||||||||||||||||||||||||||||||
| Loans and leases held for investment, gross | $ | 5,327,313 | $ | 5,415,006 | $ | 5,306,841 | $ | 5,211,856 | $ | 4,951,809 | $ | 5,327,313 | $ | 4,951,809 | ||||||||||||||||||||||||||||||
| Paycheck Protection Program ("PPP") loans | (252,849) | (528,452) | (483,773) | (501,580) | (498,978) | (252,849) | (498,978) | |||||||||||||||||||||||||||||||||||||
| Gross loans and leases, excluding PPP loans | $ | 5,074,464 | $ | 4,886,554 | $ | 4,823,068 | $ | 4,710,276 | $ | 4,452,831 | $ | 5,074,464 | $ | 4,452,831 | ||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases | $ | 71,355 | $ | 71,497 | $ | 83,044 | $ | 91,870 | $ | 86,217 | $ | 71,355 | $ | 86,217 | ||||||||||||||||||||||||||||||
| Gross loans and leases, excluding PPP loans | 5,074,464 | 4,886,554 | 4,823,068 | 4,710,276 | 4,452,831 | 5,074,464 | 4,452,831 | |||||||||||||||||||||||||||||||||||||
| Allowance for credit losses, loans and leases as a percentage of gross loans and leases excluding PPP loans | 1.41 | % | 1.46 | % | 1.72 | % | 1.95 | % | 1.94 | % | 1.41 | % | 1.94 | % | ||||||||||||||||||||||||||||||
| (a) Associated with financial center optimization plan | ||||||||||||||||||||||||||||||||||||||||||||
| (b) Amount does not include mortgage servicing rights | ||||||||||||||||||||||||||||||||||||||||||||