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Univest Financial Corporation Reports Year and Fourth Quarter Results

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(Loan Growth for 2019 of 9.5%)

SOUDERTON, Pa., Jan. 22, 2020 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the “Corporation”) (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income for the year ended December 31, 2019 of $65.7 million, or $2.24 diluted earnings per share, compared to net income of $50.5 million, or $1.72 diluted earnings per share, for the year ended December 31, 2018. Net income for the quarter ended December 31, 2019 was $15.5 million, or $0.53 diluted earnings per share, compared to net income of $18.4 million, or $0.63 diluted earnings per share, for the quarter ended December 31, 2018.

One-Time Items
The financial results for the year ended December 31, 2019 included a Federal Deposit Insurance Corporation (FDIC) small bank assessment credit of $1.1 million (after-tax benefit of $871 thousand) of which $988 thousand was recognized during the third quarter of 2019 and $114 thousand was recognized during the fourth quarter of 2019. The FDIC credit represented a favorable impact to earnings per share of $0.03 during the third quarter of 2019 and for the year ended December 31, 2019. In addition, the fourth quarter and year ended December 31, 2019 included an expense related to a legal settlement with a former Fox Chase Bank customer of $869 thousand (after-tax charge of $687 thousand), or $0.02 diluted earnings per share.

The financial results for the year ended December 31, 2018 included a net provision for loan and lease losses of $10.9 million (after-tax charge of $8.6 million), or $0.29 diluted earnings per share related to fraudulent activities by employees of a borrower. The second quarter of 2018 included a pre-tax charge to the provision for loan and lease losses of $12.7 million (after-tax charge of $10.1 million), or $0.34 diluted earnings per share, related to this relationship, and the quarter ended December 31, 2018 included a recovery of $1.8 million (after-tax recovery of $1.5 million), which represented $0.05 diluted earnings per share.

The year ended December 31, 2018 included two additional items: a tax-free bank owned life insurance (BOLI) death benefit of $446 thousand during the second quarter of 2018, which represented $0.02 diluted earnings per share, and restructuring costs related to financial center closures of $451 thousand, net of tax, recognized in the first quarter of 2018, which represented $0.02 diluted earnings per share.

Loans
Gross loans and leases increased $380.3 million, or 9.5%, from December 31, 2018 and $134.9 million, or 12.7% (annualized), from September 30, 2019 primarily due to growth in commercial real estate and residential real estate loans.

Deposits
Total deposits increased $468.8 million, or 12.1%, from December 31, 2018 primarily due to an increase in public funds deposits of $201.9 million and increases in commercial and consumer deposits. Total deposits increased $16.8 million, or 1.5% (annualized), from September 30, 2019 primarily due to increases in commercial and consumer deposits partially offset by a seasonal decrease in public funds deposits of $166.3 million.

Net Interest Income and Margin
Net interest income of $169.2 million for the year ended December 31, 2019 increased $11.2 million, or 7.1%, from the prior year. The increase in net interest income for the year ended December 31, 2019 compared to the prior year was primarily due to a 9.8% increase in average loans during the last year. Net interest margin, on a tax-equivalent basis, was 3.59% for the year ended December 31, 2019 compared to 3.72% for the year ended December 31, 2018. The favorable impact of purchase accounting accretion was two basis points for each of the years ended December 31, 2019 and 2018. Excess liquidity reduced net interest margin by approximately eight basis points for the year ended December 31, 2019 compared to one basis point for the year ended December 31, 2018. This excess liquidity was primarily driven by strong deposit balance growth during 2019. Excluding purchase accounting accretion and the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, was 3.65% for the year ended December 31, 2019 and 3.71% for the year ended December 31, 2018.

Net interest margin, on a tax-equivalent basis, was 3.44% for the fourth quarter of 2019, compared to 3.52% for the third quarter of 2019 and 3.72% for the fourth quarter of 2018. The favorable impact of purchase accounting accretion was three basis points for the quarter ended December 31, 2019 compared to no impact for the quarter ended September 30, 2019 and one basis point for the quarter ended December 31, 2018. Excess liquidity reduced net interest margin by approximately 12 basis points for the quarter ended December 31, 2019, compared to 13 basis points for the quarter ended September 30, 2019, and four basis points for the quarter ended December 31, 2018. Excluding purchase accounting accretion and the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, was 3.53% for the quarter ended December 31, 2019 compared to 3.65% for the quarter ended September 30, 2019 and 3.75% for the quarter ended December 31, 2018.

Noninterest Income
Noninterest income for the quarter ended December 31, 2019 was $16.2 million, an increase of $1.8 million, or 12.2%, from the fourth quarter of 2018. Noninterest income for the year ended December 31, 2019 was $65.4 million, an increase of $5.2 million, or 8.7%, from the comparable period in the prior year.

The net gain on mortgage banking activities increased $325 thousand, or 45.6%, for the quarter and $821 thousand, or 26.3%, for the year ended December 31, 2019, primarily due to an increase in mortgage volume partially offset by contraction in margins to remain price competitive. Investment advisory commission and fee income increased $212 thousand, or 5.5%, for the quarter and $842 thousand, or 5.6%, for the year ended December 31, 2019, primarily due to new client relationships and appreciation of assets under management. Insurance commission and fee income increased $194 thousand, or 5.7%, for the quarter and $913 thousand, or 5.8%, for the year ended December 31, 2019, primarily due to an increase in premiums for commercial lines and group life and health for the quarter and year ended December 31, 2019 as well as an increase in contingent commission income of $316 thousand for the year ended December 31, 2019. Service charges on deposit accounts increased $314 thousand, or 5.6%, for the year ended December 31, 2019, primarily due to increased fee income on commercial cash management accounts. BOLI income increased $311 thousand for the quarter ended December 31, 2019 primarily due to a decline in the value of the non-qualified annuity portfolio of $287 thousand in the fourth quarter of 2018.

Other income increased $853 thousand for the quarter and $2.4 million for the year ended December 31, 2019. Fees on risk participation agreements increased $407 thousand for the quarter and $1.1 million for the year ended December 31, 2019, driven by increased customer activity. Gain on sale of small business administration (SBA) loans increased $94 thousand for the quarter and $462 thousand for the year ended December 31, 2019 due to increased SBA loan sale activity. Net loss on valuations and sales of other real estate owned was $28 thousand for the year ended December 31, 2019 compared to $626 thousand for the year ended December 31, 2018.

Noninterest Expense
Noninterest expense for the quarter ended December 31, 2019 was $37.5 million, an increase of $4.1 million, or 12.2%, compared to the fourth quarter of 2018. Noninterest expense for the year ended December 31, 2019 was $146.1 million, an increase of $8.8 million, or 6.4%, from the prior year.

Salaries, benefits and commissions increased $2.4 million, or 12.2%, for the quarter and $7.8 million, or 9.7%, for the year ended December 31, 2019, primarily attributable to additional staff hired to support revenue generation across all business lines, expansion of our commercial lending groups and annual merit increases. During the first quarter of 2019, Univest hired a team of eight commercial lenders and support staff to focus on increasing Univest’s presence in Western Lancaster and York Counties. During the second quarter of 2019, a team of three commercial lenders was hired to help expand Univest’s presence in the New Jersey suburbs of Philadelphia. Data processing expense increased $333 thousand, or 14.2%, for the quarter and $1.4 million, or 15.9%, for the year ended December 31, 2019, primarily due to continued investments in customer relationship management software and internal infrastructure improvements as well as outsourced data processing solutions for the year ended December 31, 2019. Other expense included a charge of $869 thousand related to a legal settlement with a former Fox Chase Bank customer.

These increases were partially offset by a decrease in deposit insurance premiums of $1.1 million for the year ended December 31, 2019 due to the previously discussed FDIC small bank assessment credit. Intangible expenses decreased by $107 thousand, or 22.2%, for the quarter and $571 thousand, or 26.4%, for the year ended December 31, 2019 due to a run-off of intangible assets from prior acquisitions. In addition, restructuring costs related to financial center closures and staffing rationalization were $571 thousand during the first quarter of 2018. There were no restructuring costs incurred during 2019. Excluding the FDIC small bank assessment credit, the legal settlement charge and restructuring costs, noninterest expense for the year ended December 31, 2019 increased $9.6 million, or 7.1%.

Asset Quality and Provision for Loan and Lease Losses
Nonperforming assets were $39.3 million at December 31, 2019, compared to $40.4 million at September 30, 2019 and $28.1 million at December 31, 2018. The increase in nonperforming assets at December 31, 2019 compared to December 31, 2018 was primarily due to one commercial banking relationship, totaling $11.9 million as of December 31, 2019, which was placed on non-accrual status during 2019.

Net loan and lease charge-offs were $558 thousand during the fourth quarter of 2019 and $2.6 million for the year ended December 31, 2019. The provision for loan and lease losses was $2.2 million for the fourth quarter of 2019 and $8.5 million for the year ended December 31, 2019. Net loan and lease recoveries were $1.9 million during the fourth quarter of 2018, which included the $1.8 million recovery related to the previously discussed commercial loan charge-off. The provision for loan and lease losses was $103 thousand for the fourth quarter of 2018. For the year ended December 31, 2018, net loan and lease charge-offs of $12.5 million and the provision for loan and lease losses of $20.3 million include the previously discussed $10.9 million commercial loan net charge-off.

The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding covered loans acquired in the Fox Chase and Valley Green Bank acquisitions, which were recorded at fair value as of the acquisition date, was 0.85% at December 31, 2019 and September 30, 2019 and 0.81% at December 31, 2018.

Tax Provision
The effective income tax rate was 17.9% for the quarter ended December 31, 2019, compared to an effective income tax rate of 17.6% for the quarter ended December 31, 2018. The effective income tax rate was 17.9% for the year ended December 31, 2019 compared to an effective income tax rate of 16.7% for the year ended December 31, 2018.

Dividend
On December 9, 2019, Univest declared a quarterly cash dividend of $0.20 per share, payable on January 2, 2020. This represented a 3.01% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Conference Call
Univest will host a conference call to discuss fourth quarter and year end 2019 results on Thursday, January 23, 2020 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10137953. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through February 23, 2020 by dialing 1-877-344-7529; using Conference ID: 10137953.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $5.4 billion in assets and $3.8 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 2019. 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. 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 loan 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. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

Univest Financial Corporation

Consolidated Selected Financial Data (Unaudited)

December 31, 2019

(Dollars in thousands)

Balance Sheet (Period End)

12/31/19

09/30/19

06/30/19

03/31/19

12/31/18

Assets

$

5,375,614

$

5,353,611

$

5,154,298

$

5,035,527

$

4,984,347

Investment securities

441,599

448,447

468,833

466,883

473,306

Loans held for sale

5,504

2,893

1,498

921

1,754

Loans and leases held for investment, gross

4,386,836

4,251,933

4,167,904

4,067,879

4,006,574

Allowance for loan and lease losses

35,331

33,662

32,600

31,602

29,364

Loans and leases held for investment, net

4,351,505

4,218,271

4,135,304

4,036,277

3,977,210

Total deposits

4,354,765

4,337,991

4,122,110

4,003,153

3,885,933

Noninterest-bearing deposits

1,279,681

1,198,425

1,166,301

1,103,674

1,055,919

NOW, money market and savings

2,469,074

2,421,466

2,246,372

2,260,795

2,159,937

Time deposits

606,010

718,100

709,437

638,684

670,077

Borrowings

263,596

273,855

304,241

313,083

429,672

Shareholders' equity

675,122

664,299

651,670

637,606

624,133

Balance Sheet (Average)

For the three months ended,

For the twelve months ended,

12/31/19

09/30/19

06/30/19

03/31/19

12/31/18

12/31/19

12/31/18

Assets

$

5,400,533

$

5,317,867

$

5,170,448

$

5,004,253

$

4,890,519

$

5,224,569

$

4,737,772

Investment securities

445,932

460,099

471,422

470,196

464,684

461,841

456,612

Loans and leases, gross

4,280,430

4,170,485

4,123,069

4,017,362

3,894,298

4,148,619

3,776,940

Deposits

4,374,528

4,288,170

4,145,411

3,931,199

3,938,378

4,186,325

3,696,264

Shareholders' equity

672,647

659,523

645,538

631,574

619,204

652,453

612,197

Asset Quality Data (Period End)

12/31/19

09/30/19

06/30/19

03/31/19

12/31/18

Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases

$

38,578

$

37,368

$

25,147

$

25,952

$

26,208

Accruing loans and leases 90 days or more past due

143

2,488

1,379

636

192

Accruing troubled debt restructured loans and leases

54

54

55

270

542

Total nonperforming loans and leases

38,775

39,910

26,581

26,858

26,942

Other real estate owned

516

495

540

540

1,187

Total nonperforming assets

39,291

40,405

27,121

27,398

28,129

Nonaccrual loans and leases / Loans and leases held for investment

0.88

%

0.88

%

0.60

%

0.64

%

0.65

%

Nonperforming loans and leases / Loans and leases held for investment

0.88

%

0.94

%

0.64

%

0.66

%

0.67

%

Nonperforming assets / Total assets

0.73

%

0.75

%

0.53

%

0.54

%

0.56

%

Allowance for loan and lease losses

35,331

33,662

32,600

31,602

29,364

Allowance for loan and lease losses / Loans and leases held for investment

0.81

%

0.79

%

0.78

%

0.78

%

0.73

%

Allowance for loan and lease losses / Loans and leases held for investment

0.85

%

0.85

%

0.85

%

0.85

%

0.81

%

(excluding acquired loans at period-end)

Allowance for loan and lease losses / Nonaccrual loans and leases held for investment

91.58

%

90.08

%

129.64

%

121.77

%

112.04

%

Allowance for loan and lease losses / Nonperforming loans and leases held for investment

91.12

%

84.34

%

122.64

%

117.66

%

108.99

%

Acquired credit impaired loans

$

264

$

568

$

569

$

693

$

695

For the three months ended,

For the twelve months ended,

12/31/19

09/30/19

06/30/19

03/31/19

12/31/18

12/31/19

12/31/18

Net loan and lease charge-offs (recoveries)

$

558

$

468

$

1,078

$

447

$

(1,890

)

$

2,551

$

12,501

Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases

0.05%

0.04%

0.10%

0.05%

(0.19%

)

0.06%

0.33%


Univest Financial Corporation

Consolidated Selected Financial Data (Unaudited)

December 31, 2019

(Dollars in thousands, except per share data)

For the three months ended,

For the twelve months ended,

For the period:

12/31/19

09/30/19

06/30/19

03/31/19

12/31/18

12/31/19

12/31/18

Interest income

$

53,369

$

54,300

$

54,060

$

52,364

$

51,239

$

214,093

$

190,488

Interest expense

10,940

11,655

11,425

10,841

9,862

44,861

32,426

Net interest income

42,429

42,645

42,635

41,523

41,377

169,232

158,062

Provision for loan and lease losses

2,227

1,530

2,076

2,685

103

8,518

20,310

Net interest income after provision

40,202

41,115

40,559

38,838

41,274

160,714

137,752

Noninterest income:

Trust fee income

1,912

1,973

2,054

1,887

1,882

7,826

7,882

Service charges on deposit accounts

1,551

1,513

1,447

1,435

1,516

5,946

5,632

Investment advisory commission and fee income

4,064

4,032

4,055

3,789

3,852

15,940

15,098

Insurance commission and fee income

3,609

3,877

3,941

5,144

3,415

16,571

15,658

Other service fee income

2,229

2,255

2,590

2,267

2,448

9,341

9,332

Bank owned life insurance income

741

743

743

952

430

3,179

3,174

Net gain on sales of investment securities

13

33

7

1

-

54

10

Net gain on mortgage banking activities

1,038

1,629

796

483

713

3,946

3,125

Other income

1,013

544

723

339

160

2,619

262

Total noninterest income

16,170

16,599

16,356

16,297

14,416

65,422

60,173

Noninterest expense:

Salaries, benefits and commissions

21,933

22,758

22,052

21,546

19,544

88,289

80,488

Net occupancy

2,534

2,475

2,601

2,611

2,455

10,221

10,260

Equipment

1,027

1,088

1,065

990

1,014

4,170

4,146

Data processing

2,685

2,624

2,627

2,514

2,352

10,450

9,014

Professional fees

1,475

1,517

1,307

1,264

1,335

5,563

5,391

Marketing and advertising

710

558

786

540

655

2,594

2,642

Deposit insurance premiums

342

(444

)

430

452

449

780

1,836

Intangible expenses

374

378

417

426

481

1,595

2,166

Restructuring charges

-

-

-

-

-

-

571

Other expense

6,398

5,316

5,493

5,214

5,111

22,421

20,725

Total noninterest expense

37,478

36,270

36,778

35,557

33,396

146,083

137,239

Income before taxes

18,894

21,444

20,137

19,578

22,294

80,053

60,686

Income tax expense

3,384

3,782

3,669

3,499

3,922

14,334

10,143

Net income

$

15,510

$

17,662

$

16,468

$

16,079

$

18,372

$

65,719

$

50,543

Net income per share:

Basic

$

0.53

$

0.60

$

0.56

$

0.55

$

0.63

$

2.24

$

1.72

Diluted

$

0.53

$

0.60

$

0.56

$

0.55

$

0.63

$

2.24

$

1.72

Dividends declared per share

$

0.20

$

0.20

$

0.20

$

0.20

$

0.20

$

0.80

$

0.80

Weighted average shares outstanding

29,327,169

29,305,524

29,287,754

29,277,339

29,319,664

29,299,599

29,370,217

Period end shares outstanding

29,334,629

29,312,534

29,294,942

29,272,502

29,270,852

29,334,629

29,270,852


Univest Financial Corporation

Consolidated Selected Financial Data (Unaudited)

December 31, 2019

For the three months ended,

For the twelve months ended,

Profitability Ratios (annualized)

12/31/19

09/30/19

06/30/19

03/31/19

12/31/18

12/31/19

12/31/18

Return on average assets

1.14

%

1.32

%

1.28

%

1.30

%

1.49

%

1.26

%

1.07

%

Return on average assets, excluding restructuring charges (1), (2)

1.14

%

1.32

%

1.28

%

1.30

%

1.49

%

1.26

%

1.08

%

Return on average shareholders' equity

9.15

%

10.62

%

10.23

%

10.32

%

11.77

%

10.07

%

8.26

%

Return on average shareholders' equity, excluding restructuring charges (1), (2)

9.15

%

10.62

%

10.23

%

10.32

%

11.77

%

10.07

%

8.33

%

Return on average tangible common equity, excluding restructuring charges (1), (2)

12.40

%

14.52

%

14.10

%

14.36

%

16.52

%

13.82

%

11.77

%

Net interest margin (FTE)

3.44

%

3.52

%

3.67

%

3.75

%

3.72

%

3.59

%

3.72

%

Efficiency ratio (3)

63.0

%

60.4

%

61.5

%

60.5

%

59.0

%

61.4

%

61.9

%

Efficiency ratio, excluding restructuring charges (1), (3), (4)

63.0

%

60.4

%

61.5

%

60.5

%

59.0

%

61.4

%

61.6

%

Capitalization Ratios

Dividends declared to net income

37.8

%

33.2

%

35.6

%

36.4

%

31.9

%

35.7

%

46.5

%

Shareholders' equity to assets (Period End)

12.56

%

12.41

%

12.64

%

12.66

%

12.52

%

12.56

%

12.52

%

Tangible common equity to tangible assets (1)

9.60

%

9.42

%

9.54

%

9.47

%

9.29

%

9.60

%

9.29

%

Common equity book value per share

$

23.01

$

22.66

$

22.25

$

21.78

$

21.32

$

23.01

$

21.32

Tangible common equity book value per share (1)

$

17.01

$

16.64

$

16.20

$

15.72

$

15.25

$

17.01

$

15.25

Regulatory Capital Ratios (Period End)

Tier 1 leverage ratio

10.02

%

9.97

%

10.01

%

10.10

%

10.13

%

10.02

%

10.13

%

Common equity tier 1 risk-based capital ratio

11.03

%

11.03

%

10.99

%

10.93

%

10.88

%

11.03

%

10.88

%

Tier 1 risk-based capital ratio

11.03

%

11.03

%

10.99

%

10.93

%

10.88

%

11.03

%

10.88

%

Total risk-based capital ratio

13.78

%

13.81

%

13.79

%

13.77

%

13.70

%

13.78

%

13.70

%

(1

)

This consolidated selected financial data schedule contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The management of Univest Financial Corporation uses these non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See below table for additional information.

(a) Restructuring charges

$

-

$

-

$

-

$

-

$

-

$

-

$

571

Tax effect on restructuring charges

-

-

-

-

-

-

(120

)

(b) Restructuring charges, net of tax

$

-

$

-

$

-

$

-

$

-

$

-

$

451

(c) Shareholders' equity

$

675,122

$

664,299

$

651,670

$

637,606

$

624,133

$

675,122

$

624,133

Goodwill

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

Other intangibles (i)

(3,658

)

(4,026

)

(4,396

)

(4,805

)

(5,222

)

(3,658

)

(5,222

)

(d) Tangible common equity

$

498,905

$

487,714

$

474,715

$

460,242

$

446,352

$

498,905

$

446,352

(e) Total assets

$

5,375,614

$

5,353,611

$

5,154,298

$

5,035,527

$

4,984,347

$

5,375,614

$

4,984,347

Goodwill

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

Other intangibles (i)

(3,658

)

(4,026

)

(4,396

)

(4,805

)

(5,222

)

(3,658

)

(5,222

)

(f) Tangible assets

$

5,199,397

$

5,177,026

$

4,977,343

$

4,858,163

$

4,806,566

$

5,199,397

$

4,806,566

(g) Average shareholders' equity

$

672,647

$

659,523

$

645,538

$

631,574

$

619,204

$

652,453

$

612,197

Average goodwill

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

(172,559

)

Average other intangibles (i)

(3,853

)

(4,234

)

(4,615

)

(5,031

)

(5,473

)

(4,430

)

(6,233

)

(h) Average tangible common equity

$

496,235

$

482,730

$

468,364

$

453,984

$

441,172

$

475,464

$

433,405

(i) Amount does not include servicing rights

(2

)

Net income in this ratio excludes restructuring charges, net of tax. See (1)(b) above.

(3

)

Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.

(4

)

Noninterest expense in this ratio excludes restructuring charges. See (1)(a) above.


Univest Financial Corporation

Average Balances and Interest Rates (Unaudited)

For the Three Months Ended,

Tax Equivalent Basis

December 31, 2019

September 30, 2019

Average

Income/

Average

Average

Income/

Average

(Dollars in thousands)

Balance

Expense

Rate

Balance

Expense

Rate

Assets:

Interest-earning deposits with other banks

$

205,645

$

860

1.66

%

$

213,623

$

1,178

2.19

%

U.S. government obligations

7,297

37

2.01

14,154

62

1.74

Obligations of state and political subdivisions

35,938

324

3.58

42,465

316

2.95

Other debt and equity securities

402,697

2,684

2.64

403,480

2,519

2.48

Federal Home Loan Bank, Federal Reserve Bank and other stock

30,653

514

6.65

30,857

519

6.67

Total interest-earning deposits, investments and other interest-earning assets

682,230

4,419

2.57

704,579

4,594

2.59

Commercial, financial, and agricultural loans

830,757

9,197

4.39

800,006

9,952

4.94

Real estate—commercial and construction loans

2,040,442

23,526

4.57

1,966,593

23,439

4.73

Real estate—residential loans

966,370

11,566

4.75

956,224

11,570

4.80

Loans to individuals

31,694

458

5.73

31,504

490

6.17

Municipal loans and leases

325,939

3,323

4.04

333,734

3,413

4.06

Lease financings

85,228

1,528

7.11

82,424

1,482

7.13

Gross loans and leases

4,280,430

49,598

4.60

4,170,485

50,346

4.79

Total interest-earning assets

4,962,660

54,017

4.32

4,875,064

54,940

4.47

Cash and due from banks

50,794

53,019

Reserve for loan and lease losses

(34,392

)

(33,152

)

Premises and equipment, net

57,043

57,881

Operating lease right-of-use assets

34,693

35,238

Other assets

329,735

329,817

Total assets

$

5,400,533

$

5,317,867

Liabilities:

Interest-bearing checking deposits

$

566,904

$

941

0.66

%

$

497,185

$

678

0.54

%

Money market savings

1,074,066

3,749

1.38

1,004,806

4,112

1.62

Regular savings

798,087

870

0.43

805,632

963

0.47

Time deposits

648,726

3,261

1.99

715,520

3,681

2.04

Total time and interest-bearing deposits

3,087,783

8,821

1.13

3,023,143

9,434

1.24

Short-term borrowings

30,404

63

0.82

32,375

94

1.15

Long-term debt

153,049

795

2.06

167,338

866

2.05

Subordinated notes

94,786

1,261

5.28

94,724

1,261

5.28

Total borrowings

278,239

2,119

3.02

294,437

2,221

2.99

Total interest-bearing liabilities

3,366,022

10,940

1.29

3,317,580

11,655

1.39

Noninterest-bearing deposits

1,286,745

1,265,027

Operating lease liabilities

37,867

38,364

Accrued expenses and other liabilities

37,252

37,373

Total liabilities

4,727,886

4,658,344

Shareholders' Equity:

Common stock

157,784

157,784

Additional paid-in capital

294,731

294,138

Retained earnings and other equity

220,132

207,601

Total shareholders' equity

672,647

659,523

Total liabilities and shareholders' equity

$

5,400,533

$

5,317,867

Net interest income

$

43,077

$

43,285

Net interest spread

3.03

3.08

Effect of net interest-free funding sources

0.41

0.44

Net interest margin

3.44

%

3.52

%

Ratio of average interest-earning assets to average interest-bearing liabilities

147.43

%

146.95

%

Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and unearned discount. Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the three months ended December 31, 2019 and September 30, 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 Three Months Ended December 31,

Tax Equivalent Basis

2019

2018

Average

Income/

Average

Average

Income/

Average

(Dollars in thousands)

Balance

Expense

Rate

Balance

Expense

Rate

Assets:

Interest-earning deposits with other banks

$

205,645

$

860

1.66

%

$

89,784

$

480

2.12

%

U.S. government obligations

7,297

37

2.01

22,307

89

1.58

Obligations of state and political subdivisions

35,938

324

3.58

65,134

553

3.37

Other debt and equity securities

402,697

2,684

2.64

377,243

2,494

2.62

Federal Home Loan Bank, Federal Reserve Bank and other stock

30,653

514

6.65

30,175

468

6.15

Total interest-earning deposits, investments and other interest-earning assets

682,230

4,419

2.57

584,643

4,084

2.77

-

Commercial, financial, and agricultural loans

830,757

9,197

4.39

782,666

10,322

5.23

Real estate—commercial and construction loans

2,040,442

23,526

4.57

1,766,543

21,309

4.79

Real estate—residential loans

966,370

11,566

4.75

910,620

11,102

4.84

Loans to individuals

31,694

458

5.73

31,902

511

6.35

Municipal loans and leases

325,939

3,323

4.04

323,904

3,160

3.87

Lease financings

85,228

1,528

7.11

78,663

1,407

7.10

Gross loans and leases

4,280,430

49,598

4.60

3,894,298

47,811

4.87

Total interest-earning assets

4,962,660

54,017

4.32

4,478,941

51,895

4.60

Cash and due from banks

50,794

47,429

Reserve for loan and lease losses

(34,392

)

(28,499

)

Premises and equipment, net

57,043

60,448

Operating lease right-of-use assets

34,693

-

Other assets

329,735

332,200

Total assets

$

5,400,533

$

4,890,519

Liabilities:

Interest-bearing checking deposits

$

566,904

$

941

0.66

%

$

491,749

$

708

0.57

%

Money market savings

1,074,066

3,749

1.38

889,165

3,372

1.50

Regular savings

798,087

870

0.43

768,825

637

0.33

Time deposits

648,726

3,261

1.99

676,256

2,958

1.74

Total time and interest-bearing deposits

3,087,783

8,821

1.13

2,825,995

7,675

1.08

Short-term borrowings

30,404

63

0.82

56,215

233

1.64

Long-term debt

153,049

795

2.06

140,597

694

1.96

Subordinated notes

94,786

1,261

5.28

94,542

1,260

5.29

Total borrowings

278,239

2,119

3.02

291,354

2,187

2.98

Total interest-bearing liabilities

3,366,022

10,940

1.29

3,117,349

9,862

1.26

Noninterest-bearing deposits

1,286,745

1,112,383

Operating lease liabilities

37,867

-

Accrued expenses and other liabilities

37,252

41,583

Total liabilities

4,727,886

4,271,315

Shareholders' Equity:

Common stock

157,784

157,784

Additional paid-in capital

294,731

292,342

Retained earnings and other equity

220,132

169,078

Total shareholders' equity

672,647

619,204

Total liabilities and shareholders' equity

$

5,400,533

$

4,890,519

Net interest income

$

43,077

$

42,033

Net interest spread

3.03

3.34

Effect of net interest-free funding sources

0.41

0.38

Net interest margin

3.44

%

3.72

%

Ratio of average interest-earning assets to average interest-bearing liabilities

147.43

%

143.68

%

Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and unearned discount. Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the three months ended December 31, 2019 and 2018 have been calculated using the Corporation’s federal applicable rate of 21.0%.


Univest Financial Corporation

Average Balances and Interest Rates (Unaudited)

For the Twelve Months Ended December 31,

Tax Equivalent Basis

2019

2018

Average

Income/

Average

Average

Income/

Average

(Dollars in thousands)

Balance

Expense

Rate

Balance

Expense

Rate

Assets:

Interest-earning deposits with other banks

$

141,760

$

2,876

2.03

%

$

56,984

$

1,101

1.93

%

U.S. government obligations

14,665

254

1.73

22,930

364

1.59

Obligations of state and political subdivisions

50,360

1,693

3.36

69,842

2,330

3.34

Other debt and equity securities

396,816

10,406

2.62

363,840

9,024

2.48

Federal Home Loan Bank, Federal Reserve Bank and other stock

31,446

2,154

6.85

30,786

1,965

6.38

Total interest-earning deposits, investments and other interest-earning assets

635,047

17,383

2.74

544,382

14,784

2.72

Commercial, financial, and agricultural loans

815,472

40,496

4.97

793,028

39,156

4.94

Real estate—commercial and construction loans

1,936,073

91,634

4.73

1,689,983

78,498

4.64

Real estate—residential loans

950,743

46,031

4.84

870,846

41,270

4.74

Loans to individuals

31,912

1,976

6.19

30,242

1,866

6.17

Municipal loans and leases

331,831

13,262

4.00

316,280

12,049

3.81

Lease financings

82,588

5,904

7.15

76,561

5,514

7.20

Gross loans and leases

4,148,619

199,303

4.80

3,776,940

178,353

4.72

Total interest-earning assets

4,783,666

216,686

4.53

4,321,322

193,137

4.47

Cash and due from banks

48,877

45,979

Reserve for loan and lease losses

(32,389

)

(25,154

)

Premises and equipment, net

58,237

61,006

Operating lease right-of-use assets

35,712

-

Other assets

330,466

334,619

Total assets

$

5,224,569

$

4,737,772

Liabilities:

Interest-bearing checking deposits

$

500,295

$

2,790

0.56

%

$

461,676

$

1,924

0.42

%

Money market savings

995,403

15,843

1.59

764,777

9,137

1.19

Regular savings

802,851

3,660

0.46

798,332

2,357

0.30

Time deposits

677,199

13,276

1.96

601,674

8,768

1.46

Total time and interest-bearing deposits

2,975,748

35,569

1.20

2,626,459

22,186

0.84

Short-term borrowings

56,882

1,012

1.78

144,312

2,420

1.68

Long-term debt

156,366

3,236

2.07

150,032

2,777

1.85

Subordinated notes

94,695

5,044

5.33

94,451

5,043

5.34

Total borrowings

307,943

9,292

3.02

388,795

10,240

2.63

Total interest-bearing liabilities

3,283,691

44,861

1.37

3,015,254

32,426

1.08

Noninterest-bearing deposits

1,210,577

1,069,805

Operating lease liabilities

38,791

-

Accrued expenses and other liabilities

39,057

40,516

Total liabilities

4,572,116

4,125,575

Shareholders' Equity:

Common stock

157,784

157,784

Additional paid-in capital

293,784

291,148

Retained earnings and other equity

200,885

163,265

Total shareholders' equity

652,453

612,197

Total liabilities and shareholders' equity

$

5,224,569

$

4,737,772

Net interest income

$

171,825

$

160,711

Net interest spread

3.16

3.39

Effect of net interest-free funding sources

0.43

0.33

Net interest margin

3.59

%

3.72

%

Ratio of average interest-earning assets to average interest-bearing liabilities

145.68

%

143.32

%

Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and unearned discount. Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the twelve months ended December 31, 2019 and 2018 have been calculated using the Corporation’s federal applicable rate of 21.0%.

CONTACT:
Brian J. Richardson
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2446, richardsonb@univest.net