Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

UNIVEST FINANCIAL CORPORATION

(UVSP)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

UNIVEST FINANCIAL : REPORTS SECOND QUARTER RESULTS (Form 8-K)

07/29/2021 | 09:20am EDT
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 sixmonths 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 $ 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


Disclaimer

Univest Corporation of Pennsylvania published this content on 29 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2021 13:18:34 UTC.


© Publicnow 2021
All news about UNIVEST FINANCIAL CORPORATION
10/07Univest Financial Corporation to Hold Third Quarter 2021 Earnings Call
GL
10/07UNIVEST FINANCIAL : Corporation to Hold Third Quarter 2021 Earnings Call
GL
08/10UNIVEST FINANCIAL CORPORATION : Ex-dividend day for
FA
08/03UNIVEST FINANCIAL CORP : Regulation FD Disclosure, Financial Statements and Exhibits (form..
AQ
08/02UNIVEST FINANCIAL : Management's Discussion and Analysis of Financial Condition and Result..
AQ
08/02Tranche Update on Univest Financial Corporation's Equity Buyback Plan announced on Octo..
CI
07/30Today on Wall Street: Without a care in the world
07/30ANALYST RECOMMENDATIONS : Amazon, Barclays, Comcast, Next, Pfizer...
07/29UNIVEST FINANCIAL : Keefe, Bruyette & Woods Upgrades Univest of Pennsylvania to Outperform..
MT
07/29UNIVEST FINANCIAL : REPORTS SECOND QUARTER RESULTS (Form 8-K)
PU
More news
Analyst Recommendations on UNIVEST FINANCIAL CORPORATION
More recommendations
Financials (USD)
Sales 2021 240 M - -
Net income 2021 87,6 M - -
Net Debt 2021 - - -
P/E ratio 2021 9,49x
Yield 2021 2,83%
Capitalization 832 M 832 M -
Capi. / Sales 2021 3,47x
Capi. / Sales 2022 3,41x
Nbr of Employees 896
Free-Float 91,3%
Chart UNIVEST FINANCIAL CORPORATION
Duration : Period :
Univest Financial Corporation Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends UNIVEST FINANCIAL CORPORATION
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 4
Last Close Price 28,30 $
Average target price 31,63 $
Spread / Average Target 11,7%
EPS Revisions
Managers and Directors
Jeffrey M. Schweitzer President, Chief Executive Officer & Director
Brian J. Richardson Executive VP, Chief Financial & Accounting Officer
William S. Aichele Chairman
Michael L. Turner Independent Director
Glenn E. Moyer Independent Director