SOUDERTON, Pa., April 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 quarter ended March 31, 2020 of  $838 thousand, or $0.03 diluted earnings per share, compared to net income of $16.1 million, or $0.55 diluted earnings per share, for the quarter ended March 31, 2019.

During these challenging times, we continue to responsibly serve the needs of our customers while prioritizing the health and safety of our employees.  We have implemented drive-through only banking at all our locations that have drive-through capabilities.  Additionally, we have controlled and limited access at our financial centers to allow customers to access their safe deposit boxes and to serve customers at locations without drive-through capabilities.  We have enabled approximately 95% of our non-financial center personnel to work remotely.  Our employees, systems and processes have managed this unprecedented change seamlessly and with great success.

As a direct result of the impact of COVID-19, we have taken various actions to support our customers and the communities they live in and serve, including modifying outstanding loans and waiving certain deposit service charges.  As of April 16, 2020, we have modified, or were in the process of modifying,  approximately 1,100 loans via principal and/or interest deferrals in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and will not be categorizing these modifications as troubled debt restructurings.  These loans had current principal balances of approximately $540 million. Additionally, we successfully processed approximately 1,050 Paycheck Protection Program (PPP) applications and secured SBA funding of approximately $415 million for our customers prior to the allocated funding being exhausted on April 16, 2020.  We will continue to support our customers during these challenging times.

CECL
The Corporation adopted Accounting Standard Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”) effective January 1, 2020.  Upon adoption, the reserve for credit losses on loans and leases increased by $12.9 million, the reserve for credit losses on investments increased by $300 thousand and the reserve for unfunded commitments increased by $1.1 million.  This resulted in an after-tax retained earnings adjustment of $11.3 million.  During the quarter ended March 31, 2020, the Corporation recorded CECL related charges of $21.8 million, including a provision for credit losses on loans and leases of $20.4 million, a provision for credit losses on investment securities of $597 thousand and a reserve for unfunded commitments of $794 thousand. 

The financial results for the quarter ended March 31, 2020, included $20.3 million (after-tax charge of $16.1 million), or $0.55 diluted earnings per share, of expense related to COVID-19, which was the result of economic assumptions within the Corporation’s CECL model. This charge included a provision for credit losses on loans and leases of $19.4 million, a provision for credit losses on investment securities of $536 thousand and a reserve for unfunded commitments of $384 thousand.

One-Time Items
The results for the quarter ended March 31, 2020, included a $652 thousand ($515 thousand after-tax), or $0.02 diluted earnings per share, gain on sale of investments securities and a $656 thousand ($518 thousand after-tax), or $0.02 diluted earnings per share, charge in other expense related to the extinguishment of long-term debt.  Both of these items resulted from opportunistic balance sheet trades that were executed during the quarter ended March 31, 2020 based on market conditions.

Loans
Gross loans and leases increased $62.0 million, or 5.7% (annualized), from December 31, 2019 and $380.9 million, or 9.4%, from March 31, 2019. The growth in loans from December 31, 2019 and March 31, 2019 was primarily in commercial real estate and residential real estate loans.

Deposits
Total deposits increased $47.2 million, or 4.3% (annualized), from December 31, 2019 primarily due to increases in commercial and consumer deposits partially offset by a seasonal decrease in public funds deposits. Total deposits increased $404.2 million, or 10.1%, from March 31, 2019 primarily due to increases in commercial, public fund and consumer deposits.

Net Interest Income and Margin
Net interest income of $42.5 million for the first quarter of 2020 increased $945 thousand, or 2.3%, from the first quarter of 2019. The increase in net interest income for the first quarter of 2020 compared to the first quarter of 2019 was primarily due to lower deposit and borrowing costs and growth in loans partially offset by a decrease in yield on loans.

Net interest margin, on a tax-equivalent basis, was 3.48% for the first quarter of 2020, compared to 3.44% for the fourth quarter of 2019 and 3.75% for the first quarter of 2019. Purchase accounting accretion had no impact on the quarter ended March 31, 2020 compared to a favorable impact of three basis points for the quarter ended December 31, 2019 and one basis point for the quarter ended March 31, 2019. Excess liquidity reduced net interest margin by approximately six basis points for the quarter ended March 31, 2020 compared to twelve basis points for the quarter ended December 31, 2019 and had no impact on the quarter ended March 31, 2019. This excess liquidity was primarily driven by strong deposit balance growth over the last year. Excluding purchase accounting accretion and the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, was 3.54% for the quarter ended March 31, 2020, 3.53% for the quarter ended December 31, 2019 and 3.74% for the quarter ended March 31, 2019.

Noninterest Income
Noninterest income for the quarter ended March 31, 2020 was $18.4 million, an increase of $2.1 million, or 12.8%, from the first quarter of 2019.

Net gain on mortgage banking activities increased $2.3 million, or 468.1%, for the quarter primarily due to an increase in mortgage volume and expansion of margins. Net gain on sales of investment securities increased $694 thousand for the quarter primarily due to a $652 thousand gain on the sale of $58.3 million of agency backed mortgage backed securities. Investment advisory commission and fee income increased $466 thousand, or 12.3%, for the quarter primarily due to new client relationships and appreciation of assets under management, as a majority of investment advisory fees are billed based on the prior quarter-end assets under management balance.

Insurance commission and fee income decreased $412 thousand, or 8.0%, for the quarter primarily due to a decrease in contingent commission income of $389 thousand, which was $1.1 million for the quarter ended March 31, 2020 compared to $1.5 million for the quarter ended March 31, 2019.  Other service fee income decreased $397 thousand, or 17.5%, primarily due to an increase of $331 thousand of mortgage servicing rights amortization for the quarter ended March 31, 2020 compared to the quarter ended March 31, 2019. The increase in amortization for the quarter was primarily driven by the decline in interest rates and their impact on prepayment activity. BOLI income decreased $218 thousand, or 22.9%, for the quarter ended March 31, 2020 primarily due to income on our non-qualified annuity portfolio of $26 thousand in the first quarter of 2020 compared to income of $249 thousand in the first quarter of 2019. During the first quarter of 2019, in order to reduce future volatility, the Corporation transferred the funds invested within the non-qualified annuity portfolio to a stable fund investment strategy. Other income decreased $272 thousand, 80.2%, for the quarter ended March 31, 2020, primarily driven by a loss in the value of equity securities measured at fair value of $268 thousand for the quarter ended March 31, 2020 compared to a gain of $4 thousand for the quarter ended March 31, 2019.

Noninterest Expense
Noninterest expense for the quarter ended March 31, 2020 was $39.6 million, an increase of $4.0 million, or 11.3%, compared to the first quarter of 2019.

Salaries, benefits and commissions increased $2.3 million, or 10.6%, for the quarter primarily attributable to additional staff hired, primarily during 2019, to support revenue generation across all business lines, expansion of our commercial lending groups in the first and second quarter of 2019, annual merit increases and increased variable compensation due to strong mortgage banking activity.  Data processing expense increased $246 thousand, or 9.8%, for the quarter primarily due to continued investments in customer relationship management software and internal infrastructure improvements as well as outsourced data processing solutions. Other expense increased $1.6 million, or 31.4%, for the quarter primarily due to a one-time $656 thousand charge related to the extinguishment of long-term debt and an increase of $794 thousand in the reserve for unfunded commitments, which resulted from the adoption of CECL.

Asset Quality and Provision for Credit Losses on Loans and Leases
Nonperforming assets were $39.0 million at March 31, 2020, compared to $39.3 million at December 31, 2019 and $27.4 million at March 31, 2019. The increase in nonperforming assets at March 31, 2020 compared to March 31, 2019 was primarily due to one commercial banking relationship, totaling $11.8 million as of March 31, 2020, which was placed on non-accrual status during 2019.

Net loan and lease charge-offs were $489 thousand during the first quarter of 2020. The provision for credit losses on loans and leases was $20.4 million for the first quarter of 2020, compared to $2.7 million for the first quarter of 2019, as explained earlier in this release.

The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.53% at March 31, 2020, compared to 0.81% at December 31, 2019 and 0.78% at March 31, 2019.

Tax Provision
The effective income tax rate was (261.2%) for the quarter ended March 31, 2020, compared to an effective income tax rate of 17.9% for the quarter ended March 31, 2019.  The negative effective tax rate for the quarter ended March 31, 2020 reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases.

Dividend
On February 24, 2020, Univest declared a quarterly cash dividend of $0.20 per share, payable on April 1, 2020. This represented a 5.24% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Conference Call
Univest will host a conference call to discuss first quarter 2020 results on Thursday, April 23, 2020 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10141755. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through May 23, 2020 by dialing 1-877-344-7529; using Conference ID: 10141755.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $5.5 billion in assets and $3.3 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2020. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices in southeastern Pennsylvania extending to the Lehigh Valley and Lancaster, as well as in New Jersey and Maryland and online at www.univest.net.  

This press release of Univest and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial services industry and, specifically, the financial operations, markets and products of Univest. These forward-looking statements involve certain risks and uncertainties. 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. 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 when and how the economy may be reopened.  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, making it difficult to grow assets and income; (2) if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; (3) collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; (4) our allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect our net income; (5) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (6) as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; (6) a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend; (7) our wealth management revenues may decline with continuing market turmoil; (8) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (9) we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us; (10); and Federal Deposit Insurance Corporation premiums may increase if the agency experience additional resolution costs. 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)
March 31, 2020
(Dollars in thousands)          
           
Balance Sheet (Period End) 03/31/20 12/31/19 09/30/19 06/30/19 03/31/19
Assets $5,464,768  $5,380,924  $5,353,611  $5,154,298  $5,035,527 
Investment securities, net of allowance for credit losses  423,521   441,599   448,447   468,833   466,883 
Loans held for sale  11,417   5,504   2,893   1,498   921 
Loans and leases held for investment, gross  4,448,825   4,386,836   4,251,933   4,167,904   4,067,879 
Allowance for credit losses, loans and leases  68,216   35,331   33,662   32,600   31,602 
Loans and leases held for investment, net  4,380,609   4,351,505   4,218,271   4,135,304   4,036,277 
Total deposits  4,407,303   4,360,075   4,337,991   4,122,110   4,003,153 
Noninterest-bearing deposits  1,318,270   1,279,681   1,198,425   1,166,301   1,103,674 
NOW, money market and savings  2,452,021   2,474,384   2,421,466   2,246,372   2,260,795 
Time deposits  637,012   606,010   718,100   709,437   638,684 
Borrowings  323,363   263,596   273,855   304,241   313,083 
Shareholders' equity  651,551   675,122   664,299   651,670   637,606 
           
           
Balance Sheet (Average) For the three months ended,
  03/31/20 12/31/19 09/30/19 06/30/19 03/31/19
Assets $5,409,561  $5,400,591  $5,317,867  $5,170,448  $5,004,253 
Investment securities, net of allowance for credit losses  441,900   445,932   460,099   471,422   470,196 
Loans and leases, gross  4,388,584   4,280,430   4,170,485   4,123,069   4,017,362 
Deposits  4,349,984   4,374,586   4,288,170   4,145,411   3,931,199 
Shareholders' equity  673,460   672,647   659,523   645,538   631,574 
           
           
Asset Quality Data (Period End)           
  03/31/20 12/31/19 09/30/19 06/30/19 03/31/19
Nonaccrual loans and leases, including nonaccrual troubled debt restructured          
  loans and leases $36,626  $38,578  $37,368  $25,147  $25,952 
Accruing loans and leases 90 days or more past due  1,777   143   2,488   1,379   636 
Accruing troubled debt restructured loans and leases  54   54   54   55   270 
Total nonperforming loans and leases  38,457   38,775   39,910   26,581   26,858 
Other real estate owned  516   516   495   540   540 
Total nonperforming assets  38,973   39,291   40,405   27,121   27,398 
Nonaccrual loans and leases / Loans and leases held for investment  0.82%  0.88%  0.88%  0.60%  0.64%
Nonperforming loans and leases / Loans and leases held for investment  0.86%  0.88%  0.94%  0.64%  0.66%
Nonperforming assets / Total assets  0.71%  0.73%  0.75%  0.53%  0.54%
           
Allowance for credit losses, loans and leases  68,216   35,331   33,662   32,600   31,602 
Allowance for credit losses, loans and leases / Loans and leases held for investment  1.53%  0.81%  0.79%  0.78%  0.78%
Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment  186.25%  91.58%  90.08%  129.64%  121.77%
Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment  177.38%  91.12%  84.34%  122.64%  117.66%
           
  For the three months ended,
  03/31/20 12/31/19 09/30/19 06/30/19 03/31/19
Net loan and lease charge-offs $489  $558  $468  $1,078  $447 
Net loan and lease charge-offs (annualized)/Average loans and leases  0.04%  0.05%  0.04%  0.10%  0.05%
           



Univest Financial Corporation 
Consolidated Selected Financial Data (Unaudited) 
March 31, 2020 
(Dollars in thousands, except per share data)          
 For the three months ended, 
For the period:03/31/20 12/31/19 09/30/19 06/30/19 03/31/19 
Interest income$52,019  $53,369 $54,300  $54,060 $52,364 
Interest expense 9,551   10,940  11,655   11,425  10,841 
  Net interest income 42,468   42,429  42,645   42,635  41,523 
Provision for credit losses 21,049   2,227  1,530   2,076  2,685 
Net interest income after provision 21,419   40,202  41,115   40,559  38,838 
Noninterest income:          
  Trust fee income 1,890   1,912  1,973   2,054  1,887 
  Service charges on deposit accounts 1,397   1,551  1,513   1,447  1,435 
  Investment advisory commission and fee income 4,255   4,064  4,032   4,055  3,789 
  Insurance commission and fee income 4,732   3,609  3,877   3,941  5,144 
  Other service fee income 1,870   2,229  2,255   2,590  2,267 
  Bank owned life insurance income 734   741  743   743  952 
  Net gain on sales of investment securities 695   13  33   7  1 
  Net gain on mortgage banking activities 2,744   1,038  1,629   796  483 
  Other income 67   1,013  544   723  339 
Total noninterest income 18,384   16,170  16,599   16,356  16,297 
Noninterest expense:          
Salaries, benefits and commissions 23,836   21,933  22,758   22,052  21,546 
Net occupancy 2,574   2,534  2,475   2,601  2,611 
Equipment 995   1,027  1,088   1,065  990 
Data processing 2,760   2,685  2,624   2,627  2,514 
Professional fees 1,317   1,475  1,517   1,307  1,264 
Marketing and advertising 402   710  558   786  540 
Deposit insurance premiums 504   342  (444)  430  452 
Intangible expenses 330   374  378   417  426 
Other expense 6,853   6,398  5,316   5,493  5,214 
Total noninterest expense 39,571   37,478  36,270   36,778  35,557 
Income before taxes 232   18,894  21,444   20,137  19,578 
Income tax (benefit) expense (606)  3,384  3,782   3,669  3,499 
Net income$838  $15,510 $17,662  $16,468 $16,079 
Net income per share:          
  Basic$0.03  $0.53 $0.60  $0.56 $0.55 
  Diluted$0.03  $0.53 $0.60  $0.56 $0.55 
Dividends declared per share$0.20  $0.20 $0.20  $0.20 $0.20 
Weighted average shares outstanding 29,286,200   29,327,169  29,305,524   29,287,754  29,277,339 
Period end shares outstanding 29,164,782   29,334,629  29,312,534   29,294,942  29,272,502 
           



Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2020
            
            
            
   For the three months ended,
Profitability Ratios (annualized) 03/31/20 12/31/19 09/30/19 06/30/19 03/31/19
            
Return on average assets  0.06%  1.14%  1.32%  1.28%  1.30%
Return on average shareholders' equity  0.50%  9.15%  10.62%  10.23%  10.32%
Return on average tangible common equity (1) 0.68%  12.40%  14.52%  14.10%  14.36%
Net interest margin (FTE)  3.48%  3.44%  3.52%  3.67%  3.75%
Efficiency ratio (2)  64.1%  63.0%  60.4%  61.5%  60.5%
            
Capitalization Ratios            
            
Dividends declared to net income   699.9%  37.8%  33.2%  35.6%  36.4%
Shareholders' equity to assets (Period End)  11.92%  12.55%  12.41%  12.64%  12.66%
Tangible common equity to tangible assets (1) 8.99%  9.59%  9.42%  9.54%  9.47%
Common equity book value per share $22.34  $23.01  $22.66  $22.25  $21.78 
Tangible common equity book value per share (1)$16.31  $17.01  $16.64  $16.20  $15.72 
            
Regulatory Capital Ratios (Period End)           
Tier 1 leverage ratio   9.90%  10.02%  9.97%  10.01%  10.10%
Common equity tier 1 risk-based capital ratio 10.79%  11.03%  11.03%  10.99%  10.93%
Tier 1 risk-based capital ratio  10.79%  11.03%  11.03%  10.99%  10.93%
Total risk-based capital ratio  13.65%  13.78%  13.81%  13.79%  13.77%
            
            
(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) Shareholders' equity$651,551  $675,122  $664,299  $651,670  $637,606 
 Goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)
 Other intangibles (g)  (3,333)  (3,658)  (4,026)  (4,396)  (4,805)
 (b) Tangible common equity$475,659  $498,905  $487,714  $474,715  $460,242 
            
 (c) Total assets$5,464,768  $5,380,924  $5,353,611  $5,154,298  $5,035,527 
 Goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)
 Other intangibles (g)  (3,333)  (3,658)  (4,026)  (4,396)  (4,805)
 (d) Tangible assets$5,288,876  $5,204,707  $5,177,026  $4,977,343  $4,858,163 
            
 (e) Average shareholders' equity$673,460  $672,647  $659,523  $645,538  $631,574 
 Average goodwill (172,559)  (172,559)  (172,559)  (172,559)  (172,559)
 Average other intangibles (g)  (3,506)  (3,853)  (4,234)  (4,615)  (5,031)
 (f) Average tangible common equity$497,395  $496,235  $482,730  $468,364  $453,984 
            
 (g) Amount does not include servicing rights         
            
(2)Noninterest expense to net interest income before provision for credit losses plus noninterest income adjusted for tax equivalent income.
            



Univest Financial Corporation 
Average Balances and Interest Rates (Unaudited) 
  For the Three Months Ended,   
Tax Equivalent BasisMarch 31, 2020 December 31, 2019 
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$118,108 $3251.11%$205,703 $8601.66%
U.S. government obligations 7,298  372.04  7,297  372.01 
Obligations of state and political subdivisions 33,595  2893.46  35,938  3243.58 
Other debt and equity securities 401,007  2,6682.68  402,697  2,6842.64 
Federal Home Loan Bank, Federal Reserve Bank and other stock 31,450  5276.74  30,653  5146.65 
Total interest-earning deposits, investments and other interest-earning assets 591,458  3,8462.62  682,288  4,4192.57 
         
Commercial, financial, and agricultural loans 821,267  8,6314.23  830,757  9,1974.39 
Real estate—commercial and construction loans 2,139,369  23,9174.50  2,040,442  23,5264.57 
Real estate—residential loans 991,550  11,0524.48  966,370  11,5664.75 
Loans to individuals 30,016  4075.45  31,694  4585.73 
Municipal loans and leases 317,006  3,2654.14  325,939  3,3234.04 
Lease financings 89,376  1,5546.99  85,228  1,5287.11 
  Gross loans and leases 4,388,584  48,8264.47  4,280,430  49,5984.60 
Total interest-earning assets 4,980,042  52,6724.25  4,965,718  54,0174.32 
Cash and due from banks 50,891     50,794    
Reserve for credit losses, loans and leases (44,372)    (34,392)   
Premises and equipment, net 56,399     57,043    
Operating lease right-of-use assets 34,545     34,693    
Other assets 332,056     329,735    
  Total assets$5,409,561    $5,400,591    
         
Liabilities:        
Interest-bearing checking deposits$584,391 $7960.55%$566,904 $9410.66%
Money market savings 1,057,336  2,9031.10  1,074,066  3,7491.38 
Regular savings 816,760  7920.39  798,145  8700.43 
Time deposits 602,903  2,9151.94  648,726  3,2611.99 
  Total time and interest-bearing deposits 3,061,390  7,4060.97  3,087,841  8,8211.13 
         
Short-term borrowings 40,126  1061.06  30,404  630.82 
Long-term debt 169,205  7641.82  153,049  7952.06 
Subordinated notes 94,847  1,2755.41  94,786  1,2615.28 
  Total borrowings 304,178  2,1452.84  278,239  2,1193.02 
  Total interest-bearing liabilities 3,365,568  9,5511.14  3,366,080  10,9401.29 
Noninterest-bearing deposits 1,288,594     1,286,745    
Operating lease liabilities 37,766     37,867    
Accrued expenses and other liabilities 44,173     37,252    
  Total liabilities 4,736,101     4,727,944    
         
Shareholders' Equity:        
Common stock 157,784     157,784    
Additional paid-in capital 295,318     294,731    
Retained earnings and other equity 220,358     220,132    
  Total shareholders' equity 673,460     672,647    
  Total liabilities and shareholders' equity$5,409,561    $5,400,591    
Net interest income $43,121   $43,077  
         
Net interest spread  3.11   3.03 
Effect of net interest-free funding sources  0.37   0.41 
Net interest margin  3.48%  3.44%
Ratio of average interest-earning assets to average interest-bearing liabilities 147.97%    147.43%   
         
Note 1: 
For rate calculation purposes, average loan and lease categories include deferred fees and cost 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 March 31, 2020 and December 31, 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 March 31,   
Tax Equivalent Basis  2020    2019  
 AverageIncome/Average AverageIncome/Average 
(Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
Assets:        
Interest-earning deposits with other banks$118,108 $3251.11%$42,566 $2692.56%
U.S. government obligations 7,298  372.04  20,039  821.66 
Obligations of state and political subdivisions 33,595  2893.46  64,167  5463.45 
Other debt and equity securities 401,007  2,6682.68  385,990  2,6312.76 
Federal Home Loan Bank, Federal Reserve Bank and other stock 31,450  5276.74  32,360  5867.34 
Total interest-earning deposits, investments and other interest-earning assets 591,458  3,8462.62  545,122  4,1143.06 
         
Commercial, financial, and agricultural loans 821,267  8,6314.23  811,071  10,7585.38 
Real estate—commercial and construction loans 2,139,369  23,9174.50  1,822,276  21,5594.80 
Real estate—residential loans 991,550  11,0524.48  938,299  11,4124.93 
Loans to individuals 30,016  4075.45  32,524  5186.46 
Municipal loans and leases 317,006  3,2654.14  332,299  3,2213.93 
Lease financings 89,376  1,5546.99  80,893  1,4357.19 
  Gross loans and leases 4,388,584  48,8264.47  4,017,362  48,9034.94 
Total interest-earning assets 4,980,042  52,6724.25  4,562,484  53,0174.71 
Cash and due from banks 50,891     44,714    
Reserve for credit losses, loans and leases (44,372)    (30,111)   
Premises and equipment, net 56,399     59,179    
Operating lease right-of-use assets 34,545     37,129    
Other assets 332,056     330,858    
  Total assets$5,409,561    $5,004,253    
         
Liabilities:        
Interest-bearing checking deposits$584,391 $7960.55%$478,927 $7140.60%
Money market savings 1,057,336  2,9031.10  918,487  3,7481.65 
Regular savings 816,760  7920.39  789,033  8140.42 
Time deposits 602,903  2,9151.94  655,303  2,9271.81 
  Total time and interest-bearing deposits 3,061,390  7,4060.97  2,841,750  8,2031.17 
         
Short-term borrowings 40,126  1061.06  117,664  6382.20 
Long-term debt 169,205  7641.82  145,299  7392.06 
Subordinated notes 94,847  1,2755.41  94,603  1,2615.41 
  Total borrowings 304,178  2,1452.84  357,566  2,6382.99 
  Total interest-bearing liabilities 3,365,568  9,5511.14  3,199,316  10,8411.37 
Noninterest-bearing deposits 1,288,594     1,089,449    
Operating lease liabilities 37,766     40,090    
Accrued expenses and other liabilities 44,173     43,824    
  Total liabilities 4,736,101     4,372,679    
         
Shareholders' Equity:        
Common stock 157,784     157,784    
Additional paid-in capital 295,318     292,746    
Retained earnings and other equity 220,358     181,044    
  Total shareholders' equity 673,460     631,574    
  Total liabilities and shareholders' equity$5,409,561    $5,004,253    
Net interest income $43,121   $42,176  
         
Net interest spread  3.11   3.34 
Effect of net interest-free funding sources  0.37   0.41 
Net interest margin  3.48%  3.75%
Ratio of average interest-earning assets to average interest-bearing liabilities 147.97%    142.61%   
         
Note 1: 
For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the three months ended March 31, 2020 and 2019 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 

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