Univest Financial Corporation Reports First Quarter Results
Univest Financial Corporation Reports First Quarter Results
SOUDERTON, Pa., April 24, 2024 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. (the "Bank") and its insurance, investments and equipment financing subsidiaries, announced net income for the quarter ended March 31, 2024 was $20.3 million, or $0.69 diluted earnings per share, compared to net income of $21.0 million, or $0.71 diluted earnings per share, for the quarter ended March 31, 2023.
One-Time Items
The financial results for the quarter included a $3.4 million net gain ($2.7 million after-tax), or $0.09 diluted earnings per share, generated from the sale of mortgage servicing rights associated with $591.1 million of serviced loans.
Loans
Gross loans and leases increased $11.9 million, or 0.2% (0.8% annualized), from December 31, 2023, primarily due to increases in commercial loans and residential mortgage loans, partially offset by decreases in construction and commercial real estate loans. Gross loans and leases increased $339.3 million, or 5.4%, from March 31, 2023, primarily due to increases in commercial real estate, residential mortgage loans and lease financings, partially offset by a decrease in commercial loans.
Deposits, Borrowings and Liquidity
Total deposits increased $29.6 million, or 0.5% (2.0% annualized), from December 31, 2023, primarily due to increases in consumer and brokered deposits, partially offset by decreases in commercial and seasonal public funds deposits. Total deposits increased $570.7 million, or 9.8%, from March 31, 2023, primarily due to increases in consumer, public funds and brokered deposits, partially offset by a decrease in commercial deposits. Noninterest-bearing deposits represented 21.9% of total deposits at March 31, 2024, down from 23.0% at December 31, 2023. At March 31, 2024, unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, represented 22.3% of total deposits, down from 23.3% at December 31, 2023.
Total borrowings decreased $61.4 million, or 13.2% (52.8% annualized), from December 31, 2023, primarily due to pay-downs of long-term FHLB advances of $60.0 million. These borrowings were replaced with $110.2 million of lower cost brokered deposits during the quarter.
As of March 31, 2024, the Corporation had cash and cash equivalents totaling $201.6 million. The Corporation and its subsidiaries had committed borrowing capacity of $3.4 billion at March 31, 2024, of which $2.1 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $334.0 million at March 31, 2024. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.
Net Interest Income and Margin
Net interest income of $51.5 million for the first quarter of 2024 decreased $7.9 million, or 13.2%, from the first quarter of 2023 and $1.3 million, or 2.5%, from the fourth quarter of 2023. The decrease in net interest income for the first quarter of 2024 compared to the first quarter of 2023 was due to an increase in the cost of funds and the average balance of interest-bearing liabilities, partially offset by an increase in asset yields and the average balance of interest-earning assets. The decrease in net interest income for the first quarter of 2024 compared to the fourth quarter of 2023 was due to a decrease in the average balance of interest-earning assets, including excess liquidity, and an increase in the cost of funds, partially offset by an increase in asset yields and a decrease in the average balance of interest-bearing liabilities.
Net interest margin, on a tax-equivalent basis, was 2.88% for the first quarter of 2024, compared to 2.84% for the fourth quarter of 2023 and 3.58% for the first quarter of 2023. Excess liquidity reduced net interest margin by approximately three basis points for the quarter ended March 31, 2024 compared to approximately ten basis points for the quarter ended December 31, 2023. Excess liquidity had no impact on net interest margin for the quarter ended March 31, 2023.
Noninterest Income
Noninterest income for the quarter ended March 31, 2024 was $25.6 million, an increase of $5.9 million, or 30.1%, from the comparable period in the prior year.
Other service fee income increased $3.3 million, or 108.6%, for the quarter ended March 31, 2024, primarily due to the net gain on the sale of mortgage servicing rights as previously mentioned.
Insurance commission and fee income increased $714 thousand, or 11.0%, for the quarter ended March 31, 2024, primarily due to increases in premiums for group life and health and commercial lines and an increase in contingent commission income of $484 thousand, which were $2.3 million and $1.8 million for the quarters ended March 31, 2024 and 2023, respectively. Contingent income is largely recognized in the first quarter of the year.
Investment advisory commission and fee income increased $442 thousand, or 9.3%, for the quarter ended March 31, 2024, primarily due to new customer 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. Service charges on deposit accounts increased $324 thousand, or 20.9%, for the quarter ended March 31, 2024, primarily due to increased treasury management income. Net gain on mortgage banking activities increased $314 thousand, or 50.2%, for the quarter ended March 31, 2024, primarily due to increased salable volume.
Other income increased $554 thousand, or 117.6%, for the quarter ended March 31, 2024 compared to the three months ended March 31, 2023. Gains on the sale of Small Business Administration loans increased $239 thousand due to increased sale volume. Fees on risk participation agreements for interest rate swaps increased $141 thousand.
Noninterest Expense
Noninterest expense for the quarter ended March 31, 2024 was $50.1 million, an increase of $545 thousand, or 1.1%, from the comparable period in the prior year.
Data processing increased $466 thousand, or 11.6%, for the quarter ended March 31, 2024, primarily due to our investments in technology in recent years, including the launch of our online small business loan and deposit products, and general price increases incurred in the second half of 2023. Salaries, benefits and commissions increased $324 thousand, or 1.0%, for the quarter ended March 31, 2024, primarily driven by decreased capitalized compensation, resulting from lower loan production in the current period, and increased medical claims expense. These increases were partially offset by decreased salary expense primarily due to staff reductions over the last twelve months.
Other expense decreased $268 thousand, or 3.8%, for the quarter ended March 31, 2024, primarily due to decreases in retirement plan costs of $210 thousand. Professional fees decreased $253 thousand, or 13.0%, for the quarter ended March 31, 2024, primarily due to consultant fees incurred in the first quarter of 2023 related to our digital transformation initiative.
Tax Provision
The effective income tax rate was 20.5% for the quarter ended March 31, 2024, compared to an effective tax rate of 19.4% for the quarter ended March 31, 2023. The discrete tax effect of vested equity compensation awards unfavorably impacted the first quarter of 2024 by 74 basis points and favorably impacted the first quarter of 2023 by 76 basis points. Additionally, the effective tax rates for the three months ended March 31, 2024 and 2023 reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases.
Asset Quality and Provision for Credit Losses
Nonperforming assets were $40.0 million at March 31, 2024, compared to $40.1 million at December 31, 2023 and $32.4 million at March 31, 2023.
Net loan and lease charge-offs were $1.4 million for the three months ended March 31, 2024 compared to $1.1 million and $2.8 million for the three months ended December 31, 2023 and March 31, 2023, respectively.
The provision for credit losses was $1.4 million for the three months ended March 31, 2024 compared to $1.9 million and $3.4 million for the three months ended December 31, 2023 and March 31, 2023, respectively. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.30% at March 31, 2024 and December 31, 2023 and 1.28% March 31, 2023.
Dividend and Share Repurchases
On April 24, 2024, Univest declared a quarterly cash dividend of $0.21 per share to be paid on May 22, 2024 to shareholders of record as of May 8, 2024. During the quarter ended March 31, 2024, the Corporation repurchased 315,507 shares of common stock at an average price of $20.25 per share. Including brokerage fees and excise tax, the average price per share was $20.48. As of March 31, 2024, 887,182 shares are available for repurchase under the Share Repurchase Plan.
Conference Call
Univest will host a conference call to discuss first quarter 2024 results on Thursday, April 25, 2024 at 9:00 a.m. EST. Participants may preregister at https://www.netroadshow.com/events/login?show=1f74990c&confId=63330. The general public can access the call by dialing 1-833-470-1428; using Access Code 468018. A replay of the conference call will be available through May 25, 2024 by dialing 1-866-813-9403; using Access Code 450536.
About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.7 billion in assets and $5.0 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2024. 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 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, prospects and strategies 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 financial condition, results of operations, business, prospects or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) inflation and/or changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and/or lead to higher operating costs; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or credit loss provisions; (4) changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; (5) our ability to access cost-effective funding; (6) changes in economic conditions nationally and in our market; (7) economic assumptions that may impact our allowance for credit losses calculation; (8) legislative, regulatory, accounting or tax changes; (9) monetary and fiscal policies of the U.S. government, including the policies of the Board of Governors of the Federal Reserve System; (10) technological issues that may adversely affect our operations or those of our customers; (11) a failure or breach in our operational or security systems or infrastructure, including cyberattacks; (12) changes in the securities markets; (13) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (14) our ability to enter into new markets successfully and capitalize on growth opportunities and/or (15) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.
(UVSP - ER)
| Univest Financial Corporation | ||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | ||||||||||||||||||||
| March 31, 2024 | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Balance Sheet (Period End) | 03/31/24 | 12/31/23 | 09/30/23 | 06/30/23 | 03/31/23 | |||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 49,318 | $ | 72,815 | $ | 68,900 | $ | 80,795 | $ | 71,215 | ||||||||||
| Interest-earning deposits with other banks | 152,288 | 176,984 | 221,441 | 59,616 | 67,109 | |||||||||||||||
| Cash and cash equivalents | 201,606 | 249,799 | 290,341 | 140,411 | 138,324 | |||||||||||||||
| Investment securities held-to-maturity | 143,474 | 145,777 | 149,451 | 153,509 | 151,347 | |||||||||||||||
| Investment securities available for sale, net of allowance for credit losses | 350,819 | 351,553 | 334,538 | 356,164 | 367,656 | |||||||||||||||
| Investments in equity securities | 3,355 | 3,293 | 4,054 | 3,443 | 3,105 | |||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost | 37,394 | 40,499 | 42,417 | 42,811 | 43,792 | |||||||||||||||
| Loans held for sale | 13,188 | 11,637 | 16,473 | 29,526 | 5,425 | |||||||||||||||
| Loans and leases held for investment | 6,579,086 | 6,567,214 | 6,574,958 | 6,462,238 | 6,239,804 | |||||||||||||||
| Less: Allowance for credit losses, loans and leases | (85,632 | ) | (85,387 | ) | (83,837 | ) | (82,709 | ) | (80,034 | ) | ||||||||||
| Net loans and leases held for investment | 6,493,454 | 6,481,827 | 6,491,121 | 6,379,529 | 6,159,770 | |||||||||||||||
| Premises and equipment, net | 48,739 | 51,441 | 51,287 | 52,058 | 52,334 | |||||||||||||||
| Operating lease right-of-use assets | 30,702 | 31,795 | 31,053 | 30,237 | 31,663 | |||||||||||||||
| Goodwill | 175,510 | 175,510 | 175,510 | 175,510 | 175,510 | |||||||||||||||
| Other intangibles, net of accumulated amortization | 7,473 | 10,950 | 11,079 | 10,923 | 11,044 | |||||||||||||||
| Bank owned life insurance | 137,896 | 131,344 | 130,522 | 129,715 | 128,926 | |||||||||||||||
| Accrued interest and other assets | 102,958 | 95,203 | 100,220 | 96,314 | 90,095 | |||||||||||||||
| Total assets | $ | 7,746,568 | $ | 7,780,628 | $ | 7,828,066 | $ | 7,600,150 | $ | 7,358,991 | ||||||||||
| LIABILITIES | ||||||||||||||||||||
| Noninterest-bearing deposits | $ | 1,401,806 | $ | 1,468,320 | $ | 1,432,559 | $ | 1,582,767 | $ | 1,799,225 | ||||||||||
| Interest-bearing deposits: | 5,003,552 | 4,907,461 | 5,006,606 | 4,404,635 | 4,035,432 | |||||||||||||||
| Total deposits | 6,405,358 | 6,375,781 | 6,439,165 | 5,987,402 | 5,834,657 | |||||||||||||||
| Short-term borrowings | 4,816 | 6,306 | 14,676 | 244,666 | 271,881 | |||||||||||||||
| Long-term debt | 250,000 | 310,000 | 320,000 | 320,000 | 220,000 | |||||||||||||||
| Subordinated notes | 148,886 | 148,761 | 148,636 | 148,510 | 148,385 | |||||||||||||||
| Operating lease liabilities | 33,744 | 34,851 | 34,017 | 33,428 | 34,846 | |||||||||||||||
| Accrued expenses and other liabilities | 60,095 | 65,721 | 64,374 | 60,922 | 50,726 | |||||||||||||||
| Total liabilities | 6,902,899 | 6,941,420 | 7,020,868 | 6,794,928 | 6,560,495 | |||||||||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Common stock, $5 par value: 48,000,000 shares authorized and 31,556,799 shares issued | 157,784 | 157,784 | 157,784 | 157,784 | 157,784 | |||||||||||||||
| Additional paid-in capital | 298,914 | 301,066 | 300,171 | 299,212 | 298,167 | |||||||||||||||
| Retained earnings | 488,790 | 474,691 | 464,634 | 453,806 | 443,493 | |||||||||||||||
| Accumulated other comprehensive loss, net of tax benefit | (54,740 | ) | (50,646 | ) | (71,586 | ) | (61,034 | ) | (55,550 | ) | ||||||||||
| Treasury stock, at cost | (47,079 | ) | (43,687 | ) | (43,805 | ) | (44,546 | ) | (45,398 | ) | ||||||||||
| Total shareholders’ equity | 843,669 | 839,208 | 807,198 | 805,222 | 798,496 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,746,568 | $ | 7,780,628 | $ | 7,828,066 | $ | 7,600,150 | $ | 7,358,991 | ||||||||||
| For the three months ended, | ||||||||||||||||||||
| Balance Sheet (Average) | 03/31/24 | 12/31/23 | 09/30/23 | 06/30/23 | 03/31/23 | |||||||||||||||
| Assets | $ | 7,696,575 | $ | 7,865,634 | $ | 7,693,983 | $ | 7,440,798 | $ | 7,219,211 | ||||||||||
| Investment securities, net of allowance for credit losses | 500,983 | 489,587 | 506,341 | 518,995 | 515,880 | |||||||||||||||
| Loans and leases, gross | 6,577,365 | 6,594,233 | 6,537,169 | 6,372,342 | 6,164,890 | |||||||||||||||
| Deposits | 6,303,854 | 6,470,141 | 6,222,710 | 5,844,582 | 5,834,415 | |||||||||||||||
| Shareholders' equity | 842,546 | 814,941 | 811,515 | 806,709 | 789,153 | |||||||||||||||
| Univest Financial Corporation | ||||||||||||||||||||
| Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited) | ||||||||||||||||||||
| March 31, 2024 | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Summary of Major Loan and Lease Categories (Period End) | 03/31/24 | 12/31/23 | 09/30/23 | 06/30/23 | 03/31/23 | |||||||||||||||
| Commercial, financial and agricultural | $ | 1,014,568 | $ | 989,723 | $ | 1,050,004 | $ | 1,039,265 | $ | 1,032,753 | ||||||||||
| Real estate-commercial | 3,283,729 | 3,302,798 | 3,275,140 | 3,221,993 | 3,128,210 | |||||||||||||||
| Real estate-construction | 379,995 | 394,462 | 427,561 | 413,404 | 376,569 | |||||||||||||||
| Real estate-residential secured for business purpose | 524,196 | 517,002 | 516,471 | 517,521 | 498,505 | |||||||||||||||
| Real estate-residential secured for personal purpose | 922,412 | 909,015 | 861,122 | 832,632 | 779,557 | |||||||||||||||
| Real estate-home equity secured for personal purpose | 177,446 | 179,282 | 176,855 | 175,090 | 172,073 | |||||||||||||||
| Loans to individuals | 27,200 | 27,749 | 27,331 | 25,544 | 28,656 | |||||||||||||||
| Lease financings | 249,540 | 247,183 | 240,474 | 236,789 | 223,481 | |||||||||||||||
| Total loans and leases held for investment, net of deferred income | 6,579,086 | 6,567,214 | 6,574,958 | 6,462,238 | 6,239,804 | |||||||||||||||
| Less: Allowance for credit losses, loans and leases | (85,632 | ) | (85,387 | ) | (83,837 | ) | (82,709 | ) | (80,034 | ) | ||||||||||
| Net loans and leases held for investment | $ | 6,493,454 | $ | 6,481,827 | $ | 6,491,121 | $ | 6,379,529 | $ | 6,159,770 | ||||||||||
| Asset Quality Data (Period End) | 03/31/24 | 12/31/23 | 09/30/23 | 06/30/23 | 03/31/23 | |||||||||||||||
| Nonaccrual loans and leases, including nonaccrual loans held for sale* | $ | 20,363 | $ | 20,527 | $ | 18,085 | $ | 15,087 | $ | 11,362 | ||||||||||
| Accruing loans and leases 90 days or more past due | 268 | 534 | 2,135 | 55 | 1,996 | |||||||||||||||
| Total nonperforming loans and leases | 20,631 | 21,061 | 20,220 | 15,142 | 13,358 | |||||||||||||||
| Other real estate owned | 19,220 | 19,032 | 19,916 | 19,345 | 19,000 | |||||||||||||||
| Repossessed assets | 167 | - | - | - | - | |||||||||||||||
| Total nonperforming assets | $ | 40,018 | $ | 40,093 | $ | 40,136 | $ | 34,487 | $ | 32,358 | ||||||||||
| Nonaccrual loans and leases / Loans and leases held for investment | 0.31% | 0.31% | 0.28% | 0.23% | 0.18% | |||||||||||||||
| Nonperforming loans and leases / Loans and leases held for investment | 0.31% | 0.32% | 0.31% | 0.23% | 0.21% | |||||||||||||||
| Nonperforming assets / Total assets | 0.52% | 0.52% | 0.51% | 0.45% | 0.44% | |||||||||||||||
| Allowance for credit losses, loans and leases | $ | 85,632 | $ | 85,387 | $ | 83,837 | $ | 82,709 | $ | 80,034 | ||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment | 1.30% | 1.30% | 1.28% | 1.28% | 1.28% | |||||||||||||||
| Allowance for credit losses, loans and leases / Nonaccrual loans and leases | 420.53% | 415.97% | 463.57% | 548.21% | 704.40% | |||||||||||||||
| Allowance for credit losses, loans and leases / Nonperforming loans and leases | 415.06% | 405.43% | 414.62% | 546.22% | 599.15% | |||||||||||||||
| *Includes a $5.8 million loan held for sale at September 30, 2023. | ||||||||||||||||||||
| For the three months ended, | ||||||||||||||||||||
| 03/31/24 | 12/31/23 | 09/30/23 | 06/30/23 | 03/31/23 | ||||||||||||||||
| Net loan and lease charge-offs | $ | 1,406 | $ | 1,074 | $ | 969 | $ | 512 | $ | 2,842 | ||||||||||
| Net loan and lease charge-offs (annualized)/Average loans and leases | 0.09% | 0.06% | 0.06% | 0.03% | 0.19% | |||||||||||||||
| Univest Financial Corporation | ||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | ||||||||||||||||
| March 31, 2024 | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| For the three months ended, | ||||||||||||||||
| For the period: | 03/31/24 | 12/31/23 | 09/30/23 | 06/30/23 | 03/31/23 | |||||||||||
| Interest income | $ | 98,609 | $ | 101,232 | $ | 97,106 | $ | 90,139 | $ | 83,253 | ||||||
| Interest expense | 47,142 | 48,472 | 43,516 | 35,809 | 23,936 | |||||||||||
| Net interest income | 51,467 | 52,760 | 53,590 | 54,330 | 59,317 | |||||||||||
| Provision for credit losses | 1,432 | 1,931 | 2,024 | 3,428 | 3,387 | |||||||||||
| Net interest income after provision for credit losses | 50,035 | 50,829 | 51,566 | 50,902 | 55,930 | |||||||||||
| Noninterest income: | ||||||||||||||||
| Trust fee income | 2,108 | 1,943 | 1,910 | 1,924 | 1,955 | |||||||||||
| Service charges on deposit accounts | 1,871 | 1,960 | 1,816 | 1,725 | 1,547 | |||||||||||
| Investment advisory commission and fee income | 5,194 | 4,561 | 4,843 | 4,708 | 4,752 | |||||||||||
| Insurance commission and fee income | 7,201 | 4,596 | 4,852 | 5,108 | 6,487 | |||||||||||
| Other service fee income | 6,415 | 2,967 | 3,020 | 3,318 | 3,076 | |||||||||||
| Bank owned life insurance income | 842 | 823 | 806 | 789 | 767 | |||||||||||
| Net gain on mortgage banking activities | 939 | 809 | 1,216 | 1,039 | 625 | |||||||||||
| Other income | 1,025 | 961 | 228 | 1,222 | 471 | |||||||||||
| Total noninterest income | 25,595 | 18,620 | 18,691 | 19,833 | 19,680 | |||||||||||
| Noninterest expense: | ||||||||||||||||
| Salaries, benefits and commissions | 31,338 | 29,321 | 29,978 | 29,875 | 31,014 | |||||||||||
| Net occupancy | 2,872 | 2,751 | 2,594 | 2,614 | 2,727 | |||||||||||
| Equipment | 1,111 | 1,066 | 1,087 | 986 | 993 | |||||||||||
| Data processing | 4,495 | 4,444 | 4,189 | 4,137 | 4,029 | |||||||||||
| Professional fees | 1,688 | 1,768 | 1,763 | 1,669 | 1,941 | |||||||||||
| Marketing and advertising | 416 | 632 | 555 | 622 | 371 | |||||||||||
| Deposit insurance premiums | 1,135 | 1,350 | 1,258 | 1,116 | 1,101 | |||||||||||
| Intangible expenses | 187 | 212 | 220 | 253 | 253 | |||||||||||
| Restructuring charges | - | 189 | - | 1,330 | - | |||||||||||
| Other expense | 6,832 | 7,313 | 7,344 | 7,197 | 7,100 | |||||||||||
| Total noninterest expense | 50,074 | 49,046 | 48,988 | 49,799 | 49,529 | |||||||||||
| Income before taxes | 25,556 | 20,403 | 21,269 | 20,936 | 26,081 | |||||||||||
| Income tax expense | 5,251 | 4,149 | 4,253 | 4,136 | 5,047 | |||||||||||
| Net income | $ | 20,305 | $ | 16,254 | $ | 17,016 | $ | 16,800 | $ | 21,034 | ||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.69 | $ | 0.55 | $ | 0.58 | $ | 0.57 | $ | 0.72 | ||||||
| Diluted | $ | 0.69 | $ | 0.55 | $ | 0.58 | $ | 0.57 | $ | 0.71 | ||||||
| Dividends declared per share | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.21 | ||||||
| Weighted average shares outstanding | 29,413,999 | 29,500,147 | 29,479,066 | 29,439,392 | 29,312,265 | |||||||||||
| Period end shares outstanding | 29,337,919 | 29,511,721 | 29,508,128 | 29,471,124 | 29,427,696 | |||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||||
| March 31, 2024 | |||||||||||||||||||||||
| For the three months ended, | |||||||||||||||||||||||
| Profitability Ratios (annualized) | 03/31/24 | 12/31/23 | 09/30/23 | 06/30/23 | 03/31/23 | ||||||||||||||||||
| Return on average assets | 1.06% | 0.82% | 0.88% | 0.91% | 1.18% | ||||||||||||||||||
| Return on average assets, excluding restructuring | 1.06% | 0.83% | 0.88% | 0.96% | 1.18% | ||||||||||||||||||
| charges (1) | |||||||||||||||||||||||
| Return on average shareholders' equity | 9.69% | 7.91% | 8.32% | 8.35% | 10.81% | ||||||||||||||||||
| Return on average shareholders' equity, excluding | 9.69% | 7.99% | 8.32% | 8.88% | 10.81% | ||||||||||||||||||
| restructuring charges (1) | |||||||||||||||||||||||
| Return on average tangible common equity (1)(3) | 12.38% | 10.23% | 10.77% | 10.85% | 14.11% | ||||||||||||||||||
| Return on average tangible common equity, excluding | 12.38% | 10.32% | 10.77% | 11.52% | 14.11% | ||||||||||||||||||
| restructuring charges (1)(3) | |||||||||||||||||||||||
| Net interest margin (FTE) | 2.88% | 2.84% | 2.96% | 3.14% | 3.58% | ||||||||||||||||||
| Efficiency ratio (2) | 64.6% | 68.3% | 67.3% | 66.7% | 62.2% | ||||||||||||||||||
| Efficiency ratio, excluding restructuring charges (1)(2) | 64.6% | 68.0% | 67.3% | 64.9% | 62.2% | ||||||||||||||||||
| Capitalization Ratios | |||||||||||||||||||||||
| Dividends declared to net income | 30.5% | 38.1% | 36.4% | 36.8% | 29.2% | ||||||||||||||||||
| Shareholders' equity to assets (Period End) | 10.89% | 10.79% | 10.31% | 10.59% | 10.85% | ||||||||||||||||||
| Tangible common equity to tangible assets (1) | 8.80% | 8.70% | 8.22% | 8.45% | 8.63% | ||||||||||||||||||
| Common equity book value per share | $ | 28.76 | $ | 28.44 | $ | 27.36 | $ | 27.32 | $ | 27.13 | |||||||||||||
| Tangible common equity book value per share (1) | $ | 22.70 | $ | 22.41 | $ | 21.32 | $ | 21.27 | $ | 21.07 | |||||||||||||
| Regulatory Capital Ratios (Period End) | |||||||||||||||||||||||
| Tier 1 leverage ratio | 9.65% | 9.36% | 9.43% | 9.59% | 9.71% | ||||||||||||||||||
| Common equity tier 1 risk-based capital ratio | 10.71% | 10.58% | 10.32% | 10.26% | 10.43% | ||||||||||||||||||
| Tier 1 risk-based capital ratio | 10.71% | 10.58% | 10.32% | 10.26% | 10.43% | ||||||||||||||||||
| Total risk-based capital ratio | 14.11% | 13.90% | 13.58% | 13.54% | 13.78% | ||||||||||||||||||
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included below. | |||||||||||||||||||||||
| (2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income. | |||||||||||||||||||||||
| (3) Net income before amortization of intangibles to average tangible common equity. | |||||||||||||||||||||||
| Univest Financial Corporation | ||||||||||||||
| Average Balances and Interest Rates (Unaudited) | ||||||||||||||
| For the Three Months Ended, | ||||||||||||||
| Tax Equivalent Basis | March 31, 2024 | December 31, 2023 | ||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | |||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||
| Assets: | ||||||||||||||
| Interest-earning deposits with other banks | $ | 120,845 | $ | 1,609 | 5.36 | % | $ | 280,693 | $ | 3,804 | 5.38 | % | ||
| Obligations of state and political subdivisions* | 1,951 | 12 | 2.47 | 2,277 | 14 | 2.44 | ||||||||
| Other debt and equity securities | 499,032 | 3,647 | 2.94 | 487,310 | 3,678 | 2.99 | ||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 39,115 | 724 | 7.44 | 41,361 | 767 | 7.36 | ||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 660,943 | 5,992 | 3.65 | 811,641 | 8,263 | 4.04 | ||||||||
| Commercial, financial, and agricultural loans | 934,649 | 16,523 | 7.11 | 973,450 | 17,485 | 7.13 | ||||||||
| Real estate—commercial and construction loans | 3,575,142 | 50,641 | 5.70 | 3,590,477 | 50,715 | 5.60 | ||||||||
| Real estate—residential loans | 1,618,188 | 19,555 | 4.86 | 1,585,705 | 19,133 | 4.79 | ||||||||
| Loans to individuals | 27,315 | 548 | 8.07 | 27,667 | 558 | 8.00 | ||||||||
| Municipal loans and leases * | 232,380 | 2,464 | 4.26 | 230,394 | 2,438 | 4.20 | ||||||||
| Lease financings | 189,691 | 3,169 | 6.72 | 186,540 | 2,897 | 6.16 | ||||||||
| Gross loans and leases | 6,577,365 | 92,900 | 5.68 | 6,594,233 | 93,226 | 5.61 | ||||||||
| Total interest-earning assets | 7,238,308 | 98,892 | 5.49 | 7,405,874 | 101,489 | 5.44 | ||||||||
| Cash and due from banks | 54,870 | 54,981 | ||||||||||||
| Allowance for credit losses, loans and leases | (86,495 | ) | (84,386 | ) | ||||||||||
| Premises and equipment, net | 50,592 | 51,489 | ||||||||||||
| Operating lease right-of-use assets | 31,121 | 31,251 | ||||||||||||
| Other assets | 408,179 | 406,425 | ||||||||||||
| Total assets | $ | 7,696,575 | $ | 7,865,634 | ||||||||||
| Liabilities: | ||||||||||||||
| Interest-bearing checking deposits | $ | 1,180,696 | $ | 8,218 | 2.80 | % | $ | 1,193,386 | $ | 8,409 | 2.80 | % | ||
| Money market savings | 1,705,291 | 19,220 | 4.53 | 1,845,153 | 21,133 | 4.54 | ||||||||
| Regular savings | 769,926 | 905 | 0.47 | 784,937 | 874 | 0.44 | ||||||||
| Time deposits | 1,238,878 | 13,630 | 4.42 | 1,188,054 | 12,748 | 4.26 | ||||||||
| Total time and interest-bearing deposits | 4,894,791 | 41,973 | 3.45 | 5,011,530 | 43,164 | 3.42 | ||||||||
| Short-term borrowings | 10,127 | 5 | 0.20 | 9,814 | 1 | 0.04 | ||||||||
| Long-term debt | 292,486 | 2,883 | 3.96 | 318,805 | 3,026 | 3.77 | ||||||||
| Subordinated notes | 148,818 | 2,281 | 6.16 | 148,693 | 2,281 | 6.09 | ||||||||
| Total borrowings | 451,431 | 5,169 | 4.61 | 477,312 | 5,308 | 4.41 | ||||||||
| Total interest-bearing liabilities | 5,346,222 | 47,142 | 3.55 | 5,488,842 | 48,472 | 3.50 | ||||||||
| Noninterest-bearing deposits | 1,409,063 | 1,458,610 | ||||||||||||
| Operating lease liabilities | 34,166 | 34,255 | ||||||||||||
| Accrued expenses and other liabilities | 64,578 | 68,986 | ||||||||||||
| Total liabilities | 1,507,807 | 7,050,693 | ||||||||||||
| Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") | 6,854,029 | 2.81 | 6,947,452 | 2.77 | ||||||||||
| Shareholders' Equity: | ||||||||||||||
| Common stock | 157,784 | 157,784 | ||||||||||||
| Additional paid-in capital | 300,679 | 300,558 | ||||||||||||
| Retained earnings and other equity | 384,083 | 356,599 | ||||||||||||
| Total shareholders' equity | 842,546 | 814,941 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 7,696,575 | $ | 7,865,634 | ||||||||||
| Net interest income | $ | 51,750 | $ | 53,017 | ||||||||||
| Net interest spread | 1.94 | 1.94 | ||||||||||||
| Effect of net interest-free funding sources | 0.94 | 0.90 | ||||||||||||
| Net interest margin | 2.88 | % | 2.84 | % | ||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 135.39 | % | 134.93 | % | ||||||||||
| * Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets. | ||||||||||||||
| Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. | ||||||||||||||
| Net interest income includes net deferred costs amortization of 453 thousand and $428 thousand for the three months ended March 31, 2024 and December 31, 2023, respectively. | ||||||||||||||
| 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, 2024 and December 31, 2023 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 | 2024 | 2023 | ||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | |||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||
| Assets: | ||||||||||||||
| Interest-earning deposits with other banks | $ | 120,845 | $ | 1,609 | 5.36 | % | $ | 47,835 | $ | 479 | 4.06 | % | ||
| Obligations of state and political subdivisions* | 1,951 | 12 | 2.47 | 2,286 | 17 | 3.02 | ||||||||
| Other debt and equity securities | 499,032 | 3,647 | 2.94 | 513,594 | 3,495 | 2.76 | ||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 39,115 | 724 | 7.44 | 34,742 | 609 | 7.11 | ||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 660,943 | 5,992 | 3.65 | 598,457 | 4,600 | 3.12 | ||||||||
| Commercial, financial, and agricultural loans | 934,649 | 16,523 | 7.11 | 991,876 | 15,538 | 6.35 | ||||||||
| Real estate—commercial and construction loans | 3,575,142 | 50,641 | 5.70 | 3,342,199 | 42,421 | 5.15 | ||||||||
| Real estate—residential loans | 1,618,188 | 19,555 | 4.86 | 1,408,292 | 15,730 | 4.53 | ||||||||
| Loans to individuals | 27,315 | 548 | 8.07 | 27,254 | 449 | 6.68 | ||||||||
| Municipal loans and leases* | 232,380 | 2,464 | 4.26 | 229,955 | 2,341 | 4.13 | ||||||||
| Lease financings | 189,691 | 3,169 | 6.72 | 165,314 | 2,541 | 6.23 | ||||||||
| Gross loans and leases | 6,577,365 | 92,900 | 5.68 | 6,164,890 | 79,020 | 5.20 | ||||||||
| Total interest-earning assets | 7,238,308 | 98,892 | 5.49 | 6,763,347 | 83,620 | 5.01 | ||||||||
| Cash and due from banks | 54,870 | 58,035 | ||||||||||||
| Allowance for credit losses, loans and leases | (86,495 | ) | (79,977 | ) | ||||||||||
| Premises and equipment, net | 50,592 | 51,583 | ||||||||||||
| Operating lease right-of-use assets | 31,121 | 31,303 | ||||||||||||
| Other assets | 408,179 | 394,920 | ||||||||||||
| Total assets | $ | 7,696,575 | $ | 7,219,211 | ||||||||||
| Liabilities: | ||||||||||||||
| Interest-bearing checking deposits | $ | 1,180,696 | $ | 8,218 | 2.80 | % | $ | 857,891 | $ | 3,164 | 1.50 | % | ||
| Money market savings | 1,705,291 | 19,220 | 4.53 | 1,489,129 | 11,081 | 3.02 | ||||||||
| Regular savings | 769,926 | 905 | 0.47 | 985,716 | 669 | 0.28 | ||||||||
| Time deposits | 1,238,878 | 13,630 | 4.42 | 566,308 | 3,422 | 2.45 | ||||||||
| Total time and interest-bearing deposits | 4,894,791 | 41,973 | 3.45 | 3,899,044 | 18,336 | 1.91 | ||||||||
| Short-term borrowings | 10,127 | 5 | 0.20 | 240,318 | 2,728 | 4.60 | ||||||||
| Long-term debt | 292,486 | 2,883 | 3.96 | 112,222 | 591 | 2.14 | ||||||||
| Subordinated notes | 148,818 | 2,281 | 6.16 | 148,319 | 2,281 | 6.24 | ||||||||
| Total borrowings | 451,431 | 5,169 | 4.61 | 500,859 | 5,600 | 4.53 | ||||||||
| Total interest-bearing liabilities | 5,346,222 | 47,142 | 3.55 | 4,399,903 | 23,936 | 2.21 | ||||||||
| Noninterest-bearing deposits | 1,409,063 | 1,935,371 | ||||||||||||
| Operating lease liabilities | 34,166 | 34,438 | ||||||||||||
| Accrued expenses and other liabilities | 64,578 | 60,346 | ||||||||||||
| Total liabilities | 1,507,807 | 6,430,058 | ||||||||||||
| Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds") | 6,854,029 | 2.81 | 6,335,274 | 1.53 | ||||||||||
| Shareholders' Equity: | ||||||||||||||
| Common stock | 157,784 | 157,784 | ||||||||||||
| Additional paid-in capital | 300,679 | 300,293 | ||||||||||||
| Retained earnings and other equity | 384,083 | 331,076 | ||||||||||||
| Total shareholders' equity | 842,546 | 789,153 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 7,696,575 | $ | 7,219,211 | ||||||||||
| Net interest income | $ | 51,750 | $ | 59,684 | ||||||||||
| Net interest spread | 1.94 | 2.80 | ||||||||||||
| Effect of net interest-free funding sources | 0.94 | 0.78 | ||||||||||||
| Net interest margin | 2.88 | % | 3.58 | % | ||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 135.39 | % | 153.72 | % | ||||||||||
| * Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets. | ||||||||||||||
| Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. | ||||||||||||||
| Net interest income includes net deferred costs amortization of $453 thousand and $465 thousand for the three months ended March 31, 2024 and 2023, respectively. | ||||||||||||||
| 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, 2024 and 2023 have been calculated using the Corporation’s federal applicable rate of 21.0%. | ||||||||||||||
| Univest Financial Corporation | |||||
| Loan Portfolio Overview (Unaudited) | |||||
| March 31, 2024 | |||||
| (Dollars in thousands) | |||||
| Industry Description | Total Outstanding Balance | % of Commercial Loan Portfolio | |||
| CRE - Retail | $ | 465,915 | 9.0 | % | |
| Animal Production | 361,143 | 6.9 | |||
| CRE - Multi-family | 318,337 | 6.1 | |||
| CRE - Office | 298,301 | 5.7 | |||
| CRE - 1-4 Family Residential Investment | 289,167 | 5.6 | |||
| CRE - Industrial / Warehouse | 248,041 | 4.8 | |||
| Hotels & Motels (Accommodation) | 193,058 | 3.7 | |||
| Specialty Trade Contractors | 161,917 | 3.1 | |||
| Education | 153,971 | 3.0 | |||
| Homebuilding (tract developers, remodelers) | 152,798 | 2.9 | |||
| Nursing and Residential Care Facilities | 132,809 | 2.6 | |||
| Motor Vehicle and Parts Dealers | 132,677 | 2.6 | |||
| Merchant Wholesalers, Durable Goods | 122,481 | 2.4 | |||
| CRE - Mixed-Use - Residential | 116,749 | 2.2 | |||
| Crop Production | 104,137 | 2.0 | |||
| Repair and Maintenance | 103,139 | 2.0 | |||
| Wood Product Manufacturing | 90,017 | 1.7 | |||
| Real Estate Lenders, Secondary Market Financing | 86,382 | 1.7 | |||
| Rental and Leasing Services | 76,500 | 1.5 | |||
| Fabricated Metal Product Manufacturing | 75,371 | 1.4 | |||
| CRE - Mixed-Use - Commercial | 72,763 | 1.4 | |||
| Religious Organizations, Advocacy Groups | 71,715 | 1.4 | |||
| Personal and Laundry Services | 71,534 | 1.4 | |||
| Administrative and Support Services | 70,224 | 1.3 | |||
| Amusement, Gambling, and Recreation Industries | 68,644 | 1.3 | |||
| Merchant Wholesalers, Nondurable Goods | 67,775 | 1.3 | |||
| Food Services and Drinking Places | 66,625 | 1.3 | |||
| Private Equity & Special Purpose Entities (except 52592) | 66,517 | 1.3 | |||
| Miniwarehouse / Self-Storage | 61,996 | 1.2 | |||
| Food Manufacturing | 60,794 | 1.2 | |||
| Truck Transportation | 53,952 | 1.0 | |||
| Industries with >$50 million in outstandings | $ | 4,415,449 | 84.9 | % | |
| Industries with <$50 million in outstandings | $ | 787,039 | 15.1 | % | |
| Total Commercial Loans | $ | 5,202,488 | 100.0 | % | |
| Consumer Loans and Lease Financings | Total Outstanding Balance | ||||
| Real Estate-Residential Secured for Personal Purpose | 922,412 | ||||
| Real Estate-Home Equity Secured for Personal Purpose | 177,446 | ||||
| Loans to Individuals | 27,200 | ||||
| Lease Financings | 249,540 | ||||
| Total - Consumer Loans and Lease Financings | $ | 1,376,598 | |||
| Total | $ | 6,579,086 | |||
| Univest Financial Corporation | ||||||||||||||||||||||
| Non-GAAP Reconciliation | ||||||||||||||||||||||
| March 31, 2024 | ||||||||||||||||||||||
| Non-GAAP to GAAP Reconciliation | ||||||||||||||||||||||
| Management uses non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release. | ||||||||||||||||||||||
| As of or for the three months ended, | ||||||||||||||||||||||
| (Dollars in thousands) | 03/31/24 | 12/31/23 | 09/30/23 | 06/30/23 | 03/31/23 | |||||||||||||||||
| Restructuring charges (a) | $ | - | $ | 189 | $ | - | $ | 1,330 | $ | - | ||||||||||||
| Tax effect of restructuring charges | - | (40 | ) | - | (279 | ) | - | |||||||||||||||
| Restructuring charges, net of tax | $ | - | $ | 149 | $ | - | $ | 1,051 | $ | - | ||||||||||||
| Net income | $ | 20,305 | $ | 16,254 | $ | 17,016 | $ | 16,800 | $ | 21,034 | ||||||||||||
| Amortization of intangibles, net of tax | 148 | 167 | 174 | 200 | 200 | |||||||||||||||||
| Net income before amortization of intangibles | $ | 20,453 | $ | 16,421 | $ | 17,190 | $ | 17,000 | $ | 21,234 | ||||||||||||
| Shareholders' equity | $ | 843,669 | $ | 839,208 | $ | 807,198 | $ | 805,222 | $ | 798,496 | ||||||||||||
| Goodwill | (175,510 | ) | (175,510 | ) | (175,510 | ) | (175,510 | ) | (175,510 | ) | ||||||||||||
| Other intangibles (b) | (2,273 | ) | (2,405 | ) | (2,558 | ) | (2,767 | ) | (3,054 | ) | ||||||||||||
| Tangible common equity | $ | 665,886 | $ | 661,293 | $ | 629,130 | $ | 626,945 | $ | 619,932 | ||||||||||||
| Total assets | $ | 7,746,568 | $ | 7,780,628 | $ | 7,828,066 | $ | 7,600,150 | $ | 7,358,991 | ||||||||||||
| Goodwill | (175,510 | ) | (175,510 | ) | (175,510 | ) | (175,510 | ) | (175,510 | ) | ||||||||||||
| Other intangibles (b) | (2,273 | ) | (2,405 | ) | (2,558 | ) | (2,767 | ) | (3,054 | ) | ||||||||||||
| Tangible assets | $ | 7,568,785 | $ | 7,602,713 | $ | 7,649,998 | $ | 7,421,873 | $ | 7,180,427 | ||||||||||||
| Average shareholders' equity | $ | 842,546 | $ | 814,941 | $ | 811,515 | $ | 806,709 | $ | 789,153 | ||||||||||||
| Average goodwill | (175,510 | ) | (175,510 | ) | (175,510 | ) | (175,510 | ) | (175,510 | ) | ||||||||||||
| Average other intangibles (b) | (2,318 | ) | (2,477 | ) | (2,680 | ) | (2,924 | ) | (3,137 | ) | ||||||||||||
| Average tangible common equity | $ | 664,718 | $ | 636,954 | $ | 633,325 | $ | 628,275 | $ | 610,506 | ||||||||||||
| (a) Associated with branch optimization and headcount rationlization expense management strategies | ||||||||||||||||||||||
| (b) Amount does not include mortgage servicing rights | ||||||||||||||||||||||
CONTACT: Brian J. Richardson UNIVEST FINANCIAL CORPORATION Chief Financial Officer 215-721-2446, [email protected]
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