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Univest Financial Corporation Reports Fourth Quarter and 2023 Results

SOUDERTON, Pa., Jan. 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 December 31, 2023 was $16.3 million, or $0.55 diluted earnings per share, compared to net income of $23.8 million, or $0.81 diluted earnings per share, for the quarter ended December 31, 2022.

Loans
Gross loans and leases decreased $7.7 million, or 0.1% (0.5% annualized), from September 30, 2023, primarily due to decreases in commercial and construction loans. Gross loans and leases increased $444.0 million, or 7.3%, from December 31, 2022, primarily due to increases in commercial real estate, residential mortgage loans and lease financings.

Deposits and Liquidity
Total deposits decreased $63.4 million, or 1.0% (3.9% annualized), from September 30, 2023, due to decreases in commercial, public funds and brokered deposits, partially offset by an increase in consumer deposits. Total deposits increased $462.3 million, or 7.8%, from December 31, 2022, primarily due to increases in public funds and brokered deposits partially, offset by decreases in commercial and consumer deposits. Noninterest-bearing deposits represented 23.0% of total deposits at December 31, 2023, up from 22.2% at September 30, 2023. At December 31, 2023, unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, represented 23.3% of total deposits, up from 20.8% at September 30, 2023.

As of December 31, 2023, the Corporation had cash and cash equivalents totaling $249.8 million. The Corporation and its subsidiaries had committed borrowing capacity of $3.4 billion at December 31, 2023, of which $1.9 billion was available. The Corporation and its subsidiaries also maintained unused uncommitted funding sources from correspondent banks of $369.0 million at December 31, 2023. 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availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.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 $52.8 million for the three months ended December 31, 2023 decreased $830 thousand, or 1.5%, from the three months ended September 30, 2023, and $9.2 million, or 14.8%, from the three months ended December 31, 2022. The decrease in net interest income was due to increases in the cost of funds and the average balance of interest-bearing liabilities, partially offset by an increase in the yield and average balance of interest-earning assets.

Net interest margin, on a tax-equivalent basis, was 2.84% for the fourth quarter of 2023, compared to 2.96% for the third quarter of 2023 and 3.76% for the fourth quarter of 2022. Excess liquidity reduced net interest margin by approximately ten basis points for the quarter ended December 31, 2023 compared to approximately four basis points for the quarter ended September 30, 2023 and approximately one basis point for the quarter ended December 31, 2022.

Noninterest Income
Noninterest income for the quarter ended December 31, 2023 was $18.6 million, a decrease of $1.8 million, or 9.0%, from the comparable period in the prior year.

Investment advisory commission and fee income decreased $1.0 million, or 18.3%, for the quarter ended December 31, 2023 compared to the comparable period in the prior year. This decrease was primarily driven by a $1.2 million adjustment recorded in the fourth quarter of 2022 for previously unrecorded revenue.

Bank owned life insurance ("BOLI") decreased $407 thousand, or 33.1%, for the quarter ended December 31, 2023 compared to the comparable period in the prior year, primarily due to a death benefit claim of $526 thousand received in the fourth quarter of 2022.

Other income decreased $1.2 million, or 55.6%, for the quarter ended December 31, 2023 compared to the comparable period in the prior year, primarily due to a $1.5 million decrease in interest rate swap income.

Net gain on mortgage banking activities increased $373 thousand, or 85.6%, for the quarter ended December 31, 2023 compared to the comparable period in the prior year, primarily due to increased salable volume.

Noninterest Expense
Noninterest expense for the quarter ended December 31, 2023 was $49.0 million, an increase of $1.7 million, or 3.6%, from the comparable period in the prior year.

Salaries, benefits and commissions increased $293 thousand, or 1.0%, for the quarter ended December 31, 2023 compared to the comparable period in the prior year. The increase reflects our expansion into Maryland and Western Pennsylvania, increased medical claims expense and reduced capitalized compensation, driven by lower loan production. These increases were partially offset by decreases due to the staff reduction that was announced during the second quarter of 2023 and a reduction in incentive compensation due to decreased profitability in current the year.

Deposit insurance premiums increased $642 thousand, or 90.7%, for the quarter ended December 31, 2023 compared to the comparable period in the prior year, primarily driven by an increased industry-wide assessment rate and an increase in our assessment base. Data processing increased $405 thousand, or 10.0%, for the quarter ended December 31, 2023 compared to the comparable period in the prior year, primarily due to our investments in technology in recent years and general price increases incurred in the second half of 2023. Other expense increased $343 thousand, or 4.9%, for the quarter ended December 31, 2023 compared to the comparable period in the prior year, primarily due to increases in retirement plan costs of $236 thousand.

Tax Provision
The effective income tax rate was 20.3% for the quarter ended December 31, 2023, compared to an effective tax rate of 19.6% for the quarter ended December 31, 2022. The effective tax rates for the quarters ended December 31, 2023 and 2022 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 $40.1 million at December 31, 2023 and September 30, 2023 and $33.5 million at December 31, 2022.

Net loan and lease charge-offs were $1.1 million for the three months ended December 31, 2023 compared to $969 thousand and $908 thousand for the three months ended September 30, 2023 and December 31, 2022, respectively. Net loan and lease charge-offs were $5.4 million and $3.9 million for the years ended December 31, 2023 and December 31, 2022, respectively.

The provision for credit losses was $1.9 million for the three months ended December 31, 2023 compared to $2.0 million and $5.4 million for the three months ended September 30, 2023 and December 31, 2022, respectively. The provision for credit losses was $10.8 million for the year ended December 31, 2023 compared to $12.2 million for the year ended December 31, 2022. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.30% at December 31, 2023 compared to 1.28% at September 30, 2023 and 1.29% December 31, 2022.

Dividend
On January 24, 2024, Univest declared a quarterly cash dividend of $0.21 per share to be paid on February 21, 2024 to shareholders of record as of February 7, 2024.

Conference Call
Univest will host a conference call to discuss fourth quarter 2023 results on Thursday, January 25, 2024 at 9:00 a.m. EST. Participants may preregister at https://www.netroadshow.com/events/login?show=bfe2e840&confId=59386. The general public can access the call by dialing 1-833-470-1428; using Access Code 989044. A replay of the conference call will be available through February 22, 2024 by dialing 1-866-813-9403; using Access Code 607497.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.8 billion in assets and $4.7 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 2023. 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) changes in economic conditions nationally and in our market; (6) economic assumptions that may impact our allowance for credit losses calculation; (7) legislative, regulatory, accounting or tax changes; (8) monetary and fiscal policies of the U.S. government, including the policies of the Board of Governors of the Federal Reserve System; (9) technological issues that may adversely affect our operations or those of our customers; (10) a failure or breach in our operational or security systems or infrastructure, including cyberattacks; (11) changes in the securities markets; (12) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (13) our ability to enter into new markets successfully and capitalize on growth opportunities and/or (14) 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)  
December 31, 2023  
(Dollars in thousands)                              
                               
Balance Sheet (Period End)   12/31/23   09/30/23   06/30/23   03/31/23   12/31/22          
ASSETS                              
Cash and due from banks   $ 72,815     $ 68,900     $ 80,795     $ 71,215     $ 84,176            
Interest-earning deposits with other banks     176,984       221,441       59,616       67,109       68,623            
Cash and cash equivalents     249,799       290,341       140,411       138,324       152,799            
Investment securities held-to-maturity     145,777       149,451       153,509       151,347       154,727            
Investment securities available for sale, net of allowance for credit losses     351,553       334,538       356,164       367,656       350,256            
Investments in equity securities     3,293       4,054       3,443       3,105       2,579            
Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost     40,499       42,417       42,811       43,792       33,841            
Loans held for sale     11,637       16,473       29,526       5,425       5,037            
Loans and leases held for investment     6,567,214       6,574,958       6,462,238       6,239,804       6,123,230            
Less: Allowance for credit losses, loans and leases     (85,387 )     (83,837 )     (82,709 )     (80,034 )     (79,004 )          
Net loans and leases held for investment     6,481,827       6,491,121       6,379,529       6,159,770       6,044,226            
Premises and equipment, net     51,441       51,287       52,058       52,334       50,939            
Operating lease right-of-use assets     31,795       31,053       30,237       31,663       30,059            
Goodwill     175,510       175,510       175,510       175,510       175,510            
Other intangibles, net of accumulated amortization     10,950       11,079       10,923       11,044       11,384            
Bank owned life insurance     131,344       130,522       129,715       128,926       120,297            
Accrued interest and other assets     91,793       100,220       96,314       90,095       90,362            
Total assets   $ 7,777,218     $ 7,828,066     $ 7,600,150     $ 7,358,991     $ 7,222,016            
                               
LIABILITIES                              
Noninterest-bearing deposits   $ 1,468,320     $ 1,432,559     $ 1,582,767     $ 1,799,225     $ 2,047,263            
Interest-bearing deposits:     4,907,461       5,006,606       4,404,635       4,035,432       3,866,263            
Total deposits     6,375,781       6,439,165       5,987,402       5,834,657       5,913,526            
Short-term borrowings     6,306       14,676       244,666       271,881       197,141            
Long-term debt     310,000       320,000       320,000       220,000       95,000            
Subordinated notes     148,761       148,636       148,510       148,385       148,260            
Operating lease liabilities     34,851       34,017       33,428       34,846       33,153            
Accrued expenses and other liabilities     62,311       64,374       60,922       50,726       58,436            
Total liabilities     6,938,010       7,020,868       6,794,928       6,560,495       6,445,516            
                               
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     301,066       300,171       299,212       298,167       300,808            
Retained earnings     474,691       464,634       453,806       443,493       428,637            
Accumulated other comprehensive loss, net of tax benefit     (50,646 )     (71,586 )     (61,034 )     (55,550 )     (62,104 )          
Treasury stock, at cost     (43,687 )     (43,805 )     (44,546 )     (45,398 )     (48,625 )          
Total shareholders’ equity     839,208       807,198       805,222       798,496       776,500            
Total liabilities and shareholders’ equity   $ 7,777,218     $ 7,828,066     $ 7,600,150     $ 7,358,991     $ 7,222,016            
                               
                               
    For the three months ended,   For the twelve months ended,  
Balance Sheet (Average)   12/31/23   09/30/23   06/30/23   03/31/23   12/31/22   12/31/23   12/31/22  
Assets   $ 7,865,523     $ 7,693,983     $ 7,440,798     $ 7,219,211     $ 7,019,381     $ 7,557,030   $ 6,956,292  
Investment securities, net of allowance for credit losses     489,587       506,341       518,995       515,880       505,717       507,625     515,192  
Loans and leases, gross     6,594,233       6,537,169       6,372,342       6,164,890       5,979,581       6,418,664     5,651,265  
Deposits     6,470,141       6,222,710       5,844,582       5,834,415       5,837,823       6,095,058     5,841,832  
Shareholders' equity     814,941       811,515       806,709       789,153       767,192       805,667     771,499  

Univest Financial Corporation
Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
December 31, 2023
(Dollars in thousands)                    
                     
Summary of Major Loan and Lease Categories (Period End)   12/31/23   09/30/23   06/30/23   03/31/23   12/31/22
Commercial, financial and agricultural   $ 989,723     $ 1,050,004     $ 1,039,265     $ 1,032,753     $ 1,088,928  
Real estate-commercial     3,302,798       3,275,140       3,221,993       3,128,210       3,027,955  
Real estate-construction     394,462       427,561       413,404       376,569       381,811  
Real estate-residential secured for business purpose     517,002       516,471       517,521       498,505       478,254  
Real estate-residential secured for personal purpose     909,015       861,122       832,632       779,557       730,395  
Real estate-home equity secured for personal purpose     179,282       176,855       175,090       172,073       176,699  
Loans to individuals     27,749       27,331       25,544       28,656       27,873  
Lease financings     247,183       240,474       236,789       223,481       211,315  
Total loans and leases held for investment, net of deferred income     6,567,214       6,574,958       6,462,238       6,239,804       6,123,230  
Less: Allowance for credit losses, loans and leases     (85,387 )     (83,837 )     (82,709 )     (80,034 )     (79,004 )
Net loans and leases held for investment   $ 6,481,827     $ 6,491,121     $ 6,379,529     $ 6,159,770     $ 6,044,226  
                     
                     
Asset Quality Data (Period End)   12/31/23   09/30/23   06/30/23   03/31/23   12/31/22
Nonaccrual loans and leases, including nonaccrual loans held for sale*   $ 20,527     $ 18,085     $ 15,087     $ 11,362     $ 13,353  
Accruing loans and leases 90 days or more past due     534       2,135       55       1,996       875  
Total nonperforming loans and leases     21,061       20,220       15,142       13,358       14,228  
Other real estate owned     19,032       19,916       19,345       19,000       19,258  
Total nonperforming assets   $ 40,093     $ 40,136     $ 34,487     $ 32,358     $ 33,486  
Nonaccrual loans and leases / Loans and leases held for investment     0.31 %     0.28 %     0.23 %     0.18 %     0.22 %
Nonperforming loans and leases / Loans and leases held for investment     0.32 %     0.31 %     0.23 %     0.21 %     0.23 %
Nonperforming assets / Total assets     0.52 %     0.51 %     0.45 %     0.44 %     0.46 %
                     
Allowance for credit losses, loans and leases   $ 85,387     $ 83,837     $ 82,709     $ 80,034     $ 79,004  
Allowance for credit losses, loans and leases / Loans and leases held for investment     1.30 %     1.28 %     1.28 %     1.28 %     1.29 %
Allowance for credit losses, loans and leases / Nonaccrual loans and leases     415.97 %     463.57 %     548.21 %     704.40 %     591.66 %
Allowance for credit losses, loans and leases / Nonperforming loans and leases     405.43 %     414.62 %     546.22 %     599.15 %     555.27 %
*Includes a $5.8 million loan held for sale at September 30, 2023.                    

Univest Financial Corporation  
Consolidated Selected Financial Data (Unaudited)  
December 31, 2023  
(Dollars in thousands, except per share data)                            
  For the three months ended,   For the twelve months ended,  
For the period: 12/31/23   09/30/23   06/30/23   03/31/23   12/31/22   12/31/23   12/31/22  
Interest income $ 101,232   $ 97,106   $ 90,139   $ 83,253   $ 77,401   $ 371,730   $ 252,193  
Interest expense   48,472     43,516     35,809     23,936     15,485     151,733     33,896  
     Net interest income   52,760     53,590     54,330     59,317     61,916     219,997     218,297  
Provision for credit losses   1,931     2,024     3,428     3,387     5,416     10,770     12,198  
Net interest income after provision for credit losses   50,829     51,566     50,902     55,930     56,500     209,227     206,099  
Noninterest income:                            
     Trust fee income   1,943     1,910     1,924     1,955     1,808     7,732     7,743  
     Service charges on deposit accounts   1,960     1,816     1,725     1,547     1,575     7,048     6,175  
     Investment advisory commission and fee income   4,561     4,843     4,708     4,752     5,585     18,864     19,748  
     Insurance commission and fee income   4,596     4,852     5,108     6,487     4,424     21,043     19,065  
     Other service fee income   2,967     3,020     3,318     3,076     3,236     12,381     12,425  
     Bank owned life insurance income   823     806     789     767     1,230     3,185     3,787  
     Net gain on sales of investment securities   -     -     -     -     -     -     30  
     Net gain on mortgage banking activities   809     1,216     1,039     625     436     3,689     4,412  
     Other income   961     228     1,222     471     2,164     2,882     4,500  
Total noninterest income   18,620     18,691     19,833     19,680     20,458     76,824     77,885  
Noninterest expense:                            
Salaries, benefits and commissions   29,321     29,978     29,875     31,014     29,028     120,188     115,806  
Net occupancy   2,751     2,594     2,614     2,727     2,551     10,686     10,193  
Equipment   1,066     1,087     986     993     977     4,132     3,904  
Data processing   4,444     4,189     4,137     4,029     4,039     16,799     15,215  
Professional fees   1,768     1,763     1,669     1,941     1,829     7,141     9,332  
Marketing and advertising   632     555     622     371     739     2,180     2,462  
Deposit insurance premiums   1,350     1,258     1,116     1,101     708     4,825     3,075  
Intangible expenses   212     220     253     253     301     938     1,293  
Restructuring charges   189     -     1,330     -     184     1,519     184  
Other expense   7,313     7,344     7,197     7,100     6,970     28,954     25,310  
Total noninterest expense   49,046     48,988     49,799     49,529     47,326     197,362     186,774  
Income before taxes   20,403     21,269     20,936     26,081     29,632     88,689     97,210  
Income tax expense   4,149     4,253     4,136     5,047     5,796     17,585     19,090  
Net income $ 16,254   $ 17,016   $ 16,800   $ 21,034   $ 23,836   $ 71,104   $ 78,120  
Net income per share:                            
     Basic $ 0.55   $ 0.58   $ 0.57   $ 0.72   $ 0.82   $ 2.42   $ 2.66  
     Diluted $ 0.55   $ 0.58   $ 0.57   $ 0.71   $ 0.81   $ 2.41   $ 2.64  
Dividends declared per share $ 0.21   $ 0.21   $ 0.21   $ 0.21   $ 0.21   $ 0.84   $ 0.83  
Weighted average shares outstanding   29,500,147     29,479,066     29,439,392     29,312,265     29,251,293     29,433,359     29,392,606  
Period end shares outstanding   29,511,721     29,508,128     29,471,124     29,427,696     29,271,915     29,511,721     29,271,915  
                             

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
December 31, 2023
                                   
                                   
                                   
          For the three months ended,   For the twelve months ended,
Profitability Ratios (annualized)     12/31/23   09/30/23   06/30/23   03/31/23   12/31/22   12/31/23   12/31/22
                                   
Return on average assets       0.82 %     0.88 %     0.91 %     1.18 %     1.35 %     0.94 %     1.12 %
Return on average assets, excluding restructuring     0.83 %     0.88 %     0.96 %     1.18 %     1.36 %     0.96 %     1.13 %
charges (1)                                  
Return on average shareholders' equity     7.91 %     8.32 %     8.35 %     10.81 %     12.33 %     8.83 %     10.13 %
Return on average shareholders' equity, excluding     7.99 %     8.32 %     8.88 %     10.81 %     12.40 %     8.97 %     10.14 %
restructuring charges (1)                              
Return on average tangible common equity (1)(3)     10.23 %     10.77 %     10.85 %     14.11 %     16.23 %     11.45 %     13.36 %
Return on average tangible common equity, excluding     10.32 %     10.77 %     11.52 %     14.11 %     16.33 %     11.64 %     13.39 %
restructuring charges (1)(3)                              
Net interest margin (FTE)       2.84 %     2.96 %     3.14 %     3.58 %     3.76 %     3.12 %     3.38 %
Efficiency ratio (2)         68.3 %     67.3 %     66.7 %     62.2 %     56.9 %     66.0 %     62.4 %
Efficiency ratio, excluding restructuring charges (1)(2)     68.0 %     67.3 %     64.9 %     62.2 %     56.7 %     65.5 %     62.4 %
                                   
Capitalization Ratios                                
                                   
Dividends declared to net income       38.1 %     36.4 %     36.8 %     29.2 %     25.8 %     34.8 %     31.2 %
Shareholders' equity to assets (Period End)     10.79 %     10.31 %     10.59 %     10.85 %     10.75 %     10.79 %     10.75 %
Tangible common equity to tangible assets (1)     8.70 %     8.22 %     8.45 %     8.63 %     8.49 %     8.70 %     8.49 %
Common equity book value per share   $ 28.44     $ 27.36     $ 27.32     $ 27.13     $ 26.53     $ 28.44     $ 26.53  
Tangible common equity book value per share (1)   $ 22.41     $ 21.32     $ 21.27     $ 21.07     $ 20.42     $ 22.41     $ 20.42  
                                   
Regulatory Capital Ratios (Period End)                            
Tier 1 leverage ratio         9.36 %     9.43 %     9.59 %     9.71 %     9.81 %     9.36 %     9.81 %
Common equity tier 1 risk-based capital ratio     10.61 %     10.32 %     10.26 %     10.43 %     10.37 %     10.61 %     10.37 %
Tier 1 risk-based capital ratio       10.61 %     10.32 %     10.26 %     10.43 %     10.37 %     10.61 %     10.37 %
Total risk-based capital ratio       13.93 %     13.58 %     13.54 %     13.78 %     13.67 %     13.93 %     13.67 %
                                   
(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 December 31, 2023   September 30, 2023  
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $ 280,693   $ 3,804 5.38 % $ 143,109   $ 1,865 5.17 %
Obligations of state and political subdivisions*   2,277     14 2.44     2,281     16 2.78  
Other debt and equity securities   487,310     3,678 2.99     504,060     3,540 2.79  
Federal Home Loan Bank, Federal Reserve Bank and other stock   41,361     767 7.36     40,406     712 6.99  
Total interest-earning deposits, investments and other interest-earning assets   811,641     8,263 4.04     689,856     6,133 3.53  
                 
Commercial, financial, and agricultural loans   973,450     17,485 7.13     995,355     17,545 6.99  
Real estate—commercial and construction loans   3,590,477     50,715 5.60     3,552,709     49,548 5.53  
Real estate—residential loans   1,585,705     19,133 4.79     1,543,360     18,270 4.70  
Loans to individuals   27,667     558 8.00     26,538     525 7.85  
Municipal loans and leases *   230,394     2,438 4.20     234,685     2,430 4.11  
Lease financings   186,540     2,897 6.16     184,522     2,928 6.30  
     Gross loans and leases   6,594,233     93,226 5.61     6,537,169     91,246 5.54  
Total interest-earning assets   7,405,874     101,489 5.44     7,227,025     97,379 5.35  
Cash and due from banks   54,981           62,673        
Allowance for credit losses, loans and leases   (84,386 )         (83,827 )      
Premises and equipment, net   51,489           52,071        
Operating lease right-of-use assets   31,251           31,647        
Other assets   406,314           404,394        
      Total assets $ 7,865,523         $ 7,693,983        
                 
Liabilities:                
Interest-bearing checking deposits $ 1,193,386   $ 8,409 2.80 % $ 1,070,063   $ 6,703 2.49 %
Money market savings   1,845,153     21,133 4.54     1,645,210     17,850 4.30  
Regular savings   784,937     874 0.44     828,672     861 0.41  
Time deposits   1,188,054     12,748 4.26     1,140,622     11,668 4.06  
     Total time and interest-bearing deposits   5,011,530     43,164 3.42     4,684,567     37,082 3.14  
                 
Short-term borrowings   9,814     1 0.04     93,028     1,117 4.76  
Long-term debt   318,805     3,026 3.77     320,000     3,036 3.76  
Subordinated notes   148,693     2,281 6.09     148,568     2,281 6.09  
     Total borrowings   477,312     5,308 4.41     561,596     6,434 4.55  
     Total interest-bearing liabilities   5,488,842     48,472 3.50     5,246,163     43,516 3.29  
Noninterest-bearing deposits   1,458,610           1,538,143        
Operating lease liabilities   34,255           34,788        
Accrued expenses and other liabilities   68,875           63,374        
     Total liabilities   7,050,582           6,882,468        
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")   6,947,452     2.77     6,784,306     2.54  
                 
Shareholders' Equity:                
Common stock   157,784           157,784        
Additional paid-in capital   300,558           299,575        
Retained earnings and other equity   356,599           354,156        
     Total shareholders' equity   814,941           811,515        
     Total liabilities and shareholders' equity $ 7,865,523         $ 7,693,983        
Net interest income   $ 53,017       $ 53,863    
                 
Net interest spread     1.94       2.06  
Effect of net interest-free funding sources     0.90       0.90  
Net interest margin     2.84 %     2.96 %
Ratio of average interest-earning assets to average interest-bearing liabilities   134.93 %         137.76 %      
                 
* 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 $428 thousand and $563 thousand for the three months ended December 31,
              2023 and September 30, 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 December 31, 2023 and September 30, 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 December 31,      
Tax Equivalent Basis     2023         2022    
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $ 280,693   $ 3,804 5.38 % $ 57,059   $ 487 3.39 %
Obligations of state and political subdivisions*   2,277     14 2.44     2,266     17 2.98  
Other debt and equity securities   487,310     3,678 2.99     503,451     3,316 2.61  
Federal Home Loan Bank, Federal Reserve Bank and other stock   41,361     767 7.36     29,401     493 6.65  
Total interest-earning deposits, investments and other interest-earning assets   811,641     8,263 4.04     592,177     4,313 2.89  
                 
Commercial, financial, and agricultural loans   973,450     17,485 7.13     1,007,121     14,471 5.70  
Real estate—commercial and construction loans   3,590,477     50,715 5.60     3,223,822     39,459 4.86  
Real estate—residential loans   1,585,705     19,133 4.79     1,335,220     14,340 4.26  
Loans to individuals   27,667     558 8.00     26,772     401 5.94  
Municipal loans and leases*   230,394     2,438 4.20     233,684     2,433 4.13  
Lease financings   186,540     2,897 6.16     152,962     2,416 6.27  
     Gross loans and leases   6,594,233     93,226 5.61     5,979,581     73,520 4.88  
Total interest-earning assets   7,405,874     101,489 5.44     6,571,758     77,833 4.70  
Cash and due from banks   54,981           56,428        
Allowance for credit losses, loans and leases   (84,386 )         (75,390 )      
Premises and equipment, net   51,489           50,803        
Operating lease right-of-use assets   31,251           30,413        
Other assets   406,314           385,369        
      Total assets $ 7,865,523         $ 7,019,381        
                 
Liabilities:                
Interest-bearing checking deposits $ 1,193,386   $ 8,409 2.80 % $ 924,012   $ 2,746 1.18 %
Money market savings   1,845,153     21,133 4.54     1,365,502     7,670 2.23  
Regular savings   784,937     874 0.44     1,045,261     492 0.19  
Time deposits   1,188,054     12,748 4.26     433,010     1,586 1.45  
     Total time and interest-bearing deposits   5,011,530     43,164 3.42     3,767,785     12,494 1.32  
                 
Short-term borrowings   9,814     1 0.04     101,126     852 3.34  
Long-term debt   318,805     3,026 3.77     95,000     324 1.35  
Subordinated notes   148,693     2,281 6.09     124,250     1,815 5.80  
     Total borrowings   477,312     5,308 4.41     320,376     2,991 3.70  
     Total interest-bearing liabilities   5,488,842     48,472 3.50     4,088,161     15,485 1.50  
Noninterest-bearing deposits   1,458,610           2,070,038        
Operating lease liabilities   34,255           33,492        
Accrued expenses and other liabilities   68,875           60,498        
     Total liabilities   7,050,582           6,252,189        
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")   6,947,452     2.77     6,158,199     1.00  
                 
Shareholders' Equity:                
Common stock   157,784           157,784        
Additional paid-in capital   300,558           300,121        
Retained earnings and other equity   356,599           309,287        
     Total shareholders' equity   814,941           767,192        
     Total liabilities and shareholders' equity $ 7,865,523         $ 7,019,381        
Net interest income   $ 53,017       $ 62,348    
                 
Net interest spread     1.94       3.20  
Effect of net interest-free funding sources     0.90       0.56  
Net interest margin     2.84 %     3.76 %
Ratio of average interest-earning assets to average interest-bearing liabilities   134.93 %         160.75 %      
                 
* 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 $428 thousand and $516 thousand for the three months  
              ended December 31, 2023 and 2022, 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 December 31, 2023 and 2022 have  
               been calculated using the Corporation’s federal applicable rate of 21.0%.          
                 

Univest Financial Corporation  
Average Balances and Interest Rates (Unaudited)  
    For the Twelve Months Ended December 31,    
Tax Equivalent Basis     2023         2022    
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $ 130,309   $ 6,660 5.11 % $ 325,875   $ 1,920 0.59 %
U.S. government obligations   -     - -     1,929     40 2.07  
Obligations of state and political subdivisions*   2,282     62 2.72     2,302     71 3.08  
Other debt and equity securities   505,343     14,225 2.81     510,961     11,392 2.23  
Federal Home Loan Bank, Federal Reserve Bank and other stock   40,092     2,869 7.16     27,784     1,627 5.86  
Total interest-earning deposits, investments and other interest-earning assets   678,026     23,816 3.51     868,851     15,050 1.73  
                 
Commercial, financial, and agricultural loans   991,505     67,487 6.81     963,755     43,861 4.55  
Real estate—commercial and construction loans   3,483,576     188,644 5.42     3,060,689     127,906 4.18  
Real estate—residential loans   1,505,799     70,349 4.67     1,219,275     47,472 3.89  
Loans to individuals   27,063     2,011 7.43     26,642     1,325 4.97  
Municipal loans and leases*   232,501     9,597 4.13     236,858     9,703 4.10  
Lease financings   178,220     11,025 6.19     144,046     8,791 6.10  
     Gross loans and leases   6,418,664     349,113 5.44     5,651,265     239,058 4.23  
Total interest-earning assets   7,096,690     372,929 5.25     6,520,116     254,108 3.90  
Cash and due from banks   58,593           57,196        
Allowance for credit losses, loans and leases   (82,474 )         (72,069 )      
Premises and equipment, net   51,921           51,362        
Operating lease right-of-use assets   31,351           30,443        
Other assets   400,949           369,244        
      Total assets $ 7,557,030         $ 6,956,292        
                 
Liabilities:                
Interest-bearing checking deposits $ 1,034,327   $ 23,668 2.29 % $ 884,656   $ 5,010 0.57 %
Money market savings   1,611,169     64,153 3.98     1,389,226     13,835 1.00  
Regular savings   871,332     3,249 0.37     1,056,019     1,269 0.12  
Time deposits   931,944     34,979 3.75     443,845     5,308 1.20  
     Total time and interest-bearing deposits   4,448,772     126,049 2.83     3,773,746     25,422 0.67  
                 
Short-term borrowings   148,776     7,095 4.77     60,468     1,389 2.30  
Long-term debt   263,877     9,464 3.59     95,000     1,287 1.35  
Subordinated notes   148,507     9,125 6.14     105,356     5,798 5.50  
     Total borrowings   561,160     25,684 4.58     260,824     8,474 3.25  
     Total interest-bearing liabilities   5,009,932     151,733 3.03     4,034,570     33,896 0.84  
Noninterest-bearing deposits   1,646,286           2,068,086        
Operating lease liabilities   34,474           33,508        
Accrued expenses and other liabilities   60,671           48,629        
     Total liabilities   6,751,363           6,184,793        
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")   6,656,218     2.28     6,102,656     0.56  
                 
Shareholders' Equity:                
Common stock   157,784           157,784        
Additional paid-in capital   299,804           299,121        
Retained earnings and other equity   348,079           314,594        
     Total shareholders' equity   805,667           771,499        
     Total liabilities and shareholders' equity $ 7,557,030         $ 6,956,292        
Net interest income   $ 221,196       $ 220,212    
                 
Net interest spread     2.22       3.06  
Effect of net interest-free funding sources     0.90       0.32  
Net interest margin     3.12 %     3.38 %
Ratio of average interest-earning assets to average interest-bearing liabilities   141.65 %         161.61 %      
                 
* 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 $2.1 million and $1.8 million for the twelve months ended  
               December 31, 2023 and 2022, 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 twelve months ended December 31, 2023 and 2022 have
               been calculated using the Corporation’s federal applicable rate of 21.0%.          
                 

Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
December 31, 2023
         
(Dollars in thousands)        
Industry Description Total Outstanding Balance   % of Commercial Loan Portfolio  
CRE - Retail $ 469,890   9.0 %
Animal Production   361,597   6.9  
CRE - Multi-family   320,176   6.2  
CRE - Office   299,718   5.8  
CRE - 1-4 Family Residential Investment   285,559   5.5  
CRE - Industrial / Warehouse   248,611   4.8  
Hotels & Motels (Accommodation)   190,639   3.7  
Specialty Trade Contractors   164,798   3.2  
Education   161,325   3.1  
Homebuilding (tract developers, remodelers)   153,239   2.9  
Nursing and Residential Care Facilities   150,666   2.9  
Motor Vehicle and Parts Dealers   138,581   2.7  
Merchant Wholesalers, Durable Goods   118,351   2.3  
CRE - Mixed-Use - Residential   110,458   2.1  
Crop Production   103,285   2.0  
Repair and Maintenance   97,682   1.9  
Wood Product Manufacturing   85,292   1.6  
Real Estate Lenders, Secondary Market Financing   80,755   1.6  
Rental and Leasing Services   79,767   1.5  
Fabricated Metal Product Manufacturing   73,545   1.4  
CRE - Mixed-Use - Commercial   72,685   1.4  
Religious Organizations, Advocacy Groups   72,685   1.4  
Personal and Laundry Services   72,117   1.4  
Administrative and Support Services   70,754   1.4  
Amusement, Gambling, and Recreation Industries   70,686   1.4  
Merchant Wholesalers, Nondurable Goods   65,491   1.3  
Food Services and Drinking Places   65,143   1.3  
Private Equity & Special Purpose Entities (except 52592)   63,447   1.2  
Miniwarehouse / Self-Storage   61,964   1.2  
Food Manufacturing   59,662   1.1  
Truck Transportation   53,306   1.0  
Industries with >$50 million in outstandings $ 4,421,874   85.0 %
Industries with <$50 million in outstandings $ 782,111   15.0 %
Total Commercial Loans $ 5,203,985   100.0 %
         
         
Consumer Loans and Lease Financings Total Outstanding Balance      
Real Estate-Residential Secured for Personal Purpose $ 909,015      
Real Estate-Home Equity Secured for Personal Purpose   179,282      
Loans to Individuals   27,749      
Lease Financings   247,183      
Total - Consumer Loans and Lease Financings $ 1,363,229      
         
Total $ 6,567,214      
         

Univest Financial Corporation
Non-GAAP Reconciliation
December 31, 2023
                                   
 
 
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,   As of or for the twelve months ended,  
(Dollars in thousands) 12/31/23   09/30/23   06/30/23   03/31/23   12/31/22   12/31/23   12/31/22  
Restructuring charges (a)     $ 189     $ -     $ 1,330     $ -     $ 184     $ 1,519     $ 184    
Tax effect of restructuring charges       (40 )     -       (279 )     -       (39 )     (319 )     (39 )  
Restructuring charges, net of tax     $ 149     $ -     $ 1,051     $ -     $ 145     $ 1,200     $ 145    
                                   
Net income $ 16,254     $ 17,016     $ 16,800     $ 21,034     $ 23,836     $ 71,104     $ 78,120    
Amortization of intangibles, net of tax   167       174       200       200       238       741       1,021    
Net income before amortization of intangibles $ 16,421     $ 17,190     $ 17,000     $ 21,234     $ 24,074     $ 71,845     $ 79,141    
                                   
Shareholders' equity $ 839,208     $ 807,198     $ 805,222     $ 798,496     $ 776,500     $ 839,208     $ 776,500    
Goodwill   (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )  
Other intangibles (b)     (2,405 )     (2,558 )     (2,767 )     (3,054 )     (3,251 )     (2,405 )     (3,251 )  
Tangible common equity $ 661,293     $ 629,130     $ 626,945     $ 619,932     $ 597,739     $ 661,293     $ 597,739    
                                   
Total assets $ 7,777,218     $ 7,828,066     $ 7,600,150     $ 7,358,991     $ 7,222,016     $ 7,777,218     $ 7,222,016    
Goodwill   (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )  
Other intangibles (b)     (2,405 )     (2,558 )     (2,767 )     (3,054 )     (3,251 )     (2,405 )     (3,251 )  
Tangible assets $ 7,599,303     $ 7,649,998     $ 7,421,873     $ 7,180,427     $ 7,043,255     $ 7,599,303     $ 7,043,255    
                                   
Average shareholders' equity $ 814,941     $ 811,515     $ 806,709     $ 789,153     $ 767,192     $ 805,667     $ 771,499    
Average goodwill   (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )     (175,510 )  
Average other intangibles (b)     (2,477 )     (2,680 )     (2,924 )     (3,137 )     (3,355 )     (2,802 )     (3,694 )  
Average tangible common equity $ 636,954     $ 633,325     $ 628,275     $ 610,506     $ 588,327     $ 627,355     $ 592,295    
                                   
                                   
(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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Source: Univest Financial Corporation

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