• Univest Financial Corporation Reports First Quarter Results

    Source: Nasdaq GlobeNewswire / 27 Apr 2022 15:15:01   America/Chicago

    SOUDERTON, Pa., April 27, 2022 (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, 2022 was $20.3 million, or $0.68 diluted earnings per share, compared to net income of $32.6 million, or $1.11 diluted earnings per share, for the quarter ended March 31, 2021.

    Expansion Markets
    The Corporation announced expansion into two new markets with the hiring of Chris Trombetta, Market President of the Western Pennsylvania ("PA") region, and Matthew Cohen, Market President of the Maryland region. Mr. Trombetta joins Univest from a regional bank where he served as SVP and Commercial Banking Team Leader for Western PA. Mr. Cohen joins Univest from a regional bank where he served as the Business Banking Regional Manager in Baltimore. Messrs. Trombetta and Cohen each will be working to identify a site in their respective regions to serve as the Corporation's regional headquarters. In addition to building commercial lending teams, Messrs. Trombetta and Cohen will be working with Univest's various lines of business to ensure that they collectively bring the full suite of products and services into these new markets. Jeffrey Schweitzer, President and CEO, commented on the recent additions and the expansion markets, "We are very excited to welcome Chris and Matt to the Univest family and are thrilled about the opportunity to enter these new markets. The success we have seen in our Central PA region demonstrates our ability to enter and grow in new markets. Our Central PA region started as a lift out of fifteen employees in 2016 and has grown to a team of over sixty-five with $1.2 billion in loans outstanding."

    Digital Transformation
    During the first quarter of 2022, the Corporation began development of a comprehensive digital platform which will blend our core operating systems together and allow Univest to seamlessly sell existing products and services, digitally, across an expanded footprint. Mr. Schweitzer commented, "This platform will enable us to achieve our long-term vision for a hub and spoke approach, creating an operating model that allows Univest to lean on digital capabilities as the 'spoke' and regional headquarters as the 'hubs'." The Corporation expects to launch the new digital platform by the end of the first quarter of 2023. The first quarter of 2022 results include approximately $779 thousand in expenses related to this initiative.

    Dividend and Share Repurchases
    On April 27, 2022, Univest declared a quarterly cash dividend of $0.21 per share to be paid on May 25, 2022 to shareholders of record as of May 11, 2022. This dividend represents an increase of $0.01 per share, or 5.0%, and is the first change in our dividend since 2006. While the Corporation has not repurchased stock in the open market since March of 2020, the Corporation intends to begin repurchasing approximately 150,000 shares per quarter. There are currently 679,174 shares available for repurchase under the Corporation's existing Repurchase Plan.

    Mr. Schweitzer commented, "The dividend increase and planned repurchase activity reflect the strong capital position of the Corporation, the benefit of the rising interest rates on our profitability, and our commitment to returning value to our shareholders."

    Paycheck Protection Program
    As of March 31, 2022, $10.3 million in Paycheck Protection Program ("PPP") loans remained outstanding. During the quarter, $591 thousand was recorded as net interest income related to these loans, of which $552 thousand was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $22.0 million. As of March 31, 2022, the Corporation had $272 thousand of net deferred fees on the balance sheet, which represented approximately 1.5% of the initial deferred fee amount.

    Loans
    Gross loans and leases, excluding PPP loans1, increased $112.2 million, or 8.5% (annualized), from December 31, 2021 primarily due to increases in commercial real estate and residential mortgage loans. Gross loans and leases, excluding PPP loans1, increased $503.9 million, or 10.3%, from March 31, 2021 primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings.

    Deposits
    Total deposits decreased $7.2 million, or 0.5% (annualized), from December 31, 2021, primarily due to decreases in consumer and public funds deposits offset by an increase in commercial deposits. Total deposits increased $736.3 million, or 13.9%, from March 31, 2021, primarily due to increases in commercial, consumer and public funds deposits.
      
    Net Interest Income and Margin
    Net interest income of $46.7 million for the first quarter of 2022 increased $1.2 million, or 2.7%, from the first quarter of 2021. The increase in net interest income for the first quarter of 2022 compared to the first quarter of 2021 was due to loan and investment balance growth outpacing declines in yield on interest-bearing assets and a decrease in the cost of interest-bearing liabilities, offset by a decrease in PPP loan income.

    Net interest margin, on a tax-equivalent basis, was 2.89% for the first quarter of 2022, compared to 2.86% for the fourth quarter of 2021 and 3.12% for the first quarter of 2021. Excess liquidity reduced net interest margin by approximately 33 basis points for the quarter ended March 31, 2022 compared to 43 basis points for the quarter ended December 31, 2021 and 11 basis points for the quarter ended March 31, 2021. This excess liquidity was primarily driven by strong growth of deposit balances since the beginning of the COVID-19 pandemic, primarily due to the various pandemic-related stimulus initiatives. PPP loans had a favorable impact on net interest margin of three basis points for the quarter ended March 31, 2022 compared to eight basis points for the quarter ended December 31, 2021 and four basis points for the quarter ended March 31, 2021. As PPP loans are forgiven, the associated deferred fees are recognized in earnings, which occurred with greater frequency in 2021 as compared to 2022. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.19% for the quarter ended March 31, 2022 compared to 3.21% for the quarter ended December 31, 2021 and 3.19% for the quarter ended March 31, 2021.

    Noninterest Income
    Noninterest income for the quarter ended March 31, 2022 was $20.5 million, a decrease of $2.8 million, or 12.0%, compared to the first quarter of 2021.

    Net gain on mortgage banking activities decreased $4.0 million, or 67.5%, for the quarter primarily due to a decrease in loan sales and a contraction of margins. Other income decreased $642 thousand, or 46.9%, for the quarter ended March 31, 2022, primarily due to a decrease of $657 thousand in fees on risk participation agreements for interest rate swaps driven by a decrease in customer demand.

    Investment advisory commission and fee income increased $455 thousand, or 9.7%, for the quarter ended March 31, 2022, 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. Insurance commission and fee income increased $615 thousand, or 12.4%, for the quarter ended March 31, 2022, primarily due to incremental revenue attributable to the insurance agency the Corporation acquired in the fourth quarter of 2021.

    Other service fee income increased $564 thousand, or 25.7%, for the quarter ended March 31, 2022. Interchange fee income increased $176 thousand for the quarter ended March 31, 2022 due to increased customer activity. Mortgage servicing fees increased $262 thousand for the quarter ended March 31, 2022 driven by reduced amortization as a result of a decrease in prepayment speeds.

    Noninterest Expense
    Noninterest expense for the quarter ended March 31, 2022 was $45.4 million, an increase of $5.9 million, or 14.9%, compared to the first quarter of 2021.

    Salaries, benefits and commissions increased $3.5 million, or 14.0%, for the quarter ended March 31, 2022. These increases reflect our continued investment in revenue producing staff across all business lines, including the acquisition of the Paul I. Schaeffer insurance agency, and annual merit increases. Additionally, during the first quarter of 2022, we incurred $387 thousand of short-term incremental guaranties related to the hiring of new producers in our Mortgage Banking line of business. Finally, the first quarter of 2021 was benefited by $582 thousand of incremental capitalized compensation related to the origination of PPP loans.

    Data processing expenses increased $517 thousand, or 17.0%, for the quarter ended March 31, 2022 primarily due to continued investments in our end-to-end loan origination solution for loans below $1.0 million, customer relationship management software, internal infrastructure improvements, outsourced data processing solutions, and $103 thousand in support of our digital transformation initiative.

    Professional fees increased $390 thousand, or 22.3%, for the quarter ended March 31, 2022, primarily attributable to $658 thousand in consultant fees spent in support of our digital transformation initiative, as compared to our $276 thousand investment in support of our Diversity, Equity and Inclusion training initiatives in the quarter ended March 31, 2021. Deposit insurance premiums increased $257 thousand, or 40.4%, for the quarter ended March 31, 2022, attributable to an increased assessment base primarily driven by excess liquidity.

    Other expense increased $993 thousand, or 19.4%, for the quarter ended March 31, 2022 driven by increases in recruiting costs of $282 thousand due to increased hiring activity and travel and entertainment expenses of $265 thousand, which have begun to normalize as the markets we operate in continue to remain open. Additionally, we incurred costs of $330 thousand as a result of a customer who was defrauded.

    Tax Provision
    The effective income tax rate was 19.3% for the quarters ended March 31, 2022 and March 31, 2021, which were favorably impacted by 8 and 4 basis points, respectively, of discrete tax benefits resulting from equity compensation awards vesting in the respective quarters. Additionally, the effective tax rate reflects 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 $31.5 million at March 31, 2022, compared to $34.0 million at December 31, 2021 and $38.2 million at March 31, 2021.

    Net loan and lease charge-offs were $76 thousand during the first quarter of 2022 compared to $288 thousand for the quarter ended March 31, 2021. The reversal of provision for credit losses was $3.5 million for the first quarter of 2022, of which $5.7 million (after-tax benefit of $4.5 million), or $0.15 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model, partially offset by increases in reserves for loans, unfunded commitments and investment securities. The reversal of provision for credit losses was $11.3 million for the quarter ended March 31, 2021, of which $12.9 million (after-tax benefit of $10.2 million), or $0.35 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model partially offset by a reserve increase attributable to loan growth.

    The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.26% at March 31, 2022, compared to 1.35% at December 31, 2021, and 1.32% at March 31, 2021. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans1, was 1.27% at March 31, 2022 compared to 1.36% at December 31, 2021 and 1.46% at March 31, 2021.

    Conference Call
    Univest will host a conference call to discuss first quarter 2022 results on Thursday, April 28, 2022 at 9:00 a.m. EST. Participants may preregister at https://www.incommglobalevents.com/registration/q4inc/10559/univest-financial-corporation-to-hold-first-quarter-2022-earnings-call/. The general public can access the call by dialing 1-844-200-6205; using Access Code 206799. A replay of the conference call will be available through May 28, 2022 by dialing 1-866-813-9403; using Access Code: 439536.

    1Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included within this document.

    About Univest Financial Corporation
    Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.1 billion in assets and $4.6 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2022. 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 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 results to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) inflation and changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations of lead to higher operating costs; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and credit loss provisions; (4) changes in economic conditions nationally and in our market; (5) economic assumptions that may impact our allowance for credit losses calculation; (6) legislative, regulatory or tax changes that may adversely affect businesses; (7) technological issues that may adversely affect our operations or those of our customers; (8) changes in the securities markets; (9) the current or anticipated impact of military conflict, terrorism or other geopolitical events; or (10) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

    Additionally, it is difficult to predict the continued effects of the COVID-19 pandemic 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. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: (1) demand for our products and services may decline; (2) if economic conditions worsen, loan delinquencies, problem assets, and foreclosures may increase and our allowance for credit losses may have to be increased; (3) collateral for loans, especially real estate, may decline in value; (4) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (5) a material decrease in net income or a net loss over several quarters could result in the elimination of or a decrease in the rate of our quarterly cash dividend; (6) our wealth management revenues may decline with market turmoil; and (7) our cyber security risks may increase as the result of an increase in the number of employees working remotely. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

    (UVSP - ER)


    Univest Financial Corporation
    Consolidated Selected Financial Data (Unaudited)
    March 31, 2022
    (Dollars in thousands)          
               
    Balance Sheet (Period End) 03/31/22 12/31/21 09/30/21 06/30/21 03/31/21
    ASSETS          
    Cash and due from banks $57,307  $49,202  $67,517  $50,358  $35,117 
    Interest-earning deposits with other banks  716,474   840,948   834,840   153,091   152,200 
    Cash and cash equivalents  773,781   890,150   902,357   203,449   187,317 
    Investment securities held-to-maturity  166,339   176,983   112,643   119,692   135,153 
    Investment securities available for sale, net of allowance for credit losses  349,994   317,007   277,773   274,862   238,829 
    Investments in equity securities  2,569   2,999   2,961   2,872   3,524 
    Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost  26,330   28,186   28,679   25,228   25,571 
    Loans held for sale  14,521   21,600   29,093   27,322   22,636 
    Loans and leases held for investment  5,400,786   5,310,017   5,252,045   5,327,313   5,415,006 
    Less: Allowance for credit losses, loans and leases  (68,286)  (71,924)  (70,146)  (71,355)  (71,497)
    Net loans and leases held for investment  5,332,500   5,238,093   5,181,899   5,255,958   5,343,509 
    Premises and equipment, net  50,429   56,882   55,354   56,067   55,650 
    Operating lease right-of-use assets  30,498   30,407   31,570   33,688   34,317 
    Goodwill  175,510   175,510   172,559   172,559   172,559 
    Other intangibles, net of accumulated amortization  11,784   11,848   9,359   9,396   9,225 
    Bank owned life insurance  119,398   118,699   117,981   117,765   118,435 
    Accrued interest and other assets  54,087   54,057   57,624   57,447   69,940 
    Total assets $7,107,740  $7,122,421  $6,979,852  $6,356,305  $6,416,665 
               
    LIABILITIES          
    Noninterest-bearing deposits $2,136,467  $2,065,423  $1,861,007  $1,872,031  $1,857,547 
    Interest-bearing deposits:  3,911,465   3,989,701   4,077,147   3,446,673   3,454,045 
    Total deposits  6,047,932   6,055,124   5,938,154   5,318,704   5,311,592 
    Short-term borrowings  18,976   20,106   14,101   25,251   26,676 
    Long-term debt  95,000   95,000   95,000   95,000   95,000 
    Subordinated notes  98,952   98,874   98,797   98,719   173,617 
    Operating lease liabilities  33,566   33,453   34,641   37,131   37,737 
    Accrued expenses and other liabilities  39,459   46,070   43,136   41,502   49,588 
    Total liabilities  6,333,885   6,348,627   6,223,829   5,616,307   5,694,210 
               
    SHAREHOLDER'S 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  297,945   299,181   298,033   297,208   296,177 
    Retained earnings  389,332   375,124   363,607   348,579   333,581 
    Accumulated other comprehensive loss, net of tax benefit  (31,909)  (16,353)  (20,073)  (19,545)  (20,440)
    Treasury stock, at cost  (39,297)  (41,942)  (43,328)  (44,028)  (44,647)
    Total shareholders’ equity  773,855   773,794   756,023   739,998   722,455 
    Total liabilities and shareholders’ equity $7,107,740  $7,122,421  $6,979,852  $6,356,305  $6,416,665 
               
               
      For the three months ended,
    Balance Sheet (Average) 03/31/22 12/31/21 09/30/21 06/30/21 03/31/21
    Assets $7,047,980  $7,088,289  $6,698,177  $6,443,629  $6,383,463 
    Investment securities, net of allowance for credit losses  522,128   469,588   395,280   385,694   374,369 
    Loans and leases, gross  5,344,698   5,255,279   5,320,411   5,389,110   5,325,897 
    Deposits  5,984,815   6,041,798   5,666,725   5,351,089   5,296,147 
    Shareholders' equity  774,358   762,334   746,185   728,750   699,736 
               


    Univest Financial Corporation
    Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
    March 31, 2022
    (Dollars in thousands)          
               
    Summary of Major Loan and Lease Categories (Period End) 03/31/22 12/31/21 09/30/21 06/30/21 03/31/21
    Commercial, financial and agricultural $932,485  $956,396  $927,015  $920,621  $871,996 
    Paycheck Protection Program  10,298   31,748   85,601   252,849   528,452 
    Real estate-commercial  2,816,737   2,718,535   2,669,898   2,600,919   2,531,700 
    Real estate-construction  285,083   283,918   260,874   274,529   249,652 
    Real estate-residential secured for business purpose  412,486   409,900   412,001   407,664   387,801 
    Real estate-residential secured for personal purpose  568,735   540,566   535,705   513,330   494,349 
    Real estate-home equity secured for personal purpose  160,134   158,909   159,029   160,018   162,529 
    Loans to individuals  26,249   25,504   26,458   25,845   25,468 
    Lease financings  188,579   184,541   175,464   171,538   163,059 
    Total loans and leases held for investment, net of deferred income  5,400,786   5,310,017   5,252,045   5,327,313   5,415,006 
    Less: Allowance for credit losses, loans and leases  (68,286)  (71,924)  (70,146)  (71,355)  (71,497)
    Net loans and leases held for investment $5,332,500  $5,238,093  $5,181,899  $5,255,958  $5,343,509 
               
               
    Asset Quality Data (Period End) 03/31/22 12/31/21 09/30/21 06/30/21 03/31/21
    Nonaccrual loans and leases, including nonaccrual troubled debt restructured          
      loans and leases $30,876  $33,210  $34,528  $37,466  $29,996 
    Accruing loans and leases 90 days or more past due  274   498   2,204   750   664 
    Accruing troubled debt restructured loans and leases  51   51   51   52   52 
    Total nonperforming loans and leases  31,201   33,759   36,783   38,268   30,712 
    Other real estate owned  279   279   279   279   7,481 
    Total nonperforming assets $31,480  $34,038  $37,062  $38,547  $38,193 
    Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale  0.57%  0.63%  0.66%  0.70%  0.55%
    Nonperforming loans and leases / Loans and leases held for investment  0.58%  0.64%  0.70%  0.72%  0.57%
    Nonperforming assets / Total assets  0.44%  0.48%  0.53%  0.61%  0.60%
               
    Allowance for credit losses, loans and leases $68,286  $71,924  $70,146  $71,355  $71,497 
    Allowance for credit losses, loans and leases / Loans and leases held for investment  1.26%  1.35%  1.34%  1.34%  1.32%
    Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1)  1.27%  1.36%  1.36%  1.41%  1.46%
    Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment  221.16%  216.57%  203.16%  212.97%  238.36%
    Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment  218.86%  213.05%  190.70%  208.00%  232.80%
               
      For the three months ended,
      03/31/22 12/31/21 09/30/21 06/30/21 03/31/21
    Net loan and lease charge-offs (recoveries) $76  $(243) $(75) $243  $288 
    Net loan and lease charge-offs (annualized)/Average loans and leases  0.01%  (0.02%)  (0.01%)  0.02%  0.02%
               
    (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.
               


    Univest Financial Corporation 
    Consolidated Selected Financial Data (Unaudited) 
    March 31, 2022 
    (Dollars in thousands, except per share data)           
      For the three months ended, 
    For the period: 03/31/22 12/31/21 09/30/21 06/30/21 03/31/21 
    Interest income $51,198  $52,262 $53,571  $52,441  $51,457  
    Interest expense  4,538   4,737  4,884   5,684   6,043  
    Net interest income  46,660   47,525  48,687   46,757   45,414  
    (Reversal of provision) provision for credit losses  (3,450)  1,392  (182)  (59)  (11,283) 
    Net interest income after provision for credit losses  50,110   46,133  48,869   46,816   56,697  
    Noninterest income:           
    Trust fee income  2,102   2,086  2,126   2,157   2,034  
    Service charges on deposit accounts  1,504   1,486  1,422   1,314   1,282  
    Investment advisory commission and fee income  5,152   4,885  4,796   4,558   4,697  
    Insurance commission and fee income  5,570   3,726  3,837   3,839   4,955  
    Other service fee income  2,756   2,759  2,576   2,748   2,192  
    Bank owned life insurance income  699   719  925   1,620   717  
    Net gain on sales of investment securities  30   5  21   54   65  
    Net gain on mortgage banking activities  1,929   2,518  3,224   3,461   5,938  
    Other income  728   1,008  1,625   479   1,370  
    Total noninterest income  20,470   19,192  20,552   20,230   23,250  
    Noninterest expense:           
    Salaries, benefits and commissions  28,245   27,374  26,641   25,396   24,780  
    Net occupancy  2,716   2,477  2,525   2,656   2,739  
    Equipment  982   985  1,000   968   946  
    Data processing  3,567   3,355  3,274   3,064   3,050  
    Professional fees  2,138   1,750  2,174   2,015   1,748  
    Marketing and advertising  425   683  539   561   280  
    Deposit insurance premiums  893   698  765   613   636  
    Intangible expenses  341   267  214   249   249  
    Other expense  6,105   5,746  6,116   5,764   5,112  
    Total noninterest expense  45,412   43,335  43,248   41,286   39,540  
    Income before taxes  25,168   21,990  26,173   25,760   40,407  
    Income tax expense  4,851   4,578  5,262   4,885   7,804  
    Net income $20,317  $17,412 $20,911  $20,875  $32,603  
    Net income per share:           
         Basic $0.69  $0.59 $0.71  $0.71  $1.11  
         Diluted $0.68  $0.59 $0.71  $0.71  $1.11  
    Dividends declared per share $0.20  $0.20 $0.20  $0.20  $0.20  
    Weighted average shares outstanding  29,542,467   29,471,304  29,420,256   29,389,525   29,327,432  
    Period end shares outstanding  29,636,425   29,500,542  29,438,402   29,411,731   29,379,575  
                


    Univest Financial Corporation
    Consolidated Selected Financial Data (Unaudited)
    March 31, 2022
                  
         For the three months ended,
    Profitability Ratios (annualized)  03/31/22 12/31/21 09/30/21 06/30/21 03/31/21
                  
    Return on average assets   1.17%  0.97%  1.24%  1.30%  2.07%
    Return on average shareholders' equity  10.64%  9.06%  11.12%  11.49%  18.90%
    Return on average tangible common equity (1)(3) 14.04%  11.93%  14.63%  15.26%  25.35%
    Net interest margin (FTE)   2.89%  2.86%  3.11%  3.15%  3.12%
    Efficiency ratio (2)    67.0%  64.3%  61.8%  60.7%  57.0%
                  
    Capitalization Ratios            
                  
    Dividends declared to net income   29.1%  33.9%  28.1%  28.2%  18.0%
    Shareholders' equity to assets (Period End)  10.89%  10.86%  10.83%  11.64%  11.26%
    Tangible common equity to tangible assets (1)  8.58%  8.56%  8.55%  9.15%  8.77%
    Common equity book value per share $26.11  $26.23  $25.68  $25.16  $24.59 
    Tangible common equity book value per share (1)$20.06  $20.14  $19.75  $19.22  $18.64 
                  
    Regulatory Capital Ratios (Period End)           
    Tier 1 leverage ratio    9.35%  9.13%  9.53%  9.64%  9.45%
    Common equity tier 1 risk-based capital ratio  11.07%  11.08%  11.15%  11.04%  11.08%
    Tier 1 risk-based capital ratio   11.07%  11.08%  11.15%  11.04%  11.08%
    Total risk-based capital ratio   13.73%  13.77%  13.87%  13.82%  15.13%
                  
    (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 BasisMarch 31, 2022 December 31, 2021 
     AverageIncome/Average AverageIncome/Average 
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
    Assets:        
    Interest-earning deposits with other banks$733,173 $3570.20%$914,287 $3700.16%
    U.S. government obligations 5,222  262.02  6,999  372.10 
    Obligations of state and political subdivisions* 2,332  193.30  2,334  193.23 
    Other debt and equity securities 514,574  2,3391.84  460,255  1,8451.59 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 27,115  3555.31  28,402  3755.24 
    Total interest-earning deposits, investments and other interest-earning assets 1,282,416  3,0960.98  1,412,277  2,6460.74 
             
    Commercial, financial, and agricultural loans 901,555  7,5713.41  869,471  7,0223.20 
    Paycheck Protection Program loans 18,402  59113.02  53,745  1,56811.57 
    Real estate—commercial and construction loans 2,904,602  25,8203.61  2,826,720  26,6693.74 
    Real estate—residential loans 1,116,356  9,8823.59  1,107,911  10,1653.64 
    Loans to individuals 25,799  2383.74  26,462  2493.73 
    Municipal loans and leases * 242,508  2,4344.07  245,038  2,5154.07 
    Lease financings 135,476  2,0756.21  125,932  1,9516.15 
    Gross loans and leases 5,344,698  48,6113.69  5,255,279  50,1393.79 
    Total interest-earning assets 6,627,114  51,7073.16  6,667,556  52,7853.14 
    Cash and due from banks 53,698     54,958    
    Allowance for credit losses, loans and leases (72,067)    (71,020)   
    Premises and equipment, net 53,948     56,087    
    Operating lease right-of-use assets 30,394     31,048    
    Other assets 354,893     349,660    
          Total assets$7,047,980    $7,088,289    
             
    Liabilities:        
    Interest-bearing checking deposits$881,462 $4430.20%$939,478 $4930.21%
    Money market savings 1,542,581  9040.24  1,616,890  9680.24 
    Regular savings 1,021,550  2380.09  997,814  2530.10 
    Time deposits 473,589  1,3061.12  487,434  1,3701.12 
         Total time and interest-bearing deposits 3,919,182  2,8910.30  4,041,616  3,0840.30 
             
    Short-term borrowings 17,636  20.05  14,144  10.03 
    Long-term debt 95,000  3171.35  95,000  3251.36 
    Subordinated notes 98,911  1,3285.45  98,833  1,3275.33 
         Total borrowings 211,547  1,6473.16  207,977  1,6533.15 
         Total interest-bearing liabilities 4,130,729  4,5380.45  4,249,593  4,7370.44 
    Noninterest-bearing deposits 2,065,633     2,000,182    
    Operating lease liabilities 33,452     34,114    
    Accrued expenses and other liabilities 43,808     42,066    
         Total liabilities 6,273,622     6,325,955    
             
    Shareholders' Equity:        
    Common stock 157,784     157,784    
    Additional paid-in capital 298,975     298,508    
    Retained earnings and other equity 317,599     306,042    
         Total shareholders' equity 774,358     762,334    
         Total liabilities and shareholders' equity$7,047,980    $7,088,289    
    Net interest income $47,169   $48,048  
             
    Net interest spread  2.71   2.70 
    Effect of net interest-free funding sources  0.18   0.16 
    Net interest margin  2.89%  2.86%
    Ratio of average interest-earning assets to average interest-bearing liabilities 160.43%    156.90%   
             
    * 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) fees of $(136) thousand and $707 thousand for the three months ended March 31, 2022
    and December 31, 2021, 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, 2022 and December 31, 2021 have 
    been calculated using the Corporation’s federal applicable rate of 21.0%.     
             


    Univest Financial Corporation 
    Average Balances and Interest Rates (Unaudited) 
      For the Three Months Ended March 31,   
    Tax Equivalent Basis  2022    2021  
     AverageIncome/Average AverageIncome/Average 
    (Dollars in thousands)BalanceExpenseRate BalanceExpenseRate 
    Assets:        
    Interest-earning deposits with other banks$733,173 $3570.20%$237,548 $560.10%
    U.S. government obligations 5,222  262.02  6,998  362.09 
    Obligations of state and political subdivisions* 2,332  193.30  11,544  1053.69 
    Other debt and equity securities 514,574  2,3391.84  355,827  1,2671.44 
    Federal Home Loan Bank, Federal Reserve Bank and other stock 27,115  3555.31  26,368  3485.35 
    Total interest-earning deposits, investments and other interest-earning assets 1,282,416  3,0960.98  638,285  1,8121.15 
             
    Commercial, financial, and agricultural loans 901,555  7,5713.41  782,208  6,7983.52 
    Paycheck Protection Program loans 18,402  59113.02  506,939  4,5243.62 
    Real estate—commercial and construction loans 2,904,602  25,8203.61  2,621,981  24,4583.78 
    Real estate—residential loans 1,116,356  9,8823.59  1,037,000  9,8733.86 
    Loans to individuals 25,799  2383.74  26,447  2654.06 
    Municipal loans and leases* 242,508  2,4344.07  245,638  2,5304.18 
    Lease financings 135,476  2,0756.21  105,684  1,7376.67 
         Gross loans and leases 5,344,698  48,6113.69  5,325,897  50,1853.82 
    Total interest-earning assets 6,627,114  51,7073.16  5,964,182  51,9973.54 
    Cash and due from banks 53,698     55,311    
    Allowance for credit losses, loans and leases (72,067)    (83,254)   
    Premises and equipment, net 53,948     55,826    
    Operating lease right-of-use assets 30,394     34,033    
    Other assets 354,893     357,365    
          Total assets$7,047,980    $6,383,463    
             
    Liabilities:        
    Interest-bearing checking deposits$881,462 $4430.20%$817,940 $4900.24%
    Money market savings 1,542,581  9040.24  1,243,673  8530.28 
    Regular savings 1,021,550  2380.09  959,232  2980.13 
    Time deposits 473,589  1,3061.12  525,800  1,7591.36 
         Total time and interest-bearing deposits 3,919,182  2,8910.30  3,546,645  3,4000.39 
             
    Short-term borrowings 17,636  20.05  17,894  20.05 
    Long-term debt 95,000  3171.35  101,333  3481.39 
    Subordinated notes 98,911  1,3285.45  183,340  2,2935.07 
         Total borrowings 211,547  1,6473.16  302,567  2,6433.54 
         Total interest-bearing liabilities 4,130,729  4,5380.45  3,849,212  6,0430.64 
    Noninterest-bearing deposits 2,065,633     1,749,502    
    Operating lease liabilities 33,452     37,415    
    Accrued expenses and other liabilities 43,808     47,598    
         Total liabilities 6,273,622     5,683,727    
             
    Shareholders' Equity:        
    Common stock 157,784     157,784    
    Additional paid-in capital 298,975     296,136    
    Retained earnings and other equity 317,599     245,816    
         Total shareholders' equity 774,358     699,736    
         Total liabilities and shareholders' equity$7,047,980    $6,383,463    
    Net interest income $47,169   $45,954  
             
    Net interest spread  2.71   2.90 
    Effect of net interest-free funding sources  0.18   0.22 
    Net interest margin  2.89%  3.12%
    Ratio of average interest-earning assets to average interest-bearing liabilities 160.43%    154.95%   
             
    * 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) fees of $(136) thousand and $2.3 million for the three months ended March 31, 2022 and
    2021, 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, 2022 and 2021 have 
    been calculated using the Corporation’s federal applicable rate of 21.0%.     
             


    Univest Financial Corporation  
    Loan Portfolio Overview (Unaudited)  
       
              
    (Dollars in thousands)As of March 31, 2022  
    Industry DescriptionTotal Outstanding Balance (excl PPP) % of Commercial Loan Portfolio $ Balance of Modified Loans (1) Modified Loans as a % of Portfolio (1)  
    CRE - Retail 359,125 8.1%$- -% 
    Animal Production 310,747 7.0  - -  
    CRE - Multi-family 244,480 5.5  - -  
    CRE - 1-4 Family Residential Investment 234,653 5.3  - -  
    CRE - Office 231,125 5.2  - -  
    Hotels & Motels (Accommodation) 186,497 4.2  1,437 0.8  
    Nursing and Residential Care Facilities 168,896 3.8  - -  
    CRE - Industrial / Warehouse 160,318 3.6  - -  
    Education 151,238 3.4  - -  
    Specialty Trade Contractors 133,455 3.0  - -  
    CRE - Mixed-Use - Residential 116,479 2.6  - -  
    CRE - Medical Office 108,836 2.4  - -  
    Homebuilding (tract developers, remodelers) 101,112 2.3  - -  
    Merchant Wholesalers, Durable Goods 93,073 2.1  - -  
    Motor Vehicle and Parts Dealers 89,723 2.0  - -  
    Crop Production 85,886 1.9  - -  
    Food Manufacturing 78,597 1.8  - -  
    Wood Product Manufacturing 77,165 1.7  - -  
    Rental and Leasing Services 72,878 1.6  - -  
    Food Services and Drinking Places 71,327 1.6  473 0.7  
    Administrative and Support Services 69,578 1.6  - -  
    Merchant Wholesalers, Nondurable Goods 64,564 1.5  - -  
    Personal and Laundry Services 61,402 1.4  - -  
    Fabricated Metal Product Manufacturing 60,398 1.4  - -  
    Religious Organizations, Advocacy Groups 56,869 1.3  - -  
    Miniwarehouse / Self-Storage 54,382 1.2  - -  
    Repair and Maintenance 53,267 1.2  - -  
    Industries with >$50 million in outstandings$3,496,070 78.6%$1,910 0.1% 
    Industries with <$50 million in outstandings$950,721 21.4%$790 0.1% 
    Total Commercial Loans$4,446,791 100.0%$2,700 0.1% 
              
              
    Consumer Loans and Lease FinancingsTotal Outstanding Balance   $ Balance of Modified Loans (1) Modified Loans as a % of Portfolio (1)  
    Real Estate-Residential Secured for Personal Purpose$568,735   $- -% 
    Real Estate-Home Equity Secured for Personal Purpose 160,134    - -  
    Loans to Individuals 26,249    - -  
    Lease Financings 188,579    - -  
    Total - Consumer Loans and Lease Financings$943,697   $- -% 
              
    Total$5,390,488   $2,700 0.1% 
              
    (1) Loan modifications referenced above were made 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 therefore were not classified as TDRs as of March 31, 2022. 
     
     


    Univest Financial Corporation
    Non-GAAP Reconciliation
    March 31, 2022
     
    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.
                 
        For the three months ended,
    (Dollars in thousands)03/31/22 12/31/21 09/30/21 06/30/21 03/31/21
    Net income$20,317  $17,412  $20,911  $20,875  $32,603 
    Amortization of intangibles, net of tax 269   211   169   197   197 
    Net income before amortization of intangibles$20,586  $17,623  $21,080  $21,072  $32,800 
                 
    Shareholders' equity$773,855  $773,794  $756,023  $739,998  $722,455 
    Goodwill (175,510)  (175,510)  (172,559)  (172,559)  (172,559)
    Other intangibles (a)  (3,936)  (4,210)  (1,922)  (2,073)  (2,326)
    Tangible common equity$594,409  $594,074  $581,542  $565,366  $547,570 
                 
    Total assets$7,107,740  $7,122,421  $6,979,852  $6,356,305  $6,416,665 
    Goodwill (175,510)  (175,510)  (172,559)  (172,559)  (172,559)
    Other intangibles (a)  (3,936)  (4,210)  (1,922)  (2,073)  (2,326)
    Tangible assets$6,928,294  $6,942,701  $6,805,371  $6,181,673  $6,241,780 
                 
    Average shareholders' equity$774,358  $762,334  $746,185  $728,750  $699,736 
    Average goodwill (175,510)  (173,553)  (172,559)  (172,559)  (172,559)
    Average other intangibles (a)  (4,090)  (2,696)  (1,983)  (2,209)  (2,464)
    Average tangible common equity$594,758  $586,085  $571,643  $553,982  $524,713 
                 
    Loans and leases held for investment, gross$5,400,786  $5,310,017  $5,252,045  $5,327,313  $5,415,006 
    Paycheck Protection Program ("PPP") loans (10,298)  (31,748)  (85,601)  (252,849)  (528,452)
    Gross loans and leases excluding PPP loans$5,390,488  $5,278,269  $5,166,444  $5,074,464  $4,886,554 
                 
    Allowance for credit losses, loans and leases$68,286  $71,924  $70,146  $71,355  $71,497 
    Gross loans and leases excluding PPP loans 5,390,488   5,278,269   5,166,444   5,074,464   4,886,554 
    Allowance for credit losses, loans and leases as a percentage of gross loans and leases excluding PPP loans 1.27%  1.36%  1.36%  1.41%  1.46%
                 
    (a) Amount does not include mortgage servicing rights         
                 

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

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