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Section 1: 8-K (8-K)

uvsp-20200422
0000102212FALSE00001022122020-04-222020-04-22

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 _______________________ 
FORM 8-K 
_______________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 22, 2020
 _______________________ 
UNIVEST FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
  
Pennsylvania 0-7617 23-1886144
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
14 North Main Street, Souderton, Pennsylvania 18964
(Address of principal executive office)(Zip Code)
Registrant’s telephone number, including area code (215721-2400
Not applicable
(Former name or former address, if changed since last report)
 _______________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b))
Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c))
Securities registered pursuant to Section 12(b) of the Act:
Title of classTrading SymbolName of exchange on which registered
Common Stock, $5 par valueUVSPThe NASDAQ Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨




Item 2.02Results of Operations and Financial Condition
On April 22, 2020, Univest Financial Corporation (the “Corporation”), parent company of Univest Bank and Trust Co., issued a press release reporting 2020 first quarter earnings. A copy of this press release is attached to this Current Report on Form 8-K as Exhibit 99.1.

Item 9.01Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits
 
Exhibit No.  Description of Document
99.1  
104The cover page from the Corporation's Form 8-K, formatted in Inline XBRL



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Univest Financial Corporation
By:/s/ Brian J. Richardson
Name:Brian J. Richardson
Title:Executive Vice President,
Chief Financial Officer
April 23, 2020



EXHIBIT INDEX
 
Exhibit No.  Description of Document
99.1  
104The cover page from the Corporation's Form 8-K, formatted in Inline XBRL

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Document

Exhibit 99.1
NEWS
403708451_logo1.jpg

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

FOR IMMEDIATE RELEASE

UNIVEST FINANCIAL CORPORATION REPORTS FIRST QUARTER RESULTS

SOUDERTON, Pa., April 22, 2020 - Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income for the quarter ended March 31, 2020 of $838 thousand, or $0.03 diluted earnings per share, compared to net income of $16.1 million, or $0.55 diluted earnings per share, for the quarter ended March 31, 2019.

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

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



allocated funding being exhausted on April 16, 2020. We will continue to support our customers during these challenging times.

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

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

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

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

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



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

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

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

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

Insurance commission and fee income decreased $412 thousand, or 8.0%, for the quarter primarily due to a decrease in contingent commission income of $389 thousand, which was $1.1 million for the quarter ended March 31, 2020 compared to $1.5 million for the quarter ended March 31, 2019. Other service fee income decreased $397 thousand, or 17.5%, primarily due to an increase of $331 thousand of mortgage servicing rights amortization for the quarter ended March 31, 2020 compared to the quarter ended March 31, 2019. The increase in amortization for the quarter was primarily driven by the decline in interest rates and their impact on prepayment activity. BOLI income decreased $218 thousand, or 22.9%,



for the quarter ended March 31, 2020 primarily due to income on our non-qualified annuity portfolio of $26 thousand in the first quarter of 2020 compared to income of $249 thousand in the first quarter of 2019. During the first quarter of 2019, in order to reduce future volatility, the Corporation transferred the funds invested within the non-qualified annuity portfolio to a stable fund investment strategy. Other income decreased $272 thousand, 80.2%, for the quarter ended March 31, 2020, primarily driven by a loss in the value of equity securities measured at fair value of $268 thousand for the quarter ended March 31, 2020 compared to a gain of $4 thousand for the quarter ended March 31, 2019.

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

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

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

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

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




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

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

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

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $5.5 billion in assets and $3.3 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2020. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices in southeastern Pennsylvania extending to the Lehigh Valley and Lancaster, as well as in New Jersey and Maryland and online at www.univest.net.  
# # #
This press release of Univest and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial services industry and, specifically, the financial operations, markets and products of Univest. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest's future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) competitive pressures among financial institutions; (2) changes in the interest rate environment; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which Univest is engaged; (6) technological issues that may adversely affect Univest financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission. It is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: (1) demand for our products and services may decline, making it difficult to grow assets and income; (2) if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; (3) collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; (4) our allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect our net income; (5) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (6) as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; (6) a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend; (7) our wealth management revenues may decline with continuing market



turmoil; (8) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (9) we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us; (10); and Federal Deposit Insurance Corporation premiums may increase if the agency experience additional resolution costs. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.




Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2020
(Dollars in thousands)
Balance Sheet (Period End)3/31/202012/31/20199/30/20196/30/20193/31/2019
Assets$5,464,768  $5,380,924  $5,353,611  $5,154,298  $5,035,527  
Investment securities, net of allowance for credit losses423,521  441,599  448,447  468,833  466,883  
Loans held for sale11,417  5,504  2,893  1,498  921  
Loans and leases held for investment, gross4,448,825  4,386,836  4,251,933  4,167,904  4,067,879  
Allowance for credit losses, loans and leases68,216  35,331  33,662  32,600  31,602  
Loans and leases held for investment, net4,380,609  4,351,505  4,218,271  4,135,304  4,036,277  
Total deposits4,407,303  4,360,075  4,337,991  4,122,110  4,003,153  
Noninterest-bearing deposits1,318,270  1,279,681  1,198,425  1,166,301  1,103,674  
NOW, money market and savings2,452,021  2,474,384  2,421,466  2,246,372  2,260,795  
Time deposits637,012  606,010  718,100  709,437  638,684  
Borrowings323,363  263,596  273,855  304,241  313,083  
Shareholders' equity651,551  675,122  664,299  651,670  637,606  
Balance Sheet (Average)For the three months ended,
3/31/202012/31/20199/30/20196/30/20193/31/2019
Assets$5,409,561  $5,400,591  $5,317,867  $5,170,448  $5,004,253  
Investment securities, net of allowance for credit losses441,900  445,932  460,099  471,422  470,196  
Loans and leases, gross4,388,584  4,280,430  4,170,485  4,123,069  4,017,362  
Deposits4,349,984  4,374,586  4,288,170  4,145,411  3,931,199  
Shareholders' equity673,460  672,647  659,523  645,538  631,574  
Asset Quality Data (Period End)
3/31/202012/31/20199/30/20196/30/20193/31/2019
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases$36,626  $38,578  $37,368  $25,147  $25,952  
Accruing loans and leases 90 days or more past due1,777  143  2,488  1,379  636  
Accruing troubled debt restructured loans and leases54  54  54  55  270  
Total nonperforming loans38,457  38,775  39,910  26,581  26,858  
Other real estate owned516  516  495  540  540  
Total nonperforming assets$38,973  $39,291  $40,405  $27,121  $27,398  
Nonaccrual loans and leases / Loans and leases held for investment0.82 %0.88 %0.88 %0.60 %0.64 %
Nonperforming loans and leases / Loans and leases held for investment0.86 %0.88 %0.94 %0.64 %0.66 %
Nonperforming assets / Total assets0.71 %0.73 %0.75 %0.53 %0.54 %
Allowance for credit losses, loans and leases$68,216  $35,331  $33,662  $32,600  $31,602  
Allowance for credit losses, loans and leases / Loans and leases held for investment1.53 %0.81 %0.79 %0.78 %0.78 %
Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment186.25 %91.58 %90.08 %129.64 %121.77 %
Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment177.38 %91.12 %84.34 %122.64 %117.66 %
For the three months ended,
3/31/202012/31/20199/30/20196/30/20193/31/2019
Net loan and lease charge-offs$489  $558  $468  $1,078  $447  
Net loan and lease charge-offs (annualized)/Average loans and leases0.04 %0.05 %0.04 %0.10 %0.05 %





Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2020
(Dollars in thousands, except per share data)
For the three months ended,
For the period:3/31/202012/31/20199/30/20196/30/20193/31/2019
Interest income$52,019  $53,369  $54,300  $54,060  $52,364  
Interest expense9,551  10,940  11,655  11,425  10,841  
Net interest income42,468  42,429  42,645  42,635  41,523  
Provision for credit losses21,049  2,227  1,530  2,076  2,685  
Net interest income after provision21,419  40,202  41,115  40,559  38,838  
Noninterest income:
Trust fee income1,890  1,912  1,973  2,054  1,887  
Service charges on deposit accounts1,397  1,551  1,513  1,447  1,435  
Investment advisory commission and fee income4,255  4,064  4,032  4,055  3,789  
Insurance commission and fee income4,732  3,609  3,877  3,941  5,144  
Other service fee income1,870  2,229  2,255  2,590  2,267  
Bank owned life insurance income734  741  743  743  952  
Net gain on sales of investment securities695  13  33    
Net gain on mortgage banking activities2,744  1,038  1,629  796  483  
Other income67  1,013  544  723  339  
Total noninterest income18,384  16,170  16,599  16,356  16,297  
Noninterest expense:
Salaries, benefits and commissions23,836  21,933  22,758  22,052  21,546  
Net occupancy2,574  2,534  2,475  2,601  2,611  
Equipment995  1,027  1,088  1,065  990  
Data processing2,760  2,685  2,624  2,627  2,514  
Professional fees1,317  1,475  1,517  1,307  1,264  
Marketing and advertising402  710  558  786  540  
Deposit insurance premiums504  342  (444) 430  452  
Intangible expense330  374  378  417  426  
Other expense6,853  6,398  5,316  5,493  5,214  
Total noninterest expense39,571  37,478  36,270  36,778  35,557  
Income before taxes232  18,894  21,444  20,137  19,578  
Income tax (benefit) expense(606) 3,384  3,782  3,669  3,499  
Net income$838  $15,510  $17,662  $16,468  $16,079  
Net income per share:
Basic$0.03  $0.53  $0.60  $0.56  $0.55  
Diluted$0.03  $0.53  $0.60  $0.56  $0.55  
Dividends declared per share$0.20  $0.20  $0.20  $0.20  $0.20  
Weighted average shares outstanding29,286,200  29,327,169  29,305,524  29,287,754  29,277,339  
Period end shares outstanding29,164,782  29,334,629  29,312,534  29,294,942  29,272,502  





Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2020
For the three months ended,
Profitability Ratios (annualized)3/31/202012/31/20199/30/20196/30/20193/31/2019
Return on average assets0.06 %1.14 %1.32 %1.28 %1.30 %
Return on average shareholders' equity0.50 %9.15 %10.62 %10.23 %10.32 %
Return on average tangible common equity (1)0.68 %12.40 %14.52 %14.10 %14.36 %
Net interest margin (FTE)3.48 %3.44 %3.52 %3.67 %3.75 %
Efficiency ratio (2)64.1 %63.0 %60.4 %61.5 %60.5 %
Capitalization Ratios
Dividends declared to net income699.9 %37.8 %33.2 %35.6 %36.4 %
Shareholders' equity to assets (Period End)11.92 %12.55 %12.41 %12.64 %12.66 %
Tangible common equity to tangible assets (1)8.99 %9.59 %9.42 %9.54 %9.47 %
Common equity book value per share$22.34  $23.01  $22.66  $22.25  $21.78  
Tangible common equity book value per share (1)$16.31  $17.01  $16.64  $16.20  $15.72  
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio9.90 %10.02 %9.97 %10.01 %10.10 %
Common equity tier 1 risk-based capital ratio10.79 %11.03 %11.03 %10.99 %10.93 %
Tier 1 risk-based capital ratio10.79 %11.03 %11.03 %10.99 %10.93 %
Total risk-based capital ratio13.65 %13.78 %13.81 %13.79 %13.77 %
(1) This consolidated selected financial data schedule contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The management of Univest uses these non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See below tables for additional information. 
(a) Shareholders' equity$651,551  $675,122  $664,299  $651,670  $637,606  
Goodwill(172,559) (172,559) (172,559) (172,559) (172,559) 
Other intangibles (g)(3,333) (3,658) (4,026) (4,396) (4,805) 
(b) Tangible common equity$475,659  $498,905  $487,714  $474,715  $460,242  
(c) Total assets$5,464,768  $5,380,924  $5,353,611  $5,154,298  $5,035,527  
Goodwill(172,559) (172,559) (172,559) (172,559) (172,559) 
Other intangibles (g)(3,333) (3,658) (4,026) (4,396) (4,805) 
(d) Tangible assets$5,288,876  $5,204,707  $5,177,026  $4,977,343  $4,858,163  
(e) Average shareholders' equity$673,460  $672,647  $659,523  $645,538  $631,574  
Average goodwill(172,559) (172,559) (172,559) (172,559) (172,559) 
Average other intangibles (g)(3,506) (3,853) (4,234) (4,615) (5,031) 
(f) Average tangible common equity$497,395  $496,235  $482,730  $468,364  $453,984  
(g) Amount does not include servicing rights 
(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income. 





Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
For the Three Months Ended,
Tax Equivalent BasisMarch 31, 2020December 31, 2019
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$118,108  $325  1.11  %$205,703  $860  1.66  %
U.S. government obligations7,298  37  2.04  7,297  37  2.01  
Obligations of state and political subdivisions33,595  289  3.46  35,938  324  3.58  
Other debt and equity securities401,007  2,668  2.68  402,697  2,684  2.64  
Federal Home Loan Bank, Federal Reserve Bank and other stock31,450  527  6.74  30,653  514  6.65  
Total interest-earning deposits, investments and other interest-earning assets591,458  3,846  2.62  682,288  4,419  2.57  
Commercial, financial, and agricultural loans821,267  8,631  4.23  830,757  9,197  4.39  
Real estate—commercial and construction loans2,139,369  23,917  4.50  2,040,442  23,526  4.57  
Real estate—residential loans991,550  11,052  4.48  966,370  11,566  4.75  
Loans to individuals30,016  407  5.45  31,694  458  5.73  
Municipal loans and leases317,006  3,265  4.14  325,939  3,323  4.04  
Lease financings89,376  1,554  6.99  85,228  1,528  7.11  
     Gross loans and leases4,388,584  48,826  4.47  4,280,430  49,598  4.60  
          Total interest-earning assets4,980,042  52,672  4.25  4,962,718  54,017  4.32  
Cash and due from banks50,891  50,794  
Reserve for credit losses, loans and leases(44,372) (34,392) 
Premises and equipment, net56,399  57,043  
Operating lease right-of-use assets34,545  34,693  
Other assets332,056  329,735  
      Total assets$5,409,561  $5,400,591  
Liabilities:
Interest-bearing checking deposits$584,391  $796  0.55  %$566,904  $941  0.66  %
Money market savings1,057,336  2,903  1.10  1,074,066  3,749  1.38  
Regular savings816,760  792  0.39  798,145  870  0.43  
Time deposits602,903  2,915  1.94  648,726  3,261  1.99  
     Total time and interest-bearing deposits3,061,390  7,406  0.97  3,087,841  8,821  1.13  
Short-term borrowings40,126  106  1.06  30,404  63  0.82  
Long-term debt169,205  764  1.82  153,049  795  2.06  
Subordinated notes94,847  1,275  5.41  94,786  1,261  5.28  
     Total borrowings304,178  2,145  2.84  278,239  2,119  3.02  
     Total interest-bearing liabilities3,365,568  9,551  1.14  3,366,080  10,940  1.29  
Noninterest-bearing deposits1,288,594  1,286,745  
Operating lease liabilities37,766  37,867  
Accrued expenses and other liabilities44,173  37,252  
     Total liabilities4,736,101  4,727,944  
Shareholders' Equity:
Common stock157,784  157,784  
Additional paid-in capital295,318  294,731  
Retained earnings and other equity220,358  220,132  
     Total shareholders' equity673,460  672,647  
     Total liabilities and shareholders' equity$5,409,561  $5,400,591  
Net interest income$43,121  $43,077  
Net interest spread3.11  3.03  
Effect of net interest-free funding sources0.37  0.41  
Net interest margin3.48  %3.44  %
Ratio of average interest-earning assets to average interest-bearing liabilities147.97  %147.43  %
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and unearned discount.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the three months ended March 31, 2020 and December 31, 2019 have been calculated using the Corporation’s federal applicable rate of 21.0%.





Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
For the Three Months Ended March 31,
Tax Equivalent Basis20202019
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$118,108  $325  1.11  %$42,566  $269  2.56  %
U.S. government obligations7,298  37  2.04  20,039  82  1.66  
Obligations of state and political subdivisions33,595  289  3.46  64,167  546  3.45  
Other debt and equity securities401,007  2,668  2.68  385,990  2,631  2.76  
Federal Home Loan Bank, Federal Reserve Bank and other stock31,450  527  6.74  32,360  586  7.34  
Total interest-earning deposits, investments and other interest-earning assets591,458  3,846  2.62  545,122  4,114  3.06  
Commercial, financial, and agricultural loans821,267  8,631  4.23  811,071  10,758  5.38  
Real estate—commercial and construction loans2,139,369  23,917  4.50  1,822,276  21,559  4.80  
Real estate—residential loans991,550  11,052  4.48  938,299  11,412  4.93  
Loans to individuals30,016  407  5.45  32,524  518  6.46  
Municipal loans and leases317,006  3,265  4.14  332,299  3,221  3.93  
Lease financings89,376  1,554  6.99  80,893  1,435  7.19  
     Gross loans and leases4,388,584  48,826  4.47  4,017,362  48,903  4.94  
          Total interest-earning assets4,980,042  52,672  4.25  4,562,484  53,017  4.71  
Cash and due from banks50,891  44,714  
Reserve for credit losses, loans and leases(44,372) (30,111) 
Premises and equipment, net56,399  59,179  
Operating lease right-of-use assets34,545  37,129  
Other assets332,056  330,858  
      Total assets$5,409,561  $5,004,253  
Liabilities:
Interest-bearing checking deposits$584,391  $796  0.55  %$478,927  $714  0.60  %
Money market savings1,057,336  2,903  1.10  918,487  3,748  1.65  
Regular savings816,760  792  0.39  789,033  814  0.42  
Time deposits602,903  2,915  1.94  655,303  2,927  1.81  
     Total time and interest-bearing deposits3,061,390  7,406  0.97  2,841,750  8,203  1.17  
Short-term borrowings40,126  106  1.06  117,664  638  2.20  
Long-term debt169,205  764  1.82  145,299  739  2.06  
Subordinated notes94,847  1,275  5.41  94,603  1,261  5.41  
     Total borrowings304,178  2,145  2.84  357,566  2,638  2.99  
     Total interest-bearing liabilities3,365,568  9,551  1.14  3,199,316  10,841  1.37  
Noninterest-bearing deposits1,288,594  1,089,449  
Operating lease liabilities37,766  40,090  
Accrued expenses and other liabilities44,173  43,824  
     Total liabilities4,736,101  4,372,679  
Shareholders' Equity:
Common stock157,784  157,784  
Additional paid-in capital295,318  292,746  
Retained earnings and other equity220,358  181,044  
     Total shareholders' equity673,460  631,574  
     Total liabilities and shareholders' equity$5,409,561  $5,004,253  
Net interest income$43,121  $42,176  
Net interest spread3.11  3.34  
Effect of net interest-free funding sources0.37  0.41  
Net interest margin3.48  %3.75  %
Ratio of average interest-earning assets to average interest-bearing liabilities147.97  %142.61  %
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and unearned discount.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the three months ended March 31, 2020 and 2019 have been calculated using the Corporation’s federal applicable rate of 21.0%.


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