Univest Financial Corporation Reports First Quarter Results

Rhea-AI Summary

Univest Financial reported a net income of $20.3 million for the first quarter of 2024, with diluted earnings per share at $0.69. The financial results included a $3.4 million net gain from the sale of mortgage servicing rights. Gross loans and leases increased, while total deposits also saw an uptick. Noninterest income rose by $5.9 million, while noninterest expenses increased slightly. The effective income tax rate was 20.5%. Asset quality remained stable, with nonperforming assets at $40.0 million. Univest declared a quarterly cash dividend of $0.21 per share and repurchased 315,507 shares of common stock during the quarter.

Positive

• Univest reported a net income of $20.3 million for Q1 2024, with diluted earnings per share at $0.69.
• The financial results included a $3.4 million net gain from the sale of mortgage servicing rights.
• Gross loans and leases increased, while total deposits rose by $29.6 million.
• Noninterest income increased by $5.9 million, with service fee income and insurance commission and fee income showing growth.
• Noninterest expenses increased slightly, with data processing costs and salaries, benefits, and commissions rising.
• The effective income tax rate was 20.5% for the quarter ended March 31, 2024.
• Asset quality remained stable, with nonperforming assets at $40.0 million.
• Univest declared a quarterly cash dividend of $0.21 per share and repurchased 315,507 shares of common stock during the quarter.

Negative

• None.

Insights

Financial Analyst

Examining the reported net income decline of Univest Financial Corporation, which dropped from $21.0 million to $20.3 million year-over-year, highlights a marginal earnings decrease. Although this fluctuation is quite subtle, it may indicate pressures facing the institution, such as the increased cost of funds noted. The 13.2% reduction in net interest income is significant and reflects a changing interest rate environment. Investors should be aware that shifts in net interest margin, which is the spread between the interest income generated by banks and the amount of interest paid out to the lenders, can materially affect profitability. This metric's drop from 3.58% to 2.88% year-over-year deserves attention as it suggests a tighter spread, potentially squeezing profits moving forward.

Market Research Analyst

The strategic steps, such as the sale of mortgage servicing rights, generated a net gain, positively impacting earnings per share by $0.09. This type of transaction can be seen as a liquidity management strategy which could appeal to investors seeking signs of proactive financial stewardship. Furthermore, the growth in gross loans and leases by 5.4% year-over-year indicates a healthy demand for the bank's lending products, which is a positive signal for growth prospects. However, the shift towards increased consumer and brokered deposits, up 9.8% from the previous year, could be a double-edged sword. On one hand, it underlines a growing customer base, while on the other, it could expose the bank to higher liquidity risks if the deposits are not as stable as traditional retail deposits.

Risk Management Specialist

The decrease in noninterest-bearing deposits as a percentage of total deposits and the replacement of long-term FHLB borrowings with lower cost brokered deposits are noteworthy from a risk perspective. The reduction from 23.0% to 21.9% in noninterest-bearing deposits might slightly increase the bank's cost of funds over time. Moreover, brokered deposits are often viewed as less stable funding sources compared to core deposits, which can raise a flag for potential liquidity risk. This strategy benefits from lower costs in the short term, but investors should be cautious about the bank's liquidity profile changes and how these might affect financial stability during market stress.

SOUDERTON, Pa., April 24, 2024 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. (the "Bank") and its insurance, investments and equipment financing subsidiaries, announced net income for the quarter ended March 31, 2024 was $20.3 million, or $0.69 diluted earnings per share, compared to net income of $21.0 million, or $0.71 diluted earnings per share, for the quarter ended March 31, 2023.

One-Time Items
The financial results for the quarter included a $3.4 million net gain ($2.7 million after-tax), or $0.09 diluted earnings per share, generated from the sale of mortgage servicing rights associated with $591.1 million of serviced loans.

Loans
Gross loans and leases increased $11.9 million, or 0.2% (0.8% annualized), from December 31, 2023, primarily due to increases in commercial loans and residential mortgage loans, partially offset by decreases in construction and commercial real estate loans. Gross loans and leases increased $339.3 million, or 5.4%, from March 31, 2023, primarily due to increases in commercial real estate, residential mortgage loans and lease financings, partially offset by a decrease in commercial loans.

Deposits, Borrowings and Liquidity
Total deposits increased $29.6 million, or 0.5% (2.0% annualized), from December 31, 2023, primarily due to increases in consumer and brokered deposits, partially offset by decreases in commercial and seasonal public funds deposits. Total deposits increased $570.7 million, or 9.8%, from March 31, 2023, primarily due to increases in consumer, public funds and brokered deposits, partially offset by a decrease in commercial deposits. Noninterest-bearing deposits represented 21.9% of total deposits at March 31, 2024, down from 23.0% at December 31, 2023. At March 31, 2024, unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, represented 22.3% of total deposits, down from 23.3% at December 31, 2023.

Total borrowings decreased $61.4 million, or 13.2% (52.8% annualized), from December 31, 2023, primarily due to pay-downs of long-term FHLB advances of $60.0 million. These borrowings were replaced with $110.2 million of lower cost brokered deposits during the quarter.

As of March 31, 2024, the Corporation had cash and cash equivalents totaling $201.6 million. The Corporation and its subsidiaries had committed borrowing capacity of $3.4 billion at March 31, 2024, of which $2.1 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $334.0 million at March 31, 2024. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

Net Interest Income and Margin
Net interest income of $51.5 million for the first quarter of 2024 decreased $7.9 million, or 13.2%, from the first quarter of 2023 and $1.3 million, or 2.5%, from the fourth quarter of 2023. The decrease in net interest income for the first quarter of 2024 compared to the first quarter of 2023 was due to an increase in the cost of funds and the average balance of interest-bearing liabilities, partially offset by an increase in asset yields and the average balance of interest-earning assets. The decrease in net interest income for the first quarter of 2024 compared to the fourth quarter of 2023 was due to a decrease in the average balance of interest-earning assets, including excess liquidity, and an increase in the cost of funds, partially offset by an increase in asset yields and a decrease in the average balance of interest-bearing liabilities.

Net interest margin, on a tax-equivalent basis, was 2.88% for the first quarter of 2024, compared to 2.84% for the fourth quarter of 2023 and 3.58% for the first quarter of 2023. Excess liquidity reduced net interest margin by approximately three basis points for the quarter ended March 31, 2024 compared to approximately ten basis points for the quarter ended December 31, 2023. Excess liquidity had no impact on net interest margin for the quarter ended March 31, 2023.

Noninterest Income
Noninterest income for the quarter ended March 31, 2024 was $25.6 million, an increase of $5.9 million, or 30.1%, from the comparable period in the prior year.

Other service fee income increased $3.3 million, or 108.6%, for the quarter ended March 31, 2024, primarily due to the net gain on the sale of mortgage servicing rights as previously mentioned.

Insurance commission and fee income increased $714 thousand, or 11.0%, for the quarter ended March 31, 2024, primarily due to increases in premiums for group life and health and commercial lines and an increase in contingent commission income of $484 thousand, which were $2.3 million and $1.8 million for the quarters ended March 31, 2024 and 2023, respectively. Contingent income is largely recognized in the first quarter of the year.

Investment advisory commission and fee income increased $442 thousand, or 9.3%, for the quarter ended March 31, 2024, primarily due to new customer relationships and appreciation of assets under management, as a majority of investment advisory fees are billed based on the prior quarter-end assets under management balance. Service charges on deposit accounts increased $324 thousand, or 20.9%, for the quarter ended March 31, 2024, primarily due to increased treasury management income. Net gain on mortgage banking activities increased $314 thousand, or 50.2%, for the quarter ended March 31, 2024, primarily due to increased salable volume.

Other income increased $554 thousand, or 117.6%, for the quarter ended March 31, 2024 compared to the three months ended March 31, 2023. Gains on the sale of Small Business Administration loans increased $239 thousand due to increased sale volume. Fees on risk participation agreements for interest rate swaps increased $141 thousand.

Noninterest Expense
Noninterest expense for the quarter ended March 31, 2024 was $50.1 million, an increase of $545 thousand, or 1.1%, from the comparable period in the prior year.

Data processing increased $466 thousand, or 11.6%, for the quarter ended March 31, 2024, primarily due to our investments in technology in recent years, including the launch of our online small business loan and deposit products, and general price increases incurred in the second half of 2023. Salaries, benefits and commissions increased $324 thousand, or 1.0%, for the quarter ended March 31, 2024, primarily driven by decreased capitalized compensation, resulting from lower loan production in the current period, and increased medical claims expense. These increases were partially offset by decreased salary expense primarily due to staff reductions over the last twelve months.

Other expense decreased $268 thousand, or 3.8%, for the quarter ended March 31, 2024, primarily due to decreases in retirement plan costs of $210 thousand. Professional fees decreased $253 thousand, or 13.0%, for the quarter ended March 31, 2024, primarily due to consultant fees incurred in the first quarter of 2023 related to our digital transformation initiative.

Tax Provision
The effective income tax rate was 20.5% for the quarter ended March 31, 2024, compared to an effective tax rate of 19.4% for the quarter ended March 31, 2023. The discrete tax effect of vested equity compensation awards unfavorably impacted the first quarter of 2024 by 74 basis points and favorably impacted the first quarter of 2023 by 76 basis points. Additionally, the effective tax rates for the three months ended March 31, 2024 and 2023 reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $40.0 million at March 31, 2024, compared to $40.1 million at December 31, 2023 and $32.4 million at March 31, 2023.

Net loan and lease charge-offs were $1.4 million for the three months ended March 31, 2024 compared to $1.1 million and $2.8 million for the three months ended December 31, 2023 and March 31, 2023, respectively.

The provision for credit losses was $1.4 million for the three months ended March 31, 2024 compared to $1.9 million and $3.4 million for the three months ended December 31, 2023 and March 31, 2023, respectively. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.30% at March 31, 2024 and December 31, 2023 and 1.28% March 31, 2023.

Dividend and Share Repurchases
On April 24, 2024, Univest declared a quarterly cash dividend of $0.21 per share to be paid on May 22, 2024 to shareholders of record as of May 8, 2024. During the quarter ended March 31, 2024, the Corporation repurchased 315,507 shares of common stock at an average price of $20.25 per share. Including brokerage fees and excise tax, the average price per share was $20.48. As of March 31, 2024, 887,182 shares are available for repurchase under the Share Repurchase Plan.

Conference Call
Univest will host a conference call to discuss first quarter 2024 results on Thursday, April 25, 2024 at 9:00 a.m. EST. Participants may preregister at https://www.netroadshow.com/events/login?show=1f74990c&confId=63330. The general public can access the call by dialing 1-833-470-1428; using Access Code 468018. A replay of the conference call will be available through May 25, 2024 by dialing 1-866-813-9403; using Access Code 450536.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.7 billion in assets and $5.0 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2024. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices and online at www.univest.net.  

This press release and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, business, prospects and strategies of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future financial condition, results of operations, business, prospects or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) inflation and/or changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and/or lead to higher operating costs; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or credit loss provisions; (4) changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; (5) our ability to access cost-effective funding; (6) changes in economic conditions nationally and in our market; (7) economic assumptions that may impact our allowance for credit losses calculation; (8) legislative, regulatory, accounting or tax changes; (9) monetary and fiscal policies of the U.S. government, including the policies of the Board of Governors of the Federal Reserve System; (10) technological issues that may adversely affect our operations or those of our customers; (11) a failure or breach in our operational or security systems or infrastructure, including cyberattacks; (12) changes in the securities markets; (13) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (14) our ability to enter into new markets successfully and capitalize on growth opportunities and/or (15) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

(UVSP - ER)

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2024
(Dollars in thousands)
Balance Sheet (Period End)		03/31/24				12/31/23				09/30/23				06/30/23				03/31/23
ASSETS
Cash and due from banks		$	49,318			$	72,815			$	68,900			$	80,795			$	71,215
Interest-earning deposits with other banks			152,288				176,984				221,441				59,616				67,109
Cash and cash equivalents			201,606				249,799				290,341				140,411				138,324
Investment securities held-to-maturity			143,474				145,777				149,451				153,509				151,347
Investment securities available for sale, net of allowance for credit losses			350,819				351,553				334,538				356,164				367,656
Investments in equity securities			3,355				3,293				4,054				3,443				3,105
Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost			37,394				40,499				42,417				42,811				43,792
Loans held for sale			13,188				11,637				16,473				29,526				5,425
Loans and leases held for investment			6,579,086				6,567,214				6,574,958				6,462,238				6,239,804
Less: Allowance for credit losses, loans and leases			(85,632	)			(85,387	)			(83,837	)			(82,709	)			(80,034	)
Net loans and leases held for investment			6,493,454				6,481,827				6,491,121				6,379,529				6,159,770
Premises and equipment, net			48,739				51,441				51,287				52,058				52,334
Operating lease right-of-use assets			30,702				31,795				31,053				30,237				31,663
Goodwill			175,510				175,510				175,510				175,510				175,510
Other intangibles, net of accumulated amortization			7,473				10,950				11,079				10,923				11,044
Bank owned life insurance			137,896				131,344				130,522				129,715				128,926
Accrued interest and other assets			102,958				95,203				100,220				96,314				90,095
Total assets		$	7,746,568			$	7,780,628			$	7,828,066			$	7,600,150			$	7,358,991
LIABILITIES
Noninterest-bearing deposits		$	1,401,806			$	1,468,320			$	1,432,559			$	1,582,767			$	1,799,225
Interest-bearing deposits:			5,003,552				4,907,461				5,006,606				4,404,635				4,035,432
Total deposits			6,405,358				6,375,781				6,439,165				5,987,402				5,834,657
Short-term borrowings			4,816				6,306				14,676				244,666				271,881
Long-term debt			250,000				310,000				320,000				320,000				220,000
Subordinated notes			148,886				148,761				148,636				148,510				148,385
Operating lease liabilities			33,744				34,851				34,017				33,428				34,846
Accrued expenses and other liabilities			60,095				65,721				64,374				60,922				50,726
Total liabilities			6,902,899				6,941,420				7,020,868				6,794,928				6,560,495
SHAREHOLDERS' EQUITY
Common stock, $5 par value: 48,000,000 shares authorized and 31,556,799 shares issued			157,784				157,784				157,784				157,784				157,784
Additional paid-in capital			298,914				301,066				300,171				299,212				298,167
Retained earnings			488,790				474,691				464,634				453,806				443,493
Accumulated other comprehensive loss, net of tax benefit			(54,740	)			(50,646	)			(71,586	)			(61,034	)			(55,550	)
Treasury stock, at cost			(47,079	)			(43,687	)			(43,805	)			(44,546	)			(45,398	)
Total shareholders’ equity			843,669				839,208				807,198				805,222				798,496
Total liabilities and shareholders’ equity		$	7,746,568			$	7,780,628			$	7,828,066			$	7,600,150			$	7,358,991
		For the three months ended,
Balance Sheet (Average)		03/31/24				12/31/23				09/30/23				06/30/23				03/31/23
Assets		$	7,696,575			$	7,865,634			$	7,693,983			$	7,440,798			$	7,219,211
Investment securities, net of allowance for credit losses			500,983				489,587				506,341				518,995				515,880
Loans and leases, gross			6,577,365				6,594,233				6,537,169				6,372,342				6,164,890
Deposits			6,303,854				6,470,141				6,222,710				5,844,582				5,834,415
Shareholders' equity			842,546				814,941				811,515				806,709				789,153

Univest Financial Corporation
Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
March 31, 2024
(Dollars in thousands)
Summary of Major Loan and Lease Categories (Period End)		03/31/24				12/31/23				09/30/23				06/30/23				03/31/23
Commercial, financial and agricultural		$	1,014,568			$	989,723			$	1,050,004			$	1,039,265			$	1,032,753
Real estate-commercial			3,283,729				3,302,798				3,275,140				3,221,993				3,128,210
Real estate-construction			379,995				394,462				427,561				413,404				376,569
Real estate-residential secured for business purpose			524,196				517,002				516,471				517,521				498,505
Real estate-residential secured for personal purpose			922,412				909,015				861,122				832,632				779,557
Real estate-home equity secured for personal purpose			177,446				179,282				176,855				175,090				172,073
Loans to individuals			27,200				27,749				27,331				25,544				28,656
Lease financings			249,540				247,183				240,474				236,789				223,481
Total loans and leases held for investment, net of deferred income			6,579,086				6,567,214				6,574,958				6,462,238				6,239,804
Less: Allowance for credit losses, loans and leases			(85,632	)			(85,387	)			(83,837	)			(82,709	)			(80,034	)
Net loans and leases held for investment		$	6,493,454			$	6,481,827			$	6,491,121			$	6,379,529			$	6,159,770
Asset Quality Data (Period End)		03/31/24				12/31/23				09/30/23				06/30/23				03/31/23
Nonaccrual loans and leases, including nonaccrual loans held for sale*		$	20,363			$	20,527			$	18,085			$	15,087			$	11,362
Accruing loans and leases 90 days or more past due			268				534				2,135				55				1,996
Total nonperforming loans and leases			20,631				21,061				20,220				15,142				13,358
Other real estate owned			19,220				19,032				19,916				19,345				19,000
Repossessed assets			167				-				-				-				-
Total nonperforming assets		$	40,018			$	40,093			$	40,136			$	34,487			$	32,358
Nonaccrual loans and leases / Loans and leases held for investment			0.31%				0.31%				0.28%				0.23%				0.18%
Nonperforming loans and leases / Loans and leases held for investment			0.31%				0.32%				0.31%				0.23%				0.21%
Nonperforming assets / Total assets			0.52%				0.52%				0.51%				0.45%				0.44%
Allowance for credit losses, loans and leases		$	85,632			$	85,387			$	83,837			$	82,709			$	80,034
Allowance for credit losses, loans and leases / Loans and leases held for investment			1.30%				1.30%				1.28%				1.28%				1.28%
Allowance for credit losses, loans and leases / Nonaccrual loans and leases			420.53%				415.97%				463.57%				548.21%				704.40%
Allowance for credit losses, loans and leases / Nonperforming loans and leases			415.06%				405.43%				414.62%				546.22%				599.15%
*Includes a $5.8 million loan held for sale at September 30, 2023.
		For the three months ended,
		03/31/24				12/31/23				09/30/23				06/30/23				03/31/23
Net loan and lease charge-offs		$	1,406			$	1,074			$	969			$	512			$	2,842
Net loan and lease charge-offs (annualized)/Average loans and leases			0.09%				0.06%				0.06%				0.03%				0.19%

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2024
(Dollars in thousands, except per share data)
		For the three months ended,
For the period:		03/31/24			12/31/23			09/30/23			06/30/23			03/31/23
Interest income		$	98,609		$	101,232		$	97,106		$	90,139		$	83,253
Interest expense			47,142			48,472			43,516			35,809			23,936
Net interest income			51,467			52,760			53,590			54,330			59,317
Provision for credit losses			1,432			1,931			2,024			3,428			3,387
Net interest income after provision for credit losses			50,035			50,829			51,566			50,902			55,930
Noninterest income:
Trust fee income			2,108			1,943			1,910			1,924			1,955
Service charges on deposit accounts			1,871			1,960			1,816			1,725			1,547
Investment advisory commission and fee income			5,194			4,561			4,843			4,708			4,752
Insurance commission and fee income			7,201			4,596			4,852			5,108			6,487
Other service fee income			6,415			2,967			3,020			3,318			3,076
Bank owned life insurance income			842			823			806			789			767
Net gain on mortgage banking activities			939			809			1,216			1,039			625
Other income			1,025			961			228			1,222			471
Total noninterest income			25,595			18,620			18,691			19,833			19,680
Noninterest expense:
Salaries, benefits and commissions			31,338			29,321			29,978			29,875			31,014
Net occupancy			2,872			2,751			2,594			2,614			2,727
Equipment			1,111			1,066			1,087			986			993
Data processing			4,495			4,444			4,189			4,137			4,029
Professional fees			1,688			1,768			1,763			1,669			1,941
Marketing and advertising			416			632			555			622			371
Deposit insurance premiums			1,135			1,350			1,258			1,116			1,101
Intangible expenses			187			212			220			253			253
Restructuring charges			-			189			-			1,330			-
Other expense			6,832			7,313			7,344			7,197			7,100
Total noninterest expense			50,074			49,046			48,988			49,799			49,529
Income before taxes			25,556			20,403			21,269			20,936			26,081
Income tax expense			5,251			4,149			4,253			4,136			5,047
Net income		$	20,305		$	16,254		$	17,016		$	16,800		$	21,034
Net income per share:
Basic		$	0.69		$	0.55		$	0.58		$	0.57		$	0.72
Diluted		$	0.69		$	0.55		$	0.58		$	0.57		$	0.71
Dividends declared per share		$	0.21		$	0.21		$	0.21		$	0.21		$	0.21
Weighted average shares outstanding			29,413,999			29,500,147			29,479,066			29,439,392			29,312,265
Period end shares outstanding			29,337,919			29,511,721			29,508,128			29,471,124			29,427,696

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2024
					For the three months ended,
Profitability Ratios (annualized)					03/31/24				12/31/23				09/30/23				06/30/23				03/31/23
Return on average assets						1.06%				0.82%				0.88%				0.91%				1.18%
Return on average assets, excluding restructuring						1.06%				0.83%				0.88%				0.96%				1.18%
charges (1)
Return on average shareholders' equity						9.69%				7.91%				8.32%				8.35%				10.81%
Return on average shareholders' equity, excluding						9.69%				7.99%				8.32%				8.88%				10.81%
restructuring charges (1)
Return on average tangible common equity (1)(3)						12.38%				10.23%				10.77%				10.85%				14.11%
Return on average tangible common equity, excluding						12.38%				10.32%				10.77%				11.52%				14.11%
restructuring charges (1)(3)
Net interest margin (FTE)						2.88%				2.84%				2.96%				3.14%				3.58%
Efficiency ratio (2)						64.6%				68.3%				67.3%				66.7%				62.2%
Efficiency ratio, excluding restructuring charges (1)(2)						64.6%				68.0%				67.3%				64.9%				62.2%
Capitalization Ratios
Dividends declared to net income						30.5%				38.1%				36.4%				36.8%				29.2%
Shareholders' equity to assets (Period End)						10.89%				10.79%				10.31%				10.59%				10.85%
Tangible common equity to tangible assets (1)						8.80%				8.70%				8.22%				8.45%				8.63%
Common equity book value per share					$	28.76			$	28.44			$	27.36			$	27.32			$	27.13
Tangible common equity book value per share (1)					$	22.70			$	22.41			$	21.32			$	21.27			$	21.07
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio						9.65%				9.36%				9.43%				9.59%				9.71%
Common equity tier 1 risk-based capital ratio						10.71%				10.58%				10.32%				10.26%				10.43%
Tier 1 risk-based capital ratio						10.71%				10.58%				10.32%				10.26%				10.43%
Total risk-based capital ratio						14.11%				13.90%				13.58%				13.54%				13.78%
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included below.
(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.
(3) Net income before amortization of intangibles to average tangible common equity.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
				For the Three Months Ended,
Tax Equivalent Basis	March 31, 2024							December 31, 2023
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	120,845		$	1,609	5.36	%	$	280,693		$	3,804	5.38	%
Obligations of state and political subdivisions*		1,951			12	2.47			2,277			14	2.44
Other debt and equity securities		499,032			3,647	2.94			487,310			3,678	2.99
Federal Home Loan Bank, Federal Reserve Bank and other stock		39,115			724	7.44			41,361			767	7.36
Total interest-earning deposits, investments and other interest-earning assets		660,943			5,992	3.65			811,641			8,263	4.04
Commercial, financial, and agricultural loans		934,649			16,523	7.11			973,450			17,485	7.13
Real estate—commercial and construction loans		3,575,142			50,641	5.70			3,590,477			50,715	5.60
Real estate—residential loans		1,618,188			19,555	4.86			1,585,705			19,133	4.79
Loans to individuals		27,315			548	8.07			27,667			558	8.00
Municipal loans and leases *		232,380			2,464	4.26			230,394			2,438	4.20
Lease financings		189,691			3,169	6.72			186,540			2,897	6.16
Gross loans and leases		6,577,365			92,900	5.68			6,594,233			93,226	5.61
Total interest-earning assets		7,238,308			98,892	5.49			7,405,874			101,489	5.44
Cash and due from banks		54,870							54,981
Allowance for credit losses, loans and leases		(86,495	)						(84,386	)
Premises and equipment, net		50,592							51,489
Operating lease right-of-use assets		31,121							31,251
Other assets		408,179							406,425
Total assets	$	7,696,575						$	7,865,634
Liabilities:
Interest-bearing checking deposits	$	1,180,696		$	8,218	2.80	%	$	1,193,386		$	8,409	2.80	%
Money market savings		1,705,291			19,220	4.53			1,845,153			21,133	4.54
Regular savings		769,926			905	0.47			784,937			874	0.44
Time deposits		1,238,878			13,630	4.42			1,188,054			12,748	4.26
Total time and interest-bearing deposits		4,894,791			41,973	3.45			5,011,530			43,164	3.42
Short-term borrowings		10,127			5	0.20			9,814			1	0.04
Long-term debt		292,486			2,883	3.96			318,805			3,026	3.77
Subordinated notes		148,818			2,281	6.16			148,693			2,281	6.09
Total borrowings		451,431			5,169	4.61			477,312			5,308	4.41
Total interest-bearing liabilities		5,346,222			47,142	3.55			5,488,842			48,472	3.50
Noninterest-bearing deposits		1,409,063							1,458,610
Operating lease liabilities		34,166							34,255
Accrued expenses and other liabilities		64,578							68,986
Total liabilities		1,507,807							7,050,693
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")		6,854,029				2.81			6,947,452				2.77
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		300,679							300,558
Retained earnings and other equity		384,083							356,599
Total shareholders' equity		842,546							814,941
Total liabilities and shareholders' equity	$	7,696,575						$	7,865,634
Net interest income				$	51,750						$	53,017
Net interest spread						1.94							1.94
Effect of net interest-free funding sources						0.94							0.90
Net interest margin						2.88	%						2.84	%
Ratio of average interest-earning assets to average interest-bearing liabilities		135.39	%						134.93	%
* Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of 453 thousand and $428 thousand for the three months ended March 31, 2024 and December 31, 2023, respectively.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the three months ended March 31, 2024 and December 31, 2023 have been calculated using the Corporation’s federal applicable rate of 21.0%.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
				For the Three Months Ended March 31,
Tax Equivalent Basis					2024							2023
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	120,845		$	1,609	5.36	%	$	47,835		$	479	4.06	%
Obligations of state and political subdivisions*		1,951			12	2.47			2,286			17	3.02
Other debt and equity securities		499,032			3,647	2.94			513,594			3,495	2.76
Federal Home Loan Bank, Federal Reserve Bank and other stock		39,115			724	7.44			34,742			609	7.11
Total interest-earning deposits, investments and other interest-earning assets		660,943			5,992	3.65			598,457			4,600	3.12
Commercial, financial, and agricultural loans		934,649			16,523	7.11			991,876			15,538	6.35
Real estate—commercial and construction loans		3,575,142			50,641	5.70			3,342,199			42,421	5.15
Real estate—residential loans		1,618,188			19,555	4.86			1,408,292			15,730	4.53
Loans to individuals		27,315			548	8.07			27,254			449	6.68
Municipal loans and leases*		232,380			2,464	4.26			229,955			2,341	4.13
Lease financings		189,691			3,169	6.72			165,314			2,541	6.23
Gross loans and leases		6,577,365			92,900	5.68			6,164,890			79,020	5.20
Total interest-earning assets		7,238,308			98,892	5.49			6,763,347			83,620	5.01
Cash and due from banks		54,870							58,035
Allowance for credit losses, loans and leases		(86,495	)						(79,977	)
Premises and equipment, net		50,592							51,583
Operating lease right-of-use assets		31,121							31,303
Other assets		408,179							394,920
Total assets	$	7,696,575						$	7,219,211
Liabilities:
Interest-bearing checking deposits	$	1,180,696		$	8,218	2.80	%	$	857,891		$	3,164	1.50	%
Money market savings		1,705,291			19,220	4.53			1,489,129			11,081	3.02
Regular savings		769,926			905	0.47			985,716			669	0.28
Time deposits		1,238,878			13,630	4.42			566,308			3,422	2.45
Total time and interest-bearing deposits		4,894,791			41,973	3.45			3,899,044			18,336	1.91
Short-term borrowings		10,127			5	0.20			240,318			2,728	4.60
Long-term debt		292,486			2,883	3.96			112,222			591	2.14
Subordinated notes		148,818			2,281	6.16			148,319			2,281	6.24
Total borrowings		451,431			5,169	4.61			500,859			5,600	4.53
Total interest-bearing liabilities		5,346,222			47,142	3.55			4,399,903			23,936	2.21
Noninterest-bearing deposits		1,409,063							1,935,371
Operating lease liabilities		34,166							34,438
Accrued expenses and other liabilities		64,578							60,346
Total liabilities		1,507,807							6,430,058
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")		6,854,029				2.81			6,335,274				1.53
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		300,679							300,293
Retained earnings and other equity		384,083							331,076
Total shareholders' equity		842,546							789,153
Total liabilities and shareholders' equity	$	7,696,575						$	7,219,211
Net interest income				$	51,750						$	59,684
Net interest spread						1.94							2.80
Effect of net interest-free funding sources						0.94							0.78
Net interest margin						2.88	%						3.58	%
Ratio of average interest-earning assets to average interest-bearing liabilities		135.39	%						153.72	%
* Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of $453 thousand and $465 thousand for the three months ended March 31, 2024 and 2023, respectively.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the three months ended March 31, 2024 and 2023 have been calculated using the Corporation’s federal applicable rate of 21.0%.

Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
March 31, 2024
(Dollars in thousands)
Industry Description	Total Outstanding Balance			% of Commercial Loan Portfolio
CRE - Retail	$	465,915		9.0	%
Animal Production		361,143		6.9
CRE - Multi-family		318,337		6.1
CRE - Office		298,301		5.7
CRE - 1-4 Family Residential Investment		289,167		5.6
CRE - Industrial / Warehouse		248,041		4.8
Hotels & Motels (Accommodation)		193,058		3.7
Specialty Trade Contractors		161,917		3.1
Education		153,971		3.0
Homebuilding (tract developers, remodelers)		152,798		2.9
Nursing and Residential Care Facilities		132,809		2.6
Motor Vehicle and Parts Dealers		132,677		2.6
Merchant Wholesalers, Durable Goods		122,481		2.4
CRE - Mixed-Use - Residential		116,749		2.2
Crop Production		104,137		2.0
Repair and Maintenance		103,139		2.0
Wood Product Manufacturing		90,017		1.7
Real Estate Lenders, Secondary Market Financing		86,382		1.7
Rental and Leasing Services		76,500		1.5
Fabricated Metal Product Manufacturing		75,371		1.4
CRE - Mixed-Use - Commercial		72,763		1.4
Religious Organizations, Advocacy Groups		71,715		1.4
Personal and Laundry Services		71,534		1.4
Administrative and Support Services		70,224		1.3
Amusement, Gambling, and Recreation Industries		68,644		1.3
Merchant Wholesalers, Nondurable Goods		67,775		1.3
Food Services and Drinking Places		66,625		1.3
Private Equity & Special Purpose Entities (except 52592)		66,517		1.3
Miniwarehouse / Self-Storage		61,996		1.2
Food Manufacturing		60,794		1.2
Truck Transportation		53,952		1.0
Industries with >$50 million in outstandings	$	4,415,449		84.9	%
Industries with <$50 million in outstandings	$	787,039		15.1	%
Total Commercial Loans	$	5,202,488		100.0	%
Consumer Loans and Lease Financings	Total Outstanding Balance
Real Estate-Residential Secured for Personal Purpose		922,412
Real Estate-Home Equity Secured for Personal Purpose		177,446
Loans to Individuals		27,200
Lease Financings		249,540
Total - Consumer Loans and Lease Financings	$	1,376,598
Total	$	6,579,086

Univest Financial Corporation
Non-GAAP Reconciliation
March 31, 2024
Non-GAAP to GAAP Reconciliation
Management uses non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release.
				As of or for the three months ended,
(Dollars in thousands)				03/31/24				12/31/23				09/30/23				06/30/23				03/31/23
Restructuring charges (a)				$	-			$	189			$	-			$	1,330			$	-
Tax effect of restructuring charges					-				(40	)			-				(279	)			-
Restructuring charges, net of tax				$	-			$	149			$	-			$	1,051			$	-
Net income				$	20,305			$	16,254			$	17,016			$	16,800			$	21,034
Amortization of intangibles, net of tax					148				167				174				200				200
Net income before amortization of intangibles				$	20,453			$	16,421			$	17,190			$	17,000			$	21,234
Shareholders' equity				$	843,669			$	839,208			$	807,198			$	805,222			$	798,496
Goodwill					(175,510	)			(175,510	)			(175,510	)			(175,510	)			(175,510	)
Other intangibles (b)					(2,273	)			(2,405	)			(2,558	)			(2,767	)			(3,054	)
Tangible common equity				$	665,886			$	661,293			$	629,130			$	626,945			$	619,932
Total assets				$	7,746,568			$	7,780,628			$	7,828,066			$	7,600,150			$	7,358,991
Goodwill					(175,510	)			(175,510	)			(175,510	)			(175,510	)			(175,510	)
Other intangibles (b)					(2,273	)			(2,405	)			(2,558	)			(2,767	)			(3,054	)
Tangible assets				$	7,568,785			$	7,602,713			$	7,649,998			$	7,421,873			$	7,180,427
Average shareholders' equity				$	842,546			$	814,941			$	811,515			$	806,709			$	789,153
Average goodwill					(175,510	)			(175,510	)			(175,510	)			(175,510	)			(175,510	)
Average other intangibles (b)					(2,318	)			(2,477	)			(2,680	)			(2,924	)			(3,137	)
Average tangible common equity				$	664,718			$	636,954			$	633,325			$	628,275			$	610,506
(a) Associated with branch optimization and headcount rationlization expense management strategies
(b) Amount does not include mortgage servicing rights

FAQ

What was Univest Financial 's net income for the first quarter of 2024?

Univest Financial reported a net income of $20.3 million for the first quarter of 2024.

How much did Univest Financial earn per diluted earnings per share in Q1 2024?

Univest Financial earned $0.69 per diluted earnings per share in Q1 2024.

What was the total increase in gross loans and leases for Univest Financial ?

Gross loans and leases for Univest Financial increased by $11.9 million, or 0.2% (0.8% annualized), from December 31, 2023.

What was the total increase in total deposits for Univest Financial ?

Total deposits for Univest Financial increased by $29.6 million, or 0.5% (2.0% annualized), from December 31, 2023.

What was Univest Financial 's effective income tax rate for the quarter ended March 31, 2024?

Univest Financial 's effective income tax rate was 20.5% for the quarter ended March 31, 2024.

How much did Univest Financial repurchase shares for during Q1 2024?

Univest Financial repurchased 315,507 shares of common stock at an average price of $20.25 per share during Q1 2024.