Univest Financial Corporation Reports First Quarter Results

Rhea-AI Summary

Univest Financial Corporation (NASDAQ: UVSP) reported Q1 2022 net income of $20.3 million, down from $32.6 million in Q1 2021. Diluted EPS was $0.68, compared to $1.11 a year earlier. A 5% dividend increase to $0.21 per share was announced, with planned quarterly repurchases of 150,000 shares. The corporation expanded to Western PA and Maryland with the hiring of two new market presidents. Noninterest income decreased by 12%, driven by a significant drop in mortgage banking activities. The net interest margin slightly improved to 2.89% despite rising interest rates.

Positive

• Dividend increased by 5% to $0.21 per share.
• Expansion into two new markets with experienced leadership.
• Net interest income rose by 2.7% to $46.7 million.
• Gross loans and leases grew by 8.5% from December 31, 2021.

Negative

• Net income decreased by 37.4% from Q1 2021.
• Noninterest income fell by 12%, primarily due to a 67.5% drop in mortgage banking activities.
• Total deposits decreased by $7.2 million, or 0.5%, from December 31, 2021.

(Announces 5% increase in dividend and plan to commence quarterly share repurchases)

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 Basis	March 31, 2022							December 31, 2021
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	733,173		$	357	0.20	%	$	914,287		$	370	0.16	%
U.S. government obligations		5,222			26	2.02			6,999			37	2.10
Obligations of state and political subdivisions*		2,332			19	3.30			2,334			19	3.23
Other debt and equity securities		514,574			2,339	1.84			460,255			1,845	1.59
Federal Home Loan Bank, Federal Reserve Bank and other stock		27,115			355	5.31			28,402			375	5.24
Total interest-earning deposits, investments and other interest-earning assets		1,282,416			3,096	0.98			1,412,277			2,646	0.74
Commercial, financial, and agricultural loans		901,555			7,571	3.41			869,471			7,022	3.20
Paycheck Protection Program loans		18,402			591	13.02			53,745			1,568	11.57
Real estate—commercial and construction loans		2,904,602			25,820	3.61			2,826,720			26,669	3.74
Real estate—residential loans		1,116,356			9,882	3.59			1,107,911			10,165	3.64
Loans to individuals		25,799			238	3.74			26,462			249	3.73
Municipal loans and leases *		242,508			2,434	4.07			245,038			2,515	4.07
Lease financings		135,476			2,075	6.21			125,932			1,951	6.15
Gross loans and leases		5,344,698			48,611	3.69			5,255,279			50,139	3.79
Total interest-earning assets		6,627,114			51,707	3.16			6,667,556			52,785	3.14
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		$	443	0.20	%	$	939,478		$	493	0.21	%
Money market savings		1,542,581			904	0.24			1,616,890			968	0.24
Regular savings		1,021,550			238	0.09			997,814			253	0.10
Time deposits		473,589			1,306	1.12			487,434			1,370	1.12
Total time and interest-bearing deposits		3,919,182			2,891	0.30			4,041,616			3,084	0.30
Short-term borrowings		17,636			2	0.05			14,144			1	0.03
Long-term debt		95,000			317	1.35			95,000			325	1.36
Subordinated notes		98,911			1,328	5.45			98,833			1,327	5.33
Total borrowings		211,547			1,647	3.16			207,977			1,653	3.15
Total interest-bearing liabilities		4,130,729			4,538	0.45			4,249,593			4,737	0.44
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
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	733,173		$	357	0.20	%	$	237,548		$	56	0.10	%
U.S. government obligations		5,222			26	2.02			6,998			36	2.09
Obligations of state and political subdivisions*		2,332			19	3.30			11,544			105	3.69
Other debt and equity securities		514,574			2,339	1.84			355,827			1,267	1.44
Federal Home Loan Bank, Federal Reserve Bank and other stock		27,115			355	5.31			26,368			348	5.35
Total interest-earning deposits, investments and other interest-earning assets		1,282,416			3,096	0.98			638,285			1,812	1.15
Commercial, financial, and agricultural loans		901,555			7,571	3.41			782,208			6,798	3.52
Paycheck Protection Program loans		18,402			591	13.02			506,939			4,524	3.62
Real estate—commercial and construction loans		2,904,602			25,820	3.61			2,621,981			24,458	3.78
Real estate—residential loans		1,116,356			9,882	3.59			1,037,000			9,873	3.86
Loans to individuals		25,799			238	3.74			26,447			265	4.06
Municipal loans and leases*		242,508			2,434	4.07			245,638			2,530	4.18
Lease financings		135,476			2,075	6.21			105,684			1,737	6.67
Gross loans and leases		5,344,698			48,611	3.69			5,325,897			50,185	3.82
Total interest-earning assets		6,627,114			51,707	3.16			5,964,182			51,997	3.54
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		$	443	0.20	%	$	817,940		$	490	0.24	%
Money market savings		1,542,581			904	0.24			1,243,673			853	0.28
Regular savings		1,021,550			238	0.09			959,232			298	0.13
Time deposits		473,589			1,306	1.12			525,800			1,759	1.36
Total time and interest-bearing deposits		3,919,182			2,891	0.30			3,546,645			3,400	0.39
Short-term borrowings		17,636			2	0.05			17,894			2	0.05
Long-term debt		95,000			317	1.35			101,333			348	1.39
Subordinated notes		98,911			1,328	5.45			183,340			2,293	5.07
Total borrowings		211,547			1,647	3.16			302,567			2,643	3.54
Total interest-bearing liabilities		4,130,729			4,538	0.45			3,849,212			6,043	0.64
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 Description	Total 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 Financings	Total 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

FAQ

What are the Q1 2022 earnings for Univest Financial Corporation (UVSP)?

Univest Financial Corporation reported Q1 2022 net income of $20.3 million, or $0.68 diluted EPS.

What dividend increase did Univest announce recently?

Univest announced a 5% increase in its quarterly dividend, raising it to $0.21 per share.

How is Univest expanding its business?

Univest is expanding into Western Pennsylvania and Maryland by hiring new market presidents.

What was the change in noninterest income for Univest in Q1 2022?

Noninterest income decreased by 12% compared to Q1 2021.

What plans does Univest have for share repurchases?

Univest plans to repurchase approximately 150,000 shares per quarter.