Univest Financial Corporation Reports Year and Fourth Quarter Results
(Loan Growth (excluding PPP loans1) for 2020 of 9.9%)
SOUDERTON, Pa., Jan. 27, 2021 (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 year ended December 31, 2020 of $46.9 million, or $1.60 diluted earnings per share, compared to net income of $65.7 million, or $2.24 diluted earnings per share, for the year ended December 31, 2019. Net income for the quarter ended December 31, 2020 was $25.9 million, or $0.88 diluted earnings per share, compared to net income of $15.5 million, or $0.53 diluted earnings per share, for the quarter ended December 31, 2019.
Pre-tax pre-provision income1 for the year ended December 31, 2020 was $97.7 million, an increase of $9.1 million, or 10.3%, from the comparable period in the prior year. Pre-tax pre-provision income1 for the quarter ended December 31, 2020 was $22.9 million, an increase of $1.8 million, or 8.6%, from the fourth quarter of 2019.
One-Time Items For the Quarter
The financial results for the quarter ended December 31, 2020 included a $1.4 million ($1.1 million after-tax), or $0.04 diluted earnings per share, restructuring charge associated with the Corporation's previously announced financial service center optimization plan. The financial results for the quarter ended December 31, 2020 also included a charge of $1.1 million ($877 thousand after-tax), or $0.03 diluted earnings per share, in other expense related to the extinguishment of long-term debt. During the fourth quarter of 2020, the Corporation modified the vesting criteria for outstanding performance-based restricted stock grants to better reflect the current operating environment. As a result of these modifications, a benefit of $928 thousand ($733 thousand after-tax), or $0.03 diluted earnings per share, was recognized in salaries, benefits and commissions for the quarter ended December 31, 2020.
COVID-19
As a result of the impact of COVID-19, we have taken various actions to support our customers and the communities we collectively serve, including modifying outstanding loans and leases and waiving certain deposit service charges. Loans and leases that were modified via principal and/or interest deferrals were done so 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 have not been categorized as troubled debt restructurings. These loans and leases had a combined principal balance of approximately $68.0 million as of December 31, 2020, which represents approximately 1.4% of the loan portfolio, excluding Paycheck Protection Program ("PPP") loans1. For more information on these loans, including a breakdown of such loans by type, please see the "Loan Portfolio Overview" table within this document.
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. During the quarter ended December 31, 2020, the Corporation reduced its allowance for credit losses resulting in a reversal of provision for credit loss expense of $8.7 million, of which $11.6 million (after-tax benefit of $9.2 million), or $0.31 diluted earnings per share, was attributable to changes in economic-related assumptions within the Corporation’s CECL model offset by a reserve increase attributable to loan growth. During the year ended December 31, 2020, the Corporation recorded CECL related charges of $40.8 million, of which $27.4 million (after-tax charge of $21.6 million), or $0.74 diluted earnings per share, was attributable to changes in economic related assumptions within the CECL model.
Loans
Gross loans and leases, excluding PPP loans1, increased $436.2 million, or 9.9%, from December 31, 2019 primarily due to increases in commercial real estate loans. Gross loans and leases, excluding PPP loans1, increased $112.8 million, or 9.6% (annualized), from September 30, 2020 primarily due to increases in commercial real estate loans.
Deposits
Total deposits increased $882.6 million, or 20.2%, from December 31, 2019 primarily due to increases in commercial, consumer and public funds deposits. Total deposits increased $31.1 million, or 2.4% (annualized), from September 30, 2020 primarily due to an increase in consumer deposits offset by a decrease in commercial deposits.
Net Interest Income and Margin
Net interest income of $174.4 million for the year ended December 31, 2020 increased $5.1 million, or 3.0%, from the prior year primarily due to lower deposit costs and growth in loans partially offset by a decrease in loan and investment yields. Net interest margin, on a tax-equivalent basis, was 3.16% for the year ended December 31, 2020 compared to 3.59% for the year ended December 31, 2019. Excess liquidity reduced net interest margin by approximately fourteen basis points for the year ended December 31, 2020 compared to eight basis points for the year ended December 31, 2019. This excess liquidity was primarily driven by strong deposit balance growth during 2020. PPP loans reduced net interest margin by seven basis points for the year ended December 31, 2020 compared to no impact for the year ended December 31, 2019. Excluding the impacts of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.37% for the year ended December 31, 2020 compared to 3.67% for the year ended December 31, 2019. For the year ended December 31, 2020, PPP loans contributed $7.9 million to net interest income. As of December 31, 2020, $7.7 million of net deferred fees remained on the balance sheet, which represents approximately 63% of the initial deferred fee amount.
Net interest margin, on a tax-equivalent basis, was 3.02% for the fourth quarter of 2020, compared to 3.02% for the third quarter of 2020 and 3.44% for the fourth quarter of 2019. Excess liquidity reduced net interest margin by approximately thirteen basis points for the quarter ended December 31, 2020 compared to eighteen basis points for the quarter ended September 30, 2020 and twelve basis points for the quarter ended December 31, 2019. This excess liquidity was primarily driven by strong deposit balance growth in 2020. PPP loans reduced net interest margin by seven basis points for the quarter ended December 31, 2020 compared to ten basis points for the quarter ended September 30, 2020 and had no impact for the quarter ended December 31, 2019. Excluding the impacts of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.22%, 3.30% and 3.56% for the quarters ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively. For the quarter ended December 31, 2020, PPP loans contributed $3.1 million to net interest income, of which $369 thousand related to forgiveness activity.
Noninterest Income
Noninterest income for the quarter ended December 31, 2020 was $20.1 million, an increase of $4.0 million, or 24.6%, from the comparable period in the prior year. Noninterest income for the year ended December 31, 2020 was $78.3 million, an increase of $12.9 million, or 19.7%, from the comparable period in the prior year.
Net gain on mortgage banking activities increased $3.3 million, or 316.5%, for the quarter and $12.5 million, or 316.7%, for the year ended December 31, 2020 from the comparable periods in the prior year, due to an increase in volume and expansion of margins.
Other income increased $923 thousand, or 91.1%, for the quarter ended December 31, 2020 and $3.3 million, or 127.3%, for the year ended December 31, 2020 from the comparable periods in the prior year. Fees on risk participation agreements for interest rate swaps increased $1.0 million for the quarter ended December 31, 2020 and $4.4 million for the year ended December 31, 2020 from the comparable periods in the prior year, driven by increased customer activity due to the current rate environment. Gain on sale of small business administration (SBA) loans decreased $482 thousand for the year ended December 31, 2020 from the prior year due to decreased SBA loan sale activity. Equity securities measured at fair value decreased $266 thousand for the year ended December 31, 2020 from the prior year.
Service charges on deposit accounts decreased $1.1 million, or 18.5%, for the year ended December 31, 2020 from the prior year due to the waiving of certain deposit service charges for customers in response to COVID-19 during the second quarter of 2020 and reduced customer activity in the third and fourth quarters of 2020.
Other service fee income decreased $1.8 million, or 19.2%, for the year ended December 31, 2020 from the prior year. Mortgage servicing right amortization increased $1.4 million for the year ended December 31, 2020 from the prior year driven by the decline in interest rates and their impact on prepayment activity. Interchange income decreased $308 thousand for the year ended December 31, 2020 from the prior year due to decreased customer transaction activity.
Noninterest Expense
Noninterest expense for the quarter ended December 31, 2020 was $41.7 million, an increase of $4.3 million, or 11.4%, from the comparable period in the prior year. Noninterest expense for the year ended December 31, 2020 was $155.0 million, an increase of $8.9 million, or 6.1% from the prior year.
Salaries, benefits and commissions increased $1.7 million, or 7.7%, for the quarter ended December 31, 2020 and increased $4.9 million, or 5.6%, for the year ended December 31, 2020 from the comparable periods in the prior year. The increases were 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 quarters of 2019, annual merit increases and increased variable compensation due to strong mortgage banking activity. The increases in salaries, benefits and commissions were offset by the benefit of the previously discussed performance-based restricted stock modifications and $1.3 million of incremental capitalized compensation related to origination of PPP loans. Deposit insurance premiums increased $423 thousand, or 123.7%, for the quarter and $1.8 million, or 232.2%, for the year ended December 31, 2020 from the comparable periods in the prior year primarily due to an FDIC small bank assessment credit of $1.1 million, of which $988 thousand was recognized during the third quarter of 2019 and $114 thousand was recognized during the fourth quarter of 2019, and an increased assessment base for 2020 due to asset growth. Restructuring charges increased $1.4 million for the quarter and year ended December 31, 2020 from the comparable periods in the prior year due to the impact of the financial service center optimization plan discussed previously. Other expense increased $615 thousand, or 9.6%, for the quarter and $1.3 million, or 5.7%, for the year ended December 31, 2020 from the comparable periods in the prior year primarily due to charges from the extinguishment of long-term debt discussed previously.
Asset Quality and Provision for Credit Losses
Nonperforming assets were $40.5 million at December 31, 2020, compared to $41.9 million at September 30, 2020 and $39.3 million at December 31, 2019. Other real estate owned includes a $7.1 million property, which transferred to other real estate owned during the second quarter of 2020. The property is under an agreement of sale and is expected to be sold during the first quarter of 2021.
Net loan and lease charge-offs were $618 thousand during the fourth quarter of 2020 and $4.6 million for the year ended December 31, 2020. The reversal of provision for credit losses was $8.7 million for the fourth quarter of 2020, due to a reserve decrease of $8.2 million related to loans and leases and $690 thousand related to unfunded commitments, offset by a reserve increase of $176 thousand related to investment securities. The provision for credit losses was $40.8 million for the year ended December 31, 2020, of which $39.4 million related to loans and leases, $786 thousand related to reserves for unfunded commitments, and $569 thousand related to investment securities.
Net loan and lease charge-offs were $558 thousand during the fourth quarter of 2019 and $2.6 million for the year ended December 31, 2019. The provision for loan and lease losses was $2.2 million for the fourth quarter of 2019 and $8.5 million for the year ended December 31, 2019.
The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.56% at December 31, 2020, compared to 1.76% at September 30, 2020, and 0.81% at December 31, 2019. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans1, was 1.72% at December 31, 2020, compared to 1.95% at September 30, 2020.
Tax Provision
The effective income tax rate was 17.5% for the year ended December 31, 2020 compared to an effective income tax rate of 17.9% for the year ended December 31, 2019. The Corporation's effective income tax rate reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases.
Dividend
On January 27, 2021, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on February 24, 2021 to shareholders of record as of February 10, 2021.
Conference Call
Univest will host a conference call to discuss fourth quarter and year end 2020 results on Thursday, January 28, 2021 at 9:00 a.m. EST. Participants may preregister at https://dpregister.com/sreg/10150871/e00405b3c0. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through February 28, 2021 by dialing 1-877-344-7529; using Conference ID: 10150871.
1Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance 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 $6.3 billion in assets and $4.1 billion in assets under management and supervision through its Wealth Management lines of business at December 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 York, 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 trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, markets and products 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) changes in interest rates; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and credit 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.
Additionally, 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 whether the gradual reopening of businesses will result in a meaningful increase in economic activity. 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 the economy is unable to substantially reopen, and higher levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase; (3) collateral for loans, especially real estate, may decline in value; (4) our allowance for credit losses may have to be increased if borrowers experience financial difficulties; (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; (7) 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; (8) our wealth management revenues may decline with continuing market turmoil; (9) litigation, regulatory enforcement risk and reputation risk regarding our participation in the Paycheck Protection Program and the risk that the Small Business Administration may not fund some or all PPP loan guarantees; (10) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (11) Federal Deposit Insurance Corporation premiums may increase if the agency experience additional resolution costs; and (12) further and sustained decline in our stock price or other triggering event could result in an impairment charge being recorded. 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) | ||||||||||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||
| Balance Sheet (Period End) | 12/31/20 | 09/30/20 | 06/30/20 | 03/31/20 | 12/31/19 | |||||||||||||||||||||||
| Assets | $ | 6,336,496 | $ | 6,382,831 | $ | 6,125,312 | $ | 5,464,768 | $ | 5,380,924 | ||||||||||||||||||
| Investment securities, net of allowance for credit losses | 373,176 | 368,830 | 397,852 | 423,521 | 441,599 | |||||||||||||||||||||||
| Loans held for sale | 35,529 | 14,465 | 31,082 | 11,417 | 5,504 | |||||||||||||||||||||||
| Loans and leases held for investment, gross | 5,306,841 | 5,211,856 | 4,951,809 | 4,448,825 | 4,386,836 | |||||||||||||||||||||||
| Allowance for credit losses, loans and leases | 83,044 | 91,870 | 86,217 | 68,216 | 35,331 | |||||||||||||||||||||||
| Loans and leases held for investment, net | 5,223,797 | 5,119,986 | 4,865,592 | 4,380,609 | 4,351,505 | |||||||||||||||||||||||
| Total deposits | 5,242,715 | 5,211,603 | 4,869,329 | 4,407,303 | 4,360,075 | |||||||||||||||||||||||
| Noninterest-bearing deposits | 1,690,663 | 1,714,505 | 1,725,819 | 1,318,270 | 1,279,681 | |||||||||||||||||||||||
| NOW, money market and savings | 2,988,277 | 2,940,879 | 2,623,025 | 2,452,021 | 2,474,384 | |||||||||||||||||||||||
| Time deposits | 563,775 | 556,219 | 520,485 | 637,012 | 606,010 | |||||||||||||||||||||||
| Borrowings | 311,421 | 416,104 | 515,722 | 323,363 | 263,596 | |||||||||||||||||||||||
| Shareholders' equity | 692,472 | 669,107 | 654,873 | 651,551 | 675,122 | |||||||||||||||||||||||
| Balance Sheet (Average) | For the three months ended, | For the twelve months ended, | ||||||||||||||||||||||||||
| 12/31/20 | 09/30/20 | 06/30/20 | 03/31/20 | 12/31/19 | 12/31/20 | 12/31/19 | ||||||||||||||||||||||
| Assets | $ | 6,353,519 | $ | 6,265,605 | $ | 6,000,790 | $ | 5,409,561 | $ | 5,400,591 | $ | 6,006,877 | $ | 5,224,583 | ||||||||||||||
| Investment securities, net of allowance for credit losses | 369,511 | 385,221 | 411,957 | 441,900 | 445,932 | 402,011 | 461,841 | |||||||||||||||||||||
| Loans and leases, gross | 5,253,720 | 5,070,037 | 4,836,858 | 4,388,584 | 4,280,430 | 4,888,801 | 4,148,619 | |||||||||||||||||||||
| Deposits | 5,222,452 | 5,030,398 | 4,794,669 | 4,349,984 | 4,374,586 | 4,850,890 | 4,186,339 | |||||||||||||||||||||
| Shareholders' equity | 676,426 | 661,947 | 660,950 | 673,460 | 672,647 | 668,201 | 652,453 | |||||||||||||||||||||
| Asset Quality Data (Period End) | ||||||||||||||||||||||||||||
| 12/31/20 | 09/30/20 | 06/30/20 | 03/31/20 | 12/31/19 | ||||||||||||||||||||||||
| Nonaccrual loans and leases, including nonaccrual troubled debt restructured | ||||||||||||||||||||||||||||
| loans and leases | $ | 31,692 | $ | 30,019 | $ | 26,141 | $ | 36,626 | $ | 38,578 | ||||||||||||||||||
| Accruing loans and leases 90 days or more past due | 1,392 | 3,573 | 1,193 | 1,777 | 143 | |||||||||||||||||||||||
| Accruing troubled debt restructured loans and leases | 53 | 53 | 53 | 54 | 54 | |||||||||||||||||||||||
| Total nonperforming loans and leases | 33,137 | 33,645 | 27,387 | 38,457 | 38,775 | |||||||||||||||||||||||
| Other real estate owned | 7,355 | 8,270 | 8,642 | 516 | 516 | |||||||||||||||||||||||
| Total nonperforming assets | $ | 40,492 | $ | 41,915 | $ | 36,029 | $ | 38,973 | $ | 39,291 | ||||||||||||||||||
| Nonaccrual loans and leases / Loans and leases held for investment | 0.60 | % | 0.58 | % | 0.53 | % | 0.82 | % | 0.88 | % | ||||||||||||||||||
| Nonperforming loans and leases / Loans and leases held for investment | 0.62 | % | 0.65 | % | 0.55 | % | 0.86 | % | 0.88 | % | ||||||||||||||||||
| Nonperforming assets / Total assets | 0.64 | % | 0.66 | % | 0.59 | % | 0.71 | % | 0.73 | % | ||||||||||||||||||
| Allowance for credit losses, loans and leases | $ | 83,044 | $ | 91,870 | $ | 86,217 | $ | 68,216 | $ | 35,331 | ||||||||||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment | 1.56 | % | 1.76 | % | 1.74 | % | 1.53 | % | 0.81 | % | ||||||||||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1) | 1.72 | % | 1.95 | % | 1.94 | % | 1.53 | % | 0.81 | % | ||||||||||||||||||
| Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment | 262.03 | % | 306.04 | % | 329.82 | % | 186.25 | % | 91.58 | % | ||||||||||||||||||
| Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment | 250.61 | % | 273.06 | % | 314.81 | % | 177.38 | % | 91.12 | % | ||||||||||||||||||
| For the three months ended, | For the twelve months ended, | |||||||||||||||||||||||||||
| 12/31/20 | 09/30/20 | 06/30/20 | 03/31/20 | 12/31/19 | 12/31/20 | 12/31/19 | ||||||||||||||||||||||
| Net loan and lease charge-offs (recoveries) | $ | 618 | $ | (35 | ) | $ | 3,576 | $ | 489 | $ | 558 | $ | 4,648 | $ | 2,551 | |||||||||||||
| Net loan and lease charge-offs (annualized)/Average loans and leases | 0.05 | % | (0.00 | %) | 0.30 | % | 0.04 | % | 0.05 | % | 0.10 | % | 0.06 | % | ||||||||||||||
| (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) | |||||||||||||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||
| For the three months ended, | For the twelve months ended, | ||||||||||||||||||||||||
| For the period: | 12/31/20 | 09/30/20 | 06/30/20 | 03/31/20 | 12/31/19 | 12/31/20 | 12/31/19 | ||||||||||||||||||
| Interest income | $ | 51,334 | $ | 50,612 | $ | 49,980 | $ | 52,019 | $ | 53,369 | $ | 203,945 | $ | 214,093 | |||||||||||
| Interest expense | 6,813 | 6,758 | 6,462 | 9,551 | 10,940 | 29,584 | 44,861 | ||||||||||||||||||
| Net interest income | 44,521 | 43,854 | 43,518 | 42,468 | 42,429 | 174,361 | 169,232 | ||||||||||||||||||
| (Reversal of Provision) provision for credit losses | (8,721 | ) | 3,935 | 23,737 | 21,843 | 2,225 | 40,794 | 8,511 | |||||||||||||||||
| Net interest income after provision for credit losses | 53,242 | 39,919 | 19,781 | 20,625 | 40,204 | 133,567 | 160,721 | ||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||
| Trust fee income | 1,974 | 1,915 | 1,924 | 1,890 | 1,912 | 7,703 | 7,826 | ||||||||||||||||||
| Service charges on deposit accounts | 1,371 | 1,187 | 890 | 1,397 | 1,551 | 4,845 | 5,946 | ||||||||||||||||||
| Investment advisory commission and fee income | 4,144 | 4,005 | 3,540 | 4,255 | 4,064 | 15,944 | 15,940 | ||||||||||||||||||
| Insurance commission and fee income | 3,512 | 3,776 | 4,067 | 4,732 | 3,609 | 16,087 | 16,571 | ||||||||||||||||||
| Other service fee income | 2,092 | 2,093 | 1,488 | 1,870 | 2,229 | 7,543 | 9,341 | ||||||||||||||||||
| Bank owned life insurance income | 733 | 741 | 732 | 734 | 741 | 2,940 | 3,179 | ||||||||||||||||||
| Net gain on sales of investment securities | 54 | 57 | 65 | 695 | 13 | 871 | 54 | ||||||||||||||||||
| Net gain on mortgage banking activities | 4,323 | 5,860 | 3,515 | 2,744 | 1,038 | 16,442 | 3,946 | ||||||||||||||||||
| Other income | 1,936 | 2,171 | 1,779 | 67 | 1,013 | 5,953 | 2,619 | ||||||||||||||||||
| Total noninterest income | 20,139 | 21,805 | 18,000 | 18,384 | 16,170 | 78,328 | 65,422 | ||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||
| Salaries, benefits and commissions | 23,613 | 24,059 | 21,700 | 23,836 | 21,933 | 93,208 | 88,289 | ||||||||||||||||||
| Net occupancy | 2,697 | 2,609 | 2,478 | 2,574 | 2,534 | 10,358 | 10,221 | ||||||||||||||||||
| Equipment | 951 | 972 | 923 | 995 | 1,027 | 3,841 | 4,170 | ||||||||||||||||||
| Data processing | 2,961 | 2,862 | 2,750 | 2,760 | 2,685 | 11,333 | 10,450 | ||||||||||||||||||
| Professional fees | 1,436 | 1,321 | 1,264 | 1,317 | 1,475 | 5,338 | 5,563 | ||||||||||||||||||
| Marketing and advertising | 575 | 463 | 535 | 402 | 710 | 1,975 | 2,594 | ||||||||||||||||||
| Deposit insurance premiums | 765 | 707 | 615 | 504 | 342 | 2,591 | 780 | ||||||||||||||||||
| Intangible expenses | 282 | 283 | 321 | 330 | 374 | 1,216 | 1,595 | ||||||||||||||||||
| Restructuring charges | 1,439 | - | - | - | - | 1,439 | - | ||||||||||||||||||
| Other expense | 7,015 | 5,251 | 5,374 | 6,059 | 6,400 | 23,699 | 22,428 | ||||||||||||||||||
| Total noninterest expense | 41,734 | 38,527 | 35,960 | 38,777 | 37,480 | 154,998 | 146,090 | ||||||||||||||||||
| Income before taxes | 31,647 | 23,197 | 1,821 | 232 | 18,894 | 56,897 | 80,053 | ||||||||||||||||||
| Income tax expense (benefit) | 5,773 | 5,078 | (264 | ) | (606 | ) | 3,384 | 9,981 | 14,334 | ||||||||||||||||
| Net income | $ | 25,874 | $ | 18,119 | $ | 2,085 | $ | 838 | $ | 15,510 | $ | 46,916 | $ | 65,719 | |||||||||||
| Net income per share: | |||||||||||||||||||||||||
| Basic | $ | 0.88 | $ | 0.62 | $ | 0.07 | $ | 0.03 | $ | 0.53 | $ | 1.60 | $ | 2.24 | |||||||||||
| Diluted | $ | 0.88 | $ | 0.62 | $ | 0.07 | $ | 0.03 | $ | 0.53 | $ | 1.60 | $ | 2.24 | |||||||||||
| Dividends declared per share | $ | - | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.60 | $ | 0.80 | |||||||||||
| Weighted average shares outstanding | 29,274,915 | 29,226,627 | 29,187,197 | 29,286,200 | 29,327,169 | 29,243,773 | 29,299,599 | ||||||||||||||||||
| Period end shares outstanding | 29,295,052 | 29,241,302 | 29,201,985 | 29,164,782 | 29,334,629 | 29,295,052 | 29,334,629 | ||||||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||||||||||
| For the three months ended, | For the twelve months ended, | ||||||||||||||||||||||||||||||
| Profitability Ratios (annualized) | 12/31/20 | 09/30/20 | 06/30/20 | 03/31/20 | 12/31/19 | 12/31/20 | 12/31/19 | ||||||||||||||||||||||||
| Return on average assets | 1.62 | % | 1.15 | % | 0.14 | % | 0.06 | % | 1.14 | % | 0.78 | % | 1.26 | % | |||||||||||||||||
| Return on average assets, excluding restructuring | 1.69 | % | 1.15 | % | 0.14 | % | 0.06 | % | 1.14 | % | 0.80 | % | 1.26 | % | |||||||||||||||||
| charges (1) | |||||||||||||||||||||||||||||||
| Return on average shareholders' equity | 15.22 | % | 10.89 | % | 1.27 | % | 0.50 | % | 9.15 | % | 7.02 | % | 10.07 | % | |||||||||||||||||
| Return on average shareholders' equity, excluding | 15.89 | % | 10.89 | % | 1.27 | % | 0.50 | % | 9.15 | % | 7.19 | % | 10.07 | % | |||||||||||||||||
| restructuring charges (1) | |||||||||||||||||||||||||||||||
| Return on average tangible common equity (1) | 20.53 | % | 14.82 | % | 1.73 | % | 0.68 | % | 12.40 | % | 9.52 | % | 13.82 | % | |||||||||||||||||
| Return on average tangible common equity, excluding | 21.44 | % | 14.82 | % | 1.73 | % | 0.68 | % | 12.40 | % | 9.76 | % | 13.82 | % | |||||||||||||||||
| restructuring charges (1) | |||||||||||||||||||||||||||||||
| Net interest margin (FTE) | 3.02 | % | 3.02 | % | 3.18 | % | 3.48 | % | 3.44 | % | 3.16 | % | 3.59 | % | |||||||||||||||||
| Efficiency ratio (2) | 63.8 | % | 58.0 | % | 57.7 | % | 62.8 | % | 63.0 | % | 60.6 | % | 61.4 | % | |||||||||||||||||
| Efficiency ratio, excluding restructuring charges (1) (2) | 61.6 | % | 58.0 | % | 57.7 | % | 62.8 | % | 63.0 | % | 60.0 | % | 61.4 | % | |||||||||||||||||
| Capitalization Ratios | |||||||||||||||||||||||||||||||
| Dividends declared to net income (3) | 0.0 | % | 32.3 | % | 278.7 | % | 699.9 | % | 37.8 | % | 37.4 | % | 35.7 | % | |||||||||||||||||
| Shareholders' equity to assets (Period End) | 10.93 | % | 10.48 | % | 10.69 | % | 11.92 | % | 12.55 | % | 10.93 | % | 12.55 | % | |||||||||||||||||
| Tangible common equity to tangible assets (1) | 8.40 | % | 7.96 | % | 8.06 | % | 8.99 | % | 9.59 | % | 8.40 | % | 9.59 | % | |||||||||||||||||
| Common equity book value per share | $ | 23.64 | $ | 22.88 | $ | 22.43 | $ | 22.34 | $ | 23.01 | $ | 23.64 | $ | 23.01 | |||||||||||||||||
| Tangible common equity book value per share (1) | $ | 17.66 | $ | 16.89 | $ | 16.41 | $ | 16.31 | $ | 17.01 | $ | 17.66 | $ | 17.01 | |||||||||||||||||
| Regulatory Capital Ratios (Period End) | |||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 9.08 | % | 8.97 | % | 9.15 | % | 9.90 | % | 10.02 | % | 9.08 | % | 10.02 | % | |||||||||||||||||
| Common equity tier 1 risk-based capital ratio | 10.77 | % | 10.52 | % | 10.73 | % | 10.79 | % | 11.03 | % | 10.77 | % | 11.03 | % | |||||||||||||||||
| Tier 1 risk-based capital ratio | 10.77 | % | 10.52 | % | 10.73 | % | 10.79 | % | 11.03 | % | 10.77 | % | 11.03 | % | |||||||||||||||||
| Total risk-based capital ratio | 15.31 | % | 15.35 | % | 13.72 | % | 13.65 | % | 13.78 | % | 15.31 | % | 13.78 | % | |||||||||||||||||
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document. | |||||||||||||||||||||||||||||||
| (2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income. | |||||||||||||||||||||||||||||||
| (3) As announced in the September 30, 2020 Earnings Release, the Corporation changed the timing of future dividend declarations and payments. | |||||||||||||||||||||||||||||||
| Univest Financial Corporation | ||||||||||||||
| Average Balances and Interest Rates (Unaudited) | ||||||||||||||
| For the Three Months Ended, | ||||||||||||||
| Tax Equivalent Basis | December 31, 2020 | September 30, 2020 | ||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | |||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||
| Assets: | ||||||||||||||
| Interest-earning deposits with other banks | $ | 296,258 | $ | 82 | 0.11 | % | $ | 368,181 | $ | 100 | 0.11 | % | ||
| U.S. government obligations | 6,998 | 36 | 2.05 | 6,998 | 36 | 2.05 | ||||||||
| Obligations of state and political subdivisions | 14,269 | 129 | 3.60 | 18,004 | 167 | 3.69 | ||||||||
| Other debt and equity securities | 348,244 | 1,237 | 1.41 | 360,219 | 1,610 | 1.78 | ||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 29,838 | 438 | 5.84 | 28,651 | 419 | 5.82 | ||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 695,607 | 1,922 | 1.10 | 782,053 | 2,332 | 1.19 | ||||||||
| Commercial, financial, and agricultural loans | 824,374 | 7,366 | 3.55 | 807,376 | 7,330 | 3.61 | ||||||||
| Paycheck Protection Program loans | 497,035 | 3,133 | 2.51 | 500,549 | 2,811 | 2.23 | ||||||||
| Real estate—commercial and construction loans | 2,518,056 | 24,388 | 3.85 | 2,358,971 | 23,547 | 3.97 | ||||||||
| Real estate—residential loans | 1,025,818 | 10,345 | 4.01 | 1,009,407 | 10,380 | 4.09 | ||||||||
| Loans to individuals | 27,427 | 289 | 4.19 | 28,663 | 309 | 4.29 | ||||||||
| Municipal loans and leases | 258,627 | 2,776 | 4.27 | 267,364 | 2,839 | 4.22 | ||||||||
| Lease financings | 102,383 | 1,690 | 6.57 | 97,707 | 1,662 | 6.77 | ||||||||
| Gross loans and leases | 5,253,720 | 49,987 | 3.79 | 5,070,037 | 48,878 | 3.84 | ||||||||
| Total interest-earning assets | 5,949,327 | 51,909 | 3.47 | 5,852,090 | 51,210 | 3.48 | ||||||||
| Cash and due from banks | 53,360 | 56,715 | ||||||||||||
| Allowance for credit losses, loans and leases | (92,766 | ) | (87,046 | ) | ||||||||||
| Premises and equipment, net | 55,653 | 55,755 | ||||||||||||
| Operating lease right-of-use assets | 34,272 | 33,875 | ||||||||||||
| Other assets | 353,673 | 354,216 | ||||||||||||
| Total assets | $ | 6,353,519 | $ | 6,265,605 | ||||||||||
| Liabilities: | ||||||||||||||
| Interest-bearing checking deposits | $ | 838,323 | $ | 537 | 0.25 | % | $ | 725,580 | $ | 468 | 0.26 | % | ||
| Money market savings | 1,213,585 | 898 | 0.29 | 1,116,628 | 897 | 0.32 | ||||||||
| Regular savings | 905,918 | 341 | 0.15 | 901,716 | 449 | 0.20 | ||||||||
| Time deposits | 582,782 | 2,034 | 1.39 | 525,656 | 2,214 | 1.68 | ||||||||
| Total time and interest-bearing deposits | 3,540,608 | 3,810 | 0.43 | 3,269,580 | 4,028 | 0.49 | ||||||||
| Short-term borrowings | 15,091 | 2 | 0.05 | 130,359 | 97 | 0.30 | ||||||||
| Long-term debt | 169,623 | 611 | 1.43 | 208,776 | 742 | 1.41 | ||||||||
| Subordinated notes | 193,244 | 2,390 | 4.92 | 155,945 | 1,891 | 4.82 | ||||||||
| Total borrowings | 377,958 | 3,003 | 3.16 | 495,080 | 2,730 | 2.19 | ||||||||
| Total interest-bearing liabilities | 3,918,566 | 6,813 | 0.69 | 3,764,660 | 6,758 | 0.71 | ||||||||
| Noninterest-bearing deposits | 1,681,844 | 1,760,818 | ||||||||||||
| Operating lease liabilities | 37,616 | 37,170 | ||||||||||||
| Accrued expenses and other liabilities | 39,067 | 41,010 | ||||||||||||
| Total liabilities | 5,677,093 | 5,603,658 | ||||||||||||
| Shareholders' Equity: | ||||||||||||||
| Common stock | 157,784 | 157,784 | ||||||||||||
| Additional paid-in capital | 296,810 | 296,272 | ||||||||||||
| Retained earnings and other equity | 221,832 | 207,891 | ||||||||||||
| Total shareholders' equity | 676,426 | 661,947 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 6,353,519 | $ | 6,265,605 | ||||||||||
| Net interest income | $ | 45,096 | $ | 44,452 | ||||||||||
| Net interest spread | 2.78 | 2.77 | ||||||||||||
| Effect of net interest-free funding sources | 0.24 | 0.25 | ||||||||||||
| Net interest margin | 3.02 | % | 3.02 | % | ||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 151.82 | % | 155.45 | % | ||||||||||
| Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. | ||||||||||||||
| Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been | ||||||||||||||
| included in the average loan balances. Tax-equivalent amounts for the three months ended December 31, 2020 and September 30, 2020 have | ||||||||||||||
| been calculated using the Corporation’s federal applicable rate of 21.0%. | ||||||||||||||
| Univest Financial Corporation | ||||||||||||||||
| Average Balances and Interest Rates (Unaudited) | ||||||||||||||||
| For the Three Months Ended December 31, | ||||||||||||||||
| Tax Equivalent Basis | 2020 | 2019 | ||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | |||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||
| Assets: | ||||||||||||||||
| Interest-earning deposits with other banks | $ | 296,258 | $ | 82 | 0.11 | % | $ | 205,703 | $ | 860 | 1.66 | % | ||||
| U.S. government obligations | 6,998 | 36 | 2.05 | 7,297 | 37 | 2.01 | ||||||||||
| Obligations of state and political subdivisions | 14,269 | 129 | 3.60 | 35,938 | 324 | 3.58 | ||||||||||
| Other debt and equity securities | 348,244 | 1,237 | 1.41 | 402,697 | 2,684 | 2.64 | ||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 29,838 | 438 | 5.84 | 30,653 | 514 | 6.65 | ||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 695,607 | 1,922 | 1.10 | 682,288 | 4,419 | 2.57 | ||||||||||
| Commercial, financial, and agricultural loans | 824,374 | 7,366 | 3.55 | 830,757 | 9,197 | 4.39 | ||||||||||
| Paycheck Protection Program loans | 497,035 | 3,133 | 2.51 | - | - | - | ||||||||||
| Real estate—commercial and construction loans | 2,518,056 | 24,388 | 3.85 | 2,040,442 | 23,526 | 4.57 | ||||||||||
| Real estate—residential loans | 1,025,818 | 10,345 | 4.01 | 966,370 | 11,566 | 4.75 | ||||||||||
| Loans to individuals | 27,427 | 289 | 4.19 | 31,694 | 458 | 5.73 | ||||||||||
| Municipal loans and leases | 258,627 | 2,776 | 4.27 | 325,939 | 3,323 | 4.04 | ||||||||||
| Lease financings | 102,383 | 1,690 | 6.57 | 85,228 | 1,528 | 7.11 | ||||||||||
| Gross loans and leases | 5,253,720 | 49,987 | 3.79 | 4,280,430 | 49,598 | 4.60 | ||||||||||
| Total interest-earning assets | 5,949,327 | 51,909 | 3.47 | 4,962,718 | 54,017 | 4.32 | ||||||||||
| Cash and due from banks | 53,360 | 50,794 | ||||||||||||||
| Allowance for credit losses, loans and leases | (92,766 | ) | (34,392 | ) | ||||||||||||
| Premises and equipment, net | 55,653 | 57,043 | ||||||||||||||
| Operating lease right-of-use assets | 34,272 | 34,693 | ||||||||||||||
| Other assets | 353,673 | 329,735 | ||||||||||||||
| Total assets | $ | 6,353,519 | $ | 5,400,591 | ||||||||||||
| Liabilities: | ||||||||||||||||
| Interest-bearing checking deposits | $ | 838,323 | $ | 537 | 0.25 | % | $ | 566,904 | $ | 941 | 0.66 | % | ||||
| Money market savings | 1,213,585 | 898 | 0.29 | 1,074,066 | 3,749 | 1.38 | ||||||||||
| Regular savings | 905,918 | 341 | 0.15 | 798,145 | 870 | 0.43 | ||||||||||
| Time deposits | 582,782 | 2,034 | 1.39 | 648,726 | 3,261 | 1.99 | ||||||||||
| Total time and interest-bearing deposits | 3,540,608 | 3,810 | 0.43 | 3,087,841 | 8,821 | 1.13 | ||||||||||
| Short-term borrowings | 15,091 | 2 | 0.05 | 30,404 | 63 | 0.82 | ||||||||||
| Long-term debt | 169,623 | 611 | 1.43 | 153,049 | 795 | 2.06 | ||||||||||
| Subordinated notes | 193,244 | 2,390 | 4.92 | 94,786 | 1,261 | 5.28 | ||||||||||
| Total borrowings | 377,958 | 3,003 | 3.16 | 278,239 | 2,119 | 3.02 | ||||||||||
| Total interest-bearing liabilities | 3,918,566 | 6,813 | 0.69 | 3,366,080 | 10,940 | 1.29 | ||||||||||
| Noninterest-bearing deposits | 1,681,844 | 1,286,745 | ||||||||||||||
| Operating lease liabilities | 37,616 | 37,867 | ||||||||||||||
| Accrued expenses and other liabilities | 39,067 | 37,252 | ||||||||||||||
| Total liabilities | 5,677,093 | 4,727,944 | ||||||||||||||
| Shareholders' Equity: | ||||||||||||||||
| Common stock | 157,784 | 157,784 | ||||||||||||||
| Additional paid-in capital | 296,810 | 294,731 | ||||||||||||||
| Retained earnings and other equity | 221,832 | 220,132 | ||||||||||||||
| Total shareholders' equity | 676,426 | 672,647 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,353,519 | $ | 5,400,591 | ||||||||||||
| Net interest income | $ | 45,096 | $ | 43,077 | ||||||||||||
| Net interest spread | 2.78 | 3.03 | ||||||||||||||
| Effect of net interest-free funding sources | 0.24 | 0.41 | ||||||||||||||
| Net interest margin | 3.02 | % | 3.44 | % | ||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 151.82 | % | 147.43 | % | ||||||||||||
| Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. | ||||||||||||||||
| Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been | ||||||||||||||||
| included in the average loan balances. Tax-equivalent amounts for the three months ended December 31, 2020 and 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 Twelve Months Ended December 31, | ||||||||||||||||
| Tax Equivalent Basis | 2020 | 2019 | ||||||||||||||
| Average | Income/ | Average | Average | Income/ | Average | |||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||
| Assets: | ||||||||||||||||
| Interest-earning deposits with other banks | $ | 274,372 | $ | 574 | 0.21 | % | $ | 141,774 | $ | 2,876 | 2.03 | % | ||||
| U.S. government obligations | 7,132 | 145 | 2.03 | 14,665 | 254 | 1.73 | ||||||||||
| Obligations of state and political subdivisions | 23,065 | 825 | 3.58 | 50,360 | 1,693 | 3.36 | ||||||||||
| Other debt and equity securities | 371,814 | 7,697 | 2.07 | 396,816 | 10,406 | 2.62 | ||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 29,726 | 1,746 | 5.87 | 31,446 | 2,154 | 6.85 | ||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 706,109 | 10,987 | 1.56 | 635,061 | 17,383 | 2.74 | ||||||||||
| Commercial, financial, and agricultural loans | 817,489 | 30,657 | 3.75 | 815,472 | 40,496 | 4.97 | ||||||||||
| Paycheck Protection Program loans | 342,920 | 8,072 | 2.35 | - | - | - | ||||||||||
| Real estate—commercial and construction loans | 2,312,996 | 94,962 | 4.11 | 1,936,073 | 91,634 | 4.73 | ||||||||||
| Real estate—residential loans | 1,007,915 | 42,047 | 4.17 | 950,743 | 46,031 | 4.84 | ||||||||||
| Loans to individuals | 28,792 | 1,332 | 4.63 | 31,912 | 1,976 | 6.19 | ||||||||||
| Municipal loans and leases | 283,495 | 11,857 | 4.18 | 331,831 | 13,262 | 4.00 | ||||||||||
| Lease financings | 95,194 | 6,498 | 6.83 | 82,588 | 5,904 | 7.15 | ||||||||||
| Gross loans and leases | 4,888,801 | 195,425 | 4.00 | 4,148,619 | 199,303 | 4.80 | ||||||||||
| Total interest-earning assets | 5,594,910 | 206,412 | 3.69 | 4,783,680 | 216,686 | 4.53 | ||||||||||
| Cash and due from banks | 52,000 | 48,877 | ||||||||||||||
| Allowance for credit losses, loans and leases | (73,459 | ) | (32,389 | ) | ||||||||||||
| Premises and equipment, net | 55,888 | 58,237 | ||||||||||||||
| Operating lease right-of-use assets | 34,277 | 35,712 | ||||||||||||||
| Other assets | 343,261 | 330,466 | ||||||||||||||
| Total assets | $ | 6,006,877 | $ | 5,224,583 | ||||||||||||
| Liabilities: | ||||||||||||||||
| Interest-bearing checking deposits | $ | 692,049 | $ | 2,173 | 0.31 | % | $ | 500,295 | $ | 2,790 | 0.56 | % | ||||
| Money market savings | 1,113,039 | 5,551 | 0.50 | 995,403 | 15,843 | 1.59 | ||||||||||
| Regular savings | 874,366 | 2,057 | 0.24 | 802,865 | 3,660 | 0.46 | ||||||||||
| Time deposits | 572,103 | 9,835 | 1.72 | 677,199 | 13,276 | 1.96 | ||||||||||
| Total time and interest-bearing deposits | 3,251,557 | 19,616 | 0.60 | 2,975,762 | 35,569 | 1.20 | ||||||||||
| Short-term borrowings | 86,658 | 327 | 0.38 | 56,882 | 1,012 | 1.78 | ||||||||||
| Long-term debt | 189,410 | 2,879 | 1.52 | 156,366 | 3,236 | 2.07 | ||||||||||
| Subordinated notes | 134,949 | 6,762 | 5.01 | 94,695 | 5,044 | 5.33 | ||||||||||
| Total borrowings | 411,017 | 9,968 | 2.43 | 307,943 | 9,292 | 3.02 | ||||||||||
| Total interest-bearing liabilities | 3,662,574 | 29,584 | 0.81 | 3,283,705 | 44,861 | 1.37 | ||||||||||
| Noninterest-bearing deposits | 1,599,333 | 1,210,577 | ||||||||||||||
| Operating lease liabilities | 37,557 | 38,791 | ||||||||||||||
| Accrued expenses and other liabilities | 39,212 | 39,057 | ||||||||||||||
| Total liabilities | 5,338,676 | 4,572,130 | ||||||||||||||
| Shareholders' Equity: | ||||||||||||||||
| Common stock | 157,784 | 157,784 | ||||||||||||||
| Additional paid-in capital | 296,023 | 293,784 | ||||||||||||||
| Retained earnings and other equity | 214,394 | 200,885 | ||||||||||||||
| Total shareholders' equity | 668,201 | 652,453 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 6,006,877 | $ | 5,224,583 | ||||||||||||
| Net interest income | $ | 176,828 | $ | 171,825 | ||||||||||||
| Net interest spread | 2.88 | 3.16 | ||||||||||||||
| Effect of net interest-free funding sources | 0.28 | 0.43 | ||||||||||||||
| Net interest margin | 3.16 | % | 3.59 | % | ||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 152.76 | % | 145.68 | % | ||||||||||||
| Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments. | ||||||||||||||||
| Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been | ||||||||||||||||
| included in the average loan balances. Tax-equivalent amounts for the twelve months ended December 31, 2020 and 2019 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 December 31, 2020 | |||||||||||||
| Industry Description | Total Outstanding B alance (excl PPP) | % of Commercial Loan Portfolio | PPP $ (1) | $ Balance of Modified Loans (2) | Modified Loans as a % of Portfolio (2) | |||||||||
| CRE - Retail | $ | 342,910 | 8.6 | % | $ | 239 | $ | 3,950 | 1.2 | % | ||||
| Animal Production | 263,623 | 6.6 | 706 | 40 | - | |||||||||
| CRE - 1-4 Family Residential Investment | 245,022 | 6.2 | 1,282 | - | - | |||||||||
| CRE - Office | 237,752 | 6.0 | - | - | - | |||||||||
| CRE - Multi-family | 201,995 | 5.1 | - | - | - | |||||||||
| Real Estate Lenders, Secondary Market Financing | 181,493 | 4.6 | 4,318 | 52 | - | |||||||||
| Hotels & Motels (Accommodation) | 175,923 | 4.4 | 2,407 | 24,296 | 13.8 | |||||||||
| CRE - Industrial / Warehouse | 169,015 | 4.3 | 139 | - | - | |||||||||
| Nursing and Residential Care Facilities | 154,736 | 3.9 | 7,935 | - | - | |||||||||
| Specialty Trade Contractors | 117,301 | 2.9 | 67,267 | 109 | 0.1 | |||||||||
| CRE - Mixed-Use - Residential | 116,506 | 2.9 | - | 8,237 | 7.1 | |||||||||
| Professional, Scientific, and Technical Services | 92,857 | 2.3 | - | - | - | |||||||||
| CRE - Medical Office | 92,196 | 2.3 | - | - | - | |||||||||
| Homebuilding (tract developers, remodelers) | 87,027 | 2.2 | 12,931 | - | - | |||||||||
| Merchant Wholesalers, Durable Goods | 75,241 | 1.9 | 17,674 | - | - | |||||||||
| Education | 68,846 | 1.7 | 72,072 | 2,637 | 3.8 | |||||||||
| Crop Production | 66,998 | 1.7 | 270 | - | - | |||||||||
| Motor Vehicle and Parts Dealers | 66,516 | 1.7 | 11,391 | - | - | |||||||||
| Fabricated Metal Production Manufacturing | 62,077 | 1.6 | 12,760 | - | - | |||||||||
| Administrative and Support Services | 59,708 | 1.5 | 28,814 | 100 | 0.2 | |||||||||
| Food Services and Drinking Places | 58,067 | 1.5 | 15,971 | 2,893 | 5.0 | |||||||||
| Woods Product Manufacturing | 50,079 | 1.3 | 3,886 | - | - | |||||||||
| Industries with >$50 million in outstandings | $ | 2,985,888 | 75.2 | % | $ | 260,062 | $ | 42,314 | 1.4 | % | ||||
| Industries with <$50 million in outstandings | $ | 990,450 | 24.8 | % | $ | 223,711 | $ | 18,228 | 1.8 | % | ||||
| Total Commercial Loans | $ | 3,976,338 | 100.0 | % | $ | 483,773 | $ | 60,542 | 1.5 | % | ||||
| Consumer Loans and Lease Financings | Total Outstanding Balance | PPP $ (1) | $ Balance of Modified Loans (2) | Modified Loans as a % of Portfolio (2) | ||||||||||
| Real Estate-Residential Secured for Personal Purpose | $ | 487,600 | $ | - | $ | 7,444 | 1.5 | % | ||||||
| Real Estate-Home Equity Secured for Personal Purpose | 166,609 | - | 3 | - | ||||||||||
| Loans to Individuals | 27,482 | - | 35 | 0.1 | ||||||||||
| Lease Financings | 165,039 | - | - | - | ||||||||||
| Total - Consumer Loans and Lease Financings | $ | 846,730 | $ | - | $ | 7,482 | 0.9 | % | ||||||
| Total | $ | 4,823,068 | $ | 483,773 | $ | 68,024 | 1.4 | % | ||||||
| (1) Includes ($7.7) million of net deferred fees. | ||||||||||||||
| (2) 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 December 31, 2020. | ||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||||||||||||
| Non-GAAP Reconciliation | |||||||||||||||||||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||||||||||
| 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, | For the twelve months ended, | ||||||||||||||||||||||||||||||
| 12/31/20 | 09/30/20 | 06/30/20 | 03/31/20 | 12/31/19 | 12/31/20 | 12/31/19 | |||||||||||||||||||||||||
| Restructuring charges (a) | $ | 1,439 | $ | - | $ | - | $ | - | $ | - | $ | 1,439 | $ | - | |||||||||||||||||
| Tax effect of restructuring charges | (302 | ) | - | - | - | - | (302 | ) | - | ||||||||||||||||||||||
| Restructuring charges, net of tax | $ | 1,137 | $ | - | $ | - | $ | - | $ | - | $ | 1,137 | $ | - | |||||||||||||||||
| Shareholders' equity | $ | 692,472 | $ | 669,107 | $ | 654,873 | $ | 651,551 | $ | 675,122 | $ | 692,472 | $ | 675,122 | |||||||||||||||||
| Goodwill | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | |||||||||||||||||
| Other intangibles (b) | (2,458 | ) | (2,736 | ) | (3,017 | ) | (3,333 | ) | (3,658 | ) | (2,458 | ) | (3,658 | ) | |||||||||||||||||
| Tangible common equity | $ | 517,455 | $ | 493,812 | $ | 479,297 | $ | 475,659 | $ | 498,905 | $ | 517,455 | $ | 498,905 | |||||||||||||||||
| Total assets | $ | 6,336,496 | $ | 6,382,831 | $ | 6,125,312 | $ | 5,464,768 | $ | 5,380,924 | $ | 6,336,496 | $ | 5,380,924 | |||||||||||||||||
| Goodwill | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | |||||||||||||||||
| Other intangibles (b) | (2,458 | ) | (2,736 | ) | (3,017 | ) | (3,333 | ) | (3,658 | ) | (2,458 | ) | (3,658 | ) | |||||||||||||||||
| Tangible assets | $ | 6,161,479 | $ | 6,207,536 | $ | 5,949,736 | $ | 5,288,876 | $ | 5,204,707 | $ | 6,161,479 | $ | 5,204,707 | |||||||||||||||||
| Average shareholders' equity | $ | 676,426 | $ | 661,947 | $ | 660,950 | $ | 673,460 | $ | 672,647 | $ | 668,201 | $ | 652,453 | |||||||||||||||||
| Average goodwill | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | (172,559 | ) | |||||||||||||||||
| Average other intangibles (b) | (2,606 | ) | (2,889 | ) | (3,185 | ) | (3,506 | ) | (3,853 | ) | (3,045 | ) | (4,430 | ) | |||||||||||||||||
| Average tangible common equity | $ | 501,261 | $ | 486,499 | $ | 485,206 | $ | 497,395 | $ | 496,235 | $ | 492,597 | $ | 475,464 | |||||||||||||||||
| Net income before taxes | $ | 31,647 | $ | 23,197 | $ | 1,821 | $ | 232 | $ | 18,894 | $ | 56,897 | $ | 80,053 | |||||||||||||||||
| Provision for credit losses | (8,721 | ) | 3,935 | 23,737 | 21,843 | 2,225 | 40,794 | 8,511 | |||||||||||||||||||||||
| Pre-tax pre-provision income | $ | 22,926 | $ | 27,132 | $ | 25,558 | $ | 22,075 | $ | 21,119 | $ | 97,691 | $ | 88,564 | |||||||||||||||||
| Loans and leases held for investment, gross | $ | 5,306,841 | $ | 5,211,856 | $ | 4,951,809 | $ | 4,448,825 | $ | 4,386,836 | $ | 5,306,841 | $ | 4,386,836 | |||||||||||||||||
| Paycheck Protection Program ("PPP") loans | (483,773 | ) | (501,580 | ) | (498,978 | ) | - | - | (483,773 | ) | - | ||||||||||||||||||||
| Gross loans and leases excluding PPP loans | $ | 4,823,068 | $ | 4,710,276 | $ | 4,452,831 | $ | 4,448,825 | $ | 4,386,836 | $ | 4,823,068 | $ | 4,386,836 | |||||||||||||||||
| (a) Associated with financial center optimization plan | |||||||||||||||||||||||||||||||
| (b) Amount does not include servicing rights | |||||||||||||||||||||||||||||||
CONTACT: CONTACT: Brian J. Richardson UNIVEST FINANCIAL CORPORATION Chief Financial Officer 215-721-2446, richardsonb@univest.net