UVSP - Univest Financial Corporation Reports Fourth Quarter and 2021 Results
(Loan Growth of 9.4% for last twelve months (excluding PPP loans 1 ))
SOUDERTON, Pa., Jan. 26, 2022 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the "Corporation") ( NASDAQ: UVSP ), parent company of Univest Bank and Trust Co. (the "Bank") and its insurance, investments and equipment financing subsidiaries, today announced net income for the year ended December 31, 2021 of $91.8 million, or $3.11 diluted earnings per share, compared to net income of $46.9 million, or $1.60 diluted earnings per share, for the year ended December 31, 2020. Net income for the quarter ended December 31, 2021 was $17.4 million, or $0.59 diluted earnings per share, compared to net income of $25.9 million, or $0.88 diluted earnings per share, for the quarter ended December 31, 2020.
Pre-tax pre-provision income 1 for the year ended December 31, 2021 was $104.2 million, an increase of $6.5 million, or 6.7%, from the prior year. Pre-tax pre-provision income 1 for the quarter ended December 31, 2021 was $23.4 million, an increase of $456 thousand, or 2.0%, from the fourth quarter of 2020.
Acquisition
On December 1, 2021, Univest Insurance, LLC., the Bank's insurance subsidiary, completed the acquisition of the Paul I. Sheaffer Insurance Agency, a full-service firm providing insurance solutions to businesses and individuals in Central Pennsylvania.
Paycheck Protection Program
As of December 31, 2021, $31.7 million in PPP loans remain outstanding. During the fourth quarter, we recorded income of $1.6 million within net interest income related to these loans, of which $1.4 million was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $55.4 million. During the year ended December 31, 2021, we recorded income of $15.0 million within net interest income related to these loans, of which $10.4 million was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $630.7 million. As of December 31, 2021, we had $817 thousand of net deferred fees on our balance sheet, which represented approximately 4.5% of the initial deferred fee amount.
Loans
Gross loans and leases, excluding PPP loans 1 , increased $455.2 million, or 9.4%, from December 31, 2020 due to increases in commercial, construction, commercial real estate, and residential mortgage loans and lease financings. Gross loans and leases, excluding PPP loans 1 , increased $111.8 million, or 8.7% (annualized), from September 30, 2021 due to increases in construction, commercial real estate and commercial loans and lease financings.
Deposits
Total deposits increased $812.4 million, or 15.5%, from December 31, 2020, primarily due to increases in commercial, consumer and public funds deposits offset by a decrease in brokered deposits. Total deposits increased $117.0 million, or 7.9% (annualized), from September 30, 2021, primarily due to increases in commercial and consumer deposits offset by a decrease in public funds deposits.
Net Interest Income and Margin
Net interest income of $47.5 million for the three months ended December 31, 2021 increased $3.0 million, or 6.7%, from the three months ended December 31, 2020. The increase in net interest income for the three months ended December 31, 2021 compared to the same period of 2020 was primarily due to overall growth in loans, led by an increase in commercial real estate loan income of $2.2 million, and a $2.1 million decrease in the cost of interest-bearing liabilities offset by a decrease in PPP loan income of $1.6 million.
Net interest income of $188.4 million for the year ended December 31, 2021 increased $14.0 million, or 8.0%, from the prior year. The increase in net interest income for the year ended December 31, 2021 compared to 2020 was primarily due to an increase in PPP loan income of $7.0 million, an $8.2 million decrease in the cost of interest-bearing liabilities and growth in loans, primarily commercial real estate loans, partially offset by a decrease in loan yields, excluding PPP loans, and investment yields.
Net interest margin, on a tax-equivalent basis, was 2.86% for the fourth quarter of 2021, compared to 3.11% for the third quarter of 2021 and 3.02% for the fourth quarter of 2020. Excess liquidity reduced net interest margin by approximately 43 basis points for the quarter ended December 31, 2021 compared to 27 basis points for the quarter ended September 30, 2021 and 13 basis points for the quarter ended December 31, 2020. 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 eight basis points for the quarter ended December 31, 2021 compared to 20 basis points for the quarter ended September 30, 2021 and an unfavorable impact of seven basis points for the quarter ended December 31, 2020. As PPP loans are forgiven, the associated deferred fees are recognized in earnings, which occurred with greater frequency in 2021 as compared to 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.21% for the quarter ended December 31, 2021 compared to 3.18% for the quarter ended September 30, 2021 and 3.22% for the quarter ended December 31, 2020.
Net interest margin, on a tax-equivalent basis, was 3.06% for the year ended December 31, 2021, compared to 3.16% for the year ended December 31, 2020. Excess liquidity reduced net interest margin by approximately 23 basis points for the year ended December 31, 2021 compared to 14 basis points for the year ended December 31, 2020. 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 11 basis points for the year ended December 31, 2021 compared to an unfavorable impact of seven basis points for the year ended December 31, 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.18% for the year ended December 31, 2021 compared to 3.37% for the year ended December 31, 2020.
Noninterest Income
Noninterest income for the quarter ended December 31, 2021 was $19.2 million, a decrease of $947 thousand, or 4.7%, from the comparable period in the prior year. Noninterest income for the year ended December 31, 2021 was $83.2 million, an increase of $4.9 million, or 6.3%, from the prior year.
Net gain on mortgage banking activities decreased $1.8 million, or 41.8%, for the quarter and $1.3 million, or 7.9%, for the year ended December 31, 2021 compared to the comparable periods in the prior year. The decrease for the three months and year ended December 31, 2021 was primarily due to a decrease in volume and a contraction of margins. Investment advisory commission and fee income increased $741 thousand, or 17.9%, for the quarter and $3.0 million, or 18.8%, for the year ended December 31, 2021 compared to the comparable periods in the prior year, due to increased assets under management driven by new customer relationships and favorable market conditions. BOLI income decreased $14 thousand, or 1.9%, for the quarter and increased $1.0 million, or 35.4%, for the year ended December 31, 2021 compared to the comparable periods in the prior year, primarily due to proceeds from BOLI death benefits of $893 thousand and $196 thousand received in the second and third quarters of 2021, respectively.
Other service fee income increased $667 thousand, or 31.9%, for the quarter and $2.7 million, or 36.2%, for the year ended December 31, 2021 compared to the comparable periods in the prior year. Interchange fee income increased $260 thousand for the quarter and $1.2 million for the year ended December 31, 2021 compared to the comparable periods in the prior year, due to increased customer activity. Mortgage servicing fees increased $299 thousand for the quarter and $1.2 million for the year ended December 31, 2021 compared to the comparable period in the prior year, driven by an increase in retained servicing associated with elevated mortgage volume and reduced amortization due to decreased refinance activity and lower prepayment assumptions.
Other income decreased $928 thousand, or 47.9%, for the quarter and $1.5 million, or 24.7%, for the year ended December 31, 2021 compared to comparable periods in the prior year. Fees on risk participation agreements for interest rate swaps decreased $1.2 million and $3.5 million during the quarter and year ended December 31, 2021, respectively, compared to comparable periods in the prior year driven by a decrease in customer demand. Gain on the sale of SBA loans increased $354 thousand and $1.3 million during the quarter and year ended December 31, 2021, respectively, compared to comparable periods in the prior year. This increase was reflective of the Corporation's continued commitment to delivering comprehensive financial solutions to small businesses through the expansion of the SBA lending team during the first half of 2021. Other income also increased $347 thousand driven by an increase in the fair value of equity securities during the year ended December 31, 2021 compared to the year ended December 31, 2020.
Noninterest Expense
Noninterest expense for the quarter ended December 31, 2021 was $43.3 million, an increase of $1.6 million, or 3.8%, from the comparable period in the prior year. Noninterest expense for the year ended December 31, 2021 was $167.4 million, an increase of $12.4 million, or 8.0%, from the prior year.
Salaries, benefits and commissions increased $3.8 million, or 15.9%, for the quarter and $11.0 million, or 11.8%, for the year ended December 31, 2021 compared to the comparable periods in the prior year. These increases reflect our continued investment in revenue producing staff across all business lines and annual merit increases. The Corporation modified the vesting criteria for performance-based restricted stock grants in 2020 to better reflect the operating environment, which resulted in a benefit of $928 thousand in salaries, benefits and commissions in the fourth quarter of 2020. Additionally, variable incentive compensation expenses increased $999 thousand and $3.6 million for the quarter and year ended December 31, 2021, respectively, from the comparable periods in the prior year, due to increased profitability.
Professional fees increased $314 thousand, or 21.9%, for the quarter and $2.3 million, or 44.0%, for the year ended December 31, 2021 compared to the comparable periods in the prior year, primarily attributable to increased consultant fees in support of our Diversity, Equity and Inclusion program, training initiatives and treasury management product enhancements. During 2021, we spent $1.5 million on these initiatives. These expenses are not expected to re-occur in subsequent periods. Data processing expenses increased $394 thousand, or 13.3%, for the quarter and $1.4 million, or 12.4%, for the year ended December 31, 2021 compared to the comparable periods in the prior year, 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 and outsourced data processing solutions.
Restructuring charges decreased $1.4 million for the quarter and year ended December 31, 2021 compared to the comparable periods in the prior year. These charges relate to the Corporation's financial center optimization plan announced in the fourth quarter of 2020. Other expense decreased $1.3 million, or 18.1%, for the quarter and $961 thousand, or 4.1%, for the year ended December 31, 2021 compared to the comparable periods in the prior year, primarily driven by extinguishment of long-term debt expense of $1.1 million and $1.8 million for the quarter and year ended December 31, 2020, respectively, offset primarily by increases in interchange expense driven by increased customer activity.
Asset Quality and Provision for Credit Losses
Nonperforming assets were $34.0 million at December 31, 2021, compared to $37.1 million at September 30, 2021 and $40.5 million at December 31, 2020.
Net loan and lease recoveries were $243 thousand during the fourth quarter of 2021 compared to net loan and lease charge-offs of $618 thousand for the same period in the prior year. The provision for credit losses was $1.4 million for the fourth quarter of 2021, of which $788 thousand (after-tax expense of $623 thousand), or $0.02 diluted earnings per share, was attributable to unfavorable changes in economic-related assumptions within the Corporation’s CECL model and $1.3 million was attributable to an increase in reserves for loans. These increases were offset by a decrease of $681 thousand in reserves for unfunded commitments and investment securities. The reversal of provision for credit losses was $8.7 million for the comparable period in the prior year, 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. $11.6 million (after-tax benefit of $9.2 million), or $0.31 diluted earnings per share, of the $8.7 million reversal of provision for credit losses was attributable to changes in economic-related assumptions within the Corporation’s CECL model.
Net loan and lease charge-offs were $213 thousand for the year ended December 31, 2021 compared to $4.6 million for the same period in the prior year. The reversal of provision for credit losses was $10.1 million for the year ended December 31, 2021, of which $17.9 million (after-tax benefit of $14.2 million), or $0.48 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model partially offset by a $7.4 million increase in reserves for loans. The provision for credit losses was $40.8 million for the prior year due to a reserve increase of $39.4 million related to loans and leases, $786 thousand related to reserves for unfunded commitments, and $569 thousand related to investment securities. $27.4 million (after-tax charge of $21.6 million), or $0.74 diluted earnings per share, of the $40.8 million of provision for credit losses was attributable to changes in economic-related assumptions within the Corporation’s CECL model.
The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.35% at December 31, 2021, compared to 1.34% at September 30, 2021, and 1.56% at December 31, 2020. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans 1 , was 1.36% at December 31, 2021 compared to 1.36% at September 30, 2021 and 1.72% at December 31, 2020.
Tax Provision
The effective income tax rate was 19.7% for the year ended December 31, 2021 compared to an effective income tax rate of 17.5% for the year ended December 31, 2020. The effective tax rate for the year ended December 31, 2021 and 2020 reflects the level of pre-tax income and the benefits of tax-exempt income from investments in municipal securities and loans and leases.
Dividend
On January 26, 2022, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on February 23, 2022 to shareholders of record as of February 9, 2022.
Conference Call
Univest will host a conference call to discuss fourth quarter and year end 2021 results on Thursday, January 27, 2022 at 9:00 a.m. EST. Participants may preregister at https://www.incommglobalevents.com/registration/q4inc/9616/univest-financial-corporation-to-hold-fourth-quarter-and-year-end-2021-earnings-call/. The general public can access the call by dialing 1-844-200-6205; using Access Code 454983. A replay of the conference call will be available through February 28, 2022 by dialing 1-866-813-9403; using Access Code: 298990.
1 Non-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 $4.9 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 2021. 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) changes in interest rates; (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 or (9) 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 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 continuing market turmoil; (7) 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; and (8) our cyber security risks are increased 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) |
| December 31, 2021 |
| (Dollars in thousands) |
| Balance Sheet (Period End) |
| 12/31/21 |
| 09/30/21 |
| 06/30/21 |
| 03/31/21 |
| 12/31/20 |
| Assets |
| $ |
| 7,122,421 |
| $ |
| 6,979,852 |
| $ |
| 6,356,305 |
| $ |
| 6,416,665 |
| $ |
| 6,336,496 |
| Cash and cash equivalents |
| 890,150 |
| 902,357 |
| 203,449 |
| 187,317 |
| 219,858 |
| Investment securities, net of allowance for credit losses |
| 496,989 |
| 393,377 |
| 397,426 |
| 377,506 |
| 373,176 |
| Loans held for sale |
| 21,600 |
| 29,093 |
| 27,322 |
| 22,636 |
| 37,039 |
| Loans and leases held for investment, gross |
| 5,310,017 |
| 5,252,045 |
| 5,327,313 |
| 5,415,006 |
| 5,306,841 |
| Allowance for credit losses, loans and leases |
| 71,924 |
| 70,146 |
| 71,355 |
| 71,497 |
| 83,044 |
| Loans and leases held for investment, net |
| 5,238,093 |
| 5,181,899 |
| 5,255,958 |
| 5,343,509 |
| 5,223,797 |
| Total deposits |
| 6,055,124 |
| 5,938,154 |
| 5,318,704 |
| 5,311,592 |
| 5,242,715 |
| Noninterest-bearing deposits |
| 2,065,423 |
| 1,861,007 |
| 1,872,031 |
| 1,857,547 |
| 1,690,663 |
| Interest-bearing demand, money market and savings |
| 3,505,535 |
| 3,583,107 |
| 2,954,450 |
| 2,979,834 |
| 2,988,277 |
| Time deposits |
| 484,166 |
| 494,040 |
| 492,223 |
| 474,211 |
| 563,775 |
| Borrowings |
| 213,980 |
| 207,898 |
| 218,970 |
| 295,293 |
| 311,421 |
| Shareholders' equity |
| 773,794 |
| 756,023 |
| 739,998 |
| 722,455 |
| 692,472 |
| Balance Sheet (Average) |
| For the three months ended, |
| For the twelve months ended, |
| 12/31/21 |
| 09/30/21 |
| 06/30/21 |
| 03/31/21 |
| 12/31/20 |
| 12/31/21 |
| 12/31/20 |
| Assets |
| $ |
| 7,088,289 |
| $ |
| 6,698,177 |
| $ |
| 6,443,629 |
| $ |
| 6,383,463 |
| $ |
| 6,353,519 |
| $ |
| 6,655,443 |
| $ |
| 6,006,877 |
| Investment securities, net of allowance for credit losses |
| 469,588 |
| 395,280 |
| 385,694 |
| 374,369 |
| 369,511 |
| 406,463 |
| 402,011 |
| Loans and leases, gross |
| 5,255,279 |
| 5,320,411 |
| 5,389,110 |
| 5,325,897 |
| 5,253,720 |
| 5,322,475 |
| 4,888,801 |
| Deposits |
| 6,041,798 |
| 5,666,725 |
| 5,351,089 |
| 5,296,147 |
| 5,222,452 |
| 5,591,195 |
| 4,850,890 |
| Shareholders' equity |
| 762,334 |
| 746,185 |
| 728,750 |
| 699,736 |
| 676,426 |
| 734,456 |
| 668,201 |
| Asset Quality Data (Period End) |
| 12/31/21 |
| 09/30/21 |
| 06/30/21 |
| 03/31/21 |
| 12/31/20 |
| Nonaccrual loans and leases, including nonaccrual troubled debt restructured |
| loans and leases and nonaccrual loans held for sale |
| $ |
| 33,210 |
| $ |
| 34,528 |
| $ |
| 37,466 |
| $ |
| 29,996 |
| $ |
| 31,692 |
| Accruing loans and leases 90 days or more past due |
| 498 |
| 2,204 |
| 750 |
| 664 |
| 1,392 |
| Accruing troubled debt restructured loans and leases |
| 51 |
| 51 |
| 52 |
| 52 |
| 53 |
| Total nonperforming loans and leases |
| 33,759 |
| 36,783 |
| 38,268 |
| 30,712 |
| 33,137 |
| Other real estate owned |
| 279 |
| 279 |
| 279 |
| 7,481 |
| 7,355 |
| Total nonperforming assets |
| $ |
| 34,038 |
| $ |
| 37,062 |
| $ |
| 38,547 |
| $ |
| 38,193 |
| $ |
| 40,492 |
| Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale |
| 0.63 |
| % |
| 0.66 |
| % |
| 0.70 |
| % |
| 0.55 |
| % |
| 0.60 |
| % |
| Nonperforming loans and leases / Loans and leases held for investment |
| 0.64 |
| % |
| 0.70 |
| % |
| 0.72 |
| % |
| 0.57 |
| % |
| 0.62 |
| % |
| Nonperforming assets / Total assets |
| 0.48 |
| % |
| 0.53 |
| % |
| 0.61 |
| % |
| 0.60 |
| % |
| 0.64 |
| % |
| Allowance for credit losses, loans and leases |
| $ |
| 71,924 |
| $ |
| 70,146 |
| $ |
| 71,355 |
| $ |
| 71,497 |
| $ |
| 83,044 |
| Allowance for credit losses, loans and leases / Loans and leases held for investment |
| 1.35 |
| % |
| 1.34 |
| % |
| 1.34 |
| % |
| 1.32 |
| % |
| 1.56 |
| % |
| Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1) |
| 1.36 |
| % |
| 1.36 |
| % |
| 1.41 |
| % |
| 1.46 |
| % |
| 1.72 |
| % |
| Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment |
| 216.57 |
| % |
| 203.16 |
| % |
| 212.97 |
| % |
| 238.36 |
| % |
| 262.03 |
| % |
| Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment |
| 213.05 |
| % |
| 190.70 |
| % |
| 208.00 |
| % |
| 232.80 |
| % |
| 250.61 |
| % |
| For the three months ended, |
| For the twelve months ended, |
| 12/31/21 |
| 09/30/21 |
| 06/30/21 |
| 03/31/21 |
| 12/31/20 |
| 12/31/21 |
| 12/31/20 |
| Net loan and lease (recoveries) charge-offs |
| $ |
| (243 |
| ) |
| $ |
| (75 |
| ) |
| $ |
| 243 |
| $ |
| 288 |
| $ |
| 618 |
| $ |
| 213 |
| $ |
| 4,648 |
| Net loan and lease (recoveries) charge-offs (annualized)/Average loans and leases |
| (0.02 |
| %) |
| (0.01 |
| %) |
| 0.02 |
| % |
| 0.02 |
| % |
| 0.05 |
| % |
| 0.00 |
| % |
| 0.10 |
| % |
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included at the end of this document. |
| Univest Financial Corporation |
| Consolidated Selected Financial Data (Unaudited) |
| December 31, 2021 |
| (Dollars in thousands, except per share data) |
| For the three months ended, |
| For the twelve months ended, |
| For the period: |
| 12/31/21 |
| 09/30/21 |
| 06/30/21 |
| 03/31/21 |
| 12/31/20 |
| 12/31/21 |
| 12/31/20 |
| Interest income |
| $ |
| 52,262 |
| $ |
| 53,571 |
| $ |
| 52,441 |
| $ |
| 51,457 |
| $ |
| 51,334 |
| $ |
| 209,731 |
| $ |
| 203,945 |
| Interest expense |
| 4,737 |
| 4,884 |
| 5,684 |
| 6,043 |
| 6,813 |
| 21,348 |
| 29,584 |
| Net interest income |
| 47,525 |
| 48,687 |
| 46,757 |
| 45,414 |
| 44,521 |
| 188,383 |
| 174,361 |
| Provision (reversal of provision) for credit losses |
| 1,392 |
| (182 |
| ) |
| (59 |
| ) |
| (11,283 |
| ) |
| (8,721 |
| ) |
| (10,132 |
| ) |
| 40,794 |
| Net interest income after provision for credit losses |
| 46,133 |
| 48,869 |
| 46,816 |
| 56,697 |
| 53,242 |
| 198,515 |
| 133,567 |
| Noninterest income: |
| Trust fee income |
| 2,086 |
| 2,126 |
| 2,157 |
| 2,034 |
| 1,974 |
| 8,403 |
| 7,703 |
| Service charges on deposit accounts |
| 1,486 |
| 1,422 |
| 1,314 |
| 1,282 |
| 1,371 |
| 5,504 |
| 4,845 |
| Investment advisory commission and fee income |
| 4,885 |
| 4,796 |
| 4,558 |
| 4,697 |
| 4,144 |
| 18,936 |
| 15,944 |
| Insurance commission and fee income |
| 3,726 |
| 3,837 |
| 3,839 |
| 4,955 |
| 3,512 |
| 16,357 |
| 16,087 |
| Other service fee income |
| 2,759 |
| 2,576 |
| 2,748 |
| 2,192 |
| 2,092 |
| 10,275 |
| 7,543 |
| Bank owned life insurance income |
| 719 |
| 925 |
| 1,620 |
| 717 |
| 733 |
| 3,981 |
| 2,940 |
| Net gain on sales of investment securities |
| 5 |
| 21 |
| 54 |
| 65 |
| 54 |
| 145 |
| 871 |
| Net gain on mortgage banking activities |
| 2,518 |
| 3,224 |
| 3,461 |
| 5,938 |
| 4,323 |
| 15,141 |
| 16,442 |
| Other income |
| 1,008 |
| 1,625 |
| 479 |
| 1,370 |
| 1,936 |
| 4,482 |
| 5,953 |
| Total noninterest income |
| 19,192 |
| 20,552 |
| 20,230 |
| 23,250 |
| 20,139 |
| 83,224 |
| 78,328 |
| Noninterest expense: |
| Salaries, benefits and commissions |
| 27,374 |
| 26,641 |
| 25,396 |
| 24,780 |
| 23,613 |
| 104,191 |
| 93,208 |
| Net occupancy |
| 2,477 |
| 2,525 |
| 2,656 |
| 2,739 |
| 2,697 |
| 10,397 |
| 10,358 |
| Equipment |
| 985 |
| 1,000 |
| 968 |
| 946 |
| 951 |
| 3,899 |
| 3,841 |
| Data processing |
| 3,355 |
| 3,274 |
| 3,064 |
| 3,050 |
| 2,961 |
| 12,743 |
| 11,333 |
| Professional fees |
| 1,750 |
| 2,174 |
| 2,015 |
| 1,748 |
| 1,436 |
| 7,687 |
| 5,338 |
| Marketing and advertising |
| 683 |
| 539 |
| 561 |
| 280 |
| 575 |
| 2,063 |
| 1,975 |
| Deposit insurance premiums |
| 698 |
| 765 |
| 613 |
| 636 |
| 765 |
| 2,712 |
| 2,591 |
| Intangible expenses |
| 267 |
| 214 |
| 249 |
| 249 |
| 282 |
| 979 |
| 1,216 |
| Restructuring charges |
| - |
| - |
| - |
| - |
| 1,439 |
| - |
| 1,439 |
| Other expense |
| 5,746 |
| 6,116 |
| 5,764 |
| 5,112 |
| 7,015 |
| 22,738 |
| 23,699 |
| Total noninterest expense |
| 43,335 |
| 43,248 |
| 41,286 |
| 39,540 |
| 41,734 |
| 167,409 |
| 154,998 |
| Income before taxes |
| 21,990 |
| 26,173 |
| 25,760 |
| 40,407 |
| 31,647 |
| 114,330 |
| 56,897 |
| Income tax expense |
| 4,578 |
| 5,262 |
| 4,885 |
| 7,804 |
| 5,773 |
| 22,529 |
| 9,981 |
| Net income |
| $ |
| 17,412 |
| $ |
| 20,911 |
| $ |
| 20,875 |
| $ |
| 32,603 |
| $ |
| 25,874 |
| $ |
| 91,801 |
| $ |
| 46,916 |
| Net income per share: |
| Basic |
| $ |
| 0.59 |
| $ |
| 0.71 |
| $ |
| 0.71 |
| $ |
| 1.11 |
| $ |
| 0.88 |
| $ |
| 3.12 |
| $ |
| 1.60 |
| Diluted |
| $ |
| 0.59 |
| $ |
| 0.71 |
| $ |
| 0.71 |
| $ |
| 1.11 |
| $ |
| 0.88 |
| $ |
| 3.11 |
| $ |
| 1.60 |
| Dividends declared per share |
| $ |
| 0.20 |
| $ |
| 0.20 |
| $ |
| 0.20 |
| $ |
| 0.20 |
| $ |
| - |
| $ |
| 0.80 |
| $ |
| 0.60 |
| Weighted average shares outstanding |
| 29,471,304 |
| 29,420,256 |
| 29,389,525 |
| 29,327,432 |
| 29,274,915 |
| 29,402,845 |
| 29,243,773 |
| Period end shares outstanding |
| 29,500,542 |
| 29,438,402 |
| 29,411,731 |
| 29,379,575 |
| 29,295,052 |
| 29,500,542 |
| 29,295,052 |
| Univest Financial Corporation |
| Consolidated Selected Financial Data (Unaudited) |
| December 31, 2021 |
| For the three months ended, |
| For the twelve months ended, |
| Profitability Ratios (annualized) |
| 12/31/21 |
| 09/30/21 |
| 06/30/21 |
| 03/31/21 |
| 12/31/20 |
| 12/31/21 |
| 12/31/20 |
| Return on average assets |
| 0.97 |
| % |
| 1.24 |
| % |
| 1.30 |
| % |
| 2.07 |
| % |
| 1.62 |
| % |
| 1.38 |
| % |
| 0.78 |
| % |
| Return on average assets, excluding restructuring |
| 0.97 |
| % |
| 1.24 |
| % |
| 1.30 |
| % |
| 2.07 |
| % |
| 1.69 |
| % |
| 1.38 |
| % |
| 0.80 |
| % |
| charges (1) |
| Return on average shareholders' equity |
| 9.06 |
| % |
| 11.12 |
| % |
| 11.49 |
| % |
| 18.90 |
| % |
| 15.22 |
| % |
| 12.50 |
| % |
| 7.02 |
| % |
| Return on average shareholders' equity, excluding |
| 9.06 |
| % |
| 11.12 |
| % |
| 11.49 |
| % |
| 18.90 |
| % |
| 15.89 |
| % |
| 12.50 |
| % |
| 7.19 |
| % |
| restructuring charges (1) |
| Return on average tangible common equity (1) |
| 11.79 |
| % |
| 14.51 |
| % |
| 15.11 |
| % |
| 25.20 |
| % |
| 20.54 |
| % |
| 16.41 |
| % |
| 9.52 |
| % |
| Return on average tangible common equity, excluding |
| 11.79 |
| % |
| 14.51 |
| % |
| 15.11 |
| % |
| 25.20 |
| % |
| 21.44 |
| % |
| 16.41 |
| % |
| 9.76 |
| % |
| restructuring charges (1) |
| Net interest margin (FTE) |
| 2.86 |
| % |
| 3.11 |
| % |
| 3.15 |
| % |
| 3.12 |
| % |
| 3.02 |
| % |
| 3.06 |
| % |
| 3.16 |
| % |
| Efficiency ratio (2) |
| 64.3 |
| % |
| 61.8 |
| % |
| 60.7 |
| % |
| 57.0 |
| % |
| 63.8 |
| % |
| 60.9 |
| % |
| 60.6 |
| % |
| Efficiency ratio, excluding restructuring charges (1) (2) |
| 64.3 |
| % |
| 61.8 |
| % |
| 60.7 |
| % |
| 57.0 |
| % |
| 61.6 |
| % |
| 60.9 |
| % |
| 60.0 |
| % |
| Capitalization Ratios |
| Dividends declared to net income (3) |
| 33.9 |
| % |
| 28.1 |
| % |
| 28.2 |
| % |
| 18.0 |
| % |
| 0.0 |
| % |
| 25.6 |
| % |
| 37.4 |
| % |
| Shareholders' equity to assets (Period End) |
| 10.86 |
| % |
| 10.83 |
| % |
| 11.64 |
| % |
| 11.26 |
| % |
| 10.93 |
| % |
| 10.86 |
| % |
| 10.93 |
| % |
| Tangible common equity to tangible assets (1) |
| 8.56 |
| % |
| 8.55 |
| % |
| 9.15 |
| % |
| 8.77 |
| % |
| 8.40 |
| % |
| 8.56 |
| % |
| 8.40 |
| % |
| Common equity book value per share |
| $ |
| 26.23 |
| $ |
| 25.68 |
| $ |
| 25.16 |
| $ |
| 24.59 |
| $ |
| 23.64 |
| $ |
| 26.23 |
| $ |
| 23.64 |
| Tangible common equity book value per share (1) |
| $ |
| 20.14 |
| $ |
| 19.75 |
| $ |
| 19.22 |
| $ |
| 18.64 |
| $ |
| 17.66 |
| $ |
| 20.14 |
| $ |
| 17.66 |
| Regulatory Capital Ratios (Period End) |
| Tier 1 leverage ratio |
| 9.13 |
| % |
| 9.53 |
| % |
| 9.64 |
| % |
| 9.45 |
| % |
| 9.08 |
| % |
| 9.13 |
| % |
| 9.08 |
| % |
| Common equity tier 1 risk-based capital ratio |
| 11.08 |
| % |
| 11.15 |
| % |
| 11.04 |
| % |
| 11.08 |
| % |
| 10.76 |
| % |
| 11.08 |
| % |
| 10.76 |
| % |
| Tier 1 risk-based capital ratio |
| 11.08 |
| % |
| 11.15 |
| % |
| 11.04 |
| % |
| 11.08 |
| % |
| 10.76 |
| % |
| 11.08 |
| % |
| 10.76 |
| % |
| Total risk-based capital ratio |
| 13.77 |
| % |
| 13.87 |
| % |
| 13.82 |
| % |
| 15.13 |
| % |
| 15.31 |
| % |
| 13.77 |
| % |
| 15.31 |
| % |
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included below. |
| (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, 2021 |
| September 30, 2021 |
| Average |
| Income/ |
| Average |
| Average |
| Income/ |
| Average |
| (Dollars in thousands) |
| Balance |
| Expense |
| Rate |
| Balance |
| Expense |
| Rate |
| Assets: |
| Interest-earning deposits with other banks |
| $ |
| 914,287 |
| $ |
| 370 |
| 0.16 |
| % |
| $ |
| 530,191 |
| $ |
| 189 |
| 0.14 |
| % |
| U.S. government obligations |
| 6,999 |
| 37 |
| 2.10 |
| 6,999 |
| 36 |
| 2.04 |
| Obligations of state and political subdivisions |
| 2,334 |
| 19 |
| 3.23 |
| 2,992 |
| 24 |
| 3.18 |
| Other debt and equity securities |
| 460,255 |
| 1,845 |
| 1.59 |
| 385,289 |
| 1,516 |
| 1.56 |
| Federal Home Loan Bank, Federal Reserve Bank and other stock |
| 28,402 |
| 375 |
| 5.24 |
| 26,713 |
| 334 |
| 4.96 |
| Total interest-earning deposits, investments and other interest-earning assets |
| 1,412,277 |
| 2,646 |
| 0.74 |
| 952,184 |
| 2,099 |
| 0.87 |
| Commercial, financial, and agricultural loans |
| 869,471 |
| 7,022 |
| 3.20 |
| 880,986 |
| 7,412 |
| 3.34 |
| Paycheck Protection Program loans |
| 53,745 |
| 1,568 |
| 11.57 |
| 162,611 |
| 4,162 |
| 10.15 |
| Real estate—commercial and construction loans |
| 2,826,720 |
| 26,669 |
| 3.74 |
| 2,784,398 |
| 25,634 |
| 3.65 |
| Real estate—residential loans |
| 1,107,911 |
| 10,165 |
| 3.64 |
| 1,100,799 |
| 10,171 |
| 3.67 |
| Loans to individuals |
| 26,462 |
| 249 |
| 3.73 |
| 26,048 |
| 253 |
| 3.85 |
| Municipal loans and leases |
| 245,038 |
| 2,515 |
| 4.07 |
| 247,603 |
| 2,504 |
| 4.01 |
| Lease financings |
| 125,932 |
| 1,951 |
| 6.15 |
| 117,966 |
| 1,856 |
| 6.24 |
| Gross loans and leases |
| 5,255,279 |
| 50,139 |
| 3.79 |
| 5,320,411 |
| 51,992 |
| 3.88 |
| Total interest-earning assets |
| 6,667,556 |
| 52,785 |
| 3.14 |
| 6,272,595 |
| 54,091 |
| 3.42 |
| Cash and due from banks |
| 54,958 |
| 59,642 |
| Allowance for credit losses, loans and leases |
| (71,020 |
| ) |
| (72,606 |
| ) |
| Premises and equipment, net |
| 56,087 |
| 55,685 |
| Operating lease right-of-use assets |
| 31,048 |
| 31,998 |
| Other assets |
| 349,660 |
| 350,863 |
| Total assets |
| $ |
| 7,088,289 |
| $ |
| 6,698,177 |
| Liabilities: |
| Interest-bearing checking deposits |
| $ |
| 939,478 |
| $ |
| 493 |
| 0.21 |
| % |
| $ |
| 857,098 |
| $ |
| 537 |
| 0.25 |
| % |
| Money market savings |
| 1,616,890 |
| 968 |
| 0.24 |
| 1,382,832 |
| 922 |
| 0.26 |
| Regular savings |
| 997,814 |
| 253 |
| 0.10 |
| 998,568 |
| 281 |
| 0.11 |
| Time deposits |
| 487,434 |
| 1,370 |
| 1.12 |
| 496,702 |
| 1,490 |
| 1.19 |
| Total time and interest-bearing deposits |
| 4,041,616 |
| 3,084 |
| 0.30 |
| 3,735,200 |
| 3,230 |
| 0.34 |
| Short-term borrowings |
| 14,144 |
| 1 |
| 0.03 |
| 15,116 |
| 2 |
| 0.05 |
| Long-term debt |
| 95,000 |
| 325 |
| 1.36 |
| 95,000 |
| 324 |
| 1.35 |
| Subordinated notes |
| 98,833 |
| 1,327 |
| 5.33 |
| 98,754 |
| 1,328 |
| 5.34 |
| Total borrowings |
| 207,977 |
| 1,653 |
| 3.15 |
| 208,870 |
| 1,654 |
| 3.14 |
| Total interest-bearing liabilities |
| 4,249,593 |
| 4,737 |
| 0.44 |
| 3,944,070 |
| 4,884 |
| 0.49 |
| Noninterest-bearing deposits |
| 2,000,182 |
| 1,931,525 |
| Operating lease liabilities |
| 34,114 |
| 35,094 |
| Accrued expenses and other liabilities |
| 42,066 |
| 41,303 |
| Total liabilities |
| 6,325,955 |
| 5,951,992 |
| Shareholders' Equity: |
| Common stock |
| 157,784 |
| 157,784 |
| Additional paid-in capital |
| 298,508 |
| 297,482 |
| Retained earnings and other equity |
| 306,042 |
| 290,919 |
| Total shareholders' equity |
| 762,334 |
| 746,185 |
| Total liabilities and shareholders' equity |
| $ |
| 7,088,289 |
| $ |
| 6,698,177 |
| Net interest income |
| $ |
| 48,048 |
| $ |
| 49,207 |
| Net interest spread |
| 2.70 |
| 2.93 |
| Effect of net interest-free funding sources |
| 0.16 |
| 0.18 |
| Net interest margin |
| 2.86 |
| % |
| 3.11 |
| % |
| Ratio of average interest-earning assets to average interest-bearing liabilities |
| 156.90 |
| % |
| 159.04 |
| % |
| 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, 2021 and September 30, 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 December 31, |
| Tax Equivalent Basis |
| 2021 |
| 2020 |
| Average |
| Income/ |
| Average |
| Average |
| Income/ |
| Average |
| (Dollars in thousands) |
| Balance |
| Expense |
| Rate |
| Balance |
| Expense |
| Rate |
| Assets: |
| Interest-earning deposits with other banks |
| $ |
| 914,287 |
| $ |
| 370 |
| 0.16 |
| % |
| $ |
| 296,258 |
| $ |
| 82 |
| 0.11 |
| % |
| U.S. government obligations |
| 6,999 |
| 37 |
| 2.10 |
| 6,998 |
| 36 |
| 2.05 |
| Obligations of state and political subdivisions |
| 2,334 |
| 19 |
| 3.23 |
| 14,269 |
| 129 |
| 3.60 |
| Other debt and equity securities |
| 460,255 |
| 1,845 |
| 1.59 |
| 348,244 |
| 1,237 |
| 1.41 |
| Federal Home Loan Bank, Federal Reserve Bank and other stock |
| 28,402 |
| 375 |
| 5.24 |
| 29,838 |
| 438 |
| 5.84 |
| Total interest-earning deposits, investments and other interest-earning assets |
| 1,412,277 |
| 2,646 |
| 0.74 |
| 695,607 |
| 1,922 |
| 1.10 |
| Commercial, financial, and agricultural loans |
| 869,471 |
| 7,022 |
| 3.20 |
| 824,374 |
| 7,366 |
| 3.55 |
| Paycheck Protection Program loans |
| 53,745 |
| 1,568 |
| 11.57 |
| 497,035 |
| 3,133 |
| 2.51 |
| Real estate—commercial and construction loans |
| 2,826,720 |
| 26,669 |
| 3.74 |
| 2,518,056 |
| 24,388 |
| 3.85 |
| Real estate—residential loans |
| 1,107,911 |
| 10,165 |
| 3.64 |
| 1,025,818 |
| 10,345 |
| 4.01 |
| Loans to individuals |
| 26,462 |
| 249 |
| 3.73 |
| 27,427 |
| 289 |
| 4.19 |
| Municipal loans and leases |
| 245,038 |
| 2,515 |
| 4.07 |
| 258,627 |
| 2,776 |
| 4.27 |
| Lease financings |
| 125,932 |
| 1,951 |
| 6.15 |
| 102,383 |
| 1,690 |
| 6.57 |
| Gross loans and leases |
| 5,255,279 |
| 50,139 |
| 3.79 |
| 5,253,720 |
| 49,987 |
| 3.79 |
| Total interest-earning assets |
| 6,667,556 |
| 52,785 |
| 3.14 |
| 5,949,327 |
| 51,909 |
| 3.47 |
| Cash and due from banks |
| 54,958 |
| 53,360 |
| Allowance for credit losses, loans and leases |
| (71,020 |
| ) |
| (92,766 |
| ) |
| Premises and equipment, net |
| 56,087 |
| 55,653 |
| Operating lease right-of-use assets |
| 31,048 |
| 34,272 |
| Other assets |
| 349,660 |
| 353,673 |
| Total assets |
| $ |
| 7,088,289 |
| $ |
| 6,353,519 |
| Liabilities: |
| Interest-bearing checking deposits |
| $ |
| 939,478 |
| $ |
| 493 |
| 0.21 |
| % |
| $ |
| 838,323 |
| $ |
| 537 |
| 0.25 |
| % |
| Money market savings |
| 1,616,890 |
| 968 |
| 0.24 |
| 1,213,585 |
| 898 |
| 0.29 |
| Regular savings |
| 997,814 |
| 253 |
| 0.10 |
| 905,918 |
| 341 |
| 0.15 |
| Time deposits |
| 487,434 |
| 1,370 |
| 1.12 |
| 582,782 |
| 2,034 |
| 1.39 |
| Total time and interest-bearing deposits |
| 4,041,616 |
| 3,084 |
| 0.30 |
| 3,540,608 |
| 3,810 |
| 0.43 |
| Short-term borrowings |
| 14,144 |
| 1 |
| 0.03 |
| 15,091 |
| 2 |
| 0.05 |
| Long-term debt |
| 95,000 |
| 325 |
| 1.36 |
| 169,623 |
| 611 |
| 1.43 |
| Subordinated notes |
| 98,833 |
| 1,327 |
| 5.33 |
| 193,244 |
| 2,390 |
| 4.92 |
| Total borrowings |
| 207,977 |
| 1,653 |
| 3.15 |
| 377,958 |
| 3,003 |
| 3.16 |
| Total interest-bearing liabilities |
| 4,249,593 |
| 4,737 |
| 0.44 |
| 3,918,566 |
| 6,813 |
| 0.69 |
| Noninterest-bearing deposits |
| 2,000,182 |
| 1,681,844 |
| Operating lease liabilities |
| 34,114 |
| 37,616 |
| Accrued expenses and other liabilities |
| 42,066 |
| 39,067 |
| Total liabilities |
| 6,325,955 |
| 5,677,093 |
| Shareholders' Equity: |
| Common stock |
| 157,784 |
| 157,784 |
| Additional paid-in capital |
| 298,508 |
| 296,810 |
| Retained earnings and other equity |
| 306,042 |
| 221,832 |
| Total shareholders' equity |
| 762,334 |
| 676,426 |
| Total liabilities and shareholders' equity |
| $ |
| 7,088,289 |
| $ |
| 6,353,519 |
| Net interest income |
| $ |
| 48,048 |
| $ |
| 45,096 |
| Net interest spread |
| 2.70 |
| 2.78 |
| Effect of net interest-free funding sources |
| 0.16 |
| 0.24 |
| Net interest margin |
| 2.86 |
| % |
| 3.02 |
| % |
| Ratio of average interest-earning assets to average interest-bearing liabilities |
| 156.90 |
| % |
| 151.82 |
| % |
| 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, 2021 and 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 Twelve Months Ended December 31, |
| Tax Equivalent Basis |
| 2021 |
| 2020 |
| Average |
| Income/ |
| Average |
| Average |
| Income/ |
| Average |
| (Dollars in thousands) |
| Balance |
| Expense |
| Rate |
| Balance |
| Expense |
| Rate |
| Assets: |
| Interest-earning deposits with other banks |
| $ |
| 476,351 |
| $ |
| 661 |
| 0.14 |
| % |
| $ |
| 274,372 |
| $ |
| 574 |
| 0.21 |
| % |
| U.S. government obligations |
| 6,999 |
| 144 |
| 2.06 |
| 7,132 |
| 145 |
| 2.03 |
| Obligations of state and political subdivisions |
| 5,702 |
| 206 |
| 3.61 |
| 23,065 |
| 825 |
| 3.58 |
| Other debt and equity securities |
| 393,762 |
| 5,992 |
| 1.52 |
| 371,814 |
| 7,697 |
| 2.07 |
| Federal Home Loan Bank, Federal Reserve Bank and other stock |
| 26,844 |
| 1,417 |
| 5.28 |
| 29,726 |
| 1,746 |
| 5.87 |
| Total interest-earning deposits, investments and other interest-earning assets |
| 909,658 |
| 8,420 |
| 0.93 |
| 706,109 |
| 10,987 |
| 1.56 |
| Commercial, financial, and agricultural loans |
| 840,133 |
| 28,142 |
| 3.35 |
| 817,489 |
| 30,657 |
| 3.75 |
| Paycheck Protection Program loans |
| 281,484 |
| 15,032 |
| 5.34 |
| 342,920 |
| 8,072 |
| 2.35 |
| Real estate—commercial and construction loans |
| 2,734,259 |
| 101,692 |
| 3.72 |
| 2,312,996 |
| 94,962 |
| 4.11 |
| Real estate—residential loans |
| 1,077,952 |
| 40,045 |
| 3.71 |
| 1,007,915 |
| 42,047 |
| 4.17 |
| Loans to individuals |
| 26,062 |
| 1,018 |
| 3.91 |
| 28,792 |
| 1,332 |
| 4.63 |
| Municipal loans and leases |
| 247,396 |
| 10,147 |
| 4.10 |
| 283,495 |
| 11,857 |
| 4.18 |
| Lease financings |
| 115,189 |
| 7,363 |
| 6.39 |
| 95,194 |
| 6,498 |
| 6.83 |
| Gross loans and leases |
| 5,322,475 |
| 203,439 |
| 3.82 |
| 4,888,801 |
| 195,425 |
| 4.00 |
| Total interest-earning assets |
| 6,232,133 |
| 211,859 |
| 3.40 |
| 5,594,910 |
| 206,412 |
| 3.69 |
| Cash and due from banks |
| 55,724 |
| 52,000 |
| Allowance for credit losses, loans and leases |
| (74,943 |
| ) |
| (73,459 |
| ) |
| Premises and equipment, net |
| 55,875 |
| 55,888 |
| Operating lease right-of-use assets |
| 32,758 |
| 34,277 |
| Other assets |
| 353,896 |
| 343,261 |
| Total assets |
| $ |
| 6,655,443 |
| $ |
| 6,006,877 |
| Liabilities: |
| Interest-bearing checking deposits |
| $ |
| 850,713 |
| $ |
| 2,007 |
| 0.24 |
| % |
| $ |
| 692,049 |
| $ |
| 2,173 |
| 0.31 |
| % |
| Money market savings |
| 1,366,762 |
| 3,574 |
| 0.26 |
| 1,113,039 |
| 5,551 |
| 0.50 |
| Regular savings |
| 983,752 |
| 1,114 |
| 0.11 |
| 874,366 |
| 2,057 |
| 0.24 |
| Time deposits |
| 498,638 |
| 6,178 |
| 1.24 |
| 572,103 |
| 9,835 |
| 1.72 |
| Total time and interest-bearing deposits |
| 3,699,865 |
| 12,873 |
| 0.35 |
| 3,251,557 |
| 19,616 |
| 0.60 |
| Short-term borrowings |
| 16,552 |
| 8 |
| 0.05 |
| 86,658 |
| 327 |
| 0.38 |
| Long-term debt |
| 96,562 |
| 1,318 |
| 1.36 |
| 189,410 |
| 2,879 |
| 1.52 |
| Subordinated notes |
| 137,896 |
| 7,149 |
| 5.18 |
| 134,949 |
| 6,762 |
| 5.01 |
| Total borrowings |
| 251,010 |
| 8,475 |
| 3.38 |
| 411,017 |
| 9,968 |
| 2.43 |
| Total interest-bearing liabilities |
| 3,950,875 |
| 21,348 |
| 0.54 |
| 3,662,574 |
| 29,584 |
| 0.81 |
| Noninterest-bearing deposits |
| 1,891,330 |
| 1,599,333 |
| Operating lease liabilities |
| 36,001 |
| 37,557 |
| Accrued expenses and other liabilities |
| 42,781 |
| 39,212 |
| Total liabilities |
| 5,920,987 |
| 5,338,676 |
| Shareholders' Equity: |
| Common stock |
| 157,784 |
| 157,784 |
| Additional paid-in capital |
| 297,189 |
| 296,023 |
| Retained earnings and other equity |
| 279,483 |
| 214,394 |
| Total shareholders' equity |
| 734,456 |
| 668,201 |
| Total liabilities and shareholders' equity |
| $ |
| 6,655,443 |
| $ |
| 6,006,877 |
| Net interest income |
| $ |
| 190,511 |
| $ |
| 176,828 |
| Net interest spread |
| 2.86 |
| 2.88 |
| Effect of net interest-free funding sources |
| 0.20 |
| 0.28 |
| Net interest margin |
| 3.06 |
| % |
| 3.16 |
| % |
| Ratio of average interest-earning assets to average interest-bearing liabilities |
| 157.74 |
| % |
| 152.76 |
| % |
| 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, 2021 and 2020 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, 2021 |
| 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 |
| 350,373 |
| 8.0 |
| % |
| $ |
| - |
| - |
| % |
| Animal Production |
| 304,487 |
| 7.0 |
| - |
| - |
| CRE - 1-4 Family Residential Investment |
| 255,397 |
| 5.8 |
| - |
| - |
| CRE - Office |
| 235,078 |
| 5.4 |
| - |
| - |
| CRE - Multi-family |
| 222,488 |
| 5.1 |
| - |
| - |
| Nursing and Residential Care Facilities |
| 169,708 |
| 3.9 |
| - |
| - |
| Hotels & Motels (Accommodation) |
| 169,397 |
| 3.9 |
| 1,437 |
| 0.8 |
| CRE - Industrial / Warehouse |
| 169,329 |
| 3.9 |
| - |
| - |
| Education |
| 162,776 |
| 3.7 |
| - |
| - |
| Specialty Trade Contractors |
| 130,418 |
| 3.0 |
| - |
| - |
| CRE - Mixed-Use - Residential |
| 121,019 |
| 2.8 |
| 3,405 |
| 2.8 |
| Merchant Wholesalers, Durable Goods |
| 110,675 |
| 2.5 |
| - |
| - |
| CRE - Medical Office |
| 106,348 |
| 2.4 |
| - |
| - |
| Homebuilding (tract developers, remodelers) |
| 93,469 |
| 2.1 |
| - |
| - |
| Real Estate Lenders, Secondary Market Financing |
| 87,389 |
| 2.0 |
| - |
| - |
| Crop Production |
| 81,704 |
| 1.9 |
| - |
| - |
| Motor Vehicle and Parts Dealers |
| 78,292 |
| 1.8 |
| - |
| - |
| Food Manufacturing |
| 75,587 |
| 1.7 |
| - |
| - |
| Wood Product Manufacturing |
| 70,769 |
| 1.6 |
| - |
| - |
| Rental and Leasing Services |
| 69,048 |
| 1.6 |
| - |
| - |
| Administrative and Support Services |
| 66,529 |
| 1.5 |
| - |
| - |
| Personal and Laundry Services |
| 62,051 |
| 1.4 |
| - |
| - |
| Food Services and Drinking Places |
| 59,636 |
| 1.4 |
| - |
| - |
| Fabricated Metal Product Manufacturing |
| 58,924 |
| 1.3 |
| - |
| - |
| Merchant Wholesalers, Nondurable Goods |
| 57,114 |
| 1.3 |
| - |
| - |
| Repair and Maintenance |
| 53,820 |
| 1.2 |
| - |
| - |
| Miniwarehouse / Self-Storage |
| 51,987 |
| 1.2 |
| - |
| - |
| Religious Organizations, Advocacy Groups |
| 50,432 |
| 1.2 |
| - |
| - |
| Industries with >$50 million in outstandings |
| $ |
| 3,524,244 |
| 80.7 |
| % |
| $ |
| 4,842 |
| 0.1 |
| % |
| Industries with <$50 million in outstandings |
| $ |
| 844,505 |
| 19.3 |
| % |
| $ |
| 981 |
| 0.1 |
| % |
| Total Commercial Loans |
| $ |
| 4,368,749 |
| 100.0 |
| % |
| $ |
| 5,823 |
| 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 |
| 540,566 |
| 338 |
| 0.1 |
| % |
| Real Estate-Home Equity Secured for Personal Purpose |
| 158,909 |
| - |
| - |
| Loans to Individuals |
| 25,504 |
| 14 |
| 0.1 |
| Lease Financings |
| 184,541 |
| 33 |
| - |
| Total - Consumer Loans and Lease Financings |
| $ |
| 909,520 |
| $ |
| 385 |
| - |
| % |
| Total |
| $ |
| 5,278,269 |
| $ |
| 6,208 |
| 0.1 |
| % |
| (1) Loan modifications referenced above were made in accordance with Section 4013 of the CARES Act, the Consolidated Appropriations Act, 2021 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, 2021. |
| Univest Financial Corporation |
| Non-GAAP Reconciliation |
| December 31, 2021 |
| Non-GAAP to GAAP Reconciliation |
| Management uses non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release. |
| As of or for the three months ended, |
| As of or for the twelve months ended, |
| 12/31/21 |
| 09/30/21 |
| 06/30/21 |
| 03/31/21 |
| 12/31/20 |
| 12/31/21 |
| 12/31/20 |
| 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 |
| $ |
| 773,794 |
| $ |
| 756,023 |
| $ |
| 739,998 |
| $ |
| 722,455 |
| $ |
| 692,472 |
| $ |
| 773,794 |
| $ |
| 692,472 |
| Goodwill |
| (175,510 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (175,510 |
| ) |
| (172,559 |
| ) |
| Other intangibles (b) |
| (4,210 |
| ) |
| (1,922 |
| ) |
| (2,073 |
| ) |
| (2,326 |
| ) |
| (2,580 |
| ) |
| (4,210 |
| ) |
| (2,580 |
| ) |
| Tangible common equity |
| $ |
| 594,074 |
| $ |
| 581,542 |
| $ |
| 565,366 |
| $ |
| 547,570 |
| $ |
| 517,333 |
| $ |
| 594,074 |
| $ |
| 517,333 |
| Total assets |
| $ |
| 7,122,421 |
| $ |
| 6,979,852 |
| $ |
| 6,356,305 |
| $ |
| 6,416,665 |
| $ |
| 6,336,496 |
| $ |
| 7,122,421 |
| $ |
| 6,336,496 |
| Goodwill |
| (175,510 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (175,510 |
| ) |
| (172,559 |
| ) |
| Other intangibles (b) |
| (4,210 |
| ) |
| (1,922 |
| ) |
| (2,073 |
| ) |
| (2,326 |
| ) |
| (2,580 |
| ) |
| (4,210 |
| ) |
| (2,580 |
| ) |
| Tangible assets |
| $ |
| 6,942,701 |
| $ |
| 6,805,371 |
| $ |
| 6,181,673 |
| $ |
| 6,241,780 |
| $ |
| 6,161,357 |
| $ |
| 6,942,701 |
| $ |
| 6,161,357 |
| Average shareholders' equity |
| $ |
| 762,334 |
| $ |
| 746,185 |
| $ |
| 728,750 |
| $ |
| 699,736 |
| $ |
| 676,426 |
| $ |
| 734,456 |
| $ |
| 668,201 |
| Average goodwill |
| (173,553 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (172,559 |
| ) |
| (172,810 |
| ) |
| (172,559 |
| ) |
| Average other intangibles (b) |
| (2,696 |
| ) |
| (1,983 |
| ) |
| (2,209 |
| ) |
| (2,464 |
| ) |
| (2,734 |
| ) |
| (2,338 |
| ) |
| (3,181 |
| ) |
| Average tangible common equity |
| $ |
| 586,085 |
| $ |
| 571,643 |
| $ |
| 553,982 |
| $ |
| 524,713 |
| $ |
| 501,133 |
| $ |
| 559,308 |
| $ |
| 492,461 |
| Net income before taxes |
| $ |
| 21,990 |
| $ |
| 26,173 |
| $ |
| 25,760 |
| $ |
| 40,407 |
| $ |
| 31,647 |
| $ |
| 114,330 |
| $ |
| 56,897 |
| Provision for credit losses |
| 1,392 |
| (182 |
| ) |
| (59 |
| ) |
| (11,283 |
| ) |
| (8,721 |
| ) |
| (10,132 |
| ) |
| 40,794 |
| Pre-tax pre-provision income |
| $ |
| 23,382 |
| $ |
| 25,991 |
| $ |
| 25,701 |
| $ |
| 29,124 |
| $ |
| 22,926 |
| $ |
| 104,198 |
| $ |
| 97,691 |
| Loans and leases held for investment, gross |
| $ |
| 5,310,017 |
| $ |
| 5,252,045 |
| $ |
| 5,327,313 |
| $ |
| 5,415,006 |
| $ |
| 5,306,841 |
| $ |
| 5,310,017 |
| $ |
| 5,306,841 |
| Paycheck Protection Program ("PPP") loans |
| (31,748 |
| ) |
| (85,601 |
| ) |
| (252,849 |
| ) |
| (528,452 |
| ) |
| (483,773 |
| ) |
| (31,748 |
| ) |
| (483,773 |
| ) |
| Gross loans and leases excluding PPP loans |
| $ |
| 5,278,269 |
| $ |
| 5,166,444 |
| $ |
| 5,074,464 |
| $ |
| 4,886,554 |
| $ |
| 4,823,068 |
| $ |
| 5,278,269 |
| $ |
| 4,823,068 |
| Allowance for credit losses, loans and leases |
| $ |
| 71,924 |
| $ |
| 70,146 |
| $ |
| 71,355 |
| $ |
| 71,497 |
| $ |
| 83,044 |
| $ |
| 71,924 |
| $ |
| 83,044 |
| Gross loans and leases excluding PPP loans |
| 5,278,269 |
| 5,166,444 |
| 5,074,464 |
| 4,886,554 |
| 4,823,068 |
| 5,278,269 |
| 4,823,068 |
| Allowance for credit losses, loans and leases as a percentage of gross loans and leases excluding PPP loans |
| 1.36 |
| % |
| 1.36 |
| % |
| 1.41 |
| % |
| 1.46 |
| % |
| 1.72 |
| % |
| 1.36 |
| % |
| 1.72 |
| % |
| (a) Associated with financial center optimization plan |
| (b) Amount does not include mortgage servicing rights |
CONTACT:Brian J. RichardsonUNIVEST FINANCIAL CORPORATIONChief Financial Officer215-721-2446, richardsonb@univest.net