UVSP - Univest Financial Corporation Reports Third Quarter Results

SOUDERTON, Pa., Oct. 22, 2025 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the "Corporation") ( NASDAQ: UVSP ), parent company of Univest Bank and Trust Co. (the "Bank") and its insurance, investments and equipment financing subsidiaries, announced net income for the quarter ended September 30, 2025 of $25.6 million, or $0.89 diluted earnings per share, compared to net income of $18.6 million, or $0.63 diluted earnings per share, for the quarter ended September 30, 2024.

One-Time Items
The financial results for the quarter included tax-free bank owned life insurance ("BOLI") death benefit claims of $967 thousand, which represented $0.03 diluted earnings per share.

Loans
Gross loans and leases decreased $15.7 million, or 0.2% (0.8% annualized), from June 30, 2025 and $41.1 million, or 0.6% (0.8% annualized), from December 31, 2024, primarily due to decreases in commercial and residential mortgage loans and lease financings, partially offset by increases in construction, commercial real estate and home equity loans. Gross loans and leases increased $54.7 million, or 0.8%, from September 30, 2024, primarily due to increases in construction, commercial real estate, residential mortgage and home equity loans, partially offset by decreases in commercial loans and lease financings.

Deposits and Liquidity
Total deposits increased $635.5 million, or 9.7% (38.8% annualized), from June 30, 2025 and $458.9 million, or 6.8% (9.1% annualized), from December 31, 2024, primarily due to seasonal increases in public funds deposits and increases in commercial and brokered deposits, partially offset by a decrease in consumer deposits. Total deposits increased $364.0 million, or 5.3%, from September 30, 2024, primarily due to increases in public funds deposits and increases in commercial and brokered deposits, partially offset by a decrease in consumer deposits.

Noninterest-bearing deposits totaled $1.4 billion and represented 19.3% of total deposits at September 30, 2025, compared to $1.5 billion representing 22.2% of total deposits at June 30, 2025. Unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, totaled $1.6 billion and $1.5 billion at September 30, 2025 and June 30, 2025, respectively. This represented 22.0% of total deposits at September 30, 2025, compared to 23.0% at June 30, 2025.

As of September 30, 2025, the Corporation and its subsidiaries reported cash and cash equivalents totaling $816.7 million, which reflected the $662.2 million increase in interest-earning deposits with other banks in the third quarter, and had committed borrowing capacity of $3.6 billion, of which $1.8 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $457.0 million at September 30, 2025. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

Net Interest Income and Margin
Net interest income of $61.3 million for the third quarter of 2025 increased $8.1 million, or 15.3%, from the third quarter of 2024 and $1.8 million, or 3.0%, from the second quarter of 2025. The increase in net interest income for the third quarter of 2025 compared to the third quarter of 2024 was primarily driven by higher average balances on loans and cash and cash equivalents and increased loan yields, as well as a reduction in our overall cost of funds. The increase in net interest income for the third quarter of 2025 compared to the second quarter of 2025 was primarily driven by the increased average balance and yields on cash and cash equivalents and increased loan yields, which outpaced a decline in average loan balances.

Net interest margin, on a tax-equivalent basis, was 3.17% for the third quarter of 2025, compared to 3.20% for the second quarter of 2025 and 2.82% for the third quarter of 2024. Excess liquidity reduced net interest margin by approximately 16 basis points for the quarter ended September 30, 2025 compared to approximately four basis points for the quarter ended June 30, 2025 and approximately nine basis points for the quarter ended September 30, 2024. Excluding the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, would have been 3.33% for the quarter ended September 30, 2025 compared to 3.24% for the second quarter of 2025 and 2.91% for the third quarter of 2024.

Noninterest Income
Noninterest income for the quarter ended September 30, 2025 was $21.9 million, an increase of $1.8 million, or 8.8%, from the comparable period in the prior year.

BOLI income increased $987 thousand, or 107.2%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year, primarily due to death benefit claims.

Other service fee income increased $601 thousand, or 33.1%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year. The three months ended September 30, 2025 included a $306 thousand valuation allowance recorded on mortgage servicing rights, compared to a $785 thousand valuation allowance recorded in the third quarter of 2024, each of which were driven by the decrease in interest rates during the respective periods and the impact on prepayments speed assumptions.

Investment advisory commission and fee income increased $352 thousand, or 6.6%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year, primarily due to new customer relationships and the appreciation of assets under management and supervision.

Service charges on deposit accounts increased $265 thousand, or 13.0%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year, primarily due to an increase in treasury management income.

Insurance commission and fee income increased $230 thousand, or 4.4%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year, primarily due to an increase in commercial line premiums.

Net gain on mortgage banking activities decreased $448 thousand, or 34.6%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year, primarily due to decreased salable volume.

Other income decreased $316 thousand, or 22.6%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year, primarily due to a decrease of $303 thousand in gains on sale of Small Business Administration loans.

Noninterest Expense
Noninterest expense for the quarter ended September 30, 2025 was $50.7 million, an increase of $2.1 million, or 4.4%, from the comparable period in the prior year.

Salaries, benefits and commissions increased $950 thousand, or 3.1%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year, primarily due to annual merit increases and an increase in incentive compensation due to increased profitability, partially offset by an increase in capitalized compensation driven by higher loan production.

Other expense increased $967 thousand, or 14.8%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year due to increases in the Pennsylvania bank shares tax expense and loan workout fees, primarily related to one commercial real estate loan relationship.

Professional fees increased $297 thousand, or 18.8%, for the quarter ended September 30, 2025 compared to the comparable period in the prior year, primarily driven by an increase in consultant fees for data integration resources.

Tax Provision
The effective income tax rate was 20.0% for the quarter ended September 30, 2025, compared to an effective tax rate of 20.6% for the quarter ended September 30, 2024. The effective tax rate for the three months ended September 30, 2025 was favorably impacted by proceeds of BOLI death benefits received in the period. Excluding the BOLI death benefits, the effective tax rate was 20.7% for the three months ended September 30, 2025.

Asset Quality and Provision for Credit Losses
Nonperforming assets totaled $52.1 million at September 30, 2025, $50.6 million at June 30, 2025, and $36.6 million at September 30, 2024. During the third quarter, a $1.4 million residential real estate loan was transferred to other real estate owned. During the second quarter, a $23.7 million commercial loan relationship was placed on nonaccrual status due to, among other things, suspected fraud. Subsequent to the relationship being placed on nonaccrual status, a $7.3 million charge-off was recognized during the quarter.

Net loan and lease charge-offs were $480 thousand for the three months ended September 30, 2025 compared to $7.8 million and $820 thousand for the three months ended June 30, 2025 and September 30, 2024, respectively.

The provision for credit losses was $517 thousand for the three months ended September 30, 2025 compared to $5.7 million and $1.4 million for the three months ended June 30, 2025 and September 30, 2024, respectively. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.28% at September 30, 2025, June 30, 2025, and September 30, 2024.

Dividend and Share Repurchases
On October 22, 2025, Univest declared a quarterly cash dividend of $0.22 per share to be paid on November 19, 2025 to shareholders of record as of November 5, 2025. During the quarter ended September 30, 2025, the Corporation repurchased 255,010 shares of common stock at an average price of $30.16 per share. Including brokerage fees and excise tax, the average cost per share was $30.49. As of September 30, 2025, 750,627 shares are available for repurchase under the Share Repurchase Plan.

Conference Call
Univest will host a conference call to discuss third quarter 2025 results on Thursday, October 23, 2025 at 9:00 a.m. EDT. Participants may preregister at https://www.netroadshow.com/events/login/LE9zwo3gnOYXfXQJhlFjaq4KDhkgm0Ne3b3 . The general public can access the call by dialing 1-833-470-1428; using Access Code 288002. A replay of the conference call will be available through October 30, 2025 by dialing 1-866-813-9403; using Access Code 734075.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $8.6 billion in assets and $5.7 billion in assets under management and supervision through its Wealth Management lines of business at September 30, 2025. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices and online at www.univest.net .

This press release and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, business, prospects and strategies of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future financial condition, results of operations, business, prospects or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition and demand for financial services in our market area; (2) inflation and/or changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and/or lead to higher operating costs and higher costs we pay to retain and attract deposits; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or credit loss provisions; (4) fluctuations in real estate values and both residential and commercial real estate market conditions; (5) changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; (6) our ability to access cost-effective funding; (7) changes in economic conditions nationally and in our market, including potential recessionary conditions and the levels of unemployment in our market area; (8) changes in the economic assumptions or methodology used to calculate our allowance for credit losses; (9) legislative, regulatory, accounting or tax changes; (10) monetary and fiscal policies of the U.S. government, including the policies of the Board of Governors of the Federal Reserve System; (11) the imposition of tariffs or other domestic or international governmental policies and retaliatory responses; (12) the impacts of the current government shutdown; (13) the failure to maintain current technologies and to successfully implement future information technology enhancements; (14) technological issues that may adversely affect our operations or those of our customers; (15) a failure or breach in our operational or security systems or infrastructure, including cyberattacks; (16) changes in the securities markets; (17) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (18) our ability to enter into new markets successfully and capitalize on growth opportunities; (19) changes in investor sentiment or consumer spending or savings behavior; and/or (20) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

(UVSP - ER)