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Univest Corporation of Pennsylvania Reports First Quarter Results

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SOUDERTON, Pa., April 25, 2018 (GLOBE NEWSWIRE) -- Univest Corporation of Pennsylvania ("Univest" or the "Corporation") (NASDAQ:UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced financial results for the first quarter ended March 31, 2018. Univest reported net income of $12.9 million, or $0.44 diluted earnings per share for the quarter ended March 31, 2018, compared to net income of $10.9 million, or $0.41 diluted earnings per share, for the quarter ended March 31, 2017.

The financial results for the quarter ended March 31, 2018 included restructuring costs related to financial center closures of $451 thousand, net of tax, or $0.01 of diluted earnings per share. There were no restructuring costs during the quarter ended March 31, 2017. The financial results for the quarter ended March 31, 2018 also included a reduction in the Corporation's statutory federal income tax rate from 35% to 21% effective January 1, 2018 in accordance with the Tax Cuts and Jobs Act of 2017 ("TCJA").

Loans
Gross loans and leases increased $69.8 million, or 7.7% (annualized), from December 31, 2017 and $348.0 million, or 10.4%, from March 31, 2017. The growth in loans from December 31, 2017 and March 31, 2017 was primarily in commercial real estate, commercial business and residential real estate loans.

Deposits
Total deposits decreased $57.6 million, or 6.5% (annualized), from December 31, 2017 and increased $131.3 million, or 3.9%, from March 31, 2017. The growth in deposits compared to March 31, 2017 was primarily due to increases in commercial and public funds deposits.

Net Interest Income and Margin
Net interest income of $37.3 million for the first quarter of 2018 increased $566 thousand, or 1.5%, from the fourth quarter of 2017 and $3.0 million, or 8.7%, from the first quarter of 2017. The increase in net interest income for the first quarter of 2018 as compared to the first quarter of 2017 was primarily due to the growth in loans during the last year.

Net interest margin, on a tax-equivalent basis, was 3.72% for the first quarter of 2018, compared to 3.76% for the fourth quarter of 2017 and 3.80% for the first quarter of 2017. The favorable impact of purchase accounting accretion was 2 basis points ($146 thousand) for the quarter ended March 31, 2018 compared to 4 basis points ($449 thousand) for the quarter ended December 31, 2017 and 8 basis points ($764 thousand) for the quarter ended March 31, 2017. Excluding the impact of purchase accounting accretion, the net interest margin, on a tax-equivalent basis, was 3.70% for the quarter ended March 31, 2018 compared to 3.72% for both the quarters ended December 31, 2017 and March 31, 2017.

Net interest margin, on a tax-equivalent basis, for all periods in 2017 was calculated using a 35% federal tax rate as compared to a 21% federal tax rate for the first quarter of 2018. Assuming a 21% federal tax rate and excluding purchase accounting, net interest margin was 3.64% for both the quarters ended December 31, 2017 and March 31, 2017.

Noninterest Income
Noninterest income for the quarter ended March 31, 2018 was $15.6 million, an increase of $612 thousand, or 4.1%, from the first quarter of 2017. Investment advisory commission and fee income increased $502 thousand, or 15.8%, for the quarter ended March 31, 2018 primarily due to new customer relationships and favorable market performance during 2017. Insurance commission and fee income increased $478 thousand, or 10.8%, for the quarter ended March 31, 2018, primarily due to an increase in contingent commission income of $422 thousand, which was $1.4 million for the quarter ended March 31, 2018 compared to $963 thousand for the quarter ended March 31, 2017. These increases were partially offset by a decrease in the net gain on mortgage banking of $397 thousand, or 35.7%, for the quarter ended March 31, 2018, primarily due to a decrease in mortgage volume due to a shortage of housing supply and the extended winter weather in March 2018. In addition, BOLI income decreased $114 thousand, or 14.6% for the quarter ended March 31, 2018, primarily due to a decrease in value of our non-qualified annuity portfolio, which is subject to equity market volatility.

Noninterest Expense
Noninterest expense for the quarter ended March 31, 2018 was $35.1 million, an increase of $3.1 million, or 9.7%, compared to the first quarter of 2017. Restructuring costs related to financial center closures and staffing rationalization were $571 thousand for the quarter. There were no restructuring costs during the quarter ended March 31, 2017.

Salaries, benefits and commissions increased $1.9 million for the quarter ended March 31, 2018, primarily attributable to additional staff hired to support revenue generation across all business lines, expansion of our financial center footprint in Lancaster County and the Lehigh Valley and annual merit increases. Data processing expense increased $174 thousand for the quarter ended March 31, 2018 primarily due to increased investments in customer relationship management software, internal infrastructure improvements and outsourced data processing solutions. Other expense increased $358 thousand for the quarter ended March 31, 2018 primarily due to increases in deferred director stock expense and loan processing expense.

Asset Quality and Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $27.7 million at March 31, 2018, compared to $14.5 million at December 31, 2017 and $19.9 million at March 31, 2017. Nonperforming assets were $32.9 million at March 31, 2018, compared to $28.6 million at December 31, 2017 and $27.3 million at March 31, 2017. The increase in non-accrual loans and leases at March 31, 2018 is primarily due to one commercial real estate loan in the amount of $12.3 million which was placed on non-accrual status during the first quarter of 2018. This was partially offset by troubled debt restructured commercial real estate loans for another borrower totaling $10.3 million which were returned to performing status during the first quarter of 2018 as the borrower was in compliance with the modified terms of the restructuring for the required time period.

Net loan and lease charge-offs were $198 thousand during the first quarter of 2018. The provision for loan and lease losses was $2.1 million for the first quarter of 2018.

The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding covered loans acquired in the Fox Chase and Valley Green Bank acquisitions, which were recorded at fair value as of the acquisition date, was 0.73% at March 31, 2018, compared to 0.70% at December 31, 2017 and 0.74% at March 31, 2017.

Tax Provision
The effective income tax rate was 18.0% for the quarter ended March 31, 2018 compared to an effective income tax rate of 26.5% for the quarter ended March 31, 2017. As previously discussed, the Corporation's statutory federal tax rate was reduced to 21% effective January 1, 2018 in accordance with the TCJA. The Corporation's effective income tax rate for the quarter ended March 31, 2018 was favorably impacted by discrete tax benefits totaling $118 thousand. Excluding these discrete items, the effective tax rate was 18.8% for the quarter ended March 31, 2018.

Dividend
On February 28, 2018, Univest declared a quarterly cash dividend of $0.20 per share, payable on April 2, 2018. This represented a 2.90% annualized yield based on the closing price of Univest's stock on the date the dividend was paid.

Conference Call
Univest will host a conference call to discuss first quarter 2018 results on Thursday, April 26, 2018 at 9:00 a.m. EDT. Participants may preregister at http://dpregister.com/10119368. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through May 26, 2018 by dialing 1-877-344-7529; using Conference ID: 10119368.

About Univest Corporation of Pennsylvania
Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., has approximately $4.6 billion in assets and $3.4 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2018. 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 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 Lancaster, as well as in New Jersey and Maryland and online at www.univest.net.

This press release of Univest Corporation of Pennsylvania and the reports Univest Corporation of Pennsylvania files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial services industry and, specifically, the financial operations, markets and products of Univest Corporation of Pennsylvania. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Corporation of Pennsylvania's future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) competitive pressures among financial institutions; (2) changes in the interest rate environment; (3) changes in prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which Univest Corporation of Pennsylvania is engaged; (6) technological issues that may adversely affect Univest Corporation of Pennsylvania's financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Corporation of Pennsylvania files with the Securities and Exchange Commission. Univest Corporation of Pennsylvania undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

 

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data (Unaudited)
March 31, 2018
(Dollars in thousands)                      
                       
Balance Sheet (Period End)   03/31/18   12/31/17   09/30/17   06/30/17   03/31/17  
Assets   $ 4,613,959   $ 4,554,862   $ 4,417,363   $ 4,453,527   $ 4,273,931  
Investment securities   462,252   454,082   443,822   469,307   464,639  
Loans held for sale   687   1,642   2,228   2,259   1,110  
Loans and leases held for investment, gross   3,689,888   3,620,067   3,487,164   3,510,170   3,341,916  
Allowance for loan and lease losses   23,410   21,555   20,543   20,910   19,528  
Loans and leases held for investment, net   3,666,478   3,598,512   3,466,621   3,489,260   3,322,388  
Total deposits   3,497,293   3,554,919   3,518,590   3,348,080   3,365,951  
Noninterest-bearing deposits   1,002,021   1,040,026   987,881   963,790   947,495  
NOW, money market and savings   1,974,769   1,940,144   1,959,549   1,837,452   1,865,280  
Time deposits   520,503   574,749   571,160   546,838   553,176  
Borrowings   466,510   355,590   332,529   542,545   355,580  
Shareholders' equity   606,719   603,374   528,798   521,306   511,880  
                       
                       
Balance Sheet (Average)   For the three months ended,  
    03/31/18   12/31/17   09/30/17   06/30/17   03/31/17  
Assets   $ 4,555,977   $ 4,442,743   $ 4,416,332   $ 4,333,689   $ 4,230,428  
Investment securities    457,926   456,045   459,862   468,601   470,300  
Loans and leases, gross   3,634,510   3,505,260   3,467,235   3,401,325   3,306,877  
Deposits   3,484,044   3,508,676   3,480,318   3,346,409   3,290,285  
Shareholders' equity   605,973   554,071   527,032   517,697   509,055  
                       
                       
Asset Quality Data (Period End)                       
    03/31/18   12/31/17   09/30/17   06/30/17   03/31/17  
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases   $ 27,694   $ 14,517   $ 15,949   $ 20,174   $ 19,856  
Accruing loans and leases 90 days or more past due   2,295   761   1,595   572   919  
Accruing troubled debt restructured loans and leases   1,032   11,435   11,468   11,470   2,818  
Total nonperforming loans and leases   31,021   26,713   29,012   32,216   23,593  
Other real estate owned   1,843   1,843   1,763   2,202   3,712  
Total nonperforming assets   32,864   28,556   30,775   34,418   27,305  
Nonaccrual loans and leases / Loans and leases held for investment   0.75 % 0.40 % 0.46 % 0.57 % 0.59 %
Nonperforming loans and leases / Loans and leases held for investment   0.84 % 0.74 % 0.83 % 0.92 % 0.71 %
Nonperforming assets / Total assets   0.71 % 0.63 % 0.70 % 0.77 % 0.64 %
                       
Allowance for loan and lease losses   23,410   21,555   20,543   20,910   19,528  
Allowance for loan and lease losses / Loans and leases held for investment    0.63 % 0.60 % 0.59 % 0.60 % 0.58 %
Allowance for loan and lease losses / Loans and leases held for investment (excluding acquired loans at period-end)   0.73 % 0.70 % 0.71 % 0.73 % 0.74 %
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment   84.53 % 148.48 % 128.80 % 103.65 % 98.35 %
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 75.47 % 80.69 % 70.81 % 64.91 % 82.77 %
Acquired credit impaired loans   $ 1,525   $ 1,583   $ 1,622   $ 6,485   $ 6,616  
                       
    For the three months ended,  
    03/31/18   12/31/17   09/30/17   06/30/17   03/31/17  
Net loan and lease charge-offs   $ 198   $ 980   $ 3,056   $ 1,384   $ 416  
Net loan and lease charge-offs (annualized)/Average loans and leases   0.02 % 0.11 % 0.35 % 0.16 % 0.05 %


Univest Corporation of Pennsylvania
Consolidated Selected Financial Data (Unaudited)
March 31, 2018
(Dollars in thousands, except per share data)                      
    For the three months ended,  
For the period:   03/31/18   12/31/17   09/30/17   06/30/17   03/31/17  
Interest income   $ 43,534   $ 42,417   $ 42,172   $ 40,030   $ 38,396  
Interest expense   6,262   5,711   5,285   4,730   4,113  
Net interest income   37,272   36,706   36,887   35,300   34,283  
Provision for loan and lease losses   2,053   1,992   2,689   2,766   2,445  
Net interest income after provision    35,219   34,714   34,198   32,534   31,838  
Noninterest income:                      
Trust fee income   1,996   2,208   1,924   2,016   1,907  
Service charges on deposit accounts   1,327   1,555   1,371   1,313   1,243  
Investment advisory commission and fee income   3,683   3,485   3,455   3,333   3,181  
Insurance commission and fee income   4,888   3,258   3,492   3,628   4,410  
Bank owned life insurance income   669   841   742   1,622   783  
Net gain on sales of investment securities   10   5   7   21   15  
Net gain on mortgage banking activities   716   465   908   1,537   1,113  
Other income   2,293   2,335   2,210   2,539   2,318  
Total noninterest income   15,582   14,152   14,109   16,009   14,970  
Noninterest expense:                      
Salaries, benefits and commissions   20,647   19,340   19,185   18,730   18,737  
Premises and equipment   3,780   3,636   3,542   3,715   3,658  
Data processing   2,232   2,243   2,118   2,081   2,058  
Professional fees   1,355   1,391   1,447   1,248   1,239  
Marketing and advertising   381   360   271   475   379  
Deposit insurance premiums   391   374   409   451   402  
Intangible expenses   612   687   690   446   759  
Restructuring charges   571          
Other expense   5,156   5,409   5,033   5,402   4,798  
Total noninterest expense   35,125   33,440   32,695   32,548   32,030  
Income before taxes   15,676   15,426   15,612   15,995   14,778  
Income tax expense    2,826   5,162   4,416   4,217   3,922  
Net income   $ 12,850   $ 10,264   $ 11,196   $ 11,778   $ 10,856  
Per common share data:                      
Book value per share   $ 20.68   $ 20.57   $ 19.83   $ 19.55   $ 19.21  
Net income per share:                      
Basic   $ 0.44   $ 0.37   $ 0.42   $ 0.44   $ 0.41  
Diluted   $ 0.44   $ 0.37   $ 0.42   $ 0.44   $ 0.41  
Dividends declared per share   $ 0.20   $ 0.20   $ 0.20   $ 0.20   $ 0.20  
Weighted average shares outstanding   29,354,887   27,481,309   26,666,460   26,661,784   26,630,698  
Period end shares outstanding   29,391,934   29,334,859   26,671,336   26,667,991   26,645,520  


Univest Corporation of Pennsylvania
Consolidated Selected Financial Data (Unaudited)
March 31, 2018
                             
                             
                             
          For the three months ended,  
Profitability Ratios (annualized)     03/31/18   12/31/17   09/30/17   06/30/17   03/31/17  
                             
Return on average assets     1.14 % 0.92 % 1.01 % 1.09 % 1.04 %
Return on average assets, excluding restructuring charges (1), (2) 1.18 % 0.92 % 1.01 % 1.09 % 1.04 %
Return on average shareholders' equity   8.60 % 7.35 % 8.43 % 9.13 % 8.65 %
Return on average shareholders' equity, excluding restructuring charges (1), (2) 8.90 % 7.35 % 8.43 % 9.13 % 8.65 %
Return on average tangible common equity, excluding restructuring charges (1), (2), (5) 12.65 % 10.89 % 12.83 % 14.06 % 13.48 %
Net interest margin (FTE)     3.72 % 3.76 % 3.80 % 3.76 % 3.80 %
Efficiency ratio (3)       65.41 % 63.43 % 61.94 % 60.74 % 62.70 %
Efficiency ratio, excluding restructuring charges (1), (3), (4) 64.35 % 63.43 % 61.94 % 60.74 % 62.70 %
                             
Capitalization Ratios                          
                             
Dividends declared to net income     45.7 % 57.1 % 47.6 % 45.3 % 49.0 %
Shareholders' equity to assets (Period End)   13.15 % 13.25 % 11.97 % 11.71 % 11.98 %
Tangible common equity to tangible assets (5)   9.64 % 9.68 % 8.22 % 7.96 % 8.06 %
Tangible book value per share (5)     $ 14.54   $ 14.44   $ 13.06   $ 12.75   $ 12.38  
Tangible book value per share - Core (5), (6)   $ 14.90   $ 14.57   $ 13.14   $ 12.87   $ 12.56  
                             
Regulatory Capital Ratios (Period End)                       
Tier 1 leverage ratio       10.47 % 10.48 % 8.74 % 8.74 % 8.75 %
Common equity tier 1 risk-based capital ratio   11.16 % 11.11 % 9.51 % 9.21 % 9.41 %
Tier 1 risk-based capital ratio     11.16 % 11.11 % 9.51 % 9.21 % 9.41 %
Total risk-based capital ratio     14.04 % 14.00 % 12.47 % 12.15 % 12.44 %
                             
                             
(1) This consolidated selected financial data schedule contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). The management of Univest Corporation of Pennsylvania uses these 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 below table for additional information.  
                             
  (a) Restructuring charges $ 571   $   $   $   $  
  Tax effect on restructuring charges 120     -      -      -      -   
  (b) Restructuring charges, net of tax  $ 451   $   $   $   $  
                       
                             
(2)  Net income in this ratio excludes restructuring charges, net of tax. See (1)(b) above.   
(3)  Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.   
(4)  Noninterest expense in this ratio excludes restructuring charges. See (1)(a) above.   
(5)  Tangible equity represents total shareholders' equity less goodwill and other intangible assets, but includes servicing rights which were $6,605 at March 31, 2018, $6,573 at December 31, 2017, $6,556 at September 30, 2017, $6,548 at June 30, 2017 and $6,502 at March 31, 2017.  
(6)  Tangible equity as defined in (5), excluding the impact of accumulated other comprehensive (loss) income on available-for-sale investment securities, net ($10,477) at March 31, 2018, ($4,061) at December 31, 2017, ($2,364) at September 30, 2017, ($3,028) at June 30, 2017 and ($4,726) at March 31, 2017), divided by total shares outstanding.
N/M Not meaningful   


Univest Corporation of Pennsylvania  
Average Balances and Interest Rates (Unaudited)  
    For the Three Months Ended,      
Tax Equivalent Basis March 31, 2018   December 31, 2017  
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $  19,184   $  76 1.61 %   $  33,557   $  92 1.09 %
U.S. government obligations 23,921 94 1.59   24,039 94 1.55  
Obligations of state and political subdivisions 74,554 593 3.23   79,708 844 4.20  
Other debt and equity securities 359,451 2,095 2.36   352,298 1,873 2.11  
Federal funds sold and other earning assets 29,057 504 7.03   27,719 371 5.31  
Total interest-earning deposits, investments, federal funds sold and other earning assets 506,167 3,362 2.69   517,321 3,274 2.51  
                 
Commercial, financial, and agricultural loans 782,200 8,900 4.61   752,750 8,608 4.54  
Real estate—commercial and construction loans 1,600,394 17,618 4.46   1,566,944 17,798 4.51  
Real estate—residential loans 837,495 9,675 4.69   802,013 9,097 4.50  
Loans to individuals 27,960 413 5.99   27,299 414 6.02  
Municipal loans and leases 311,752 2,892 3.76   285,821 3,343 4.64  
Lease financings 74,709 1,344 7.30   70,433 1,303 7.34  
Gross loans and leases 3,634,510 40,842 4.56   3,505,260 40,563 4.59  
Total interest-earning assets 4,140,677 44,204 4.33   4,022,581 43,837 4.32  
Cash and due from banks 42,506       44,922      
Reserve for loan and lease losses (22,022)       (20,734)      
Premises and equipment, net 61,738       63,119      
Other assets 333,078       332,855      
Total assets $ 4,555,977         $ 4,442,743      
                 
Liabilities:                
Interest-bearing checking deposits $  425,027   $  292 0.28     $  439,397   $  172 0.16  
Money market savings 658,367 1,343 0.83   649,861 1,213 0.74  
Regular savings 834,375 557 0.27   841,223 648 0.31  
Time deposits 541,478 1,499 1.12   567,982 1,524 1.06  
Total time and interest-bearing deposits 2,459,247 3,691 0.61   2,498,463 3,557 0.56  
                 
Short-term borrowings 175,824 645 1.49   61,524 148 0.95  
Long-term debt 155,765 665 1.73   188,466 745 1.57  
Subordinated notes 94,359 1,261 5.42   94,298 1,261 5.31  
Total borrowings 425,948 2,571 2.45   344,288 2,154 2.48  
Total interest-bearing liabilities 2,885,195 6,262 0.88   2,842,751 5,711 0.80  
Noninterest-bearing deposits 1,024,797       1,010,213      
Accrued expenses and other liabilities 40,012       35,708      
Total liabilities 3,950,004       3,888,672      
                 
Shareholders' Equity:                
Common stock 157,784       148,546      
Additional paid-in capital 290,209       249,778      
Retained earnings and other equity 157,980       155,747      
Total shareholders' equity 605,973       554,071      
Total liabilities and shareholders' equity $ 4,555,977         $ 4,442,743      
Net interest income     $ 37,942         $ 38,126    
                 
Net interest spread     3.45       3.52  
Effect of net interest-free funding sources     0.27       0.24  
Net interest margin     3.72 %   3.76 %
Ratio of average interest-earning assets to average interest-bearing liabilities  143.51%       141.50%      


Note 1:                          In the above schedule, the interest income and net interest income analysis contains tax-equivalent financial information and measures determined by methods other than in accordance with U.S. GAAP. This financial information and measures should not be considered a substitute for GAAP basis financial information and measures. Management believes the presentation of the non-GAAP financial information and measures provide useful information that is essential to a proper understanding of the financial results of the Corporation.
   
Note 2:                          For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and unearned discount. 
Nonaccrual loans and leases have been included in the average loan and lease balances.
Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the three months ended March 31, 2018 and December 31, 2017 have been calculated using the Corporation's federal applicable rate of 21.0% and 35.0%, respectively.

 

Univest Corporation of Pennsylvania  
Average Balances and Interest Rates (Unaudited)  
    For the Three Months Ended March 31,      
Tax Equivalent Basis   2018       2017    
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $   19,184   $   76   1.61 %   $   8,592   $   16   0.76 %
U.S. government obligations   23,921   94   1.59     34,038   106   1.26  
Obligations of state and political subdivisions   74,554   593   3.23     85,854   922   4.36  
Other debt and equity securities   359,451   2,095   2.36     350,408   1,582   1.83  
Federal funds sold and other earning assets   29,057   504   7.03     25,909   358   5.60  
Total interest-earning deposits, investments, federal funds sold and other earning assets   506,167   3,362   2.69     504,801   2,984   2.40  
                 
Commercial, financial, and agricultural loans   782,200   8,900   4.61     721,050   7,841   4.41  
Real estate—commercial and construction loans   1,600,394   17,618   4.46     1,460,029   15,740   4.37  
Real estate—residential loans   837,495   9,675   4.69     738,211   8,236   4.52  
Loans to individuals   27,960   413   5.99     29,575   400   5.49  
Municipal loans and leases   311,752   2,892   3.76     279,379   3,120   4.53  
Lease financings   74,709   1,344   7.30     78,633   1,483   7.65  
Gross loans and leases   3,634,510   40,842   4.56     3,306,877   36,820   4.52  
Total interest-earning assets   4,140,677   44,204   4.33     3,811,678   39,804   4.24  
Cash and due from banks   42,506         41,942      
Reserve for loan and lease losses   (22,022)         (18,200)      
Premises and equipment, net   61,738         64,507      
Other assets   333,078         330,501      
Total assets $  4,555,977         $  4,230,428      
                 
Liabilities:                
Interest-bearing checking deposits $   425,027   $   292   0.28   $   426,373   $   105   0.10 %
Money market savings   658,367   1,343   0.83     531,658   563   0.43  
Regular savings   834,375   557   0.27     807,802   349   0.18  
Time deposits   541,478   1,499   1.12     591,813   1,174   0.80  
Total time and interest-bearing deposits   2,459,247   3,691   0.61     2,357,646   2,191   0.38  
                 
Short-term borrowings   175,824   645   1.49     150,155   262   0.71  
Long-term debt   155,765   665   1.73     148,031   399   1.09  
Subordinated notes   94,359   1,261   5.42     94,116   1,261   5.43  
Total borrowings   425,948   2,571   2.45     392,302   1,922   1.99  
Total interest-bearing liabilities   2,885,195   6,262   0.88     2,749,948   4,113   0.61  
Noninterest-bearing deposits   1,024,797         932,639      
Accrued expenses and other liabilities   40,012         38,786      
Total liabilities   3,950,004         3,721,373      
                 
Shareholders' Equity:                
Common stock   157,784         144,559      
Additional paid-in capital   290,209         230,104      
Retained earnings and other equity   157,980         134,392      
Total shareholders' equity   605,973         509,055      
Total liabilities and shareholders' equity $ 4,555,977         $ 4,230,428      
Net interest income     $ 37,942         $ 35,691    
                 
Net interest spread       3.45         3.63  
Effect of net interest-free funding sources       0.27         0.17  
Net interest margin       3.72 %     3.80 %
Ratio of average interest-earning assets to average interest-bearing liabilities  143.51%       138.61%      


Note 1:                          In the above schedule, the interest income and net interest income analysis contains tax-equivalent financial information and measures determined by methods other than in accordance with U.S. GAAP. This financial information and measures should not be considered a substitute for GAAP basis financial information and measures. Management believes the presentation of the non-GAAP financial information and measures provide useful information that is essential to a proper understanding of the financial results of the Corporation.
   
Note 2:  For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and unearned discount.
Nonaccrual loans and leases have been included in the average loan and lease balances.
Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the three months ended March 31, 2018 and 2017 have been calculated using the Corporation's federal applicable rate of 21.0% and 35.0%, respectively.

CONTACT:
Roger Deacon
UNIVEST CORPORATION OF PENNSYLVANIA
Chief Financial Officer
215-721-2455
DeaconR@univest.net

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