Yahoo Finance Univest Financial Corporation (NASDAQ:UVSP) Q1 2024 Earnings Call Transcript
Univest Financial Corporation (NASDAQ:UVSP) Q1 2024 Earnings Call Transcript April 25, 2024
Univest Financial Corporation isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Welcome to the Univest Financial Corporation First Quarter 2024 Earnings Call. My name is Carla and I will be coordinating your call today. [Operator Instructions]. I will now turn the call over to your host, Jeff Schweitzer, President and CEO of Univest Financial Corporation to begin. Jeff, please go ahead.
Jeff Schweitzer: Thank you, Carla, and good morning. And thank you to all of our listeners for joining us. Joining me on the call this morning is Mike Keim, our Chief Operating Officer and President of Univest Bank and Trust; and Brian Richardson, our Chief Financial Officer. Before we begin, I would like to remind everyone of the forward-looking cautionary statements disclaimer. Please be advised that during the course of this conference call, management may make forward-looking statements that express management's intentions, beliefs, or expectations within the meaning of the Federal Securities Laws. Univest's actual results may differ materially from those contemplated by these forward-looking statements. I will refer you to the forward-looking cautionary statements in our earnings release and in our SEC filings.
Hopefully, everyone had a chance to review our earnings release from yesterday. If not, it can be found on our website at univest.net under the Investor Relations tab. We reported net income of $20.3 million during the first quarter or $0.69 per share. During the quarter, we continued to see stabilization in the shift in the mix of deposits along with the cost of deposits. This resulted in stabilization in our net interest margin. Loan growth was muted during the quarter as loans grew $11.9 million, this is due to a combination of lower loan demand from customers given the higher interest rate environment, pay off activity of some problem credits and remaining disciplined down pricing and focusing on relationship customers and prospects. With that said Q1 is historically a slower quarter and we are seeing pipelines grow as we head into the second quarter.
Our diversified business model served as well as the insurance and wealth management lines of business and strong performance in the quarter. We were also actively stopped [ph] buybacks during the quarter as we repurchased 315,507 shares of stock while still growing tangible book value. Before I pass it over to Brian, I would like to thank the entire Univest family for the great work they do everyday and for their continued efforts serving our customers, communities and eachother. I will now turn it over to Brian for further discussion on our results.
Brian Richardson : Thank you, Jeff, and I would also like to thank everyone for joining us today. I would like to highly a few items from the earnings release. First, during the quarter, we continued to see signs of NIM stabilization. Reported NIM of 2.88% increased 4 basis points from 2.84% in the fourth quarter of 2023. Core NIM of 2.91% which excludes the impact of excess liquidity declined 3 basis points compared to the fourth quarter. This compares to a 6 basis point decline experienced during the last quarter. Second, as it relates to our loan and deposit activity, loans grew $11.9 million and deposits grew $29.6 million during the first quarter. Third, during the quarter we recorded a provision for credit losses of $1.4 million.
Our coverage ratio was 1.3% at March 31st which was consistent with December 31st. Net charge-offs for the quarter totalled $1.4 million or 9 basis points annualized. During the quarter we saw decreases in delinquent loans, criticizing classified loans and stability in non-performing assets. Fourth, non-interest income increased $5.9 million, or 30.1% compared to the first quarter of 2023. This includes a $3.4 million net gain on mortgage serving rates. Insurance, commission and fee income increased $714,000 primarily due to a $484,000 increase in contingent income. As a reminder contingent income has always been recognized in the first quarter of each year. Additionally we saw notable increases in investment advisory, commission and fee income, treasury management fees, net gains on mortgage banking and the sale of SPA loans.
These year over year increase continued to highlight the benefit of our diversified business model. Non-interest expense increased $545,000 or 1.1% compared to the first quarter of 2023. This reflects the various expense management strategies deployed over the last year. Lastly during the first quarter as Jeff said we repurchased 315,507 shares of stock and we plan to remain active with regard to buybacks. As it relates to 2024 guidance when excluding the $3.4 million pretax gain on the sale of mortgage servicing rates there are no changes to the information I provided on last quarter's call. That concludes my prepared remarks. We will be happy to answer any questions. Carla, would you please begin the question and answer session.
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