Univest Financial Corporation Reports Second Quarter Results

Univest Financial Corporation

(Loan Growth of 19.6% (annualized) for the second quarter 2022 (excluding PPP loans¹))

SOUDERTON, Pa., July 27, 2022 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income for the quarter ended June 30, 2022 was $13.2 million, or $0.45 diluted earnings per share, compared to net income of $20.9 million, or $0.71 diluted earnings per share, for the quarter ended June 30, 2021. Net income for the six months ended June 30, 2022 was $33.5 million, or $1.13 diluted earnings per share, compared to net income of $53.5 million, or $1.81 diluted earnings per share, for the six months ended June 30, 2021.

Loans
Gross loans and leases, excluding Paycheck Protection Program ("PPP") loans¹, increased $265.9 million, or 19.6% (annualized), from March 31, 2022, $378.2 million, or 14.4% (annualized), from December 31, 2021 and $582.0 million, or 11.5%, from June 30, 2021 primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings. As of June 30, 2022, $5.4 million in PPP loans remained outstanding.

Deposits
Total deposits decreased $484.9 million, or 32.0% (annualized), from March 31, 2022 and $492.1 million, or 16.2% (annualized), from December 31, 2021 primarily due to a seasonal decrease in public funds deposits as well as decreases in commercial and consumer deposits. Total deposits increased $244.3 million, or 4.6%, from June 30, 2021, primarily due to increases in commercial, consumer and public funds deposits.

Net Interest Income and Margin
Net interest income of $51.5 million for the three months ended June 30, 2022 increased $4.8 million, or 10.3%, from the three months ended March 31, 2022, and $4.7 million, or 10.1%, from the three months ended June 30, 2021. The increase in net interest income for the three months ended June 30, 2022 compared to the same period of 2021 was due to an increase in the average balance of loans and investments, increased asset yields and a decrease in the cost of interest-bearing liabilities, partially offset by an increase in the average balance of interest-bearing liabilities and a decrease in PPP loan income.

Net interest income of $98.1 million for the six months ended June 30, 2022 increased $6.0 million, or 6.5%, from the six months ended June 30, 2021. The increase in net interest income for the six months ended June 30, 2022 compared to the same period of 2021 was due to loan and investment average balance growth outpacing declines in asset yields and a decrease in the cost of interest-bearing liabilities, offset by an increase in the average balance of interest-bearing liabilities and a decrease in PPP loan income.

Net interest margin, on a tax-equivalent basis, was 3.19% for the second quarter of 2022, compared to 2.89% for the first quarter of 2022 and 3.15% for the second quarter of 2021. Excess liquidity reduced net interest margin by approximately 23 basis points for the quarter ended June 30, 2022 compared to 33 basis points for the quarter ended March 31, 2022 and ten basis points for the quarter ended June 30, 2021. During the quarter ended June 30, 2022, our excess liquidity diminished and we returned to a pre-pandemic liquidity level at the end of the quarter. PPP loans had a favorable impact on net interest margin of one basis point for the quarter ended June 30, 2022 compared to three basis points for the quarter ended March 31, 2022 and eleven basis points for the quarter ended June 30, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.41% for the quarter ended June 30, 2022 compared to 3.19% for the quarter ended March 31, 2022 and 3.14% for the quarter ended June 30, 2021.

During the second quarter, the Bank entered into a 4-year $250 million interest rate swap (representing approximately 13% of the Bank's variable rate loans), whereby the Bank receives a fixed rate of 5.99% and pays a variable rate equal to the Prime Rate. During the second quarter of 2022, the swap contributed $707 thousand to net interest income and four basis points to net interest margin.

Net interest margin, on a tax-equivalent basis, was 3.04% for the six months ended June 30, 2022, compared to 3.14% for the six months ended June 30, 2021. Excess liquidity reduced net interest margin by approximately 28 basis points for the six months ended June 30, 2022 compared to ten basis points for the six months ended June 30, 2021. PPP loans had a favorable impact on net interest margin of two basis points for the six months ended June 30, 2022 compared to seven basis points for the six months ended June 30, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.30% for the six months ended June 30, 2022 compared to 3.17% for the six months ended June 30, 2021.

Noninterest Income
Noninterest income for the quarter ended June 30, 2022 was $19.0 million, a decrease of $1.2 million, or 6.1%, compared to the second quarter of 2021. Noninterest income for the six months ended June 30, 2022 was $39.5 million, a decrease of $4.0 million, or 9.2%, from the comparable period in the prior year.

Net gain on mortgage banking activities decreased $2.2 million, or 64.5%, for the quarter and $6.2 million, or 66.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to a decrease in loan sales and a contraction of margins. Bank owned life insurance ("BOLI") decreased $915 thousand, or 56.5%, for the quarter and $933 thousand, or 39.9%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to a death benefit claim of $893 thousand in the second quarter of 2021.

Insurance commission and fee income increased $790 thousand, or 20.6%, for the quarter and $1.4 million, or 16.0%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to incremental revenue attributable to the insurance agency the Corporation acquired in the fourth quarter of 2021. Investment advisory commission and fee income increased $254 thousand, or 5.6%, for the quarter and $709 thousand, or 7.7%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to new customer relationships and appreciation of assets under management, as a majority of investment advisory fees are billed based on the prior quarter-end assets under management balance.

Other service fee income increased $561 thousand, or 20.4%, for the quarter and $1.1 million, or 22.8%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. Mortgage servicing fees increased $357 thousand for the quarter and $619 thousand for the six months ended June 30, 2022 driven by reduced amortization as a result of a decrease in prepayment speeds. Interchange fee income increased $115 thousand for the quarter and $291 thousand for the six months ended June 30, 2022 due to increased customer activity.

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2022 was $47.4 million, an increase of $6.1 million, or 14.7%, compared to the second quarter of 2021. Noninterest expense for the six months ended June 30, 2022 was $92.8 million, an increase of $12.0 million, or 14.8%, from the comparable period in the prior year. The results for the three and six months ended June 30, 2022 include approximately $1.4 million and $2.1 million, respectively, in expenses related to our digital transformation initiative, a comprehensive digital platform which will blend our core operating systems together and allow Univest to seamlessly sell existing products and services, digitally, across an expanded footprint.

Salaries, benefits and commissions increased $3.7 million, or 14.7%, for the quarter and $7.2 million, or 14.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. These increases reflect our continued investment in revenue producing staff across all business lines, including the acquisition of the Paul I. Schaeffer insurance agency, and annual merit increases. Additionally, during the three and six months ended June 30, 2022, we incurred $353 thousand and $740 thousand, respectively, of short-term incremental guaranties related to the hiring of new producers in our mortgage banking line of business. Finally, during the six months ended June 30, 2021 salaries, benefits and commissions expense was benefited by $616 thousand of incremental capitalized compensation related to the origination of PPP loans.

Professional fees increased $829 thousand, or 41.1%, for the quarter and $1.2 million, or 32.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. The increase for the three months ended June 30, 2022 was primarily attributable to $1.2 million of consultant fees spent related to the previously discussed digital transformation initiative, as compared to our $230 thousand investment in our Diversity, Equity and Inclusion training initiatives for the three months ended June 30, 2021. The increase for the six months ended June 30, 2022 was primarily attributable to $1.9 million of consultant fees spent related to the previously discussed digital transformation initiative, as compared to our $506 thousand investment in our Diversity, Equity and Inclusion training initiatives for the six months ended June 30, 2021. Deposit insurance premiums increased $199 thousand, or 32.5%, for the quarter and $456 thousand, or 36.5%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, driven by an increased assessment base.

Data processing expenses increased $644 thousand, or 21.0%, for the quarter and $1.2 million, or 19.0%, for the six months ended June 30, 2022 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, outsourced data processing solutions, and $155 thousand and $258 thousand in support of the previously discussed digital transformation initiative for the respective periods.

Other expense increased $676 thousand, or 11.7%, for the quarter and $1.7 million, or 15.3%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. Recruiting costs increased $138 thousand and $420 thousand for the three and six months ended June 30, 2022, respectively, due to increased hiring activity, including the entry into our two new expansions markets. Travel and entertainment expenses increased $309 thousand and $574 thousand for the three and six months ended June 30, 2022, respectively, as related activities have largely returned to pre-pandemic levels. Additionally, the six months ended June 30, 2022 includes incurred costs of $330 thousand as a result of a customer who was defrauded.

Tax Provision
The effective income tax rate was 19.8% for the quarter ended June 30, 2022, compared to an effective income tax rate of 19.0% for the quarter ended June 30, 2021. The effective income tax rate was 19.5% for the six months ended June 30, 2022, compared to an effective income tax rate of 19.2% for the six months ended June 30, 2021.The effective tax rate for the three and six months ended June 30, 2022 and 2021 reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $34.8 million at June 30, 2022, compared to $31.5 million at March 31, 2022 and $38.5 million at June 30, 2021. During the quarter, a nonaccrual commercial real estate loan was transferred to other real estate owned ("OREO") with a carrying value of $18.3 million.

Net loan and lease charge-offs were $1.7 million and $1.8 million for the three and six months ended June 30, 2022, respectively. Net loan and lease charge-offs were $243 thousand and $531 thousand for the three and six months ended June 30, 2021, respectively. During the second quarter of 2022, a $1.7 million charge-off was recorded against an existing nonaccrual commercial real estate loan.

The provision for credit losses was $6.7 million for the second quarter of 2022 primarily driven by a $5.5 million increase (after-tax charge of $4.3 million), or $0.15 diluted earnings per share, in reserves due to loan growth, a specific reserve of $1.1 million related to a commercial real estate loan that was placed on nonaccrual status during the second quarter and an incremental provision of $736 thousand related to the previously mentioned $1.7 million charge-off. The reversal of provision for credit losses was $59 thousand for the second quarter of 2021 driven by a $2.7 million increase (after-tax charge of $2.1 million), or $0.07 diluted earnings per share, in reserves due to loan growth outpaced by favorable changes in economic-related assumptions within the Corporation’s CECL model.

The provision for credit losses was $3.2 million for the six months ended June 30, 2022 primarily driven by a $6.8 million increase (after-tax charge of $5.4 million), or $0.18 diluted earnings per share, in reserves due to loan growth and specific reserves of $2.8 million on two nonaccrual commercial real estate properties. These increases were partially offset by $7.3 million (after-tax benefit of $5.8 million), or $0.19 diluted earnings per share, of changes in economic-related assumptions within the Corporation’s CECL model. Additionally, reserves on unfunded commitments and investment securities increased $990 thousand during the six months ended June 30, 2022. The reversal of provision for credit losses was $11.3 million for the comparable period in the prior year, of which $15.8 million (after-tax benefit of $12.5 million), or $0.42 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model, partially offset by a reserve increase attributable to loan growth.

The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.27% at June 30, 2022, compared to 1.26% at March 31, 2022, and 1.34% at June 30, 2021. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans¹, was 1.27% at June 30, 2022 compared to 1.27% at March 31, 2022 and 1.41% at June 30, 2021.

Share Repurchases
As previously announced, the Corporation began to repurchase its common stock on the open market. During the second quarter of 2022, the Corporation repurchased 300,000 shares at an average price of $25.23, for an aggregate cost of $7.6 million. As of June 30, 2022, the Corporation has 379,174 shares remaining to repurchase under the current approved plan.

Dividend
On July 27, 2022, Univest declared a quarterly cash dividend of $0.21 per share to be paid on August 24, 2022 to shareholders of record as of August 10, 2022.

Conference Call
Univest will host a conference call to discuss second quarter 2022 results on Thursday, July 28, 2022 at 9:00 a.m. EST. Participants may preregister at https://ige.netroadshow.com/registration/q4inc/11282/univest-financial-corporation-to-hold-second-quarter-2022-earnings-call/. The general public can access the call by dialing 1-844-200-6205; using Access Code 571585. A replay of the conference call will be available through August 27, 2022 by dialing 1-866-813-9403; using Access Code: 134898.

¹Non-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 $6.7 billion in assets and $4.1 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2022. 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, business 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; (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 or lead to higher operating costs; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or 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; (7) technological issues that may adversely affect our operations or those of our customers; (8) changes in the securities markets; (9) the current or anticipated impact of military conflict, terrorism or other geopolitical events; or (10) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

Additionally, it is difficult to predict the continued effects 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 market turmoil; and (7) our cyber security risks may increase 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)
June 30, 2022
(Dollars in thousands)
Balance Sheet (Period End)		06/30/22				03/31/22				12/31/21				09/30/21				06/30/21
ASSETS
Cash and due from banks		$	59,590			$	57,307			$	49,202			$	67,517			$	50,358
Interest-earning deposits with other banks			35,187				716,474				840,948				834,840				153,091
Cash and cash equivalents			94,777				773,781				890,150				902,357				203,449
Investment securities held-to-maturity			159,808				166,339				176,983				112,643				119,692
Investment securities available for sale, net of allowance for credit losses			351,382				349,994				317,007				277,773				274,862
Investments in equity securities			2,934				2,569				2,999				2,961				2,872
Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost			29,116				26,330				28,186				28,679				25,228
Loans held for sale			8,352				14,521				21,600				29,093				27,322
Loans and leases held for investment			5,661,777				5,400,786				5,310,017				5,252,045				5,327,313
Less: Allowance for credit losses, loans and leases			(72,011	)			(68,286	)			(71,924	)			(70,146	)			(71,355	)
Net loans and leases held for investment			5,589,766				5,332,500				5,238,093				5,181,899				5,255,958
Premises and equipment, net			50,080				50,429				56,882				55,354				56,067
Operating lease right-of-use assets			30,929				30,498				30,407				31,570				33,688
Goodwill			175,510				175,510				175,510				172,559				172,559
Other intangibles, net of accumulated amortization			11,728				11,784				11,848				9,359				9,396
Bank owned life insurance			120,103				119,398				118,699				117,981				117,765
Accrued interest and other assets			76,328				54,087				54,057				57,624				57,447
Total assets		$	6,700,813			$	7,107,740			$	7,122,421			$	6,979,852			$	6,356,305
LIABILITIES
Noninterest-bearing deposits		$	2,062,538			$	2,136,467			$	2,065,423			$	1,861,007			$	1,872,031
Interest-bearing deposits:			3,500,510				3,911,465				3,989,701				4,077,147				3,446,673
Total deposits			5,563,048				6,047,932				6,055,124				5,938,154				5,318,704
Short-term borrowings			97,606				18,976				20,106				14,101				25,251
Long-term debt			95,000				95,000				95,000				95,000				95,000
Subordinated notes			99,030				98,952				98,874				98,797				98,719
Operating lease liabilities			33,951				33,566				33,453				34,641				37,131
Accrued expenses and other liabilities			48,253				39,459				46,070				43,136				41,502
Total liabilities			5,936,888				6,333,885				6,348,627				6,223,829				5,616,307
SHAREHOLDER'S EQUITY
Common stock, $5 par value: 48,000,000 shares authorized and 31,556,799 shares issued			157,784				157,784				157,784				157,784				157,784
Additional paid-in capital			298,800				297,945				299,181				298,033				297,208
Retained earnings			396,295				389,332				375,124				363,607				348,579
Accumulated other comprehensive loss, net of tax benefit			(42,781	)			(31,909	)			(16,353	)			(20,073	)			(19,545	)
Treasury stock, at cost			(46,173	)			(39,297	)			(41,942	)			(43,328	)			(44,028	)
Total shareholders’ equity			763,925				773,855				773,794				756,023				739,998
Total liabilities and shareholders’ equity		$	6,700,813			$	7,107,740			$	7,122,421			$	6,979,852			$	6,356,305
		For the three months ended,																				For the six months ended,
Balance Sheet (Average)		06/30/22				03/31/22				12/31/21				09/30/21				06/30/21				06/30/22		06/30/21
Assets		$	6,962,401			$	7,047,980			$	7,088,289			$	6,698,177			$	6,443,629			7,004,954		$	6,413,712
Investment securities, net of allowance for credit losses			515,741				522,128				469,588				395,280				385,694			518,917			380,063
Loans and leases, gross			5,520,580				5,344,698				5,255,279				5,320,411				5,389,110			5,433,125			5,357,678
Deposits			5,903,173				5,984,815				6,041,798				5,666,725				5,351,089			5,943,769			5,323,770
Shareholders' equity			771,410				774,358				762,334				746,185				728,750			772,876			714,324

Univest Financial Corporation
Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
June 30, 2022
(Dollars in thousands)
Summary of Major Loan and Lease Categories (Period End)		06/30/22				03/31/22				12/31/21				09/30/21				06/30/21
Commercial, financial and agricultural		$	1,028,354			$	932,485			$	956,396			$	927,015			$	920,621
Paycheck Protection Program			5,358				10,298				31,748				85,601				252,849
Real estate-commercial			2,870,286				2,816,737				2,718,535				2,669,898				2,600,919
Real estate-construction			319,449				285,083				283,918				260,874				274,529
Real estate-residential secured for business purpose			419,652				412,486				409,900				412,001				407,664
Real estate-residential secured for personal purpose			629,144				568,735				540,566				535,705				513,330
Real estate-home equity secured for personal purpose			168,536				160,134				158,909				159,029				160,018
Loans to individuals			27,061				26,249				25,504				26,458				25,845
Lease financings			193,937				188,579				184,541				175,464				171,538
Total loans and leases held for investment, net of deferred income			5,661,777				5,400,786				5,310,017				5,252,045				5,327,313
Less: Allowance for credit losses, loans and leases			(72,011	)			(68,286	)			(71,924	)			(70,146	)			(71,355	)
Net loans and leases held for investment		$	5,589,766			$	5,332,500			$	5,238,093			$	5,181,899			$	5,255,958
Asset Quality Data (Period End)		06/30/22				03/31/22				12/31/21				09/30/21				06/30/21
Nonaccrual loans and leases, including nonaccrual troubled debt restructured
loans and leases		$	13,355			$	30,876			$	33,210			$	34,528			$	37,466
Accruing loans and leases 90 days or more past due			2,784				274				498				2,204				750
Accruing troubled debt restructured loans and leases			50				51				51				51				52
Total nonperforming loans and leases			16,189				31,201				33,759				36,783				38,268
Other real estate owned			18,604				279				279				279				279
Total nonperforming assets		$	34,793			$	31,480			$	34,038			$	37,062			$	38,547
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale			0.24	%			0.57	%			0.63	%			0.66	%			0.70	%
Nonperforming loans and leases / Loans and leases held for investment			0.29	%			0.58	%			0.64	%			0.70	%			0.72	%
Nonperforming assets / Total assets			0.52	%			0.44	%			0.48	%			0.53	%			0.61	%
Allowance for credit losses, loans and leases		$	72,011			$	68,286			$	71,924			$	70,146			$	71,355
Allowance for credit losses, loans and leases / Loans and leases held for investment			1.27	%			1.26	%			1.35	%			1.34	%			1.34	%
Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1)			1.27	%			1.27	%			1.36	%			1.36	%			1.41	%
Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment			539.21	%			221.16	%			216.57	%			203.16	%			212.97	%
Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment			444.81	%			218.86	%			213.05	%			190.70	%			208.00	%
		For the three months ended,																				For the six months ended,
		06/30/22				03/31/22				12/31/21				09/30/21				06/30/21				06/30/22				06/30/21
Net loan and lease charge-offs (recoveries)		$	1,715			$	76			$	(243	)		$	(75	)		$	243			$	1,791			$	531
Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases			0.12	%			0.01	%			(0.02	%)			(0.01	%)			0.02	%			0.07	%			0.02	%
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2022
(Dollars in thousands, except per share data)
		For the three months ended,																		For the six months ended,
For the period:		06/30/22			03/31/22				12/31/21			09/30/21				06/30/21				06/30/22			06/30/21
Interest income		$	56,717		$	51,198			$	52,262		$	53,571			$	52,441			$	107,915		$	103,898
Interest expense			5,246			4,538				4,737			4,884				5,684				9,784			11,727
Net interest income			51,471			46,660				47,525			48,687				46,757				98,131			92,171
Provison (reversal of provision) for credit losses			6,674			(3,450	)			1,392			(182	)			(59	)			3,224			(11,342	)
Net interest income after provision for credit losses			44,797			50,110				46,133			48,869				46,816				94,907			103,513
Noninterest income:
Trust fee income			1,998			2,102				2,086			2,126				2,157				4,100			4,191
Service charges on deposit accounts			1,574			1,504				1,486			1,422				1,314				3,078			2,596
Investment advisory commission and fee income			4,812			5,152				4,885			4,796				4,558				9,964			9,255
Insurance commission and fee income			4,629			5,570				3,726			3,837				3,839				10,199			8,794
Other service fee income			3,309			2,756				2,759			2,576				2,748				6,065			4,940
Bank owned life insurance income			705			699				719			925				1,620				1,404			2,337
Net gain on sales of investment securities			-			30				5			21				54				30			119
Net gain on mortgage banking activities			1,230			1,929				2,518			3,224				3,461				3,159			9,399
Other income			741			728				1,008			1,625				479				1,469			1,849
Total noninterest income			18,998			20,470				19,192			20,552				20,230				39,468			43,480
Noninterest expense:
Salaries, benefits and commissions			29,133			28,245				27,374			26,641				25,396				57,378			50,176
Net occupancy			2,422			2,716				2,477			2,525				2,656				5,138			5,395
Equipment			977			982				985			1,000				968				1,959			1,914
Data processing			3,708			3,567				3,355			3,274				3,064				7,275			6,114
Professional fees			2,844			2,138				1,750			2,174				2,015				4,982			3,763
Marketing and advertising			693			425				683			539				561				1,118			841
Deposit insurance premiums			812			893				698			765				613				1,705			1,249
Intangible expenses			342			341				267			214				249				683			498
Other expense			6,440			6,105				5,746			6,116				5,764				12,545			10,876
Total noninterest expense			47,371			45,412				43,335			43,248				41,286				92,783			80,826
Income before taxes			16,424			25,168				21,990			26,173				25,760				41,592			66,167
Income tax expense			3,258			4,851				4,578			5,262				4,885				8,109			12,689
Net income		$	13,166		$	20,317			$	17,412		$	20,911			$	20,875			$	33,483		$	53,478
Net income per share:
Basic		$	0.45		$	0.69			$	0.59		$	0.71			$	0.71			$	1.14		$	1.82
Diluted		$	0.45		$	0.68			$	0.59		$	0.71			$	0.71			$	1.13		$	1.81
Dividends declared per share		$	0.21		$	0.20			$	0.20		$	0.20			$	0.20			$	0.41		$	0.40
Weighted average shares outstanding			29,490,154			29,542,467				29,471,304			29,420,256				29,389,525				29,516,166			29,359,198
Period end shares outstanding			29,365,775			29,636,425				29,500,542			29,438,402				29,411,731				29,365,775			29,411,731

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2022
					For the three months ended,																				For the six months ended,
Profitability Ratios (annualized)					06/30/22				03/31/22				12/31/21				09/30/21				06/30/21				06/30/22				06/30/21
Return on average assets						0.76	%			1.17	%			0.97	%			1.24	%			1.30	%			0.96	%			1.68	%
Return on average shareholders' equity						6.85	%			10.64	%			9.06	%			11.12	%			11.49	%			8.74	%			15.10	%
Return on average tangible common equity (1)(3)						9.10	%			14.04	%			11.93	%			14.63	%			15.26	%			11.56	%			20.14	%
Net interest margin (FTE)						3.19	%			2.89	%			2.86	%			3.11	%			3.15	%			3.04	%			3.14	%
Efficiency ratio (2)						66.6	%			67.0	%			64.3	%			61.8	%			60.7	%			66.8	%			58.8	%
Capitalization Ratios
Dividends declared to net income						47.1	%			29.1	%			33.9	%			28.1	%			28.2	%			36.2	%			22.0	%
Shareholders' equity to assets (Period End)						11.40	%			10.89	%			10.86	%			10.83	%			11.64	%			11.40	%			11.64	%
Tangible common equity to tangible assets (1)						8.97	%			8.58	%			8.56	%			8.55	%			9.15	%			8.97	%			9.15	%
Common equity book value per share					$	26.01			$	26.11			$	26.23			$	25.68			$	25.16			$	26.01			$	25.16
Tangible common equity book value per share (1)					$	19.91			$	20.06			$	20.14			$	19.75			$	19.22			$	19.91			$	19.22
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio						9.45	%			9.35	%			9.13	%			9.53	%			9.64	%			9.45	%			9.64	%
Common equity tier 1 risk-based capital ratio						10.62	%			11.07	%			11.08	%			11.15	%			11.04	%			10.62	%			11.04	%
Tier 1 risk-based capital ratio						10.62	%			11.07	%			11.08	%			11.15	%			11.04	%			10.62	%			11.04	%
Total risk-based capital ratio						13.23	%			13.73	%			13.77	%			13.87	%			13.82	%			13.23	%			13.82	%
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included below.
(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.
(3) Net income before amortization of intangibles to average tangible common equity.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
				For the Three Months Ended,
Tax Equivalent Basis	June 30, 2022							March 31, 2022
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	474,260		$	824	0.70	%	$	733,173		$	357	0.20	%
U.S. government obligations		2,000			11	2.21			5,222			26	2.02
Obligations of state and political subdivisions*		2,302			17	2.96			2,332			19	3.30
Other debt and equity securities		511,439			2,727	2.14			514,574			2,339	1.84
Federal Home Loan Bank, Federal Reserve Bank and other stock		26,221			344	5.26			27,115			355	5.31
Total interest-earning deposits, investments and other interest-earning assets		1,016,222			3,923	1.55			1,282,416			3,096	0.98
Commercial, financial, and agricultural loans		937,846			9,037	3.86			901,555			7,571	3.41
Paycheck Protection Program loans		7,644			155	8.13			18,402			591	13.02
Real estate—commercial and construction loans		3,004,509			28,527	3.81			2,904,602			25,820	3.61
Real estate—residential loans		1,166,201			10,758	3.70			1,116,356			9,882	3.59
Loans to individuals		26,782			305	4.57			25,799			238	3.74
Municipal loans and leases *		235,922			2,404	4.09			242,508			2,434	4.07
Lease financings		141,676			2,105	5.96			135,476			2,075	6.21
Gross loans and leases		5,520,580			53,291	3.87			5,344,698			48,611	3.69
Total interest-earning assets		6,536,802			57,214	3.51			6,627,114			51,707	3.16
Cash and due from banks		55,634							53,698
Allowance for credit losses, loans and leases		(68,426	)						(72,067	)
Premises and equipment, net		50,266							53,948
Operating lease right-of-use assets		30,222							30,394
Other assets		357,903							354,893
Total assets	$	6,962,401						$	7,047,980
Liabilities:
Interest-bearing checking deposits	$	851,324		$	570	0.27	%	$	881,462		$	443	0.20	%
Money market savings		1,405,536			1,552	0.44			1,542,581			904	0.24
Regular savings		1,070,480			237	0.09			1,021,550			238	0.09
Time deposits		452,989			1,227	1.09			473,589			1,306	1.12
Total time and interest-bearing deposits		3,780,329			3,586	0.38			3,919,182			2,891	0.30
Short-term borrowings		17,253			11	0.26			17,636			2	0.05
Long-term debt		95,000			321	1.36			95,000			317	1.35
Subordinated notes		98,988			1,328	5.38			98,911			1,328	5.45
Total borrowings		211,241			1,660	3.15			211,547			1,647	3.16
Total interest-bearing liabilities		3,991,570			5,246	0.53			4,130,729			4,538	0.45
Noninterest-bearing deposits		2,122,844							2,065,633
Operating lease liabilities		33,300							33,452
Accrued expenses and other liabilities		43,277							43,808
Total liabilities		6,190,991							6,273,622
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		298,241							298,975
Retained earnings and other equity		315,385							317,599
Total shareholders' equity		771,410							774,358
Total liabilities and shareholders' equity	$	6,962,401						$	7,047,980
Net interest income				$	51,968						$	47,169
Net interest spread						2.98							2.71
Effect of net interest-free funding sources						0.21							0.18
Net interest margin						3.19	%						2.89	%
Ratio of average interest-earning assets to average interest-bearing liabilities		163.77	%						160.43	%
* Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs of $(618) thousand and $(136) thousand for the three months ended June 30, 2022 and March 31, 2022, respectively.
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 June 30, 2022 and March 31, 2022 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 June 30,
Tax Equivalent Basis				2022							2021
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	474,260		$	824	0.70	%	$	215,349		$	46	0.09	%
U.S. government obligations		2,000			11	2.21			6,999			35	2.01
Obligations of state and political subdivisions*		2,302			17	2.96			6,070			58	3.83
Other debt and equity securities		511,439			2,727	2.14			372,625			1,364	1.47
Federal Home Loan Bank, Federal Reserve Bank and other stock		26,221			344	5.26			25,872			360	5.58
Total interest-earning deposits, investments and other interest-earning assets		1,016,222			3,923	1.55			626,915			1,863	1.19
Commercial, financial, and agricultural loans		937,846			9,037	3.86			826,464			6,910	3.35
Paycheck Protection Program loans		7,644			155	8.13			408,928			4,778	4.69
Real estate—commercial and construction loans		3,004,509			28,527	3.81			2,701,137			24,931	3.70
Real estate—residential loans		1,166,201			10,758	3.70			1,065,065			9,836	3.70
Loans to individuals		26,782			305	4.57			25,284			251	3.98
Municipal loans and leases*		235,922			2,404	4.09			251,311			2,598	4.15
Lease financings		141,676			2,105	5.96			110,921			1,819	6.58
Gross loans and leases		5,520,580			53,291	3.87			5,389,110			51,123	3.80
Total interest-earning assets		6,536,802			57,214	3.51			6,016,025			52,986	3.53
Cash and due from banks		55,634							52,948
Allowance for credit losses, loans and leases		(68,426	)						(73,052	)
Premises and equipment, net		50,266							55,903
Operating lease right-of-use assets		30,222							33,992
Other assets		357,903							357,813
Total assets	$	6,962,401						$	6,443,629
Liabilities:
Interest-bearing checking deposits	$	851,324		$	570	0.27	%	$	786,931		$	487	0.25	%
Money market savings		1,405,536			1,552	0.44			1,219,375			831	0.27
Regular savings		1,070,480			237	0.09			978,807			282	0.12
Time deposits		452,989			1,227	1.09			485,060			1,559	1.29
Total time and interest-bearing deposits		3,780,329			3,586	0.38			3,470,173			3,159	0.37
Short-term borrowings		17,253			11	0.26			19,109			3	0.06
Long-term debt		95,000			321	1.36			95,000			321	1.36
Subordinated notes		98,988			1,328	5.38			172,016			2,201	5.13
Total borrowings		211,241			1,660	3.15			286,125			2,525	3.54
Total interest-bearing liabilities		3,991,570			5,246	0.53			3,756,298			5,684	0.61
Noninterest-bearing deposits		2,122,844							1,880,916
Operating lease liabilities		33,300							37,426
Accrued expenses and other liabilities		43,277							40,239
Total liabilities		6,190,991							5,714,879
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		298,241							296,599
Retained earnings and other equity		315,385							274,367
Total shareholders' equity		771,410							728,750
Total liabilities and shareholders' equity	$	6,962,401						$	6,443,629
Net interest income				$	51,968						$	47,302
Net interest spread						2.98							2.92
Effect of net interest-free funding sources						0.21							0.23
Net interest margin						3.19	%						3.15	%
Ratio of average interest-earning assets to average interest-bearing liabilities		163.77	%						160.16	%
* Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred (costs) fees of $(618)thousand and $2.7 million for the three months ended June 30, 2022 and 2021, respectively.
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 June 30, 2022 and 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 Six Months Ended June 30,
Tax Equivalent Basis				2022							2021
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	603,002		$	1,181	0.39	%	$	226,387		$	102	0.09	%
U.S. government obligations		3,602			37	2.07			6,999			71	2.05
Obligations of state and political subdivisions*		2,317			36	3.13			8,792			163	3.74
Other debt and equity securities		512,998			5,066	1.99			364,272			2,631	1.46
Federal Home Loan Bank, Federal Reserve Bank and other stock		26,665			699	5.29			26,119			708	5.47
Total interest-earning deposits, investments and other interest-earning assets		1,148,584			7,019	1.23			632,569			3,675	1.17
Commercial, financial, and agricultural loans		919,801			16,608	3.64			804,458			13,708	3.44
Paycheck Protection Program loans		12,994			746	11.58			457,663			9,302	4.10
Real estate—commercial and construction loans		2,954,831			54,347	3.71			2,661,778			49,389	3.74
Real estate—residential loans		1,141,416			20,640	3.65			1,051,110			19,709	3.78
Loans to individuals		26,293			543	4.16			25,862			516	4.02
Municipal loans and leases*		239,197			4,838	4.08			248,490			5,128	4.16
Lease financings		138,593			4,180	6.08			108,317			3,556	6.62
Gross loans and leases		5,433,125			101,902	3.78			5,357,678			101,308	3.81
Total interest-earning assets		6,581,709			108,921	3.34			5,990,247			104,983	3.53
Cash and due from banks		54,671							54,123
Allowance for credit losses, loans and leases		(70,237	)						(78,125	)
Premises and equipment, net		52,097							55,865
Operating lease right-of-use assets		30,308							34,013
Other assets		356,406							357,589
Total assets	$	7,004,954						$	6,413,712
Liabilities:
Interest-bearing checking deposits	$	866,310		$	1,013	0.24	%	$	802,350		$	977	0.25	%
Money market savings		1,473,680			2,456	0.34			1,231,457			1,684	0.28
Regular savings		1,046,150			475	0.09			969,073			580	0.12
Time deposits		463,232			2,533	1.10			505,318			3,318	1.32
Total time and interest-bearing deposits		3,849,372			6,477	0.34			3,508,198			6,559	0.38
Short-term borrowings		17,443			13	0.15			18,506			5	0.05
Long-term debt		95,000			638	1.35			98,149			669	1.37
Subordinated notes		98,950			2,656	5.41			177,647			4,494	5.10
Total borrowings		211,393			3,307	3.15			294,302			5,168	3.54
Total interest-bearing liabilities		4,060,765			9,784	0.49			3,802,500			11,727	0.62
Noninterest-bearing deposits		2,094,397							1,815,572
Operating lease liabilities		33,375							37,419
Accrued expenses and other liabilities		43,541							43,897
Total liabilities		6,232,078							5,699,388
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		298,606							296,369
Retained earnings and other equity		316,486							260,171
Total shareholders' equity		772,876							714,324
Total liabilities and shareholders' equity	$	7,004,954						$	6,413,712
Net interest income				$	99,137						$	93,256
Net interest spread						2.85							2.91
Effect of net interest-free funding sources						0.19							0.23
Net interest margin						3.04	%						3.14	%
Ratio of average interest-earning assets to average interest-bearing liabilities		162.08	%						157.53	%
* Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred (costs) fees of $(754) thousand and $5.0 million for the six months ended June 30, 2022 and 2021, respectively.
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 six months ended June 30, 2022 and 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%.

Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
As of June 30, 2022
(Dollars in thousands)
Industry Description	Total Outstanding Balance (excl PPP)		% of Commercial Loan Portfolio
CRE - Retail	379,935		8.2	%
Animal Production	315,801		6.8
CRE - Multi-family	262,182		5.7
CRE - 1-4 Family Residential Investment	240,887		5.2
CRE - Office	215,847		4.7
Hotels & Motels (Accommodation)	188,811		4.1
CRE - Industrial / Warehouse	185,241		4.0
Education	161,151		3.5
Nursing and Residential Care Facilities	154,034		3.3
Specialty Trade Contractors	143,724		3.1
Homebuilding (tract developers, remodelers)	118,877		2.6
Motor Vehicle and Parts Dealers	112,372		2.4
CRE - Medical Office	108,978		2.3
CRE - Mixed-Use - Residential	106,228		2.3
Merchant Wholesalers, Durable Goods	100,825		2.2
Crop Production	88,786		1.9
Food Manufacturing	85,953		1.9
Administrative and Support Services	75,587		1.6
Rental and Leasing Services	72,560		1.6
Wood Product Manufacturing	71,961		1.6
Food Services and Drinking Places	69,209		1.5
Merchant Wholesalers, Nondurable Goods	66,568		1.4
Fabricated Metal Product Manufacturing	63,016		1.4
Personal and Laundry Services	60,774		1.3
Religious Organizations, Advocacy Groups	58,409		1.3
Miniwarehouse / Self-Storage	54,761		1.2
Repair and Maintenance	53,472		1.2
CRE - Mixed-Use - Commercial	52,080		1.1
Private Equity & Special Purpose Entities	51,853		1.1
Truck Transportation	51,191		1.1
Industries with >$50 million in outstandings	3,771,073		81.3	%
Industries with <$50 million in outstandings	866,668		18.7	%
Total Commercial Loans	4,637,741		100.0	%
Consumer Loans and Lease Financings	Total Outstanding Balance
Real Estate-Residential Secured for Personal Purpose	629,144
Real Estate-Home Equity Secured for Personal Purpose	168,536
Loans to Individuals	27,061
Lease Financings	193,937
Total - Consumer Loans and Lease Financings	1,018,678
Total	5,656,419

Univest Financial Corporation
Non-GAAP Reconciliation
June 30, 2022
Non-GAAP to GAAP Reconciliation
Management uses non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release.
				For the three months ended,																				For the six months ended,
(Dollars in thousands)				06/30/22				03/31/22				12/31/21				09/30/21				06/30/21				06/30/22				06/30/21
Net income				$	13,166			$	20,317			$	17,412			$	20,911			$	20,875			$	33,483			$	53,478
Amortization of intangibles, net of tax					270				269				211				169				197				540				393
Net income before amortization of intangibles				$	13,436			$	20,586			$	17,623			$	21,080			$	21,072			$	34,023			$	53,871
Shareholders' equity				$	763,925			$	773,855			$	773,794			$	756,023			$	739,998			$	763,925			$	739,998
Goodwill					(175,510	)			(175,510	)			(175,510	)			(172,559	)			(172,559	)			(175,510	)			(172,559	)
Other intangibles (a)					(3,678	)			(3,936	)			(4,210	)			(1,922	)			(2,073	)			(3,678	)			(2,073	)
Tangible common equity				$	584,737			$	594,409			$	594,074			$	581,542			$	565,366			$	584,737			$	565,366
Total assets				$	6,700,813			$	7,107,740			$	7,122,421			$	6,979,852			$	6,356,305			$	6,700,813			$	6,356,305
Goodwill					(175,510	)			(175,510	)			(175,510	)			(172,559	)			(172,559	)			(175,510	)			(172,559	)
Other intangibles (a)					(3,678	)			(3,936	)			(4,210	)			(1,922	)			(2,073	)			(3,678	)			(2,073	)
Tangible assets				$	6,521,625			$	6,928,294			$	6,942,701			$	6,805,371			$	6,181,673			$	6,521,625			$	6,181,673
Average shareholders' equity				$	771,410			$	774,358			$	762,334			$	746,185			$	728,750			$	772,876			$	714,324
Average goodwill					(175,510	)			(175,510	)			(173,553	)			(172,559	)			(172,559	)			(175,510	)			(172,559	)
Average other intangibles (a)					(3,791	)			(4,090	)			(2,696	)			(1,983	)			(2,209	)			(3,940	)			(2,336	)
Average tangible common equity				$	592,109			$	594,758			$	586,085			$	571,643			$	553,982			$	593,426			$	539,429
Loans and leases held for investment, gross				$	5,661,777			$	5,400,786			$	5,310,017			$	5,252,045			$	5,327,313			$	5,661,777			$	5,327,313
Paycheck Protection Program ("PPP") loans					(5,358	)			(10,298	)			(31,748	)			(85,601	)			(252,849	)			(5,358	)			(252,849	)
Gross loans and leases excluding PPP loans				$	5,656,419			$	5,390,488			$	5,278,269			$	5,166,444			$	5,074,464			$	5,656,419			$	5,074,464
Allowance for credit losses, loans and leases				$	72,011			$	68,286			$	71,924			$	70,146			$	71,355			$	72,011			$	71,355
Gross loans and leases excluding PPP loans					5,656,419				5,390,488				5,278,269				5,166,444				5,074,464				5,656,419				5,074,464
Allowance for credit losses, loans and leases as a percentage of gross loans and leases excluding PPP loans					1.27	%			1.27	%			1.36	%			1.36	%			1.41	%			1.27	%			1.41	%
(a) Amount does not include mortgage servicing rights

CONTACT: CONTACT: Brian J. Richardson UNIVEST FINANCIAL CORPORATION Chief Financial Officer 215-721-2446, richardsonb@univest.net