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Univest Financial Corporation Reports Third Quarter Results

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(Loan Growth of 9.7% for last twelve months (excluding PPP loans1))

SOUDERTON, Pa., Oct. 27, 2021 (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 September 30, 2021 of $20.9 million, or $0.71 diluted earnings per share, compared to net income of $18.1 million, or $0.62 diluted earnings per share, for the quarter ended September 30, 2020. Net income for the nine months ended September 30, 2021 was $74.4 million, or $2.52 diluted earnings per share, compared to net income of $21.0 million, or $0.72 diluted earnings per share, for the nine months ended September 30, 2020.

Pre-tax pre-provision income1 for the quarter ended September 30, 2021 was $26.0 million, a decrease of $1.1 million, or 4.2%, from the third quarter of 2020. Pre-tax pre-provision income1 for the nine months ended September 30, 2021 was $80.8 million, an increase of $6.1 million, or 8.1%, from the comparable period in the prior year.

One-Time Items
The financial results for the three and nine months ended September 30, 2021 included tax-free bank owned life insurance ("BOLI") death benefit claims of $196 thousand and $1.1 million, respectively, which represents $0.01 and $0.04 diluted earnings per share, respectively.

Paycheck Protection Program
As of September 30, 2021, $85.6 million in PPP loan originations remain outstanding. During the quarter, we recorded income of $4.2 million within net interest income related to these loans, of which $3.7 million was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $171.4 million. During the nine months ended September 30, 2021, we recorded income of $13.5 million within net interest income related to these loans, of which $8.6 million was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $575.3 million. As of September 30, 2021, we had $2.4 million of net deferred fees on our balance sheet, which represented approximately 13.2% of the initial deferred fee amount.

Loans
Gross loans and leases, excluding PPP loans1, increased $92.0 million, or 7.3% (annualized), from June 30, 2021 due to increases in commercial real estate and residential mortgage loans. Gross loans and leases, excluding PPP loans, increased $343.4 million or 9.5% (annualized) from December 31, 2020 and $456.2 million, or 9.7%, from September 30, 2020 due to increases in commercial, construction, commercial real estate, and residential mortgage loans.

Deposits
Total deposits increased $619.5 million, or 46.6% (annualized), from June 30, 2021 due to increases in commercial deposits and seasonal increases in public funds deposits. Total deposits increased $695.4 million, or 17.7% (annualized), from December 31, 2020 and $726.6 million, or 13.9%, from September 30, 2020, primarily due to increases in commercial, consumer and public funds deposits offset by a decrease in brokered deposits.

Net Interest Income and Margin
Net interest income of $48.7 million for the three months ended September 30, 2021 increased $1.9 million, or 4.1%, from the three months ended June 30, 2021, and $4.8 million, or 11.0%, from the three months ended September 30, 2020. The increase in net interest income for the three months ended September 30, 2021 compared to the same period of 2020 was primarily due to an increase in PPP loan income of $1.4 million, a $1.9 million decrease in the cost of interest-bearing liabilities and growth in loans partially offset by a decrease in loan, excluding PPP, and investment yields.

Net interest income of $140.9 million for the nine months ended September 30, 2021 increased $11.0 million, or 8.5%, from the nine months ended September 30, 2020. The increase in net interest income for the nine months ended September 30, 2021 compared to the same period of 2020 was primarily due to an increase in PPP loan income of $8.5 million, a $6.2 million decrease in the cost of interest-bearing liabilities and growth in loans partially offset by a decrease in loans and investment yields.

Net interest margin, on a tax-equivalent basis, was 3.11% for the third quarter of 2021, compared to 3.15% for the second quarter of 2021 and 3.02% for the third quarter of 2020. Excess liquidity reduced net interest margin by approximately 27 basis points for the quarter ended September 30, 2021 compared to ten basis points for the quarter ended June 30, 2021 and 18 basis points for the quarter ended September 30, 2020. This excess liquidity was primarily driven by strong growth of deposit balances since the beginning of the COVID-19 pandemic, primarily due to the various pandemic-related stimulus initiatives. PPP loans had a favorable impact on net interest margin of 20 basis points for the quarter ended September 30, 2021 compared to 11 basis points for the quarter ended June 30, 2021 and an unfavorable impact of ten basis points for the quarter ended September 30, 2020. As PPP loans are forgiven, the associated deferred fees are recognized in earnings, which occurred with greater frequency in 2021 as compared to 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.18% for the quarter ended September 30, 2021 compared to 3.14% for the quarter ended June 30, 2021 and 3.30% for the quarter ended September 30, 2020.

Net interest margin, on a tax-equivalent basis, was 3.13% for the nine months ended September 20, 2021, compared to 3.21% for the nine months ended September 30, 2020. Excess liquidity reduced net interest margin by approximately 16 basis points for the nine months ended September 30, 2021 compared to 14 basis points for the nine months ended September 30, 2020. This excess liquidity was primarily driven by strong growth of deposit balances since the beginning of the COVID-19 pandemic, primarily due to the various pandemic-related stimulus initiatives. PPP loans had a favorable impact on net interest margin of 12 basis points for the nine months ended September 30, 2021 compared to an unfavorable impact of seven basis points for the nine months ended September 30, 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.17% for the nine months ended September 30, 2021 compared to 3.42% for the nine months ended September 30, 2020.

Noninterest Income
Noninterest income for the quarter ended September 30, 2021 was $20.6 million, a decrease of $1.3 million, or 5.7%, compared to the third quarter of 2020. Noninterest income for the nine months ended September 30, 2021 was $64.0 million, an increase of $5.8 million, or 10.0%, from the comparable period in the prior year.

Net gain on mortgage banking activities decreased $2.6 million, or 45.0%, for the quarter but increased $504 thousand, or 4.2%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year. The decrease for the three months ended September 30, 2021 was primarily due to a decrease in volume and a contraction of margins. Investment advisory commission and fee income increased $791 thousand, or 19.8%, for the quarter and $2.3 million, or 19.1%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year, due to increased assets under management driven by favorable market conditions and new customer relationships. BOLI income increased $184 thousand, or 24.8%, for the quarter and $1.1 million, or 47.8%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year, primarily due to proceeds from BOLI death benefits of $893 thousand and $196 thousand received in the second and third quarter of 2021, respectively.

Other service fee income increased $483 thousand, or 23.1%, for the quarter and $2.1 million, or 37.9%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year. Interchange fee income increased $290 thousand for the quarter and $962 thousand for the nine months ended September 30, 2021 compared to the comparable periods in the prior year, due to increased customer activity. Mortgage servicing fees increased $163 thousand for the quarter and $855 thousand for the nine months ended September 30, 2021 driven by an increase in retained servicing associated with elevated mortgage volume over the past eighteen months.

Other income decreased $546 thousand, or 25.1%, for the quarter and $543 thousand, or 13.5%, for the nine months ended September 30, 2021 compared to comparable periods in the prior year. Fees on risk participation agreements for interest rate swaps decreased $1.9 million and $2.3 million during the three and nine months ended September 30, 2021, respectively, compared to comparable periods in the prior year driven by a decrease in customer demand. Gain on the sale of SBA loans increased $897 thousand and $922 thousand during the three and nine months ended September 30, 2021, respectively. This increase was reflective of the Corporation's commitment to delivering comprehensive financial solutions to small businesses and the expansion of the SBA lending team during the first half of 2021. Net gains or losses related to valuations and sales of other real estate owned increased $297 thousand for the three and nine months ended September 30, 2021 compared to comparable periods in the prior year, primarily due to a $300 thousand valuation adjustment on other real estate owned during the third quarter of 2020. Other income increased $456 thousand for the nine months ended September 30, 2021 primarily driven by a gain on the value of equity securities measured at fair value of $164 thousand compared to a loss of $321 thousand for the nine months ended September 30, 2020.

Noninterest Expense
Noninterest expense for the quarter ended September 30, 2021 was $43.2 million, an increase of $4.7 million, or 12.3%, compared to the third quarter of 2020. Noninterest expense for the nine months ended September 30, 2021 was $124.1 million, an increase of $10.8 million, or 9.5%, from the comparable period in the prior year.

Salaries, benefits and commissions increased $2.6 million, or 10.7%, for the quarter and $7.2 million, or 10.4%, for the nine months ended September 30, 2021 from the comparable periods in the prior year. These increases reflect our continued investment in revenue producing staff across all business lines and annual merit increases. Additionally, variable incentive compensation expenses increased $829 thousand and $2.6 million for the three and nine months ended September 30, 2021, respectively, from the comparable periods in the prior year, due to increased profitability.

Professional fees increased $853 thousand, or 64.6%, for the quarter and $2.0 million, or 52.2%, for the nine months ended September 30, 2021 from the comparable periods in the prior year, primarily attributable to increased consultant fees in support of our Diversity, Equity and Inclusion program, training initiatives and treasury management product enhancements. During the first nine months of 2021, we have spent $1.4 million on these initiatives and we expect to incur approximately $70 thousand of additional expenses related to these initiatives in the fourth quarter of 2021. These expenses are not expected to re-occur in subsequent periods. Data processing expenses increased $412 thousand, or 14.4%, for the quarter and $1.0 million, or 12.1%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year, primarily due to continued investments in our end-to-end loan origination solution for loans below $1.0 million, customer relationship management software, internal infrastructure improvements and outsourced data processing solutions.

Other expense increased $865 thousand, or 16.5%, for the quarter compared to the comparable period in the prior year, due to increases in professional liability insurance, bank shares tax expense, interchange fee expense and travel and entertainment expenses, which are beginning to normalize as the markets we operate in continue to remain open.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $37.1 million at September 30, 2021, compared to $38.5 million at June 30, 2021 and $41.9 million at September 30, 2020.

Net loan and lease recoveries were $75 thousand during the third quarter of 2021 compared to $35 thousand for the same period in the prior year. The reversal of provision for credit losses was $182 thousand for the third quarter of 2021, of which $2.9 million (after-tax benefit of $2.3 million), or $0.08 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model, partially offset by an increase in reserves for loans, unfunded commitments and investment securities. The provision for credit losses was $3.9 million for the comparable period in the prior year, of which $280 thousand (after-tax charge of $221 thousand), or $0.01 diluted earnings per share, was attributable to adverse changes in economic-related assumptions, which were predominately driven by COVID-19.

Net loan and lease charge-offs were $456 thousand for the nine months ended September 30, 2021 compared to $4.0 million for the same period in the prior year. The reversal of provision for credit losses was $11.5 million for the nine months ended September 30, 2021, of which $18.7 million (after-tax benefit of $14.8 million), or $0.50 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model partially offset by an increase in reserves for loans, unfunded commitments and investment securities. The provision for credit losses was $49.5 million for the comparable period in the prior year, of which $40.5 million (after-tax charge of $32.0 million), or $1.10 diluted earnings per share, was attributable to adverse changes in economic-related assumptions.

The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.34% at September 30, 2021, compared to 1.34% at June 30, 2021, and 1.76% at September 30, 2020. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans1, was 1.36% at September 30, 2021 compared to 1.41% at June 30, 2021 and 1.95% at September 30, 2020.

Tax Provision
The effective income tax rate was 19.4% for the nine months ended September 30, 2021 compared to an effective income tax rate of 16.7% for the nine months ended September 30, 2020. The effective tax rate for the nine months ended September 30, 2021 and 2020 reflects the level of pre-tax income and the benefits of tax-exempt income from investments in municipal securities and loans and leases. Additionally, the effective income tax rate for the nine months ended September 30, 2021 was favorably impacted by discrete tax benefits and proceeds from BOLI death benefits. Excluding these items, the effective tax rate was 19.9% for the nine months ended September 30, 2021.

Dividend
On October 27, 2021, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on November 24, 2021 to shareholders of record as of November 10, 2021.

Conference Call
Univest will host a conference call to discuss third quarter 2021 results on Thursday, October 28, 2021 at 9:00 a.m. EST. Participants may preregister at https://dpregister.com/sreg/10160789/ee1d498407. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through November 28, 2021 by dialing 1-877-344-7529; using Conference ID: 10160789.

1Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included within this document.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.0 billion in assets and $4.6 billion in assets under management and supervision through its Wealth Management lines of business at September 30, 2021. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices and online at www.univest.net.

This press release of Univest 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 capital management strategies, markets and products of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future results to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) changes in interest rates; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and credit loss provisions; (4) general economic conditions nationally and in our market; (5) economic assumptions that may impact our allowance for credit losses calculation; (6) legislative, regulatory or tax changes that may adversely affect the businesses in which Univest is engaged; (7) technological issues that may adversely affect Univest financial operations or those of our customers; (8) changes in the securities markets or (9) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

Additionally, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and whether the continued reopening of businesses will result in a meaningful increase in economic activity. 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 the economy is unable to remain open, and higher levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase; (3) collateral for loans, especially real estate, may decline in value; (4) our allowance for credit losses may have to be increased if economic conditions worsen or if borrowers experience financial difficulties; (5) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (6) 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; (7) our wealth management revenues may decline with continuing market turmoil; (8) litigation, regulatory enforcement risk and reputation risk regarding our participation in the Paycheck Protection Program and the risk that the Small Business Administration may not fund some or all PPP loan guarantees; (9) our cyber security risks are increased as the result of an increase in the number of employees working remotely; and (10) Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs. 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)

September 30, 2021

(Dollars in thousands)

Balance Sheet (Period End)

09/30/21

06/30/21

03/31/21

12/31/20

09/30/20

Assets

$

6,979,852

$

6,356,305

$

6,416,665

$

6,336,496

$

6,382,831

Cash and cash equivalents

902,357

203,449

187,317

219,858

387,676

Investment securities, net of allowance for credit losses

393,377

397,426

377,506

373,176

368,830

Loans held for sale

29,093

27,322

22,636

37,039

14,465

Loans and leases held for investment, gross

5,252,045

5,327,313

5,415,006

5,306,841

5,211,856

Allowance for credit losses, loans and leases

70,146

71,355

71,497

83,044

91,870

Loans and leases held for investment, net

5,181,899

5,255,958

5,343,509

5,223,797

5,119,986

Total deposits

5,938,154

5,318,704

5,311,592

5,242,715

5,211,603

Noninterest-bearing deposits

1,861,007

1,872,031

1,857,547

1,690,663

1,714,505

Interest-bearing demand, money market and savings

3,583,107

2,954,450

2,979,834

2,988,277

2,940,879

Time deposits

494,040

492,223

474,211

563,775

556,219

Borrowings

207,898

218,970

295,293

311,421

416,104

Shareholders' equity

756,023

739,998

722,455

692,472

669,107

Balance Sheet (Average)

For the three months ended,

For the nine months ended,

09/30/21

06/30/21

03/31/21

12/31/20

09/30/20

09/30/21

09/30/20

Assets

$

6,698,177

$

6,443,629

$

6,383,463

$

6,353,519

$

6,265,605

$

6,509,576

$

5,892,918

Investment securities, net of allowance for credit losses

395,280

385,694

374,369

369,511

385,221

385,192

412,924

Loans and leases, gross

5,320,411

5,389,110

5,325,897

5,253,720

5,070,037

5,345,119

4,766,274

Deposits

5,666,725

5,351,089

5,296,147

5,222,452

5,030,398

5,439,345

4,726,132

Shareholders' equity

746,185

728,750

699,736

676,426

661,947

725,061

665,439

Asset Quality Data (Period End)

09/30/21

06/30/21

03/31/21

12/31/20

09/30/20

Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases and nonaccrual loans held for sale

$

34,528

$

37,466

$

29,996

$

31,692

$

30,019

Accruing loans and leases 90 days or more past due

2,204

750

664

1,392

3,573

Accruing troubled debt restructured loans and leases

51

52

52

53

53

Total nonperforming loans and leases

36,783

38,268

30,712

33,137

33,645

Other real estate owned

279

279

7,481

7,355

8,270

Total nonperforming assets

$

37,062

$

38,547

$

38,193

$

40,492

$

41,915

Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale

0.66

%

0.70

%

0.55

%

0.60

%

0.58

%

Nonperforming loans and leases / Loans and leases held for investment

0.70

%

0.72

%

0.57

%

0.62

%

0.65

%

Nonperforming assets / Total assets

0.53

%

0.61

%

0.60

%

0.64

%

0.66

%

Allowance for credit losses, loans and leases

$

70,146

$

71,355

$

71,497

$

83,044

$

91,870

Allowance for credit losses, loans and leases / Loans and leases held for investment

1.34

%

1.34

%

1.32

%

1.56

%

1.76

%

Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1)

1.36

%

1.41

%

1.46

%

1.72

%

1.95

%

Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment

203.16

%

212.97

%

238.36

%

262.03

%

306.04

%

Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment

190.70

%

208.00

%

232.80

%

250.61

%

273.06

%

For the three months ended,

For the nine months ended,

09/30/21

06/30/21

03/31/21

12/31/20

09/30/20

09/30/21

09/30/20

Net loan and lease (recoveries) charge-offs

$

(75

)

$

243

$

288

$

618

$

(35

)

$

456

$

4,030

Net loan and lease (recoveries) charge-offs (annualized)/Average loans and leases

(0.01

%)

0.02

%

0.02

%

0.05

%

(0.00

%)

0.01

%

0.11

%

(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)

September 30, 2021

(Dollars in thousands, except per share data)

For the three months ended,

For the nine months ended,

For the period:

09/30/21

06/30/21

03/31/21

12/31/20

09/30/20

09/30/21

09/30/20

Interest income

$

53,571

$

52,441

$

51,457

$

51,334

$

50,612

$

157,469

$

152,611

Interest expense

4,884

5,684

6,043

6,813

6,758

16,611

22,771

Net interest income

48,687

46,757

45,414

44,521

43,854

140,858

129,840

(Reversal of provision) provision for credit losses

(182

)

(59

)

(11,283

)

(8,721

)

3,935

(11,524

)

49,515

Net interest income after provision for credit losses

48,869

46,816

56,697

53,242

39,919

152,382

80,325

Noninterest income:

Trust fee income

2,126

2,157

2,034

1,974

1,915

6,317

5,729

Service charges on deposit accounts

1,422

1,314

1,282

1,371

1,187

4,018

3,474

Investment advisory commission and fee income

4,796

4,558

4,697

4,144

4,005

14,051

11,800

Insurance commission and fee income

3,837

3,839

4,955

3,512

3,776

12,631

12,575

Other service fee income

2,576

2,748

2,192

2,092

2,093

7,516

5,451

Bank owned life insurance income

925

1,620

717

733

741

3,262

2,207

Net gain on sales of investment securities

21

54

65

54

57

140

817

Net gain on mortgage banking activities

3,224

3,461

5,938

4,323

5,860

12,623

12,119

Other income

1,625

479

1,370

1,936

2,171

3,474

4,017

Total noninterest income

20,552

20,230

23,250

20,139

21,805

64,032

58,189

Noninterest expense:

Salaries, benefits and commissions

26,641

25,396

24,780

23,613

24,059

76,817

69,595

Net occupancy

2,525

2,656

2,739

2,697

2,609

7,920

7,661

Equipment

1,000

968

946

951

972

2,914

2,890

Data processing

3,274

3,064

3,050

2,961

2,862

9,388

8,372

Professional fees

2,174

2,015

1,748

1,436

1,321

5,937

3,902

Marketing and advertising

539

561

280

575

463

1,380

1,400

Deposit insurance premiums

765

613

636

765

707

2,014

1,826

Intangible expenses

214

249

249

282

283

712

934

Restructuring charges

-

-

-

1,439

-

-

-

Other expense

6,116

5,764

5,112

7,015

5,251

16,992

16,684

Total noninterest expense

43,248

41,286

39,540

41,734

38,527

124,074

113,264

Income before taxes

26,173

25,760

40,407

31,647

23,197

92,340

25,250

Income tax expense

5,262

4,885

7,804

5,773

5,078

17,951

4,208

Net income

$

20,911

$

20,875

$

32,603

$

25,874

$

18,119

$

74,389

$

21,042

Net income per share:

Basic

$

0.71

$

0.71

$

1.11

$

0.88

$

0.62

$

2.53

$

0.72

Diluted

$

0.71

$

0.71

$

1.11

$

0.88

$

0.62

$

2.52

$

0.72

Dividends declared per share

$

0.20

$

0.20

$

0.20

$

-

$

0.20

$

0.60

$

0.60

Weighted average shares outstanding

29,420,256

29,389,525

29,327,432

29,274,915

29,226,627

29,379,774

29,233,317

Period end shares outstanding

29,438,402

29,411,731

29,379,575

29,295,052

29,241,302

29,438,402

29,241,302


Univest Financial Corporation

Consolidated Selected Financial Data (Unaudited)

September 30, 2021

For the three months ended,

For the nine months ended,

Profitability Ratios (annualized)

09/30/21

06/30/21

03/31/21

12/31/20

09/30/20

09/30/21

09/30/20

Return on average assets

1.24

%

1.30

%

2.07

%

1.62

%

1.15

%

1.53

%

0.48

%

Return on average assets, excluding restructuring charges (1)

1.24

%

1.30

%

2.07

%

1.69

%

1.15

%

1.53

%

0.48

%

Return on average shareholders' equity

11.12

%

11.49

%

18.90

%

15.22

%

10.89

%

13.72

%

4.22

%

Return on average shareholders' equity, excluding restructuring charges (1)

11.12

%

11.49

%

18.90

%

15.89

%

10.89

%

13.72

%

4.22

%

Return on average tangible common equity (1)

14.51

%

15.11

%

25.20

%

20.54

%

14.82

%

18.07

%

5.74

%

Return on average tangible common equity, excluding restructuring charges (1)

14.51

%

15.11

%

25.20

%

21.44

%

14.82

%

18.07

%

5.74

%

Net interest margin (FTE)

3.11

%

3.15

%

3.12

%

3.02

%

3.02

%

3.13

%

3.21

%

Efficiency ratio (2)

61.8

%

60.7

%

57.0

%

63.8

%

58.0

%

59.8

%

59.5

%

Efficiency ratio, excluding restructuring charges (1) (2)

61.8

%

60.7

%

57.0

%

61.6

%

58.0

%

59.8

%

59.5

%

Capitalization Ratios

Dividends declared to net income (3)

28.1

%

28.2

%

18.0

%

0.0

%

32.3

%

23.7

%

83.3

%

Shareholders' equity to assets (Period End)

10.83

%

11.64

%

11.26

%

10.93

%

10.48

%

10.83

%

10.48

%

Tangible common equity to tangible assets (1)

8.55

%

9.15

%

8.77

%

8.40

%

7.95

%

8.55

%

7.96

%

Common equity book value per share

$

25.68

$

25.16

$

24.59

$

23.64

$

22.88

$

25.68

$

22.88

Tangible common equity book value per share (1)

$

19.75

$

19.22

$

18.64

$

17.66

$

16.88

$

19.75

$

16.89

Regulatory Capital Ratios (Period End)

Tier 1 leverage ratio

9.53

%

9.64

%

9.45

%

9.08

%

8.97

%

9.53

%

8.97

%

Common equity tier 1 risk-based capital ratio

11.15

%

11.04

%

11.08

%

10.76

%

10.52

%

11.15

%

10.52

%

Tier 1 risk-based capital ratio

11.15

%

11.04

%

11.08

%

10.76

%

10.52

%

11.15

%

10.52

%

Total risk-based capital ratio

13.87

%

13.82

%

15.13

%

15.31

%

15.35

%

13.87

%

15.35

%

(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) As announced in the September 30, 2020 Earnings Release, the Corporation changed the timing of future dividend declarations and payments.


Univest Financial Corporation

Average Balances and Interest Rates (Unaudited)

For the Three Months Ended,

Tax Equivalent Basis

September 30, 2021

June 30, 2021

Average

Income/

Average

Average

Income/

Average

(Dollars in thousands)

Balance

Expense

Rate

Balance

Expense

Rate

Assets:

Interest-earning deposits with other banks

$

530,191

$

189

0.14

%

$

215,349

$

46

0.09

%

U.S. government obligations

6,999

36

2.04

6,999

35

2.01

Obligations of state and political subdivisions

2,992

24

3.18

6,070

58

3.83

Other debt and equity securities

385,289

1,516

1.56

372,625

1,364

1.47

Federal Home Loan Bank, Federal Reserve Bank and other stock

26,713

334

4.96

25,872

360

5.58

Total interest-earning deposits, investments and other interest-earning assets

952,184

2,099

0.87

626,915

1,863

1.19

Commercial, financial, and agricultural loans

880,986

7,412

3.34

826,464

6,910

3.35

Paycheck Protection Program loans

162,611

4,162

10.15

408,928

4,778

4.69

Real estate—commercial and construction loans

2,784,398

25,634

3.65

2,701,137

24,931

3.70

Real estate—residential loans

1,100,799

10,171

3.67

1,065,065

9,836

3.70

Loans to individuals

26,048

253

3.85

25,284

251

3.98

Municipal loans and leases

247,603

2,504

4.01

251,311

2,598

4.15

Lease financings

117,966

1,856

6.24

110,921

1,819

6.58

Gross loans and leases

5,320,411

51,992

3.88

5,389,110

51,123

3.80

Total interest-earning assets

6,272,595

54,091

3.42

6,016,025

52,986

3.53

Cash and due from banks

59,642

52,948

Allowance for credit losses, loans and leases

(72,606

)

(73,052

)

Premises and equipment, net

55,685

55,903

Operating lease right-of-use assets

31,998

33,992

Other assets

350,863

357,813

Total assets

$

6,698,177

6,443,629

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