Univest Financial Corporation Reports Fourth Quarter and 2022 Results
01/25/2023 - 04:15 PM
(2022 Loan Growth of 16.0% (excluding PPP 1 loans))
SOUDERTON, Pa., Jan. 25, 2023 (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, announced net income for the quarter ended December 31, 2022 was $23.8 million , or $0.81 diluted earnings per share, compared to net income of $17.4 million , or $0.59 diluted earnings per share, for the quarter ended December 31, 2021.
One-Time Items $526 thousand , which represented $0.02 diluted earnings per share. Restructuring charges of $184 thousand were recognized in the fourth quarter related to the consolidation of two financial centers.
Loans 1 , increased $842.8 million , or 16.0% , from December 31, 2021, primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings. Gross loans and leases, excluding PPP loans, increased $274.0 million , or 18.8% (annualized), from September 30, 2022, primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings.
Deposits $151.3 million , or 2.5% , from December 31, 2021, primarily due to decreases in commercial, consumer and public funds deposits partially offset by an increase in brokered deposits. Total deposits increased $116.8 million , or 8.0% (annualized), from September 30, 2022, primarily due to increases in commercial, consumer and brokered deposits partially offset by decreases in public funds deposits.
Net Interest Income and Margin $61.9 million for the three months ended December 31, 2022 increased $3.7 million , or 6.3% , from the three months ended September 30, 2022, and $14.4 million , or 30.3% , from the three months ended December 31, 2021. The increase in net interest income for the three months ended December 31, 2022 compared to the same period of 2021 and the prior quarter was largely due to significant loan growth, the rapid increase in interest rates and the asset sensitivity of the Corporation's balance sheet, offset by an increase in costs of funds.
Net interest margin, on a tax-equivalent basis, was 3.76% for the fourth quarter of 2022, compared to 3.67% for the third quarter of 2022 and 2.86% for the fourth quarter of 2021. Excess liquidity reduced net interest margin by approximately one basis point for the quarter ended December 31, 2022 compared to one basis point for the quarter ended September 30, 2022 and 43 basis points for the quarter ended December 31, 2021. PPP loans had no impact on net interest margin for the quarters ended December 31, 2022 and September 30, 2022 and had a favorable impact on net interest margin of eight basis points for the quarter ended December 31, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.77% for the quarter ended December 31, 2022 compared to 3.68% for the quarter ended September 30, 2022 and 3.21% for the quarter ended December 31, 2021.
Noninterest Income $20.5 million , an increase of $1.3 million , or 6.6% , from the comparable period in the prior year.
Investment advisory commission and fee income increased $700 thousand , or 14.3% , for the quarter ended December 31, 2022 compared to the comparable period in the prior year. This increase was primarily due to a $1.2 million adjustment in the quarter for previously unrecorded revenue of which $815 thousand related to the first nine months of 2022. This adjustment was partially offset by decreased income driven by reduced assets under management due to market volatility. Insurance commission and fee income increased $698 thousand , or 18.7% , for the quarter ended December 31, 2022 compared to the comparable period in the prior year, primarily due to incremental revenue attributable to the acquisition of the Paul I. Sheaffer insurance agency in the fourth quarter of 2021.
Other income increased $1.2 million , or 114.7% , for the quarter ended December 31, 2022 compared to the comparable period in the prior year due to a $1.1 million increase in interest rate swap income.
BOLI increased $511 thousand , or 71.1% , for the quarter ended December 31, 2022 compared to the comparable period in the prior year, primarily due to death benefit claims as previously discussed.
Net gain on mortgage banking activities decreased $2.1 million , or 82.7% , for the quarter ended December 31, 2022 compared to the comparable period in the prior year, primarily due to a decrease in loan sales and a contraction of gain on sale margins.
Noninterest Expense $47.3 million , an increase of $4.0 million , or 9.2% , from the comparable period in the prior year. The results for the three months ended December 31, 2022 included approximately $434 thousand in expenses related to our digital transformation initiative, a comprehensive digital platform which will blend our core operating systems together and allow Univest to personalize experiences and seamlessly deliver existing products and services, digitally, across an expanded footprint.
Salaries, benefits and commissions increased $1.7 million , or 6.0% , for the quarter ended December 31, 2022 compared to the comparable period in the prior year. This increase reflects the insurance acquisition in the fourth quarter of 2021, our expansion into Maryland and Western Pennsylvania, and annual merit increases.
Data processing expenses increased $684 thousand , or 20.4% , for the quarter ended December 31, 2022 compared to the comparable period in the prior year, primarily due to continued investments in technology, general price increases, and $206 thousand in support of the previously discussed digital transformation initiative for the respective period.
Restructuring charges increased $184 thousand for the quarter ended December 31, 2022 compared to the comparable period in the prior year as previously discussed.
Other expense increased $1.2 million , or 21.3% , for the quarter compared to the comparable period in the prior year primarily due to increases in travel and entertainment expenses of $228 thousand for the quarter and $430 thousand of fraud losses.
Tax Provision 19.6% for the year ended December 31, 2022, compared to an effective income tax rate of 19.7% for the year ended December 31, 2021. The effective tax rate for the year ended December 31, 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 $33.5 million at December 31, 2022, compared to $33.0 million at September 30, 2022 and $34.0 million at December 31, 2021.
Net loan and lease charge-offs were $908 thousand and $1.2 million for the three months ended December 31, 2022 and September 30, 2022, respectively, compared to net loan and lease recoveries of $243 thousand for the three months ended December 31, 2021. Net loan and lease charge-offs were $3.9 million and $213 thousand for the year ended December 31, 2022 and December 31, 2021, respectively.
The provision for credit losses was $5.4 million for the three months ended December 31, 2022 compared to a provision for credit losses of $3.6 million and $1.4 million for the three months ended September 30, 2022 and December 31, 2021, respectively. The provision for credit losses was $12.2 million for the year ended December 31, 2022 compared to a reversal of provision for credit losses of $10.1 million for the comparable period in the prior year. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.29% at December 31, 2022 compared to 1.28% at September 30, 2022 and 1.35% at December 31, 2021.
Dividend
Conference Call https://www.netroadshow.com/events/login?show=789ec9e7&confId=45853
1 Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included within this document.
About Univest Financial Corporation $7.2 billion in assets and $4.2 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 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, prospects and strategies of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future financial condition, results, business, prospects or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (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, accounting 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 continuing effects resulting from the COVID-19 pandemic on our business and results of operation; (10) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (11) potential recessionary conditions and/or (12) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.
(UVSP - ER)
Univest Financial Corporation Consolidated Selected Financial Data (Unaudited) December 31, 2022 (Dollars in thousands) Balance Sheet (Period End) 12/31/22 09/30/22 06/30/22 03/31/22 12/31/21 ASSETS Cash and due from banks $ 84,176 $ 65,859 $ 59,590 $ 57,307 $ 49,202 Interest-earning deposits with other banks 68,623 47,451 35,187 716,474 840,948 Cash and cash equivalents 152,799 113,310 94,777 773,781 890,150 Investment securities held-to-maturity 154,727 159,170 159,808 166,339 176,983 Investment securities available for sale, net of allowance for credit losses 350,256 347,479 351,382 349,994 317,007 Investments in equity securities 2,579 2,994 2,934 2,569 2,999 Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost 33,841 29,475 29,116 26,330 28,186 Loans held for sale 5,037 9,087 8,352 14,521 21,600 Loans and leases held for investment 6,123,230 5,849,259 5,661,777 5,400,786 5,310,017 Less: Allowance for credit losses, loans and leases (79,004 ) (74,929 ) (72,011 ) (68,286 ) (71,924 ) Net loans and leases held for investment 6,044,226 5,774,330 5,589,766 5,332,500 5,238,093 Premises and equipment, net 50,939 50,533 50,080 50,429 56,882 Operating lease right-of-use assets 30,059 30,654 30,929 30,498 30,407 Goodwill 175,510 175,510 175,510 175,510 175,510 Other intangibles, net of accumulated amortization 11,384 11,650 11,728 11,784 11,848 Bank owned life insurance 120,297 120,035 120,103 119,398 118,699 Accrued interest and other assets 90,362 83,170 76,328 54,087 54,057 Total assets $ 7,222,016 $ 6,907,397 $ 6,700,813 $ 7,107,740 $ 7,122,421 LIABILITIES Noninterest-bearing deposits $ 2,037,562 $ 1,968,422 $ 2,062,538 $ 2,136,467 $ 2,065,423 Interest-bearing deposits: 3,866,263 3,818,554 3,500,510 3,911,465 3,989,701 Total deposits 5,903,825 5,786,976 5,563,048 6,047,932 6,055,124 Short-term borrowings 197,141 80,711 97,606 18,976 20,106 Long-term debt 95,000 95,000 95,000 95,000 95,000 Subordinated notes 148,260 99,107 99,030 98,952 98,874 Operating lease liabilities 33,153 33,718 33,951 33,566 33,453 Accrued expenses and other liabilities 68,137 57,698 48,253 39,459 46,070 Total liabilities 6,445,516 6,153,210 5,936,888 6,333,885 6,348,627 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 300,808 299,791 298,800 297,945 299,181 Retained earnings 428,637 410,942 396,295 389,332 375,124 Accumulated other comprehensive loss, net of tax benefit (62,104 ) (64,985 ) (42,781 ) (31,909 ) (16,353 ) Treasury stock, at cost (48,625 ) (49,345 ) (46,173 ) (39,297 ) (41,942 ) Total shareholders’ equity 776,500 754,187 763,925 773,855 773,794 Total liabilities and shareholders’ equity $ 7,222,016 $ 6,907,397 $ 6,700,813 $ 7,107,740 $ 7,122,421 For the three months ended, For the twelve months ended, Balance Sheet (Average) 12/31/22 09/30/22 06/30/22 03/31/22 12/31/21 12/31/22 12/31/21 Assets $ 7,019,381 $ 6,797,466 $ 6,962,401 $ 7,047,980 $ 7,088,289 $ 6,956,292 $ 6,655,443 Investment securities, net of allowance for credit losses 505,717 517,335 515,741 522,128 469,588 515,192 406,463 Loans and leases, gross 5,979,581 5,752,119 5,520,580 5,344,698 5,255,279 5,651,265 5,322,475 Deposits 5,837,823 5,645,291 5,903,173 5,984,815 6,041,798 5,841,832 5,591,195 Shareholders' equity 767,192 773,099 771,410 774,358 762,334 771,499 734,456
Univest Financial Corporation Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited) December 31, 2022 (Dollars in thousands) Summary of Major Loan and Lease Categories (Period End) 12/31/22 09/30/22 06/30/22 03/31/22 12/31/21 Commercial, financial and agricultural $ 1,086,781 $ 1,052,733 $ 1,028,354 $ 932,485 $ 956,396 Paycheck Protection Program 2,147 2,207 5,358 10,298 31,748 Real estate-commercial 3,027,955 2,936,204 2,870,286 2,816,737 2,718,535 Real estate-construction 381,811 329,915 319,449 285,083 283,918 Real estate-residential secured for business purpose 478,254 443,837 419,652 412,486 409,900 Real estate-residential secured for personal purpose 730,395 685,771 629,144 568,735 540,566 Real estate-home equity secured for personal purpose 176,699 175,843 168,536 160,134 158,909 Loans to individuals 27,873 26,679 27,061 26,249 25,504 Lease financings 211,315 196,070 193,937 188,579 184,541 Total loans and leases held for investment, net of deferred income 6,123,230 5,849,259 5,661,777 5,400,786 5,310,017 Less: Allowance for credit losses, loans and leases (79,004 ) (74,929 ) (72,011 ) (68,286 ) (71,924 ) Net loans and leases held for investment $ 6,044,226 $ 5,774,330 $ 5,589,766 $ 5,332,500 $ 5,238,093 Asset Quality Data (Period End) 12/31/22 09/30/22 06/30/22 03/31/22 12/31/21 Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases $ 13,353 $ 13,620 $ 13,355 $ 30,876 $ 33,210 Accruing loans and leases 90 days or more past due 875 416 2,784 274 498 Accruing troubled debt restructured loans and leases 49 50 50 51 51 Total nonperforming loans and leases 14,277 14,086 16,189 31,201 33,759 Other real estate owned 19,258 18,960 18,604 279 279 Total nonperforming assets $ 33,535 $ 33,046 $ 34,793 $ 31,480 $ 34,038 Nonaccrual loans and leases / Loans and leases held for investment 0.22 % 0.23 % 0.24 % 0.57 % 0.63 % Nonperforming loans and leases / Loans and leases held for investment 0.23 % 0.24 % 0.29 % 0.58 % 0.64 % Nonperforming assets / Total assets 0.46 % 0.48 % 0.52 % 0.44 % 0.48 % Allowance for credit losses, loans and leases $ 79,004 $ 74,929 $ 72,011 $ 68,286 $ 71,924 Allowance for credit losses, loans and leases / Loans and leases held for investment 1.29 % 1.28 % 1.27 % 1.26 % 1.35 % Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1) 1.29 % 1.28 % 1.27 % 1.27 % 1.36 % Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment 591.66 % 550.14 % 539.21 % 221.16 % 216.57 % Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment 553.37 % 531.94 % 444.81 % 218.86 % 213.05 % For the three months ended, For the twelve months ended, 12/31/22 09/30/22 06/30/22 03/31/22 12/31/21 12/31/22 12/31/21 Net loan and lease charge-offs (recoveries) $ 908 $ 1,196 $ 1,715 $ 76 $ (243 ) $ 3,895 $ 213 Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases 0.06 % 0.08 % 0.12 % 0.01 % (0.02 %) 0.07 % 0.00 % (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) December 31, 2022 (Dollars in thousands, except per share data) For the three months ended, For the twelve months ended, For the period: 12/31/22 09/30/22 06/30/22 03/31/22 12/31/21 12/31/22 12/31/21 Interest income $ 77,401 $ 66,877 $ 56,717 $ 51,198 $ 52,262 $ 252,193 $ 209,731 Interest expense 15,485 8,627 5,246 4,538 4,737 33,896 21,348 Net interest income 61,916 58,250 51,471 46,660 47,525 218,297 188,383 Provison (reversal of provision) for credit losses 5,416 3,558 6,674 (3,450 ) 1,392 12,198 (10,132 ) Net interest income after provision for credit losses 56,500 54,692 44,797 50,110 46,133 206,099 198,515 Noninterest income: Trust fee income 1,808 1,835 1,998 2,102 2,086 7,743 8,403 Service charges on deposit accounts 1,575 1,522 1,574 1,504 1,486 6,175 5,504 Investment advisory commission and fee income 5,585 4,199 4,812 5,152 4,885 19,748 18,936 Insurance commission and fee income 4,424 4,442 4,629 5,570 3,726 19,065 16,357 Other service fee income 3,236 3,124 3,309 2,756 2,759 12,425 10,275 Bank owned life insurance income 1,230 1,153 705 699 719 3,787 3,981 Net gain on sales of investment securities - - - 30 5 30 145 Net gain on mortgage banking activities 436 817 1,230 1,929 2,518 4,412 15,141 Other income 2,164 867 741 728 1,008 4,500 4,482 Total noninterest income 20,458 17,959 18,998 20,470 19,192 77,885 83,224 Noninterest expense: Salaries, benefits and commissions 29,028 29,400 29,133 28,245 27,374 115,806 104,191 Net occupancy 2,551 2,504 2,422 2,716 2,477 10,193 10,397 Equipment 977 968 977 982 985 3,904 3,899 Data processing 4,039 3,901 3,708 3,567 3,355 15,215 12,743 Professional fees 1,829 2,521 2,844 2,138 1,750 9,332 7,687 Marketing and advertising 739 605 693 425 683 2,462 2,063 Deposit insurance premiums 708 662 812 893 698 3,075 2,712 Intangible expenses 301 309 342 341 267 1,293 979 Restructuring charges 184 - - - - 184 - Other expense 6,970 5,795 6,440 6,105 5,746 25,310 22,738 Total noninterest expense 47,326 46,665 47,371 45,412 43,335 186,774 167,409 Income before taxes 29,632 25,986 16,424 25,168 21,990 97,210 114,330 Income tax expense 5,796 5,185 3,258 4,851 4,578 19,090 22,529 Net income $ 23,836 $ 20,801 $ 13,166 $ 20,317 $ 17,412 $ 78,120 $ 91,801 Net income per share: Basic $ 0.82 $ 0.71 $ 0.45 $ 0.69 $ 0.59 $ 2.66 $ 3.12 Diluted $ 0.81 $ 0.71 $ 0.45 $ 0.68 $ 0.59 $ 2.64 $ 3.11 Dividends declared per share $ 0.21 $ 0.21 $ 0.21 $ 0.20 $ 0.20 $ 0.83 $ 0.80 Weighted average shares outstanding 29,251,293 29,290,829 29,490,154 29,542,467 29,471,304 29,392,606 29,402,845 Period end shares outstanding 29,271,915 29,242,451 29,365,775 29,636,425 29,500,542 29,271,915 29,500,542
Univest Financial Corporation Consolidated Selected Financial Data (Unaudited) December 31, 2022 For the three months ended, For the twelve months ended, Profitability Ratios (annualized) 12/31/22 09/30/22 06/30/22 03/31/22 12/31/21 12/31/22 12/31/21 Return on average assets 1.35 % 1.21 % 0.76 % 1.17 % 0.97 % 1.12 % 1.38 % Return on average assets, excluding restructuring 1.36 % 1.21 % 0.76 % 1.17 % 0.97 % 1.13 % 1.38 % charges (1) Return on average shareholders' equity 12.33 % 10.67 % 6.85 % 10.64 % 9.06 % 10.13 % 12.50 % Return on average shareholders' equity, excluding 12.40 % 10.67 % 6.85 % 10.64 % 9.06 % 10.14 % 12.50 % restructuring charges (1) Return on average tangible common equity (1)(3) 16.23 % 14.06 % 9.10 % 14.04 % 11.93 % 13.36 % 16.55 % Return on average tangible common equity, excluding 16.33 % 14.06 % 9.10 % 14.04 % 11.93 % 13.39 % 16.55 % restructuring charges (1)(3) Net interest margin (FTE) 3.76 % 3.67 % 3.19 % 2.89 % 2.86 % 3.38 % 3.06 % Efficiency ratio (2) 56.9 % 60.6 % 66.6 % 67.0 % 64.3 % 62.4 % 60.9 % Efficiency ratio, excluding restructuring charges (1)(2) 56.7 % 60.6 % 66.6 % 67.0 % 64.3 % 62.4 % 60.9 % Capitalization Ratios Dividends declared to net income 25.8 % 29.6 % 47.1 % 29.1 % 33.9 % 31.2 % 25.6 % Shareholders' equity to assets (Period End) 10.75 % 10.92 % 11.40 % 10.89 % 10.86 % 10.75 % 10.86 % Tangible common equity to tangible assets (1) 8.49 % 8.55 % 8.97 % 8.58 % 8.56 % 8.49 % 8.56 % Common equity book value per share $ 26.53 $ 25.79 $ 26.01 $ 26.11 $ 26.23 $ 26.53 $ 26.23 Tangible common equity book value per share (1) $ 20.42 $ 19.67 $ 19.91 $ 20.06 $ 20.14 $ 20.42 $ 20.14 Regulatory Capital Ratios (Period End) Tier 1 leverage ratio 9.81 % 9.87 % 9.45 % 9.35 % 9.13 % 9.81 % 9.13 % Common equity tier 1 risk-based capital ratio 10.37 % 10.51 % 10.62 % 11.07 % 11.08 % 10.37 % 11.08 % Tier 1 risk-based capital ratio 10.37 % 10.51 % 10.62 % 11.07 % 11.08 % 10.37 % 11.08 % Total risk-based capital ratio 13.67 % 13.10 % 13.23 % 13.73 % 13.77 % 13.67 % 13.77 % (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 December 31, 2022 September 30, 2022 Average Income/ Average Average Income/ Average (Dollars in thousands) Balance Expense Rate Balance Expense Rate Assets: Interest-earning deposits with other banks $ 57,059 $ 487 3.39 % $ 49,476 $ 252 2.02 % U.S. government obligations - - - 565 3 2.11 Obligations of state and political subdivisions* 2,266 17 2.98 2,308 18 3.09 Other debt and equity securities 503,451 3,316 2.61 514,462 3,010 2.32 Federal Home Loan Bank, Federal Reserve Bank and other stock 29,401 493 6.65 28,368 435 6.08 Total interest-earning deposits, investments and other interest-earning assets 592,177 4,313 2.89 595,179 3,718 2.48 Commercial, financial, and agricultural loans 1,004,940 14,460 5.71 977,549 11,996 4.87 Paycheck Protection Program loans 2,181 11 2.00 3,754 40 4.23 Real estate—commercial and construction loans 3,223,822 39,459 4.86 3,105,821 34,100 4.36 Real estate—residential loans 1,335,220 14,340 4.26 1,256,509 12,492 3.94 Loans to individuals 26,772 401 5.94 27,197 381 5.56 Municipal loans and leases * 233,684 2,433 4.13 235,433 2,432 4.10 Lease financings 152,962 2,416 6.27 145,856 2,195 5.97 Gross loans and leases 5,979,581 73,520 4.88 5,752,119 63,636 4.39 Total interest-earning assets 6,571,758 77,833 4.70 6,347,298 67,354 4.21 Cash and due from banks 56,428 62,930 Allowance for credit losses, loans and leases (75,390 ) (72,355 ) Premises and equipment, net 50,803 50,476 Operating lease right-of-use assets 30,413 30,740 Other assets 385,369 378,377 Total assets $ 7,019,381 $ 6,797,466 Liabilities: Interest-bearing checking deposits $ 924,012 $ 2,746 1.18 % $ 881,395 $ 1,251 0.56 % Money market savings 1,365,502 7,670 2.23 1,246,795 3,709 1.18 Regular savings 1,045,261 492 0.19 1,086,191 302 0.11 Time deposits 433,010 1,586 1.45 416,539 1,189 1.13 Total time and interest-bearing deposits 3,767,785 12,494 1.32 3,630,920 6,451 0.70 Short-term borrowings 101,126 852 3.34 104,453 524 1.99 Long-term debt 95,000 324 1.35 95,000 324 1.35 Subordinated notes 124,250 1,815 5.80 99,065 1,328 5.32 Total borrowings 320,376 2,991 3.70 298,518 2,176 2.89 Total interest-bearing liabilities 4,088,161 15,485 1.50 3,929,438 8,627 0.87 Noninterest-bearing deposits 2,070,038 2,014,371 Operating lease liabilities 33,492 33,786 Accrued expenses and other liabilities 60,498 46,772 Total liabilities 6,252,189 6,024,367 Shareholders' Equity: Common stock 157,784 157,784 Additional paid-in capital 300,121 299,135 Retained earnings and other equity 309,287 316,180 Total shareholders' equity 767,192 773,099 Total liabilities and shareholders' equity $ 7,019,381 $ 6,797,466 Net interest income - $ 62,348 $ - $ 58,727 Net interest spread 3.20 3.34 Effect of net interest-free funding sources 0.56 0.33 Net interest margin 3.76 % 3.67 % Ratio of average interest-earning assets to average interest-bearing liabilities 160.75 % 161.53 % * 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 of $(516) thousand and $(498) thousand for the three months ended December 31, 2022 and September 30, 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 December 31, 2022 and September 30, 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 December 31, 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 $ 57,059 $ 487 3.39 % $ 914,287 $ 370 0.16 % U.S. government obligations - - - 6,999 37 2.10 Obligations of state and political subdivisions* 2,266 17 2.98 2,334 19 3.23 Other debt and equity securities 503,451 3,316 2.61 460,255 1,845 1.59 Federal Home Loan Bank, Federal Reserve Bank and other stock 29,401 493 6.65 28,402 375 5.24 Total interest-earning deposits, investments and other interest-earning assets 592,177 4,313 2.89 1,412,277 2,646 0.74 Commercial, financial, and agricultural loans 1,004,940 14,460 5.71 869,471 7,022 3.20 Paycheck Protection Program loans 2,181 11 2.00 53,745 1,568 11.57 Real estate—commercial and construction loans 3,223,822 39,459 4.86 2,826,720 26,669 3.74 Real estate—residential loans 1,335,220 14,340 4.26 1,107,911 10,165 3.64 Loans to individuals 26,772 401 5.94 26,462 249 3.73 Municipal loans and leases* 233,684 2,433 4.13 245,038 2,515 4.07 Lease financings 152,962 2,416 6.27 125,932 1,951 6.15 Gross loans and leases 5,979,581 73,520 4.88 5,255,279 50,139 3.79 Total interest-earning assets 6,571,758 77,833 4.70 6,667,556 52,785 3.14 Cash and due from banks 56,428 54,958 Allowance for credit losses, loans and leases (75,390 ) (71,020 ) Premises and equipment, net 50,803 56,087 Operating lease right-of-use assets 30,413 31,048 Other assets 385,369 349,660 Total assets $ 7,019,381 $ 7,088,289 Liabilities: Interest-bearing checking deposits $ 924,012 $ 2,746 1.18 % $ 939,478 $ 493 0.21 % Money market savings 1,365,502 7,670 2.23 1,616,890 968 0.24 Regular savings 1,045,261 492 0.19 997,814 253 0.10 Time deposits 433,010 1,586 1.45 487,434 1,370 1.12 Total time and interest-bearing deposits 3,767,785 12,494 1.32 4,041,616 3,084 0.30 Short-term borrowings 101,126 852 3.34 14,144 1 0.03 Long-term debt 95,000 324 1.35 95,000 325 1.36 Subordinated notes 124,250 1,815 5.80 98,833 1,327 5.33 Total borrowings 320,376 2,991 3.70 207,977 1,653 3.15 Total interest-bearing liabilities 4,088,161 15,485 1.50 4,249,593 4,737 0.44 Noninterest-bearing deposits 2,070,038 2,000,182 Operating lease liabilities 33,492 34,114 Accrued expenses and other liabilities 60,498 42,066 Total liabilities 6,252,189 6,325,955 Shareholders' Equity: Common stock 157,784 157,784 Additional paid-in capital 300,121 298,508 Retained earnings and other equity 309,287 306,042 Total shareholders' equity 767,192 762,334 Total liabilities and shareholders' equity $ 7,019,381 $ 7,088,289 Net interest income - $ 62,348 $ 48,048 Net interest spread 3.20 2.70 Effect of net interest-free funding sources 0.56 0.16 Net interest margin 3.76 % 2.86 % Ratio of average interest-earning assets to average interest-bearing liabilities 160.75 % 156.90 % * 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 $(516) thousand and $707 thousand for the three months ended December 31, 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 December 31, 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 Twelve Months Ended December 31, 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 $ 325,875 $ 1,920 0.59 % $ 476,351 $ 661 0.14 % U.S. government obligations 1,929 40 2.07 6,999 144 2.06 Obligations of state and political subdivisions* 2,302 71 3.08 5,702 206 3.61 Other debt and equity securities 510,961 11,392 2.23 393,762 5,992 1.52 Federal Home Loan Bank, Federal Reserve Bank and other stock 27,784 1,627 5.86 26,844 1,417 5.28 Total interest-earning deposits, investments and other interest-earning assets 868,851 15,050 1.73 909,658 8,420 0.93 Commercial, financial, and agricultural loans 955,816 43,064 4.51 840,133 28,142 3.35 Paycheck Protection Program loans 7,939 797 10.04 281,484 15,032 5.34 Real estate—commercial and construction loans 3,060,689 127,906 4.18 2,734,259 101,692 3.72 Real estate—residential loans 1,219,275 47,472 3.89 1,077,952 40,045 3.71 Loans to individuals 26,642 1,325 4.97 26,062 1,018 3.91 Municipal loans and leases* 236,858 9,703 4.10 247,396 10,147 4.10 Lease financings 144,046 8,791 6.10 115,189 7,363 6.39 Gross loans and leases 5,651,265 239,058 4.23 5,322,475 203,439 3.82 Total interest-earning assets 6,520,116 254,108 3.90 6,232,133 211,859 3.40 Cash and due from banks 57,196 55,724 Allowance for credit losses, loans and leases (72,069 ) (74,943 ) Premises and equipment, net 51,362 55,875 Operating lease right-of-use assets 30,443 32,758 Other assets 369,244 353,896 Total assets $ 6,956,292 $ 6,655,443 Liabilities: Interest-bearing checking deposits $ 884,656 $ 5,010 0.57 % $ 850,713 $ 2,007 0.24 % Money market savings 1,389,226 13,835 1.00 1,366,762 3,574 0.26 Regular savings 1,056,019 1,269 0.12 983,752 1,114 0.11 Time deposits 443,845 5,308 1.20 498,638 6,178 1.24 Total time and interest-bearing deposits 3,773,746 25,422 0.67 3,699,865 12,873 0.35 Short-term borrowings 60,468 1,389 2.30 16,552 8 0.05 Long-term debt 95,000 1,287 1.35 96,562 1,318 1.36 Subordinated notes 105,356 5,798 5.50 137,896 7,149 5.18 Total borrowings 260,824 8,474 3.25 251,010 8,475 3.38 Total interest-bearing liabilities 4,034,570 33,896 0.84 3,950,875 21,348 0.54 Noninterest-bearing deposits 2,068,086 1,891,330 Operating lease liabilities 33,508 36,001 Accrued expenses and other liabilities 48,629 42,781 Total liabilities 6,184,793 5,920,987 Shareholders' Equity: Common stock 157,784 157,784 Additional paid-in capital 299,121 297,189 Retained earnings and other equity 314,594 279,483 Total shareholders' equity 771,499 734,456 Total liabilities and shareholders' equity $ 6,956,292 $ 6,655,443 Net interest income - $ 220,212 $ 190,511 Net interest spread 3.06 2.86 Effect of net interest-free funding sources 0.32 0.20 Net interest margin 3.38 % 3.06 % Ratio of average interest-earning assets to average interest-bearing liabilities 161.61 % 157.74 % * 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 $(1.8) million and $8.7 million for the twelve months ended December 31, 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 twelve months ended December 31, 2022 and 2021 have been calculated using the Corporation’s federal applicable rate of 21.0% .
Univest Financial Corporation Loan Portfolio Overview (Unaudited) December 31, 2022 (Dollars in thousands) Industry Description Total Outstanding Balance (excl PPP) % of Commercial Loan Portfolio CRE - Retail $ 440,112 8.8 % Animal Production 340,877 6.9 CRE - Office 292,740 5.9 CRE - Multi-family 277,157 5.6 CRE - 1-4 Family Residential Investment 266,423 5.3 Hotels & Motels (Accommodation) 191,735 3.9 CRE - Industrial / Warehouse 174,357 3.5 Nursing and Residential Care Facilities 169,443 3.4 Education 163,310 3.3 Specialty Trade Contractors 153,422 3.1 Homebuilding (tract developers, remodelers) 149,935 3.0 Merchant Wholesalers, Durable Goods 136,707 2.7 Motor Vehicle and Parts Dealers 122,291 2.5 Credit Intermediation and Other Related Activities 114,124 2.3 CRE - Mixed-Use - Residential 109,812 2.2 Crop Production 91,597 1.8 Administrative and Support Services 79,600 1.6 CRE - Mixed-Use - Commercial 77,790 1.6 Religious Organizations, Advocacy Groups 74,980 1.5 Wood Product Manufacturing 74,913 1.5 Rental and Leasing Services 74,158 1.5 Food Manufacturing 73,755 1.5 Food Services and Drinking Places 68,056 1.4 Merchant Wholesalers, Nondurable Goods 63,539 1.3 Personal and Laundry Services 59,796 1.2 Repair and Maintenance 56,870 1.1 Fabricated Metal Product Manufacturing 55,546 1.1 Miniwarehouse / Self-Storage 55,543 1.1 Amusement, Gambling, and Recreation Industries 55,248 1.1 Private Equity & Special Purpose Entities 53,818 1.1 Truck Transportation 50,182 1.0 Industries with >$50 million in outstandings $ 4,167,836 83.8 % Industries with <$50 million in outstandings $ 806,965 16.2 % Total Commercial Loans $ 4,974,801 100.0 % Consumer Loans and Lease Financings Total Outstanding Balance Real Estate-Residential Secured for Personal Purpose $ 730,395 Real Estate-Home Equity Secured for Personal Purpose 176,699 Loans to Individuals 27,873 Lease Financings 211,315 Total - Consumer Loans and Lease Financings $ 1,146,282 Total $ 6,121,083
Univest Financial Corporation Non-GAAP Reconciliation December 31, 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. As of or for the three months ended, As of or for the twelve months ended, (Dollars in thousands) 12/31/22 09/30/22 06/30/22 03/31/22 12/31/21 12/31/22 12/31/21 Restructuring charges (a) $ 184 $ - $ - $ - $ - $ 184 $ - Tax effect of restructuring charges (39 ) - - - - (39 ) - Restructuring charges, net of tax $ 145 $ - $ - $ - $ - $ 145 $ - Net income $ 23,836 $ 20,801 $ 13,166 $ 20,317 $ 17,412 $ 78,120 $ 91,801 Amortization of intangibles, net of tax 238 244 270 269 211 1,021 773 Net income before amortization of intangibles $ 24,074 $ 21,045 $ 13,436 $ 20,586 $ 17,623 $ 79,141 $ 92,574 Shareholders' equity $ 776,500 $ 754,187 $ 763,925 $ 773,855 $ 773,794 $ 776,500 $ 773,794 Goodwill (175,510 ) (175,510 ) (175,510 ) (175,510 ) (175,510 ) (175,510 ) (175,510 ) Other intangibles (b) (3,251 ) (3,485 ) (3,678 ) (3,936 ) (4,210 ) (3,251 ) (4,210 ) Tangible common equity $ 597,739 $ 575,192 $ 584,737 $ 594,409 $ 594,074 $ 597,739 $ 594,074 Total assets $ 7,222,016 $ 6,907,397 $ 6,700,813 $ 7,107,740 $ 7,122,421 $ 7,222,016 $ 7,122,421 Goodwill (175,510 ) (175,510 ) (175,510 ) (175,510 ) (175,510 ) (175,510 ) (175,510 ) Other intangibles (b) (3,251 ) (3,485 ) (3,678 ) (3,936 ) (4,210 ) (3,251 ) (4,210 ) Tangible assets $ 7,043,255 $ 6,728,402 $ 6,521,625 $ 6,928,294 $ 6,942,701 $ 7,043,255 $ 6,942,701 Average shareholders' equity $ 767,192 $ 773,099 $ 771,410 $ 774,358 $ 762,334 $ 771,499 $ 734,456 Average goodwill (175,510 ) (175,510 ) (175,510 ) (175,510 ) (173,553 ) (175,510 ) (172,810 ) Average other intangibles (b) (3,355 ) (3,550 ) (3,791 ) (4,090 ) (2,696 ) (3,694 ) (2,338 ) Average tangible common equity $ 588,327 $ 594,039 $ 592,109 $ 594,758 $ 586,085 $ 592,295 $ 559,308 Loans and leases held for investment, gross $ 6,123,230 $ 5,849,259 $ 5,661,777 $ 5,400,786 $ 5,310,017 $ 6,123,230 $ 5,310,017 Paycheck Protection Program ("PPP") loans (2,147 ) (2,207 ) (5,358 ) (10,298 ) (31,748 ) (2,147 ) (31,748 ) Gross loans and leases excluding PPP loans $ 6,121,083 $ 5,847,052 $ 5,656,419 $ 5,390,488 $ 5,278,269 $ 6,121,083 $ 5,278,269 (a) Associated with the consolidation of 2 financial centers (b) Amount does not include mortgage servicing rights
