Univest Financial Corporation Reports Fourth Quarter and 2021 Results

·25 min read
GlobeNewswire Inc.

(Loan Growth of 9.4% for last twelve months (excluding PPP loans1))

SOUDERTON, Pa., Jan. 26, 2022 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. (the "Bank") and its insurance, investments and equipment financing subsidiaries, today announced net income for the year ended December 31, 2021 of $91.8 million, or $3.11 diluted earnings per share, compared to net income of $46.9 million, or $1.60 diluted earnings per share, for the year ended December 31, 2020. Net income for the quarter ended December 31, 2021 was $17.4 million, or $0.59 diluted earnings per share, compared to net income of $25.9 million, or $0.88 diluted earnings per share, for the quarter ended December 31, 2020.

Pre-tax pre-provision income1 for the year ended December 31, 2021 was $104.2 million, an increase of $6.5 million, or 6.7%, from the prior year. Pre-tax pre-provision income1 for the quarter ended December 31, 2021 was $23.4 million, an increase of $456 thousand, or 2.0%, from the fourth quarter of 2020.

Acquisition
On December 1, 2021, Univest Insurance, LLC., the Bank's insurance subsidiary, completed the acquisition of the Paul I. Sheaffer Insurance Agency, a full-service firm providing insurance solutions to businesses and individuals in Central Pennsylvania.

Paycheck Protection Program
As of December 31, 2021, $31.7 million in PPP loans remain outstanding. During the fourth quarter, we recorded income of $1.6 million within net interest income related to these loans, of which $1.4 million was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $55.4 million. During the year ended December 31, 2021, we recorded income of $15.0 million within net interest income related to these loans, of which $10.4 million was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $630.7 million. As of December 31, 2021, we had $817 thousand of net deferred fees on our balance sheet, which represented approximately 4.5% of the initial deferred fee amount.

Loans
Gross loans and leases, excluding PPP loans1, increased $455.2 million, or 9.4%, from December 31, 2020 due to increases in commercial, construction, commercial real estate, and residential mortgage loans and lease financings. Gross loans and leases, excluding PPP loans1, increased $111.8 million, or 8.7% (annualized), from September 30, 2021 due to increases in construction, commercial real estate and commercial loans and lease financings.

Deposits
Total deposits increased $812.4 million, or 15.5%, from December 31, 2020, primarily due to increases in commercial, consumer and public funds deposits offset by a decrease in brokered deposits. Total deposits increased $117.0 million, or 7.9% (annualized), from September 30, 2021, primarily due to increases in commercial and consumer deposits offset by a decrease in public funds deposits.

Net Interest Income and Margin
Net interest income of $47.5 million for the three months ended December 31, 2021 increased $3.0 million, or 6.7%, from the three months ended December 31, 2020. The increase in net interest income for the three months ended December 31, 2021 compared to the same period of 2020 was primarily due to overall growth in loans, led by an increase in commercial real estate loan income of $2.2 million, and a $2.1 million decrease in the cost of interest-bearing liabilities offset by a decrease in PPP loan income of $1.6 million.

Net interest income of $188.4 million for the year ended December 31, 2021 increased $14.0 million, or 8.0%, from the prior year. The increase in net interest income for the year ended December 31, 2021 compared to 2020 was primarily due to an increase in PPP loan income of $7.0 million, an $8.2 million decrease in the cost of interest-bearing liabilities and growth in loans, primarily commercial real estate loans, partially offset by a decrease in loan yields, excluding PPP loans, and investment yields.

Net interest margin, on a tax-equivalent basis, was 2.86% for the fourth quarter of 2021, compared to 3.11% for the third quarter of 2021 and 3.02% for the fourth quarter of 2020. Excess liquidity reduced net interest margin by approximately 43 basis points for the quarter ended December 31, 2021 compared to 27 basis points for the quarter ended September 30, 2021 and 13 basis points for the quarter ended December 31, 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 eight basis points for the quarter ended December 31, 2021 compared to 20 basis points for the quarter ended September 30, 2021 and an unfavorable impact of seven basis points for the quarter ended December 31, 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 3.21% for the quarter ended December 31, 2021 compared to 3.18% for the quarter ended September 30, 2021 and 3.22% for the quarter ended December 31, 2020.

Net interest margin, on a tax-equivalent basis, was 3.06% for the year ended December 31, 2021, compared to 3.16% for the year ended December 31, 2020. Excess liquidity reduced net interest margin by approximately 23 basis points for the year ended December 31, 2021 compared to 14 basis points for the year ended December 31, 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 11 basis points for the year ended December 31, 2021 compared to an unfavorable impact of seven basis points for the year ended December 31, 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.18% for the year ended December 31, 2021 compared to 3.37% for the year ended December 31, 2020.

Noninterest Income
Noninterest income for the quarter ended December 31, 2021 was $19.2 million, a decrease of $947 thousand, or 4.7%, from the comparable period in the prior year. Noninterest income for the year ended December 31, 2021 was $83.2 million, an increase of $4.9 million, or 6.3%, from the prior year.

Net gain on mortgage banking activities decreased $1.8 million, or 41.8%, for the quarter and $1.3 million, or 7.9%, for the year ended December 31, 2021 compared to the comparable periods in the prior year. The decrease for the three months and year ended December 31, 2021 was primarily due to a decrease in volume and a contraction of margins. Investment advisory commission and fee income increased $741 thousand, or 17.9%, for the quarter and $3.0 million, or 18.8%, for the year ended December 31, 2021 compared to the comparable periods in the prior year, due to increased assets under management driven by new customer relationships and favorable market conditions. BOLI income decreased $14 thousand, or 1.9%, for the quarter and increased $1.0 million, or 35.4%, for the year ended December 31, 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 quarters of 2021, respectively.

Other service fee income increased $667 thousand, or 31.9%, for the quarter and $2.7 million, or 36.2%, for the year ended December 31, 2021 compared to the comparable periods in the prior year. Interchange fee income increased $260 thousand for the quarter and $1.2 million for the year ended December 31, 2021 compared to the comparable periods in the prior year, due to increased customer activity. Mortgage servicing fees increased $299 thousand for the quarter and $1.2 million for the year ended December 31, 2021 compared to the comparable period in the prior year, driven by an increase in retained servicing associated with elevated mortgage volume and reduced amortization due to decreased refinance activity and lower prepayment assumptions.

Other income decreased $928 thousand, or 47.9%, for the quarter and $1.5 million, or 24.7%, for the year ended December 31, 2021 compared to comparable periods in the prior year. Fees on risk participation agreements for interest rate swaps decreased $1.2 million and $3.5 million during the quarter and year ended December 31, 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 $354 thousand and $1.3 million during the quarter and year ended December 31, 2021, respectively, compared to comparable periods in the prior year. This increase was reflective of the Corporation's continued commitment to delivering comprehensive financial solutions to small businesses through the expansion of the SBA lending team during the first half of 2021. Other income also increased $347 thousand driven by an increase in the fair value of equity securities during the year ended December 31, 2021 compared to the year ended December 31, 2020.

Noninterest Expense
Noninterest expense for the quarter ended December 31, 2021 was $43.3 million, an increase of $1.6 million, or 3.8%, from the comparable period in the prior year. Noninterest expense for the year ended December 31, 2021 was $167.4 million, an increase of $12.4 million, or 8.0%, from the prior year.

Salaries, benefits and commissions increased $3.8 million, or 15.9%, for the quarter and $11.0 million, or 11.8%, for the year ended December 31, 2021 compared to 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. The Corporation modified the vesting criteria for performance-based restricted stock grants in 2020 to better reflect the operating environment, which resulted in a benefit of $928 thousand in salaries, benefits and commissions in the fourth quarter of 2020. Additionally, variable incentive compensation expenses increased $999 thousand and $3.6 million for the quarter and year ended December 31, 2021, respectively, from the comparable periods in the prior year, due to increased profitability.

Professional fees increased $314 thousand, or 21.9%, for the quarter and $2.3 million, or 44.0%, for the year ended December 31, 2021 compared to 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 2021, we spent $1.5 million on these initiatives. These expenses are not expected to re-occur in subsequent periods. Data processing expenses increased $394 thousand, or 13.3%, for the quarter and $1.4 million, or 12.4%, for the year ended December 31, 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.

Restructuring charges decreased $1.4 million for the quarter and year ended December 31, 2021 compared to the comparable periods in the prior year. These charges relate to the Corporation's financial center optimization plan announced in the fourth quarter of 2020. Other expense decreased $1.3 million, or 18.1%, for the quarter and $961 thousand, or 4.1%, for the year ended December 31, 2021 compared to the comparable periods in the prior year, primarily driven by extinguishment of long-term debt expense of $1.1 million and $1.8 million for the quarter and year ended December 31, 2020, respectively, offset primarily by increases in interchange expense driven by increased customer activity.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $34.0 million at December 31, 2021, compared to $37.1 million at September 30, 2021 and $40.5 million at December 31, 2020.

Net loan and lease recoveries were $243 thousand during the fourth quarter of 2021 compared to net loan and lease charge-offs of $618 thousand for the same period in the prior year. The provision for credit losses was $1.4 million for the fourth quarter of 2021, of which $788 thousand (after-tax expense of $623 thousand), or $0.02 diluted earnings per share, was attributable to unfavorable changes in economic-related assumptions within the Corporation’s CECL model and $1.3 million was attributable to an increase in reserves for loans. These increases were offset by a decrease of $681 thousand in reserves for unfunded commitments and investment securities. The reversal of provision for credit losses was $8.7 million for the comparable period in the prior year, due to a reserve decrease of $8.2 million related to loans and leases and $690 thousand related to unfunded commitments, offset by a reserve increase of $176 thousand related to investment securities. $11.6 million (after-tax benefit of $9.2 million), or $0.31 diluted earnings per share, of the $8.7 million reversal of provision for credit losses was attributable to changes in economic-related assumptions within the Corporation’s CECL model.

Net loan and lease charge-offs were $213 thousand for the year ended December 31, 2021 compared to $4.6 million for the same period in the prior year. The reversal of provision for credit losses was $10.1 million for the year ended December 31, 2021, of which $17.9 million (after-tax benefit of $14.2 million), or $0.48 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model partially offset by a $7.4 million increase in reserves for loans. The provision for credit losses was $40.8 million for the prior year due to a reserve increase of $39.4 million related to loans and leases, $786 thousand related to reserves for unfunded commitments, and $569 thousand related to investment securities. $27.4 million (after-tax charge of $21.6 million), or $0.74 diluted earnings per share, of the $40.8 million of provision for credit losses was attributable to changes in economic-related assumptions within the Corporation’s CECL model.

The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.35% at December 31, 2021, compared to 1.34% at September 30, 2021, and 1.56% at December 31, 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 December 31, 2021 compared to 1.36% at September 30, 2021 and 1.72% at December 31, 2020.

Tax Provision
The effective income tax rate was 19.7% for the year ended December 31, 2021 compared to an effective income tax rate of 17.5% for the year ended December 31, 2020. The effective tax rate for the year ended December 31, 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.

Dividend
On January 26, 2022, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on February 23, 2022 to shareholders of record as of February 9, 2022.

Conference Call
Univest will host a conference call to discuss fourth quarter and year end 2021 results on Thursday, January 27, 2022 at 9:00 a.m. EST. Participants may preregister at https://www.incommglobalevents.com/registration/q4inc/9616/univest-financial-corporation-to-hold-fourth-quarter-and-year-end-2021-earnings-call/. The general public can access the call by dialing 1-844-200-6205; using Access Code 454983. A replay of the conference call will be available through February 28, 2022 by dialing 1-866-813-9403; using Access Code: 298990.

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 $7.1 billion in assets and $4.9 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 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 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 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) 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 that may adversely affect businesses; (7) technological issues that may adversely affect our 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. 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 continuing market turmoil; (7) 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; and (8) our cyber security risks are increased 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)

December 31, 2021

(Dollars in thousands)

Balance Sheet (Period End)

12/31/21

09/30/21

06/30/21

03/31/21

12/31/20

Assets

$

7,122,421

$

6,979,852

$

6,356,305

$

6,416,665

$

6,336,496

Cash and cash equivalents

890,150

902,357

203,449

187,317

219,858

Investment securities, net of allowance for credit losses

496,989

393,377

397,426

377,506

373,176

Loans held for sale

21,600

29,093

27,322

22,636

37,039

Loans and leases held for investment, gross

5,310,017

5,252,045

5,327,313

5,415,006

5,306,841

Allowance for credit losses, loans and leases

71,924

70,146

71,355

71,497

83,044

Loans and leases held for investment, net

5,238,093

5,181,899

5,255,958

5,343,509

5,223,797

Total deposits

6,055,124

5,938,154

5,318,704

5,311,592

5,242,715

Noninterest-bearing deposits

2,065,423

1,861,007

1,872,031

1,857,547

1,690,663

Interest-bearing demand, money market and savings

3,505,535

3,583,107

2,954,450

2,979,834

2,988,277

Time deposits

484,166

494,040

492,223

474,211

563,775

Borrowings

213,980

207,898

218,970

295,293

311,421

Shareholders' equity

773,794

756,023

739,998

722,455

692,472

Balance Sheet (Average)

For the three months ended,

For the twelve months ended,

12/31/21

09/30/21

06/30/21

03/31/21

12/31/20

12/31/21

12/31/20

Assets

$

7,088,289

$

6,698,177

$

6,443,629

$

6,383,463

$

6,353,519

$

6,655,443

$

6,006,877

Investment securities, net of allowance for credit losses

469,588

395,280

385,694

374,369

369,511

406,463

402,011

Loans and leases, gross

5,255,279

5,320,411

5,389,110

5,325,897

5,253,720

5,322,475

4,888,801

Deposits

6,041,798

5,666,725

5,351,089

5,296,147

5,222,452

5,591,195

4,850,890

Shareholders' equity

762,334

746,185

728,750

699,736

676,426

734,456

668,201

Asset Quality Data (Period End)

12/31/21

09/30/21

06/30/21

03/31/21

12/31/20

Nonaccrual loans and leases, including nonaccrual troubled debt restructured

loans and leases and nonaccrual loans held for sale

$

33,210

$

34,528

$

37,466

$

29,996

$

31,692

Accruing loans and leases 90 days or more past due

498

2,204

750

664

1,392

Accruing troubled debt restructured loans and leases

51

51

52

52

53

Total nonperforming loans and leases

33,759

36,783

38,268

30,712

33,137

Other real estate owned

279

279

279

7,481

7,355

Total nonperforming assets

$

34,038

$

37,062

$

38,547

$

38,193

$

40,492

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

0.63

%

0.66

%

0.70

%

0.55

%

0.60

%

Nonperforming loans and leases / Loans and leases held for investment

0.64

%

0.70

%

0.72

%

0.57

%

0.62

%

Nonperforming assets / Total assets

0.48

%

0.53

%

0.61

%

0.60

%

0.64

%

Allowance for credit losses, loans and leases

$

71,924

$

70,146

$

71,355

$

71,497

$

83,044

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

1.35

%

1.34

%

1.34

%

1.32

%

1.56

%

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

1.36

%

1.36

%

1.41

%

1.46

%

1.72

%

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

216.57

%

203.16

%

212.97

%

238.36

%

262.03

%

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

213.05

%

190.70

%

208.00

%

232.80

%

250.61

%

For the three months ended,

For the twelve months ended,

12/31/21

09/30/21

06/30/21

03/31/21

12/31/20

12/31/21

12/31/20

Net loan and lease (recoveries) charge-offs

$

(243

)

$

(75

)

$

243

$

288

$

618

$

213

$

4,648

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

(0.02

%)

(0.01

%)

0.02

%

0.02

%

0.05

%

0.00

%

0.10

%

(1) Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included at the end of this document.


Univest Financial Corporation

Consolidated Selected Financial Data (Unaudited)

December 31, 2021

(Dollars in thousands, except per share data)

For the three months ended,

For the twelve months ended,

For the period:

12/31/21

09/30/21

06/30/21

03/31/21

12/31/20

12/31/21

12/31/20

Interest income

$

52,262

$

53,571

$

52,441

$

51,457

$

51,334

$

209,731

$

203,945

Interest expense

4,737

4,884

5,684

6,043

6,813

21,348

29,584

Net interest income

47,525

48,687

46,757

45,414

44,521

188,383

174,361

Provision (reversal of provision) for credit losses

1,392

(182

)

(59

)

(11,283

)

(8,721

)

(10,132

)

40,794

Net interest income after provision for credit losses

46,133

48,869

46,816

56,697

53,242

198,515

133,567

Noninterest income:

Trust fee income

2,086

2,126

2,157

2,034

1,974

8,403

7,703

Service charges on deposit accounts

1,486

1,422

1,314

1,282

1,371

5,504

4,845

Investment advisory commission and fee income

4,885

4,796

4,558

4,697

4,144

18,936

15,944

Insurance commission and fee income

3,726

3,837

3,839

4,955

3,512

16,357

16,087

Other service fee income

2,759

2,576

2,748

2,192

2,092

10,275

7,543

Bank owned life insurance income

719

925

1,620

717

733

3,981

2,940

Net gain on sales of investment securities

5

21

54

65

54

145

871

Net gain on mortgage banking activities

2,518

3,224

3,461

5,938

4,323

15,141

16,442

Other income

1,008

1,625

479

1,370

1,936

4,482

5,953

Total noninterest income

19,192

20,552

20,230

23,250

20,139

83,224

78,328

Noninterest expense:

Salaries, benefits and commissions

27,374

26,641

25,396

24,780

23,613

104,191

93,208

Net occupancy

2,477

2,525

2,656

2,739

2,697

10,397

10,358

Equipment

985

1,000

968

946

951

3,899

3,841

Data processing

3,355

3,274

3,064

3,050

2,961

12,743

11,333

Professional fees

1,750

2,174

2,015

1,748

1,436

7,687

5,338

Marketing and advertising

683

539

561

280

575

2,063

1,975

Deposit insurance premiums

698

765

613

636

765

2,712

2,591

Intangible expenses

267

214

249

249

282

979

1,216

Restructuring charges

-

-

-

-

1,439

-

1,439

Other expense

5,746

6,116

5,764

5,112

7,015

22,738

23,699

Total noninterest expense

43,335

43,248

41,286

39,540

41,734

167,409

154,998

Income before taxes

21,990

26,173

25,760

40,407

31,647

114,330

56,897

Income tax expense

4,578

5,262

4,885

7,804

5,773

22,529

9,981

Net income

$

17,412

$

20,911

$

20,875

$

32,603

$

25,874

$

91,801

$

46,916

Net income per share:

Basic

$

0.59

$

0.71

$

0.71

$

1.11

$

0.88

$

3.12

$

1.60

Diluted

$

0.59

$

0.71

$

0.71

$

1.11

$

0.88

$

3.11

$

1.60

Dividends declared per share

$

0.20

$

0.20

$

0.20

$

0.20

$

-

$

0.80

$

0.60

Weighted average shares outstanding

29,471,304

29,420,256

29,389,525

29,327,432

29,274,915

29,402,845

29,243,773

Period end shares outstanding

29,500,542

29,438,402

29,411,731

29,379,575

29,295,052

29,500,542

29,295,052


Univest Financial Corporation

Consolidated Selected Financial Data (Unaudited)

December 31, 2021

For the three months ended,

For the twelve months ended,

Profitability Ratios (annualized)

12/31/21

09/30/21

06/30/21

03/31/21

12/31/20

12/31/21

12/31/20

Return on average assets

0.97

%

1.24

%

1.30

%

2.07

%

1.62

%

1.38

%

0.78

%

Return on average assets, excluding restructuring

0.97

%

1.24

%

1.30

%

2.07

%

1.69

%

1.38

%

0.80

%

charges (1)

Return on average shareholders' equity

9.06

%

11.12

%

11.49

%

18.90

%

15.22

%

12.50

%

7.02

%

Return on average shareholders' equity, excluding

9.06

%

11.12

%

11.49

%

18.90

%

15.89

%

12.50

%

7.19

%

restructuring charges (1)

Return on average tangible common equity (1)

11.79

%

14.51

%

15.11

%

25.20

%

20.54

%

16.41

%

9.52

%

Return on average tangible common equity, excluding

11.79

%

14.51

%

15.11

%

25.20

%

21.44

%

16.41

%

9.76

%

restructuring charges (1)

Net interest margin (FTE)

2.86

%

3.11

%

3.15

%

3.12

%

3.02

%

3.06

%

3.16

%

Efficiency ratio (2)

64.3

%

61.8

%

60.7

%

57.0

%

63.8

%

60.9

%

60.6

%

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

64.3

%

61.8

%

60.7

%

57.0

%

61.6

%

60.9

%

60.0

%

Capitalization Ratios

Dividends declared to net income (3)

33.9

%

28.1

%

28.2

%

18.0

%

0.0

%

25.6

%

37.4

%

Shareholders' equity to assets (Period End)

10.86

%

10.83

%

11.64

%

11.26

%

10.93

%

10.86

%

10.93

%

Tangible common equity to tangible assets (1)

8.56

%

8.55

%

9.15

%

8.77

%

8.40

%

8.56

%

8.40

%

Common equity book value per share

$

26.23

$

25.68

$

25.16

$

24.59

$

23.64

$

26.23

$

23.64

Tangible common equity book value per share (1)

$

20.14

$

19.75

$

19.22

$

18.64

$

17.66

$

20.14

$

17.66

Regulatory Capital Ratios (Period End)

Tier 1 leverage ratio

9.13

%

9.53

%

9.64

%

9.45

%

9.08

%

9.13

%

9.08

%

Common equity tier 1 risk-based capital ratio

11.08

%

11.15

%

11.04

%

11.08

%

10.76

%

11.08

%

10.76

%

Tier 1 risk-based capital ratio

11.08

%

11.15

%

11.04

%

11.08

%

10.76

%

11.08

%

10.76

%

Total risk-based capital ratio

13.77

%

13.87

%

13.82

%

15.13

%

15.31

%

13.77

%

15.31

%

(1) Non-GAAP metric. A reconciliation of this and other non-GAAP financial 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

December 31, 2021

September 30, 2021

Average

Income/

Average

Average

Income/

Average

(Dollars in thousands)

Balance

Expense

Rate

Balance

Expense

Rate

Assets:

Interest-earning deposits with other banks

$

914,287

$

370

0.16

%

$

530,191

$

189

0.14

%

U.S. government obligations

6,999

37

2.10

6,999

36

2.04

Obligations of state and political subdivisions

2,334

19

3.23

2,992

24

3.18

Other debt and equity securities

460,255

1,845

1.59

385,289

1,516

1.56

Federal Home Loan Bank, Federal Reserve Bank and other stock

28,402

375

5.24

26,713

334

4.96

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

1,412,277

2,646

0.74

952,184

2,099

0.87

Commercial, financial, and agricultural loans

869,471

7,022

3.20

880,986

7,412

3.34

Paycheck Protection Program loans

53,745

1,568

11.57

162,611

4,162

10.15

Real estate—commercial and construction loans

2,826,720

26,669

3.74

2,784,398

25,634

3.65

Real estate—residential loans

1,107,911

10,165

3.64

1,100,799

10,171

3.67

Loans to individuals

26,462

249

3.73

26,048

253

3.85

Municipal loans and leases

245,038

2,515

4.07

247,603

2,504

4.01

Lease financings

125,932

1,951

6.15

1,8...