8-K
UNIVEST FINANCIAL Corp (UVSP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 8-K
_______________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2022
_______________________
UNIVEST FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
| Pennsylvania | 0-7617 | 23-1886144 |
|---|---|---|
| (State or other jurisdiction | (Commission | (I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
14 North Main Street, Souderton, Pennsylvania 18964
(Address of principal executive office)(Zip Code)
Registrant’s telephone number, including area code (215) 721-2400
Not applicable
(Former name or former address, if changed since last report)
_______________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
Securities registered pursuant to Section 12(b) of the Act:Title of classTrading SymbolName of exchange on which registeredCommon Stock, $5 par valueUVSPThe NASDAQ Stock Market
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
|---|---|
| Emerging growth company | ☐ |
| If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
| Item 2.02 | Results of Operations and Financial Condition |
| --- | --- |
On October 26, 2022, Univest Financial Corporation (the “Corporation”), parent company of Univest Bank and Trust Co. (the "Bank"), issued a press release reporting 2022 third quarter earnings. A copy of this press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
|---|
On October 26, 2022, the Corporation and the Bank (collectively, the “Employer”) entered into change in control agreements with each of Jeffrey M. Schweitzer, President and Chief Executive Officer of the Corporation and the Bank, Michael S. Keim, Senior Executive Vice President and Chief Operating Officer of the Corporation and President of the Bank, Brian J. Richardson, Senior Executive Vice President and Chief Financial Officer of the Corporation and the Bank, and Megan D. Santana, Senior Executive Vice President and Chief Risk Officer and General Counsel of the Corporation and the Bank (collectively, the “Agreements”).
The Agreements contain substantially similar terms that replace and supersede the change in control agreements previously entered into with the executives. The initial term of the Agreements ends on December 31, 2023. The term then automatically renews as of each January 1st for an additional year, unless either party provides the other with notice of non-renewal. However, if either the Corporation or the Bank enter into a transaction that would constitute a change in control, as defined in the Agreements, the term of the Agreements will automatically extend so that it ends no sooner than two years following the effective date of the change in control.
Under the Agreements, in the event that the executive’s employment is terminated within nine months prior to or one year subsequent to a “change in control” either by the Corporation for a reason other than “cause” (as defined in the Agreements) or by the executive after the occurrence of certain specified events constituting “good reason,” the Employer will pay the executive a lump-sum cash payment equal to the sum of (i) two times the executive’s highest annual base salary in effect at the time of the termination of employment for the current and two preceding calendar years and (ii) two times the executive’s average cash bonus paid for the current and two calendar years preceding termination of employment. In addition, the executive will receive continuing medical insurance benefits for two years, or a cash payment equal to the cost to obtain such benefits.
The specified events constituting “good reason” permitting an executive to terminate employment in connection with a change in control and receive payments or benefits under the Agreements include: (i) a material diminution in the executive’s authority, duties or other terms and conditions of employment; (ii) reassignment to a location greater than 25 miles from the executive’s office on the date of the change in control (unless closer to the executive’s residence); (iii) a material diminution in the executive’s base salary; (iv) a failure to provide the executive with certain employee benefits in effect at the time of the change in control; or (v) a material breach of the Agreement.
The Agreements contain non-competition and non-solicitation covenants, which apply six months following an executive's voluntary termination of employment during the term of the agreement (other than a voluntary termination for good reason following a change in control). If the executive terminates employment following a change in control and receives a payment under the agreement, the non-competition and non-solicitation covenants apply for a period mutually to be agreed to by the parties, which will be no less than six months nor exceed two years. In the event payments and benefits provided to the executive become subject to Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), and after considering the value of the non-competition and non-solicitation covenants, the payments will be reduced if the reduction would leave the executive financially better off on an after-tax basis than if the executive received the entire payment and was obligated to pay the excise tax under Section 4999 of the Code.
The foregoing description of the Agreements does not purport to be complete and it is qualified in its entirety by reference to the form of the change in control agreement attached hereto as Exhibit 10.1 of this Current Report on Form 8-K, and is incorporated by reference into this Item 5.02.
| Item 8.01 | Other Events |
|---|
On October 26, 2022, the Corporation's Board of Directors approved an increase of 1,000,000 shares available for repurchase under the Corporation's share repurchase program, or approximately 3.4% of the outstanding shares of the
Corporation's common stock as of September 30, 2022. As of October 26, 2022, the Corporation had 229,174 shares available for repurchase under the Board approved share repurchase program announced in May 2015.
| Item 9.01 | Financial Statements and Exhibits |
|---|
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits
| Exhibit No. | Description of Document |
|---|---|
| 10.1 | Form of Change in Control Agreement, dated October 26, 2022, entered into between Univest Financial Corporation, Univest Bank and Trust Co. and each of Jeffrey M. Schweitzer, Michael S. Keim, Brian J. Richardson and Megan D. Santana. |
| 99.1 | Press release issued by Univest Financial Corporation onOctober26, 2022 |
| 104 | The cover page from the Corporation's Form 8-K, formatted in Inline XBRL |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Univest Financial Corporation | |
|---|---|
| By: | /s/ Brian J. Richardson |
| Name: | Brian J. Richardson |
| Title: | Senior Executive Vice President, |
| Chief Financial Officer |
October 27, 2022
EXHIBIT INDEX
| Exhibit No. | Description of Document |
|---|---|
| 10.1 | Form of Change in Control Agreement, dated October 26, 2022, entered into between Univest Financial Corporation, Univest Bank and Trust Co. and each of Jeffrey M. Schweitzer, Michael S. Keim, Brian J. Richardson and Megan D. Santana. |
| 99.1 | Press release issued by Univest Financial Corporation onOctober26, 2022 |
| 104 | The cover page from the Corporation's Form 8-K, formatted in Inline XBRL |
changeincontrolagreement
{Clients/1612/00409184.DOCX/2 } Exhibit 10.1 CHANGE IN CONTROL AGREEMENT THIS AGREEMENT, made the 26th day of October 2022, between UNIVEST FINANCIAL CORPORATION (“Univest”), a Pennsylvania corporation, UNIVEST BANK AND TRUST CO. (“Bank”), a Pennsylvania banking and trust company and wholly owned subsidiary of Univest (Univest and Bank are sometimes referred to herein collectively as “Employer”), and [Name], an adult individual (“Employee”). WITNESSETH: WHEREAS, Employee is currently employed as [title] of Employer; WHEREAS, Employer desires to induce Employee to remain in its employ on an impartial and objective basis in the event of a transaction pursuant to which a Change in Control of Employer occurs, and is willing to provide Employee the additional benefits provided herein in consideration of Employee’s continued employment and the additional non-competition, non-disclosure and non-solicitation covenants provided herein; NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows: AGREEMENT: 1. Term of Agreement. (a) General. This Agreement shall be for a period (the “Term”) commencing on the date of this Agreement and ending on December 31, 2023; provided, however, that, commencing on January 1, 2024 and on January 1 of each succeeding year (each an “Annual Renewal Date”), the Term shall be automatically extended for one (1) additional year from the applicable Annual Renewal Date (each, an “Extension”), unless Employer or Employee shall give written notice of nonrenewal to the other party at least sixty (60) days prior to an Annual Renewal Date, in which event this Agreement shall terminate at the end of the then existing Term. Notwithstanding the foregoing, in the event that during the Term, Univest or Bank enter into an agreement to effect a transaction that would be considered a Change in Control, as defined in Section 2(b) of this Agreement, the Term will automatically extend, as of the date of that agreement, so that the Term expires no less than two (2) years beyond the effective date of the Change in Control. References in this Agreement to the “Term” shall refer to the initial term and the terms of any Extensions as may become effective. (b) Termination for Cause. Notwithstanding the provisions of Section l(a) of this Agreement, this Agreement shall terminate automatically upon termination by Employer of Employee’s employment for Cause. As used in this Agreement, “Cause” shall mean the following: (i) Employee’s material breach of this Agreement or any other agreement with Employer to which he is a party;
2 (ii) Employee’s material failure to adhere to any written policy of Employer generally applicable to officers of Employer if Employee has been given thirty (30) days written notice of the failure to adhere and a reasonable opportunity to comply with such policy or cure Employee’s failure to comply; (iii) Employee’s appropriation or attempted appropriation of a business opportunity of Employer, including attempting to secure or securing any business or personal profit in connection with any transaction entered into on behalf of Employer; (iv) Employee’s misappropriation or attempted misappropriation of any of Employer’s funds or property (including any intellectual property of the Employer); (v) Employee’s conviction of, or the entering of a guilty plea or plea of no contest with respect to, a felony or the equivalent thereof involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year; (vi) Employee’s conviction of an offense involving moral turpitude under the provisions of any federal, state or local laws or ordinances, or Employee’s use of alcohol, narcotics or illegal drugs to such an extent that will cause a material detrimental effect on Employer; or (vii) Employee’s removal or prohibition from being an institution-affiliated party by a final order of an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act or by the Pennsylvania Department of Banking and Securities pursuant to state law. If Employee’s employment is terminated for Cause, Employee’s rights and obligations under this Agreement shall cease as of the effective date of such termination. (c) Voluntary Termination, Retirement, or Death. Notwithstanding the provisions of Section l(a) of this Agreement, this Agreement shall terminate automatically upon termination of Employee’s employment as a result of voluntary termination by Employee (other than in accordance with Section 2 of this Agreement), retirement at Employee’s election, or death. In any such event, Employee’s rights under this Agreement shall cease as of the date of such event; provided, however, that if Employee dies after a Notice of Termination (as defined in Section 2(a) of this Agreement) is delivered by Employee, the payments and benefits described in Section 3 will nonetheless be made to the person or persons determined pursuant to Section 11(b) of this Agreement. (d) Disability. Notwithstanding the provisions of Section 1(a) of this Agreement, this Agreement shall terminate automatically upon termination of Employee’s employment as a result of Employee’s Disability and Employee’s rights under this Agreement shall cease as of the date of such termination; provided, however, that, if Employee becomes Disabled after a Notice of Termination (as defined in Section 2(a) of this Agreement) is delivered by Employee, Employee shall nevertheless be entitled to receive the payments and
3 benefits provided for in, and for the term set forth in, Section 3 of this Agreement. As used in this Agreement, the terms “Disability” or “Disabled” means incapacitation, by accident, sickness or otherwise, such that Employee is rendered unable to perform the essential duties required of Employee by Employee’s position with Employer at that time, notwithstanding reasonable accommodation, for a period of six (6) consecutive months. 2. Termination Following Change in Control. (a) Good Reason. If a Change in Control (as defined in Section 2(b) of this Agreement) shall occur at any time during the Term of this Agreement, and if within the period beginning on the date Univest or Bank enter into an agreement to effect a Change in Control (or nine (9) months prior to the effective date of the Change in Control, whichever is longer), and one year after the effective date of the Change in Control (A) Employer terminates the employment of Employee (other than for Cause), or (B) any of the following occur, if taken without Employee’s express written consent: (i) a material diminution in Employee’s authority, duties or other terms or conditions of employment; (ii) any reassignment of Employee to a location greater than 25 miles from the location of Employee’s office, unless such new location is closer to Employee’s primary residence than the prior location; (iii) any material diminution in Employee’s base salary; (iv) any failure to provide Employee with any benefits enjoyed by Employee under any of Univest’s or Bank’s retirement or pension, life insurance, medical, health and accident, disability or other material employee plans in which Employee participated or the taking of any action that would materially reduce any of such benefits, except for any reductions in benefits or other actions resulting from changes to or reductions in benefits applicable to employees generally prior to the Change in Control; or (v) any other material breach of this Agreement by Employer; then, at the option of Employee, exercisable by Employee during the ninety (90) day period after the occurrence of each and every of the foregoing events (“Good Reason”), Employee may give notice of intent to terminate employment under this Agreement (or, if involuntarily terminated, give notice of intention to collect benefits under this Agreement) by delivering a notice in writing (the “Notice of Termination”) to Employer. If, with respect to any of the items set forth in Section 2(a)(B), Employer fails to cure such situation within thirty (30) days after said notice, Employee will become entitled to the payments and benefits described in Section 3 of this
4 Agreement. After the expiration of the ninety (90) day period described in this Section 2(a)(B), Employee cannot exercise such right with respect to that Good Reason event. (b) Change in Control Defined. As used in this Agreement, “Change in Control” shall mean the occurrence of any of the following: (i) (A) a merger, consolidation, or division involving Univest or Bank, (B) a sale, exchange, transfer, or other disposition of substantially all of the assets of Univest or Bank, or (C) a purchase by Univest of substantially all of the assets of another entity, unless (x) such merger, consolidation, division, sale, exchange, transfer, purchase or disposition is approved in advance by at least a majority of the members of the Board of Directors of Univest who are not interested in the transaction and (y) a majority of the members of the Board of Directors of the legal entity resulting from or existing after any such transaction and of the Board of Directors of such entity’s parent corporation, if any, are former members of the Board of Directors of Univest; (ii) a “person” or “group” (within the meaning of Section 13(d) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (within the meaning of Section 13(d) of the Securities Exchange Act of 1934) of 50% or more of the outstanding shares of common stock of Univest; (iii) at any time during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of Univest cease to constitute a majority of such Board (unless the election or nomination of each new director was approved by a vote of at least 51% of the directors who were directors at the beginning of such period); or (iv) any other change in control similar in effect to any of the foregoing and specifically designated in writing as a change in control by the Board of Directors of Univest. 3. Rights in Event of Termination Following Change in Control. In the event Employee validly and timely delivers a Notice of Termination to Employer, Employee shall be entitled to receive the following benefits: (a) Employer shall pay, within thirty-five (35) days from the later of the date of termination of employment or the delivery of a Notice of Termination, notwithstanding any termination of this Agreement during such period, a lump sum cash payment equal to (i) two (2) times Employee’s base salary at the highest annual amount in effect during the current and two (2) calendar years preceding the year in which the Notice of Termination is delivered plus (ii) two (2) times Employee’s average cash bonus paid within the current and two (2) calendar years preceding the year in which the Notice of Termination is delivered. (b) In addition, during the period commencing from date of termination of employment until the end of the twenty-fourth (24th) month after such date, Employee shall be permitted to continue participation in, and the Employer shall maintain the same level of contribution for, Employee’s participation in the Employer’s medical/health
5 insurance in effect with respect to Employee during the one (1) year period prior to his termination of employment, or, if the Employer is not permitted to provide such benefits because Employee is no longer an employee or as a result of any applicable legal requirement, Employee shall receive a dollar amount, on or within thirty-five (35) days following the date of termination, equal to the cost to Employee of obtaining such benefits (or substantially similar benefits). 4. Noncompetition and Nonsolicitation. (a) Employee hereby acknowledges and recognizes the highly competitive nature of the business of Univest and Bank and accordingly agrees that, during and for the applicable period set forth in Section 4(c), Employee shall not: (i) be engaged (other than by Univest or Bank), directly or indirectly, as a consultant, employee, partner, officer, director, proprietor, investor (except as an investor owning less than 5% of the stock of a publicly owned company) or otherwise of any person, firm, corporation or enterprise engaged in banking, insurance, mortgage banking, wealth management or trust services in any county in which a branch location, office, loan production office, or trust or asset and wealth management office of Univest, Bank, or any of their subsidiaries are located (“Non-Competition Area”); (ii) for or on behalf of Employee or a same, similar or competitive business as Univest, Bank or any of their affiliates, solicit, provide services to, contract with, or accept business from any person or entity which (A) was or has been a client of Univest, Bank or any of their affiliates within one (1) year prior to the cessation of Employee’s employment and with whom Employee had business dealings during that period, or (B) received a new business proposal from Univest, Bank or any of their affiliates within one (1) year prior to the cessation of Employee’s employment; (iii) solicit, encourage or induce any person or entity with the effect or for the purpose of: (A) knowingly causing any material loans or deposits or other funds with respect to which Univest, Bank or any of their affiliates provides services to be withdrawn, (B) causing any client of Univest, Bank to refrain from engaging Univest, Bank or any of their affiliates, or (C) causing any client to terminate or materially diminish its relationship with Univest, Bank or any of their affiliates; and/or (iv) (A) affirmatively induce, offer, assist, solicit, encourage or suggest, in any manner whatsoever, (1) that Employee or another business or enterprise offer employment to or enter into a business affiliation with any employee of Univest, Bank or any of their affiliates, or (2) that any employee, agent or representative of Univest, Bank or any of their affiliates terminate his or her employment or business affiliation with Univest, Bank or any of their affiliates; or (B) hire, employ or contract with any employee of Univest, Bank or any of their affiliates. Notwithstanding any of the foregoing, Employee shall not be prohibited from making personal investments, loans or real estate transactions comparable to such transactions which would have been permitted during Employee’s employment with Univest or Bank.
6 (b) It is expressly understood and agreed that, although Employee, Univest and Bank consider the restrictions contained in Section 4(a) reasonable for the purpose of preserving for Univest and Bank their goodwill and other proprietary rights, if a final judicial determination is made by a court or arbitrator having jurisdiction that the time or territory or any other restriction contained in Section 4(a) is an unreasonable or otherwise unenforceable restriction against Employee, the provisions of Section 4(a) shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such other extent as such court may judicially determine or indicate to be reasonable. (c) If Employee receives the payments and benefits in Section 3 of this Agreement, the provisions of this Section 4 shall apply for the period of time mutually agreed to by the parties, and in no event shall the time period be less than six months or exceed two years, taking into account the provisions of Section 25. In addition, in the event the Employee voluntarily terminates employment during the Term (other than a voluntary termination for Good Reason following a Change in Control), the provisions of this Section 4 shall be applicable commencing on the date of this Agreement and ending six (6) months following the effective date of termination of employment. 5. Unauthorized Disclosure. During the Employment Period and at any time thereafter, Employee shall not, without the written consent of the Boards of Directors of Univest and Bank, or a person authorized thereby, knowingly disclose to any person, other than an employee of Univest or Bank, or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by Employee of Employee’s duties hereunder, any material confidential information obtained by him while in the employ of Employer with respect to Univest’s, Bank’s or any of their majority-owned subsidiaries’ services, products, improvements, formulas, designs or styles, processes, customers, methods of business or any business practices the disclosure of which could be or would be damaging to Univest, Bank or any such subsidiary; provided, however, that confidential information shall not include any information known generally to the public (other than as a result of unauthorized disclosure by Employee or any person with the assistance, consent, or direction of Employee), or any information that must be disclosed as required by law. 6. Remedies. Employee acknowledges and agrees that the remedy at law of Employer for a breach or threatened breach of any of the provisions of Sections 4 or 5 would be inadequate and, in recognition of this fact, in the event of a breach or threatened breach by Employee of any of the provisions of Sections 4 or 5, it is agreed that Employer shall be entitled to, without posting any bond, and Employee agrees not to oppose any request of Employer for, equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction, or any other equitable remedy which may then be available. Nothing contained in this section shall be construed as prohibiting Employer from pursuing any other remedies available to them, at law or in equity, for such breach or threatened breach. 7. Notices. Except as otherwise provided in this Agreement, any notice required or permitted to be given under this Agreement shall be deemed properly given if in writing and if mailed by registered or certified mail, postage prepaid with return receipt requested, to Employee’s residence, in the case of notices to Employee, and to the principal office of Employer, in the case of notices to Employer.
7 8. Waiver. No provision of this Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing and signed by Employee and an executive officer specifically designated by the Board of Directors of Employer. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 9. Assignment. This Agreement shall not be assignable by either party, except by Employer to any successor in interest to Employer’s business. 10. Entire Agreement. This Agreement contains the entire agreement of the parties relating to the subject matter of this Agreement and, in accordance with the provisions of Section 21, supersedes any prior understanding of the parties. 11. Successors; Binding Agreement. (a) Employer. Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of Employer to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had taken place. Failure by Employer to obtain such assumption and agreement prior to the effectiveness of any such succession shall constitute a breach of this Agreement. As used in this Agreement, “Employer” shall mean Employer as defined previously and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise. (b) Employee. This Agreement shall inure to the benefit of and be enforceable by Employee’s personal or legal representatives, executors, administrators, heirs, distributees, devisees, and legatees. If Employee should die after a Notice of Termination is delivered by Employee and any amounts would be payable to Employee under this Agreement if Employee had continued to live, all such amounts shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee, or other designee, or, if there is no such designee, to Employee’s estate. 12. Continuation of Certain Provisions. Any termination of Employee’s employment under this Agreement or of this Agreement after a Change in Control will not affect the payment and benefit provisions of Section 3, which will, if relevant, survive any such termination and remain in full force and effect in accordance with its terms. 13. Other Rights; Severance. Except as provided in Sections 25 and 26, nothing herein will be construed as limiting, restricting or eliminating any rights Employee may have under any plan, contract or arrangement to which Employee is a party or in which Employee is a vested participant; provided, however, that any termination payments required hereunder will be in lieu of any severance benefits to which Employee may be entitled under a severance plan or arrangement of Employer; and provided further, that if the benefits under any such plan or arrangement may not legally be eliminated, then the payments hereunder will be
8 reduced (but not below zero) by the amount payable under such plan or arrangement. For the avoidance of doubt, any amounts payable related to equity compensation programs are not deemed severance for purposes of this Agreement. 14. No Employment Agreement; At-Will Employment. This Agreement does not constitute an employment agreement or an agreement to maintain employment for any period of time. Employee’s employment with Employer constitutes “at-will” employment and either Employee or Employer may terminate Employee’s employment at any time, subject to the procedures and consequences in the event of a termination of employment in accordance with the terms of this Agreement. 15. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 16. Applicable Law. This Agreement shall be governed by and construed in accordance with the domestic laws (but not the law of conflicts of law) of the Commonwealth of Pennsylvania. 17. Headings. The headings of the Sections of this Agreement are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement. 18. Number. Words used herein in the singular will be construed as being used in the plural, as the context requires, and vice versa. 19. Regulatory Matters. The obligations of Employer under this Agreement shall in all events be subject to any required limitations or restrictions imposed by or pursuant to the Federal Deposit Insurance Act or the Pennsylvania Banking Code of 1965 as the same may be amended from time to time. 20. References to Employer. All references to Employer shall be deemed to include references to companies affiliated with Employer, as appropriate in the relevant context. 21. Effective Date; Termination of Prior Understandings. This Agreement will become effective immediately upon the execution and delivery of this Agreement by the parties hereto. Upon the execution and delivery of this Agreement, any prior understanding relating to the subject matter hereof will be deemed automatically terminated and be of no further force or effect. 22. Withholding For Taxes. All amounts and benefits paid or provided hereunder will be subject to withholding for taxes as required by law. 23. Individual Agreement. This Agreement is an agreement solely between and among the parties hereto. It is intended to constitute a nonqualified unfunded arrangement for the benefit of a key management employee and will be construed and interpreted in a manner consistent with such intention.
9 24. Application of Code Section 409A. (a) Notwithstanding anything in this Agreement to the contrary, the receipt of any benefits under this Agreement as a result of a termination of employment shall be subject to satisfaction of the condition precedent that Employee undergo a “separation from service” within the meaning of Treas. Reg. § 1.409A-1(h) or any successor thereto. In addition, if Employee is deemed to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provisions of any benefit that is required to be delayed pursuant to Code Section 409A(a)(2)(B), such payment or benefit shall not be made or provided prior to the earlier of (i) the expiration of the six (6) month period measured from the date of Employee’s “separation from service” (as such term is defined in Treas. Reg. § 1.409A-1(h)), or (ii) the date of Employee’s death (the “Delay Period”). Within ten (10) days following the expiration of the Delay Period, all payments and benefits delayed pursuant to this section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Employee in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. To the extent that the foregoing applies to the provision of any ongoing welfare benefits to Employee that would not be required to be delayed if the premiums therefore were paid by Employee, Employee shall pay the full costs of premiums for such welfare benefits during the Delay Period and Univest or Bank shall pay Employee an amount equal to the amount of such premiums paid by Employee during the Delay Period within ten (10) days after the conclusion of such Delay Period. (b) Except as otherwise expressly provided herein, to the extent any expense reimbursement or other in-kind benefit is determined to be subject to Code Section 409A, the amount of any such expenses eligible for reimbursement or in-kind benefits in one calendar year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year (except under any lifetime limit applicable to expenses for medical care), in no event shall any expenses be reimbursed or in-kind benefits be provided after the last day of the calendar year following the calendar year in which Employee incurred such expenses or received such benefits, and in no event shall any right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit. (c) Any payments made pursuant to Section 3, to the extent of payments made from the date of termination through March 15th of the calendar year following such date, are intended to constitute separate payments for purposes of Treas. Reg. § 1.409A-2(b)(2) and thus payable pursuant to the “short-term deferral” rule set forth in Treas. Reg. § 1.409A-1(b)(4); to the extent such payments are made following said March 15th, they are intended to constitute separate payments for purposes of Treas. Reg. § 1.409A-2(b)(2) made upon an involuntary termination from service and payable pursuant to Treas. Reg. § 1.409A-1(b)(9)(iii), to the maximum extent permitted by said provision. Notwithstanding the foregoing, if Employer determines that any other payments hereunder fail to satisfy the distribution requirement of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), the payment of such benefit shall be delayed to the minimum extent necessary so that such payments are not subject to the provisions of Code Section 409A(a)(1).
10 25. Potential Limitation on Benefits. (a) Employee and Employer hereby recognize that: (A) the non- solicitation restriction and non-competition restrictions under Section 4(a) of this Agreement have value, and (B) the value shall be recognized in any calculations Employer and Employee perform with respect to determining the effect, if any, of the parachute payment provisions of Code Section 280G (“Section 280G”), by allocating a portion of any payments, benefits or distributions in the nature of compensation (within the meaning of Section 280G(b)(2)), including the payments under Section 3 of this Agreement, to the fair value of the non- solicitation and non-competition restriction under Section 4(a) of this Agreement (the “Appraised Value”). Employer, at Employer’s expense, shall obtain an independent appraisal to determine the Appraised Value no later than forty-five (45) days after entering into an agreement, that if completed, would constitute a Change in Control as defined in this Agreement. The Appraised Value will be considered reasonable compensation for post-change in control services within the meaning of Q&A-40 of the regulations under Section 280G; and accordingly, to the extent allowable under the regulations under Section 280G, any aggregate parachute payments, as defined in Section 280G, will be reduced by the Appraised Value. (b) After taking into account the Appraised Value, in the event the receipt of all payments, benefits or distributions in the nature of compensation (within the meaning of Section 280G(b)(2)), whether paid or payable pursuant to Section 3 of this Agreement or otherwise (the “Change in Control Benefits”) would subject Employee to an excise tax imposed by Sections 280G and Code Section 4999, then the payments and/or benefits payable under this Agreement (the “Payments”) shall be reduced by the minimum amount necessary so that no portion of the Payments under this Agreement are non-deductible to Employer pursuant to Code Section 280G and subject to the excise tax imposed under Code Section 4999 (the “Reduced Amount”). Notwithstanding the foregoing, the Payments will not be reduced if it is determined that without such reduction, the Change in Control Benefits received by Employee on a net after-tax basis (including without limitation, any excise taxes payable under Code Section 4999) is greater than the Change in Control Benefits that Employee would receive, on a net after-tax benefit, if Employee is paid the Reduced Amount under the Agreement. (c) Unless otherwise agreed in writing by the parties, all calculations with respect to Sections 280G and Code Section 4999 required by this Section 25 shall be determined by a nationally recognized firm with appropriate expertise mutually agreeable to Employer and Employee (the “Firm”) whose determination will be conclusive and binding on all parties. Employer shall pay all fees charged by the Firm for this purpose. Employer and Employee shall provide the Firm with all information or documents it reasonably requests, and the Firm will be entitled to rely on such information and on reasonable estimates and assumptions and interpretations of the provisions of Sections 280G and Code Section 4999. If it is determined that the Payments should be reduced as a result of the Section 280G calculations performed by the Firm, Employer shall promptly give (or cause the Firm to give) Employee notice to that effect and a copy of the detailed calculations thereof. All determinations made under this Section 25 shall be made as soon as reasonably practicable and in no event later than ten (10) days prior to the date of termination of Employee’s employment.
11 26. Limitation on Payments. All payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with applicable laws and any regulations promulgated thereunder, including, without limitation, 12 C.F.R. Part 359. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. UNIVEST FINANCIAL CORPORATION By: Attest: UNIVEST BANK AND TRUST CO. By: Attest: Witness: (“Employee”)
Document
Exhibit 99.1
| NEWS |
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CONTACT: Brian J. Richardson
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2446, richardsonb@univest.net
FOR IMMEDIATE RELEASE
UNIVEST FINANCIAL CORPORATION REPORTS THIRD QUARTER RESULTS
SOUDERTON, Pa., October 26, 2022 - 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 September 30, 2022 was $20.8 million, or $0.71 diluted earnings per share, compared to net income of $20.9 million, or $0.71 diluted earnings per share, for the quarter ended September 30, 2021.
One-Time Items
The financial results for the three and nine months ended September 30, 2022 included tax-free bank owned life insurance ("BOLI") death benefit claims of $446 thousand, which represented $0.02 diluted earnings per share for both periods.
Loans
Gross loans and leases, excluding Paycheck Protection Program ("PPP") loans1, increased $190.6 million, or 13.5% (annualized), from June 30, 2022, $568.8 million, or 14.4% (annualized), from December 31, 2021 and $680.6 million, or 13.2%, from September 30, 2021 primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings.
Deposits
Total deposits increased $223.9 million, or 16.1% (annualized), from June 30, 2022, primarily due to increases in public funds deposits partially offset by decreases in commercial deposits. Total deposits decreased $268.1 million, or 5.9% (annualized), from December 31, 2021, primarily due to decreases in
1 Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included at the end of this document.
commercial and consumer deposits. Total deposits decreased $151.2 million, or 2.5%, from September 30, 2021, primarily due to a decrease in public funds deposits.
Net Interest Income and Margin
Net interest income of $58.3 million for the three months ended September 30, 2022 increased $6.8 million, or 13.2%, from the three months ended June 30, 2022, and $9.6 million, or 19.6%, from the three months ended September 30, 2021. The increase in net interest income for the three months ended September 30, 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 position of the Corporation's balance sheet.
Net interest margin, on a tax-equivalent basis, was 3.67% for the third quarter of 2022, compared to 3.19% for the second quarter of 2022 and 3.11% for the third quarter of 2021. Excess liquidity reduced net interest margin by approximately one basis point for the quarter ended September 30, 2022 compared to 23 basis points for the quarter ended June 30, 2022 and 27 basis points for the quarter ended September 30, 2021. PPP loans had no impact on net interest margin for the quarter ended September 30, 2022 compared to one basis point for the quarter ended June 30, 2022 and 20 basis points for the quarter ended September 30, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.68% for the quarter ended September 30, 2022 compared to 3.41% for the quarter ended June 30, 2022 and 3.18% for the quarter ended September 30, 2021.
Noninterest Income
Noninterest income for the quarter ended September 30, 2022 was $18.0 million, a decrease of $2.6 million, or 12.6%, compared to the third quarter of 2021.
Net gain on mortgage banking activities decreased $2.4 million, or 74.7%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year, primarily due to a decrease in loan sales and a contraction of margins. BOLI increased $228 thousand, or 24.6%, for the quarter compared to the comparable period in the prior year, primarily due to death benefit claims of $446 thousand in the third quarter of 2022. Investment advisory commission and fee income decreased $597 thousand, or 12.4%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year, primarily due to reduced assets under management, which was driven by market performance.
Other income decreased $758 thousand, or 46.6%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year. Gains on the sale of Small Business Administration loans
decreased $520 thousand for the quarter due to decreased sale activity. Fees on risk participation agreements for interest rate swaps decreased $171 thousand for the quarter driven by a decrease in customer demand due to the current interest rate environment.
Insurance commission and fee income increased $605 thousand, or 15.8%, for the quarter ended September 30, 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 service fee income increased $548 thousand, or 21.3%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year. Mortgage servicing fees increased $336 thousand for the quarter driven by reduced amortization as a result of a decrease in prepayment speeds.
Noninterest Expense
Noninterest expense for the quarter ended September 30, 2022 was $46.7 million, an increase of $3.4 million, or 7.9%, compared to the third quarter of 2021. The results for the three months ended September 30, 2022 included approximately $1.2 million in expenses related to our digital transformation initiative, a comprehensive digital platform which will blend our core operating systems together and allow Univest to seamlessly sell existing products and services, digitally, across an expanded footprint.
Salaries, benefits and commissions increased $2.8 million, or 10.4%, for the quarter ended September 30, 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 PA, and annual merit increases.
Professional fees increased $347 thousand, or 16.0%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year. The increase for the three months ended September 30, 2022 was primarily due to $1.0 million in consultant fees attributable to the previously discussed digital transformation initiative, as compared to our $585 thousand investment in our Diversity, Equity and Inclusion program, training initiatives and treasury management product enhancements for the three months ended September 30, 2021.
Data processing expenses increased $627 thousand, or 19.2%, for the quarter ended September 30, 2022 compared to the comparable period in the prior year, primarily due to continued investments in technology including $180 thousand in support of the previously discussed digital transformation initiative for the respective period.
Tax Provision
The effective income tax rate was 19.7% for the nine months ended September 30, 2022, compared to an effective income tax rate of 19.4% for the nine months ended September 30, 2021. The effective tax rate for the nine months ended September 30, 2022 and 2021 reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases. Additionally, the effective tax rate for the nine months ended September 30, 2022 was favorably impacted by discrete tax benefits and proceeds from BOLI death benefits. Excluding these items, the effective tax rate was 20.1% for the nine months ended September 30, 2022.
Asset Quality and Provision for Credit Losses
Nonperforming assets were $33.0 million at September 30, 2022, compared to $34.8 million at June 30, 2022 and $37.1 million at September 30, 2021.
Net loan and lease charge-offs were $1.2 million and $1.7 million for the three months ended September 30, 2022 and June 30, 2022, respectively, compared to net loan and lease recoveries of $75 thousand for the three months ended September 30, 2021. Net loan and lease charge-offs were $3.0 million and $456 thousand for the nine months ended September 30, 2022 and September 30, 2021, respectively.
The provision for credit losses was $3.6 million for the third quarter of 2022 compared to a provision for credit losses of $6.7 million for the second quarter of 2022 and a reversal of provision of $182 thousand for the third quarter of 2021. The provision for credit losses was $6.8 million for the nine months ended September 30, 2022 compared to a reversal of provision for credit losses of $11.5 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 1.28% at September 30, 2022 compared to 1.27% at June 30, 2022 and 1.34% at September 30, 2021.
Share Repurchases
During the three months ended September 30, 2022, the Corporation repurchased 150,000 shares at an average price of $25.41, for an aggregate cost of $3.8 million. During the nine months ended September 30, 2022, the Corporation repurchased 450,000 shares at an average price of $25.29, for an aggregate cost of $11.4 million. As of September 30, 2022, the Corporation has 229,174 shares remaining to repurchase under the program that was approved on May 27, 2015. On October 26, 2022, the Corporation’s Board of Directors approved an increase of 1,000,000 in the shares available for repurchase under the Corporation’s share repurchase program.
Dividend
On October 26, 2022, Univest declared a quarterly cash dividend of $0.21 per share to be paid on November 23, 2022 to shareholders of record as of November 9, 2022.
Conference Call
Univest will host a conference call to discuss third quarter 2022 results on Thursday, October 27, 2022 at 9:00 a.m. EST. Participants may preregister at https://www.netroadshow.com/events/login?show=7205620b&confId=42951. The general public can access the call by dialing 1-844-200-6205; using Access Code 478630. A replay of the conference call will be available through November 24, 2022 by dialing 1-866-813-9403; using Access Code: 211821.
About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $6.9 billion in assets and $4.0 billion in assets under management and supervision through its Wealth Management lines of business at September 30, 2022. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices and online at www.univest.net.
#
This press release and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, business and strategies of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future results, business or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) inflation and/or changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations or lead to higher operating costs; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or credit loss provisions; (4) changes in economic conditions nationally and in our market; (5) economic assumptions that may impact our allowance for credit losses calculation; (6) legislative, regulatory or tax changes; (7) technological issues that may adversely affect our operations or those of our customers; (8) changes in the securities markets; (9) the 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; and/or (11) 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) | |||||||||||||||||||||
| September 30, 2022 | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| Balance Sheet (Period End) | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | ||||||||||||||||
| ASSETS | |||||||||||||||||||||
| Cash and due from banks | $ | 65,859 | $ | 59,590 | $ | 57,307 | $ | 49,202 | $ | 67,517 | |||||||||||
| Interest-earning deposits with other banks | 47,451 | 35,187 | 716,474 | 840,948 | 834,840 | ||||||||||||||||
| Cash and cash equivalents | 113,310 | 94,777 | 773,781 | 890,150 | 902,357 | ||||||||||||||||
| Investment securities held-to-maturity | 159,170 | 159,808 | 166,339 | 176,983 | 112,643 | ||||||||||||||||
| Investment securities available for sale, net of allowance for credit losses | 347,479 | 351,382 | 349,994 | 317,007 | 277,773 | ||||||||||||||||
| Investments in equity securities | 2,994 | 2,934 | 2,569 | 2,999 | 2,961 | ||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost | 29,475 | 29,116 | 26,330 | 28,186 | 28,679 | ||||||||||||||||
| Loans held for sale | 9,087 | 8,352 | 14,521 | 21,600 | 29,093 | ||||||||||||||||
| Loans and leases held for investment | 5,849,259 | 5,661,777 | 5,400,786 | 5,310,017 | 5,252,045 | ||||||||||||||||
| Less: Allowance for credit losses, loans and leases | (74,929) | (72,011) | (68,286) | (71,924) | (70,146) | ||||||||||||||||
| Net loans and leases held for investment | 5,774,330 | 5,589,766 | 5,332,500 | 5,238,093 | 5,181,899 | ||||||||||||||||
| Premises and equipment, net | 50,533 | 50,080 | 50,429 | 56,882 | 55,354 | ||||||||||||||||
| Operating lease right-of-use assets | 30,654 | 30,929 | 30,498 | 30,407 | 31,570 | ||||||||||||||||
| Goodwill | 175,510 | 175,510 | 175,510 | 175,510 | 172,559 | ||||||||||||||||
| Other intangibles, net of accumulated amortization | 11,650 | 11,728 | 11,784 | 11,848 | 9,359 | ||||||||||||||||
| Bank owned life insurance | 120,035 | 120,103 | 119,398 | 118,699 | 117,981 | ||||||||||||||||
| Accrued interest and other assets | 83,170 | 76,328 | 54,087 | 54,057 | 57,624 | ||||||||||||||||
| Total assets | $ | 6,907,397 | $ | 6,700,813 | $ | 7,107,740 | $ | 7,122,421 | $ | 6,979,852 | |||||||||||
| LIABILITIES | |||||||||||||||||||||
| Noninterest-bearing deposits | $ | 1,968,422 | $ | 2,062,538 | $ | 2,136,467 | $ | 2,065,423 | $ | 1,861,007 | |||||||||||
| Interest-bearing deposits: | 3,818,554 | 3,500,510 | 3,911,465 | 3,989,701 | 4,077,147 | ||||||||||||||||
| Total deposits | 5,786,976 | 5,563,048 | 6,047,932 | 6,055,124 | 5,938,154 | ||||||||||||||||
| Short-term borrowings | 80,711 | 97,606 | 18,976 | 20,106 | 14,101 | ||||||||||||||||
| Long-term debt | 95,000 | 95,000 | 95,000 | 95,000 | 95,000 | ||||||||||||||||
| Subordinated notes | 99,107 | 99,030 | 98,952 | 98,874 | 98,797 | ||||||||||||||||
| Operating lease liabilities | 33,718 | 33,951 | 33,566 | 33,453 | 34,641 | ||||||||||||||||
| Accrued expenses and other liabilities | 57,698 | 48,253 | 39,459 | 46,070 | 43,136 | ||||||||||||||||
| Total liabilities | 6,153,210 | 5,936,888 | 6,333,885 | 6,348,627 | 6,223,829 | ||||||||||||||||
| 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 | 299,791 | 298,800 | 297,945 | 299,181 | 298,033 | ||||||||||||||||
| Retained earnings | 410,942 | 396,295 | 389,332 | 375,124 | 363,607 | ||||||||||||||||
| Accumulated other comprehensive loss, net of tax benefit | (64,985) | (42,781) | (31,909) | (16,353) | (20,073) | ||||||||||||||||
| Treasury stock, at cost | (49,345) | (46,173) | (39,297) | (41,942) | (43,328) | ||||||||||||||||
| Total shareholders’ equity | 754,187 | 763,925 | 773,855 | 773,794 | 756,023 | ||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 6,907,397 | $ | 6,700,813 | $ | 7,107,740 | $ | 7,122,421 | $ | 6,979,852 | |||||||||||
| For the three months ended, | For the nine months ended, | ||||||||||||||||||||
| Balance Sheet (Average) | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | 9/30/2022 | 9/30/2021 | ||||||||||||||
| Assets | $ | 6,797,466 | $ | 6,962,401 | $ | 7,047,980 | $ | 7,088,289 | $ | 6,698,177 | $ | 6,935,031 | $ | 6,509,576 | |||||||
| Investment securities, net of allowance for credit losses | 517,335 | 515,741 | 522,128 | 469,588 | 395,280 | 518,383 | 385,192 | ||||||||||||||
| Loans and leases, gross | 5,752,119 | 5,520,580 | 5,344,698 | 5,255,279 | 5,320,411 | 5,540,624 | 5,345,119 | ||||||||||||||
| Deposits | 5,645,291 | 5,903,173 | 5,984,815 | 6,041,798 | 5,666,725 | 5,843,182 | 5,439,345 | ||||||||||||||
| Shareholders' equity | 773,099 | 771,410 | 774,358 | 762,334 | 746,185 | 772,951 | 725,061 | ||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited) | |||||||||||||||||||||
| September 30, 2022 | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| Summary of Major Loan and Lease Categories (Period End) | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | ||||||||||||||||
| Commercial, financial and agricultural | $ | 1,052,733 | $ | 1,028,354 | $ | 932,485 | $ | 956,396 | $ | 927,015 | |||||||||||
| Paycheck Protection Program | 2,207 | 5,358 | 10,298 | 31,748 | 85,601 | ||||||||||||||||
| Real estate-commercial | 2,936,204 | 2,870,286 | 2,816,737 | 2,718,535 | 2,669,898 | ||||||||||||||||
| Real estate-construction | 329,915 | 319,449 | 285,083 | 283,918 | 260,874 | ||||||||||||||||
| Real estate-residential secured for business purpose | 443,837 | 419,652 | 412,486 | 409,900 | 412,001 | ||||||||||||||||
| Real estate-residential secured for personal purpose | 685,771 | 629,144 | 568,735 | 540,566 | 535,705 | ||||||||||||||||
| Real estate-home equity secured for personal purpose | 175,843 | 168,536 | 160,134 | 158,909 | 159,029 | ||||||||||||||||
| Loans to individuals | 26,679 | 27,061 | 26,249 | 25,504 | 26,458 | ||||||||||||||||
| Lease financings | 196,070 | 193,937 | 188,579 | 184,541 | 175,464 | ||||||||||||||||
| Total loans and leases held for investment, net of deferred income | 5,849,259 | 5,661,777 | 5,400,786 | 5,310,017 | 5,252,045 | ||||||||||||||||
| Less: Allowance for credit losses, loans and leases | (74,929) | (72,011) | (68,286) | (71,924) | (70,146) | ||||||||||||||||
| Net loans and leases held for investment | $ | 5,774,330 | $ | 5,589,766 | $ | 5,332,500 | $ | 5,238,093 | $ | 5,181,899 | |||||||||||
| Asset Quality Data (Period End) | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | ||||||||||||||||
| Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases and nonaccrual loans held for sale | $ | 13,620 | $ | 13,355 | $ | 30,876 | $ | 33,210 | $ | 34,528 | |||||||||||
| Accruing loans and leases 90 days or more past due | 416 | 2,784 | 274 | 498 | 2,204 | ||||||||||||||||
| Accruing troubled debt restructured loans and leases | 50 | 50 | 51 | 51 | 51 | ||||||||||||||||
| Total nonperforming loans and leases | 14,086 | 16,189 | 31,201 | 33,759 | 36,783 | ||||||||||||||||
| Other real estate owned | 18,960 | 18,604 | 279 | 279 | 279 | ||||||||||||||||
| Total nonperforming assets | $ | 33,046 | $ | 34,793 | $ | 31,480 | $ | 34,038 | $ | 37,062 | |||||||||||
| Nonaccrual loans and leases / Loans and leases held for investment | 0.23 | % | 0.24 | % | 0.57 | % | 0.63 | % | 0.66 | % | |||||||||||
| Nonperforming loans and leases / Loans and leases held for investment | 0.24 | % | 0.29 | % | 0.58 | % | 0.64 | % | 0.70 | % | |||||||||||
| Nonperforming assets / Total assets | 0.48 | % | 0.52 | % | 0.44 | % | 0.48 | % | 0.53 | % | |||||||||||
| Allowance for credit losses, loans and leases | $ | 74,929 | $ | 72,011 | $ | 68,286 | $ | 71,924 | $ | 70,146 | |||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment | 1.28 | % | 1.27 | % | 1.26 | % | 1.35 | % | 1.34 | % | |||||||||||
| Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1) | 1.28 | % | 1.27 | % | 1.27 | % | 1.36 | % | 1.36 | % | |||||||||||
| Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment | 550.14 | % | 539.21 | % | 221.16 | % | 216.57 | % | 203.16 | % | |||||||||||
| Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment | 531.94 | % | 444.81 | % | 218.86 | % | 213.05 | % | 190.70 | % | |||||||||||
| For the three months ended, | For the nine months ended, | ||||||||||||||||||||
| 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | 9/30/2022 | 9/30/2021 | |||||||||||||||
| Net loan and lease charge-offs (recoveries) | $ | 1,196 | $ | 1,715 | $ | 76 | $ | (243) | $ | (75) | $ | 2,987 | $ | 456 | |||||||
| Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases | 0.08 | % | 0.12 | % | 0.01 | % | (0.02) | % | (0.01) | % | 0.07 | % | 0.01 | % | |||||||
| (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) | |||||||||||||||||||||
| September 30, 2022 | |||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||
| For the three months ended, | For the nine months ended, | ||||||||||||||||||||
| For the period: | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | 9/30/2022 | 9/30/2021 | ||||||||||||||
| Interest income | $ | 66,877 | $ | 56,717 | $ | 51,198 | $ | 52,262 | $ | 53,571 | $ | 174,792 | $ | 157,469 | |||||||
| Interest expense | 8,627 | 5,246 | 4,538 | 4,737 | 4,884 | 18,411 | 16,611 | ||||||||||||||
| Net interest income | 58,250 | 51,471 | 46,660 | 47,525 | 48,687 | 156,381 | 140,858 | ||||||||||||||
| Provision (reversal of provision) for credit losses | 3,558 | 6,674 | (3,450) | 1,392 | (182) | 6,782 | (11,524) | ||||||||||||||
| Net interest income after provision for credit losses | 54,692 | 44,797 | 50,110 | 46,133 | 48,869 | 149,599 | 152,382 | ||||||||||||||
| Noninterest income: | |||||||||||||||||||||
| Trust fee income | 1,835 | 1,998 | 2,102 | 2,086 | 2,126 | 5,935 | 6,317 | ||||||||||||||
| Service charges on deposit accounts | 1,522 | 1,574 | 1,504 | 1,486 | 1,422 | 4,600 | 4,018 | ||||||||||||||
| Investment advisory commission and fee income | 4,199 | 4,812 | 5,152 | 4,885 | 4,796 | 14,163 | 14,051 | ||||||||||||||
| Insurance commission and fee income | 4,442 | 4,629 | 5,570 | 3,726 | 3,837 | 14,641 | 12,631 | ||||||||||||||
| Other service fee income | 3,124 | 3,309 | 2,756 | 2,759 | 2,576 | 9,189 | 7,516 | ||||||||||||||
| Bank owned life insurance income | 1,153 | 705 | 699 | 719 | 925 | 2,557 | 3,262 | ||||||||||||||
| Net gain on sales of investment securities | — | — | 30 | 5 | 21 | 30 | 140 | ||||||||||||||
| Net gain on mortgage banking activities | 817 | 1,230 | 1,929 | 2,518 | 3,224 | 3,976 | 12,623 | ||||||||||||||
| Other income | 867 | 741 | 728 | 1,008 | 1,625 | 2,336 | 3,474 | ||||||||||||||
| Total noninterest income | 17,959 | 18,998 | 20,470 | 19,192 | 20,552 | 57,427 | 64,032 | ||||||||||||||
| Noninterest expense: | |||||||||||||||||||||
| Salaries, benefits and commissions | 29,400 | 29,133 | 28,245 | 27,374 | 26,641 | 86,778 | 76,817 | ||||||||||||||
| Net occupancy | 2,504 | 2,422 | 2,716 | 2,477 | 2,525 | 7,642 | 7,920 | ||||||||||||||
| Equipment | 968 | 977 | 982 | 985 | 1,000 | 2,927 | 2,914 | ||||||||||||||
| Data processing | 3,901 | 3,708 | 3,567 | 3,355 | 3,274 | 11,176 | 9,388 | ||||||||||||||
| Professional fees | 2,521 | 2,844 | 2,138 | 1,750 | 2,174 | 7,503 | 5,937 | ||||||||||||||
| Marketing and advertising | 605 | 693 | 425 | 683 | 539 | 1,723 | 1,380 | ||||||||||||||
| Deposit insurance premiums | 662 | 812 | 893 | 698 | 765 | 2,367 | 2,014 | ||||||||||||||
| Intangible expenses | 309 | 342 | 341 | 267 | 214 | 992 | 712 | ||||||||||||||
| Other expense | 5,795 | 6,440 | 6,105 | 5,746 | 6,116 | 18,340 | 16,992 | ||||||||||||||
| Total noninterest expense | 46,665 | 47,371 | 45,412 | 43,335 | 43,248 | 139,448 | 124,074 | ||||||||||||||
| Income before taxes | 25,986 | 16,424 | 25,168 | 21,990 | 26,173 | 67,578 | 92,340 | ||||||||||||||
| Income tax expense | 5,185 | 3,258 | 4,851 | 4,578 | 5,262 | 13,294 | 17,951 | ||||||||||||||
| Net income | $ | 20,801 | $ | 13,166 | $ | 20,317 | $ | 17,412 | $ | 20,911 | $ | 54,284 | $ | 74,389 | |||||||
| Net income per share: | |||||||||||||||||||||
| Basic | $ | 0.71 | $ | 0.45 | $ | 0.69 | $ | 0.59 | $ | 0.71 | $ | 1.85 | $ | 2.53 | |||||||
| Diluted | $ | 0.71 | $ | 0.45 | $ | 0.68 | $ | 0.59 | $ | 0.71 | $ | 1.84 | $ | 2.52 | |||||||
| Dividends declared per share | $ | 0.21 | $ | 0.21 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.62 | $ | 0.60 | |||||||
| Weighted average shares outstanding | 29,290,829 | 29,490,154 | 29,542,467 | 29,471,304 | 29,420,256 | 29,440,228 | 29,379,774 | ||||||||||||||
| Period end shares outstanding | 29,242,451 | 29,365,775 | 29,636,425 | 29,500,542 | 29,438,402 | 29,242,451 | 29,438,402 | ||||||||||||||
| Univest Financial Corporation | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Consolidated Selected Financial Data (Unaudited) | |||||||||||||||||||||
| September 30, 2022 | |||||||||||||||||||||
| For the three months ended, | For the nine months ended, | ||||||||||||||||||||
| Profitability Ratios (annualized) | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | 9/30/2022 | 9/30/2021 | ||||||||||||||
| Return on average assets | 1.21 | % | 0.76 | % | 1.17 | % | 0.97 | % | 1.24 | % | 1.05 | % | 1.53 | % | |||||||
| Return on average shareholders' equity | 10.67 | % | 6.85 | % | 10.64 | % | 9.06 | % | 11.12 | % | 9.39 | % | 13.72 | % | |||||||
| Return on average tangible common equity (1)(3) | 14.06 | % | 9.10 | % | 14.04 | % | 11.93 | % | 14.63 | % | 12.40 | % | 18.21 | % | |||||||
| Net interest margin (FTE) | 3.67 | % | 3.19 | % | 2.89 | % | 2.86 | % | 3.11 | % | 3.25 | % | 3.13 | % | |||||||
| Efficiency ratio (2) | 60.6 | % | 66.6 | % | 67.0 | % | 64.3 | % | 61.8 | % | 64.6 | % | 59.8 | % | |||||||
| Capitalization Ratios | |||||||||||||||||||||
| Dividends declared to net income | 29.7 | % | 47.1 | % | 29.1 | % | 33.9 | % | 28.1 | % | 33.7 | % | 23.7 | % | |||||||
| Shareholders' equity to assets (Period End) | 10.92 | % | 11.40 | % | 10.89 | % | 10.86 | % | 10.83 | % | 10.92 | % | 10.83 | % | |||||||
| Tangible common equity to tangible assets (1) | 8.55 | % | 8.97 | % | 8.58 | % | 8.56 | % | 8.55 | % | 8.55 | % | 8.55 | % | |||||||
| Common equity book value per share | $ | 25.79 | $ | 26.01 | $ | 26.11 | $ | 26.23 | $ | 25.68 | $ | 25.79 | $ | 25.68 | |||||||
| Tangible common equity book value per share (1) | $ | 19.67 | $ | 19.91 | $ | 20.06 | $ | 20.14 | $ | 19.75 | $ | 19.67 | $ | 19.75 | |||||||
| Regulatory Capital Ratios (Period End) | |||||||||||||||||||||
| Tier 1 leverage ratio | 9.87 | % | 9.45 | % | 9.35 | % | 9.13 | % | 9.53 | % | 9.87 | % | 9.53 | % | |||||||
| Common equity tier 1 risk-based capital ratio | 10.51 | % | 10.62 | % | 11.07 | % | 11.08 | % | 11.15 | % | 10.51 | % | 11.15 | % | |||||||
| Tier 1 risk-based capital ratio | 10.51 | % | 10.62 | % | 11.07 | % | 11.08 | % | 11.15 | % | 10.51 | % | 11.15 | % | |||||||
| Total risk-based capital ratio | 13.10 | % | 13.23 | % | 13.73 | % | 13.77 | % | 13.87 | % | 13.10 | % | 13.87 | % | |||||||
| (1) Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included at the end of this document. | |||||||||||||||||||||
| (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) | |||||||||||||||||||||
| Tax Equivalent Basis | June 30, 2022 | ||||||||||||||||||||
| Income/ | Average | Average | Income/ | Average | |||||||||||||||||
| (Dollars in thousands) | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||
| Assets: | |||||||||||||||||||||
| Interest-earning deposits with other banks | 49,476 | $ | 252 | 2.02 | % | $ | 474,260 | $ | 824 | 0.70 | % | ||||||||||
| U.S. government obligations | 3 | 2.11 | 2,000 | 11 | 2.21 | ||||||||||||||||
| Obligations of state and political subdivisions* | 18 | 3.09 | 2,302 | 17 | 2.96 | ||||||||||||||||
| Other debt and equity securities | 3,010 | 2.32 | 511,439 | 2,727 | 2.14 | ||||||||||||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 435 | 6.08 | 26,221 | 344 | 5.26 | ||||||||||||||||
| Total interest-earning deposits, investments and other interest-earning assets | 3,718 | 2.48 | 1,016,222 | 3,923 | 1.55 | ||||||||||||||||
| Commercial, financial, and agricultural loans | 11,996 | 4.87 | 937,846 | 9,037 | 3.86 | ||||||||||||||||
| Paycheck Protection Program loans | 40 | 4.23 | 7,644 | 155 | 8.13 | ||||||||||||||||
| Real estate—commercial and construction loans | 34,100 | 4.36 | 3,004,509 | 28,527 | 3.81 | ||||||||||||||||
| Real estate—residential loans | 12,492 | 3.94 | 1,166,201 | 10,758 | 3.70 | ||||||||||||||||
| Loans to individuals | 381 | 5.56 | 26,782 | 305 | 4.57 | ||||||||||||||||
| Municipal loans and leases* | 2,432 | 4.10 | 235,922 | 2,404 | 4.09 | ||||||||||||||||
| Lease financings | 2,195 | 5.97 | 141,676 | 2,105 | 5.96 | ||||||||||||||||
| Gross loans and leases | 63,636 | 4.39 | 5,520,580 | 53,291 | 3.87 | ||||||||||||||||
| Total interest-earning assets | 67,354 | 4.21 | 6,536,802 | 57,214 | 3.51 | ||||||||||||||||
| Cash and due from banks | 55,634 | ||||||||||||||||||||
| Allowance for credit losses, loans and leases | (68,426) | ||||||||||||||||||||
| Premises and equipment, net | 50,266 | ||||||||||||||||||||
| Operating lease right-of-use assets | 30,222 | ||||||||||||||||||||
| Other assets | 357,903 | ||||||||||||||||||||
| Total assets | 6,797,466 | $ | 6,962,401 | ||||||||||||||||||
| Liabilities: | |||||||||||||||||||||
| Interest-bearing checking deposits | 881,395 | $ | 1,251 | 0.56 | % | $ | 851,324 | $ | 570 | 0.27 | % | ||||||||||
| Money market savings | 3,709 | 1.18 | 1,405,536 | 1,552 | 0.44 | ||||||||||||||||
| Regular savings | 302 | 0.11 | 1,070,480 | 237 | 0.09 | ||||||||||||||||
| Time deposits | 1,189 | 1.13 | 452,989 | 1,227 | 1.09 | ||||||||||||||||
| Total time and interest-bearing deposits | 6,451 | 0.70 | 3,780,329 | 3,586 | 0.38 | ||||||||||||||||
| Short-term borrowings | 524 | 1.99 | 17,253 | 11 | 0.26 | ||||||||||||||||
| Long-term debt | 324 | 1.35 | 95,000 | 321 | 1.36 | ||||||||||||||||
| Subordinated notes | 1,328 | 5.32 | 98,988 | 1,328 | 5.38 | ||||||||||||||||
| Total borrowings | 2,176 | 2.89 | 211,241 | 1,660 | 3.15 | ||||||||||||||||
| Total interest-bearing liabilities | 8,627 | 0.87 | 3,991,570 | 5,246 | 0.53 | ||||||||||||||||
| Noninterest-bearing deposits | 2,122,844 | ||||||||||||||||||||
| Operating lease liabilities | 33,300 | ||||||||||||||||||||
| Accrued expenses and other liabilities | 43,277 | ||||||||||||||||||||
| Total liabilities | 6,190,991 | ||||||||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||||
| Common stock | 157,784 | ||||||||||||||||||||
| Additional paid-in capital | 298,241 | ||||||||||||||||||||
| Retained earnings and other equity | 315,385 | ||||||||||||||||||||
| Total shareholders' equity | 771,410 | ||||||||||||||||||||
| Total liabilities and shareholders' equity | 6,797,466 | $ | 6,962,401 | ||||||||||||||||||
| Net interest income | $ | 58,727 | $ | 51,968 | |||||||||||||||||
| Net interest spread | 3.34 | 2.98 | |||||||||||||||||||
| Effect of net interest-free funding sources | 0.33 | 0.21 | |||||||||||||||||||
| Net interest margin | 3.67 | % | 3.19 | % | |||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | % | 163.77 | % | ||||||||||||||||||
| *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 adjustment. | |||||||||||||||||||||
| Net interest income includes net deferred costs of (498) thousand and (618) thousand for the three months ended September 30, 2022 and June 30, 2022. | |||||||||||||||||||||
| 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 September 30, 2022 and June 30, 2022 have been calculated using the Corporation’s federal applicable rate of 21.0%. |
All values are in US Dollars.
| Univest Financial Corporation | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Average Balances and Interest Rates (Unaudited) | |||||||||||
| Tax Equivalent Basis | 2021 | ||||||||||
| Income/ | Average | Average | Income/ | Average | |||||||
| (Dollars in thousands) | Expense | Rate | Balance | Expense | Rate | ||||||
| Assets: | |||||||||||
| Interest-earning deposits with other banks | 49,476 | $ | 252 | 2.02 | % | $ | 530,191 | $ | 189 | 0.14 | % |
| U.S. government obligations | 3 | 2.11 | 6,999 | 36 | 2.04 | ||||||
| Obligations of state and political subdivisions* | 18 | 3.09 | 2,992 | 24 | 3.18 | ||||||
| Other debt and equity securities | 3,010 | 2.32 | 385,289 | 1,516 | 1.56 | ||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 435 | 6.08 | 26,713 | 334 | 4.96 | ||||||
| Total interest-earning deposits, investments and other interest-earning assets | 3,718 | 2.48 | 952,184 | 2,099 | 0.87 | ||||||
| Commercial, financial, and agricultural loans | 11,996 | 4.87 | 880,986 | 7,412 | 3.34 | ||||||
| Paycheck Protection Program loans | 40 | 4.23 | 162,611 | 4,162 | 10.15 | ||||||
| Real estate—commercial and construction loans | 34,100 | 4.36 | 2,784,398 | 25,634 | 3.65 | ||||||
| Real estate—residential loans | 12,492 | 3.94 | 1,100,799 | 10,171 | 3.67 | ||||||
| Loans to individuals | 381 | 5.56 | 26,048 | 253 | 3.85 | ||||||
| Municipal loans and leases* | 2,432 | 4.10 | 247,603 | 2,504 | 4.01 | ||||||
| Lease financings | 2,195 | 5.97 | 117,966 | 1,856 | 6.24 | ||||||
| Gross loans and leases | 63,636 | 4.39 | 5,320,411 | 51,992 | 3.88 | ||||||
| Total interest-earning assets | 67,354 | 4.21 | 6,272,595 | 54,091 | 3.42 | ||||||
| Cash and due from banks | 59,642 | ||||||||||
| Allowance for credit losses, loans and leases | (72,606) | ||||||||||
| Premises and equipment, net | 55,685 | ||||||||||
| Operating lease right-of-use assets | 31,998 | ||||||||||
| Other assets | 350,863 | ||||||||||
| Total assets | 6,797,466 | $ | 6,698,177 | ||||||||
| Liabilities: | |||||||||||
| Interest-bearing checking deposits | 881,395 | $ | 1,251 | 0.56 | % | $ | 857,098 | $ | 537 | 0.25 | % |
| Money market savings | 3,709 | 1.18 | 1,382,832 | 922 | 0.26 | ||||||
| Regular savings | 302 | 0.11 | 998,568 | 281 | 0.11 | ||||||
| Time deposits | 1,189 | 1.13 | 496,702 | 1,490 | 1.19 | ||||||
| Total time and interest-bearing deposits | 6,451 | 0.70 | 3,735,200 | 3,230 | 0.34 | ||||||
| Short-term borrowings | 524 | 1.99 | 15,116 | 2 | 0.05 | ||||||
| Long-term debt | 324 | 1.35 | 95,000 | 324 | 1.35 | ||||||
| Subordinated notes | 1,328 | 5.32 | 98,754 | 1,328 | 5.34 | ||||||
| Total borrowings | 2,176 | 2.89 | 208,870 | 1,654 | 3.14 | ||||||
| Total interest-bearing liabilities | 8,627 | 0.87 | 3,944,070 | 4,884 | 0.49 | ||||||
| Noninterest-bearing deposits | 1,931,525 | ||||||||||
| Operating lease liabilities | 35,094 | ||||||||||
| Accrued expenses and other liabilities | 41,303 | ||||||||||
| Total liabilities | 5,951,992 | ||||||||||
| Shareholders' Equity: | |||||||||||
| Common stock | 157,784 | ||||||||||
| Additional paid-in capital | 297,482 | ||||||||||
| Retained earnings and other equity | 290,919 | ||||||||||
| Total shareholders' equity | 746,185 | ||||||||||
| Total liabilities and shareholders' equity | 6,797,466 | $ | 6,698,177 | ||||||||
| Net interest income | $ | 58,727 | $ | 49,207 | |||||||
| Net interest spread | 3.34 | 2.93 | |||||||||
| Effect of net interest-free funding sources | 0.33 | 0.18 | |||||||||
| Net interest margin | 3.67 | % | 3.11 | % | |||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | % | 159.04 | % | ||||||||
| *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 (498) thousand and 3.0 million for the three months ended September 30, 2022 and 2021, respectively. | |||||||||||
| Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. | |||||||||||
| Tax-equivalent amounts for the three months ended September 30, 2022 and 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%. |
All values are in US Dollars.
| Univest Financial Corporation | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Average Balances and Interest Rates (Unaudited) | |||||||||||
| Tax Equivalent Basis | 2021 | ||||||||||
| Income/ | Average | Average | Income/ | Average | |||||||
| (Dollars in thousands) | Expense | Rate | Balance | Expense | Rate | ||||||
| Assets: | |||||||||||
| Interest-earning deposits with other banks | 416,466 | $ | 1,433 | 0.46 | % | $ | 328,768 | $ | 291 | 0.12 | % |
| U.S. government obligations | 40 | 2.07 | 6,999 | 107 | 2.04 | ||||||
| Obligations of state and political subdivisions* | 54 | 3.12 | 6,838 | 187 | 3.66 | ||||||
| Other debt and equity securities | 8,076 | 2.10 | 371,355 | 4,147 | 1.49 | ||||||
| Federal Home Loan Bank, Federal Reserve Bank and other stock | 1,134 | 5.57 | 26,319 | 1,042 | 5.29 | ||||||
| Total interest-earning deposits, investments and other interest-earning assets | 10,737 | 1.49 | 740,279 | 5,774 | 1.04 | ||||||
| Commercial, financial, and agricultural loans | 28,604 | 4.07 | 830,248 | 21,120 | 3.40 | ||||||
| Paycheck Protection Program loans | 786 | 10.64 | 358,231 | 13,464 | 5.03 | ||||||
| Real estate—commercial and construction loans | 88,447 | 3.93 | 2,703,100 | 75,023 | 3.71 | ||||||
| Real estate—residential loans | 33,132 | 3.75 | 1,067,855 | 29,880 | 3.74 | ||||||
| Loans to individuals | 924 | 4.64 | 25,925 | 769 | 3.97 | ||||||
| Municipal loans and leases* | 7,270 | 4.09 | 248,191 | 7,632 | 4.11 | ||||||
| Lease financings | 6,375 | 6.04 | 111,569 | 5,412 | 6.49 | ||||||
| Gross loans and leases | 165,538 | 3.99 | 5,345,119 | 153,300 | 3.83 | ||||||
| Total interest-earning assets | 176,275 | 3.62 | 6,085,398 | 159,074 | 3.49 | ||||||
| Cash and due from banks | 55,983 | ||||||||||
| Allowance for credit losses, loans and leases | (76,265) | ||||||||||
| Premises and equipment, net | 55,803 | ||||||||||
| Operating lease right-of-use assets | 33,334 | ||||||||||
| Other assets | 355,323 | ||||||||||
| Total assets | 6,935,031 | $ | 6,509,576 | ||||||||
| Liabilities: | |||||||||||
| Interest-bearing checking deposits | 871,393 | $ | 2,264 | 0.35 | % | $ | 820,800 | $ | 1,514 | 0.25 | % |
| Money market savings | 6,165 | 0.59 | 1,282,470 | 2,606 | 0.27 | ||||||
| Regular savings | 777 | 0.10 | 979,013 | 861 | 0.12 | ||||||
| Time deposits | 3,722 | 1.11 | 502,414 | 4,808 | 1.28 | ||||||
| Total time and interest-bearing deposits | 12,928 | 0.46 | 3,584,697 | 9,789 | 0.37 | ||||||
| Short-term borrowings | 537 | 1.54 | 17,363 | 7 | 0.05 | ||||||
| Long-term debt | 962 | 1.35 | 97,088 | 993 | 1.37 | ||||||
| Subordinated notes | 3,984 | 5.38 | 151,060 | 5,822 | 5.15 | ||||||
| Total borrowings | 5,483 | 3.04 | 265,511 | 6,822 | 3.44 | ||||||
| Total interest-bearing liabilities | 18,411 | 0.61 | 3,850,208 | 16,611 | 0.58 | ||||||
| Noninterest-bearing deposits | 1,854,648 | ||||||||||
| Operating lease liabilities | 36,636 | ||||||||||
| Accrued expenses and other liabilities | 43,023 | ||||||||||
| Total liabilities | 5,784,515 | ||||||||||
| Shareholders' Equity: | |||||||||||
| Common stock | 157,784 | ||||||||||
| Additional paid-in capital | 296,744 | ||||||||||
| Retained earnings and other equity | 270,533 | ||||||||||
| Total shareholders' equity | 725,061 | ||||||||||
| Total liabilities and shareholders' equity | 6,935,031 | $ | 6,509,576 | ||||||||
| Net interest income | $ | 157,864 | $ | 142,463 | |||||||
| Net interest spread | 3.01 | 2.91 | |||||||||
| Effect of net interest-free funding sources | 0.24 | 0.22 | |||||||||
| Net interest margin | 3.25 | % | 3.13 | % | |||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | % | 158.05 | % | ||||||||
| *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 (1.3) million and 8.0 million for the nine months ended September 30, 2022 and 2021, respectively. | |||||||||||
| Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. | |||||||||||
| Tax-equivalent amounts for the nine months ended September 30, 2022 and 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%. |
All values are in US Dollars.
| Univest Financial Corporation | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Loan Portfolio Overview (Unaudited) | ||||||||||||||
| September 30, 2022 | ||||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Industry Description | Total Outstanding Balance (excl PPP) | % of Commercial Loan Portfolio | ||||||||||||
| CRE - Retail | $ | 378,087 | 7.9 | % | ||||||||||
| Animal Production | 332,130 | 7.0 | ||||||||||||
| CRE - Multi-family | 263,698 | 5.5 | ||||||||||||
| CRE - 1-4 Family Residential Investment | 249,149 | 5.2 | ||||||||||||
| CRE - Office | 201,659 | 4.2 | ||||||||||||
| CRE - Industrial / Warehouse | 185,952 | 3.9 | ||||||||||||
| Hotels & Motels (Accommodation) | 170,627 | 3.6 | ||||||||||||
| Nursing and Residential Care Facilities | 168,576 | 3.5 | ||||||||||||
| Education | 155,122 | 3.3 | ||||||||||||
| Specialty Trade Contractors | 147,227 | 3.1 | ||||||||||||
| Homebuilding (tract developers, remodelers) | 133,902 | 2.8 | ||||||||||||
| Motor Vehicle and Parts Dealers | 113,639 | 2.4 | ||||||||||||
| Merchant Wholesalers, Durable Goods | 108,825 | 2.3 | ||||||||||||
| CRE - Medical Office | 105,744 | 2.2 | ||||||||||||
| CRE - Mixed-Use - Residential | 105,702 | 2.2 | ||||||||||||
| Crop Production | 91,597 | 1.9 | ||||||||||||
| CRE - Mixed-Use - Commercial | 85,172 | 1.8 | ||||||||||||
| Food Manufacturing | 84,131 | 1.8 | ||||||||||||
| Wood Product Manufacturing | 75,768 | 1.6 | ||||||||||||
| Rental and Leasing Services | 74,514 | 1.6 | ||||||||||||
| Administrative and Support Services | 73,558 | 1.5 | ||||||||||||
| Religious Organizations, Advocacy Groups | 73,091 | 1.5 | ||||||||||||
| Merchant Wholesalers, Nondurable Goods | 70,679 | 1.5 | ||||||||||||
| Food Services and Drinking Places | 70,498 | 1.5 | ||||||||||||
| Personal and Laundry Services | 60,651 | 1.3 | ||||||||||||
| Fabricated Metal Product Manufacturing | 56,640 | 1.2 | ||||||||||||
| Repair and Maintenance | 56,623 | 1.2 | ||||||||||||
| Miniwarehouse / Self-Storage | 56,279 | 1.2 | ||||||||||||
| Truck Transportation | 50,969 | 1.1 | ||||||||||||
| Industries with >$50 million in outstandings | $ | 3,800,209 | 79.8 | % | ||||||||||
| Industries with <$50 million in outstandings | $ | 962,480 | 20.2 | % | ||||||||||
| Total Commercial Loans | $ | 4,762,689 | 100.0 | % | ||||||||||
| Consumer Loans and Lease Financings | Total Outstanding Balance | |||||||||||||
| Real Estate-Residential Secured for Personal Purpose | $ | 685,771 | ||||||||||||
| Real Estate-Home Equity Secured for Personal Purpose | 175,843 | |||||||||||||
| Loans to Individuals | 26,679 | |||||||||||||
| Lease Financings | 196,070 | |||||||||||||
| Total Consumer Loans and Lease Financings | $ | 1,084,363 | ||||||||||||
| Total | $ | 5,847,052 | ||||||||||||
| Univest Financial Corporation | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Non-GAAP Reconciliation | ||||||||||||||
| September 30, 2022 | ||||||||||||||
| 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 nine months ended, | |||||||||||||
| (Dollars in thousands) | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | 9/30/2021 | 9/30/2022 | 9/30/2021 | |||||||
| Net income | $ | 20,801 | $ | 13,166 | $ | 20,317 | $ | 17,412 | $ | 20,911 | $ | 54,284 | $ | 74,389 |
| Amortization of intangibles, net of tax | 244 | 270 | 269 | 211 | 169 | 784 | 562 | |||||||
| Net income before amortization of intangibles | $ | 21,045 | $ | 13,436 | $ | 20,586 | $ | 17,623 | $ | 21,080 | $ | 55,068 | $ | 74,951 |
| Shareholders' equity | $ | 754,187 | $ | 763,925 | $ | 773,855 | $ | 773,794 | $ | 756,023 | $ | 754,187 | $ | 756,023 |
| Goodwill | (175,510) | (175,510) | (175,510) | (175,510) | (172,559) | (175,510) | (172,559) | |||||||
| Other intangibles (a) | (3,485) | (3,678) | (3,936) | (4,210) | (1,922) | (3,485) | (1,922) | |||||||
| Tangible common equity | $ | 575,192 | $ | 584,737 | $ | 594,409 | $ | 594,074 | $ | 581,542 | $ | 575,192 | $ | 581,542 |
| Total assets | $ | 6,907,397 | $ | 6,700,813 | $ | 7,107,740 | $ | 7,122,421 | $ | 6,979,852 | $ | 6,907,397 | $ | 6,979,852 |
| Goodwill | (175,510) | (175,510) | (175,510) | (175,510) | (172,559) | (175,510) | (172,559) | |||||||
| Other intangibles (a) | (3,485) | (3,678) | (3,936) | (4,210) | (1,922) | (3,485) | (1,922) | |||||||
| Tangible assets | $ | 6,728,402 | $ | 6,521,625 | $ | 6,928,294 | $ | 6,942,701 | $ | 6,805,371 | $ | 6,728,402 | $ | 6,805,371 |
| Average shareholders' equity | $ | 773,099 | $ | 771,410 | $ | 774,358 | $ | 762,334 | $ | 746,185 | $ | 772,951 | $ | 725,061 |
| Average goodwill | (175,510) | (175,510) | (175,510) | (173,553) | (172,559) | (175,510) | (172,559) | |||||||
| Average other intangibles (a) | (3,550) | (3,791) | (4,090) | (2,696) | (1,983) | (3,808) | (2,217) | |||||||
| Average tangible common equity | $ | 594,039 | $ | 592,109 | $ | 594,758 | $ | 586,085 | $ | 571,643 | $ | 593,633 | $ | 550,285 |
| Loans and leases held for investment, gross | $ | 5,849,259 | $ | 5,661,777 | $ | 5,400,786 | $ | 5,310,017 | $ | 5,252,045 | $ | 5,849,259 | $ | 5,252,045 |
| Paycheck Protection Program ("PPP") loans | (2,207) | (5,358) | (10,298) | (31,748) | (85,601) | (2,207) | (85,601) | |||||||
| Gross loans and leases, excluding PPP loans | $ | 5,847,052 | $ | 5,656,419 | $ | 5,390,488 | $ | 5,278,269 | $ | 5,166,444 | $ | 5,847,052 | $ | 5,166,444 |
| (a) Amount does not include mortgage servicing rights |