EX-99.1 2 exhibit991earningsrelease6.htm EX-99.1 Document

Exhibit 99.1
NEWS
logoa.jpg

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

FOR IMMEDIATE RELEASE

UNIVEST FINANCIAL CORPORATION
REPORTS SECOND QUARTER RESULTS
(Loan Growth (excluding PPP loans1) for last twelve months of 14.0%)

SOUDERTON, Pa., July 28, 2021 - Univest Financial Corporation (“Univest” or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income for the quarter ended June 30, 2021 was $20.9 million, or $0.71 diluted earnings per share, compared to net income of $2.1 million, or $0.07 diluted earnings per share, for the quarter ended June 30, 2020. Net income for the six months ended June 30, 2021 was $53.5 million, or $1.81 diluted earnings per share, compared to net income of $2.9 million, or $0.10 diluted earnings per share, for the six months ended June 30, 2020.

Pre-tax pre-provision income1 for the quarter ended June 30, 2021 was $25.7 million, an increase of $143 thousand, or 0.6%, from the second quarter of 2020. Pre-tax pre-provision income1 for the six months ended June 30, 2021 was $54.8 million, an increase of $7.2 million, or 15.1%, from the comparable period in the prior year.

One-Time Items
The financial results for the three and six months ended June 30, 2021 included a tax-free bank owned life insurance ("BOLI") death benefit claim of $893 thousand, which represents $0.03 diluted earnings per share.

Paycheck Protection Program
On December 27, 2020, the Consolidated Appropriations Act, 2021, was signed into law, which provides new COVID-19 relief funds, additional funding under the Paycheck Protection Program (the "PPP") and
1 Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.



the establishment of PPP Second Draw Loans. The Small Business Administration (the "SBA") announced it was taking certain steps under the PPP to further promote equitable relief for smaller businesses. Under this program, we successfully originated 1,226 PPP loans and secured funding of approximately $169.5 million for our customers.

As of June 30, 2021, $252.8 million in PPP loan originations remain outstanding. During the quarter, we recorded income of $4.8 million within net interest income related to these loans, of which $3.7 million was the result of forgiveness and pay downs of PPP loans totaling $282.3 million. During the six months ended June 30, 2021, we recorded income of $9.3 million within net interest income related to these loans, of which $7.1 million was the result of forgiveness and pay downs of PPP loans totaling $402.0 million. As of June 30, 2021, we have $6.4 million of net deferred fees on our balance sheet, which represents approximately 35.2% of the initial deferred fee amount.

Loans
Gross loans and leases, excluding PPP loans2, increased $187.9 million, or 15.4% (annualized), from March 31, 2021, $251.4 million or 10.4% (annualized) from December 31, 2020 and $621.6 million, or 14.0%, from June 30, 2020 due to increases in commercial, construction, residential mortgage loans and lease financings.
Deposits
Total deposits increased $7.1 million, or 0.5% (annualized), from March 31, 2021 and $76.0 million, or 2.9% (annualized), from December 31, 2020 primarily due to increases in commercial and consumer deposits offset by a decrease in brokered deposits and a seasonal decrease in public funds deposits. Total deposits increased $449.4 million, or 9.2%, from June 30, 2020, primarily due to increases in commercial, consumer and public funds deposits.

Net Interest Income and Margin
Net interest income of $46.8 million for the three months ended June 30, 2021 increased $1.3 million, or 3.0%, from the three months ended March 31, 2021, and $3.2 million, or 7.4%, from the three months ended June 30, 2020. Net interest income of $92.2 million for the six months ended June 30, 2021 increased $6.2 million, or 7.2%, from the six months ended June 30, 2020. The increase in net interest income for the six months ended June 30, 2021 compared to the same period of 2020 was primarily due to an increase in PPP loan income of $7.2 million and lower deposit costs offset by a decrease in yield on loans and investment securities.

2 Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.



Net interest margin, on a tax-equivalent basis, was 3.15% for the second quarter of 2021, compared to 3.12% for the first quarter of 2021 and 3.18% for the second quarter of 2020. Excess liquidity reduced net interest margin by approximately ten basis points for the quarter ended June 30, 2021 compared to eleven basis points for the quarter ended March 31, 2021 and sixteen basis points for the quarter ended June 30, 2020. This excess liquidity was primarily driven by strong deposit balance growth during the last fifteen months, which was partially attributable to the various stimulus initiatives associated with the COVID-19 pandemic. As PPP loans are forgiven, the associated deferred fees are recognized in earnings, thus attaining yields in excess of 2020 run rates. PPP loans had a favorable impact on net interest margin of eleven basis points for the quarter ended June 30, 2021 compared to four basis points for the quarter ended March 31, 2021 and an unfavorable impact of nine basis points for the quarter ended June 30, 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.14% for the quarter ended June 30, 2021 compared to 3.19% for the quarter ended March 31, 2021 and 3.43% for the quarter ended June 30, 2020.

Noninterest Income
Noninterest income for the quarter ended June 30, 2021 was $20.2 million, an increase of $2.2 million, or 12.4%, compared to the second quarter of 2020. Noninterest income for the six months ended June 30, 2021 was $43.5 million, an increase of $7.1 million, or 19.5%, from the comparable period in the prior year.

Net gain on mortgage banking activities decreased $54 thousand, or 1.5%, for the quarter and increased $3.1 million, or 50.2% for the six months ended June 30, 2021 compared to the comparable periods in the prior year. The increase for the six months ended June 30, 2021 was primarily due to an increase in volume and expansion of margins. Investment advisory commission and fee income increased $1.0 million, or 28.8%, for the quarter and $1.5 million, or 18.7%, for the six months ended June 30, 2021 compared to the comparable periods in the prior year, due to increased assets under management driven by favorable market conditions and new customer relationships. BOLI income increased $888 thousand, or 121.3%, for the quarter and $871 thousand, or 59.4%, for the six months ended June 30, 2021 primarily due to proceeds from BOLI death benefits of $893 thousand as previously discussed.

Other service fee income increased $1.3 million, or 84.7%, for the quarter and $1.6 million, or 47.1%, for the six months ended June 30, 2021 compared to the comparable periods in the prior year. Mortgage servicing fees increased $599 thousand for the quarter and $692 thousand for the six months ended June 30, 2021 driven by an increase in retained servicing associated with elevated mortgage volume over the past fifteen months. Interchange fee income increased $494 thousand for the quarter and $672 thousand for the six months ended June 30, 2021 due to increased customer activity as the markets we operate in continue to re-open.



Other income decreased $1.3 million, or 73.1%, for the quarter due to a decrease of $1.4 million in fees on risk participation agreements for interest rate swaps driven by a decrease in customer demand.

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2021 was $41.3 million, an increase of $5.3 million, or 14.8%, compared to the second quarter of 2020. Noninterest expense for the six months ended June 30, 2021 was $80.8 million, an increase of $6.1 million, or 8.1%, from the comparable period in the prior year.

Salaries, benefits and commissions increased $3.7 million, or 17.0%, for the quarter and $4.6 million, or 10.2%, for the six months ended June 30, 2021 from the comparable periods in the prior year. These increases reflect our continued investment in staff to support revenue generation across all business lines and annual merit increases. Variable compensation expenses increased $1.0 million and $1.7 million for the three and six months ended June 30, 2021, respectively, from the comparable periods in the prior year, due to increased profitability, specifically in our mortgage banking and wealth management lines of business. Additionally, capitalized compensation related to PPP origination activity was $1.2 million and $664 thousand lower in the three and six months ended June 30, 2021, respectively, from the comparable periods in the prior year.

Data processing expenses increased $314 thousand, or 11.4%, for the quarter and $604 thousand, or 11.0%, for the six months ended June 30, 2021 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. Professional fees increased $751 thousand, or 59.4%, for the quarter and $1.2 million, or 45.8%, for the six months ended June 30, 2021, primarily attributable to increased consultant fees in support of our Diversity, Equity and Inclusion, training initiatives and treasury management product enhancements. During the first six months of 2021, we have spent $781 thousand on these initiatives and we expect to incur approximately $650 thousand of additional expenses related to these initiatives in the second half of the year. These expenses are not expected to re-occur in subsequent periods.

Other expense increased $390 thousand, or 7.3%, for the quarter primarily attributable to an increase in interchange fee expense and travel and entertainment expenses, which are beginning to normalize as the markets we operate in continue to re-open. Other expense decreased $557 thousand, or 4.9%, for the six months ended June 30, 2021 primarily due to a $656 thousand charge related to the extinguishment of long-term debt that occurred in the first quarter of 2020.




Asset Quality and Provision for Credit Losses
Nonperforming assets were $38.5 million at June 30, 2021, compared to $38.2 million at March 31, 2021 and $36.0 million at June 30, 2020.

Net loan and lease charge-offs were $243 thousand during the second quarter of 2021 compared to $3.6 million for the three months ended June 30, 2020. The reversal of provision for credit losses was $59 thousand for the second quarter of 2021, of which $2.8 million (after-tax benefit of $2.2 million), or $0.08 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model, partially offset by a reserve increase attributable to loan growth. The provision for credit losses was $23.7 million for the comparable period in the prior year, of which $19.9 million (after-tax charge of $15.7 million), or $0.54 diluted earnings per share, was attributable to adverse changes in economic-related assumptions, which were predominately driven by COVID-19.

Net loan and lease charge-offs were $531 thousand for the six months ended June 30, 2021 compared to $4.1 million for the same period in the prior year. The reversal of provision for credit losses was $11.3 million for the six months ended June 30, 2021, of which $15.8 million (after-tax benefit of $12.5 million), or $0.42 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model partially offset by a reserve increase attributable to loan growth. The provision for credit losses was $45.6 million for the comparable period in the prior year, of which $40.2 million (after-tax charge of $31.8 million), or $1.09 diluted earnings per share, was attributable to adverse changes in economic-related assumptions.

The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.34% at June 30, 2021, compared to 1.32% at March 31, 2021, and 1.74% at June 30, 2020. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans3, was 1.41% at June 30, 2021 compared to 1.46% at March 31, 2021 and 1.94% at June 30, 2020.

Tax Provision
The effective income tax rate was 19.0% for the quarter ended June 30, 2021, compared to an effective income tax rate of (14.5%) for the quarter ended June 30, 2020. The effective income tax rate was 19.2% for the six months ended June 30, 2021 compared to an effective income tax rate of (42.4%) for the six months ended June 30, 2020. The effective tax rate for the three and six months ended June 30, 2021 and 2020 reflects the level of pre-tax income and the benefits of tax-exempt income from investments in
3 Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.



municipal securities and loans and leases.

Dividend
On July 28, 2021, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on August 25, 2021 to shareholders of record as of August 11, 2021.

Conference Call
Univest will host a conference call to discuss second quarter 2021 results on Thursday, July 29, 2021 at 9:00 a.m. EST. Participants may preregister at https://dpregister.com/sreg/10158232/ea90430528. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through August 29, 2021 by dialing 1-877-344-7529; using Conference ID: 10158232.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $6.4 billion in assets and $4.5 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2021. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices and online at www.univest.net.  
# # #
This press release of Univest and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, business and capital management strategies, markets and products of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future results to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) changes in interest rates; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and credit loss provisions; (4) general economic conditions in our market; (5) economic conditions nationally that may impact the assumptions used to calculate our allowance for credit losses; (6) legislative, regulatory or tax changes that may adversely affect the businesses in which Univest is engaged; (7) technological issues that may adversely affect Univest financial operations or 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 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and whether the continued reopening of businesses will result in a meaningful increase in economic activity. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: (1) demand for our products and services may decline; (2) if the economy is unable to remain open, and higher levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase; (3) collateral for loans, especially real estate, may decline in value; (4) our allowance for credit losses may have to be increased if borrowers experience financial difficulties; (5) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (6) a material decrease in net income or a net loss over several quarters could result in the elimination of or a decrease in the rate of our quarterly cash dividend; (7) our wealth management revenues may decline with continuing market turmoil; (8) litigation, regulatory enforcement risk and reputation risk regarding our participation in the Paycheck Protection Program and the risk that the Small Business Administration may not fund some or all PPP loan guarantees; (9) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (10) Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs; and (11) further and sustained decline in our stock price or other triggering event could result in an impairment charge being recorded. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

(UVSP - ER)



Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2021
(Dollars in thousands)
Balance Sheet (Period End)6/30/20213/31/202112/31/20209/30/20206/30/2020
Assets$6,356,305 $6,416,665$6,336,496$6,382,831$6,125,312
Investment securities, net of allowance for credit losses397,426377,506373,176368,830397,852
Loans held for sale27,32222,63637,03914,46531,082
Loans and leases held for investment, gross5,327,3135,415,0065,306,8415,211,8564,951,809
Allowance for credit losses, loans and leases71,35571,49783,04491,87086,217
Loans and leases held for investment, net5,255,9585,343,5095,223,7975,119,9864,865,592
Total deposits5,318,7045,311,5925,242,7155,211,6034,869,329
Noninterest-bearing deposits1,872,0311,857,5471,690,6631,714,5051,725,819
NOW, money market and savings2,954,4502,979,8342,988,2772,940,8792,623,025
Time deposits492,223474,211563,775556,219520,485
Borrowings218,970295,293311,421416,104515,722
Shareholders' equity739,998722,455692,472669,107654,873
Balance Sheet (Average)For the three months ended,For the six months ended,
6/30/20213/31/202112/31/20209/30/20206/30/20206/30/20216/30/2020
Assets$6,443,629 $6,383,463$6,353,519$6,265,605$6,000,790$6,413,712$5,704,527
Investment securities, net of allowance for credit losses385,694374,369369,511385,221411,957380,063426,928
Loans and leases, gross5,389,1105,325,8975,253,7205,070,0374,836,8585,357,6784,612,720
Deposits5,351,0895,296,1475,222,4525,030,3984,794,6695,323,7704,572,326
Shareholders' equity728,750699,736676,426661,947660,950714,324667,205
Asset Quality Data (Period End)
6/30/20213/31/202112/31/20209/30/20206/30/2020
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases and nonaccrual loans held for sale$37,466$29,996$31,692$30,019$26,141
Accruing loans and leases 90 days or more past due7506641,3923,5731,193
Accruing troubled debt restructured loans and leases5252535353
Total nonperforming loans and leases38,26830,71233,13733,64527,387
Other real estate owned2797,4817,3558,2708,642
Total nonperforming assets$38,547$38,193$40,492$41,915$36,029
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale0.70 %0.55 %0.60 %0.58 %0.53 %
Nonperforming loans and leases / Loans and leases held for investment0.72 %0.57 %0.62 %0.65 %0.55 %
Nonperforming assets / Total assets0.61 %0.60 %0.64 %0.66 %0.59 %
Allowance for credit losses, loans and leases$71,355$71,497$83,044$91,870$86,217
Allowance for credit losses, loans and leases / Loans and leases held for investment1.34 %1.32 %1.56 %1.76 %1.74 %
Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1)1.41 %1.46 %1.72 %1.95 %1.94 %
Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment212.97 %238.36 %262.03 %306.04 %329.82 %
Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment208.00 %232.80 %250.61 %273.06 %314.81 %
For the three months ended,For the six months ended,
6/30/20213/31/202112/31/20209/30/20206/30/20206/30/20216/30/2020
Net loan and lease charge-offs (recoveries)$243$288$618$(35)$3,576$531$4,065
Net loan and lease charge-offs (annualized)/Average loans and leases0.02 %0.02 %0.05 %— %0.30 %0.02 %0.18 %
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.




Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2021
(Dollars in thousands, except per share data)
For the three months ended,For the six months ended,
For the period:6/30/20213/31/202112/31/20209/30/20206/30/20206/30/20216/30/2020
Interest income$52,441 $51,457 $51,334 $50,612 $49,980 $103,898 $101,999 
Interest expense5,684 6,043 6,813 6,758 6,462 11,727 16,013 
Net interest income46,757 45,414 44,521 43,854 43,518 92,171 85,986 
(Reversal of provision) provision for credit losses(59)(11,283)(8,721)3,935 23,737 (11,342)45,580 
Net interest income after provision for credit losses46,816 56,697 53,242 39,919 19,781 103,513 40,406 
Noninterest income:
Trust fee income2,157 2,034 1,974 1,915 1,924 4,191 3,814 
Service charges on deposit accounts1,314 1,282 1,371 1,187 890 2,596 2,287 
Investment advisory commission and fee income4,558 4,697 4,144 4,005 3,540 9,255 7,795 
Insurance commission and fee income3,839 4,955 3,512 3,776 4,067 8,794 8,799 
Other service fee income2,748 2,192 2,092 2,093 1,488 4,940 3,358 
Bank owned life insurance income1,620 717 733 741 732 2,337 1,466 
Net gain on sales of investment securities54 65 54 57 65 119 760 
Net gain on mortgage banking activities3,461 5,938 4,323 5,860 3,515 9,399 6,259 
Other income479 1,370 1,936 2,171 1,779 1,849 1,846 
Total noninterest income20,230 23,250 20,139 21,805 18,000 43,480 36,384 
Noninterest expense:
Salaries, benefits and commissions25,396 24,780 23,613 24,059 21,700 50,176 45,536 
Net occupancy2,656 2,739 2,697 2,609 2,478 5,395 5,052 
Equipment968 946 951 972 923 1,914 1,918 
Data processing3,064 3,050 2,961 2,862 2,750 6,114 5,510 
Professional fees2,015 1,748 1,436 1,321 1,264 3,763 2,581 
Marketing and advertising561 280 575 463 535 841 937 
Deposit insurance premiums613 636 765 707 615 1,249 1,119 
Intangible expenses249 249 282 283 321 498 651 
Restructuring charges— — 1,439 — — — — 
Other expense5,764 5,112 7,015 5,251 5,374 10,876 11,433 
Total noninterest expense41,286 39,540 41,734 38,527 35,960 80,826 74,737 
Income before taxes25,760 40,407 31,647 23,197 1,821 66,167 2,053 
Income tax expense (benefit)4,885 7,804 5,773 5,078 (264)12,689 (870)
Net income$20,875 $32,603 $25,874 $18,119 $2,085 $53,478 $2,923 
Net income per share:
Basic$0.71 $1.11 $0.88 $0.62 $0.07 $1.82 $0.10 
Diluted$0.71 $1.11 $0.88 $0.62 $0.07 $1.81 $0.10 
Dividends declared per share (1)$0.20 $0.20 $— $0.20 $0.20 $0.40 $0.40 
Weighted average shares outstanding29,389,525 29,327,432 29,274,915 29,226,627 29,187,197 29,359,198 29,236,698 
Period end shares outstanding29,411,731 29,379,575 29,295,052 29,241,302 29,201,985 29,411,731 29,201,985 
(1) As announced in the September 30, 2020 Earnings Release, the Corporation changed the timing of future dividend declarations and payments.




Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2021
For the three months ended,For the six months ended,
Profitability Ratios (annualized)6/30/20213/31/202112/31/20209/30/20206/30/20206/30/20216/30/2020
Return on average assets1.30 %2.07 %1.62 %1.15 %0.14 %1.68 %0.10 %
Return on average assets, excluding restructuring charges (1)1.30 %2.07 %1.69 %1.15 %0.14 %1.68 %0.10 %
Return on average shareholders' equity11.49 %18.90 %15.22 %10.89 %1.27 %15.10 %0.88 %
Return on average shareholders' equity, excluding restructuring charges (1)11.49 %18.90 %15.89 %10.89 %1.27 %15.10 %0.88 %
Return on average tangible common equity (1)15.11 %25.20 %20.54 %14.82 %1.73 %19.99 %1.20 %
Return on average tangible common equity, excluding restructuring charges (1)15.11 %25.20 %21.44 %14.82 %1.73 %19.99 %1.20 %
Net interest margin (FTE)3.15 %3.12 %3.02 %3.02 %3.18 %3.14 %3.32 %
Efficiency ratio (2)60.7 %57.0 %63.8 %58.0 %57.7 %58.8 %60.2 %
Efficiency ratio, excluding restructuring charges (1) (2)60.7 %57.0 %61.6 %58.0 %57.7 %58.8 %60.2 %
Capitalization Ratios
Dividends declared to net income (3)28.2 %18.0 %— %32.3 %278.7 %22.0 %399.5 %
Shareholders' equity to assets (Period End)11.64 %11.26 %10.93 %10.48 %10.69 %11.64 %10.69 %
Tangible common equity to tangible assets (1)9.15 %8.77 %8.40 %7.95 %8.05 %9.15 %8.05 %
Common equity book value per share$25.16 $24.59 $23.64 $22.88 $22.43 $25.16 $22.43 
Tangible common equity book value per share (1)$19.22 $18.64 $17.66 $16.88 $16.41 $19.22 $16.41 
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio9.64 %9.45 %9.08 %8.97 %9.15 %9.64 %9.15 %
Common equity tier 1 risk-based capital ratio11.04 %11.08 %10.76 %10.52 %10.73 %11.04 %10.73 %
Tier 1 risk-based capital ratio11.04 %11.08 %10.76 %10.52 %10.73 %11.04 %10.73 %
Total risk-based capital ratio13.82 %15.13 %15.31 %15.35 %13.72 %13.82 %13.72 %
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance 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) 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 BasisJune 30, 2021March 31, 2021
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$215,349 $46 0.09 %$237,548 $56 0.10 %
U.S. government obligations6,999 35 2.01 6,998 36 2.09 
Obligations of state and political subdivisions6,070 58 3.83 11,544 105 3.69 
Other debt and equity securities372,625 1,364 1.47 355,827 1,267 1.44 
Federal Home Loan Bank, Federal Reserve Bank and other stock25,872 360 5.58 26,368 348 5.35 
Total interest-earning deposits, investments and other interest-earning assets626,915 1,863 1.19 638,285 1,812 1.15 
Commercial, financial, and agricultural loans826,464 6,910 3.35 782,208 6,798 3.52 
Paycheck Protection Program loans408,928 4,778 4.69 506,939 4,524 3.62 
Real estate—commercial and construction loans2,701,137 24,931 3.70 2,621,981 24,458 3.78 
Real estate—residential loans1,065,065 9,836 3.70 1,037,000 9,873 3.86 
Loans to individuals25,284 251 3.98 26,447 265 4.05 
Municipal loans and leases251,311 2,598 4.15 245,638 2,530 4.18 
Lease financings110,921 1,819 6.58 105,684 1,737 6.67 
     Gross loans and leases5,389,110 51,123 3.80 5,325,897 50,185 3.82 
          Total interest-earning assets6,016,025 52,986 3.53 5,964,182 51,997 3.54 
Cash and due from banks52,948 55,311 
Allowance for credit losses, loans and leases(73,052)(83,254)
Premises and equipment, net55,903 55,826 
Operating lease right-of-use assets33,992 34,033 
Other assets357,813 357,365 
      Total assets$6,443,629 $6,383,463 
Liabilities:
Interest-bearing checking deposits$786,931 $487 0.25 %$817,940 $490 0.24 %
Money market savings1,219,375 831 0.27 1,243,673 853 0.28 
Regular savings978,807 282 0.12 959,232 298 0.13 
Time deposits485,060 1,559 1.29 525,800 1,759 1.36 
Total time and interest-bearing deposits3,470,173 3,159 0.37 3,546,645 3,400 0.39 
Short-term borrowings19,109 0.06 17,894 0.05 
Long-term debt95,000 321 1.36 101,333 348 1.39 
Subordinated notes172,016 2,201 5.13 183,340 2,293 5.07 
     Total borrowings286,125 2,525 3.54 302,567 2,643 3.54 
     Total interest-bearing liabilities3,756,298 5,684 0.61 3,849,212 6,043 0.64 
Noninterest-bearing deposits1,880,916 1,749,502 
Operating lease liabilities37,426 37,415 
Accrued expenses and other liabilities40,239 47,598 
     Total liabilities5,714,879 5,683,727 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital296,599 296,136 
Retained earnings and other equity274,367 245,816 
     Total shareholders' equity728,750 699,736 
     Total liabilities and shareholders' equity$6,443,629 $6,383,463 
Net interest income$47,302 $45,954 
Net interest spread2.92 2.90 
Effect of net interest-free funding sources0.23 0.22 
Net interest margin3.15 %3.12 %
Ratio of average interest-earning assets to average interest-bearing liabilities160.16 %154.95 %
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustment.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the three months ended June 30, 2021 and March 31, 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%.




Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
For the Three Months Ended June 30,
Tax Equivalent Basis20212020
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$215,349 $46 0.09 %$313,668 $67 0.09 %
U.S. government obligations6,999 35 2.01 7,236 36 2.00 
Obligations of state and political subdivisions6,070 58 3.83 26,546 240 3.64 
Other debt and equity securities372,625 1,364 1.47 378,175 2,182 2.32 
Federal Home Loan Bank, Federal Reserve Bank and other stock25,872 360 5.58 28,977 362 5.02 
Total interest-earning deposits, investments and other interest-earning assets626,915 1,863 1.19 754,602 2,887 1.54 
Commercial, financial, and agricultural loans826,464 6,910 3.35 816,976 7,330 3.61 
Paycheck Protection Program loans408,928 4,778 4.69 370,669 2,128 2.31 
Real estate—commercial and construction loans2,701,137 24,931 3.70 2,232,827 23,110 4.16 
Real estate—residential loans1,065,065 9,836 3.70 1,004,671 10,270 4.11 
Loans to individuals25,284 251 3.98 29,079 327 4.52 
Municipal loans and leases251,311 2,598 4.15 291,433 2,977 4.11 
Lease financings110,921 1,819 6.58 91,203 1,592 7.02 
     Gross loans and leases5,389,110 51,123 3.80 4,836,858 47,734 3.97 
          Total interest-earning assets6,016,025 52,986 3.53 5,591,460 50,621 3.64 
Cash and due from banks52,948 46,970 
Allowance for credit losses, loans and leases(73,052)(69,292)
Premises and equipment, net55,903 55,750 
Operating lease right-of-use assets33,992 34,419 
Other assets357,813 341,483 
      Total assets$6,443,629 $6,000,790 
Liabilities:
Interest-bearing checking deposits$786,931 $487 0.25 %$617,927 $372 0.24 %
Money market savings1,219,375 831 0.27 1,063,463 853 0.32 
Regular savings978,807 282 0.12 872,422 475 0.22 
Time deposits485,060 1,559 1.29 577,462 2,672 1.86 
Total time and interest-bearing deposits3,470,173 3,159 0.37 3,131,274 4,372 0.56 
Short-term borrowings19,109 0.06 161,365 122 0.30 
Long-term debt95,000 321 1.36 210,040 762 1.46 
Subordinated notes172,016 2,201 5.13 94,890 1,206 5.11 
     Total borrowings286,125 2,525 3.54 466,295 2,090 1.80 
     Total interest-bearing liabilities3,756,298 5,684 0.61 3,597,569 6,462 0.72 
Noninterest-bearing deposits1,880,916 1,663,395 
Operating lease liabilities37,426 37,680 
Accrued expenses and other liabilities40,239 41,196 
     Total liabilities5,714,879 5,339,840 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital296,599 295,681 
Retained earnings and other equity274,367 207,485 
     Total shareholders' equity728,750 660,950 
     Total liabilities and shareholders' equity$6,443,629 $6,000,790 
Net interest income$47,302 $44,159 
Net interest spread2.92 2.92 
Effect of net interest-free funding sources0.23 0.26 
Net interest margin3.15 %3.18 %
Ratio of average interest-earning assets to average interest-bearing liabilities160.16 %155.42 %
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the three months ended June 30, 2021 and 2020 have been calculated using the Corporation’s federal applicable rate of 21.0%.




Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
For the Six Months Ended June 30,
Tax Equivalent Basis20212020
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$226,387 $102 0.09 %$215,888 $392 0.37 %
U.S. government obligations6,999 71 2.05 7,267 73 2.02 
Obligations of state and political subdivisions8,792 163 3.74 30,070 529 3.54 
Other debt and equity securities364,272 2,631 1.46 389,591 4,850 2.50 
Federal Home Loan Bank, Federal Reserve Bank and other stock26,119 708 5.47 30,214 889 5.92 
Total interest-earning deposits, investments and other interest-earning assets632,569 3,675 1.17 673,030 6,733 2.01 
Commercial, financial, and agricultural loans804,458 13,708 3.44 819,121 15,961 3.92 
Paycheck Protection Program loans457,663 9,302 4.10 185,334 2,128 2.31 
Real estate—commercial and construction loans2,661,778 49,389 3.74 2,186,098 47,027 4.33 
Real estate—residential loans1,051,110 19,709 3.78 998,111 21,322 4.30 
Loans to individuals25,862 516 4.02 29,548 734 5.00 
Municipal loans and leases248,490 5,128 4.16 304,219 6,242 4.13 
Lease financings108,317 3,556 6.62 90,289 3,146 7.01 
     Gross loans and leases5,357,678 101,308 3.81 4,612,720 96,560 4.21 
          Total interest-earning assets5,990,247 104,983 3.53 5,285,750 103,293 3.93 
Cash and due from banks54,123 48,931 
Allowance for credit losses, loans and leases(78,125)(56,832)
Premises and equipment, net55,865 56,074 
Operating lease right-of-use assets34,013 34,482 
Other assets357,589 336,122 
      Total assets$6,413,712 $5,704,527 
Liabilities:
Interest-bearing checking deposits$802,350 $977 0.25 %$601,159 $1,168 0.39 %
Money market savings1,231,457 1,684 0.28 1,060,399 3,756 0.71 
Regular savings969,073 580 0.12 844,591 1,267 0.30 
Time deposits505,318 3,318 1.32 590,183 5,587 1.90 
Total time and interest-bearing deposits3,508,198 6,559 0.38 3,096,332 11,778 0.76 
Short-term borrowings18,506 0.05 100,745 228 0.46 
Long-term debt98,149 669 1.37 189,623 1,526 1.62 
Subordinated notes177,647 4,494 5.10 94,868 2,481 5.26 
     Total borrowings294,302 5,168 3.54 385,236 4,235 2.21 
     Total interest-bearing liabilities3,802,500 11,727 0.62 3,481,568 16,013 0.92 
Noninterest-bearing deposits1,815,572 1,475,994 
Operating lease liabilities37,419 37,724 
Accrued expenses and other liabilities43,897 42,036 
     Total liabilities5,699,388 5,037,322 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital296,369 295,500 
Retained earnings and other equity260,171 213,921 
     Total shareholders' equity714,324 667,205 
     Total liabilities and shareholders' equity$6,413,712 $5,704,527 
Net interest income$93,256 $87,280 
Net interest spread2.91 3.01 
Effect of net interest-free funding sources0.23 0.31 
Net interest margin3.14 %3.32 %
Ratio of average interest-earning assets to average interest-bearing liabilities157.53 %151.82 
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the six months ended June 30, 2021 and 2020 have been calculated using the Corporation’s federal applicable rate of 21.0%.




Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
(Dollars in thousands)As of June 30, 2021
Industry DescriptionTotal Outstanding Balance (excl PPP)% of Commercial Loan Portfolio$ Balance of Modified Loans (1)Modified Loans as a % of Portfolio (excl PPP) (1)
CRE - Retail$365,096 8.7 %$— — %
Animal Production281,368 6.7 — — 
CRE - 1-4 Family Residential Investment250,694 6.0 605 0.2 
CRE - Office249,692 5.9 — — 
CRE - Industrial / Warehouse217,874 5.2 — — 
CRE - Multi-family206,766 4.9 — — 
Hotels & Motels (Accommodation)170,730 4.1 26,036 15.2 
Nursing and Residential Care Facilities158,292 3.8 — — 
Education152,983 3.6 — — 
CRE - Mixed-Use - Residential122,489 2.9 3,268 2.7 
Specialty Trade Contractors121,303 2.9 36 — 
Real Estate Lenders, Secondary Market Financing103,796 2.5 — — 
CRE - Medical Office96,075 2.3 — — 
Homebuilding (tract developers, remodelers)89,915 2.1 — — 
Private Equity & Special Purpose Entities87,111 2.1 — — 
Merchant Wholesalers, Durable Goods78,944 1.9 — — 
Crop Production72,558 1.7 — — 
Motor Vehicle and Parts Dealers67,371 1.6 — — 
Rental and Leasing Services63,142 1.5 — — 
Wood Product Manufacturing63,095 1.5 — 
Fabricated Metal Product Manufacturing59,398 1.4 — — 
Merchant Wholesalers, Nondurable Goods53,783 1.3 — — 
Food Services and Drinking Places51,356 1.2 3,233 6.3 
Administrative and Support Services50,296 1.1 101 0.2 
Industries with >$50 million in outstandings$3,234,127 76.9 %$33,279 1.0 %
Industries with <$50 million in outstandings $969,606 23.1 %$18,272 1.9 %
Total Commercial Loans$4,203,733 100.0 %$51,551 1.2 %
Consumer Loans and Lease FinancingsTotal Outstanding Balance$ Balance of Modified Loans (1)Modified Loans as a % of Portfolio (excl PPP) (1)
Real Estate-Residential Secured for Personal Purpose$513,330 $2,429 0.5 %
Real Estate-Home Equity Secured for Personal Purpose160,018 — — 
Loans to Individuals25,845 — — 
Lease Financings171,538 215 0.1 
Total Consumer Loans and Lease Financings$870,731 $2,644 0.3 %
Total$5,074,464 $54,195 1.1 %
(1) Loan modifications referenced above were made in accordance with Section 4013 of the CARES Act, the Consolidated Appropriations Act, 2021 and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and therefore were not classified as TDRs as of June 30, 2021.




Univest Financial Corporation
Non-GAAP Reconciliation
June 30, 2021
Management uses non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release.
For the three months ended,For the six months ended,
(Dollars in thousands)6/30/20213/31/202112/31/20209/30/20206/30/20206/30/20216/30/2020
Restructuring charges (a)$— $— $1,439 $— $— $— $— 
Tax effect of restructuring charges— — (302)— — — — 
Restructuring charges, net of tax$— $— $1,137 $— $— $— $— 
Shareholders' equity$739,998 $722,455 $692,472 $669,107 $654,873 $739,998 $654,873 
Goodwill(172,559)(172,559)(172,559)(172,559)(172,559)(172,559)(172,559)
Other intangibles (b)(2,073)(2,326)(2,580)(2,866)(3,147)(2,073)(3,147)
Tangible common equity$565,366 $547,570 $517,333 $493,682 $479,167 $565,366 $479,167 
Total assets$6,356,305 $6,416,665 $6,336,496 $6,382,831 $6,125,312 $6,356,305 $6,125,312 
Goodwill(172,559)(172,559)(172,559)(172,559)(172,559)(172,559)(172,559)
Other intangibles (b)(2,073)(2,326)(2,580)(2,866)(3,147)(2,073)(3,147)
Tangible assets$6,181,673 $6,241,780 $6,161,357 $6,207,406 $5,949,606 $6,181,673 $5,949,606 
Average shareholders' equity$728,750 $699,736 $676,426 $661,947 $660,950 $714,324 $667,205 
Average goodwill(172,559)(172,559)(172,559)(172,559)(172,559)(172,559)(172,559)
Average other intangibles (b)(2,209)(2,464)(2,734)(3,019)(3,321)(2,336)(3,490)
Average tangible common equity$553,982 $524,713 $501,133 $486,369 $485,070 $539,429 $491,156 
Net income before taxes$25,760 $40,407 $31,647 $23,197 $1,821 $66,167 $2,053 
Provision for credit losses(59)(11,283)(8,721)3,935 23,737 (11,342)45,580 
Pre-tax pre-provision income$25,701 $29,124 $22,926 $27,132 $25,558 $54,825 $47,633 
Loans and leases held for investment, gross$5,327,313 $5,415,006 $5,306,841 $5,211,856 $4,951,809 $5,327,313 $4,951,809 
Paycheck Protection Program ("PPP") loans (252,849)(528,452)(483,773)(501,580)(498,978)(252,849)(498,978)
Gross loans and leases, excluding PPP loans$5,074,464 $4,886,554 $4,823,068 $4,710,276 $4,452,831 $5,074,464 $4,452,831 
Allowance for credit losses, loans and leases$71,355 $71,497 $83,044 $91,870 $86,217 $71,355 $86,217 
Gross loans and leases, excluding PPP loans5,074,464 4,886,554 4,823,068 4,710,276 4,452,831 5,074,464 4,452,831 
Allowance for credit losses, loans and leases as a percentage of gross loans and leases excluding PPP loans1.41 %1.46 %1.72 %1.95 %1.94 %1.41 %1.94 %
(a) Associated with financial center optimization plan
(b) Amount does not include mortgage servicing rights