EX-99.1 3 exhibit991earningsrelease0.htm EX-99.1 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 SECOND QUARTER RESULTS
(Loan Growth of 19.6% (annualized) for the second quarter 2022 (excluding PPP loans1))

SOUDERTON, Pa., July 27, 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, today announced net income for the quarter ended June 30, 2022 was $13.2 million, or $0.45 diluted earnings per share, compared to net income of $20.9 million, or $0.71 diluted earnings per share, for the quarter ended June 30, 2021. Net income for the six months ended June 30, 2022 was $33.5 million, or $1.13 diluted earnings per share, compared to net income of $53.5 million, or $1.81 diluted earnings per share, for the six months ended June 30, 2021.

Loans
Gross loans and leases, excluding Paycheck Protection Program ("PPP") loans1, increased $265.9 million, or 19.6% (annualized), from March 31, 2022, $378.2 million, or 14.4% (annualized), from December 31, 2021 and $582.0 million, or 11.5%, from June 30, 2021 primarily due to increases in commercial, commercial real estate, construction, residential mortgage loans, and lease financings. As of June 30, 2022, $5.4 million in PPP loans remained outstanding.
Deposits
Total deposits decreased $484.9 million, or 32.0% (annualized), from March 31, 2022 and $492.1 million, or 16.2% (annualized), from December 31, 2021 primarily due to a seasonal decrease in public funds deposits as well as decreases in commercial and consumer deposits. Total deposits increased $244.3 million, or 4.6%, from June 30, 2021, primarily due to increases in commercial, consumer and public funds deposits.

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


Net Interest Income and Margin
Net interest income of $51.5 million for the three months ended June 30, 2022 increased $4.8 million, or 10.3%, from the three months ended March 31, 2022, and $4.7 million, or 10.1%, from the three months ended June 30, 2021. The increase in net interest income for the three months ended June 30, 2022 compared to the same period of 2021 was due to an increase in the average balance of loans and investments, increased asset yields and a decrease in the cost of interest-bearing liabilities, partially offset by an increase in the average balance of interest-bearing liabilities and a decrease in PPP loan income.

Net interest income of $98.1 million for the six months ended June 30, 2022 increased $6.0 million, or 6.5%, from the six months ended June 30, 2021. The increase in net interest income for the six months ended June 30, 2022 compared to the same period of 2021 was due to loan and investment average balance growth outpacing declines in asset yields and a decrease in the cost of interest-bearing liabilities, offset by an increase in the average balance of interest-bearing liabilities and a decrease in PPP loan income.

Net interest margin, on a tax-equivalent basis, was 3.19% for the second quarter of 2022, compared to 2.89% for the first quarter of 2022 and 3.15% for the second quarter of 2021. Excess liquidity reduced net interest margin by approximately 23 basis points for the quarter ended June 30, 2022 compared to 33 basis points for the quarter ended March 31, 2022 and ten basis points for the quarter ended June 30, 2021. During the quarter ended June 30, 2022, our excess liquidity diminished and we returned to a pre-pandemic liquidity level at the end of the quarter. PPP loans had a favorable impact on net interest margin of one basis point for the quarter ended June 30, 2022 compared to three basis points for the quarter ended March 31, 2022 and eleven basis points for the quarter ended June 30, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.41% for the quarter ended June 30, 2022 compared to 3.19% for the quarter ended March 31, 2022 and 3.14% for the quarter ended June 30, 2021.

During the second quarter, the Bank entered into a 4-year $250 million interest rate swap (representing approximately 13% of the Bank's variable rate loans), whereby the Bank receives a fixed rate of 5.99% and pays a variable rate equal to the Prime Rate. During the second quarter of 2022, the swap contributed $707 thousand to net interest income and four basis points to net interest margin.

Net interest margin, on a tax-equivalent basis, was 3.04% for the six months ended June 30, 2022, compared to 3.14% for the six months ended June 30, 2021. Excess liquidity reduced net interest margin by approximately 28 basis points for the six months ended June 30, 2022 compared to ten basis points for the six months ended June 30, 2021. PPP loans had a favorable impact on net interest margin of two


basis points for the six months ended June 30, 2022 compared to seven basis points for the six months ended June 30, 2021. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.30% for the six months ended June 30, 2022 compared to 3.17% for the six months ended June 30, 2021.

Noninterest Income
Noninterest income for the quarter ended June 30, 2022 was $19.0 million, a decrease of $1.2 million, or 6.1%, compared to the second quarter of 2021. Noninterest income for the six months ended June 30, 2022 was $39.5 million, a decrease of $4.0 million, or 9.2%, from the comparable period in the prior year.

Net gain on mortgage banking activities decreased $2.2 million, or 64.5%, for the quarter and $6.2 million, or 66.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to a decrease in loan sales and a contraction of margins. Bank owned life insurance ("BOLI") decreased $915 thousand, or 56.5%, for the quarter and $933 thousand, or 39.9%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to a death benefit claim of $893 thousand in the second quarter of 2021.

Insurance commission and fee income increased $790 thousand, or 20.6%, for the quarter and $1.4 million, or 16.0%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to incremental revenue attributable to the insurance agency the Corporation acquired in the fourth quarter of 2021. Investment advisory commission and fee income increased $254 thousand, or 5.6%, for the quarter and $709 thousand, or 7.7%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to new customer relationships and appreciation of assets under management, as a majority of investment advisory fees are billed based on the prior quarter-end assets under management balance.

Other service fee income increased $561 thousand, or 20.4%, for the quarter and $1.1 million, or 22.8%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. Mortgage servicing fees increased $357 thousand for the quarter and $619 thousand for the six months ended June 30, 2022 driven by reduced amortization as a result of a decrease in prepayment speeds. Interchange fee income increased $115 thousand for the quarter and $291 thousand for the six months ended June 30, 2022 due to increased customer activity.

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2022 was $47.4 million, an increase of $6.1 million, or 14.7%, compared to the second quarter of 2021. Noninterest expense for the six months ended June 30, 2022 was $92.8 million, an increase of $12.0 million, or 14.8%, from the comparable period in


the prior year. The results for the three and six months ended June 30, 2022 include approximately $1.4 million and $2.1 million, respectively, 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 $3.7 million, or 14.7%, for the quarter and $7.2 million, or 14.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. These increases reflect our continued investment in revenue producing staff across all business lines, including the acquisition of the Paul I. Schaeffer insurance agency, and annual merit increases. Additionally, during the three and six months ended June 30, 2022, we incurred $353 thousand and $740 thousand, respectively, of short-term incremental guaranties related to the hiring of new producers in our mortgage banking line of business. Finally, during the six months ended June 30, 2021 salaries, benefits and commissions expense was benefited by $616 thousand of incremental capitalized compensation related to the origination of PPP loans.

Professional fees increased $829 thousand, or 41.1%, for the quarter and $1.2 million, or 32.4%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. The increase for the three months ended June 30, 2022 was primarily attributable to $1.2 million of consultant fees spent related to the previously discussed digital transformation initiative, as compared to our $230 thousand investment in our Diversity, Equity and Inclusion training initiatives for the three months ended June 30, 2021. The increase for the six months ended June 30, 2022 was primarily attributable to $1.9 million of consultant fees spent related to the previously discussed digital transformation initiative, as compared to our $506 thousand investment in our Diversity, Equity and Inclusion training initiatives for the six months ended June 30, 2021. Deposit insurance premiums increased $199 thousand, or 32.5%, for the quarter and $456 thousand, or 36.5%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, driven by an increased assessment base.

Data processing expenses increased $644 thousand, or 21.0%, for the quarter and $1.2 million, or 19.0%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year, primarily due to continued investments in our end-to-end loan origination solution for loans below $1.0 million, customer relationship management software, internal infrastructure improvements, outsourced data processing solutions, and $155 thousand and $258 thousand in support of the previously discussed digital transformation initiative for the respective periods.

Other expense increased $676 thousand, or 11.7%, for the quarter and $1.7 million, or 15.3%, for the six months ended June 30, 2022 compared to the comparable periods in the prior year. Recruiting costs increased $138 thousand and $420 thousand for the three and six months ended June 30, 2022,


respectively, due to increased hiring activity, including the entry into our two new expansions markets. Travel and entertainment expenses increased $309 thousand and $574 thousand for the three and six months ended June 30, 2022, respectively, as related activities have largely returned to pre-pandemic levels. Additionally, the six months ended June 30, 2022 includes incurred costs of $330 thousand as a result of a customer who was defrauded.

Tax Provision
The effective income tax rate was 19.8% for the quarter ended June 30, 2022, compared to an effective income tax rate of 19.0% for the quarter ended June 30, 2021. The effective income tax rate was 19.5% for the six months ended June 30, 2022, compared to an effective income tax rate of 19.2% for the six months ended June 30, 2021.The effective tax rate for the three and six months ended June 30, 2022 and 2021 reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $34.8 million at June 30, 2022, compared to $31.5 million at March 31, 2022 and $38.5 million at June 30, 2021. During the quarter, a nonaccrual commercial real estate loan was transferred to other real estate owned ("OREO") with a carrying value of $18.3 million.

Net loan and lease charge-offs were $1.7 million and $1.8 million for the three and six months ended June 30, 2022, respectively. Net loan and lease charge-offs were $243 thousand and $531 thousand for the three and six months ended June 30, 2021, respectively. During the second quarter of 2022, a $1.7 million charge-off was recorded against an existing nonaccrual commercial real estate loan.

The provision for credit losses was $6.7 million for the second quarter of 2022 primarily driven by a $5.5 million increase (after-tax charge of $4.3 million), or $0.15 diluted earnings per share, in reserves due to loan growth, a specific reserve of $1.1 million related to a commercial real estate loan that was placed on nonaccrual status during the second quarter and an incremental provision of $736 thousand related to the previously mentioned $1.7 million charge-off. The reversal of provision for credit losses was $59 thousand for the second quarter of 2021 driven by a $2.7 million increase (after-tax charge of $2.1 million), or $0.07 diluted earnings per share, in reserves due to loan growth outpaced by favorable changes in economic-related assumptions within the Corporation’s CECL model.

The provision for credit losses was $3.2 million for the six months ended June 30, 2022 primarily driven by a $6.8 million increase (after-tax charge of $5.4 million), or $0.18 diluted earnings per share, in reserves due to loan growth and specific reserves of $2.8 million on two nonaccrual commercial real estate properties. These increases were partially offset by $7.3 million (after-tax benefit of $5.8 million), or


$0.19 diluted earnings per share, of changes in economic-related assumptions within the Corporation’s CECL model. Additionally, reserves on unfunded commitments and investment securities increased $990 thousand during the six months ended June 30, 2022. The reversal of provision for credit losses was $11.3 million for the comparable period in the prior year, 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 allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.27% at June 30, 2022, compared to 1.26% at March 31, 2022, and 1.34% at June 30, 2021. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans2, was 1.27% at June 30, 2022 compared to 1.27% at March 31, 2022 and 1.41% at June 30, 2021.

Share Repurchases
As previously announced, the Corporation began to repurchase its common stock on the open market. During the second quarter of 2022, the Corporation repurchased 300,000 shares at an average price of $25.23, for an aggregate cost of $7.6 million. As of June 30, 2022, the Corporation has 379,174 shares remaining to repurchase under the current approved plan.

Dividend
On July 27, 2022, Univest declared a quarterly cash dividend of $0.21 per share to be paid on August 24, 2022 to shareholders of record as of August 10, 2022.

Conference Call
Univest will host a conference call to discuss second quarter 2022 results on Thursday, July 28, 2022 at 9:00 a.m. EST. Participants may preregister at https://ige.netroadshow.com/registration/q4inc/11282/univest-financial-corporation-to-hold-second-quarter-2022-earnings-call/. The general public can access the call by dialing 1-844-200-6205; using Access Code 571585. A replay of the conference call will be available through August 27, 2022 by dialing 1-866-813-9403; using Access Code: 134898.

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


About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $6.7 billion in assets and $4.1 billion in assets under management and supervision through its Wealth Management lines of business at June 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 current or anticipated impact of military conflict, terrorism or other geopolitical events; or (10) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

Additionally, it is difficult to predict the continued effects of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: (1) demand for our products and services may decline; (2) if economic conditions worsen, loan delinquencies, problem assets, and foreclosures may increase and our allowance for credit losses may have to be increased; (3) collateral for loans, especially real estate, may decline in value; (4) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (5) a material decrease in net income or a net loss over several quarters could result in the elimination of or a decrease in the rate of our quarterly cash dividend; (6) our wealth management revenues may decline with market turmoil; and (7) our cyber security risks may increase as the result of an increase in the number of employees working remotely. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

(UVSP - ER)


Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2022
(Dollars in thousands)
Balance Sheet (Period End)6/30/20223/31/202212/31/20219/30/20216/30/2021
ASSETS
Cash and due from banks $59,590 $57,307 $49,202 $67,517 $50,358 
Interest-earning deposits with other banks 35,187 716,474 840,948 834,840 153,091 
Cash and cash equivalents94,777 773,781 890,150 902,357 203,449 
Investment securities held-to-maturity159,808 166,339 176,983 112,643 119,692 
Investment securities available for sale, net of allowance for credit losses351,382 349,994 317,007 277,773 274,862 
Investments in equity securities2,934 2,569 2,999 2,961 2,872 
Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost29,116 26,330 28,186 28,679 25,228 
Loans held for sale8,352 14,521 21,600 29,093 27,322 
Loans and leases held for investment5,661,777 5,400,786 5,310,017 5,252,045 5,327,313 
Less: Allowance for credit losses, loans and leases (72,011)(68,286)(71,924)(70,146)(71,355)
Net loans and leases held for investment5,589,766 5,332,500 5,238,093 5,181,899 5,255,958 
Premises and equipment, net 50,080 50,429 56,882 55,354 56,067 
Operating lease right-of-use assets30,929 30,498 30,407 31,570 33,688 
Goodwill175,510 175,510 175,510 172,559 172,559 
Other intangibles, net of accumulated amortization11,728 11,784 11,848 9,359 9,396 
Bank owned life insurance120,103 119,398 118,699 117,981 117,765 
Accrued interest and other assets 76,328 54,087 54,057 57,624 57,447 
Total assets $6,700,813 $7,107,740 $7,122,421 $6,979,852 $6,356,305 
LIABILITIES
Noninterest-bearing deposits$2,062,538 $2,136,467 $2,065,423 $1,861,007 $1,872,031 
Interest-bearing deposits:3,500,510 3,911,465 3,989,701 4,077,147 3,446,673 
Total deposits 5,563,048 6,047,932 6,055,124 5,938,154 5,318,704 
Short-term borrowings97,606 18,976 20,106 14,101 25,251 
Long-term debt 95,000 95,000 95,000 95,000 95,000 
Subordinated notes 99,030 98,952 98,874 98,797 98,719 
Operating lease liabilities33,951 33,566 33,453 34,641 37,131 
Accrued expenses and other liabilities 48,253 39,459 46,070 43,136 41,502 
Total liabilities 5,936,888 6,333,885 6,348,627 6,223,829 5,616,307 
SHAREHOLDER'S EQUITY
Common stock, $5 par value: 48,000,000 shares authorized and 31,556,799 shares issued157,784 157,784 157,784 157,784 157,784 
Additional paid-in capital298,800 297,945 299,181 298,033 297,208 
Retained earnings396,295 389,332 375,124 363,607 348,579 
Accumulated other comprehensive loss, net of tax benefit(42,781)(31,909)(16,353)(20,073)(19,545)
Treasury stock, at cost(46,173)(39,297)(41,942)(43,328)(44,028)
Total shareholders’ equity763,925 773,855 773,794 756,023 739,998 
Total liabilities and shareholders’ equity$6,700,813 $7,107,740 $7,122,421 $6,979,852 $6,356,305 
For the three months ended,For the six months ended,
Balance Sheet (Average)6/30/20223/31/202212/31/20219/30/20216/30/20216/30/20226/30/2021
Assets$6,962,401 $7,047,980 $7,088,289 $6,698,177 $6,443,629 $7,004,954 $6,413,712 
Investment securities, net of allowance for credit losses515,741 522,128 469,588 395,280 385,694 518,917 380,063 
Loans and leases, gross5,520,580 5,344,698 5,255,279 5,320,411 5,389,110 5,433,125 5,357,678 
Deposits5,903,173 5,984,815 6,041,798 5,666,725 5,351,089 5,943,769 5,323,770 
Shareholders' equity771,410 774,358 762,334 746,185 728,750 772,876 714,324 


Univest Financial Corporation
Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
June 30, 2022
(Dollars in thousands)
Summary of Major Loan and Lease Categories (Period End)6/30/20223/31/202212/31/20219/30/20216/30/2021
Commercial, financial and agricultural$1,028,354 $932,485 $956,396 $927,015 $920,621 
Paycheck Protection Program5,358 10,298 31,748 85,601 252,849 
Real estate-commercial2,870,286 2,816,737 2,718,535 2,669,898 2,600,919 
Real estate-construction319,449 285,083 283,918 260,874 274,529 
Real estate-residential secured for business purpose419,652 412,486 409,900 412,001 407,664 
Real estate-residential secured for personal purpose629,144 568,735 540,566 535,705 513,330 
Real estate-home equity secured for personal purpose168,536 160,134 158,909 159,029 160,018 
Loans to individuals27,061 26,249 25,504 26,458 25,845 
Lease financings193,937 188,579 184,541 175,464 171,538 
Total loans and leases held for investment, net of deferred income5,661,777 5,400,786 5,310,017 5,252,045 5,327,313 
Less: Allowance for credit losses, loans and leases(72,011)(68,286)(71,924)(70,146)(71,355)
Net loans and leases held for investment$5,589,766 $5,332,500 $5,238,093 $5,181,899 $5,255,958 
Asset Quality Data (Period End)6/30/20223/31/202212/31/20219/30/20216/30/2021
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases and nonaccrual loans held for sale$13,355 $30,876 $33,210 $34,528 $37,466 
Accruing loans and leases 90 days or more past due2,784 274 498 2,204 750 
Accruing troubled debt restructured loans and leases50 51 51 51 52 
Total nonperforming loans and leases16,189 31,201 33,759 36,783 38,268 
Other real estate owned18,604 279 279 279 279 
Total nonperforming assets$34,793 $31,480 $34,038 $37,062 $38,547 
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale0.24 %0.57 %0.63 %0.66 %0.70 %
Nonperforming loans and leases / Loans and leases held for investment0.29 %0.58 %0.64 %0.70 %0.72 %
Nonperforming assets / Total assets0.52 %0.44 %0.48 %0.53 %0.61 %
Allowance for credit losses, loans and leases$72,011 $68,286 $71,924 $70,146 $71,355 
Allowance for credit losses, loans and leases / Loans and leases held for investment1.27 %1.26 %1.35 %1.34 %1.34 %
Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1)1.27 %1.27 %1.36 %1.36 %1.41 %
Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment539.21 %221.16 %216.57 %203.16 %212.97 %
Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment444.81 %218.86 %213.05 %190.70 %208.00 %
For the three months ended,For the six months ended,
6/30/20223/31/202212/31/20219/30/20216/30/20216/30/20226/30/2021
Net loan and lease charge-offs (recoveries)$1,715 $76 $(243)$(75)$243 $1,791 $531 
Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases0.12 %0.01 %(0.02)%(0.01)%0.02 %0.07 %0.02 %
(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)
June 30, 2022
(Dollars in thousands, except per share data)
For the three months ended,For the six months ended,
For the period:6/30/20223/31/202212/31/20219/30/20216/30/20216/30/20226/30/2021
Interest income$56,717 $51,198 $52,262 $53,571 $52,441 $107,915 $103,898 
Interest expense5,246 4,538 4,737 4,884 5,684 9,784 11,727 
Net interest income51,471 46,660 47,525 48,687 46,757 98,131 92,171 
Provision (reversal of provision) for credit losses6,674 (3,450)1,392 (182)(59)3,224 (11,342)
Net interest income after provision for credit losses44,797 50,110 46,133 48,869 46,816 94,907 103,513 
Noninterest income:
Trust fee income1,998 2,102 2,086 2,126 2,157 4,100 4,191 
Service charges on deposit accounts1,574 1,504 1,486 1,422 1,314 3,078 2,596 
Investment advisory commission and fee income4,812 5,152 4,885 4,796 4,558 9,964 9,255 
Insurance commission and fee income4,629 5,570 3,726 3,837 3,839 10,199 8,794 
Other service fee income3,309 2,756 2,759 2,576 2,748 6,065 4,940 
Bank owned life insurance income705 699 719 925 1,620 1,404 2,337 
Net gain on sales of investment securities— 30 5 21 54 30 119 
Net gain on mortgage banking activities1,230 1,929 2,518 3,224 3,461 3,159 9,399 
Other income741 728 1,008 1,625 479 1,469 1,849 
Total noninterest income18,998 20,470 19,192 20,552 20,230 39,468 43,480 
Noninterest expense:
Salaries, benefits and commissions29,133 28,245 27,374 26,641 25,396 57,378 50,176 
Net occupancy2,422 2,716 2,477 2,525 2,656 5,138 5,395 
Equipment977 982 985 1,000 968 1,959 1,914 
Data processing3,708 3,567 3,355 3,274 3,064 7,275 6,114 
Professional fees2,844 2,138 1,750 2,174 2,015 4,982 3,763 
Marketing and advertising693 425 683 539 561 1,118 841 
Deposit insurance premiums812 893 698 765 613 1,705 1,249 
Intangible expenses342 341 267 214 249 683 498 
Other expense6,440 6,105 5,746 6,116 5,764 12,545 10,876 
Total noninterest expense47,371 45,412 43,335 43,248 41,286 92,783 80,826 
Income before taxes16,424 25,168 21,990 26,173 25,760 41,592 66,167 
Income tax expense3,258 4,851 4,578 5,262 4,885 8,109 12,689 
Net income$13,166 $20,317 $17,412 $20,911 $20,875 $33,483 $53,478 
Net income per share:
Basic$0.45 $0.69 $0.59 $0.71 $0.71 $1.14 $1.82 
Diluted$0.45 $0.68 $0.59 $0.71 $0.71 $1.13 $1.81 
Dividends declared per share$0.21 $0.20 $0.20 $0.20 $0.20 $0.41 $0.40 
Weighted average shares outstanding29,490,154 29,542,467 29,471,304 29,420,256 29,389,525 29,516,166 29,359,198 
Period end shares outstanding29,365,775 29,636,425 29,500,542 29,438,402 29,411,731 29,365,775 29,411,731 



Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2022
For the three months ended,For the six months ended,
Profitability Ratios (annualized)6/30/20223/31/202212/31/20219/30/20216/30/20216/30/20226/30/2021
Return on average assets0.76 %1.17 %0.97 %1.24 %1.30 %0.96 %1.68 %
Return on average shareholders' equity6.85 %10.64 %9.06 %11.12 %11.49 %8.74 %15.10 %
Return on average tangible common equity (1)(3)9.10 %14.04 %11.93 %14.63 %15.26 %11.56 %20.14 %
Net interest margin (FTE)3.19 %2.89 %2.86 %3.11 %3.15 %3.04 %3.14 %
Efficiency ratio (2)66.6 %67.0 %64.3 %61.8 %60.7 %66.8 %58.8 %
Capitalization Ratios
Dividends declared to net income47.1 %29.1 %33.9 %28.1 %28.2 %36.2 %22.0 %
Shareholders' equity to assets (Period End)11.40 %10.89 %10.86 %10.83 %11.64 %11.40 %11.64 %
Tangible common equity to tangible assets (1)8.97 %8.58 %8.56 %8.55 %9.15 %8.97 %9.15 %
Common equity book value per share$26.01 $26.11 $26.23 $25.68 $25.16 $26.01 $25.16 
Tangible common equity book value per share (1)$19.91 $20.06 $20.14 $19.75 $19.22 $19.91 $19.22 
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio9.45 %9.35 %9.13 %9.53 %9.64 %9.45 %9.64 %
Common equity tier 1 risk-based capital ratio10.62 %11.07 %11.08 %11.15 %11.04 %10.62 %11.04 %
Tier 1 risk-based capital ratio10.62 %11.07 %11.08 %11.15 %11.04 %10.62 %11.04 %
Total risk-based capital ratio13.23 %13.73 %13.77 %13.87 %13.82 %13.23 %13.82 %
(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)
For the Three Months Ended,
Tax Equivalent BasisJune 30, 2022March 31, 2022
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$474,260 $824 0.70 %$733,173 $357 0.20 %
U.S. government obligations2,000 11 2.21 5,222 26 2.02 
Obligations of state and political subdivisions*2,302 17 2.96 2,332 19 3.30 
Other debt and equity securities511,439 2,727 2.14 514,574 2,339 1.84 
Federal Home Loan Bank, Federal Reserve Bank and other stock26,221 344 5.26 27,115 355 5.31 
Total interest-earning deposits, investments and other interest-earning assets1,016,222 3,923 1.55 1,282,416 3,096 0.98 
Commercial, financial, and agricultural loans937,846 9,037 3.86 901,555 7,571 3.41 
Paycheck Protection Program loans7,644 155 8.13 18,402 591 13.02 
Real estate—commercial and construction loans3,004,509 28,527 3.81 2,904,602 25,820 3.61 
Real estate—residential loans1,166,201 10,758 3.70 1,116,356 9,882 3.59 
Loans to individuals26,782 305 4.57 25,799 238 3.74 
Municipal loans and leases*235,922 2,404 4.09 242,508 2,434 4.07 
Lease financings141,676 2,105 5.96 135,476 2,075 6.21 
     Gross loans and leases5,520,580 53,291 3.87 5,344,698 48,611 3.69 
          Total interest-earning assets6,536,802 57,214 3.51 6,627,114 51,707 3.16 
Cash and due from banks55,634 53,698 
Allowance for credit losses, loans and leases(68,426)(72,067)
Premises and equipment, net50,266 53,948 
Operating lease right-of-use assets30,222 30,394 
Other assets357,903 354,893 
      Total assets$6,962,401 $7,047,980 
Liabilities:
Interest-bearing checking deposits$851,324 $570 0.27 %$881,462 $443 0.20 %
Money market savings1,405,536 1,552 0.44 1,542,581 904 0.24 
Regular savings1,070,480 237 0.09 1,021,550 238 0.09 
Time deposits452,989 1,227 1.09 473,589 1,306 1.12 
Total time and interest-bearing deposits3,780,329 3,586 0.38 3,919,182 2,891 0.30 
Short-term borrowings17,253 11 0.26 17,636 2 0.05 
Long-term debt95,000 321 1.36 95,000 317 1.35 
Subordinated notes98,988 1,328 5.38 98,911 1,328 5.45 
     Total borrowings211,241 1,660 3.15 211,547 1,647 3.16 
     Total interest-bearing liabilities3,991,570 5,246 0.53 4,130,729 4,538 0.45 
Noninterest-bearing deposits2,122,844 2,065,633 
Operating lease liabilities33,300 33,452 
Accrued expenses and other liabilities43,277 43,808 
     Total liabilities6,190,991 6,273,622 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital298,241 298,975 
Retained earnings and other equity315,385 317,599 
     Total shareholders' equity771,410 774,358 
     Total liabilities and shareholders' equity$6,962,401 $7,047,980 
Net interest income$51,968 $47,169 
Net interest spread2.98 2.71 
Effect of net interest-free funding sources0.21 0.18 
Net interest margin3.19 %2.89 %
Ratio of average interest-earning assets to average interest-bearing liabilities163.77 %160.43 %
*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 $(618) thousand and $(136) thousand for the three months ended June 30, 2022 and March 31, 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 June 30, 2022 and March 31, 2022 have been calculated using the Corporation’s federal applicable rate of 21.0%.



Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
For the Three Months Ended June 30,
Tax Equivalent Basis20222021
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$474,260 $824 0.70 %$215,349 $46 0.09 %
U.S. government obligations2,000 11 2.21 6,999 35 2.01 
Obligations of state and political subdivisions*2,302 17 2.96 6,070 58 3.83 
Other debt and equity securities511,439 2,727 2.14 372,625 1,364 1.47 
Federal Home Loan Bank, Federal Reserve Bank and other stock26,221 344 5.26 25,872 360 5.58 
Total interest-earning deposits, investments and other interest-earning assets1,016,222 3,923 1.55 626,915 1,863 1.19 
Commercial, financial, and agricultural loans937,846 9,037 3.86 826,464 6,910 3.35 
Paycheck Protection Program loans7,644 155 8.13 408,928 4,778 4.69 
Real estate—commercial and construction loans3,004,509 28,527 3.81 2,701,137 24,931 3.70 
Real estate—residential loans1,166,201 10,758 3.70 1,065,065 9,836 3.70 
Loans to individuals26,782 305 4.57 25,284 251 3.98 
Municipal loans and leases*235,922 2,404 4.09 251,311 2,598 4.15 
Lease financings141,676 2,105 5.96 110,921 1,819 6.58 
     Gross loans and leases5,520,580 53,291 3.87 5,389,110 51,123 3.80 
          Total interest-earning assets6,536,802 57,214 3.51 6,016,025 52,986 3.53 
Cash and due from banks55,634 52,948 
Allowance for credit losses, loans and leases(68,426)(73,052)
Premises and equipment, net50,266 55,903 
Operating lease right-of-use assets30,222 33,992 
Other assets357,903 357,813 
      Total assets$6,962,401 $6,443,629 
Liabilities:
Interest-bearing checking deposits$851,324 $570 0.27 %$786,931 $487 0.25 %
Money market savings1,405,536 1,552 0.44 1,219,375 831 0.27 
Regular savings1,070,480 237 0.09 978,807 282 0.12 
Time deposits452,989 1,227 1.09 485,060 1,559 1.29 
Total time and interest-bearing deposits3,780,329 3,586 0.38 3,470,173 3,159 0.37 
Short-term borrowings17,253 11 0.26 19,109 3 0.06 
Long-term debt95,000 321 1.36 95,000 321 1.36 
Subordinated notes98,988 1,328 5.38 172,016 2,201 5.13 
     Total borrowings211,241 1,660 3.15 286,125 2,525 3.54 
     Total interest-bearing liabilities3,991,570 5,246 0.53 3,756,298 5,684 0.61 
Noninterest-bearing deposits2,122,844 1,880,916 
Operating lease liabilities33,300 37,426 
Accrued expenses and other liabilities43,277 40,239 
     Total liabilities6,190,991 5,714,879 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital298,241 296,599 
Retained earnings and other equity315,385 274,367 
     Total shareholders' equity771,410 728,750 
     Total liabilities and shareholders' equity$6,962,401 $6,443,629 
Net interest income$51,968 $47,302 
Net interest spread2.98 2.92 
Effect of net interest-free funding sources0.21 0.23 
Net interest margin3.19 %3.15 %
Ratio of average interest-earning assets to average interest-bearing liabilities163.77 %160.16 %
*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 $(618) thousand and $2.7 million for the three months ended June 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 June 30, 2022 and 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%.



Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
For the Six Months Ended June 30,
Tax Equivalent Basis20222021
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$603,002 $1,181 0.39 %$226,387 $102 0.09 %
U.S. government obligations3,602 37 2.07 6,999 71 2.05 
Obligations of state and political subdivisions*2,317 36 3.13 8,792 163 3.74 
Other debt and equity securities512,998 5,066 1.99 364,272 2,631 1.46 
Federal Home Loan Bank, Federal Reserve Bank and other stock26,665 699 5.29 26,119 708 5.47 
Total interest-earning deposits, investments and other interest-earning assets1,148,584 7,019 1.23 632,569 3,675 1.17 
Commercial, financial, and agricultural loans919,801 16,608 3.64 804,458 13,708 3.44 
Paycheck Protection Program loans12,994 746 11.58 457,663 9,302 4.10 
Real estate—commercial and construction loans2,954,831 54,347 3.71 2,661,778 49,389 3.74 
Real estate—residential loans1,141,416 20,640 3.65 1,051,110 19,709 3.78 
Loans to individuals26,293 543 4.16 25,862 516 4.02 
Municipal loans and leases*239,197 4,838 4.08 248,490 5,128 4.16 
Lease financings138,593 4,180 6.08 108,317 3,556 6.62 
     Gross loans and leases5,433,125 101,902 3.78 5,357,678 101,308 3.81 
          Total interest-earning assets6,581,709 108,921 3.34 5,990,247 104,983 3.53 
Cash and due from banks54,671 54,123 
Allowance for credit losses, loans and leases(70,237)(78,125)
Premises and equipment, net52,097 55,865 
Operating lease right-of-use assets30,308 34,013 
Other assets356,406 357,589 
      Total assets$7,004,954 $6,413,712 
Liabilities:
Interest-bearing checking deposits$866,310 $1,013 0.24 %$802,350 $977 0.25 %
Money market savings1,473,680 2,456 0.34 1,231,457 1,684 0.28 
Regular savings1,046,150 475 0.09 969,073 580 0.12 
Time deposits463,232 2,533 1.10 505,318 3,318 1.32 
Total time and interest-bearing deposits3,849,372 6,477 0.34 3,508,198 6,559 0.38 
Short-term borrowings17,443 13 0.15 18,506 5 0.05 
Long-term debt95,000 638 1.35 98,149 669 1.37 
Subordinated notes98,950 2,656 5.41 177,647 4,494 5.10 
     Total borrowings211,393 3,307 3.15 294,302 5,168 3.54 
     Total interest-bearing liabilities4,060,765 9,784 0.49 3,802,500 11,727 0.62 
Noninterest-bearing deposits2,094,397 1,815,572 
Operating lease liabilities33,375 37,419 
Accrued expenses and other liabilities43,541 43,897 
     Total liabilities6,232,078 5,699,388 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital298,606 296,369 
Retained earnings and other equity316,486 260,171 
     Total shareholders' equity772,876 714,324 
     Total liabilities and shareholders' equity$7,004,954 $6,413,712 
Net interest income$99,137 $93,256 
Net interest spread2.85 2.91 
Effect of net interest-free funding sources0.19 0.23 
Net interest margin3.04 %3.14 %
Ratio of average interest-earning assets to average interest-bearing liabilities162.08 %157.53 %
*Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred (costs) fees of $(754) thousand and $5.0 million for the six months ended June 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 six months ended June 30, 2022 and 2021 have been calculated using the Corporation’s federal applicable rate of 21.0%.


Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
As of June 30, 2022
(Dollars in thousands)
Industry DescriptionTotal Outstanding Balance (excl PPP)% of Commercial Loan Portfolio
CRE - Retail$379,935 8.2 %
Animal Production315,801 6.8 
CRE - Multi-family262,182 5.7 
CRE - 1-4 Family Residential Investment240,887 5.2 
CRE - Office215,847 4.7 
Hotels & Motels (Accommodation)188,811 4.1 
CRE - Industrial / Warehouse185,241 4.0 
Education161,151 3.5 
Nursing and Residential Care Facilities154,034 3.3 
Specialty Trade Contractors143,724 3.1 
Homebuilding (tract developers, remodelers)118,877 2.6 
Motor Vehicle and Parts Dealers112,372 2.4 
CRE - Medical Office108,978 2.3 
CRE - Mixed-Use - Residential106,228 2.3 
Merchant Wholesalers, Durable Goods100,825 2.2 
Crop Production88,786 1.9 
Food Manufacturing85,953 1.9 
Administrative and Support Services75,587 1.6 
Rental and Leasing Services72,560 1.6 
Wood Product Manufacturing71,961 1.6 
Food Services and Drinking Places69,209 1.5 
Merchant Wholesalers, Nondurable Goods66,568 1.4 
Fabricated Metal Product Manufacturing63,016 1.4 
Personal and Laundry Services60,774 1.3 
Religious Organizations, Advocacy Groups58,409 1.3 
Miniwarehouse / Self-Storage54,761 1.2 
Repair and Maintenance53,472 1.2 
CRE - Mixed-Use - Commercial52,080 1.1 
Private Equity & Special Purpose Entities51,853 1.1 
Truck Transportation51,191 1.1 
Industries with >$50 million in outstandings$3,771,073 81.3 %
Industries with <$50 million in outstandings $866,668 18.7 %
Total Commercial Loans$4,637,741 100.0 %
Consumer Loans and Lease FinancingsTotal Outstanding Balance
Real Estate-Residential Secured for Personal Purpose$629,144 
Real Estate-Home Equity Secured for Personal Purpose168,536 
Loans to Individuals27,061 
Lease Financings193,937 
Total Consumer Loans and Lease Financings$1,018,678 
Total$5,656,419 



Univest Financial Corporation
Non-GAAP Reconciliation
June 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 six months ended,
(Dollars in thousands)6/30/20223/31/202212/31/20219/30/20216/30/20216/30/20226/30/2021
Net income$13,166 $20,317 $17,412 $20,911 $20,875 $33,483 $53,478 
Amortization of intangibles, net of tax270 269 211 169 197 540 393 
Net income before amortization of intangibles$13,436 $20,586 $17,623 $21,080 $21,072 $34,023 $53,871 
Shareholders' equity$763,925 $773,855 $773,794 $756,023 $739,998 $763,925 $739,998 
Goodwill(175,510)(175,510)(175,510)(172,559)(172,559)(175,510)(172,559)
Other intangibles (a)(3,678)(3,936)(4,210)(1,922)(2,073)(3,678)(2,073)
Tangible common equity$584,737 $594,409 $594,074 $581,542 $565,366 $584,737 $565,366 
Total assets$6,700,813 $7,107,740 $7,122,421 $6,979,852 $6,356,305 $6,700,813 $6,356,305 
Goodwill(175,510)(175,510)(175,510)(172,559)(172,559)(175,510)(172,559)
Other intangibles (a)(3,678)(3,936)(4,210)(1,922)(2,073)(3,678)(2,073)
Tangible assets$6,521,625 $6,928,294 $6,942,701 $6,805,371 $6,181,673 $6,521,625 $6,181,673 
Average shareholders' equity$771,410 $774,358 $762,334 $746,185 $728,750 $772,876 $714,324 
Average goodwill(175,510)(175,510)(173,553)(172,559)(172,559)(175,510)(172,559)
Average other intangibles (a)(3,791)(4,090)(2,696)(1,983)(2,209)(3,940)(2,336)
Average tangible common equity$592,109 $594,758 $586,085 $571,643 $553,982 $593,426 $539,429 
Loans and leases held for investment, gross$5,661,777 $5,400,786 $5,310,017 $5,252,045 $5,327,313 $5,661,777 $5,327,313 
Paycheck Protection Program ("PPP") loans (5,358)(10,298)(31,748)(85,601)(252,849)(5,358)(252,849)
Gross loans and leases, excluding PPP loans$5,656,419 $5,390,488 $5,278,269 $5,166,444 $5,074,464 $5,656,419 $5,074,464 
Allowance for credit losses, loans and leases$72,011 $68,286 $71,924 $70,146 $71,355 $72,011 $71,355 
Gross loans and leases, excluding PPP loans5,656,419 5,390,488 5,278,269 5,166,444 5,074,464 5,656,419 5,074,464 
Allowance for credit losses, loans and leases as a percentage of gross loans and leases excluding PPP loans1.27 %1.27 %1.36 %1.36 %1.41 %1.27 %1.41 %
(a) Amount does not include mortgage servicing rights