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Univest Corporation of Pennsylvania - Univest Bank and Trust Co. - Reports Second Quarter Earnings

SOUDERTON, Pa., July 27, 2016 (GLOBE NEWSWIRE) -- Univest Corporation of Pennsylvania (“Univest” or “Corporation”) (NASDAQ:UVSP), parent company of Univest Bank and Trust Co. ("Bank") and its insurance, investments and equipment financing subsidiaries, today announced financial results for the quarter ended June 30, 2016. Univest reported net income of $5.2 million or $0.27 diluted earnings per share for the quarter ended June 30, 2016, compared to net income of $6.5 million or $0.33 diluted earnings per share for the quarter ended June 30, 2015. Net income for the six months ended June 30, 2016 was $12.5 million or $0.64 diluted earnings per share, consistent with net income of $12.6 million or $0.64 diluted earnings per share for the comparable period in the prior year. The financial results for the quarter and six months ended June 30, 2016 included $1.2 million and $1.4 million, net of tax, respectively, of acquisition-related and integration costs associated with the merger with Fox Chase Bancorp (Fox Chase), or $0.06 and $0.07, respectively, of diluted earnings per share. The quarter and six months ended June 30, 2015 included $1.2 million and $2.4 million, net of tax, respectively, of integration and acquisition-related costs and restructuring charges, or $0.05 and $0.12, respectively, of diluted earnings per share. The second quarter and year-to-date financial results do not include the financial results of Fox Chase, which Univest acquired on July 1, 2016.  

Loans
Gross loans and leases grew $166.0 million or 7.6% from December 31, 2015 and $237.2 million or 11.3% from June 30, 2015. Gross loans and leases also grew $161.8 million or 7.4% from March 31, 2016. The growth in loans was primarily in commercial business, commercial real estate and residential real estate loans. Loan growth in the quarter resulted from new and existing customer relationships and the addition of new lenders due to continued market disruption created by other bank acquisitions. Additionally, during the second quarter we hired a lending team from Lancaster County and during the third quarter we will integrate the Fox Chase Bank lending team. 

Deposits
Total deposits declined $17.3 million or 0.7% from December 31, 2015. Declines in public fund time deposits were partially offset by growth in savings deposits and non-interest bearing demand deposits. Deposits grew $114.1 million or 5.0% from June 30, 2015, primarily due to growth in both non-interest bearing and interest-bearing demand deposits and savings deposits, partially offset by a decrease in time deposits. During the quarter, interest-bearing consumer demand deposits of approximately $92.4 million were transferred to noninterest-bearing deposits due to a product consolidation for existing customers.

Net Interest Income and Margin
Net interest income of $23.5 million for the second quarter of 2016 and $46.9 million for the six months ended June 30, 2016 remained consistent with the same periods in 2015. The net interest margin on a tax-equivalent basis for the second quarter of 2016 was 3.92%, compared to 3.90% for the first quarter of 2016 and 4.03% for the second quarter of 2015. Increases in net interest income from the comparable periods in the prior year, due to loan growth, were partially offset by reductions in loan rates and a decrease in the net accretion of acquisition accounting fair value adjustments related to the Valley Green Bank acquisition (the favorable impact of the acquisition accounting adjustments was three basis points for both the three and six months ended June 30, 2016 compared to 13 basis points for both the three and six months ended June 30, 2015). Also, included in interest expense are $289 thousand of amortized bridge loan fees and interest expense related to the Fox Chase merger incurred in the second quarter of 2016. The bridge loan was paid off on July 1, 2016 in conjunction with the closing of the merger.

Noninterest Income
Noninterest income for the quarter ended June 30, 2016 was $14.1 million, an increase of $768 thousand or 5.8% from the second quarter of 2015. Noninterest income for the six months ended June 30, 2016 was $28.1 million, an increase of $1.3 million or 4.8% from the comparable period in the prior year. Insurance commission and fee income increased $481 thousand or 6.3% for the six months ended June 30, 2016, primarily due to an increase in contingent commission income and commercial premiums received in the first quarter of 2016. Bank owned life insurance (BOLI) income increased $324 thousand for the quarter and $441 thousand for the six months ended June 30, 2016 mainly due to the purchase of policies totaling $8.0 million during the third quarter of 2015 and the transfer of policies totaling $9.8 million during 2015 to a higher yielding account structure. The net gain on mortgage banking activities increased $344 thousand for the quarter and $304 thousand for the six months ended June 30, 2016, mainly due to an increase in mortgage volume during the second quarter of 2016. Funded first mortgage volume for the quarter increased $7.4 million or 13.0% compared to the same period in 2015.   

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2016 was $29.5 million, an increase of $2.7 million or 10.1%, compared to the second quarter of 2015. Noninterest expense for the six months ended June 30, 2016 was $56.5 million, an increase of $2.2 million or 4.1% from the comparable period in the prior year. Salaries and benefit expense increased $2.1 million for the quarter and $3.0 million for the six months ended June 30, 2016, primarily attributable to additional staff hired to support revenue generation across all business lines including the expansion into Lancaster County. Premises and equipment expenses increased $464 thousand for the quarter and $401 thousand for the six months ended June 30, 2016, mainly due to increased investments in computer equipment and software. Noninterest expense for the quarter and six months ended June 30, 2016 included $1.2 million and $1.4 million, respectively, of acquisition-related and integration costs associated with the merger with Fox Chase. Noninterest expense for the quarter and six months ended June 30, 2015 included $1.8 million and $3.6 million, respectively, of integration and acquisition-related costs and restructuring charges.

Asset Quality and Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $13.3 million at June 30, 2016, compared to $14.2 million at December 31, 2015 and $17.7 million at June 30, 2015. Net loan and lease charge-offs were $129 thousand during the second quarter of 2016, compared to $2.5 million for the second quarter of 2015. Non-accrual loans and leases as a percentage of total loans and leases held for investment was 0.57% at June 30, 2016, compared to 0.65% at December 31, 2015 and 0.84% at June 30, 2015. The provision for loan and lease losses was $830 thousand for the second quarter of 2016, compared to $1.1 million for the second quarter of 2015.

The allowance for loan and lease losses as a percentage of loans and leases held for investment was 0.73% at June 30, 2016, compared to 0.81% at December 31, 2015 and 0.93% at June 30, 2015. The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding loans acquired in the Valley Green Bank acquisition which were recorded at fair value as of the acquisition date, was 0.82% at June 30, 2016, compared to 0.94% at December 31, 2015 and 1.12% at June 30, 2015. The allowance for loan and lease losses to nonaccrual loans and leases held for investment equaled 129.3% at June 30, 2016, compared to 124.3% at December 31, 2015 and 143.1% at June 30, 2015.

Capital
Univest remains well-capitalized at June 30, 2016. Total risk-based capital at June 30, 2016 was 12.32%, well in excess of the regulatory minimum for well-capitalized status of 10%.

Dividend
On May 25, 2016, Univest declared a quarterly cash dividend of $0.20 per share, payable on July 1, 2016. This represented a 3.80% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Merger with Fox Chase Bancorp
On July 1, 2016, Univest completed its previously announced merger with Fox Chase, complementing and expanding the Corporation’s presence in Bucks, Chester, Philadelphia and Montgomery counties in Pennsylvania and into Atlantic and Cape May counties in New Jersey.

Conference Call
Univest will host a conference call to discuss second quarter results on Thursday, July 28, 2016 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10089539. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through August 28, 2016 by dialing 1-877-344-7529; using Conference ID: 10089539.

About Univest Corporation of Pennsylvania
Subsequent to the merger with Fox Chase Bancorp, Inc., Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has approximately $4.0 billion in assets and $3.2 billion in assets under management and supervision through its Wealth Management lines of business. 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 in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices in southeastern Pennsylvania extending to the Lehigh Valley and Lancaster - in New Jersey and Maryland and online at www.univest.net.

This press release of Univest Corporation of Pennsylvania and the reports Univest Corporation of Pennsylvania files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial services industry and, specifically, the financial operations, markets and products of Univest Corporation of Pennsylvania. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Corporation of Pennsylvania’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce net interest margins; (3) changes in prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which Univest Corporation of Pennsylvania is engaged; (6) technological issues which may adversely affect Univest Corporation of Pennsylvania’s financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Corporation of Pennsylvania files with the Securities and Exchange Commission. Univest Corporation of Pennsylvania undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

Univest Corporation of Pennsylvania  
Consolidated Selected Financial Data  
June 30, 2016  
(Dollars in thousands)                              
                               
Balance Sheet (Period End)   06/30/16   03/31/16   12/31/15   09/30/15   06/30/15          
Assets   $ 3,107,617     $ 2,824,777     $ 2,879,451     $ 2,851,568     $ 2,780,578            
Investment securities     286,980       329,357       370,760       374,558       374,711            
Loans held for sale     4,657       3,818       4,680       9,151       8,831            
Loans and leases held for investment, gross     2,345,037       2,183,256       2,179,013       2,097,807       2,107,857            
Allowance for loan and lease losses     17,153       16,452       17,628       18,620       19,602            
Loans and leases held for investment, net     2,327,884       2,166,804       2,161,385       2,079,187       2,088,255            
Total deposits     2,377,084       2,334,361       2,394,360       2,372,865       2,263,025            
Noninterest-bearing deposits     689,916       559,827       541,460       519,767       519,026            
NOW, money market and savings     1,326,976       1,391,626       1,398,494       1,361,827       1,288,318            
Time deposits     360,192       382,908       454,406       491,271       455,681            
Borrowings     309,666       75,265       73,588       70,531       110,480            
Shareholders' equity     369,160       367,003       361,574       359,109       356,186            
                               
                               
Balance Sheet (Average)   For the three months ended,   For the six months ended,  
    06/30/16   03/31/16   12/31/15   09/30/15   06/30/15   06/30/16   06/30/15  
Assets   $ 2,854,561     $ 2,834,557     $ 2,866,848     $ 2,804,578     $ 2,739,968     $ 2,844,277     $ 2,715,874    
Investment securities     302,492       342,218       370,163       368,837       375,887       322,355       378,433    
Loans and leases, gross     2,239,674       2,177,091       2,132,922       2,098,007       2,067,120       2,208,382       2,045,598    
Deposits     2,340,959       2,351,816       2,393,655       2,325,049       2,242,217       2,346,387       2,240,035    
Shareholders' equity     368,466       364,092       360,521       357,150       359,154       366,280       360,631    
                               
                               
Asset Quality Data (Period End)                               
    06/30/16   03/31/16   12/31/15   09/30/15   06/30/15          
Nonaccrual loans and leases, including nonaccrual troubled debt restructured                              
loans and leases and nonaccrual loans held for sale   $ 13,265     $ 13,482     $ 14,183     $ 20,838     $ 17,697            
Accruing loans and leases 90 days or more past due     748       693       379       428       287            
Accruing troubled debt restructured loans and leases     4,413       4,279       5,245       4,789       6,099            
Other real estate owned     3,131       3,073       1,276       955       955            
Nonperforming assets     21,557       21,527       21,083       27,010       25,038            
Allowance for loan and lease losses     17,153       16,452       17,628       18,620       19,602            
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual     0.57 %     0.62 %     0.65 %     0.99 %     0.84 %          
loans held for sale                              
Nonperforming loans and leases / Loans and leases held for investment and nonaccrual     0.79 %     0.85 %     0.91 %     1.24 %     1.14 %          
loans held for sale                              
Allowance for loan and lease losses / Loans and leases held for investment     0.73 %     0.75 %     0.81 %     0.89 %     0.93 %          
Allowance for loan and lease losses / Loans and leases held for investment     0.82 %     0.86 %     0.94 %     1.06 %     1.12 %          
(excluding acquired loans at period-end)                              
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment     129.31 %     122.03 %     124.29 %     110.58 %     143.11 %          
Allowance for loan and lease losses / Nonperforming loans and leases held for investment   93.09 %     89.15 %     89.00 %     84.43 %     97.60 %          
Acquired credit impaired loans   $ 942     $ 1,267     $ 1,253     $ 1,379     $ 1,876            
                               
    For the three months ended,   For the six months ended,  
    06/30/16   03/31/16   12/31/15   09/30/15   06/30/15   06/30/16   06/30/15  
Net loan and lease charge-offs   $ 129     $ 1,502     $ 1,909     $ 1,652     $ 2,473     $ 1,631     $ 3,275    
Net loan and lease charge-offs (annualized)/Average loans and leases     0.02 %     0.28 %     0.36 %     0.31 %     0.48 %     0.15 %     0.32 %  
                               

/EIN News/ --

Univest Corporation of Pennsylvania  
Consolidated Selected Financial Data  
June 30, 2016  
(Dollars in thousands, except per share data)                              
    For the three months ended,   For the six months ended,  
For the period:   06/30/16   03/31/16   12/31/15   09/30/15   06/30/15   06/30/16   06/30/15  
Interest income   $ 25,994     $ 25,609     $ 25,623     $ 25,585     $ 25,513     $ 51,603     $ 50,251    
Interest expense     2,451       2,211       2,278       2,220       2,133       4,662       3,567    
Net interest income     23,543       23,398       23,345       23,365       23,380       46,941       46,684    
Provision for loan and lease losses     830       326       917       670       1,141       1,156       2,215    
Net interest income after provision     22,713       23,072       22,428       22,695       22,239       45,785       44,469    
Noninterest income:                              
Trust fee income     1,997       1,865       2,030       1,904       2,154       3,862       3,974    
Service charges on deposit accounts     1,056       998       1,059       1,069       1,039       2,054       2,102    
Investment advisory commission and fee income     2,759       2,669       2,583       2,687       2,740       5,428       5,503    
Insurance commission and fee income     3,503       4,558       3,073       3,232       3,434       8,061       7,580    
Bank owned life insurance income     535       470       425       306       211       1,005       564    
Net gain on sales of investment securities     413       44       697       296       181       457       272    
Net gain on mortgage banking activities     1,711       1,218       1,090       1,123       1,367       2,929       2,625    
Other income     2,145       2,134       2,355       2,238       2,225       4,279       4,162    
Total noninterest income     14,119       13,956       13,312       12,855       13,351       28,075       26,782    
Noninterest expense:                              
Salaries and benefits     14,080       14,182       12,828       11,970       11,957       28,262       25,271    
Commissions     2,363       1,895       1,894       2,174       2,155       4,258       3,969    
Premises and equipment     4,207       3,984       3,897       3,924       3,743       8,191       7,790    
Professional fees     947       1,020       870       1,096       1,066       1,967       1,873    
Intangible expenses     996       770       178       710       893       1,766       1,679    
Acquisition-related costs     1,158       214       540       -       41       1,372       507    
Integration costs     27       6       6       -       110       33       1,484    
Restructuring charges     -       -       -       -       1,642       -       1,642    
Other expense     5,768       4,868       5,816       5,369       5,225       10,636       10,028    
Total noninterest expense     29,546       26,939       26,029       25,243       26,832       56,485       54,243    
Income before taxes     7,286       10,089       9,711       10,307       8,758       17,375       17,008    
Income taxes     2,046       2,800       2,553       2,779       2,292       4,846       4,426    
Net income   $ 5,240     $ 7,289     $ 7,158     $ 7,528     $ 6,466     $ 12,529     $ 12,582    
Per common share data:                              
Book value per share   $ 18.88     $ 18.73     $ 18.51     $ 18.41     $ 18.21     $ 18.88     $ 18.21    
Net income per share:                              
Basic   $ 0.27     $ 0.37     $ 0.37     $ 0.39     $ 0.33     $ 0.64     $ 0.64    
Diluted   $ 0.27     $ 0.37     $ 0.37     $ 0.39     $ 0.33     $ 0.64     $ 0.64    
Dividends declared per share   $ 0.20     $ 0.20     $ 0.20     $ 0.20     $ 0.20     $ 0.40     $ 0.40    
Weighted average shares outstanding     19,603,310       19,578,438       19,525,701       19,506,609       19,675,002       19,590,873       19,812,359    
Period end shares outstanding     19,557,958       19,592,798       19,530,930       19,502,613       19,559,941       19,557,958       19,559,941    
                               
                               


Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
June 30, 2016
                                   
                                   
                                   
          For the three months ended,   For the six months ended,
Profitability Ratios (annualized)     06/30/16   03/31/16   12/31/15   09/30/15   06/30/15   06/30/16   06/30/15
                                   
Return on average assets       0.74 %     1.03 %     0.99 %     1.06 %     0.95 %     0.89 %     0.93 %
Return on average assets, excluding integration     0.90 %     1.07 %     1.06 %     1.06 %     1.12 %     0.98 %     1.11 %
and acquisition-related costs and restructuring charges (1), (2)                        
Return on average shareholders' equity     5.72 %     8.05 %     7.88 %     8.36 %     7.22 %     6.88 %     7.04 %
Return on average shareholders' equity, excluding   6.99 %     8.29 %     8.42 %     8.36 %     8.52 %     7.64 %     8.36 %
integration and acquisition-related costs and                            
restructuring charges (1), (2)                              
Return on average tangible common equity, excluding   10.56 %     12.63 %     12.92 %     12.91 %     13.12 %     11.58 %     12.80 %
integration and acquisition-related costs and                            
restructuring charges (1), (2)                              
Net interest margin (FTE)       3.92 %     3.90 %     3.80 %     3.89 %     4.03 %     3.91 %     4.07 %
Efficiency ratio (3)         75.22 %     69.23 %     68.10 %     66.96 %     70.29 %     72.24 %     70.99 %
Efficiency ratio, excluding integration and     72.20 %     68.67 %     66.67 %     66.96 %     65.60 %     70.44 %     66.23 %
acquisition-related costs and restructuring charges (1), (3), (4)                        
                                   
Capitalization Ratios                                
                                   
Dividends declared to net income       74.64 %     53.62 %     54.08 %     51.79 %     60.49 %     62.41 %     62.80 %
Shareholders' equity to assets (Period End)     11.88 %     12.99 %     12.56 %     12.59 %     12.81 %     11.88 %     12.81 %
Tangible common equity to tangible assets     8.21 %     8.97 %     8.58 %     8.56 %     8.67 %     8.21 %     8.67 %
                                   
                                   
Regulatory Capital Ratios  (Period End)                             
Tier 1 leverage ratio         9.90 %     9.93 %     9.69 %     9.75 %     9.89 %     9.90 %     9.89 %
Common equity tier 1 risk-based capital ratio     9.87 %     10.81 %     10.65 %     10.85 %     10.77 %     9.87 %     10.77 %
Tier 1 risk-based capital ratio       9.87 %     10.81 %     10.65 %     10.85 %     10.77 %     9.87 %     10.77 %
Total risk-based capital ratio       12.32 %     13.47 %     13.35 %     13.69 %     13.65 %     12.32 %     13.65 %
                                   
                                   
  (1 ) This consolidated selected financial data schedule contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The management of Univest Corporation of Pennsylvania uses these 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 below table for additional information.        
                                   
  (a) Integration and acquisition-related costs and $ 1,185     $ 220     $ 546     $ -     $ 1,793     $ 1,405     $ 3,633  
  restructuring charges                          
  Tax effect on integration and acquisition-related   22       2       49       -       628       24       1,270  
  costs and restructuring charges                          
  (b) Integration and acquisition-related costs and $ 1,163     $ 218     $ 497     $ -     $ 1,165     $ 1,381     $ 2,363  
  restructuring charges, net of tax                          
                                   
  (2 ) Net income in this ratio excludes integration and acquisition-related costs and restructuring charges, net of tax. See (1)(b) above.            
  (3 ) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.            
  (4 ) Noninterest expense in this ratio excludes integration and acquisition-related costs and restructuring charges. See (1)(a) above.            
                                   


  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential     
    For the Three Months Ended June 30,        
Tax Equivalent Basis     2016           2015        
  Average Income/ Average
  Average Income/ Average    
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate    
Assets:                  
Interest-earning deposits with other banks $ 7,654   $ 9   0.47 % $ 17,767   $ 11   0.25 %  
U.S. government obligations   57,776     176   1.23     129,482     351   1.09    
Obligations of state and political subdivisions   101,241     1,092   4.34     109,449     1,354   4.96    
Other debt and equity securities   143,475     1,012   2.84     136,956     753   2.21    
Federal funds sold   973     2   0.83     825     -   -    
Total interest-earning deposits, investments and federal funds sold   311,119     2,291   2.96     394,479     2,469   2.51    
                   
Commercial, financial, and agricultural loans   436,189     4,132   3.81     434,251     4,483   4.14    
Real estate—commercial and construction loans   898,494     10,106   4.52     846,318     9,913   4.70    
Real estate—residential loans   557,733     6,141   4.43     482,796     5,619   4.67    
Loans to individuals   30,301     408   5.42     29,149     389   5.35    
Municipal loans and leases   241,507     2,723   4.53     204,931     2,431   4.76    
Lease financings   75,450     1,524   8.12     69,675     1,535   8.84    
Gross loans and leases   2,239,674     25,034   4.50     2,067,120     24,370   4.73    
Total interest-earning assets   2,550,793     27,325   4.31     2,461,599     26,839   4.37    
Cash and due from banks   32,647           32,624          
Reserve for loan and lease losses   (16,789 )         (21,373 )        
Premises and equipment, net   43,990           40,433          
Other assets   243,920           226,685          
Total assets $ 2,854,561         $ 2,739,968          
                   
Liabilities:                  
Interest-bearing checking deposits $ 351,011   $ 75   0.09   $ 370,449   $ 67   0.07    
Money market savings   337,250     322   0.38     344,523     259   0.30    
Regular savings   644,199     199   0.12     581,765     136   0.09    
Time deposits   374,936     862   0.92     445,255     983   0.89    
Total time and interest-bearing deposits   1,707,396     1,458   0.34     1,741,992     1,445   0.33    
                   
Short-term borrowings   53,874     320   2.39     45,525     13   0.11    
Subordinated notes (1)   49,431     673   5.48     49,286     675   5.49    
Total borrowings   103,305     993   3.87     94,811     688   2.91    
Total interest-bearing liabilities   1,810,701     2,451   0.54     1,836,803     2,133   0.47    
Noninterest-bearing deposits   633,563           500,225          
Accrued expenses and other liabilities   41,831           43,786          
Total liabilities   2,486,095           2,380,814          
                   
Shareholders' Equity:                  
Common stock   110,271           110,271          
Additional paid-in capital   121,070           120,294          
Retained earnings and other equity   137,125           128,589          
Total shareholders' equity   368,466           359,154          
Total liabilities and shareholders' equity $ 2,854,561         $ 2,739,968          
Net interest income   $ 24,874         $ 24,706        
                   
Net interest spread     3.77       3.90    
Effect of net interest-free funding sources     0.15       0.13    
Net interest margin     3.92 %   4.03 %  
Ratio of average interest-earning assets to average interest-bearing liabilities   140.87 %         134.02 %        
                   
(1)  The interest rate on subordinated notes is calculated on a 30/360 day basis at a rate of 5.10%. The balance is net of debt issuance    
costs which are amortized to interest expense.                  
                   
Notes: For rate calculation purposes, average loan and lease categories include unearned discount.        
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, 2016 and 2015 have been calculated        
using the Corporation’s federal applicable rate of 35.0%.                
                   


  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential     
    For the Six Months Ended June 30,        
Tax Equivalent Basis 2016 2015    
  Average Income/ Average
  Average Income/ Average    
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate    
Assets:                  
Interest-earning deposits with other banks $ 13,637   $ 37   0.55 % $ 13,474   $ 16   0.24 %  
U.S. government obligations   70,132     426   1.22     134,694     730   1.09    
Obligations of state and political subdivisions   101,151     2,221   4.42     107,048     2,676   5.04    
Other debt and equity securities   151,072     2,036   2.71     136,691     1,408   2.08    
Federal funds sold   3,456     9   0.52     3,692     2   0.11    
Total interest-earning deposits, investments and federal funds sold   339,448     4,729   2.80     395,599     4,832   2.46    
                   
Commercial, financial, and agricultural loans   424,094     8,146   3.86     428,566     8,732   4.11    
Real estate—commercial and construction loans   892,806     20,025   4.51     834,178     19,544   4.72    
Real estate—residential loans   549,855     12,117   4.43     477,996     11,003   4.64    
Loans to individuals   29,889     807   5.43     29,881     796   5.37    
Municipal loans and leases   236,503     5,348   4.55     204,468     4,868   4.80    
Lease financings   75,235     3,066   8.20     70,509     3,118   8.92    
Gross loans and leases   2,208,382     49,509   4.51     2,045,598     48,061   4.74    
Total interest-earning assets   2,547,830     54,238   4.28     2,441,197     52,893   4.37    
Cash and due from banks   32,156           31,420          
Reserve for loan and lease losses   (17,280 )         (21,231 )        
Premises and equipment, net   43,431           40,500          
Other assets   238,140           223,988          
Total assets $ 2,844,277         $ 2,715,874          
                   
Liabilities:                  
Interest-bearing checking deposits $ 376,586   $ 159   0.08   $ 358,234   $ 114   0.06    
Money market savings   349,519     662   0.38     359,936     538   0.30    
Regular savings   635,546     373   0.12     572,453     258   0.09    
Time deposits   396,741     1,797   0.91     453,270     1,952   0.87    
Total time and interest-bearing deposits   1,758,392     2,991   0.34     1,743,893     2,862   0.33    
                   
Short-term borrowings   40,631     323   1.60     46,178     23   0.10    
Subordinated notes (1)   49,412     1,348   5.49     25,324     682   5.43    
Total borrowings   90,043     1,671   3.73     71,502     705   1.99    
Total interest-bearing liabilities   1,848,435     4,662   0.51     1,815,395     3,567   0.40    
Noninterest-bearing deposits   587,995           496,142          
Accrued expenses and other liabilities   41,567           43,706          
Total liabilities   2,477,997           2,355,243          
                   
Shareholders' Equity:                  
Common stock   110,271           110,271          
Additional paid-in capital   120,947           120,227          
Retained earnings and other equity   135,062           130,133          
Total shareholders' equity   366,280           360,631          
Total liabilities and shareholders' equity $ 2,844,277         $ 2,715,874          
Net interest income   $ 49,576         $ 49,326        
                   
Net interest spread     3.77       3.97    
Effect of net interest-free funding sources     0.14       0.10    
Net interest margin     3.91 %         4.07 %  
Ratio of average interest-earning assets to average interest-bearing liabilities   137.84 %         134.47 %        
                   
(1)  The interest rate on subordinated notes is calculated on a 30/360 day basis at a rate of 5.10%. The balance is net of debt issuance    
costs which are amortized to interest expense.                  
                   
Notes: For rate calculation purposes, average loan and lease categories include unearned discount.        
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, 2016 and 2015 have been calculated        
using the Corporation’s federal applicable rate of 35.0%.                
                   
CONTACT:     
                    Roger Deacon                                                                                                
                    UNIVEST CORPORATION OF PENNSYLVANIA
                    Chief Financial Officer
                    215-721-2455, DeaconR@univest.net 

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