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	%

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