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Univest Corporation of Pennsylvania - Univest Bank and Trust Co. - Reports Third Quarter Results

SOUDERTON, Pa., Oct. 26, 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 third quarter ended September 30, 2016. Univest reported net income of $58 thousand or $0.00 diluted earnings per share for the three months ended September 30, 2016, compared to net income of $7.5 million or $0.39 diluted earnings per share for the three months ended September 30, 2015. Net income for the nine months ended September 30, 2016 was $12.6 million or $0.57 diluted earnings per share, compared to net income of $20.1 million or $1.02 diluted earnings per share for the comparable period in the prior year.

The financial results for the three and nine months ended September 30, 2016 included $9.2 million and $10.6 million, net of tax, respectively, of acquisition and integration related costs associated with the acquisition of Fox Chase Bancorp (“Fox Chase”), or a total of $0.35 and $0.48, respectively, of diluted earnings per share. The nine months ended September 30, 2015 included $2.4 million, net of tax, of integration and acquisition-related costs and restructuring charges incurred during the first and second quarters, or $0.12 of diluted earnings per share. The current quarter is the first reporting period reflecting financial results inclusive of Fox Chase which Univest acquired on July 1, 2016. On September 12, 2016, Univest completed the Fox Chase system conversion, moving all operations to Univest and providing all Univest and Fox Chase customers with access to an expanded financial center and ATM network.

Loans

Gross loans and leases increased $1.0 billion from December 31, 2015 and $1.1 billion from September 30, 2015, including $776.3 million of loans acquired from Fox Chase Bank. Organic loan growth, which excludes the loans acquired from Fox Chase at June 30, 2016, was $69.1 million, or 2.2% (not annualized), for the three months ended September 30, 2016. The growth in loans was primarily in commercial business, commercial real estate and residential real estate loans. Loan growth in 2016 resulted from new and existing customer relationships and Univest’s strategic move to expand its presence and hire a lending team in Lancaster County to seize opportunities as a result of market disruption caused by other bank acquisitions. Loan growth also resulted from opportunities brought by Univest’s new lending talent in its core market and through the acquisition of Fox Chase.

Deposits

Total deposits increased $784.1 million from December 31, 2015 and $805.6 million from September 30, 2015, primarily due to $738.3 million of deposits acquired from Fox Chase. Organic deposit growth, which excludes the Fox Chase deposits at June 30, 2016, was $63.2 million, or 2.0% (not annualized), for the three months ended September 30, 2016 which is primarily due to an increase in public funds deposits.

Borrowings

Total borrowings increased $324.8 million from December 31, 2015 and $327.8 million from September 30, 2015, primarily due to long-term borrowings acquired from Fox Chase which consisted of $90.0 million principal amount of Federal Home Loan bank borrowings and borrowed funds obtained from other commercial banks, the issuance by the Corporation of $45.0 million in subordinated notes on July 1, 2016 and an increase of $187.2 million in short-term borrowings.

Net Interest Income and Margin

Net interest income increased $9.4 million to $32.9 million for the third quarter of 2016 from the same period in 2015. Net interest income increased $9.6 million for the nine months ended September 30, 2016 from the same period in the prior year. The net interest margin on a tax-equivalent basis for the third quarter of 2016 was 3.68%, compared to 3.93% for the second quarter of 2016 and 3.89% for the third quarter of 2015. The increase in net interest income and decrease in net interest margin during the third quarter of 2016 was mainly due to the impact of the Fox Chase acquisition, which included a full quarter of average net interest-earning assets acquired. The favorable impact of acquisition accounting fair value adjustments was 7 basis points for the quarter ended September 30, 2016 compared to 8 basis points for the quarter ended September 30, 2015.  A detailed analysis comparing net interest margin and net interest income for the quarter ended September 30, 2016 and the quarter ended June 30, 2106 is included in the attached exhibits.

Noninterest Income

Noninterest income for the quarter ended September 30, 2016 was $14.1 million, an increase of $1.4 million or 11.0% from the third quarter of 2015. Noninterest income for the nine months ended September 30, 2016 was $42.0 million, an increase of $2.7 million or 7.0% from the comparable period in the prior year. Service charges on deposits increased $275 thousand or 25.7% for the quarter and $227 thousand or 7.2% for the nine months ended September 30, 2016, mostly due to fees on deposit accounts acquired from Fox Chase. Insurance commission and fee income increased $516 thousand or 4.8% for the nine months ended September 30, 2016, primarily due to an increase in contingent commission income and growth in the group life and health and commercial product lines premiums. Bank owned life insurance (BOLI) income increased $405 thousand for the quarter and $846 thousand for the nine months ended September 30, 2016 mainly due to $26.1 million of policies acquired from Fox Chase which generated $208 thousand of income during the third quarter of 2016, the purchase of policies totaling $8.0 million during the third quarter of 2015, and the transfer of policies totaling $9.8 million during the second and fourth quarters of 2015 to a higher yielding account structure. The net gain on mortgage banking activities increased $883 thousand for the quarter and $1.2 million for the nine months ended September 30, 2016, mainly due to increases in mortgage volume during the second and third quarters of 2016. Mortgage volume closings increased $32.8 million, or 65.5%, for the three months ended September 30, 2016 and $33.4 million, or 21.7% for the nine months ended September 30, 2016, compared to the same periods in 2015.

Noninterest Expense

Noninterest expense for the quarter ended September 30, 2016 was $47.1 million, an increase of $21.8 million or 86.5%, compared to the third quarter of 2015. Noninterest expense for the nine months ended September 30, 2016 was $103.6 million, an increase of $24.1 million or 30.3% from the comparable period in the prior year.  Acquisition and integration costs related to the Fox Chase merger were $14.1 million for the three months ended September 30, 2016 and $15.6 million for the nine months ended September 30, 2016.  Acquisition, integration and restructuring costs related to the Valley Green merger were $3.6 million for the nine months ended September 30, 2015. Salaries and benefit expense increased $4.7 million for the quarter and $7.7 million for the nine months ended September 30, 2016, primarily attributable to higher staffing levels resulting from the Fox Chase acquisition, additional staff hired to support revenue generation across all business lines and the expansion into Lancaster County. Commission expense increased $311 thousand for the quarter and $600 thousand for the nine months ended September 30, 2016, mostly due to commissions paid on increased mortgage banking and insurance revenue. Premises and equipment expenses increased $545 thousand for the quarter and $365 thousand for the nine months ended September 30, 2016, primarily due to higher premises expense related to Fox Chase locations. Data processing expense increased $954 thousand for the quarter and $1.6 million for the nine months ended September 30, 2016 due to increased investments in computer software as well as a full quarter of Fox Chase processing expense.

Asset Quality and Provision for Loan and Lease Losses

Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $15.1 million at September 30, 2016, compared to $14.2 million at December 31, 2015 and $20.8 million at September 30, 2015. Net loan and lease charge-offs were $1.7 million during the third quarter of 2016 and $3.3 million for the nine months ended September 30, 2016. The provision for loan and lease losses was $1.4 million for the third quarter of 2016 and $2.6 million for the nine months ended September 30, 2016.

The allowance for loan and lease losses as a percentage of loans and leases held for investment was 0.53% at September 30, 2016, compared to 0.81% at December 31, 2015 and 0.89% at September 30, 2015. The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding loans acquired in the Fox Chase and Valley Green Bank acquisitions which were recorded at fair value as of the acquisition date, was 0.77% at September 30, 2016, compared to 0.94% at December 31, 2015.

Dividend

On August 19, 2016, Univest declared a quarterly cash dividend of $0.20 per share, payable on October 3, 2016. This represented a 3.45% annualized yield based on the closing price of Univest’s stock on the date the dividend was paid.

Conference Call

Univest will host a conference call to discuss second quarter results on Thursday, October 27, 2016 at 9:00 a.m. EDT. Participants may preregister at http://dpregister.com/10094672. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through November 27, 2016 by dialing 1-877-344-7529; using Conference ID: 10094672.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has approximately $4.1 billion in assets and $3.0 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, as well as 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
September 30, 2016
(Dollars in thousands)                            
                             
Balance Sheet (Period End)   09/30/16   06/30/16   03/31/16   12/31/15   09/30/15        
Assets   $   4,140,444     $   3,107,617     $   2,824,777     $   2,879,451     $   2,851,568          
Investment securities       484,213         286,980         329,357         370,760         374,558          
Loans held for sale       3,844         4,657         3,818         4,680         9,151          
Loans and leases held for investment, gross       3,190,361         2,345,037         2,183,256         2,179,013         2,097,807          
Allowance for loan and lease losses       16,899         17,153         16,452         17,628         18,620          
Loans and leases held for investment, net       3,173,462         2,327,884         2,166,804         2,161,385         2,079,187          
Total deposits       3,178,509         2,377,084         2,334,361         2,394,360         2,372,865          
Noninterest-bearing deposits       874,581         689,916         559,827         541,460         519,767          
NOW, money market and savings       1,652,696         1,326,976         1,391,626         1,398,494         1,361,827          
Time deposits       651,232         360,192         382,908         454,406         491,271          
Borrowings       398,341         309,666         75,265         73,588         70,531          
Shareholders' equity       509,249         369,160         367,003         361,574         359,109          
                             
                             
Balance Sheet (Average)   For the three months ended,   For the nine months ended,
    09/30/16   06/30/16   03/31/16   12/31/15   09/30/15   09/30/16   09/30/15
Assets   $   4,147,468     $   2,854,561     $   2,834,557     $   2,866,848     $   2,804,578     $   3,281,469     $   2,745,767  
Investment securities        503,790         302,492         342,218         370,163         368,837         383,275         375,200  
Loans and leases, gross       3,164,273         2,239,674         2,177,091         2,132,922         2,098,007         2,529,339         2,063,259  
Deposits       3,177,060         2,340,959         2,351,816         2,393,655         2,325,049         2,625,299         2,268,685  
Shareholders' equity       506,464         368,466         364,092         360,521         357,150         413,348         359,457  
                             
                             
Asset Quality Data (Period End)                             
    09/30/16   06/30/16   03/31/16   12/31/15   09/30/15        
Nonaccrual loans and leases, including nonaccrual troubled debt restructured                            
  loans and leases and nonaccrual loans held for sale   $   15,050     $   13,265     $   13,482     $   14,183     $   20,838          
Accruing loans and leases 90 days or more past due       1,128         748         693         379         428          
Accruing troubled debt restructured loans and leases       3,286         4,413         4,279         5,245         4,789          
Other real estate owned       6,041         3,131         3,073         1,276         955          
Nonperforming assets       25,505         21,557         21,527         21,083         27,010          
Allowance for loan and lease losses       16,899         17,153         16,452         17,628         18,620          
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual      0.47 %     0.57 %     0.62 %     0.65 %     0.99 %        
  loans held for sale                            
Nonperforming loans and leases / Loans and leases held for investment and nonaccrual      0.61 %     0.79 %     0.85 %     0.91 %     1.24 %        
  loans held for sale                            
Allowance for loan and lease losses / Loans and leases held for investment      0.53 %     0.73 %     0.75 %     0.81 %     0.89 %        
Allowance for loan and lease losses / Loans and leases held for investment     0.77 %     0.82 %     0.86 %     0.94 %     1.06 %        
  (excluding acquired loans at period-end)                            
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment     112.29 %     129.31 %     122.03 %     124.29 %     110.58 %        
Allowance for loan and lease losses / Nonperforming loans and leases held for investment       86.82 %     93.09 %     89.15 %     89.00 %     84.43 %        
Acquired credit impaired loans   $   14,575     $   942     $   1,267     $   1,253     $   1,379          
                             
    For the three months ended,   For the nine months ended,
    09/30/16   06/30/16   03/31/16   12/31/15   09/30/15   09/30/16   09/30/15
Net loan and lease charge-offs   $   1,669     $   129     $   1,502     $   1,909     $   1,652     $   3,300     $   4,927  
Net loan and lease charge-offs (annualized)/Average loans and leases     0.21 %     0.02 %     0.28 %     0.36 %     0.31 %     0.17 %     0.32 %
                             

 

   
Univest Corporation of Pennsylvania  
Consolidated Selected Financial Data  
September 30, 2016  
(Dollars in thousands, except per share data)                              
    For the three months ended,   For the nine months ended,  
For the period:   09/30/16   06/30/16   03/31/16   12/31/15   09/30/15   09/30/16   09/30/15  
Interest income   $   36,705     $   26,112     $   25,734     $   25,747     $   25,704     $   88,551     $   76,236    
Interest expense       3,836         2,451         2,211         2,278         2,220         8,498         5,787    
Net interest income       32,869         23,661         23,523         23,469         23,484         80,053         70,449    
Provision for loan and lease losses       1,415         830         326         917         670         2,571         2,885    
Net interest income after provision       31,454         22,831         23,197         22,552         22,814         77,482         67,564    
Noninterest income:                              
Trust fee income       1,958         1,997         1,865         2,030         1,904         5,820         5,878    
Service charges on deposit accounts       1,344         1,056         998         1,059         1,069         3,398         3,171    
Investment advisory commission and fee income         2,864         2,759         2,669         2,583         2,687         8,292         8,190    
Insurance commission and fee income       3,267         3,503         4,558         3,073         3,232         11,328         10,812    
Bank owned life insurance income       711         535         470         425         306         1,716         870    
Net gain on sales of investment securities       30         413         44         697         296         487         568    
Net gain on mortgage banking activities       2,006         1,711         1,218         1,090         1,123         4,935         3,748    
Other income       1,957         2,027         2,009         2,231         2,119         5,993         6,000    
Total noninterest income       14,137         14,001         13,831         13,188         12,736         41,969         39,237    
Noninterest expense:                              
Salaries and benefits       16,710         14,080         14,182         12,828         11,970         44,972         37,241    
Commissions       2,485         2,363         1,895         1,894         2,174         6,743         6,143    
Premises and equipment       3,424         2,841         2,872         2,817         2,879         9,137         8,772    
Data processing       2,169         1,530         1,281         1,244         1,215         4,980         3,416    
Professional fees       1,322         947         1,020         870         1,096         3,289         2,969    
Intangible expenses       906         996         770         178         710         2,672         2,389    
Acquisition-related costs       8,784         1,158         214         540         -          10,156         507    
Integration costs       5,365         27         6         6         -          5,398         1,484    
Restructuring charges       (85 )       -          -          -          -          (85 )       1,642    
Other expense       5,986         5,604         4,699         5,652         5,199         16,289         14,923    
Total noninterest expense       47,066         29,546         26,939         26,029         25,243         103,551         79,486    
Income before taxes       (1,475 )       7,286         10,089         9,711         10,307         15,900         27,315    
Income taxes       (1,533 )       2,046         2,800         2,553         2,779         3,313         7,205    
Net income   $   58     $   5,240     $   7,289     $   7,158     $   7,528     $   12,587     $   20,110    
Per common share data:                              
Book value per share   $   19.17     $   18.88     $   18.73     $   18.51     $   18.41     $   19.17     $   18.41    
Net income per share:                              
Basic   $   -      $   0.27     $   0.37     $   0.37     $   0.39     $   0.58     $   1.02    
Diluted   $   -      $   0.27     $   0.37     $   0.37     $   0.39     $   0.57     $   1.02    
Dividends declared per share   $   0.20     $   0.20     $   0.20     $   0.20     $   0.20     $   0.60     $   0.60    
Weighted average shares outstanding       26,555,626         19,603,310         19,578,438         19,525,701         19,506,609         21,929,403         19,709,322    
Period end shares outstanding       26,558,412         19,557,958         19,592,798         19,530,930         19,502,613         26,558,412         19,502,613    
                               

 

 
Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
September 30, 2016
                                   
                                   
                                   
          For the three months ended,   For the nine months ended,
Profitability Ratios (annualized)     09/30/16   06/30/16   03/31/16   12/31/15   09/30/15   09/30/16   09/30/15
                                   
Return on average assets       0.01 %     0.74 %     1.03 %     0.99 %     1.06 %     0.51 %     0.98 %
Return on average assets, excluding integration      0.88 %     0.90 %     1.07 %     1.06 %     1.06 %     0.94 %     1.09 %
  and acquisition-related costs and restructuring charges (1), (2)                                
Return on average shareholders' equity     0.05 %     5.72 %     8.05 %     7.88 %     8.36 %     4.07 %     7.48 %
Return on average shareholders' equity, excluding   7.24 %     6.99 %     8.29 %     8.42 %     8.36 %     7.47 %     8.36 %
  integration and acquisition-related costs and                            
  restructuring charges (1), (2)                              
Return on average tangible common equity, excluding   11.54 %     10.56 %     12.63 %     12.92 %     12.91 %     11.57 %     12.84 %
  integration and acquisition-related costs and                            
  restructuring charges (1), (2)                              
Net interest margin (FTE)       3.68 %     3.93 %     3.91 %     3.80 %     3.89 %     3.82 %     4.02 %
Efficiency ratio (3)         96.45 %     75.22 %     69.23 %     68.10 %     66.96 %     81.54 %     69.66 %
Efficiency ratio, excluding integration and     67.63 %     72.20 %     68.67 %     66.67 %     66.96 %     69.36 %     66.47 %
  acquisition-related costs and restructuring charges (1), (3), (4)                                
                                   
Capitalization Ratios                                
                                   
Dividends declared to net income       N/M       74.64 %     53.62 %     54.08 %     51.79 %     104.27 %     58.68 %
Shareholders' equity to assets (Period End)     12.30 %     11.88 %     12.99 %     12.56 %     12.59 %     12.30 %     12.59 %
Tangible common equity to tangible assets     8.10 %     8.21 %     8.97 %     8.58 %     8.56 %     8.10 %     8.56 %
                                   
                                   
Regulatory Capital Ratios  (Period End)                             
Tier 1 leverage ratio         8.80 %     9.90 %     9.93 %     9.69 %     9.75 %     8.80 %     9.75 %
Common equity tier 1 risk-based capital ratio     9.58 %     10.24 %     10.81 %     10.65 %     10.85 %     9.58 %     10.85 %
Tier 1 risk-based capital ratio       9.58 %     10.24 %     10.81 %     10.65 %     10.85 %     9.58 %     10.85 %
Total risk-based capital ratio       12.64 %     12.77 %     13.47 %     13.35 %     13.69 %     12.64 %     13.69 %
                                   
                                   
  (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 restructuring charges  $   14,064     $   1,185     $   220     $   546     $   -      $   15,469     $   3,633  
                             
  Tax effect on integration and acquisition-related costs and restructuring charges     4,910         22         2         49         -          4,934         1,270  
                             
  (b) Integration and acquisition-related costs and restructuring charges, net of tax  $   9,154     $   1,163     $   218     $   497     $   -      $   10,535     $   2,363  
                             
                                   
  (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. 
N/M Not meaningful                              
                                   

 

   
Univest Corporation of Pennsylvania  
  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential   
    For the Three Months Ended ,      
Tax Equivalent Basis September 30, 2016   June 30, 2016  
  Average Income/ Average   Average Income/ Average  
(Dollars in thousands) Balance Expense Rate   Balance Expense Rate  
Assets:                
Interest-earning deposits with other banks $ 16,248   $ 14       0.34 %   $   7,654   $   9       0.47 %  
U.S. government obligations     43,622       125       1.14         57,776       176       1.23    
Obligations of state and political subdivisions     96,581       1,030       4.24         101,241       1,092       4.34    
Other debt and equity securities     363,587       1,358       1.49         143,475       1,012       2.84    
Federal funds sold and other earning assets (1)     18,987       321       6.73         11,018       121       4.42    
Total interest-earning deposits, investments, federal funds sold and other earning assets       539,025       2,848       2.10         321,164       2,410       3.02    
                 
Commercial, financial, and agricultural loans     674,569       6,571       3.88         436,189       4,132       3.81    
Real estate—commercial and construction loans     1,382,947       15,816       4.55         898,494       10,106       4.52    
Real estate—residential loans     710,814       7,887       4.41         557,733       6,141       4.43    
Loans to individuals     31,416       415       5.26         30,301       408       5.42    
Municipal loans and leases     288,391       3,030       4.18         241,507       2,723       4.53    
Lease financings     76,136       1,547       8.08         75,450       1,524       8.12    
Gross loans and leases     3,164,273       35,266       4.43         2,239,674       25,034       4.50    
Total interest-earning assets     3,703,298       38,114       4.09         2,560,838       27,444       4.31    
Cash and due from banks     40,835             32,647        
Reserve for loan and lease losses     (17,110 )           (16,789 )      
Premises and equipment, net     61,361             43,990        
Other assets     359,084             233,875        
Total assets $   4,147,468         $   2,854,561        
                 
Liabilities:                
Interest-bearing checking deposits $ 389,079   $ 114       0.12     $   351,011   $   75       0.09    
Money market savings     483,579       428       0.35         337,250       322       0.38    
Regular savings     793,644       352       0.18         644,199       199       0.12    
Time deposits     606,561       1,187       0.78         374,936       862       0.92    
Total time and interest-bearing deposits     2,272,863       2,081       0.36         1,707,396       1,458       0.34    
                 
Short-term borrowings     229,282       276       0.48         53,874       320       2.39    
Long-term debt (2)     93,188       218       0.93         -        -        -     
Subordinated notes (3)     94,035       1,261       5.33         49,431       673       5.48    
Total borrowings     416,505       1,755       1.68         103,305       993       3.87    
Total interest-bearing liabilities     2,689,368       3,836       0.57         1,810,701       2,451       0.54    
Noninterest-bearing deposits     904,197             633,563        
Accrued expenses and other liabilities     47,439             41,831        
Total liabilities     3,641,004             2,486,095        
                 
Shareholders' Equity:                
Common stock     144,559             110,271        
Additional paid-in capital     229,319             121,070        
Retained earnings and other equity     132,586             137,125        
Total shareholders' equity     506,464             368,466        
Total liabilities and shareholders' equity $   4,147,468         $   2,854,561        
Net interest income   $   34,278         $   24,993      
                 
Net interest spread         3.52             3.77    
Effect of net interest-free funding sources         0.16             0.16    
Net interest margin         3.68 %               3.93 %  
                         
Ratio of average interest-earning assets to average interest-bearing liabilities   137.70 %         141.43 %      
                 
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost.      
(2) The average interest rate on long-term debt includes the net accretion of acquisition accounting fair value adjustments.    
(3) The interest rate on subordinated notes is calculated on a 30/360 day basis with a weighted average note rate of 5.05% and 5.10% for the  
  three months ended September 30, 2016 and June 30, 2016, respectively. 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 September 30, 2016 and June 30, 2016 have been calculated using the Corporation’s federal applicable rate of 35.0%.   
                 

 

   
Univest Corporation of Pennsylvania  
  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential   
   For the Three Months Ended September 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 $ 16,248   $ 14       0.34 %   $   50,514   $   21       0.16 %  
U.S. government obligations     43,622       125       1.14         119,712       345       1.14    
Obligations of state and political subdivisions     96,581       1,030       4.24         109,300       1,335       4.85    
Other debt and equity securities     363,587       1,358       1.49         139,825       859       2.44    
Federal funds sold and other earning assets (1)     18,987       321       6.73         8,998       119       5.25    
Total interest-earning deposits, investments, federal funds sold and other earning assets       539,025       2,848       2.10         428,349       2,679       2.48    
                 
Commercial, financial, and agricultural loans     674,569       6,571       3.88         423,912       4,219       3.95    
Real estate—commercial and construction loans     1,382,947       15,816       4.55         857,181       9,942       4.60    
Real estate—residential loans     710,814       7,887       4.41         509,599       5,786       4.50    
Loans to individuals     31,416       415       5.26         28,957       388       5.32    
Municipal loans and leases     288,391       3,030       4.18         205,302       2,450       4.73    
Lease financings     76,136       1,547       8.08         73,056       1,555       8.44    
Gross loans and leases     3,164,273       35,266       4.43         2,098,007       24,340       4.60    
Total interest-earning assets     3,703,298       38,114       4.09         2,526,356       27,019       4.24    
Cash and due from banks     40,835             35,419        
Reserve for loan and lease losses     (17,110 )           (20,494 )      
Premises and equipment, net     61,361             40,852        
Other assets     359,084             222,445        
Total assets $   4,147,468         $   2,804,578        
                 
Liabilities:                
Interest-bearing checking deposits $ 389,079   $ 114       0.12     $   375,362   $   77       0.08    
Money market savings     483,579       428       0.35         361,530       318       0.35    
Regular savings     793,644       352       0.18         590,331       134       0.09    
Time deposits     606,561       1,187       0.78         463,524       1,014       0.87    
Total time and interest-bearing deposits     2,272,863       2,081       0.36         1,790,747       1,543       0.34    
                 
Short-term borrowings     229,282       276       0.48         30,520       10       0.13    
Long-term debt (2)     93,188       218       0.93         -        -        -     
Subordinated notes (3)     94,035       1,261       5.33         49,321       667       5.37    
Total borrowings     416,505       1,755       1.68         79,841       677       3.36    
Total interest-bearing liabilities     2,689,368       3,836       0.57         1,870,588       2,220       0.47    
Noninterest-bearing deposits     904,197             534,302        
Accrued expenses and other liabilities     47,439             42,538        
Total liabilities     3,641,004             2,447,428        
                 
Shareholders' Equity:                
Common stock     144,559             110,271        
Additional paid-in capital     229,319             120,770        
Retained earnings and other equity     132,586             126,109        
Total shareholders' equity     506,464             357,150        
Total liabilities and shareholders' equity $   4,147,468         $   2,804,578        
Net interest income   $   34,278         $   24,799      
                 
Net interest spread         3.52             3.77    
Effect of net interest-free funding sources         0.16             0.12    
Net interest margin         3.68 %               3.89 %  
                         
Ratio of average interest-earning assets to average interest-bearing liabilities   137.70 %         135.06 %      
                 
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost.      
(2) The average interest rate on long-term debt includes the net accretion of acquisition accounting fair value adjustments.    
(3) The interest rate on subordinated notes is calculated on a 30/360 day basis with a weighted average note rate of 5.05% and 5.10% for the  
  three months ended September 30, 2016 and 2015, respectively. 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 September 30, 2016 and 2015 have been calculated 
   using the Corporation’s federal applicable rate of 35.0%. 
   

 

     
Univest Corporation of Pennsylvania    
  Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential     
   For the Nine Months Ended September 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 $ 14,514   $ 51       0.47 %   $   25,957   $   37       0.19 %    
U.S. government obligations     61,231       551       1.20         129,646       1,075       1.11      
Obligations of state and political subdivisions     99,617       3,251       4.36         107,807       4,011       4.97      
Other debt and equity securities     222,427       3,394       2.04         137,747       2,267       2.20      
Federal funds sold and other earning assets (1)     14,956       573       5.12         10,256       402       5.24      
Total interest-earning deposits, investments, federal funds sold and other earning assets       412,745       7,820       2.53         411,413       7,792       2.53      
                   
Commercial, financial, and agricultural loans     508,195       14,717       3.87         426,997       12,951       4.06      
Real estate—commercial and construction loans     1,057,379       35,841       4.53         841,930       29,486       4.68      
Real estate—residential loans     603,900       20,004       4.42         488,646       16,789       4.59      
Loans to individuals     30,402       1,222       5.37         29,570       1,184       5.35      
Municipal loans and leases     253,925       8,378       4.41         204,748       7,318       4.78      
Lease financings     75,538       4,613       8.16         71,368       4,673       8.75      
Gross loans and leases     2,529,339       84,775       4.48         2,063,259       72,401       4.69      
Total interest-earning assets     2,942,084       92,595       4.20         2,474,672       80,193       4.33      
Cash and due from banks     35,070             32,768          
Reserve for loan and lease losses     (17,223 )           (20,983 )        
Premises and equipment, net     49,451             40,618          
Other assets     272,087             218,692          
Total assets $   3,281,469         $   2,745,767          
                   
Liabilities:                  
Interest-bearing checking deposits $ 380,780   $ 273       0.10     $   364,006   $   190       0.07      
Money market savings     394,532       1,090       0.37         360,473       857       0.32      
Regular savings     688,630       725       0.14         578,478       392       0.09      
Time deposits     467,192       2,984       0.85         456,726       2,966       0.87      
Total time and interest-bearing deposits     1,931,134       5,072       0.35         1,759,683       4,405       0.33      
                   
Short-term borrowings     103,974       599       0.77         40,902       33       0.11      
Long-term debt (2)     31,290       218       0.93         -        -        -       
Subordinated notes (3)     64,395       2,609       5.41         33,411       1,349       5.40      
Total borrowings     199,659       3,426       2.29         74,313       1,382       2.49      
Total interest-bearing liabilities     2,130,793       8,498       0.53         1,833,996       5,787       0.42      
Noninterest-bearing deposits     694,165             509,002          
Accrued expenses and other liabilities     43,163             43,312          
Total liabilities     2,868,121             2,386,310          
                   
Shareholders' Equity:                  
Common stock     121,784             110,271          
Additional paid-in capital     157,334             120,409          
Retained earnings and other equity     134,230             128,777          
Total shareholders' equity     413,348             359,457          
Total liabilities and shareholders' equity $   3,281,469         $   2,745,767          
Net interest income   $   84,097         $   74,406        
                   
Net interest spread         3.67             3.91      
Effect of net interest-free funding sources         0.15             0.11      
Net interest margin         3.82 %               4.02 %    
                           
Ratio of average interest-earning assets to average interest-bearing liabilities    138.07 %         134.93 %        
                   
(1) Other earning assets include Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost.        
(2) The average interest rate on long-term debt includes the net accretion of acquisition accounting fair value adjustments.      
(3) The interest rate on subordinated notes is calculated on a 30/360 day basis with a weighted average note rate of 5.08% and 5.10% for the    
  nine months ended September 30, 2016 and 2015, respectively. 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 nine months ended September 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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