Univest Financial Corporation Reports Year and Fourth Quarter Results

(Loan Growth for 2019 of 9.5%)

SOUDERTON, Pa., Jan. 22, 2020 (GLOBE NEWSWIRE) -- Univest Financial Corporation (“Univest” or the “Corporation”) (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income for the year ended December 31, 2019 of  $65.7 million, or $2.24 diluted earnings per share, compared to net income of $50.5 million, or $1.72 diluted earnings per share, for the year ended December 31, 2018. Net income for the quarter ended December 31, 2019 was $15.5 million, or $0.53 diluted earnings per share, compared to net income of $18.4 million, or $0.63 diluted earnings per share, for the quarter ended December 31, 2018.

One-Time Items
The financial results for the year ended December 31, 2019 included a Federal Deposit Insurance Corporation (FDIC) small bank assessment credit of $1.1 million (after-tax benefit of $871 thousand) of which $988 thousand was recognized during the third quarter of 2019 and $114 thousand was recognized during the fourth quarter of 2019. The FDIC credit represented a favorable impact to earnings per share of $0.03 during the third quarter of 2019 and for the year ended December 31, 2019. In addition, the fourth quarter and year ended December 31, 2019 included an expense related to a legal settlement with a former Fox Chase Bank customer of $869 thousand (after-tax charge of $687 thousand), or $0.02 diluted earnings per share.

The financial results for the year ended December 31, 2018 included a net provision for loan and lease losses of $10.9 million (after-tax charge of $8.6 million), or $0.29 diluted earnings per share related to fraudulent activities by employees of a borrower. The second quarter of 2018 included a pre-tax charge to the provision for loan and lease losses of $12.7 million (after-tax charge of $10.1 million), or $0.34 diluted earnings per share, related to this relationship, and the quarter ended December 31, 2018 included a recovery of $1.8 million (after-tax recovery of $1.5 million), which represented $0.05 diluted earnings per share.

The year ended December 31, 2018 included two additional items: a tax-free bank owned life insurance (BOLI) death benefit of $446 thousand during the second quarter of 2018, which represented $0.02 diluted earnings per share, and restructuring costs related to financial center closures of $451 thousand, net of tax, recognized in the first quarter of 2018, which represented $0.02 diluted earnings per share.

Loans
Gross loans and leases increased $380.3 million, or 9.5%, from December 31, 2018 and $134.9 million, or 12.7% (annualized), from September 30, 2019 primarily due to growth in commercial real estate and residential real estate loans.

Deposits
Total deposits increased $468.8 million, or 12.1%, from December 31, 2018 primarily due to an increase in public funds deposits of $201.9 million and increases in commercial and consumer deposits. Total deposits increased $16.8 million, or 1.5% (annualized), from September 30, 2019 primarily due to increases in commercial and consumer deposits partially offset by a seasonal decrease in public funds deposits of $166.3 million.

Net Interest Income and Margin
Net interest income of $169.2 million for the year ended December 31, 2019 increased $11.2 million, or 7.1%, from the prior year. The increase in net interest income for the year ended December 31, 2019 compared to the prior year was primarily due to a 9.8% increase in average loans during the last year. Net interest margin, on a tax-equivalent basis, was 3.59% for the year ended December 31, 2019 compared to 3.72% for the year ended December 31, 2018. The favorable impact of purchase accounting accretion was two basis points for each of the years ended December 31, 2019 and 2018. Excess liquidity reduced net interest margin by approximately eight basis points for the year ended December 31, 2019 compared to one basis point for the year ended December 31, 2018. This excess liquidity was primarily driven by strong deposit balance growth during 2019. Excluding purchase accounting accretion and the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, was 3.65% for the year ended December 31, 2019 and 3.71% for the year ended December 31, 2018.

Net interest margin, on a tax-equivalent basis, was 3.44% for the fourth quarter of 2019, compared to 3.52% for the third quarter of 2019 and 3.72% for the fourth quarter of 2018. The favorable impact of purchase accounting accretion was three basis points for the quarter ended December 31, 2019 compared to no impact for the quarter ended September 30, 2019 and one basis point for the quarter ended December 31, 2018. Excess liquidity reduced net interest margin by approximately 12 basis points for the quarter ended December 31, 2019, compared to 13 basis points for the quarter ended September 30, 2019, and four basis points for the quarter ended December 31, 2018. Excluding purchase accounting accretion and the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, was 3.53% for the quarter ended December 31, 2019 compared to 3.65% for the quarter ended September 30, 2019 and 3.75% for the quarter ended December 31, 2018.

Noninterest Income
Noninterest income for the quarter ended December 31, 2019 was $16.2 million, an increase of $1.8 million, or 12.2%, from the fourth quarter of 2018. Noninterest income for the year ended December 31, 2019 was $65.4 million, an increase of $5.2 million, or 8.7%, from the comparable period in the prior year.

The net gain on mortgage banking activities increased $325 thousand, or 45.6%, for the quarter and $821 thousand, or 26.3%, for the year ended December 31, 2019, primarily due to an increase in mortgage volume partially offset by contraction in margins to remain price competitive. Investment advisory commission and fee income increased $212 thousand, or 5.5%, for the quarter and $842 thousand, or 5.6%, for the year ended December 31, 2019, primarily due to new client relationships and appreciation of assets under management. Insurance commission and fee income increased $194 thousand, or 5.7%, for the quarter and $913 thousand, or 5.8%, for the year ended December 31, 2019, primarily due to an increase in premiums for commercial lines and group life and health for the quarter and year ended December 31, 2019 as well as an increase in contingent commission income of $316 thousand for the year ended December 31, 2019. Service charges on deposit accounts increased $314 thousand, or 5.6%, for the year ended December 31, 2019, primarily due to increased fee income on commercial cash management accounts. BOLI income increased $311 thousand for the quarter ended December 31, 2019 primarily due to a decline in the value of the non-qualified annuity portfolio of $287 thousand in the fourth quarter of 2018.

Other income increased $853 thousand for the quarter and $2.4 million for the year ended December 31, 2019. Fees on risk participation agreements increased $407 thousand for the quarter and $1.1 million for the year ended December 31, 2019, driven by increased customer activity. Gain on sale of small business administration (SBA) loans increased $94 thousand for the quarter and $462 thousand for the year ended December 31, 2019 due to increased SBA loan sale activity. Net loss on valuations and sales of other real estate owned was $28 thousand for the year ended December 31, 2019 compared to $626 thousand for the year ended December 31, 2018.

Noninterest Expense
Noninterest expense for the quarter ended December 31, 2019 was $37.5 million, an increase of $4.1 million, or 12.2%, compared to the fourth quarter of 2018. Noninterest expense for the year ended December 31, 2019 was $146.1 million, an increase of $8.8 million, or 6.4%, from the prior year.

Salaries, benefits and commissions increased $2.4 million, or 12.2%, for the quarter and $7.8 million, or 9.7%, for the year ended December 31, 2019, primarily attributable to additional staff hired to support revenue generation across all business lines, expansion of our commercial lending groups and annual merit increases. During the first quarter of 2019, Univest hired a team of eight commercial lenders and support staff to focus on increasing Univest’s presence in Western Lancaster and York Counties. During the second quarter of 2019, a team of three commercial lenders was hired to help expand Univest’s presence in the New Jersey suburbs of Philadelphia. Data processing expense increased $333 thousand, or 14.2%, for the quarter and $1.4 million, or 15.9%, for the year ended December 31, 2019, primarily due to continued investments in customer relationship management software and internal infrastructure improvements as well as outsourced data processing solutions for the year ended December 31, 2019. Other expense included a charge of $869 thousand related to a legal settlement with a former Fox Chase Bank customer.

These increases were partially offset by a decrease in deposit insurance premiums of $1.1 million for the year ended December 31, 2019 due to the previously discussed FDIC small bank assessment credit. Intangible expenses decreased by $107 thousand, or 22.2%, for the quarter and $571 thousand, or 26.4%, for the year ended December 31, 2019 due to a run-off of intangible assets from prior acquisitions. In addition, restructuring costs related to financial center closures and staffing rationalization were $571 thousand during the first quarter of 2018. There were no restructuring costs incurred during 2019.  Excluding the FDIC small bank assessment credit, the legal settlement charge and restructuring costs, noninterest expense for the year ended December 31, 2019 increased $9.6 million, or 7.1%.

Asset Quality and Provision for Loan and Lease Losses
Nonperforming assets were $39.3 million at December 31, 2019, compared to $40.4 million at September 30, 2019 and $28.1 million at December 31, 2018. The increase in nonperforming assets at December 31, 2019 compared to December 31, 2018 was primarily due to one commercial banking relationship, totaling $11.9 million as of December 31, 2019, which was placed on non-accrual status during 2019.

Net loan and lease charge-offs were $558 thousand during the fourth quarter of 2019 and $2.6 million for the year ended December 31, 2019. The provision for loan and lease losses was $2.2 million for the fourth quarter of 2019 and $8.5 million for the year ended December 31, 2019. Net loan and lease recoveries were $1.9 million during the fourth quarter of 2018, which included the $1.8 million recovery related to the previously discussed commercial loan charge-off. The provision for loan and lease losses was $103 thousand for the fourth quarter of 2018. For the year ended December 31, 2018, net loan and lease charge-offs of $12.5 million and the provision for loan and lease losses of $20.3 million include the previously discussed $10.9 million commercial loan net charge-off.

The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding covered loans acquired in the Fox Chase and Valley Green Bank acquisitions, which were recorded at fair value as of the acquisition date, was 0.85% at December 31, 2019 and September 30, 2019 and 0.81% at December 31, 2018.

Tax Provision  
The effective income tax rate was 17.9% for the quarter ended December 31, 2019, compared to an effective income tax rate of 17.6% for the quarter ended December 31, 2018. The effective income tax rate was 17.9% for the year ended December 31, 2019 compared to an effective income tax rate of 16.7% for the year ended December 31, 2018.

Dividend
On December 9, 2019, Univest declared a quarterly cash dividend of $0.20 per share, payable on January 2, 2020. This represented a 3.01% 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 fourth quarter and year end 2019 results on Thursday, January 23, 2020 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10137953. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through February 23, 2020 by dialing 1-877-344-7529; using Conference ID: 10137953.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $5.4 billion in assets and $3.8 billion in assets under management and supervision through its Wealth Management lines of business at December 31, 2019. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices 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 and the reports Univest 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. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) competitive pressures among financial institutions; (2) changes in the interest rate environment; (3) changes in asset quality, 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 is engaged; (6) technological issues that may adversely affect Univest financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
December 31, 2019
(Dollars in thousands)
Balance Sheet (Period End)		12/31/19				09/30/19				06/30/19				03/31/19				12/31/18
Assets		$	5,375,614			$	5,353,611			$	5,154,298			$	5,035,527			$	4,984,347
Investment securities			441,599				448,447				468,833				466,883				473,306
Loans held for sale			5,504				2,893				1,498				921				1,754
Loans and leases held for investment, gross			4,386,836				4,251,933				4,167,904				4,067,879				4,006,574
Allowance for loan and lease losses			35,331				33,662				32,600				31,602				29,364
Loans and leases held for investment, net			4,351,505				4,218,271				4,135,304				4,036,277				3,977,210
Total deposits			4,354,765				4,337,991				4,122,110				4,003,153				3,885,933
Noninterest-bearing deposits			1,279,681				1,198,425				1,166,301				1,103,674				1,055,919
NOW, money market and savings			2,469,074				2,421,466				2,246,372				2,260,795				2,159,937
Time deposits			606,010				718,100				709,437				638,684				670,077
Borrowings			263,596				273,855				304,241				313,083				429,672
Shareholders' equity			675,122				664,299				651,670				637,606				624,133
Balance Sheet (Average)		For the three months ended,																				For the twelve months ended,
		12/31/19				09/30/19				06/30/19				03/31/19				12/31/18				12/31/19				12/31/18
Assets		$	5,400,533			$	5,317,867			$	5,170,448			$	5,004,253			$	4,890,519			$	5,224,569			$	4,737,772
Investment securities			445,932				460,099				471,422				470,196				464,684				461,841				456,612
Loans and leases, gross			4,280,430				4,170,485				4,123,069				4,017,362				3,894,298				4,148,619				3,776,940
Deposits			4,374,528				4,288,170				4,145,411				3,931,199				3,938,378				4,186,325				3,696,264
Shareholders' equity			672,647				659,523				645,538				631,574				619,204				652,453				612,197
Asset Quality Data (Period End)
		12/31/19				09/30/19				06/30/19				03/31/19				12/31/18
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases		$	38,578			$	37,368			$	25,147			$	25,952			$	26,208
Accruing loans and leases 90 days or more past due			143				2,488				1,379				636				192
Accruing troubled debt restructured loans and leases			54				54				55				270				542
Total nonperforming loans and leases			38,775				39,910				26,581				26,858				26,942
Other real estate owned			516				495				540				540				1,187
Total nonperforming assets			39,291				40,405				27,121				27,398				28,129
Nonaccrual loans and leases / Loans and leases held for investment			0.88	%			0.88	%			0.60	%			0.64	%			0.65	%
Nonperforming loans and leases / Loans and leases held for investment			0.88	%			0.94	%			0.64	%			0.66	%			0.67	%
Nonperforming assets / Total assets			0.73	%			0.75	%			0.53	%			0.54	%			0.56	%
Allowance for loan and lease losses			35,331				33,662				32,600				31,602				29,364
Allowance for loan and lease losses / Loans and leases held for investment			0.81	%			0.79	%			0.78	%			0.78	%			0.73	%
Allowance for loan and lease losses / Loans and leases held for investment			0.85	%			0.85	%			0.85	%			0.85	%			0.81	%
(excluding acquired loans at period-end)
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment			91.58	%			90.08	%			129.64	%			121.77	%			112.04	%
Allowance for loan and lease losses / Nonperforming loans and leases held for investment			91.12	%			84.34	%			122.64	%			117.66	%			108.99	%
Acquired credit impaired loans		$	264			$	568			$	569			$	693			$	695
		For the three months ended,																				For the twelve months ended,
		12/31/19				09/30/19				06/30/19				03/31/19				12/31/18				12/31/19				12/31/18
Net loan and lease charge-offs (recoveries)		$	558			$	468			$	1,078			$	447			$	(1,890	)		$	2,551			$	12,501
Net loan and lease charge-offs (recoveries) (annualized)/Average loans and leases			0.05%				0.04%				0.10%				0.05%				(0.19%	)			0.06%				0.33%

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
December 31, 2019
(Dollars in thousands, except per share data)
		For the three months ended,																For the twelve months ended,
For the period:		12/31/19			09/30/19				06/30/19			03/31/19			12/31/18			12/31/19			12/31/18
Interest income		$	53,369		$	54,300			$	54,060		$	52,364		$	51,239		$	214,093		$	190,488
Interest expense			10,940			11,655				11,425			10,841			9,862			44,861			32,426
Net interest income			42,429			42,645				42,635			41,523			41,377			169,232			158,062
Provision for loan and lease losses			2,227			1,530				2,076			2,685			103			8,518			20,310
Net interest income after provision			40,202			41,115				40,559			38,838			41,274			160,714			137,752
Noninterest income:
Trust fee income			1,912			1,973				2,054			1,887			1,882			7,826			7,882
Service charges on deposit accounts			1,551			1,513				1,447			1,435			1,516			5,946			5,632
Investment advisory commission and fee income			4,064			4,032				4,055			3,789			3,852			15,940			15,098
Insurance commission and fee income			3,609			3,877				3,941			5,144			3,415			16,571			15,658
Other service fee income			2,229			2,255				2,590			2,267			2,448			9,341			9,332
Bank owned life insurance income			741			743				743			952			430			3,179			3,174
Net gain on sales of investment securities			13			33				7			1			-			54			10
Net gain on mortgage banking activities			1,038			1,629				796			483			713			3,946			3,125
Other income			1,013			544				723			339			160			2,619			262
Total noninterest income			16,170			16,599				16,356			16,297			14,416			65,422			60,173
Noninterest expense:
Salaries, benefits and commissions			21,933			22,758				22,052			21,546			19,544			88,289			80,488
Net occupancy			2,534			2,475				2,601			2,611			2,455			10,221			10,260
Equipment			1,027			1,088				1,065			990			1,014			4,170			4,146
Data processing			2,685			2,624				2,627			2,514			2,352			10,450			9,014
Professional fees			1,475			1,517				1,307			1,264			1,335			5,563			5,391
Marketing and advertising			710			558				786			540			655			2,594			2,642
Deposit insurance premiums			342			(444	)			430			452			449			780			1,836
Intangible expenses			374			378				417			426			481			1,595			2,166
Restructuring charges			-			-				-			-			-			-			571
Other expense			6,398			5,316				5,493			5,214			5,111			22,421			20,725
Total noninterest expense			37,478			36,270				36,778			35,557			33,396			146,083			137,239
Income before taxes			18,894			21,444				20,137			19,578			22,294			80,053			60,686
Income tax expense			3,384			3,782				3,669			3,499			3,922			14,334			10,143
Net income		$	15,510		$	17,662			$	16,468		$	16,079		$	18,372		$	65,719		$	50,543
Net income per share:
Basic		$	0.53		$	0.60			$	0.56		$	0.55		$	0.63		$	2.24		$	1.72
Diluted		$	0.53		$	0.60			$	0.56		$	0.55		$	0.63		$	2.24		$	1.72
Dividends declared per share		$	0.20		$	0.20			$	0.20		$	0.20		$	0.20		$	0.80		$	0.80
Weighted average shares outstanding			29,327,169			29,305,524				29,287,754			29,277,339			29,319,664			29,299,599			29,370,217
Period end shares outstanding			29,334,629			29,312,534				29,294,942			29,272,502			29,270,852			29,334,629			29,270,852

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
December 31, 2019
						For the three months ended,																				For the twelve months ended,
Profitability Ratios (annualized)						12/31/19				09/30/19				06/30/19				03/31/19				12/31/18				12/31/19				12/31/18
Return on average assets							1.14	%			1.32	%			1.28	%			1.30	%			1.49	%			1.26	%			1.07	%
Return on average assets, excluding restructuring charges (1), (2)							1.14	%			1.32	%			1.28	%			1.30	%			1.49	%			1.26	%			1.08	%
Return on average shareholders' equity							9.15	%			10.62	%			10.23	%			10.32	%			11.77	%			10.07	%			8.26	%
Return on average shareholders' equity, excluding restructuring charges (1), (2)							9.15	%			10.62	%			10.23	%			10.32	%			11.77	%			10.07	%			8.33	%
Return on average tangible common equity, excluding restructuring charges (1), (2)							12.40	%			14.52	%			14.10	%			14.36	%			16.52	%			13.82	%			11.77	%
Net interest margin (FTE)							3.44	%			3.52	%			3.67	%			3.75	%			3.72	%			3.59	%			3.72	%
Efficiency ratio (3)							63.0	%			60.4	%			61.5	%			60.5	%			59.0	%			61.4	%			61.9	%
Efficiency ratio, excluding restructuring charges (1), (3), (4)							63.0	%			60.4	%			61.5	%			60.5	%			59.0	%			61.4	%			61.6	%
Capitalization Ratios
Dividends declared to net income							37.8	%			33.2	%			35.6	%			36.4	%			31.9	%			35.7	%			46.5	%
Shareholders' equity to assets (Period End)							12.56	%			12.41	%			12.64	%			12.66	%			12.52	%			12.56	%			12.52	%
Tangible common equity to tangible assets (1)							9.60	%			9.42	%			9.54	%			9.47	%			9.29	%			9.60	%			9.29	%
Common equity book value per share						$	23.01			$	22.66			$	22.25			$	21.78			$	21.32			$	23.01			$	21.32
Tangible common equity book value per share (1)						$	17.01			$	16.64			$	16.20			$	15.72			$	15.25			$	17.01			$	15.25
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio							10.02	%			9.97	%			10.01	%			10.10	%			10.13	%			10.02	%			10.13	%
Common equity tier 1 risk-based capital ratio							11.03	%			11.03	%			10.99	%			10.93	%			10.88	%			11.03	%			10.88	%
Tier 1 risk-based capital ratio							11.03	%			11.03	%			10.99	%			10.93	%			10.88	%			11.03	%			10.88	%
Total risk-based capital ratio							13.78	%			13.81	%			13.79	%			13.77	%			13.70	%			13.78	%			13.70	%
(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 Financial Corporation 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) Restructuring charges				$	-			$	-			$	-			$	-			$	-			$	-			$	571
		Tax effect on restructuring charges					-				-				-				-				-				-				(120	)
		(b) Restructuring charges, net of tax				$	-			$	-			$	-			$	-			$	-			$	-			$	451
		(c) Shareholders' equity				$	675,122			$	664,299			$	651,670			$	637,606			$	624,133			$	675,122			$	624,133
		Goodwill					(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)
		Other intangibles (i)					(3,658	)			(4,026	)			(4,396	)			(4,805	)			(5,222	)			(3,658	)			(5,222	)
		(d) Tangible common equity				$	498,905			$	487,714			$	474,715			$	460,242			$	446,352			$	498,905			$	446,352
		(e) Total assets				$	5,375,614			$	5,353,611			$	5,154,298			$	5,035,527			$	4,984,347			$	5,375,614			$	4,984,347
		Goodwill					(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)
		Other intangibles (i)					(3,658	)			(4,026	)			(4,396	)			(4,805	)			(5,222	)			(3,658	)			(5,222	)
		(f) Tangible assets				$	5,199,397			$	5,177,026			$	4,977,343			$	4,858,163			$	4,806,566			$	5,199,397			$	4,806,566
		(g) Average shareholders' equity				$	672,647			$	659,523			$	645,538			$	631,574			$	619,204			$	652,453			$	612,197
		Average goodwill					(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)
		Average other intangibles (i)					(3,853	)			(4,234	)			(4,615	)			(5,031	)			(5,473	)			(4,430	)			(6,233	)
		(h) Average tangible common equity				$	496,235			$	482,730			$	468,364			$	453,984			$	441,172			$	475,464			$	433,405
		(i) Amount does not include servicing rights
(2	)	Net income in this ratio excludes 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 restructuring charges. See (1)(a) above.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
				For the Three Months Ended,
Tax Equivalent Basis	December 31, 2019							September 30, 2019
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	205,645		$	860	1.66	%	$	213,623		$	1,178	2.19	%
U.S. government obligations		7,297			37	2.01			14,154			62	1.74
Obligations of state and political subdivisions		35,938			324	3.58			42,465			316	2.95
Other debt and equity securities		402,697			2,684	2.64			403,480			2,519	2.48
Federal Home Loan Bank, Federal Reserve Bank and other stock		30,653			514	6.65			30,857			519	6.67
Total interest-earning deposits, investments and other interest-earning assets		682,230			4,419	2.57			704,579			4,594	2.59
Commercial, financial, and agricultural loans		830,757			9,197	4.39			800,006			9,952	4.94
Real estate—commercial and construction loans		2,040,442			23,526	4.57			1,966,593			23,439	4.73
Real estate—residential loans		966,370			11,566	4.75			956,224			11,570	4.80
Loans to individuals		31,694			458	5.73			31,504			490	6.17
Municipal loans and leases		325,939			3,323	4.04			333,734			3,413	4.06
Lease financings		85,228			1,528	7.11			82,424			1,482	7.13
Gross loans and leases		4,280,430			49,598	4.60			4,170,485			50,346	4.79
Total interest-earning assets		4,962,660			54,017	4.32			4,875,064			54,940	4.47
Cash and due from banks		50,794							53,019
Reserve for loan and lease losses		(34,392	)						(33,152	)
Premises and equipment, net		57,043							57,881
Operating lease right-of-use assets		34,693							35,238
Other assets		329,735							329,817
Total assets	$	5,400,533						$	5,317,867
Liabilities:
Interest-bearing checking deposits	$	566,904		$	941	0.66	%	$	497,185		$	678	0.54	%
Money market savings		1,074,066			3,749	1.38			1,004,806			4,112	1.62
Regular savings		798,087			870	0.43			805,632			963	0.47
Time deposits		648,726			3,261	1.99			715,520			3,681	2.04
Total time and interest-bearing deposits		3,087,783			8,821	1.13			3,023,143			9,434	1.24
Short-term borrowings		30,404			63	0.82			32,375			94	1.15
Long-term debt		153,049			795	2.06			167,338			866	2.05
Subordinated notes		94,786			1,261	5.28			94,724			1,261	5.28
Total borrowings		278,239			2,119	3.02			294,437			2,221	2.99
Total interest-bearing liabilities		3,366,022			10,940	1.29			3,317,580			11,655	1.39
Noninterest-bearing deposits		1,286,745							1,265,027
Operating lease liabilities		37,867							38,364
Accrued expenses and other liabilities		37,252							37,373
Total liabilities		4,727,886							4,658,344
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		294,731							294,138
Retained earnings and other equity		220,132							207,601
Total shareholders' equity		672,647							659,523
Total liabilities and shareholders' equity	$	5,400,533						$	5,317,867
Net interest income				$	43,077						$	43,285
Net interest spread						3.03							3.08
Effect of net interest-free funding sources						0.41							0.44
Net interest margin						3.44	%						3.52	%
Ratio of average interest-earning assets to average interest-bearing liabilities		147.43	%						146.95	%
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and 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 December 31, 2019 and September 30, 2019 have been calculated using the Corporation’s federal applicable rate of 21.0%.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
				For the Three Months Ended December 31,
Tax Equivalent Basis				2019							2018
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	205,645		$	860	1.66	%	$	89,784		$	480	2.12	%
U.S. government obligations		7,297			37	2.01			22,307			89	1.58
Obligations of state and political subdivisions		35,938			324	3.58			65,134			553	3.37
Other debt and equity securities		402,697			2,684	2.64			377,243			2,494	2.62
Federal Home Loan Bank, Federal Reserve Bank and other stock		30,653			514	6.65			30,175			468	6.15
Total interest-earning deposits, investments and other interest-earning assets		682,230			4,419	2.57			584,643			4,084	2.77
													-
Commercial, financial, and agricultural loans		830,757			9,197	4.39			782,666			10,322	5.23
Real estate—commercial and construction loans		2,040,442			23,526	4.57			1,766,543			21,309	4.79
Real estate—residential loans		966,370			11,566	4.75			910,620			11,102	4.84
Loans to individuals		31,694			458	5.73			31,902			511	6.35
Municipal loans and leases		325,939			3,323	4.04			323,904			3,160	3.87
Lease financings		85,228			1,528	7.11			78,663			1,407	7.10
Gross loans and leases		4,280,430			49,598	4.60			3,894,298			47,811	4.87
Total interest-earning assets		4,962,660			54,017	4.32			4,478,941			51,895	4.60
Cash and due from banks		50,794							47,429
Reserve for loan and lease losses		(34,392	)						(28,499	)
Premises and equipment, net		57,043							60,448
Operating lease right-of-use assets		34,693							-
Other assets		329,735							332,200
Total assets	$	5,400,533						$	4,890,519
Liabilities:
Interest-bearing checking deposits	$	566,904		$	941	0.66	%	$	491,749		$	708	0.57	%
Money market savings		1,074,066			3,749	1.38			889,165			3,372	1.50
Regular savings		798,087			870	0.43			768,825			637	0.33
Time deposits		648,726			3,261	1.99			676,256			2,958	1.74
Total time and interest-bearing deposits		3,087,783			8,821	1.13			2,825,995			7,675	1.08
Short-term borrowings		30,404			63	0.82			56,215			233	1.64
Long-term debt		153,049			795	2.06			140,597			694	1.96
Subordinated notes		94,786			1,261	5.28			94,542			1,260	5.29
Total borrowings		278,239			2,119	3.02			291,354			2,187	2.98
Total interest-bearing liabilities		3,366,022			10,940	1.29			3,117,349			9,862	1.26
Noninterest-bearing deposits		1,286,745							1,112,383
Operating lease liabilities		37,867							-
Accrued expenses and other liabilities		37,252							41,583
Total liabilities		4,727,886							4,271,315
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		294,731							292,342
Retained earnings and other equity		220,132							169,078
Total shareholders' equity		672,647							619,204
Total liabilities and shareholders' equity	$	5,400,533						$	4,890,519
Net interest income				$	43,077						$	42,033
Net interest spread						3.03							3.34
Effect of net interest-free funding sources						0.41							0.38
Net interest margin						3.44	%						3.72	%
Ratio of average interest-earning assets to average interest-bearing liabilities		147.43	%						143.68	%
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and 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 December 31, 2019 and 2018 have been calculated using the Corporation’s federal applicable rate of 21.0%.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
				For the Twelve Months Ended December 31,
Tax Equivalent Basis					2019							2018
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	141,760		$	2,876	2.03	%	$	56,984		$	1,101	1.93	%
U.S. government obligations		14,665			254	1.73			22,930			364	1.59
Obligations of state and political subdivisions		50,360			1,693	3.36			69,842			2,330	3.34
Other debt and equity securities		396,816			10,406	2.62			363,840			9,024	2.48
Federal Home Loan Bank, Federal Reserve Bank and other stock		31,446			2,154	6.85			30,786			1,965	6.38
Total interest-earning deposits, investments and other interest-earning assets		635,047			17,383	2.74			544,382			14,784	2.72
Commercial, financial, and agricultural loans		815,472			40,496	4.97			793,028			39,156	4.94
Real estate—commercial and construction loans		1,936,073			91,634	4.73			1,689,983			78,498	4.64
Real estate—residential loans		950,743			46,031	4.84			870,846			41,270	4.74
Loans to individuals		31,912			1,976	6.19			30,242			1,866	6.17
Municipal loans and leases		331,831			13,262	4.00			316,280			12,049	3.81
Lease financings		82,588			5,904	7.15			76,561			5,514	7.20
Gross loans and leases		4,148,619			199,303	4.80			3,776,940			178,353	4.72
Total interest-earning assets		4,783,666			216,686	4.53			4,321,322			193,137	4.47
Cash and due from banks		48,877							45,979
Reserve for loan and lease losses		(32,389	)						(25,154	)
Premises and equipment, net		58,237							61,006
Operating lease right-of-use assets		35,712							-
Other assets		330,466							334,619
Total assets	$	5,224,569						$	4,737,772
Liabilities:
Interest-bearing checking deposits	$	500,295		$	2,790	0.56	%	$	461,676		$	1,924	0.42	%
Money market savings		995,403			15,843	1.59			764,777			9,137	1.19
Regular savings		802,851			3,660	0.46			798,332			2,357	0.30
Time deposits		677,199			13,276	1.96			601,674			8,768	1.46
Total time and interest-bearing deposits		2,975,748			35,569	1.20			2,626,459			22,186	0.84
Short-term borrowings		56,882			1,012	1.78			144,312			2,420	1.68
Long-term debt		156,366			3,236	2.07			150,032			2,777	1.85
Subordinated notes		94,695			5,044	5.33			94,451			5,043	5.34
Total borrowings		307,943			9,292	3.02			388,795			10,240	2.63
Total interest-bearing liabilities		3,283,691			44,861	1.37			3,015,254			32,426	1.08
Noninterest-bearing deposits		1,210,577							1,069,805
Operating lease liabilities		38,791							-
Accrued expenses and other liabilities		39,057							40,516
Total liabilities		4,572,116							4,125,575
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		293,784							291,148
Retained earnings and other equity		200,885							163,265
Total shareholders' equity		652,453							612,197
Total liabilities and shareholders' equity	$	5,224,569						$	4,737,772
Net interest income				$	171,825						$	160,711
Net interest spread						3.16							3.39
Effect of net interest-free funding sources						0.43							0.33
Net interest margin						3.59	%						3.72	%
Ratio of average interest-earning assets to average interest-bearing liabilities		145.68	%						143.32	%
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs, purchase accounting adjustments and 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 twelve months ended December 31, 2019 and 2018 have been calculated using the Corporation’s federal applicable rate of 21.0%.

CONTACT: CONTACT:
Brian J. Richardson
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2446, [e-mail]