Univest Financial Corporation Reports First Quarter Results

SOUDERTON, Pa., April 28, 2021 (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 quarter ended March 31, 2021 was $32.6 million, or $1.11 diluted earnings per share, compared to net income of $838 thousand, or $0.03 diluted earnings per share, for the quarter ended March 31, 2020.

Pre-tax pre-provision income¹ for the quarter ended March 31, 2021 was $29.1 million, an increase of $7.0 million, or 31.9%, from the first quarter of 2020.

COVID-19
As the re-opening of our local economy continues and progress is made in getting the COVID-19 vaccines distributed and administered, access to all Univest financial center lobbies resumed on April 5, 2021.

Throughout the COVID-19 pandemic, we have taken various actions to support our customers and the communities we collectively serve, including modifying outstanding loans and leases. Loans and leases that were modified via principal and/or interest deferrals were done so in accordance with Section 4013 of the CARES Act, the Consolidated Appropriations Act, 2021 and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and have not been categorized as troubled debt restructurings. These loans and leases had a combined principal balance of approximately $73.0 million as of March 31, 2021, which represents approximately 1.5% of the loan portfolio, excluding Paycheck Protection Program (PPP) loans¹. For more information on these loans, including a breakdown of such loans by type, please see the "Loan Portfolio Overview" table within this document.

Paycheck Protection Program
On December 27, 2020, the Consolidated Appropriations Act, 2021, was signed into law, which provides new COVID-19 relief funds, additional funding under the PPP and the establishment of PPP Second Draw Loans. The Small Business Administration (SBA) announced the taking of certain steps under the PPP to further promote equitable relief for smaller businesses. Under this program, we successfully originated approximately 1,200 PPP loans and secured funding of approximately $168.6 million for our customers as of April 15, 2021.

As of March 31, 2021, $528.5 million in PPP loan originations remain outstanding. During the quarter, we recorded income of $4.5 million within net interest income related to these loans, of which $2.3 million was the result of forgiveness and pay downs of PPP loans totaling $119.7 million. As of March 31, 2021, we have $9.5 million of net deferred fees on our balance sheet, which represents approximately 55% of the initial deferred fee amount.

Loans
Gross loans and leases, excluding PPP loans¹, increased $63.5 million, or 5.3% (annualized), from December 31, 2020 primarily due to increases in commercial real estate loans, despite a $58.1 million decrease in commercial line utilization. Gross loans and leases, excluding PPP loans¹, increased $437.7 million, or 9.8%, from March 31, 2020 primarily due to increases in commercial real estate loans. As of March 31, 2021, commercial line utilization was 30.2% compared to 34.0% at December 31, 2020 and 38.3% at March 31, 2020.
  
Deposits
Total deposits increased $68.9 million, or 5.3% (annualized), from December 31, 2020 primarily due to an increase in consumer and commercial deposits offset by a decrease in public funds and brokered deposits. Total deposits increased $904.3 million, or 20.5%, from March 31, 2020 primarily due to increases in commercial, consumer and public funds deposits.

Net Interest Income and Margin
Net interest income of $45.4 million for the first quarter of 2021 increased $2.9 million, or 6.9%, from the first quarter of 2020. The increase in net interest income for the first quarter of 2021 compared to the first quarter of 2020 was primarily due to $4.5 million in PPP income, a $3.5 million decrease in the cost of interest-bearing liabilities and growth in loans partially offset by a decrease in loan and investment yields.

Net interest margin, on a tax-equivalent basis, was 3.12% for the first quarter of 2021, compared to 3.02% for the fourth quarter of 2020 and 3.48% for the first quarter of 2020. Excess liquidity reduced net interest margin by approximately eleven basis points for the quarter ended March 31, 2021 compared to thirteen basis points for the quarter ended December 31, 2020 and six basis points for the quarter ended March 31, 2020. This excess liquidity was primarily driven by strong deposit balance growth during the last twelve months, which was partially attributable to the various stimulus initiatives associated with the COVID-19 pandemic. PPP loans had a favorable impact on net interest margin of four basis points for the quarter ended March 31, 2021 compared to an unfavorable impact of seven basis points for the quarter ended December 31, 2020 and had no impact for the quarter ended March 31, 2020. Excluding the impacts of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.19% for the quarter ended March 31, 2021 compared to 3.22% for the quarter ended December 31, 2020 and 3.54% for the quarter ended March 31, 2020.

Noninterest Income
Noninterest income for the quarter ended March 31, 2021 was $23.3 million, an increase of $4.9 million, or 26.5%, compared to the first quarter of 2020.

Net gain on mortgage banking activities increased $3.2 million, or 116.4%, for the quarter primarily due to an increase in volume and expansion of margins. Investment advisory commission and fee income increased $442 thousand, or 10.4%, due to increased assets under management driven by favorable market conditions and new customer relationships. Insurance commission and fee income increased $223 thousand, or 4.7%, for the quarter ended March 31, 2021, primarily due to an increase in premiums for group life and health and commercial lines and an increase in contingent commission income of $36 thousand, which was $1.1 million for each of the quarters ended March 31, 2021 and 2020. Contingent commission income is largely recognized in the first quarter of the year.

Other income increased $1.3 million, for the quarter primarily due to an increase of $967 thousand in fees on risk participation agreements for interest rate swaps driven by increased customer activity due to the current rate environment. Additionally, equity securities measured at fair value increased $384 thousand for the quarter.

Noninterest Expense
Noninterest expense for the quarter ended March 31, 2021 was $39.5 million, an increase of $763 thousand, or 2.0%, compared to the first quarter of 2020.

Salaries, benefits and commissions increased $944 thousand, or 4.0%, for the quarter primarily attributable to additional staff hired to support revenue generation across all business lines, annual merit increases and increased variable compensation due to strong pre-tax pre-provision income during the first quarter of 2021. The increases in salaries, benefits and commissions were offset by $582 thousand of incremental capitalized compensation related to the origination of PPP loans. Professional fees increased $431 thousand, or 32.7%, for the quarter primarily attributable to increased consultant fees in support of our Diversity, Equity and Inclusion and training initiatives. Data processing expenses increased $290 thousand, or 10.5%, for the quarter primarily due to continued investments in customer relationship management software, internal infrastructure improvements and outsourced data processing solutions. Deposit insurance premiums increased $132 thousand, or 26.2%, for the quarter primarily due to an increased assessment base due to asset growth.

Other expense decreased $947 thousand, or 15.6%, for the quarter primarily due to a $656 thousand charge related to the extinguishment of long-term debt that occurred in the first quarter of 2020 and a $295 thousand decrease in travel and entertainment expenses due to COVID-19 related restrictions.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $38.2 million at March 31, 2021, compared to $40.5 million at December 31, 2020 and $39.0 million at March 31, 2020.

Net loan and lease charge-offs were $288 thousand during the first quarter of 2021 compared to $489 thousand for the quarter ended March 31, 2020. The reversal of provision for credit losses was $11.3 million for the first quarter of 2021, of which $12.9 million (after-tax benefit of $10.2 million), or $0.35 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model partially offset by a reserve increase attributable to loan growth. The provision for credit losses was $21.8 million for the quarter ended March 31, 2020, of which $20.3 million (after-tax charge of $16.1 million), or $0.55 diluted earnings per share, was attributable to adverse changes in economic-related assumptions.

The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.32% at March 31, 2021, compared to 1.56% at December 31, 2020, and 1.53% at March 31, 2020. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans¹, was 1.46% at March 31, 2021 compared to 1.72% at December 31, 2020 and 1.53% at March 31, 2020.

Tax Provision
The effective income tax rate was 19.3% for the quarter ended March 31, 2021 compared to an effective income tax rate of (261.2%) for the quarter ended March 31, 2020. The effective tax rate for the quarter ended March 31, 2021 reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases.

Dividend
On April 28, 2021, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on May 26, 2021 to shareholders of record as of May 12, 2021.

Conference Call
Univest will host a conference call to discuss first quarter 2021 results on Thursday, April 29, 2021 at 9:00 a.m. EST. Participants may preregister at https://dpregister.com/sreg/10154212/e624e999e4. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through May 28, 2021 by dialing 1-877-344-7529; using Conference ID: 10154212.

¹Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included within this document.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $6.4 billion in assets and $4.2 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2021. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices and online at www.univest.net.  

This press release of Univest and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, business and capital management strategies, markets and products of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest's future results to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) changes in interest rates; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and credit 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.

Additionally, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and whether the continued reopening of businesses will result in a meaningful increase in economic activity. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: (1) demand for our products and services may decline; (2) if the economy is unable to remain open, and higher levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase; (3) collateral for loans, especially real estate, may decline in value; (4) our allowance for credit losses may have to be increased if borrowers experience financial difficulties; (5) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (6) a material decrease in net income or a net loss over several quarters could result in the elimination of or a decrease in the rate of our quarterly cash dividend; (7) our wealth management revenues may decline with continuing market turmoil; (8) litigation, regulatory enforcement risk and reputation risk regarding our participation in the Paycheck Protection Program and the risk that the Small Business Administration may not fund some or all PPP loan guarantees; (9) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (10) Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs; and (11) further and sustained decline in our stock price or other triggering event could result in an impairment charge being recorded. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

(UVSP - ER)

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2021
(Dollars in thousands)
Balance Sheet (Period End)	03/31/21				12/31/20				09/30/20				06/30/20				03/31/20
Assets	$	6,416,665			$	6,336,496			$	6,382,831			$	6,125,312			$	5,464,768
Investment securities, net of allowance for credit losses		377,506				373,176				368,830				397,852				423,521
Loans held for sale		22,636				37,039				14,465				31,082				11,417
Loans and leases held for investment, gross		5,415,006				5,306,841				5,211,856				4,951,809				4,448,825
Allowance for credit losses, loans and leases		71,497				83,044				91,870				86,217				68,216
Loans and leases held for investment, net		5,343,509				5,223,797				5,119,986				4,865,592				4,380,609
Total deposits		5,311,592				5,242,715				5,211,603				4,869,329				4,407,303
Noninterest-bearing deposits		1,857,547				1,690,663				1,714,505				1,725,819				1,318,270
NOW, money market and savings		2,979,834				2,988,277				2,940,879				2,623,025				2,452,021
Time deposits		474,211				563,775				556,219				520,485				637,012
Borrowings		295,293				311,421				416,104				515,722				323,363
Shareholders' equity		722,455				692,472				669,107				654,873				651,551
Balance Sheet (Average)	For the three months ended,
	03/31/21				12/31/20				09/30/20				06/30/20				03/31/20
Assets	$	6,383,463			$	6,353,519			$	6,265,605			$	6,000,790			$	5,409,561
Investment securities, net of allowance for credit losses		374,369				369,511				385,221				411,957				441,900
Loans and leases, gross		5,325,897				5,253,720				5,070,037				4,836,858				4,388,584
Deposits		5,296,147				5,222,452				5,030,398				4,794,669				4,349,984
Shareholders' equity		699,736				676,426				661,947				660,950				673,460
Asset Quality Data (Period End)
	03/31/21				12/31/20				09/30/20				06/30/20				03/31/20
Nonaccrual loans and leases, including nonaccrual troubled debt restructured
loans and leases	$	29,996			$	31,692			$	30,019			$	26,141			$	36,626
Accruing loans and leases 90 days or more past due		664				1,392				3,573				1,193				1,777
Accruing troubled debt restructured loans and leases		52				53				53				53				54
Total nonperforming loans and leases		30,712				33,137				33,645				27,387				38,457
Other real estate owned		7,481				7,355				8,270				8,642				516
Total nonperforming assets	$	38,193			$	40,492			$	41,915			$	36,029			$	38,973
Nonaccrual loans and leases / Loans and leases held for investment		0.55	%			0.60	%			0.58	%			0.53	%			0.82	%
Nonperforming loans and leases / Loans and leases held for investment		0.57	%			0.62	%			0.65	%			0.55	%			0.86	%
Nonperforming assets / Total assets		0.60	%			0.64	%			0.66	%			0.59	%			0.71	%
Allowance for credit losses, loans and leases	$	71,497			$	83,044			$	91,870			$	86,217			$	68,216
Allowance for credit losses, loans and leases / Loans and leases held for investment		1.32	%			1.56	%			1.76	%			1.74	%			1.53	%
Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1)		1.46	%			1.72	%			1.95	%			1.94	%			1.53	%
Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment		238.36	%			262.03	%			306.04	%			329.82	%			186.25	%
Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment		232.80	%			250.61	%			273.06	%			314.81	%			177.38	%
	For the three months ended,
	03/31/21				12/31/20				09/30/20				06/30/20				03/31/20
Net loan and lease charge-offs (recoveries)	$	288			$	618			$	(35	)		$	3,576			$	489
Net loan and lease charge-offs (annualized)/Average loans and leases		0.02	%			0.05	%			(0.00	%)			0.30	%			0.04	%
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included at the end of this document.

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2021
(Dollars in thousands, except per share data)
	For the three months ended,
For the period:	03/31/21				12/31/20				09/30/20			06/30/20				03/31/20
Interest income	$	51,457			$	51,334			$	50,612		$	49,980			$	52,019
Interest expense		6,043				6,813				6,758			6,462				9,551
Net interest income		45,414				44,521				43,854			43,518				42,468
Provision (reversal of provision) for credit losses		(11,283	)			(8,721	)			3,935			23,737				21,843
Net interest income after provision for credit losses		56,697				53,242				39,919			19,781				20,625
Noninterest income:
Trust fee income		2,034				1,974				1,915			1,924				1,890
Service charges on deposit accounts		1,282				1,371				1,187			890				1,397
Investment advisory commission and fee income		4,697				4,144				4,005			3,540				4,255
Insurance commission and fee income		4,955				3,512				3,776			4,067				4,732
Other service fee income		2,192				2,092				2,093			1,488				1,870
Bank owned life insurance income		717				733				741			732				734
Net gain on sales of investment securities		65				54				57			65				695
Net gain on mortgage banking activities		5,938				4,323				5,860			3,515				2,744
Other income		1,370				1,936				2,171			1,779				67
Total noninterest income		23,250				20,139				21,805			18,000				18,384
Noninterest expense:
Salaries, benefits and commissions		24,780				23,613				24,059			21,700				23,836
Net occupancy		2,739				2,697				2,609			2,478				2,574
Equipment		946				951				972			923				995
Data processing		3,050				2,961				2,862			2,750				2,760
Professional fees		1,748				1,436				1,321			1,264				1,317
Marketing and advertising		280				575				463			535				402
Deposit insurance premiums		636				765				707			615				504
Intangible expenses		249				282				283			321				330
Restructuring charges		-				1,439				-			-				-
Other expense		5,112				7,015				5,251			5,374				6,059
Total noninterest expense		39,540				41,734				38,527			35,960				38,777
Income before taxes		40,407				31,647				23,197			1,821				232
Income tax expense (benefit)		7,804				5,773				5,078			(264	)			(606	)
Net income	$	32,603			$	25,874			$	18,119		$	2,085			$	838
Net income per share:
Basic	$	1.11			$	0.88			$	0.62		$	0.07			$	0.03
Diluted	$	1.11			$	0.88			$	0.62		$	0.07			$	0.03
Dividends declared per share	$	0.20			$	-			$	0.20		$	0.20			$	0.20
Weighted average shares outstanding		29,327,432				29,274,915				29,226,627			29,187,197				29,286,200
Period end shares outstanding		29,379,575				29,295,052				29,241,302			29,201,985				29,164,782

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2021
	For the three months ended,
Profitability Ratios (annualized)	03/31/21				12/31/20				09/30/20				06/30/20				03/31/20
Return on average assets		2.07	%			1.62	%			1.15	%			0.14	%			0.06	%
Return on average assets, excluding restructuring		2.07	%			1.69	%			1.15	%			0.14	%			0.06	%
charges (1)
Return on average shareholders' equity		18.90	%			15.22	%			10.89	%			1.27	%			0.50	%
Return on average shareholders' equity, excluding		18.90	%			15.89	%			10.89	%			1.27	%			0.50	%
restructuring charges (1)
Return on average tangible common equity (1)		25.19	%			20.53	%			14.82	%			1.73	%			0.68	%
Return on average tangible common equity, excluding		25.19	%			21.44	%			14.82	%			1.73	%			0.68	%
restructuring charges (1)
Net interest margin (FTE)		3.12	%			3.02	%			3.02	%			3.18	%			3.48	%
Efficiency ratio (2)		57.0	%			63.8	%			58.0	%			57.7	%			62.8	%
Efficiency ratio, excluding restructuring charges (1) (2)		57.0	%			61.6	%			58.0	%			57.7	%			62.8	%
Capitalization Ratios
Dividends declared to net income (3)		18.0	%			0.0	%			32.3	%			278.7	%			699.9	%
Shareholders' equity to assets (Period End)		11.26	%			10.93	%			10.48	%			10.69	%			11.92	%
Tangible common equity to tangible assets (1)		8.77	%			8.40	%			7.96	%			8.06	%			8.99	%
Common equity book value per share	$	24.59			$	23.64			$	22.88			$	22.43			$	22.34
Tangible common equity book value per share (1)	$	18.64			$	17.66			$	16.89			$	16.41			$	16.31
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio		9.45	%			9.08	%			8.97	%			9.15	%			9.90	%
Common equity tier 1 risk-based capital ratio		11.08	%			10.76	%			10.52	%			10.73	%			10.79	%
Tier 1 risk-based capital ratio		11.08	%			10.76	%			10.52	%			10.73	%			10.79	%
Total risk-based capital ratio		15.13	%			15.31	%			15.35	%			13.72	%			13.65	%
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included below.
(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.
(3) As announced in the September 30, 2020 Earnings Release, the Corporation changed the timing of future dividend declarations and payments.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
				For the Three Months Ended,
Tax Equivalent Basis	March 31, 2021							December 31, 2020
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	237,548		$	56	0.10	%	$	296,258		$	82	0.11	%
U.S. government obligations		6,998			36	2.09			6,998			36	2.05
Obligations of state and political subdivisions		11,544			105	3.69			14,269			129	3.60
Other debt and equity securities		355,827			1,267	1.44			348,244			1,237	1.41
Federal Home Loan Bank, Federal Reserve Bank and other stock		26,368			348	5.35			29,838			438	5.84
Total interest-earning deposits, investments and other interest-earning assets		638,285			1,812	1.15			695,607			1,922	1.10
Commercial, financial, and agricultural loans		782,208			6,798	3.52			824,374			7,366	3.55
Paycheck Protection Program loans		506,939			4,524	3.62			497,035			3,133	2.51
Real estate—commercial and construction loans		2,621,981			24,458	3.78			2,518,056			24,388	3.85
Real estate—residential loans		1,037,000			9,873	3.86			1,025,818			10,345	4.01
Loans to individuals		26,447			265	4.05			27,427			289	4.19
Municipal loans and leases		245,638			2,530	4.18			258,627			2,776	4.27
Lease financings		105,684			1,737	6.67			102,383			1,690	6.57
Gross loans and leases		5,325,897			50,185	3.82			5,253,720			49,987	3.79
Total interest-earning assets		5,964,182			51,997	3.54			5,949,327			51,909	3.47
Cash and due from banks		55,311							53,360
Allowance for credit losses, loans and leases		(83,254	)						(92,766	)
Premises and equipment, net		55,826							55,653
Operating lease right-of-use assets		34,033							34,272
Other assets		357,365							353,673
Total assets	$	6,383,463						$	6,353,519
Liabilities:
Interest-bearing checking deposits	$	817,940		$	490	0.24	%	$	838,323		$	537	0.25	%
Money market savings		1,243,673			853	0.28			1,213,585			898	0.29
Regular savings		959,232			298	0.13			905,918			341	0.15
Time deposits		525,800			1,759	1.36			582,782			2,034	1.39
Total time and interest-bearing deposits		3,546,645			3,400	0.39			3,540,608			3,810	0.43
Short-term borrowings		17,894			2	0.05			15,091			2	0.05
Long-term debt		101,333			348	1.39			169,623			611	1.43
Subordinated notes		183,340			2,293	5.07			193,244			2,390	4.92
Total borrowings		302,567			2,643	3.54			377,958			3,003	3.16
Total interest-bearing liabilities		3,849,212			6,043	0.64			3,918,566			6,813	0.69
Noninterest-bearing deposits		1,749,502							1,681,844
Operating lease liabilities		37,415							37,616
Accrued expenses and other liabilities		47,598							39,067
Total liabilities		5,683,727							5,677,093
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		296,136							296,810
Retained earnings and other equity		245,816							221,832
Total shareholders' equity		699,736							676,426
Total liabilities and shareholders' equity	$	6,383,463						$	6,353,519
Net interest income				$	45,954						$	45,096
Net interest spread						2.90							2.78
Effect of net interest-free funding sources						0.22							0.24
Net interest margin						3.12	%						3.02	%
Ratio of average interest-earning assets to average interest-bearing liabilities		154.95	%						151.82	%
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
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 March 31, 2021 and December 31, 2020 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 March 31,
Tax Equivalent Basis	2021							2020
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	237,548		$	56	0.10	%	$	118,108		$	325	1.11	%
U.S. government obligations		6,998			36	2.09			7,298			37	2.04
Obligations of state and political subdivisions		11,544			105	3.69			33,595			289	3.46
Other debt and equity securities		355,827			1,267	1.44			401,007			2,668	2.68
Federal Home Loan Bank, Federal Reserve Bank and other stock		26,368			348	5.35			31,450			527	6.74
Total interest-earning deposits, investments and other interest-earning assets		638,285			1,812	1.15			591,458			3,846	2.62
Commercial, financial, and agricultural loans		782,208			6,798	3.52			821,267			8,631	4.23
Paycheck Protection Program loans		506,939			4,524	3.62			-			-	-
Real estate—commercial and construction loans		2,621,981			24,458	3.78			2,139,369			23,917	4.50
Real estate—residential loans		1,037,000			9,873	3.86			991,550			11,052	4.48
Loans to individuals		26,447			265	4.05			30,016			407	5.45
Municipal loans and leases		245,638			2,530	4.18			317,006			3,265	4.14
Lease financings		105,684			1,737	6.67			89,376			1,554	6.99
Gross loans and leases		5,325,897			50,185	3.82			4,388,584			48,826	4.47
Total interest-earning assets		5,964,182			51,997	3.54			4,980,042			52,672	4.25
Cash and due from banks		55,311							50,891
Allowance for credit losses, loans and leases		(83,254	)						(44,372	)
Premises and equipment, net		55,826							56,399
Operating lease right-of-use assets		34,033							34,545
Other assets		357,365							332,056
Total assets	$	6,383,463						$	5,409,561
Liabilities:
Interest-bearing checking deposits	$	817,940		$	490	0.24	%	$	584,391		$	796	0.55	%
Money market savings		1,243,673			853	0.28			1,057,336			2,903	1.10
Regular savings		959,232			298	0.13			816,760			792	0.39
Time deposits		525,800			1,759	1.36			602,903			2,915	1.94
Total time and interest-bearing deposits		3,546,645			3,400	0.39			3,061,390			7,406	0.97
Short-term borrowings		17,894			2	0.05			40,126			106	1.06
Long-term debt		101,333			348	1.39			169,205			764	1.82
Subordinated notes		183,340			2,293	5.07			94,847			1,275	5.41
Total borrowings		302,567			2,643	3.54			304,178			2,145	2.84
Total interest-bearing liabilities		3,849,212			6,043	0.64			3,365,568			9,551	1.14
Noninterest-bearing deposits		1,749,502							1,288,594
Operating lease liabilities		37,415							37,766
Accrued expenses and other liabilities		47,598							44,173
Total liabilities		5,683,727							4,736,101
Shareholders' Equity:
Common stock		157,784							157,784
Additional paid-in capital		296,136							295,318
Retained earnings and other equity		245,816							220,358
Total shareholders' equity		699,736							673,460
Total liabilities and shareholders' equity	$	6,383,463						$	5,409,561
Net interest income				$	45,954						$	43,121
Net interest spread						2.90							3.11
Effect of net interest-free funding sources						0.22							0.37
Net interest margin						3.12	%						3.48	%
Ratio of average interest-earning assets to average interest-bearing liabilities		154.95	%						147.97	%
Note 1: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
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 March 31, 2021 and 2020 have
been calculated using the Corporation’s federal applicable rate of 21.0%.

Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
(Dollars in thousands)	As of March 31, 2021
Industry Description	Total Outstanding Balance (excl PPP)			% of Commercial Loan Portfolio		$ Balance of Modified Loans (1)			Modified Loans as a % of Portfolio (1)
CRE - Retail	$	356,690		8.8	%	$	-		-	%
Animal Production		269,608		6.7			27		-
CRE - Office		247,320		6.1			-		-
CRE - 1-4 Family Residential Investment		246,643		6.1			1,097		0.4
CRE - Multi-family		213,065		5.3			-		-
CRE - Industrial / Warehouse		180,254		4.5			738		0.4
Hotels & Motels (Accommodation)		174,751		4.3			35,222		20.2
Education		155,589		3.9			2,638		1.7
Nursing and Residential Care Facilities		152,016		3.8			-		-
CRE - Mixed-Use - Residential		120,629		3.0			3,530		2.9
Specialty Trade Contractors		117,204		2.9			85		0.1
Real Estate Lenders, Secondary Market Financing		106,027		2.6			12		-
CRE - Medical Office		93,834		2.3			-		-
Homebuilding (tract developers, remodelers)		81,879		2.0			-		-
Merchant Wholesalers, Durable Goods		73,063		1.8			-		-
Crop Production		69,853		1.7			-		-
Motor Vehicle and Parts Dealers		65,839		1.6			-		-
Rental and Leasing Services		61,096		1.5			-		-
Fabricated Metal Product Manufacturing		60,472		1.5			-		-
Administrative and Support Services		58,298		1.4			101		0.2
Wood Product Manufacturing		57,180		1.4			-		-
Food Services and Drinking Places		53,168		1.3			3,300		6.2
Industries with >$50 million in outstandings	$	3,014,478		74.5	%	$	46,750		1.6	%
Industries with <$50 million in outstandings	$	1,026,671		25.5	%	$	24,277		2.4	%
Total Commercial Loans	$	4,041,149		100.0	%	$	71,027		1.8	%
Consumer Loans and Lease Financings	Total Outstanding Balance					$ Balance of Modified Loans (1)			Modified Loans as a % of Portfolio (1)
Real Estate-Residential Secured for Personal Purpose	$	494,349				$	1,712		0.3	%
Real Estate-Home Equity Secured for Personal Purpose		162,529					84		0.1
Loans to Individuals		25,468					-		-
Lease Financings		163,059					212		0.1
Total - Consumer Loans and Lease Financings	$	845,405				$	2,008		0.2	%
Total	$	4,886,554				$	73,035		1.5	%
(1) Loan modifications referenced above were made in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and therefore were not classified as TDRs as of March 31, 2021.

Univest Financial Corporation
Non-GAAP Reconciliation
March 31, 2021
Non-GAAP to GAAP Reconciliation
Management uses non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release.
	For the three months ended,
	03/31/21				12/31/20				09/30/20				06/30/20				03/31/20
Restructuring charges (a)	$	-			$	1,439			$	-			$	-			$	-
Tax effect of restructuring charges		-				(302	)			-				-				-
Restructuring charges, net of tax	$	-			$	1,137			$	-			$	-			$	-
Shareholders' equity	$	722,455			$	692,472			$	669,107			$	654,873			$	651,551
Goodwill		(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)
Other intangibles (b)		(2,210	)			(2,458	)			(2,736	)			(3,017	)			(3,333	)
Tangible common equity	$	547,686			$	517,455			$	493,812			$	479,297			$	475,659
Total assets	$	6,416,665			$	6,336,496			$	6,382,831			$	6,125,312			$	5,464,768
Goodwill		(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)
Other intangibles (b)		(2,210	)			(2,458	)			(2,736	)			(3,017	)			(3,333	)
Tangible assets	$	6,241,896			$	6,161,479			$	6,207,536			$	5,949,736			$	5,288,876
Average shareholders' equity	$	699,736			$	676,426			$	661,947			$	660,950			$	673,460
Average goodwill		(172,559	)			(172,559	)			(172,559	)			(172,559	)			(172,559	)
Average other intangibles (b)		(2,344	)			(2,606	)			(2,889	)			(3,185	)			(3,506	)
Average tangible common equity	$	524,833			$	501,261			$	486,499			$	485,206			$	497,395
Net income before taxes	$	40,407			$	31,647			$	23,197			$	1,821			$	232
Provision for credit losses		(11,283	)			(8,721	)			3,935				23,737				21,843
Pre-tax pre-provision income	$	29,124			$	22,926			$	27,132			$	25,558			$	22,075
Loans and leases held for investment, gross	$	5,415,006			$	5,306,841			$	5,211,856			$	4,951,809			$	4,448,825
Paycheck Protection Program ("PPP") loans		(528,452	)			(483,773	)			(501,580	)			(498,978	)			-
Gross loans and leases excluding PPP loans	$	4,886,554			$	4,823,068			$	4,710,276			$	4,452,831			$	4,448,825
(a) Associated with financial center optimization plan
(b) Amount does not include servicing rights

 

 

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