SOUDERTON, Pa., April 27, 2016 (GLOBE NEWSWIRE) -- Univest Corporation of Pennsylvania (“Univest” or “Corporation”) (NASDAQ:UVSP), parent company of Univest Bank and Trust Co. ("Bank") and its insurance, investments and equipment financing subsidiaries, today announced financial results for the quarter ended March 31, 2016. Univest reported net income of $7.3 million or $0.37 diluted earnings per share for the quarter ended March 31, 2016, a 19% increase from reported net income of $6.1 million or $0.31 diluted earnings per share for the quarter ended March 31, 2015. The financial results for the quarter ended March 31, 2016 included $220 thousand of acquisition-related and integration costs associated with the pending merger with Fox Chase Bancorp, or $0.01 diluted earnings per share on a tax affected basis. Excluding these costs, net income for the quarter ended March 31, 2016, would have been $7.5 million or $0.38 diluted earnings per share. The quarter ended March 31, 2015 included $1.8 million of integration and acquisition-related costs associated with Valley Green Bank or $0.06 diluted earnings per share on a tax affected basis. Excluding these costs, net income for the quarter ended March 31, 2015 would have been $7.3 million or $0.37 diluted earnings per share.  

Loans
Gross loans and leases were $2.2 billion at March 31, 2016, an increase of $4.2 million from December 31, 2015. Consistent with prior years, sluggish economic growth led to flat funded loan growth in the first quarter, however, loan activity did increase during the quarter leading to growth in our loan pipeline. Compared to March 31, 2015, loans grew $139.4 million or 7%, primarily in commercial real estate loans and residential real estate loans. The growth in loans from March 31, 2015 resulted from new and existing customer relationships as economic conditions improved while interest rates remain at historical lows, lending team additions and market disruption created by other bank acquisitions.

Deposits
Total deposits declined $60.0 million or 3% from December 31, 2015, primarily due to a decrease in public funds. Deposits grew $79.5 million or 4% from March 31, 2015, primarily due to increases in both non-interest bearing and interest bearing demand deposits and savings deposits, partially offset by a decrease in time deposits.

Net Interest Income and Margin
Net interest income of $23.4 million for the first quarter of 2016 remained consistent with the same period in 2015. The net interest margin on a tax-equivalent basis for the first quarter of 2016 was 3.90%, compared to 3.80% for the fourth quarter of 2015 and 4.12% for the first quarter of 2015. Increases in net interest income from the comparable period in the prior year, due to loan growth, were partially offset by reductions in loan rates and a decrease in the net accretion of acquisition accounting fair value adjustments related to the Valley Green Bank acquisition (the favorable impact of the acquisition accounting adjustments was two basis points for the first quarter of 2016 compared to nine basis points for the first quarter of 2015). In addition, the subordinated debt issuance for $50 million on March 30, 2015 increased funding costs by 14 basis points in the first quarter of 2016 from the same period in 2015.

Non-Interest Income
Non-interest income for the quarter ended March 31, 2016 was $14.0 million, an increase of $525 thousand or 4% from the first quarter of 2015. Insurance commission and fee income increased $412 thousand for the quarter ended March 31, 2016, primarily due to an increase in contingent commission income and commercial premiums. Bank owned life insurance (BOLI) income increased $117 thousand or 33% mainly due to the purchase of policies totaling $8.0 million during the third quarter of 2015 and the transfer of policies totaling $9.8 million during 2015 to a higher yielding account structure. These increases were partially offset by a decrease of $94 thousand or 3% in investment advisory commission and fee income primarily resulting from the repricing of asset management fees in our municipal pension business due to competitive pressures in the second quarter of 2015.

Non-Interest Expense
Non-interest expense for the quarter ended March 31, 2016 was $26.9 million, a decrease of $472 thousand or 2%, compared to the first quarter of 2015. Non-interest expense for the first quarter of 2016 included $220 thousand of acquisition-related and integration costs associated with the pending merger with Fox Chase Bancorp. Non-interest expense for the first quarter of 2015 included $1.8 million of acquisition-related and integration costs related to the Valley Green Bank acquisition. Salaries and benefit expense increased $868 thousand for the quarter, primarily attributable to additional staff hired to support revenue generation across all business lines. This increase was partially offset by higher deferred loan origination costs.

Asset Quality and Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $13.5 million at March 31, 2016 compared to $14.2 million at December 31, 2015 and $18.6 million at March 31, 2015. Net loan and lease charge-offs were $1.5 million during the first quarter of 2016 compared to $802 thousand for the first quarter of 2015. Non-accrual loans and leases as a percentage of total loans and leases held for investment was 0.62% at March 31, 2016 compared to 0.65% at December 31, 2015 and 0.91% at March 31, 2015. The provision for loan and lease losses was $326 thousand for the first quarter of 2016, down from $1.1 million for the first quarter of 2015 as asset quality continues to improve; both qualitative factors and historical loss factors have improved.

The allowance for loan and lease losses as a percentage of loans and leases held for investment was 0.75% at March 31, 2016, compared to 0.81% at December 31, 2015 and 1.02% at March 31, 2015. The allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding loans acquired in the Valley Green Bank acquisition which were recorded at fair value as of the acquisition date, was 0.86% at March 31, 2016, compared to 0.94% at December 31, 2015 and 1.26% at March 31, 2015. The allowance for loan and lease losses to nonaccrual loans and leases held for investment equaled 122.03% at March 31, 2016, compared to 124.29% at December 31, 2015 and 112.52% at March 31, 2015.

Capital
Univest continues to remain well-capitalized at March 31, 2016. Total risk-based capital at March 31, 2016 was 13.47%, well in excess of the regulatory minimum for well-capitalized status of 10%.

Dividend
On February 24, 2016, Univest declared a quarterly cash dividend of $0.20 per share, payable on April 1, 2016. This represented a 4.08% 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 first quarter results on Thursday, April 28, 2016 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10083573. The general public can access the call by dialing 1-888-317-6016. A replay of the conference call will be available through May 28, 2016 by dialing 1-877-344-7529; using Conference ID: 10083573.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has $2.8 billion in assets and $3.1 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, 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
March 31, 2016
(Dollars in thousands)
Balance Sheet (Period End)		03/31/16				12/31/15				09/30/15				06/30/15				03/31/15
Assets		$	2,824,777			$	2,879,451			$	2,851,568			$	2,780,578			$	2,757,495
Investment securities			329,357				370,760				374,558				374,711				380,484
Loans held for sale			3,818				4,680				9,151				8,831				5,479
Loans and leases held for investment, gross			2,183,256				2,179,013				2,097,807				2,107,857				2,043,840
Allowance for loan and lease losses			16,452				17,628				18,620				19,602				20,934
Loans and leases held for investment, net			2,166,804				2,161,385				2,079,187				2,088,255				2,022,906
Total deposits			2,334,361				2,394,360				2,372,865				2,263,025				2,254,834
Noninterest-bearing deposits			559,827				541,460				519,767				519,026				509,183
NOW, money market and savings			1,391,626				1,398,494				1,361,827				1,288,318				1,293,165
Time deposits			382,908				454,406				491,271				455,681				452,486
Borrowings			75,265				73,588				70,531				110,480				91,423
Shareholders' equity			367,003				361,574				359,109				356,186				360,394
Balance Sheet (Average)		For the three months ended,
		03/31/16				12/31/15				09/30/15				06/30/15				03/31/15
Assets		$	2,834,557			$	2,866,848			$	2,804,578			$	2,739,968			$	2,691,513
Investment securities			342,218				370,163				368,837				375,887				381,008
Loans and leases, gross			2,177,091				2,132,922				2,098,007				2,067,120				2,023,835
Deposits			2,351,816				2,393,655				2,325,049				2,242,217				2,237,830
Shareholders' equity			364,092				360,521				357,150				359,154				362,125
Asset Quality Data (Period End)
		03/31/16				12/31/15				09/30/15				06/30/15				03/31/15
Nonaccrual loans and leases, including nonaccrual troubled debt restructured
loans and leases and nonaccrual loans held for sale		$	13,482			$	14,183			$	20,838			$	17,697			$	18,604
Accruing loans and leases 90 days or more past due			693				379				428				287				1,063
Accruing troubled debt restructured loans and leases			4,279				5,245				4,789				6,099				5,341
Other real estate owned			3,073				1,276				955				955				955
Nonperforming assets			21,527				21,083				27,010				25,038				25,963
Allowance for loan and lease losses			16,452				17,628				18,620				19,602				20,934
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual			0.62	%			0.65	%			0.99	%			0.84	%			0.91	%
loans held for sale
Nonperforming loans and leases / Loans and leases held for investment and nonaccrual			0.85	%			0.91	%			1.24	%			1.14	%			1.22	%
loans held for sale
Allowance for loan and lease losses / Loans and leases held for investment			0.75	%			0.81	%			0.89	%			0.93	%			1.02	%
Allowance for loan and lease losses / Loans and leases held for investment			0.86	%			0.94	%			1.06	%			1.12	%			1.26	%
(excluding acquired loans at period-end)
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment			122.03	%			124.29	%			110.58	%			143.11	%			112.52	%
Allowance for loan and lease losses / Nonperforming loans and leases held for investment			89.15	%			89.00	%			84.43	%			97.60	%			83.71	%
Acquired credit impaired loans		$	1,267			$	1,253			$	1,379			$	1,876			$	1,631
		For the three months ended,
		03/31/16				12/31/15				09/30/15				06/30/15				03/31/15
Net loan and lease charge-offs		$	1,502			$	1,909			$	1,652			$	2,473			$	802
Net loan and lease charge-offs (annualized)/Average loans and leases			0.28	%			0.36	%			0.31	%			0.48	%			0.16	%

 

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
March 31, 2016
(Dollars in thousands, except per share data)
		For the three months ended,
For the period:		03/31/16				12/31/15				09/30/15				06/30/15				03/31/15
Interest income		$	25,609			$	25,623			$	25,585			$	25,513			$	24,738
Interest expense			2,211				2,278				2,220				2,133				1,434
Net interest income			23,398				23,345				23,365				23,380				23,304
Provision for loan and lease losses			326				917				670				1,141				1,074
Net interest income after provision			23,072				22,428				22,695				22,239				22,230
Noninterest income:
Trust fee income			1,865				2,030				1,904				2,154				1,820
Service charges on deposit accounts			998				1,059				1,069				1,039				1,063
Investment advisory commission and fee income			2,669				2,583				2,687				2,740				2,763
Insurance commission and fee income			4,558				3,073				3,232				3,434				4,146
Bank owned life insurance income			470				425				306				211				353
Net gain on sales of investment securities			44				697				296				181				91
Net gain on mortgage banking activities			1,218				1,090				1,123				1,367				1,258
Net gain on sales of other real estate owned			-				-				14				-				-
Other income			2,134				2,355				2,224				2,225				1,937
Total noninterest income			13,956				13,312				12,855				13,351				13,431
Noninterest expense:
Salaries and benefits			14,182				12,828				11,970				11,957				13,314
Commissions			1,895				1,894				2,174				2,155				1,814
Premises and equipment			3,984				3,897				3,924				3,743				4,047
Professional fees			1,020				870				1,096				1,066				807
Intangible expenses			770				178				710				893				786
Acquisition-related costs			214				540				-				41				466
Integration costs			6				6				-				110				1,374
Restructuring charges			-				-				-				1,642				-
Other expense			4,868				5,816				5,369				5,225				4,803
Total noninterest expense			26,939				26,029				25,243				26,832				27,411
Income before taxes			10,089				9,711				10,307				8,758				8,250
Income taxes			2,800				2,553				2,779				2,292				2,134
Net income		$	7,289			$	7,158			$	7,528			$	6,466			$	6,116
Per common share data:
Book value per share		$	18.73			$	18.51			$	18.41			$	18.21			$	18.18
Net income per share:
Basic		$	0.37			$	0.37			$	0.39			$	0.33			$	0.31
Diluted		$	0.37			$	0.37			$	0.39			$	0.33			$	0.31
Dividends declared per share		$	0.20			$	0.20			$	0.20			$	0.20			$	0.20
Weighted average shares outstanding			19,578,438				19,525,701				19,506,609				19,675,002				19,951,242
Period end shares outstanding			19,592,798				19,530,930				19,502,613				19,559,941				19,820,824

 

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
March 31, 2016
							For the three months ended,
Profitability Ratios (annualized)							03/31/16				12/31/15				09/30/15				06/30/15				03/31/15
Return on average assets								1.03	%			0.99	%			1.06	%			0.95	%			0.92	%
Return on average assets, excluding integration								1.07	%			1.06	%			1.06	%			1.12	%			1.10	%
and acquisition-related costs and restructuring charges (1)
Return on average shareholders' equity								8.05	%			7.88	%			8.36	%			7.22	%			6.85	%
Return on average shareholders' equity, excluding								8.29	%			8.42	%			8.36	%			8.52	%			8.19	%
integration and acquisition-related costs and
restructuring charges (1)
Return on average tangible common equity, excluding								12.63	%			12.92	%			12.91	%			13.12	%			12.48	%
integration and acquisition-related costs and
restructuring charges (1)
Net interest margin (FTE)								3.90	%			3.80	%			3.89	%			4.03	%			4.12	%
Efficiency ratio (2)								69.23	%			68.10	%			66.96	%			70.29	%			71.68	%
Efficiency ratio, excluding integration and								68.67	%			66.67	%			66.96	%			65.60	%			66.87	%
acquisition-related costs and restructuring charges (1), (2)
Capitalization Ratios
Dividends declared to net income								53.62	%			54.08	%			51.79	%			60.49	%			65.26	%
Shareholders' equity to assets (Period End)								12.99	%			12.56	%			12.59	%			12.81	%			13.07	%
Tangible common equity to tangible assets								8.97	%			8.58	%			8.56	%			8.67	%			8.91	%
Regulatory Capital Ratios  (Period End)
Tier 1 leverage ratio								9.93	%			9.69	%			9.75	%			9.89	%			10.16	%
Common equity tier 1 risk-based capital ratio								10.81	%			10.65	%			10.85	%			10.77	%			11.09	%
Tier 1 risk-based capital ratio								10.81	%			10.65	%			10.85	%			10.77	%			11.09	%
Total risk-based capital ratio								13.47	%			13.35	%			13.69	%			13.65	%			14.09	%
(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.
(2) Total operating expenses to net interest income before loan loss provision plus non-interest income adjusted for tax equivalent income.

 

Univest Corporation of Pennsylvania
Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential
				For the Three Months Ended March 31,
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	$	19,619		$	28		0.57	%	$	9,135		$	5		0.22	%
U.S. government obligations		82,488			250		1.22			139,965			379		1.10
Obligations of state and political subdivisions		101,061			1,129		4.49			104,620			1,322		5.12
Other debt and equity securities		158,669			1,024		2.60			136,423			655		1.95
Federal funds sold		5,940			7		0.47			6,591			2		0.12
Total interest-earning deposits and investments		367,777			2,438		2.67			396,734			2,363		2.42
Commercial, financial, and agricultural loans		411,999			4,014		3.92			422,817			4,249		4.08
Real estate—commercial and construction loans		887,118			9,919		4.50			821,902			9,631		4.75
Real estate—residential loans		541,976			5,976		4.43			473,142			5,384		4.61
Loans to individuals		29,478			399		5.44			30,622			407		5.39
Municipal loans and leases		231,498			2,625		4.56			203,999			2,437		4.84
Lease financings		75,022			1,542		8.27			71,353			1,583		9.00
Gross loans and leases		2,177,091			24,475		4.52			2,023,835			23,691		4.75
Total interest-earning assets		2,544,868			26,913		4.25			2,420,569			26,054		4.37
Cash and due from banks		31,665								30,203
Reserve for loan and lease losses		(17,771	)							(21,088	)
Premises and equipment, net		42,873								40,568
Other assets		232,922								221,261
Total assets	$	2,834,557							$	2,691,513
Liabilities:
Interest-bearing checking deposits	$	402,160		$	84		0.08		$	345,884		$	46		0.05
Money market savings		361,788			340		0.38			375,521			280		0.30
Regular savings		626,894			174		0.11			563,037			122		0.09
Time deposits		418,547			935		0.90			461,374			969		0.85
Total time and interest-bearing deposits		1,809,389			1,533		0.34			1,745,816			1,417		0.33
Short-term borrowings		27,388			3		0.04			46,837			10		0.09
Subordinated notes (1)		49,394			675		5.50			1,096			7		2.59
Total borrowings		76,782			678		3.55			47,933			17		0.14
Total interest-bearing liabilities		1,886,171			2,211		0.47			1,793,749			1,434		0.32
Noninterest-bearing deposits		542,427								492,014
Accrued expenses and other liabilities		41,867								43,625
Total liabilities		2,470,465								2,329,388
Shareholders' Equity:
Common stock		110,271								110,271
Additional paid-in capital		120,824								120,159
Retained earnings and other equity		132,997								131,695
Total shareholders' equity		364,092								362,125
Total liabilities and shareholders' equity	$	2,834,557							$	2,691,513
Net interest income				$	24,702							$	24,620
Net interest spread							3.78								4.05
Effect of net interest-free funding sources							0.12								0.07
Net interest margin							3.90	%							4.12	%
Ratio of average interest-earning assets to average interest-bearing liabilities		134.92	%							134.94	%
(1)  The interest rate on subordinated notes is calculated on a 30/360 day basis at a rate of 5.10%. The balance is net of debt issuance
costs which are amortized to interest expense.
Notes: For rate calculation purposes, average loan and lease categories include unearned discount.
Nonaccrual loans and leases have been included in the average loan and lease balances.
Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the three months ended March 31, 2016 and 2015 have been calculated
using the Corporation’s federal applicable rate of 35.0%.

CONTACT:  Mike Keim
Chief Financial Officer, Univest Corporation of Pennsylvania
President and Chief Financial Officer, Univest Bank and Trust Co.
215-721-2511, keimm@univest.net 

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