SOUDERTON, Pa., April 24, 2024 (GLOBE NEWSWIRE) -- Univest Financial Corporation ("Univest" or the "Corporation") (NASDAQ:UVSP), parent company of Univest Bank and Trust Co. (the "Bank") and its insurance, investments and equipment financing subsidiaries, announced net income for the quarter ended March 31, 2024 was $20.3 million, or $0.69 diluted earnings per share, compared to net income of $21.0 million, or $0.71 diluted earnings per share, for the quarter ended March 31, 2023. One-Time ItemsThe financial results for the quarter included a $3.4 million net gain ($2.7 million after-tax), or $0.09 diluted earnings per share, generated from the sale of mortgage servicing rights associated with $591.1 million of serviced loans. LoansGross loans and leases increased $11.9 million, or 0.2% (0.8% annualized), from December 31, 2023, primarily due to increases in commercial loans and residential mortgage loans, partially offset by decreases in construction and commercial real estate loans. Gross loans and leases increased $339.3 million, or 5.4%, from March 31, 2023, primarily due to increases in commercial real estate, residential mortgage loans and lease financings, partially offset by a decrease in commercial loans. Deposits, Borrowings and LiquidityTotal deposits increased $29.6 million, or 0.5% (2.0% annualized), from December 31, 2023, primarily due to increases in consumer and brokered deposits, partially offset by decreases in commercial and seasonal public funds deposits. Total deposits increased $570.7 million, or 9.8%, from March 31, 2023, primarily due to increases in consumer, public funds and brokered deposits, partially offset by a decrease in commercial deposits. Noninterest-bearing deposits represented 21.9% of total deposits at March 31, 2024, down from 23.0% at December 31, 2023. At March 31, 2024, unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, represented 22.3% of total deposits, down from 23.3% at December 31, 2023. Total borrowings decreased $61.4 million, or 13.2% (52.8% annualized), from December 31, 2023, primarily due to pay-downs of long-term FHLB advances of $60.0 million. These borrowings were replaced with $110.2 million of lower cost brokered deposits during the quarter. As of March 31, 2024, the Corporation had cash and cash equivalents totaling $201.6 million. The Corporation and its subsidiaries had committed borrowing capacity of $3.4 billion at March 31, 2024, of which $2.1 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $334.0 million at March 31, 2024. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will. Net Interest Income and MarginNet interest income of $51.5 million for the first quarter of 2024 decreased $7.9 million, or 13.2%, from the first quarter of 2023 and $1.3 million, or 2.5%, from the fourth quarter of 2023. The decrease in net interest income for the first quarter of 2024 compared to the first quarter of 2023 was due to an increase in the cost of funds and the average balance of interest-bearing liabilities, partially offset by an increase in asset yields and the average balance of interest-earning assets. The decrease in net interest income for the first quarter of 2024 compared to the fourth quarter of 2023 was due to a decrease in the average balance of interest-earning assets, including excess liquidity, and an increase in the cost of funds, partially offset by an increase in asset yields and a decrease in the average balance of interest-bearing liabilities. Net interest margin, on a tax-equivalent basis, was 2.88% for the first quarter of 2024, compared to 2.84% for the fourth quarter of 2023 and 3.58% for the first quarter of 2023. Excess liquidity reduced net interest margin by approximately three basis points for the quarter ended March 31, 2024 compared to approximately ten basis points for the quarter ended December 31, 2023. Excess liquidity had no impact on net interest margin for the quarter ended March 31, 2023. Noninterest IncomeNoninterest income for the quarter ended March 31, 2024 was $25.6 million, an increase of $5.9 million, or 30.1%, from the comparable period in the prior year. Other service fee income increased $3.3 million, or 108.6%, for the quarter ended March 31, 2024, primarily due to the net gain on the sale of mortgage servicing rights as previously mentioned. Insurance commission and fee income increased $714 thousand, or 11.0%, for the quarter ended March 31, 2024, primarily due to increases in premiums for group life and health and commercial lines and an increase in contingent commission income of $484 thousand, which were $2.3 million and $1.8 million for the quarters ended March 31, 2024 and 2023, respectively. Contingent income is largely recognized in the first quarter of the year. Investment advisory commission and fee income increased $442 thousand, or 9.3%, for the quarter ended March 31, 2024, primarily due to new customer relationships and appreciation of assets under management, as a majority of investment advisory fees are billed based on the prior quarter-end assets under management balance. Service charges on deposit accounts increased $324 thousand, or 20.9%, for the quarter ended March 31, 2024, primarily due to increased treasury management income. Net gain on mortgage banking activities increased $314 thousand, or 50.2%, for the quarter ended March 31, 2024, primarily due to increased salable volume. Other income increased $554 thousand, or 117.6%, for the quarter ended March 31, 2024 compared to the three months ended March 31, 2023. Gains on the sale of Small Business Administration loans increased $239 thousand due to increased sale volume. Fees on risk participation agreements for interest rate swaps increased $141 thousand. Noninterest ExpenseNoninterest expense for the quarter ended March 31, 2024 was $50.1 million, an increase of $545 thousand, or 1.1%, from the comparable period in the prior year. Data processing increased $466 thousand, or 11.6%, for the quarter ended March 31, 2024, primarily due to our investments in technology in recent years, including the launch of our online small business loan and deposit products, and general price increases incurred in the second half of 2023. Salaries, benefits and commissions increased $324 thousand, or 1.0%, for the quarter ended March 31, 2024, primarily driven by decreased capitalized compensation, resulting from lower loan production in the current period, and increased medical claims expense. These increases were partially offset by decreased salary expense primarily due to staff reductions over the last twelve months. Other expense decreased $268 thousand, or 3.8%, for the quarter ended March 31, 2024, primarily due to decreases in retirement plan costs of $210 thousand. Professional fees decreased $253 thousand, or 13.0%, for the quarter ended March 31, 2024, primarily due to consultant fees incurred in the first quarter of 2023 related to our digital transformation initiative. Tax Provision The effective income tax rate was 20.5% for the quarter ended March 31, 2024, compared to an effective tax rate of 19.4% for the quarter ended March 31, 2023. The discrete tax effect of vested equity compensation awards unfavorably impacted the first quarter of 2024 by 74 basis points and favorably impacted the first quarter of 2023 by 76 basis points. Additionally, the effective tax rates for the three months ended March 31, 2024 and 2023 reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases. Asset Quality and Provision for Credit LossesNonperforming assets were $40.0 million at March 31, 2024, compared to $40.1 million at December 31, 2023 and $32.4 million at March 31, 2023. Net loan and lease charge-offs were $1.4 million for the three months ended March 31, 2024 compared to $1.1 million and $2.8 million for the three months ended December 31, 2023 and March 31, 2023, respectively. The provision for credit losses was $1.4 million for the three months ended March 31, 2024 compared to $1.9 million and $3.4 million for the three months ended December 31, 2023 and March 31, 2023, respectively. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.30% at March 31, 2024 and December 31, 2023 and 1.28% March 31, 2023. Dividend and Share RepurchasesOn April 24, 2024, Univest declared a quarterly cash dividend of $0.21 per share to be paid on May 22, 2024 to shareholders of record as of May 8, 2024. During the quarter ended March 31, 2024, the Corporation repurchased 315,507 shares of common stock at an average price of $20.25 per share. Including brokerage fees and excise tax, the average price per share was $20.48. As of March 31, 2024, 887,182 shares are available for repurchase under the Share Repurchase Plan. Conference CallUnivest will host a conference call to discuss first quarter 2024 results on Thursday, April 25, 2024 at 9:00 a.m. EST. Participants may preregister at https://www.netroadshow.com/events/login?show=1f74990c&confId=63330. The general public can access the call by dialing 1-833-470-1428; using Access Code 468018. A replay of the conference call will be available through May 25, 2024 by dialing 1-866-813-9403; using Access Code 450536. About Univest Financial CorporationUnivest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.7 billion in assets and $5.0 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2024. 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 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, prospects and strategies 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 financial condition, results of operations, business, prospects or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition; (2) inflation and/or changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and/or lead to higher operating costs; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or credit loss provisions; (4) changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; (5) our ability to access cost-effective funding; (6) changes in economic conditions nationally and in our market; (7) economic assumptions that may impact our allowance for credit losses calculation; (8) legislative, regulatory, accounting or tax changes; (9) monetary and fiscal policies of the U.S. government, including the policies of the Board of Governors of the Federal Reserve System; (10) technological issues that may adversely affect our operations or those of our customers; (11) a failure or breach in our operational or security systems or infrastructure, including cyberattacks; (12) changes in the securities markets; (13) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (14) our ability to enter into new markets successfully and capitalize on growth opportunities and/or (15) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission. (UVSP - ER)   Univest Financial Corporation Consolidated Selected Financial Data (Unaudited) March 31, 2024 (Dollars in thousands)                                           Balance Sheet (Period End)   03/31/24   12/31/23   09/30/23   06/30/23   03/31/23 ASSETS                     Cash and due from banks   $ 49,318     $ 72,815     $ 68,900     $ 80,795     $ 71,215   Interest-earning deposits with other banks     152,288       176,984       221,441       59,616       67,109   Cash and cash equivalents     201,606       249,799       290,341       140,411       138,324   Investment securities held-to-maturity     143,474       145,777       149,451       153,509       151,347   Investment securities available for sale, net of allowance for credit losses     350,819       351,553       334,538       356,164       367,656   Investments in equity securities     3,355       3,293       4,054       3,443       3,105   Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost     37,394       40,499       42,417       42,811       43,792   Loans held for sale     13,188       11,637       16,473       29,526       5,425   Loans and leases held for investment     6,579,086       6,567,214       6,574,958       6,462,238       6,239,804   Less: Allowance for credit losses, loans and leases     (85,632 )     (85,387 )     (83,837 )     (82,709 )     (80,034 ) Net loans and leases held for investment     6,493,454       6,481,827       6,491,121       6,379,529       6,159,770   Premises and equipment, net     48,739       51,441       51,287       52,058       52,334   Operating lease right-of-use assets     30,702       31,795       31,053       30,237       31,663   Goodwill     175,510       175,510       175,510       175,510       175,510   Other intangibles, net of accumulated amortization     7,473       10,950       11,079       10,923       11,044   Bank owned life insurance     137,896       131,344       130,522       129,715       128,926   Accrued interest and other assets     102,958       95,203       100,220       96,314       90,095   Total assets   $ 7,746,568     $ 7,780,628     $ 7,828,066     $ 7,600,150     $ 7,358,991                         LIABILITIES                     Noninterest-bearing deposits   $ 1,401,806     $ 1,468,320     $ 1,432,559     $ 1,582,767     $ 1,799,225   Interest-bearing deposits:     5,003,552       4,907,461       5,006,606       4,404,635       4,035,432   Total deposits     6,405,358       6,375,781       6,439,165       5,987,402       5,834,657   Short-term borrowings     4,816       6,306       14,676       244,666       271,881   Long-term debt     250,000       310,000       320,000       320,000       220,000   Subordinated notes     148,886       148,761       148,636       148,510       148,385   Operating lease liabilities     33,744       34,851       34,017       33,428       34,846   Accrued expenses and other liabilities     60,095       65,721       64,374       60,922       50,726   Total liabilities     6,902,899       6,941,420       7,020,868       6,794,928       6,560,495                         SHAREHOLDERS' EQUITY                     Common stock, $5 par value: 48,000,000 shares authorized and 31,556,799 shares issued     157,784       157,784       157,784       157,784       157,784   Additional paid-in capital     298,914       301,066       300,171       299,212       298,167   Retained earnings     488,790       474,691       464,634       453,806       443,493   Accumulated other comprehensive loss, net of tax benefit     (54,740 )     (50,646 )     (71,586 )     (61,034 )     (55,550 ) Treasury stock, at cost     (47,079 )     (43,687 )     (43,805 )     (44,546 )     (45,398 ) Total shareholders' equity     843,669       839,208       807,198       805,222       798,496   Total liabilities and shareholders' equity   $ 7,746,568     $ 7,780,628     $ 7,828,066     $ 7,600,150     $ 7,358,991                                                   For the three months ended, Balance Sheet (Average)   03/31/24   12/31/23   09/30/23   06/30/23   03/31/23 Assets   $ 7,696,575     $ 7,865,634     $ 7,693,983     $ 7,440,798     $ 7,219,211   Investment securities, net of allowance for credit losses     500,983       489,587       506,341       518,995       515,880   Loans and leases, gross     6,577,365       6,594,233       6,537,169       6,372,342       6,164,890   Deposits     6,303,854       6,470,141       6,222,710       5,844,582       5,834,415   Shareholders' equity     842,546       814,941       811,515       806,709       789,153                         Univest Financial Corporation Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited) March 31, 2024 (Dollars in thousands)                                           Summary of Major Loan and Lease Categories (Period End)   03/31/24   12/31/23   09/30/23   06/30/23   03/31/23 Commercial, financial and agricultural   $ 1,014,568     $ 989,723     $ 1,050,004     $ 1,039,265     $ 1,032,753   Real estate-commercial     3,283,729       3,302,798       3,275,140       3,221,993       3,128,210   Real estate-construction     379,995       394,462       427,561       413,404       376,569   Real estate-residential secured for business purpose     524,196       517,002       516,471       517,521       498,505   Real estate-residential secured for personal purpose     922,412       909,015       861,122       832,632       779,557   Real estate-home equity secured for personal purpose     177,446       179,282       176,855       175,090       172,073   Loans to individuals     27,200       27,749       27,331       25,544       28,656   Lease financings     249,540       247,183       240,474       236,789       223,481   Total loans and leases held for investment, net of deferred income     6,579,086       6,567,214       6,574,958       6,462,238       6,239,804   Less: Allowance for credit losses, loans and leases     (85,632 )     (85,387 )     (83,837 )     (82,709 )     (80,034 ) Net loans and leases held for investment   $ 6,493,454     $ 6,481,827     $ 6,491,121     $ 6,379,529     $ 6,159,770                                               Asset Quality Data (Period End)   03/31/24   12/31/23   09/30/23   06/30/23   03/31/23 Nonaccrual loans and leases, including nonaccrual loans held for sale*   $ 20,363     $ 20,527     $ 18,085     $ 15,087     $ 11,362   Accruing loans and leases 90 days or more past due     268       534       2,135       55       1,996   Total nonperforming loans and leases     20,631       21,061       20,220       15,142       13,358   Other real estate owned     19,220       19,032       19,916       19,345       19,000   Repossessed assets     167