0000102212FALSE00001022122023-07-262023-07-26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 _______________________ 
FORM 8-K 
_______________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 26, 2023
 _______________________ 
UNIVEST FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
  
Pennsylvania 0-7617 23-1886144
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
14 North Main Street, Souderton, Pennsylvania 18964
(Address of principal executive office)(Zip Code)
Registrant’s telephone number, including area code (215) 721-2400
Not applicable
(Former name or former address, if changed since last report)
 _______________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b))
☐Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c))
Securities registered pursuant to Section 12(b) of the Act:
Title of classTrading SymbolName of exchange on which registered
Common Stock, $5 par valueUVSPThe NASDAQ Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨


Item 2.02Results of Operations and Financial Condition
On July 26, 2023, Univest Financial Corporation (the “Corporation”), parent company of Univest Bank and Trust Co. (the "Bank"), issued a press release reporting 2023 second quarter earnings. A copy of this press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers
On July 26, 2023, the Board of Directors of the Corporation appointed Martin P. Connor, who is presently serving as an Alternate Director of the Corporation, as a Class III director. Mr. Connor's term will expire at the 2025 annual shareholders meeting.
Item 9.01Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits
Exhibit No.  Description of Document
99.1  
104The cover page from the Corporation's Form 8-K, formatted in Inline XBRL



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Univest Financial Corporation
By:/s/ Brian J. Richardson
Name:Brian J. Richardson
Title:Senior Executive Vice President,
Chief Financial Officer
July 27, 2023


EXHIBIT INDEX
 
Exhibit No.  Description of Document
99.1  
104The cover page from the Corporation's Form 8-K, formatted in Inline XBRL



Exhibit 99.1
NEWS
logo.jpg

CONTACT:     Brian J. Richardson
UNIVEST FINANCIAL CORPORATION
Chief Financial Officer
215-721-2446, richardsonb@univest.net                     

FOR IMMEDIATE RELEASE

UNIVEST FINANCIAL CORPORATION REPORTS SECOND QUARTER RESULTS
(26.7% increase in earnings per share)


SOUDERTON, Pa., July 26, 2023 - 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 June 30, 2023 was $16.8 million, or $0.57 diluted earnings per share, compared to net income of $13.2 million, or $0.45 diluted earnings per share, for the quarter ended June 30, 2022.

One-Time Items
The financial results for the quarter included a $1.3 million ($1.1 million after-tax), or $0.04 diluted earnings per share, restructuring charge associated with the Corporation's financial service center optimization and expense management strategies deployed in response to macroeconomic headwinds. These strategies will result in a net reduction of three locations and a headcount rationalization, primarily concentrated within certain commercial real estate and residential mortgage lending teams. Estimated annualized cost savings from these initiatives is approximately $5.4 million. The financial results for the quarter also included a $250 thousand ($198 thousand after-tax) loss associated with the planned sale of a $19.7 million interest in a shared national credit.
Loans
Gross loans and leases increased $222.4 million, or 3.6% (14.4% annualized), from March 31, 2023 and $339.0 million, or 5.5% (11.0% annualized), from December 31, 2022. The increase in both periods was primarily due to increases in commercial real estate, construction, residential mortgage loans, and lease financings.


Deposits and Liquidity
Total deposits increased $152.7 million, or 2.6% (10.5% annualized), from March 31, 2023, primarily due to increases in brokered deposits partially offset by decreases in commercial and consumer deposits and public funds. Total deposits increased $73.9 million, or 1.2% (2.4% annualized), from December 31, 2022, primarily due to increases in public funds and brokered deposits partially offset by decreases in commercial and consumer deposits. Noninterest-bearing deposits represented 26.4% of total deposits at June 30, 2023, down from 30.8% at March 31, 2023. At June 30, 2023, unprotected deposits, which excludes insured accounts, internal accounts, and collateralized trust accounts, represented 23.3% of total deposits, down from 27.2% at March 31, 2023.

The Corporation and its subsidiaries had committed borrowing capacity of $3.2 billion at June 30, 2023, of which $2.0 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $410.0 million at June 30, 2023, of which $285.0 million was unused. 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 Margin
Net interest income of $54.3 million for the three months ended June 30, 2023 decreased $5.0 million, or 8.4%, from the three months ended March 31, 2023, and increased $2.9 million, or 5.6%, from the three months ended June 30, 2022. The decrease in net interest income for the three months ended June 30, 2023 compared to the prior quarter was due to an increase in cost of funds, including long-term borrowings as well as the continued increase in deposit cost of funds, both of which outpaced the impact of higher asset yields and loan growth during the quarter. The increase in net interest income for the three months ended June 30, 2023 compared to the same period of 2022 was largely due to an increase in average loan balances and asset yields, offset by increases in the average balance of interest bearing liabilities and the cost of funds.

Net interest margin, on a tax-equivalent basis, was 3.14% for the second quarter of 2023, compared to 3.58% for the first quarter of 2023 and 3.19% for the second quarter of 2022. Excess liquidity reduced net interest margin by approximately 23 basis points for the quarter ended June 30, 2022.

Noninterest Income
Noninterest income for the quarter ended June 30, 2023 was $19.8 million, an increase of $835 thousand, or 4.4%, compared to the second quarter of 2022.

Insurance commission and fee income increased $479 thousand, or 10.3%, for the quarter ended June 30, 2023, primarily due to an increase in premiums for commercial lines. Other income increased


$481 thousand, or 64.9%, for the quarter ended June 30, 2023, primarily due to $292 thousand of other real estate owned ("OREO") income related to a commercial real estate loan transferred to OREO during the second quarter of 2022 and an increase of $232 thousand in fees on risk participation agreements for interest rate swaps. These increases were offset by a loss of $250 thousand on the planned sale of an interest in a shared national credit, as previously discussed.

Noninterest Expense
Noninterest expense for the quarter ended June 30, 2023 was $49.8 million, an increase of $2.4 million, or 5.1%, compared to the second quarter of 2022. Excluding restructuring charges, expenses increased $1.1 million, or 2.3%.

Salaries, benefits and commissions increased $742 thousand, or 2.5%, for the quarter ended June 30, 2023. This increase reflects our expansion into Maryland and Western Pennsylvania and annual merit increases offset by a reduction in incentive compensation. Data processing expenses increased $429 thousand, or 11.6%, for the quarter ended June 30, 2023, primarily due to our investments in technology in recent years and general price increases incurred in the second half of 2022. Restructuring charges increased $1.3 million, as previously discussed. Other expense increased $757 thousand, or 11.8%, for the quarter ended June 30, 2023, primarily due to increases in retirement plan costs of $410 thousand, which is driven by the current interest rate environment. Professional fees decreased $1.2 million, or 41.3%, for the quarter ended June 30, 2023, primarily due to consultant fees incurred in the second quarter of 2022 related to our digital transformation initiative.

Tax Provision
The effective income tax rate was 19.8% for the quarters ended June 30, 2023 and 2022. The effective tax rates for the three months ended June 30, 2023 and 2022 reflected the benefits of tax-exempt income from investments in municipal securities and loans and leases.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $34.5 million at June 30, 2023, compared to $32.4 million at March 31, 2023 and $34.7 million at June 30, 2022. During the quarter, a $5.8 million construction loan was placed on nonaccrual status and a $2.5 million nonaccrual commercial loan was paid off. Based on the value of the underlying collateral, an individual reserve was not recorded for the $5.8 million construction loan as of June 30, 2023.

Net loan and lease charge-offs were $512 thousand for the three months ended June 30, 2023 compared to $2.8 million and $1.7 million for the three months ended March 31, 2023 and June 30, 2022, respectively.



The provision for credit losses was $3.4 million for the three months ended June 30, 2023 compared to $3.4 million and $6.7 million for the three months ended March 31, 2023 and June 30, 2022, respectively. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.28% at June 30, 2023 and March 31, 2023, and 1.27% at June 30, 2022.

Dividend
On July 26, 2023, Univest declared a quarterly cash dividend of $0.21 per share to be paid on August 23, 2023 to shareholders of record as of August 9, 2023.

Conference Call
Univest will host a conference call to discuss second quarter 2023 results on Thursday, July 27, 2023 at 9:00 a.m. EST. Participants may preregister at https://conferencingportals.com/event/QPDnglhR. The general public can access the call by dialing 1-888-330-2398; using Conference ID 38917. A replay of the conference call will be available through August 26, 2023 by dialing 1-800-700-2030; using Conference ID 38917.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $7.6 billion in assets and $4.5 billion in assets under management and supervision through its Wealth Management lines of business at June 30, 2023. 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) changes in economic conditions nationally and in our market; (6) economic assumptions that may impact our allowance for credit losses calculation; (7) legislative, regulatory, accounting or tax changes; (8) technological issues that may adversely affect our operations or those of our customers; (9) changes in the securities markets; (10) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (11) potential recessionary conditions and/or (12) 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)
June 30, 2023
(Dollars in thousands)
Balance Sheet (Period End)6/30/20233/31/202312/31/20229/30/20226/30/2022
ASSETS
Cash and due from banks $80,795 $71,215 $84,176 $65,859 $59,590 
Interest-earning deposits with other banks 59,616 67,109 68,623 47,451 35,187 
Cash and cash equivalents140,411 138,324 152,799 113,310 94,777 
Investment securities held-to-maturity153,509 151,347 154,727 159,170 159,808 
Investment securities available for sale, net of allowance for credit losses356,164 367,656 350,256 347,479 351,382 
Investments in equity securities3,443 3,105 2,579 2,994 2,934 
Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost42,811 43,792 33,841 29,475 29,116 
Loans held for sale29,526 5,425 5,037 9,087 8,352 
Loans and leases held for investment6,462,238 6,239,804 6,123,230 5,849,259 5,661,777 
Less: Allowance for credit losses, loans and leases (82,709)(80,034)(79,004)(74,929)(72,011)
Net loans and leases held for investment6,379,529 6,159,770 6,044,226 5,774,330 5,589,766 
Premises and equipment, net 52,058 52,334 50,939 50,533 50,080 
Operating lease right-of-use assets30,237 31,663 30,059 30,654 30,929 
Goodwill175,510 175,510 175,510 175,510 175,510 
Other intangibles, net of accumulated amortization10,923 11,044 11,384 11,650 11,728 
Bank owned life insurance129,715 128,926 120,297 120,035 120,103 
Accrued interest and other assets 96,314 90,095 90,362 83,170 76,328 
Total assets $7,600,150 $7,358,991 $7,222,016 $6,907,397 $6,700,813 
LIABILITIES
Noninterest-bearing deposits$1,582,767 $1,799,225 $2,047,263 $1,968,422 $2,062,538 
Interest-bearing deposits:4,404,635 4,035,432 3,866,263 3,818,554 3,500,510 
Total deposits 5,987,402 5,834,657 5,913,526 5,786,976 5,563,048 
Short-term borrowings244,666 271,881 197,141 80,711 97,606 
Long-term debt 320,000 220,000 95,000 95,000 95,000 
Subordinated notes 148,510 148,385 148,260 99,107 99,030 
Operating lease liabilities33,428 34,846 33,153 33,718 33,951 
Accrued expenses and other liabilities 60,922 50,726 58,436 57,698 48,253 
Total liabilities 6,794,928 6,560,495 6,445,516 6,153,210 5,936,888 
SHAREHOLDERS' EQUITY
Common stock, $5 par value: 48,000,000 shares authorized and 31,556,799 shares issued157,784 157,784 157,784 157,784 157,784 
Additional paid-in capital299,212 298,167 300,808 299,791 298,800 
Retained earnings453,806 443,493 428,637 410,942 396,295 
Accumulated other comprehensive loss, net of tax benefit(61,034)(55,550)(62,104)(64,985)(42,781)
Treasury stock, at cost(44,546)(45,398)(48,625)(49,345)(46,173)
Total shareholders’ equity805,222 798,496 776,500 754,187 763,925 
Total liabilities and shareholders’ equity$7,600,150 $7,358,991 $7,222,016 $6,907,397 $6,700,813 
For the three months ended,For the six months ended,
Balance Sheet (Average)6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Assets$7,440,798 $7,219,211 $7,019,381 $6,797,466 $6,962,401 $7,330,616 $7,004,954 
Investment securities, net of allowance for credit losses518,995 515,880 505,717 517,335 515,741 517,446 518,917 
Loans and leases, gross6,372,342 6,164,890 5,979,581 5,752,119 5,520,580 6,269,190 5,433,125 
Deposits5,844,582 5,834,415 5,837,823 5,645,291 5,903,173 5,839,526 5,943,769 
Shareholders' equity806,709 789,153 767,192 773,099 771,410 797,980 772,876 


Univest Financial Corporation
Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
June 30, 2023
(Dollars in thousands)
Summary of Major Loan and Lease Categories (Period End)6/30/20233/31/202312/31/20229/30/20226/30/2022
Commercial, financial and agricultural$1,039,265 $1,032,753 $1,088,928 $1,054,940 $1,033,712 
Real estate-commercial3,221,993 3,128,210 3,027,955 2,936,204 2,870,286 
Real estate-construction413,404 376,569 381,811 329,915 319,449 
Real estate-residential secured for business purpose517,521 498,505 478,254 443,837 419,652 
Real estate-residential secured for personal purpose832,632 779,557 730,395 685,771 629,144 
Real estate-home equity secured for personal purpose175,090 172,073 176,699 175,843 168,536 
Loans to individuals25,544 28,656 27,873 26,679 27,061 
Lease financings236,789 223,481 211,315 196,070 193,937 
Total loans and leases held for investment, net of deferred income6,462,238 6,239,804 6,123,230 5,849,259 5,661,777 
Less: Allowance for credit losses, loans and leases(82,709)(80,034)(79,004)(74,929)(72,011)
Net loans and leases held for investment$6,379,529 $6,159,770 $6,044,226 $5,774,330 $5,589,766 
Asset Quality Data (Period End)6/30/20233/31/202312/31/20229/30/20226/30/2022
Nonaccrual loans and leases$15,087 $11,362 $13,353 $13,620 $13,355 
Accruing loans and leases 90 days or more past due55 1,996 875 416 2,784 
Total nonperforming loans and leases15,142 13,358 14,228 14,036 16,139 
Other real estate owned19,345 19,000 19,258 18,960 18,604 
Total nonperforming assets$34,487 $32,358 $33,486 $32,996 $34,743 
Nonaccrual loans and leases / Loans and leases held for investment0.23 %0.18 %0.22 %0.23 %0.24 %
Nonperforming loans and leases / Loans and leases held for investment0.23 %0.21 %0.23 %0.24 %0.29 %
Nonperforming assets / Total assets0.45 %0.44 %0.46 %0.48 %0.52 %
Allowance for credit losses, loans and leases$82,709 $80,034 $79,004 $74,929 $72,011 
Allowance for credit losses, loans and leases / Loans and leases held for investment1.28 %1.28 %1.29 %1.28 %1.27 %
Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment548.21 %704.40 %591.66 %550.14 %539.21 %
Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment546.22 %599.15 %555.27 %533.83 %446.19 %
For the three months ended,For the six months ended,
6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Net loan and lease charge-offs$512 $2,842 $908 $1,196 $1,715 $3,354 $1,791 
Net loan and lease charge-offs (annualized)/Average loans and leases0.03 %0.19 %0.06 %0.08 %0.12 %0.11 %0.07 %


Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2023
(Dollars in thousands, except per share data)
For the three months ended,For the six months ended,
For the period:6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Interest income$90,139 $83,253 $77,401 $66,877 $56,717 $173,392 $107,915 
Interest expense35,809 23,936 15,485 8,627 5,246 59,745 9,784 
Net interest income54,330 59,317 61,916 58,250 51,471 113,647 98,131 
Provision for credit losses3,428 3,387 5,416 3,558 6,674 6,815 3,224 
Net interest income after provision for credit losses50,902 55,930 56,500 54,692 44,797 106,832 94,907 
Noninterest income:
Trust fee income1,924 1,955 1,808 1,835 1,998 3,879 4,100 
Service charges on deposit accounts1,725 1,547 1,575 1,522 1,574 3,272 3,078 
Investment advisory commission and fee income4,708 4,752 5,585 4,199 4,812 9,460 9,964 
Insurance commission and fee income5,108 6,487 4,424 4,442 4,629 11,595 10,199 
Other service fee income3,318 3,076 3,236 3,124 3,309 6,394 6,065 
Bank owned life insurance income789 767 1,230 1,153 705 1,556 1,404 
Net gain on sales of investment securities— — — — — — 30 
Net gain on mortgage banking activities1,039 625 436 817 1,230 1,664 3,159 
Other income1,222 471 2,164 867 741 1,693 1,469 
Total noninterest income19,833 19,680 20,458 17,959 18,998 39,513 39,468 
Noninterest expense:
Salaries, benefits and commissions29,875 31,014 29,028 29,400 29,133 60,889 57,378 
Net occupancy2,614 2,727 2,551 2,504 2,422 5,341 5,138 
Equipment986 993 977 968 977 1,979 1,959 
Data processing4,137 4,029 4,039 3,901 3,708 8,166 7,275 
Professional fees1,669 1,941 1,829 2,521 2,844 3,610 4,982 
Marketing and advertising622 371 739 605 693 993 1,118 
Deposit insurance premiums1,116 1,101 708 662 812 2,217 1,705 
Intangible expenses253 253 301 309 342 506 683 
Restructuring charges1,330 — 184 — — 1,330 — 
Other expense7,197 7,100 6,970 5,795 6,440 14,297 12,545 
Total noninterest expense49,799 49,529 47,326 46,665 47,371 99,328 92,783 
Income before taxes20,936 26,081 29,632 25,986 16,424 47,017 41,592 
Income tax expense4,136 5,047 5,796 5,185 3,258 9,183 8,109 
Net income$16,800 $21,034 $23,836 $20,801 $13,166 $37,834 $33,483 
Net income per share:
Basic$0.57 $0.72 $0.82 $0.71 $0.45 $1.29 $1.14 
Diluted$0.57 $0.71 $0.81 $0.71 $0.45 $1.28 $1.13 
Dividends declared per share$0.21 $0.21 $0.21 $0.21 $0.21 $0.42 $0.41 
Weighted average shares outstanding29,439,392 29,312,265 29,251,293 29,290,829 29,490,154 29,376,179 29,516,166 
Period end shares outstanding29,471,124 29,427,696 29,271,915 29,242,451 29,365,775 29,471,124 29,365,775 



Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
June 30, 2023
For the three months ended,For the six months ended,
Profitability Ratios (annualized)6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Return on average assets0.91 %1.18 %1.35 %1.21 %0.76 %1.04 %0.96 %
Return on average assets, excluding restructuring charges (1)0.96 %1.18 %1.36 %1.21 %0.76 %1.07 %0.96 %
Return on average shareholders' equity8.35 %10.81 %12.33 %10.67 %6.85 %9.56 %8.74 %
Return on average shareholders' equity, excluding restructuring charges (1)8.88 %10.81 %12.40 %10.67 %6.85 %9.83 %8.74 %
Return on average tangible common equity (1)(3)10.85 %14.11 %16.23 %14.06 %9.10 %12.45 %11.56 %
Return on average tangible common equity, excluding restructuring charges (1)(3)11.52 %14.11 %16.33 %14.06 %9.10 %12.79 %11.56 %
Net interest margin (FTE)3.14 %3.58 %3.76 %3.67 %3.19 %3.35 %3.04 %
Efficiency ratio (2)66.7 %62.2 %56.9 %60.6 %66.6 %64.4 %66.8 %
Efficiency ratio, excluding restructuring charges (1)(2)64.9 %62.2 %56.7 %60.6 %66.6 %63.5 %66.8 %
Capitalization Ratios
Dividends declared to net income36.8 %29.2 %25.8 %29.6 %47.1 %32.6 %36.2 %
Shareholders' equity to assets (Period End)10.59 %10.85 %10.75 %10.92 %11.40 %10.59 %11.40 %
Tangible common equity to tangible assets (1)8.45 %8.63 %8.49 %8.55 %8.97 %8.45 %8.97 %
Common equity book value per share$27.32 $27.13 $26.53 $25.79 $26.01 $27.32 $26.01 
Tangible common equity book value per share (1)$21.27 $21.07 $20.42 $19.67 $19.91 $21.27 $19.91 
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio9.59 %9.71 %9.81 %9.87 %9.45 %9.59 %9.45 %
Common equity tier 1 risk-based capital ratio10.26 %10.43 %10.37 %10.51 %10.62 %10.26 %10.62 %
Tier 1 risk-based capital ratio10.26 %10.43 %10.37 %10.51 %10.62 %10.26 %10.62 %
Total risk-based capital ratio13.54 %13.78 %13.67 %13.10 %13.23 %13.54 %13.23 %
(1) Non-GAAP metric. A reconciliation of this and other non-GAAP financial measures is included at the end of this document.
(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.
(3) Net income before amortization of intangibles to average tangible common equity.



Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
For the Three Months Ended,
Tax Equivalent BasisJune 30, 2023March 31, 2023
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$46,897 $512 4.38 %$47,835 $479 4.06 %
Obligations of state and political subdivisions*2,284 15 2.63 2,286 17 3.02 
Other debt and equity securities516,711 3,512 2.73 513,594 3,495 2.76 
Federal Home Loan Bank, Federal Reserve Bank and other stock43,783 781 7.15 34,742 609 7.11 
Total interest-earning deposits, investments and other interest-earning assets609,675 4,820 3.17 598,457 4,600 3.12 
Commercial, financial, and agricultural loans1,005,499 16,919 6.75 991,876 15,538 6.35 
Real estate—commercial and construction loans3,445,431 45,960 5.35 3,342,199 42,421 5.15 
Real estate—residential loans1,483,478 17,216 4.65 1,408,292 15,730 4.53 
Loans to individuals26,794 479 7.17 27,254 449 6.68 
Municipal loans and leases*234,940 2,388 4.08 229,955 2,341 4.13 
Lease financings176,200 2,659 6.05 165,314 2,541 6.23 
     Gross loans and leases6,372,342 85,621 5.39 6,164,890 79,020 5.20 
          Total interest-earning assets6,982,017 90,441 5.20 6,763,347 83,620 5.01 
Cash and due from banks58,675 58,035 
Allowance for credit losses, loans and leases(81,641)(79,977)
Premises and equipment, net52,540 51,583 
Operating lease right-of-use assets31,200 31,303 
Other assets398,007 394,920 
      Total assets$7,440,798 $7,219,211 
Liabilities:
Interest-bearing checking deposits$1,011,889 $5,392 2.14 %$857,891 $3,164 1.50 %
Money market savings1,460,899 14,089 3.87 1,489,129 11,081 3.02 
Regular savings888,680 845 0.38 985,716 669 0.28 
Time deposits823,665 7,141 3.48 566,308 3,422 2.45 
Total time and interest-bearing deposits4,185,133 27,467 2.63 3,899,044 18,336 1.91 
Short-term borrowings255,090 3,249 5.11 240,318 2,728 4.60 
Long-term debt301,593 2,811 3.74 112,222 591 2.14 
Subordinated notes148,443 2,282 6.17 148,319 2,281 6.24 
     Total borrowings705,126 8,342 4.75 500,859 5,600 4.53 
     Total interest-bearing liabilities4,890,259 35,809 2.94 4,399,903 23,936 2.21 
Noninterest-bearing deposits1,659,449 1,935,371 
Operating lease liabilities34,415 34,438 
Accrued expenses and other liabilities49,966 60,346 
     Total liabilities6,634,089 6,430,058 
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")6,549,708 2.19 6,335,274 1.53 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital298,788 300,293 
Retained earnings and other equity350,137 331,076 
     Total shareholders' equity806,709 789,153 
     Total liabilities and shareholders' equity$7,440,798 $7,219,211 
Net interest income$54,632 $59,684 
Net interest spread2.26 2.80 
Effect of net interest-free funding sources0.88 0.78 
Net interest margin3.14 %3.58 %
Ratio of average interest-earning assets to average interest-bearing liabilities142.77 %153.72 %
*Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustment.
Net interest income includes net deferred costs amortization of $668 thousand and $465 thousand for the three months ended June 30, 2023 and March 31, 2023.
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 June 30, 2023 and March 31, 2023 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 June 30,
Tax Equivalent Basis20232022
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$46,897 $512 4.38 %$474,260 $824 0.70 %
U.S. government obligations— — — 2,000 11 2.21 
Obligations of state and political subdivisions*2,284 15 2.63 2,302 17 2.96 
Other debt and equity securities516,711 3,512 2.73 511,439 2,727 2.14 
Federal Home Loan Bank, Federal Reserve Bank and other stock43,783 781 7.15 26,221 344 5.26 
Total interest-earning deposits, investments and other interest-earning assets609,675 4,820 3.17 1,016,222 3,923 1.55 
Commercial, financial, and agricultural loans1,005,499 16,919 6.75 945,490 9,192 3.90 
Real estate—commercial and construction loans3,445,431 45,960 5.35 3,004,509 28,527 3.81 
Real estate—residential loans1,483,478 17,216 4.65 1,166,201 10,758 3.70 
Loans to individuals26,794 479 7.17 26,782 305 4.57 
Municipal loans and leases*234,940 2,388 4.08 235,922 2,404 4.09 
Lease financings176,200 2,659 6.05 141,676 2,105 5.96 
     Gross loans and leases6,372,342 85,621 5.39 5,520,580 53,291 3.87 
          Total interest-earning assets6,982,017 90,441 5.20 6,536,802 57,214 3.51 
Cash and due from banks58,675 55,634 
Allowance for credit losses, loans and leases(81,641)(68,426)
Premises and equipment, net52,540 50,266 
Operating lease right-of-use assets31,200 30,222 
Other assets398,007 357,903 
      Total assets$7,440,798 $6,962,401 
Liabilities:
Interest-bearing checking deposits$1,011,889 $5,392 2.14 %$851,324 $570 0.27 %
Money market savings1,460,899 14,089 3.87 1,405,536 1,552 0.44 
Regular savings888,680 845 0.38 1,070,480 237 0.09 
Time deposits823,665 7,141 3.48 452,989 1,227 1.09 
Total time and interest-bearing deposits4,185,133 27,467 2.63 3,780,329 3,586 0.38 
Short-term borrowings255,090 3,249 5.11 17,253 11 0.26 
Long-term debt301,593 2,811 3.74 95,000 321 1.36 
Subordinated notes148,443 2,282 6.17 98,988 1,328 5.38 
     Total borrowings705,126 8,342 4.75 211,241 1,660 3.15 
     Total interest-bearing liabilities4,890,259 35,809 2.94 3,991,570 5,246 0.53 
Noninterest-bearing deposits1,659,449 2,122,844 
Operating lease liabilities34,415 33,300 
Accrued expenses and other liabilities49,966 43,277 
     Total liabilities6,634,089 6,190,991 
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")6,549,708 2.19 6,114,414 0.34 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital298,788 298,241 
Retained earnings and other equity350,137 315,385 
     Total shareholders' equity806,709 771,410 
     Total liabilities and shareholders' equity$7,440,798 $6,962,401 
Net interest income$54,632 $51,968 
Net interest spread2.26 2.98 
Effect of net interest-free funding sources0.88 0.21 
Net interest margin3.14 %3.19 %
Ratio of average interest-earning assets to average interest-bearing liabilities142.77 %163.77 %
*Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of $668 thousand and $618 thousand for the three months ended June 30, 2023 and 2022, respectively.
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 June 30, 2023 and 2022 have been calculated using the Corporation’s federal applicable rate of 21.0%.


Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
For the Six Months Ended June 30,
Tax Equivalent Basis20232022
AverageIncome/AverageAverageIncome/Average
(Dollars in thousands)BalanceExpenseRateBalanceExpenseRate
Assets:
Interest-earning deposits with other banks$47,364 $991 4.22 %$603,002 $1,181 0.39 %
U.S. government obligations— — — 3,602 37 2.07 
Obligations of state and political subdivisions*2,285 32 2.82 2,317 36 3.13 
Other debt and equity securities515,161 7,007 2.74 512,998 5,066 1.99 
Federal Home Loan Bank, Federal Reserve Bank and other stock39,287 1,390 7.13 26,665 699 5.29 
Total interest-earning deposits, investments and other interest-earning assets604,097 9,420 3.14 1,148,584 7,019 1.23 
Commercial, financial, and agricultural loans998,726 32,457 6.55 932,795 17,354 3.75 
Real estate—commercial and construction loans3,394,100 88,381 5.25 2,954,831 54,347 3.71 
Real estate—residential loans1,446,093 32,946 4.59 1,141,416 20,640 3.65 
Loans to individuals27,023 928 6.93 26,293 543 4.16 
Municipal loans and leases*232,461 4,729 4.10 239,197 4,838 4.08 
Lease financings170,787 5,200 6.14 138,593 4,180 6.08 
     Gross loans and leases6,269,190 164,641 5.30 5,433,125 101,902 3.78 
          Total interest-earning assets6,873,287 174,061 5.11 6,581,709 108,921 3.34 
Cash and due from banks58,356 54,671 
Allowance for credit losses, loans and leases(80,813)(70,237)
Premises and equipment, net52,064 52,097 
Operating lease right-of-use assets31,251 30,308 
Other assets396,471 356,406 
      Total assets$7,330,616 $7,004,954 
Liabilities:
Interest-bearing checking deposits$935,316 $8,556 1.84 %$866,310 $1,013 0.24 %
Money market savings1,474,936 25,170 3.44 1,473,680 2,456 0.34 
Regular savings936,930 1,514 0.33 1,046,150 475 0.09 
Time deposits695,697 10,563 3.06 463,232 2,533 1.10 
Total time and interest-bearing deposits4,042,879 45,803 2.28 3,849,372 6,477 0.34 
Short-term borrowings247,745 5,977 4.87 17,443 13 0.15 
Long-term debt207,431 3,402 3.31 95,000 638 1.35 
Subordinated notes148,381 4,563 6.20 98,950 2,656 5.41 
     Total borrowings603,557 13,942 4.66 211,393 3,307 3.15 
     Total interest-bearing liabilities4,646,436 59,745 2.59 4,060,765 9,784 0.49 
Noninterest-bearing deposits1,796,647 2,094,397 
Operating lease liabilities34,427 33,375 
Accrued expenses and other liabilities55,126 43,541 
     Total liabilities6,532,636 6,232,078 
Total interest-bearing liabilities and noninterest-bearing deposits ("Cost of Funds")6,443,083 1.87 6,155,162 0.32 
Shareholders' Equity:
Common stock157,784 157,784 
Additional paid-in capital299,537 298,606 
Retained earnings and other equity340,659 316,486 
     Total shareholders' equity797,980 772,876 
     Total liabilities and shareholders' equity$7,330,616 $7,004,954 
Net interest income$114,316 $99,137 
Net interest spread2.52 2.85 
Effect of net interest-free funding sources0.83 0.19 
Net interest margin3.35 %3.04 %
Ratio of average interest-earning assets to average interest-bearing liabilities147.93 %162.08 %
*Obligations of states and political subdivisions and municipal loans and leases are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of $1.1 million and $754 thousand for the six months ended June 30, 2023 and 2022, respectively.
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 six months ended June 30, 2023 and 2022 have been calculated using the Corporation’s federal applicable rate of 21.0%.


Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
June 30, 2023
(Dollars in thousands)
Industry DescriptionTotal Outstanding Balance % of Commercial Loan Portfolio
CRE - Retail$468,650 9.0 %
Animal Production350,654 6.8 
CRE - Multi-family306,508 5.9 
CRE - Office303,848 5.9 
CRE - 1-4 Family Residential Investment282,613 5.4 
CRE - Industrial / Warehouse226,781 4.4 
Hotels & Motels (Accommodation)191,824 3.7 
Nursing and Residential Care Facilities174,408 3.4 
Specialty Trade Contractors170,316 3.3 
Education155,108 3.0 
Homebuilding (tract developers, remodelers)151,225 2.9 
Merchant Wholesalers, Durable Goods132,533 2.6 
Motor Vehicle and Parts Dealers120,027 2.3 
CRE - Mixed-Use - Residential110,604 2.1 
Crop Production98,772 1.9 
Administrative and Support Services88,027 1.7 
Rental and Leasing Services86,872 1.7 
Wood Product Manufacturing81,867 1.6 
Repair and Maintenance81,038 1.6 
Real Estate Lenders, Secondary Market Financing79,265 1.5 
CRE - Mixed-Use - Commercial77,981 1.5 
Religious Organizations, Advocacy Groups74,106 1.4 
Amusement, Gambling, and Recreation Industries71,243 1.4 
Fabricated Metal Product Manufacturing70,147 1.4 
Merchant Wholesalers, Nondurable Goods68,736 1.3 
Personal and Laundry Services67,717 1.3 
Miniwarehouse / Self-Storage63,917 1.2 
Food Services and Drinking Places63,769 1.2 
Private Equity & Special Purpose Entities (except 52592)61,598 1.2 
Food Manufacturing57,748 1.1 
Truck Transportation54,135 1.0 
Industries with >$50 million in outstandings$4,392,037 84.6 %
Industries with <$50 million in outstandings $800,146 15.4 %
Total Commercial Loans$5,192,183 100.0 %
Consumer Loans and Lease FinancingsTotal Outstanding Balance
Real Estate-Residential Secured for Personal Purpose$832,632 
Real Estate-Home Equity Secured for Personal Purpose175,090 
Loans to Individuals25,544 
Lease Financings236,789 
Total Consumer Loans and Lease Financings$1,270,055 
Total$6,462,238 


Univest Financial Corporation
Non-GAAP Reconciliation
June 30, 2023
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.
As of or for the three months ended,As of or for the six months ended,
(Dollars in thousands)6/30/20233/31/202312/31/20229/30/20226/30/20226/30/20236/30/2022
Restructuring charges (a)$1,330 $— $184 $— $— $1,330 $— 
Tax effect of restructuring charges(279)— (39)— — (279)— 
Restructuring charges, net of tax$1,051 $— $145 $— $— $1,051 $— 
Net income$16,800 $21,034 $23,836 $20,801 $13,166 $37,834 $33,483 
Amortization of intangibles, net of tax200 200 238 244 270 400 540 
Net income before amortization of intangibles$17,000 $21,234 $24,074 $21,045 $13,436 $38,234 $34,023 
Shareholders' equity$805,222 $798,496 $776,500 $754,187 $763,925 $805,222 $763,925 
Goodwill(175,510)(175,510)(175,510)(175,510)(175,510)(175,510)(175,510)
Other intangibles (b)(2,767)(3,054)(3,251)(3,485)(3,678)(2,767)(3,678)
Tangible common equity$626,945 $619,932 $597,739 $575,192 $584,737 $626,945 $584,737 
Total assets$7,600,150 $7,358,991 $7,222,016 $6,907,397 $6,700,813 $7,600,150 $6,700,813 
Goodwill(175,510)(175,510)(175,510)(175,510)(175,510)(175,510)(175,510)
Other intangibles (b)(2,767)(3,054)(3,251)(3,485)(3,678)(2,767)(3,678)
Tangible assets$7,421,873 $7,180,427 $7,043,255 $6,728,402 $6,521,625 $7,421,873 $6,521,625 
Average shareholders' equity$806,709 $789,153 $767,192 $773,099 $771,410 $797,980 $772,876 
Average goodwill(175,510)(175,510)(175,510)(175,510)(175,510)(175,510)(175,510)
Average other intangibles (b)(2,924)(3,137)(3,355)(3,550)(3,791)(3,030)(3,940)
Average tangible common equity$628,275 $610,506 $588,327 $594,039 $592,109 $619,440 $593,426 
(a) Associated with financial service center optimization and headcount rationalization expense management strategies
(b) Amount does not include mortgage servicing rights


v3.23.2
Cover
Jul. 26, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 26, 2023
Entity Registrant Name UNIVEST FINANCIAL CORPORATION
Entity Incorporation, State or Country Code PA
Entity File Number 0-7617
Entity Tax Identification Number 23-1886144
Entity Address, Address Line One 14 North Main Street
Entity Address, City or Town Souderton
Entity Address, State or Province PA
Entity Address, Postal Zip Code 18964
City Area Code 215
Local Phone Number 721-2400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $5 par value
Trading Symbol UVSP
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000102212
Amendment Flag false
Univest Financial (NASDAQ:UVSP)
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