Univest Financial Corporation Reports Third Quarter Results

(Loan Growth of 9.7% for last twelve months (excluding PPP loans¹))

SOUDERTON, Pa., Oct. 27, 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 September 30, 2021 of $20.9 million, or $0.71 diluted earnings per share, compared to net income of $18.1 million, or $0.62 diluted earnings per share, for the quarter ended September 30, 2020. Net income for the nine months ended September 30, 2021 was $74.4 million, or $2.52 diluted earnings per share, compared to net income of $21.0 million, or $0.72 diluted earnings per share, for the nine months ended September 30, 2020.

Pre-tax pre-provision income¹ for the quarter ended September 30, 2021 was $26.0 million, a decrease of $1.1 million, or 4.2%, from the third quarter of 2020. Pre-tax pre-provision income¹ for the nine months ended September 30, 2021 was $80.8 million, an increase of $6.1 million, or 8.1%, from the comparable period in the prior year.

One-Time Items
The financial results for the three and nine months ended September 30, 2021 included tax-free bank owned life insurance ("BOLI") death benefit claims of $196 thousand and $1.1 million, respectively, which represents $0.01 and $0.04 diluted earnings per share, respectively.

Paycheck Protection Program
As of September 30, 2021, $85.6 million in PPP loan originations remain outstanding. During the quarter, we recorded income of $4.2 million within net interest income related to these loans, of which $3.7 million was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $171.4 million. During the nine months ended September 30, 2021, we recorded income of $13.5 million within net interest income related to these loans, of which $8.6 million was the result of recognition of associated net deferred loan fees upon forgiveness and pay downs of PPP loans totaling $575.3 million. As of September 30, 2021, we had $2.4 million of net deferred fees on our balance sheet, which represented approximately 13.2% of the initial deferred fee amount.

Loans
Gross loans and leases, excluding PPP loans¹, increased $92.0 million, or 7.3% (annualized), from June 30, 2021 due to increases in commercial real estate and residential mortgage loans. Gross loans and leases, excluding PPP loans, increased $343.4 million or 9.5% (annualized) from December 31, 2020 and $456.2 million, or 9.7%, from September 30, 2020 due to increases in commercial, construction, commercial real estate, and residential mortgage loans.

Deposits
Total deposits increased $619.5 million, or 46.6% (annualized), from June 30, 2021 due to increases in commercial deposits and seasonal increases in public funds deposits. Total deposits increased $695.4 million, or 17.7% (annualized), from December 31, 2020 and $726.6 million, or 13.9%, from September 30, 2020, primarily due to increases in commercial, consumer and public funds deposits offset by a decrease in brokered deposits.

Net Interest Income and Margin
Net interest income of $48.7 million for the three months ended September 30, 2021 increased $1.9 million, or 4.1%, from the three months ended June 30, 2021, and $4.8 million, or 11.0%, from the three months ended September 30, 2020. The increase in net interest income for the three months ended September 30, 2021 compared to the same period of 2020 was primarily due to an increase in PPP loan income of $1.4 million, a $1.9 million decrease in the cost of interest-bearing liabilities and growth in loans partially offset by a decrease in loan, excluding PPP, and investment yields.

Net interest income of $140.9 million for the nine months ended September 30, 2021 increased $11.0 million, or 8.5%, from the nine months ended September 30, 2020. The increase in net interest income for the nine months ended September 30, 2021 compared to the same period of 2020 was primarily due to an increase in PPP loan income of $8.5 million, a $6.2 million decrease in the cost of interest-bearing liabilities and growth in loans partially offset by a decrease in loans and investment yields.

Net interest margin, on a tax-equivalent basis, was 3.11% for the third quarter of 2021, compared to 3.15% for the second quarter of 2021 and 3.02% for the third quarter of 2020. Excess liquidity reduced net interest margin by approximately 27 basis points for the quarter ended September 30, 2021 compared to ten basis points for the quarter ended June 30, 2021 and 18 basis points for the quarter ended September 30, 2020. This excess liquidity was primarily driven by strong growth of deposit balances since the beginning of the COVID-19 pandemic, primarily due to the various pandemic-related stimulus initiatives. PPP loans had a favorable impact on net interest margin of 20 basis points for the quarter ended September 30, 2021 compared to 11 basis points for the quarter ended June 30, 2021 and an unfavorable impact of ten basis points for the quarter ended September 30, 2020. As PPP loans are forgiven, the associated deferred fees are recognized in earnings, which occurred with greater frequency in 2021 as compared to 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.18% for the quarter ended September 30, 2021 compared to 3.14% for the quarter ended June 30, 2021 and 3.30% for the quarter ended September 30, 2020.

Net interest margin, on a tax-equivalent basis, was 3.13% for the nine months ended September 20, 2021, compared to 3.21% for the nine months ended September 30, 2020. Excess liquidity reduced net interest margin by approximately 16 basis points for the nine months ended September 30, 2021 compared to 14 basis points for the nine months ended September 30, 2020. This excess liquidity was primarily driven by strong growth of deposit balances since the beginning of the COVID-19 pandemic, primarily due to the various pandemic-related stimulus initiatives. PPP loans had a favorable impact on net interest margin of 12 basis points for the nine months ended September 30, 2021 compared to an unfavorable impact of seven basis points for the nine months ended September 30, 2020. Excluding the impact of excess liquidity and PPP loans, the net interest margin, on a tax-equivalent basis, was 3.17% for the nine months ended September 30, 2021 compared to 3.42% for the nine months ended September 30, 2020.

Noninterest Income
Noninterest income for the quarter ended September 30, 2021 was $20.6 million, a decrease of $1.3 million, or 5.7%, compared to the third quarter of 2020. Noninterest income for the nine months ended September 30, 2021 was $64.0 million, an increase of $5.8 million, or 10.0%, from the comparable period in the prior year.

Net gain on mortgage banking activities decreased $2.6 million, or 45.0%, for the quarter but increased $504 thousand, or 4.2%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year. The decrease for the three months ended September 30, 2021 was primarily due to a decrease in volume and a contraction of margins. Investment advisory commission and fee income increased $791 thousand, or 19.8%, for the quarter and $2.3 million, or 19.1%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year, due to increased assets under management driven by favorable market conditions and new customer relationships. BOLI income increased $184 thousand, or 24.8%, for the quarter and $1.1 million, or 47.8%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year, primarily due to proceeds from BOLI death benefits of $893 thousand and $196 thousand received in the second and third quarter of 2021, respectively.

Other service fee income increased $483 thousand, or 23.1%, for the quarter and $2.1 million, or 37.9%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year. Interchange fee income increased $290 thousand for the quarter and $962 thousand for the nine months ended September 30, 2021 compared to the comparable periods in the prior year, due to increased customer activity. Mortgage servicing fees increased $163 thousand for the quarter and $855 thousand for the nine months ended September 30, 2021 driven by an increase in retained servicing associated with elevated mortgage volume over the past eighteen months.

Other income decreased $546 thousand, or 25.1%, for the quarter and $543 thousand, or 13.5%, for the nine months ended September 30, 2021 compared to comparable periods in the prior year. Fees on risk participation agreements for interest rate swaps decreased $1.9 million and $2.3 million during the three and nine months ended September 30, 2021, respectively, compared to comparable periods in the prior year driven by a decrease in customer demand. Gain on the sale of SBA loans increased $897 thousand and $922 thousand during the three and nine months ended September 30, 2021, respectively. This increase was reflective of the Corporation's commitment to delivering comprehensive financial solutions to small businesses and the expansion of the SBA lending team during the first half of 2021. Net gains or losses related to valuations and sales of other real estate owned increased $297 thousand for the three and nine months ended September 30, 2021 compared to comparable periods in the prior year, primarily due to a $300 thousand valuation adjustment on other real estate owned during the third quarter of 2020. Other income increased $456 thousand for the nine months ended September 30, 2021 primarily driven by a gain on the value of equity securities measured at fair value of $164 thousand compared to a loss of $321 thousand for the nine months ended September 30, 2020.

Noninterest Expense
Noninterest expense for the quarter ended September 30, 2021 was $43.2 million, an increase of $4.7 million, or 12.3%, compared to the third quarter of 2020. Noninterest expense for the nine months ended September 30, 2021 was $124.1 million, an increase of $10.8 million, or 9.5%, from the comparable period in the prior year.

Salaries, benefits and commissions increased $2.6 million, or 10.7%, for the quarter and $7.2 million, or 10.4%, for the nine months ended September 30, 2021 from the comparable periods in the prior year. These increases reflect our continued investment in revenue producing staff across all business lines and annual merit increases. Additionally, variable incentive compensation expenses increased $829 thousand and $2.6 million for the three and nine months ended September 30, 2021, respectively, from the comparable periods in the prior year, due to increased profitability.

Professional fees increased $853 thousand, or 64.6%, for the quarter and $2.0 million, or 52.2%, for the nine months ended September 30, 2021 from the comparable periods in the prior year, primarily attributable to increased consultant fees in support of our Diversity, Equity and Inclusion program, training initiatives and treasury management product enhancements. During the first nine months of 2021, we have spent $1.4 million on these initiatives and we expect to incur approximately $70 thousand of additional expenses related to these initiatives in the fourth quarter of 2021. These expenses are not expected to re-occur in subsequent periods. Data processing expenses increased $412 thousand, or 14.4%, for the quarter and $1.0 million, or 12.1%, for the nine months ended September 30, 2021 compared to the comparable periods in the prior year, primarily due to continued investments in our end-to-end loan origination solution for loans below $1.0 million, customer relationship management software, internal infrastructure improvements and outsourced data processing solutions.

Other expense increased $865 thousand, or 16.5%, for the quarter compared to the comparable period in the prior year, due to increases in professional liability insurance, bank shares tax expense, interchange fee expense and travel and entertainment expenses, which are beginning to normalize as the markets we operate in continue to remain open.

Asset Quality and Provision for Credit Losses
Nonperforming assets were $37.1 million at September 30, 2021, compared to $38.5 million at June 30, 2021 and $41.9 million at September 30, 2020.

Net loan and lease recoveries were $75 thousand during the third quarter of 2021 compared to $35 thousand for the same period in the prior year. The reversal of provision for credit losses was $182 thousand for the third quarter of 2021, of which $2.9 million (after-tax benefit of $2.3 million), or $0.08 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model, partially offset by an increase in reserves for loans, unfunded commitments and investment securities. The provision for credit losses was $3.9 million for the comparable period in the prior year, of which $280 thousand (after-tax charge of $221 thousand), or $0.01 diluted earnings per share, was attributable to adverse changes in economic-related assumptions, which were predominately driven by COVID-19.

Net loan and lease charge-offs were $456 thousand for the nine months ended September 30, 2021 compared to $4.0 million for the same period in the prior year. The reversal of provision for credit losses was $11.5 million for the nine months ended September 30, 2021, of which $18.7 million (after-tax benefit of $14.8 million), or $0.50 diluted earnings per share, was attributable to favorable changes in economic-related assumptions within the Corporation’s CECL model partially offset by an increase in reserves for loans, unfunded commitments and investment securities. The provision for credit losses was $49.5 million for the comparable period in the prior year, of which $40.5 million (after-tax charge of $32.0 million), or $1.10 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 1.34% at September 30, 2021, compared to 1.34% at June 30, 2021, and 1.76% at September 30, 2020. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans¹, was 1.36% at September 30, 2021 compared to 1.41% at June 30, 2021 and 1.95% at September 30, 2020.

Tax Provision
The effective income tax rate was 19.4% for the nine months ended September 30, 2021 compared to an effective income tax rate of 16.7% for the nine months ended September 30, 2020. The effective tax rate for the nine months ended September 30, 2021 and 2020 reflects the level of pre-tax income and the benefits of tax-exempt income from investments in municipal securities and loans and leases. Additionally, the effective income tax rate for the nine months ended September 30, 2021 was favorably impacted by discrete tax benefits and proceeds from BOLI death benefits. Excluding these items, the effective tax rate was 19.9% for the nine months ended September 30, 2021.

Dividend
On October 27, 2021, Univest declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on November 24, 2021 to shareholders of record as of November 10, 2021.

Conference Call
Univest will host a conference call to discuss third quarter 2021 results on Thursday, October 28, 2021 at 9:00 a.m. EST. Participants may preregister at https://dpregister.com/sreg/10160789/ee1d498407. The general public can access the call by dialing 1-888-338-6515. A replay of the conference call will be available through November 28, 2021 by dialing 1-877-344-7529; using Conference ID: 10160789.

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 $7.0 billion in assets and $4.6 billion in assets under management and supervision through its Wealth Management lines of business at September 30, 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 nationally and in our market; (5) economic assumptions that may impact our allowance for credit losses calculation; (6) legislative, regulatory or tax changes that may adversely affect the businesses in which Univest is engaged; (7) technological issues that may adversely affect Univest financial operations or those of our customers; (8) changes in the securities markets or (9) 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 pandemic 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 economic conditions worsen or 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; and (10) Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs. 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)
September 30, 2021
(Dollars in thousands)
Balance Sheet (Period End)	09/30/21				06/30/21				03/31/21				12/31/20				09/30/20
Assets	$	6,979,852			$	6,356,305			$	6,416,665			$	6,336,496			$	6,382,831
Cash and cash equivalents		902,357				203,449				187,317				219,858				387,676
Investment securities, net of allowance for credit losses		393,377				397,426				377,506				373,176				368,830
Loans held for sale		29,093				27,322				22,636				37,039				14,465
Loans and leases held for investment, gross		5,252,045				5,327,313				5,415,006				5,306,841				5,211,856
Allowance for credit losses, loans and leases		70,146				71,355				71,497				83,044				91,870
Loans and leases held for investment, net		5,181,899				5,255,958				5,343,509				5,223,797				5,119,986
Total deposits		5,938,154				5,318,704				5,311,592				5,242,715				5,211,603
Noninterest-bearing deposits		1,861,007				1,872,031				1,857,547				1,690,663				1,714,505
Interest-bearing demand, money market and savings		3,583,107				2,954,450				2,979,834				2,988,277				2,940,879
Time deposits		494,040				492,223				474,211				563,775				556,219
Borrowings		207,898				218,970				295,293				311,421				416,104
Shareholders' equity		756,023				739,998				722,455				692,472				669,107
Balance Sheet (Average)	For the three months ended,																				For the nine months ended,
	09/30/21				06/30/21				03/31/21				12/31/20				09/30/20				09/30/21				09/30/20
Assets	$	6,698,177			$	6,443,629			$	6,383,463			$	6,353,519			$	6,265,605			$	6,509,576			$	5,892,918
Investment securities, net of allowance for credit losses		395,280				385,694				374,369				369,511				385,221				385,192				412,924
Loans and leases, gross		5,320,411				5,389,110				5,325,897				5,253,720				5,070,037				5,345,119				4,766,274
Deposits		5,666,725				5,351,089				5,296,147				5,222,452				5,030,398				5,439,345				4,726,132
Shareholders' equity		746,185				728,750				699,736				676,426				661,947				725,061				665,439
Asset Quality Data (Period End)
	09/30/21				06/30/21				03/31/21				12/31/20				09/30/20
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases and nonaccrual loans held for sale	$	34,528			$	37,466			$	29,996			$	31,692			$	30,019
Accruing loans and leases 90 days or more past due		2,204				750				664				1,392				3,573
Accruing troubled debt restructured loans and leases		51				52				52				53				53
Total nonperforming loans and leases		36,783				38,268				30,712				33,137				33,645
Other real estate owned		279				279				7,481				7,355				8,270
Total nonperforming assets	$	37,062			$	38,547			$	38,193			$	40,492			$	41,915
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale		0.66	%			0.70	%			0.55	%			0.60	%			0.58	%
Nonperforming loans and leases / Loans and leases held for investment		0.70	%			0.72	%			0.57	%			0.62	%			0.65	%
Nonperforming assets / Total assets		0.53	%			0.61	%			0.60	%			0.64	%			0.66	%
Allowance for credit losses, loans and leases	$	70,146			$	71,355			$	71,497			$	83,044			$	91,870
Allowance for credit losses, loans and leases / Loans and leases held for investment		1.34	%			1.34	%			1.32	%			1.56	%			1.76	%
Allowance for credit losses, loans and leases / Loans and leases held for investment, excluding Paycheck Protection Program loans (1)		1.36	%			1.41	%			1.46	%			1.72	%			1.95	%
Allowance for credit losses, loans and leases / Nonaccrual loans and leases held for investment		203.16	%			212.97	%			238.36	%			262.03	%			306.04	%
Allowance for credit losses, loans and leases / Nonperforming loans and leases held for investment		190.70	%			208.00	%			232.80	%			250.61	%			273.06	%
	For the three months ended,																				For the nine months ended,
	09/30/21				06/30/21				03/31/21				12/31/20				09/30/20				09/30/21				09/30/20
Net loan and lease (recoveries) charge-offs	$	(75	)		$	243			$	288			$	618			$	(35	)		$	456			$	4,030
Net loan and lease (recoveries) charge-offs (annualized)/Average loans and leases		(0.01	%)			0.02	%			0.02	%			0.05	%			(0.00	%)			0.01	%			0.11	%
(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)
September 30, 2021
(Dollars in thousands, except per share data)
	For the three months ended,																				For the nine months ended,
For the period:	09/30/21				06/30/21				03/31/21				12/31/20				09/30/20				09/30/21				09/30/20
Interest income	$	53,571			$	52,441			$	51,457			$	51,334			$	50,612			$	157,469			$	152,611
Interest expense		4,884				5,684				6,043				6,813				6,758				16,611				22,771
Net interest income		48,687				46,757				45,414				44,521				43,854				140,858				129,840
(Reversal of provision) provision for credit losses		(182	)			(59	)			(11,283	)			(8,721	)			3,935				(11,524	)			49,515
Net interest income after provision for credit losses		48,869				46,816				56,697				53,242				39,919				152,382				80,325
Noninterest income:
Trust fee income		2,126				2,157				2,034				1,974				1,915				6,317				5,729
Service charges on deposit accounts		1,422				1,314				1,282				1,371				1,187				4,018				3,474
Investment advisory commission and fee income		4,796				4,558				4,697				4,144				4,005				14,051				11,800
Insurance commission and fee income		3,837				3,839				4,955				3,512				3,776				12,631				12,575
Other service fee income		2,576				2,748				2,192				2,092				2,093				7,516				5,451
Bank owned life insurance income		925				1,620				717				733				741				3,262				2,207
Net gain on sales of investment securities		21				54				65				54				57				140				817
Net gain on mortgage banking activities		3,224				3,461				5,938				4,323				5,860				12,623				12,119
Other income		1,625				479				1,370				1,936				2,171				3,474				4,017
Total noninterest income		20,552				20,230				23,250				20,139				21,805				64,032				58,189
Noninterest expense:
Salaries, benefits and commissions		26,641				25,396				24,780				23,613				24,059				76,817				69,595
Net occupancy		2,525				2,656				2,739				2,697				2,609				7,920				7,661
Equipment		1,000				968				946				951				972				2,914				2,890
Data processing		3,274				3,064				3,050				2,961				2,862				9,388				8,372
Professional fees		2,174				2,015				1,748				1,436				1,321				5,937				3,902
Marketing and advertising		539				561				280				575				463				1,380				1,400
Deposit insurance premiums		765				613				636				765				707				2,014				1,826
Intangible expenses		214				249				249				282				283				712				934
Restructuring charges		-				-				-				1,439				-				-				-
Other expense		6,116				5,764				5,112				7,015				5,251				16,992				16,684
Total noninterest expense		43,248				41,286				39,540				41,734				38,527				124,074				113,264
Income before taxes		26,173				25,760				40,407				31,647				23,197				92,340				25,250
Income tax expense		5,262				4,885				7,804				5,773				5,078				17,951				4,208
Net income	$	20,911			$	20,875			$	32,603			$	25,874			$	18,119			$	74,389			$	21,042
Net income per share:
Basic	$	0.71			$	0.71			$	1.11			$	0.88			$	0.62			$	2.53			$	0.72
Diluted	$	0.71			$	0.71			$	1.11			$	0.88			$	0.62			$	2.52			$	0.72
Dividends declared per share	$	0.20			$	0.20			$	0.20			$	-			$	0.20			$	0.60			$	0.60
Weighted average shares outstanding		29,420,256				29,389,525				29,327,432				29,274,915				29,226,627				29,379,774				29,233,317
Period end shares outstanding		29,438,402				29,411,731				29,379,575				29,295,052				29,241,302				29,438,402				29,241,302

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
September 30, 2021
	For the three months ended,																				For the nine months ended,
Profitability Ratios (annualized)	09/30/21				06/30/21				03/31/21				12/31/20				09/30/20				09/30/21				09/30/20
Return on average assets		1.24	%			1.30	%			2.07	%			1.62	%			1.15	%			1.53	%			0.48	%
Return on average assets, excluding restructuring charges (1)		1.24	%			1.30	%			2.07	%			1.69	%			1.15	%			1.53	%			0.48	%
Return on average shareholders' equity		11.12	%			11.49	%			18.90	%			15.22	%			10.89	%			13.72	%			4.22	%
Return on average shareholders' equity, excluding restructuring charges (1)		11.12	%			11.49	%			18.90	%			15.89	%			10.89	%			13.72	%			4.22	%
Return on average tangible common equity (1)		14.51	%			15.11	%			25.20	%			20.54	%			14.82	%			18.07	%			5.74	%
Return on average tangible common equity, excluding restructuring charges (1)		14.51	%			15.11	%			25.20	%			21.44	%			14.82	%			18.07	%			5.74	%
Net interest margin (FTE)		3.11	%			3.15	%			3.12	%			3.02	%			3.02	%			3.13	%			3.21	%
Efficiency ratio (2)		61.8	%			60.7	%			57.0	%			63.8	%			58.0	%			59.8	%			59.5	%
Efficiency ratio, excluding restructuring charges (1) (2)		61.8	%			60.7	%			57.0	%			61.6	%			58.0	%			59.8	%			59.5	%
Capitalization Ratios
Dividends declared to net income (3)		28.1	%			28.2	%			18.0	%			0.0	%			32.3	%			23.7	%			83.3	%
Shareholders' equity to assets (Period End)		10.83	%			11.64	%			11.26	%			10.93	%			10.48	%			10.83	%			10.48	%
Tangible common equity to tangible assets (1)		8.55	%			9.15	%			8.77	%			8.40	%			7.95	%			8.55	%			7.96	%
Common equity book value per share	$	25.68			$	25.16			$	24.59			$	23.64			$	22.88			$	25.68			$	22.88
Tangible common equity book value per share (1)	$	19.75			$	19.22			$	18.64			$	17.66			$	16.88			$	19.75			$	16.89
Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio		9.53	%			9.64	%			9.45	%			9.08	%			8.97	%			9.53	%			8.97	%
Common equity tier 1 risk-based capital ratio		11.15	%			11.04	%			11.08	%			10.76	%			10.52	%			11.15	%			10.52	%
Tier 1 risk-based capital ratio		11.15	%			11.04	%			11.08	%			10.76	%			10.52	%			11.15	%			10.52	%
Total risk-based capital ratio		13.87	%			13.82	%			15.13	%			15.31	%			15.35	%			13.87	%			15.35	%
(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	September 30, 2021								June 30, 2021
	Average			Income/			Average		Average			Income/			Average
(Dollars in thousands)	Balance			Expense			Rate		Balance			Expense			Rate
Assets:
Interest-earning deposits with other banks	$	530,191		$	189		0.14	%	$	215,349		$	46		0.09	%
U.S. government obligations		6,999			36		2.04			6,999			35		2.01
Obligations of state and political subdivisions		2,992			24		3.18			6,070			58		3.83
Other debt and equity securities		385,289			1,516		1.56			372,625			1,364		1.47
Federal Home Loan Bank, Federal Reserve Bank and other stock		26,713			334		4.96			25,872			360		5.58
Total interest-earning deposits, investments and other interest-earning assets		952,184			2,099		0.87			626,915			1,863		1.19
Commercial, financial, and agricultural loans		880,986			7,412		3.34			826,464			6,910		3.35
Paycheck Protection Program loans		162,611			4,162		10.15			408,928			4,778		4.69
Real estate—commercial and construction loans		2,784,398			25,634		3.65			2,701,137			24,931		3.70
Real estate—residential loans		1,100,799			10,171		3.67			1,065,065			9,836		3.70
Loans to individuals		26,048			253		3.85			25,284			251		3.98
Municipal loans and leases		247,603			2,504		4.01			251,311			2,598		4.15
Lease financings		117,966			1,856		6.24			110,921			1,819		6.58
Gross loans and leases		5,320,411			51,992		3.88			5,389,110			51,123		3.80
Total interest-earning assets		6,272,595			54,091		3.42			6,016,025			52,986		3.53
Cash and due from banks		59,642								52,948
Allowance for credit losses, loans and leases		(72,606	)							(73,052	)
Premises and equipment, net		55,685								55,903
Operating lease right-of-use assets		31,998								33,992
Other assets		350,863								357,813
Total assets	$	6,698,177							6,443,629