EX-99.1 2 c91553exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(UNIVEST LOGO)
     
CONTACT:
  Jeff Schweitzer
UNIVEST CORPORATION OF PENNSYLVANIA
Chief Financial Officer
215-721-2458, schweitzerj@univest.net
FOR IMMEDIATE RELEASE
UNIVEST CORPORATION OF PENNSYLVANIA — UNIVEST NATIONAL
BANK AND TRUST CO. — REPORTS THIRD QUARTER EARNINGS
SOUDERTON, Pa., October 28, 2009 — Univest Corporation of Pennsylvania (NASDAQ: UVSP), parent company of Univest National Bank and Trust Co. of Souderton, Pa., today announced financial results for the third quarter ended September 30, 2009. Univest reported net income of $2.8 million or $0.19 diluted earnings per share for the quarter ended September 30, 2009, compared to net income of $4.2 million or $0.33 diluted earnings per share for the quarter ended September 30, 2008.
For the nine months ended September 30, 2009, Univest reported net income of $9.3 million or $0.68 diluted earnings per share compared to net income of $16.8 million or $1.30 diluted earnings per share reported for the nine months ended September 30, 2008. The decrease year over year is primarily due to an increase in the provision for loan and lease losses of $7.1 million, increased FDIC insurance expense of $2.3 million, along with death benefit claims on bank owned life insurance policies in the prior year of $1.9 million.
During the quarter ended September 30, 2009, Univest successfully completed a follow-on public offering of 3,392,500 shares of its common stock. The net proceeds from the offering to Univest were approximately $55.6 million. Univest continues to remain well-capitalized with total risk-based capital equaling 15.47% at September 30, 2009, well in excess of the regulatory minimum for well-capitalized status.
Net Interest Income and Margin
Net interest income increased $830 thousand or 5.03% in the third quarter of 2009 from the third quarter of 2008. The result is from the growth in average interest earning assets of $69.6 million or 3.8% combined with a decrease in the cost of interest-bearing liabilities.

 

 

 

The net interest margin on a tax-equivalent basis for the third quarter of 2009 increased 5 basis points to 3.82% compared to 3.77% for the third quarter of 2008. The increase in the net interest margin can be attributed to increased loan volume and declines in the cost of interest-bearing liabilities exceeding the declines in yields on total interest-earning assets.
Net interest income increased $1.9 million or 3.96% for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. The net interest margin on a tax equivalent basis for the nine months ended September 30, 2009 increased 9 basis points to 3.82% compared to 3.73% for the comparable period in the prior year. The increases in net interest income and net interest margin are primarily due to increased loan volume and declines in the cost of interest-bearing liabilities exceeding the declines in yields on total interest earning assets. Average loans increased $68.0 million or 4.9% year over year, which was driven by an increase in average commercial loans of $92.6 million or 9.1%.
Non-Interest Income
Total non-interest income increased for the quarter ended September 30, 2009 compared to the quarter ended September 30, 2008. For the quarter ended September 30, 2009, Univest reported total non-interest income of $7.1 million compared to $5.6 million for the comparable period in the prior year. This increase is primarily due to increased mortgage banking revenue of $360 thousand for the quarter ended September 30, 2009 compared to the same period in the prior year and increased revenues from the acquisitions of Trollinger Consulting Group and Liberty Benefits, Inc. at the end of 2008. Additionally, Univest recorded an other-than-temporary impairment charge on certain bank equity securities in the third quarter of 2008 of $693 thousand compared to a charge of $47 thousand in the third quarter of 2009.
Total non-interest income for the nine months ended September 30, 2009 decreased slightly compared to the corresponding period in the prior year. This decline is due to $1.9 million of revenue from death benefit claims on bank owned life insurance in the prior year and other than temporary impairment on bank equity securities of $1.4 million recorded during the nine months ended September 30, 2009 compared to $928 thousand recorded during the nine months ended September 30, 2008. Excluding these items, total non-interest income increased $2.2 million compared to the same period in the prior year primarily due to increased mortgage banking revenue of $1.5 million along with increased revenues from the acquisitions of Trollinger Consulting Group and Liberty Benefits, Inc.

 

 

 

Non-Interest Expense
Non-interest expense for the third quarter of 2009 increased $1.9 million, or 13.9%, primarily due to higher FDIC insurance costs, salaries and employee benefits expense. FDIC insurance costs increased $343 thousand quarter over quarter primarily due to premium increases affecting all financial institutions. Salary and employee benefits expenses increased primarily due to increased pension costs, normal merit increases and increased headcount due to the acquisitions of Trollinger Consulting Group and Liberty Benefits, Inc along with increased staff from our mortgage banking initiative launched in the fourth quarter of 2008.
Non-interest expense for the nine months ended September 30, 2009 increased $5.5 million, or 13.0%, primarily due to higher FDIC insurance costs, salaries and employee benefits expense. FDIC insurance costs increased $2.3 million year over year, which includes the special assessment levied on all banks in the second quarter of 2009 which cost Univest $947 thousand. Salaries and employee benefits expense increased $3.5 million primarily due to increased pension expenses of $822 thousand along with normal merit increases combined with increased headcount from the acquisitions completed at the end of the year along with our recent mortgage banking initiatives.
Credit Quality and Provision for Loan and Lease Losses
Nonaccrual loans and leases were $33.1 million at September 30, 2009 compared to $5.0 million at December 31, 2008 and $7.9 million at September 30, 2008. Nonperforming loans and leases as a percentage of total loans and leases equaled 2.55% at September 30, 2009 compared to 0.75% at June 30, 2009 and 0.45% at December 31, 2008 and 0.69% at September 30, 2008. The increase from year-end is primarily due to an increase in non-accrual loans of $28.1 million and an increase in restructured loans of $2.8 million. This increase is primarily due to two credits which went on non-accrual during the third quarter of 2009. One credit is a Shared National Credit to a continuing care retirement community in which Univest participates. The parent company of the community has come under financial difficulty and as a result, the parent company and all communities recently declared bankruptcy. The credit has $7.4 million outstanding at September 30, 2009. The second credit is for four separate facilities to a local commercial real estate developer/home builder which aggregate $16.6 million at September 30, 2009. Univest will continue to closely monitor these credits and may have to provide additional reserve in future quarters related to these credits. Net loan and lease charge-offs for the nine months ended September 30, 2009 were $4.6 million or 0.42% of average loans and leases compared to $4.5 million or 0.43% for the nine months ended September 30, 2008. The provision for loan and lease losses was $5.9 million for the third quarter of 2009 compared to $3.0 million for the corresponding quarter in the prior year. For the nine months ended September 30, 2009, the provision for loan and lease losses was $13.4 million compared to $6.3 million in the prior year. The increase in the provision is due to the migration of loans to higher-risk ratings as a result of deterioration of underlying collateral and economic factors. As a result of the increased provision, the allowance for loan and leases as a percentage of total loans and leases increased to 1.51% at September 30, 2009 from 1.29% at June 30, 2009 and 0.90% at December 31, 2008. The allowance for loan and leases losses to nonperforming loans and leases equaled 59.35% at September 30, 2009 which decreased from 172.30% at June 30, 2009 primarily due to the addition to non-accrual status of the two credits discussed above.

 

 

 

On October 1, 2009, Univest Corporation paid a quarterly cash dividend of $0.20 per share.
About Univest Corporation
Headquartered in Souderton, Pa., Univest Corporation of Pennsylvania (www.univest.net) and its subsidiaries serve the financial needs of residents, businesses, and nonprofit organizations in Bucks, Chester, Montgomery and Lehigh counties. Univest National Bank and Trust Co., member FDIC and Equal Housing Lender, offers customers 32 financial service centers, 12 retirement financial services centers, and 38 ATM locations throughout the region, and is the parent company of Univest Capital, Inc., a small ticket commercial finance business; Univest Insurance, Inc., an independent insurance agency headquartered in Lansdale, Pa., which serves commercial and personal customers; and Univest Investments, Inc., Member FINRA and SIPC, a full-service broker-dealer and investment advisory firm. For more information on Univest Corporation of Pennsylvania and its subsidiaries, please visit www.univest.net.
# # #
This press release of Univest Corporation and the reports Univest Corporation files with the Securities and Exchange Commission often contain “forward-looking statements” relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of Univest Corporation. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Corporation’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce net interest margins; (3) changes in prepayment speeds, loan sale volumes, charge-offs and loan loss provisions; (4) general economic conditions; (5) legislative or regulatory changes that may adversely affect the businesses in which Univest Corporation is engaged; (6) technological issues which may adversely affect Univest Corporation’s financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Corporation files with the Securities and Exchange Commission. Univest Corporation undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

 

 

 

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
9/30/2009
(Dollars in thousands)
                                         
Balance Sheet (Period End)   09/30/09     06/30/09     03/31/09     12/31/08     09/30/08  
Assets
   $ 2,117,849     $ 2,086,821     $ 2,065,901     $ 2,084,797     $ 2,046,390  
Securities
     472,491       425,774       410,357       432,266       406,965  
Loans held for sale
     1,439       1,119       5,072       544       —  
Loans and leases, gross
     1,451,128       1,464,886       1,450,420       1,449,892       1,441,899  
Allowance for loan and lease losses
     21,945       18,824       14,720       13,118       14,954  
Loans and leases, net
     1,429,183       1,446,062       1,435,700       1,436,774       1,426,945  
Total deposits
     1,536,903       1,565,076       1,573,052       1,527,328       1,507,527  
Non-interest bearing deposits
     226,395       222,877       218,148       221,863       226,606  
NOW, Money Market and Savings
     812,122       833,825       819,659       795,495       783,830  
Time deposits
     498,386       508,374       535,245       509,970       497,091  
Borrowings
     267,821       265,457       245,962       312,736       304,368  
Shareholders’ equity
     268,052       208,358       206,238       203,207       204,251  
                                                         
    For the three months ended,     For the nine months ended  
Balance Sheet (Average)   09/30/09     06/30/09     03/31/09     12/31/08     09/30/08     09/30/09     09/30/08  
Assets
   $ 2,098,964     $ 2,077,565     $ 2,059,965     $ 2,028,900     $ 2,020,537     $ 2,078,899     $ 2,023,725  
Securities
     447,925       413,142       419,995       403,783       412,271       427,123       434,544  
Loans and leases, gross
     1,456,446       1,471,231       1,446,095       1,437,721       1,422,774       1,457,961       1,389,965  
Deposits
     1,547,436       1,560,317       1,555,964       1,523,964       1,503,402       1,554,542       1,542,892  
Shareholders’ equity
     240,267       208,321       204,544       205,384       205,062       217,841       203,662  
                                         
Asset Quality Data (Period End)   09/30/09     06/30/09     03/31/09     12/31/08     09/30/08  
Nonaccrual loans and leases
   $ 33,116     $ 5,762     $ 3,675     $ 5,029     $ 7,871  
Accruing loans and leases 90 days or more past due
     644       1,839       2,109       1,145       1,578  
Troubled debt restructured
     3,216       3,324       747       380       563  
Other real estate owned
     3,330       2,812       2,824       346       346  
Nonperforming assets
     40,306       13,737       9,355       6,900       10,358  
Allowance for loan and lease losses
     21,945       18,824       14,720       13,118       14,954  
Nonperforming loans and leases / Loans and leases
     2.55 %     0.75 %     0.45 %     0.45 %     0.69 %
Allowance for loan and lease losses / Loans and leases
     1.51 %     1.29 %     1.01 %     0.90 %     1.04 %
Allowance for loan and lease losses / Nonperforming loans
     59.35 %     172.30 %     225.39 %     200.15 %     149.36 %
                                                         
    For the three months ended,     For the nine months ended  
    09/30/09     06/30/09     03/31/09     12/31/08     09/30/08     09/30/09     09/30/08  
Net loan and lease charge-offs
   $ 2,807     $ 1,249     $ 554     $ 4,263     $ 1,804     $ 4,610     $ 4,474  
Net loan and lease charge-offs (annualized)/Average loans and leases
     0.76 %     0.34 %     0.16 %     1.18 %     0.50 %     0.42 %     0.43 %

 

 

 

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
September 30, 2009
(Dollars in thousands, except per share data)
                                                         
    For the three months ended,     For the nine months ended  
For the period:   09/30/09     06/30/09     03/31/09     12/31/08     09/30/08     09/30/09     09/30/08  
Interest income
   $ 24,244     $ 24,529     $ 24,402     $ 26,455     $ 26,661     $ 73,175     $ 81,602  
Interest expense
     6,901       7,356       8,057       9,630       10,148       22,314       32,680  
 
                                          
Net interest income
     17,343       17,173       16,345       16,825       16,513       50,861       48,922  
Provision for loan and lease losses
     5,928       5,353       2,156       2,427       3,046       13,437       6,342  
 
                                          
Net interest income after provision
     11,415       11,820       14,189       14,398       13,467       37,424       42,580  
Noninterest income:
                                                        
Trust fee income
     1,325       1,325       1,425       1,171       1,578       4,075       4,833  
Service charges on deposit accounts
     1,745       1,692       1,613       1,723       1,719       5,050       5,085  
Investment advisory commission and fee income
     876       766       760       536       581       2,402       1,838  
Insurance commissions and fee income
     1,470       1,964       2,133       1,128       1,266       5,567       4,595  
Bank owned life insurance income
     405       408       157       25       241       970       2,766  
Other-than-temporary impairment on securities
     (47 )     (223 )     (1,177 )     (323 )     (693 )     (1,447 )     (928 )
Net gain (loss) on sales of securities
     112       (22 )     37       201       1       127       79  
Gain on sales of loans held for sale
     401       669       261       21       26       1,331       61  
Other income
     811       1,247       965       846       845       3,023       2,958  
 
                                          
Total noninterest income
     7,098       7,826       6,174       5,328       5,564       21,098       21,287  
Noninterest expense
                                                        
Salaries and benefits
     8,818       9,417       9,432       8,291       7,935       27,667       24,122  
Premises and equipment
     2,216       2,125       2,233       2,225       2,110       6,574       6,252  
Deposit insurance premiums
     526       1,477       583       477       183       2,586       291  
Other expense
     4,003       3,771       3,255       3,874       3,437       11,029       11,693  
 
                                          
Total noninterest expense
     15,563       16,790       15,503       14,867       13,665       47,856       42,358  
 
                                          
Income before taxes
     2,950       2,856       4,860       4,859       5,366       10,666       21,509  
Applicable income taxes
     197       187       1,024       1,054       1,176       1,408       4,724  
 
                                          
Net income
   $ 2,753     $ 2,669     $ 3,836     $ 3,805     $ 4,190     $ 9,258     $ 16,785  
 
                                          
 
                                                        
Per Common Share Data:
                                                        
Book value per share
   $ 16.30     $ 16.00     $ 15.87     $ 15.71     $ 15.83     $ 16.30     $ 15.83  
Net income per share:
                                                        
Basic
   $ 0.19     $ 0.21     $ 0.30     $ 0.30     $ 0.33     $ 0.68     $ 1.31  
Diluted
   $ 0.19     $ 0.21     $ 0.30     $ 0.29     $ 0.33     $ 0.68     $ 1.30  
Dividends per share
   $ 0.20     $ 0.20     $ 0.20     $ 0.20     $ 0.20     $ 0.60     $ 0.60  
Weighted average shares outstanding
     13,635,961       13,023,148       12,977,369       12,921,814       12,874,648       14,873,152       12,856,462  
Period end shares outstanding
     16,442,021       13,023,704       12,996,291       12,938,514       12,905,326       16,442,021       12,905,326  

 

 

 

Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
9/30/09
                                                         
    For the three months ended,     Year to date  
    09/30/09     06/30/09     03/31/09     12/31/08     09/30/08     09/30/09     09/30/08  
Profitability Ratios (annualized)
                                                        
Return on average assets
     0.52 %     0.52 %     0.76 %     0.75 %     0.82 %     0.60 %     1.11 %
Return on average shareholders’ equity
     4.55 %     5.14 %     7.61 %     7.37 %     8.13 %     5.68 %     11.01 %
Net interest margin (FTE)
     3.82 %     3.87 %     3.76 %     3.83 %     3.77 %     3.82 %     3.73 %
Efficiency ratio (1)
     60.58 %     63.96 %     65.70 %     64.32 %     59.17 %     63.35 %     57.06 %
 
                                                        
Capitalization Ratios
                                                        
Dividends paid to net income
     119.47 %     97.60 %     67.75 %     67.94 %     61.50 %     91.74 %     45.96 %
Shareholders’ equity to assets (Period End)
     12.66 %     9.98 %     9.98 %     9.75 %     9.98 %     12.66 %     9.98 %
Tangible common equity to tangible assets
     10.28 %     7.49 %     7.47 %     7.25 %     7.87 %     10.28 %     7.87 %
 
                                                        
Regulatory Capital Ratios (Period End)
                                                        
Tier 1 leverage ratio
     11.51 %     8.86 %     8.89 %     8.94 %     9.29 %     11.51 %     9.29 %
Tier 1 risk-based capital ratio
     14.12 %     10.65 %     10.72 %     10.65 %     11.22 %     14.12 %     11.22 %
Risk-based capital ratio
     15.47 %     11.89 %     11.74 %     11.60 %     12.30 %     15.47 %     12.30 %
     
(1)   Total operating expenses to net interest income before loan loss provision plus non-interest income adjusted for tax equivalent income.