Financial Performance - Net income for Q1 2024 was $20.3 million, or $0.69 diluted earnings per share, a decrease from $21.0 million, or $0.71 per share in Q1 2023[1] - Noninterest income for Q1 2024 was $25.6 million, an increase of $5.9 million, or 30.1%, from the prior year[9] - For the three months ended March 31, 2024, net income was $20,305,000, an increase of 25.3% compared to $16,254,000 for the previous quarter[32] - The company reported net income of $20,305 thousand for the three months ended March 31, 2024, compared to $21,034 thousand in the same period of 2023, indicating a decrease of approximately 3.5%[48] Loans and Leases - Gross loans and leases increased by $339.3 million, or 5.4%, from March 31, 2023, primarily due to increases in commercial real estate and residential mortgage loans[3] - Net loans and leases held for investment increased to $6,493,454 thousand, up from $6,481,827 thousand, reflecting a growth of 0.18%[29] - Nonperforming loans and leases totaled $20,631 thousand, a decrease from $21,061 thousand, indicating a reduction of 2.05%[29] - The ratio of nonperforming loans and leases to loans and leases held for investment remained stable at 0.31%[29] - Total commercial loans outstanding reached $5,202,488 thousand, with industries having more than $50 million in outstandings accounting for 84.9% of the commercial loan portfolio[45] Deposits and Assets - Total deposits rose by $570.7 million, or 9.8%, from March 31, 2023, driven by increases in consumer, public funds, and brokered deposits[4] - Total deposits rose slightly to $6,405,358 thousand from $6,375,781 thousand, marking an increase of 0.46%[27] - Total assets decreased to $7,746,568 thousand as of March 31, 2024, from $7,780,628 thousand at December 31, 2023, representing a decline of 0.43%[27] - Total assets increased to $7,696,575 thousand as of March 31, 2024, compared to $7,219,211 thousand in the same period of 2023, reflecting a growth of approximately 6.6%[41] Interest Income and Expenses - Net interest income decreased by $7.9 million, or 13.2%, from Q1 2023, attributed to higher cost of funds and interest-bearing liabilities[7] - Net interest income for the three months ended March 31, 2024, was $51,750 thousand, compared to $53,017 thousand for the previous quarter[36] - The net interest margin decreased to 2.88% for Q1 2024 from 3.58% in Q1 2023, representing a decline of 70 basis points[41] - The gross loans and leases totaled $6,577,365 thousand, with a net interest spread of 1.94% for Q1 2024, down from 2.80% in Q1 2023[41] Credit Losses and Allowances - The provision for credit losses was $1.4 million for Q1 2024, compared to $3.4 million in Q1 2023[20] - The allowance for credit losses on loans and leases was $85,632 thousand, up from $85,387 thousand, showing an increase of 0.29%[29] - The allowance for credit losses on loans and leases was $86,495 thousand as of March 31, 2024, compared to $84,386 thousand in the previous quarter[36] Shareholder Returns - The Corporation declared a quarterly cash dividend of $0.21 per share, payable on May 22, 2024[21] - Dividends declared per share remained stable at $0.21, consistent with the previous quarter[32] - Return on average assets increased to 1.06%, up from 0.82% in the previous quarter, reflecting enhanced profitability[34] - Return on average shareholders' equity rose to 9.69%, compared to 7.91% in the previous quarter, showing improved returns for shareholders[34] Efficiency and Ratios - The efficiency ratio improved to 64.6%, compared to 68.3% in the previous quarter, indicating better cost management[34] - The average interest-earning assets to average interest-bearing liabilities ratio was 135.39% for Q1 2024, down from 153.72% in Q1 2023[41] - Tier 1 leverage ratio improved to 9.65%, compared to 9.36% in the previous quarter, indicating stronger capital position[34]

[PART I](index=3&type=section&id=PART%20I) [Business](index=4&type=section&id=Item%201.%20Business) Univest Financial Corporation is a bank holding company headquartered in Souderton, PA, with **$7.8 billion** in assets as of December 31, 2023, offering banking, wealth management, and insurance services across Pennsylvania, New Jersey, and Maryland Company Snapshot (as of December 31, 2023) | Metric | Value | | :--- | :--- | | Total Assets | $7.8 billion | | Net Loans and Leases | $6.5 billion | | Total Deposits | $6.4 billion | | Total Shareholders' Equity | $839.2 million | - The Corporation's primary market is Southeastern, Central, and Western Pennsylvania, with a high concentration of deposits and loans in Montgomery, Bucks, Lancaster, and Philadelphia counties[17](index=17&type=chunk) - As of December 31, 2023, the company employed **979 individuals**, with approximately **94%** being full-time, and an annual turnover rate of **19.6%**, which is below the industry average of **23.5%**[23](index=23&type=chunk)[27](index=27&type=chunk) - The Corporation and its subsidiaries are primarily regulated by the Pennsylvania Department of Banking and Securities, the Federal Reserve Bank of Philadelphia, the FDIC, and the SEC[15](index=15&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Human Capital Resources](index=5&type=section&id=Human%20Capital%20Resources) The company significantly invests in employee development, diversity initiatives, and community engagement, fostering a supportive work environment - In 2023, the company invested over **$736,000** in employee training and development, providing approximately **28,000 training hours**[25](index=25&type=chunk) - The company emphasizes Diversity, Equity, and Inclusion (DEI) through a dedicated committee, a DEI Manager, and mandatory training for all employees, including an Inclusive Leadership Workshop for supervisors[32](index=32&type=chunk)[33](index=33&type=chunk) - In 2023, employees volunteered **13,117 hours**, and the Corporation contributed **$2.4 million** to non-profit organizations[36](index=36&type=chunk) [Supervision and Regulation](index=7&type=section&id=Supervision%20and%20Regulation) The Corporation and its bank subsidiary are subject to extensive federal and state regulations, including capital rules and deposit insurance assessments - The Bank received a "satisfactory" Community Reinvestment Act (CRA) rating in its most recent federal examination, with new CRA regulations becoming applicable on January 1, 2026[41](index=41&type=chunk)[42](index=42&type=chunk) - The Corporation and the Bank are subject to Basel III capital rules, requiring specific minimum ratios for Common Equity Tier 1, Tier 1, and Total Capital to risk-weighted assets, along with a **2.5%** capital conservation buffer[45](index=45&type=chunk) - The FDIC increased deposit insurance assessment rates by **two basis points** starting in Q1 2023 and issued a special assessment to recover losses from recent bank failures[49](index=49&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The Corporation faces significant risks from interest rate fluctuations, concentrated commercial lending, operational vulnerabilities, and regional economic downturns - Profitability is highly dependent on net interest income, which can be adversely affected by changes in interest rates and an inverted yield curve[72](index=72&type=chunk)[73](index=73&type=chunk) - Lending activities are a primary source of risk, with approximately **79.2%** of the loan portfolio consisting of commercial, financial, agricultural, commercial real estate, and construction loans, which carry a higher risk of default than residential loans[76](index=76&type=chunk) - The Corporation's geographic concentration in Pennsylvania and New Jersey makes it vulnerable to local economic downturns, which could lead to higher loan losses and nonperforming assets[104](index=104&type=chunk)[105](index=105&type=chunk) - Operational risks include potential failures or security breaches of IT systems, reliance on third-party providers, and the challenge of keeping pace with technological changes[94](index=94&type=chunk)[97](index=97&type=chunk) [Cybersecurity Risk Management, Strategy and Governance](index=23&type=section&id=Item%201C.%20Cybersecurity%20Risk%20Management%2C%20Strategy%20and%20Governance) The Corporation manages cybersecurity risk through a NIST-based framework, overseen by the Board's Enterprise-Wide Risk Management Committee and led by a CISO - The cybersecurity program is designed around the National Institute of Standards and Technology (NIST) Cybersecurity Framework and is managed by the Chief Information Security Officer (CISO)[132](index=132&type=chunk)[133](index=133&type=chunk) - Oversight is provided by the Enterprise-Wide Risk Management Committee, which includes independent board members and receives quarterly cybersecurity updates from the CISO[133](index=133&type=chunk)[134](index=134&type=chunk) - Key components of the program include annual risk assessments, regular employee training with simulated phishing attacks, independent third-party penetration testing, and a structured Incident Response Plan (IRP)[136](index=136&type=chunk)[139](index=139&type=chunk)[141](index=141&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) As of December 31, 2023, the Corporation occupied **54 properties**, primarily banking offices, across its operating regions - The Corporation occupied **54 properties** as of year-end 2023, which include full-service branches, corporate headquarters, and subsidiary offices for its various business segments[148](index=148&type=chunk)[149](index=149&type=chunk) [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The Corporation is involved in various legal actions, but management anticipates no material adverse effect on its financial condition or operations - Management does not expect any pending or threatened legal actions to have a material adverse effect on the Corporation's financial position, results of operations, or cash flows[152](index=152&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Corporation [PART II](index=26&type=section&id=PART%20II) [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Univest Financial Corporation's common stock trades on NASDAQ under "UVSP", and the company repurchased shares in Q4 2023 under its approved program - The Corporation's common stock is traded on the NASDAQ Global Select Market under the symbol "UVSP"[156](index=156&type=chunk) Issuer Purchases of Equity Securities (Q4 2023) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | October 2023 | — | $ — | | November 2023 | 26,485 | $17.43 | | December 2023 | — | $ — | | **Total** | **26,485** | **$17.43** | - As of the end of Q4 2023, **1,202,689 shares** remained available for repurchase under the company's publicly announced plan[161](index=161&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For 2023, net income decreased to **$71.1 million**, impacted by restructuring charges, while total assets grew to **$7.8 billion** driven by loan and deposit increases Key Performance Indicators (2023 vs. 2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Income | $71.1 M | $78.1 M | | Diluted EPS | $2.41 | $2.64 | | Net Interest Income | $220.0 M | $218.3 M | | Net Interest Margin (Tax-Equivalent) | 3.12% | 3.38% | | Provision for Credit Losses | $10.8 M | $12.2 M | | Return on Average Assets | 0.94% | 1.12% | | Return on Average Equity | 8.83% | 10.13% | - The decrease in net income for 2023 was influenced by **$1.5 million** in restructuring charges related to financial service center optimization and expense management strategies[183](index=183&type=chunk) - Total assets grew by **$558.6 million (7.7%)** to **$7.8 billion** at year-end 2023, primarily driven by a **$444.0 million (7.3%)** increase in gross loans and leases[216](index=216&type=chunk)[222](index=222&type=chunk) - Total deposits increased by **$462.3 million (7.8%)**, but the composition shifted, with noninterest-bearing deposits decreasing from **34.6%** to **23.0%** of total deposits from 2022 to 2023[242](index=242&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Net interest income slightly increased in 2023, while noninterest income decreased and noninterest expense rose due to higher salaries and deposit insurance premiums - Net interest income increased by **$1.7 million (0.8%)** in 2023, as a **$118.8 million** increase in interest income was largely offset by a **$117.8 million** increase in interest expense due to the rising rate environment[187](index=187&type=chunk) - The provision for credit losses was **$10.8 million** in 2023, down from **$12.2 million** in 2022, while net charge-offs increased to **$5.4 million** from **$3.9 million**[196](index=196&type=chunk) - Noninterest income decreased by **$1.1 million (1.4%)** to **$76.8 million**, driven by lower mortgage banking income and a prior-year revenue adjustment, partially offset by a **$2.0 million** increase in insurance commissions[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - Noninterest expense rose by **$10.6 million (5.7%)** to **$197.4 million**, primarily due to higher salaries and benefits, a **56.9%** increase in deposit insurance premiums, and **$1.3 million** in restructuring charges[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) [Financial Condition](index=39&type=section&id=Financial%20Condition) Total assets and deposits grew in 2023, while nonaccrual loans increased and shareholders' equity improved due to net income Balance Sheet Highlights (December 31, 2023 vs. 2022) | (in thousands) | 2023 | 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $7,780,628 | $7,222,016 | $558,612 | 7.7% | | Net Loans & Leases | $6,481,827 | $6,044,226 | $437,601 | 7.2% | | Total Deposits | $6,375,781 | $5,913,526 | $462,255 | 7.8% | | Total Borrowings | $465,067 | $440,401 | $24,666 | 5.6% | | Shareholders' Equity | $839,208 | $776,500 | $62,708 | 8.1% | - Nonaccrual loans and leases increased to **$20.5 million** at year-end 2023 from **$13.4 million** at year-end 2022, primarily due to a **$6.1 million** construction loan relationship being placed on nonaccrual status[227](index=227&type=chunk) - Shareholders' equity increased by **$62.7 million**, driven by **$71.1 million** in net income, partially offset by **$24.7 million** in cash dividends, with accumulated other comprehensive loss improving by **$11.5 million**[250](index=250&type=chunk) [Asset/Liability Management](index=47&type=section&id=Asset%2FLiability%20Management) The Corporation manages interest rate risk using gap analysis and earnings at risk simulation, maintaining substantial liquidity through committed borrowing capacity - The Corporation uses gap analysis and earnings at risk simulation modeling to manage interest rate risk, indicating a liability-sensitive position over the next twelve months, with more liabilities repricing than assets[258](index=258&type=chunk)[261](index=261&type=chunk) Earnings at Risk Simulation (Estimated Change in NII over 12 Months) | Rate Shock | Amount (in thousands) | Percent | | :--- | :--- | :--- | | +300 bps | $(2,680) | (1.25%) | | +200 bps | $(2,769) | (1.29%) | | +100 bps | $(197) | (0.09%) | | -100 bps | $(1,802) | (0.84%) | | -200 bps | $(5,195) | (2.43%) | | -300 bps | $(11,389) | (5.32%) | - At December 31, 2023, the Corporation had total committed borrowing capacity of **$3.4 billion** from the FHLB and Federal Reserve, of which **$1.9 billion** was available, providing ample liquidity[274](index=274&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Corporation's primary market risk is interest rate risk, managed by the Investment Asset/Liability Management Committee, with detailed disclosures in Item 7 - The primary market risk for the Corporation is interest rate risk, which is managed by the Investment Asset/Liability Management Committee under policies established by the Board of Directors[280](index=280&type=chunk)[281](index=281&type=chunk) - Detailed quantitative and qualitative disclosures about market risk, including liquidity and interest rate sensitivity analysis, are located in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" (Item 7)[282](index=282&type=chunk) [Financial Statements and Supplementary Data](index=52&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Univest Financial Corporation for the three-year period ended December 31, 2023, including the independent auditor's report [Consolidated Balance Sheets](index=55&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets provide a snapshot of the Corporation's financial position, detailing assets, liabilities, and equity as of December 31, 2023 and 2022 Consolidated Balance Sheet Data (as of Dec 31) | (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $249,799 | $152,799 | | Net loans and leases | $6,481,827 | $6,044,226 | | Total assets | $7,780,628 | $7,222,016 | | **Liabilities & Equity** | | | | Total deposits | $6,375,781 | $5,913,526 | | Total liabilities | $6,941,420 | $6,445,516 | | Total shareholders' equity | $839,208 | $776,500 | [Consolidated Statements of Income](index=56&type=section&id=Consolidated%20Statements%20of%20Income) The Consolidated Statements of Income present the Corporation's financial performance, including net interest income, noninterest income, expenses, and net income for the past three fiscal years Consolidated Income Statement Data (for the year ended Dec 31) | (in thousands, except per share) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net interest income | $219,997 | $218,297 | $188,383 | | Provision for credit losses | $10,770 | $12,198 | $(10,132) | | Noninterest income | $76,824 | $77,885 | $83,224 | | Noninterest expense | $197,362 | $186,774 | $167,409 | | **Net income** | **$71,104** | **$78,120** | **$91,801** | | **Diluted EPS** | **$2.41** | **$2.64** | **$3.11** | [Notes to Consolidated Financial Statements](index=61&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and breakdowns of significant accounts and policies, including loans, asset quality, deposits, and regulatory capital matters - **Note 5: Loans and Leases** - Total loans and leases held for investment grew to **$6.57 billion** in 2023 from **$6.12 billion** in 2022, with Real estate-commercial (**$3.30 billion**) and Commercial, financial and agricultural (**$0.99 billion**) as the largest categories[397](index=397&type=chunk) - **Note 5: Asset Quality** - Nonperforming loans and leases increased to **$21.1 million** at year-end 2023 from **$14.2 million** in 2022, with the allowance for credit losses on loans and leases standing at **1.30%** of total loans held for investment[231](index=231&type=chunk)[400](index=400&type=chunk) - **Note 9: Deposits** - Total deposits were **$6.38 billion** at year-end 2023, with time deposits significantly increasing to **$1.15 billion** from **$519 million** in 2022, while noninterest-bearing deposits decreased to **$1.47 billion** from **$2.05 billion**[437](index=437&type=chunk) - **Note 21: Regulatory Matters** - Both the Corporation and the Bank were categorized as "well capitalized" under regulatory standards as of December 31, 2023, with the Corporation's Total Capital to Risk-Weighted Assets ratio at **13.90%**[529](index=529&type=chunk)[530](index=530&type=chunk) [Controls and Procedures](index=117&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the Corporation's disclosure controls and internal control over financial reporting were effective as of December 31, 2023, a conclusion affirmed by the independent auditor - Management, including the CEO and CFO, concluded that the Corporation's disclosure controls and procedures were effective as of December 31, 2023[559](index=559&type=chunk) - Based on an assessment using the 2013 COSO framework, management concluded that the Corporation's internal control over financial reporting was effective as of December 31, 2023[562](index=562&type=chunk) - The independent registered public accounting firm, KPMG LLP, provided an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2023[567](index=567&type=chunk)[568](index=568&type=chunk) [Other Information](index=119&type=section&id=Item%209B.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the fourth quarter of 2023 - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan during the three months ended December 31, 2023[574](index=574&type=chunk) [PART III](index=118&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=119&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the Corporation's definitive proxy statement for its annual shareholder meeting on April 25, 2024 - Required information is incorporated by reference from the proxy statement for the annual meeting of shareholders on April 25, 2024[576](index=576&type=chunk) [Executive Compensation](index=119&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the Corporation's definitive proxy statement for its annual shareholder meeting on April 25, 2024 - Required information is incorporated by reference from the 2024 Proxy statement[577](index=577&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=119&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the 2024 Proxy statement, detailing securities available for future issuance under equity compensation plans Equity Compensation Plan Information (as of Dec 31, 2023) | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by security holders | 269,914 | $26.14 | 1,195,500 | [Certain Relationships and Related Transactions, and Director Independence](index=120&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item is incorporated by reference from the Corporation's definitive proxy statement for its annual shareholder meeting on April 25, 2024 - Required information is incorporated by reference from the 2024 Proxy statement[579](index=579&type=chunk) [Principal Accounting Fees and Services](index=120&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information for this item is incorporated by reference from the Corporation's definitive proxy statement for its annual shareholder meeting on April 25, 2024 - Required information is incorporated by reference from the 2024 Proxy statement[579](index=579&type=chunk) [PART IV](index=119&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=120&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed as part of the annual report, including articles of incorporation, bylaws, and certifications - This section contains the index to financial statements and a list of all exhibits filed as part of the Form 10-K[581](index=581&type=chunk)[586](index=586&type=chunk) [Form 10-K Summary](index=123&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the Corporation - No summary is provided under this item[588](index=588&type=chunk)

Financial Data and Key Metrics Changes - The company reported net income of $16.3 million for Q4 2023, equating to $0.55 per share, with a slight decline in net interest margin (NIM) to 2.84%, down 12 basis points from 2.96% in Q3 2023 [72][73] - Non-interest income decreased by $1.8 million, or 9%, compared to Q4 2022, primarily due to declines in wealth management revenue and BOLI income [74] - Non-interest expense increased by $1.7 million, or 3.6%, compared to Q4 2022, driven by higher FDIC expenses [4] Business Line Data and Key Metrics Changes - Loans contracted by $7.7 million in Q4 but grew by $444 million, or 7.3%, during 2023 [32] - Non-interest-bearing deposits represented 23% of total deposits, up from 22.2% at the end of Q3 [9] - The company expects non-interest income growth of approximately 4% to 6% in 2024, off a base of $76.8 million [10] Market Data and Key Metrics Changes - The company experienced a decrease in brokered CDs by $57.5 million during Q4, contributing to a total deposit contraction of $63.4 million [68] - Public funds decreased by $165 million in Q4, with expectations for continued decline into Q2 2024 before rebuilding [24][25] Company Strategy and Development Direction - The company aims to focus on full relationship customers and expects to opportunistically repurchase shares in 2024 [2][33] - The management anticipates loan growth of approximately 4% to 5% for 2024, with net interest income expected to be flat to down 3% [69] - The company is preparing for a competitive market environment, emphasizing the importance of customer behavior and expectations [12][96] Management's Comments on Operating Environment and Future Outlook - Management noted that while 2023 was challenging, they made significant progress and are optimistic about 2024, expecting some favorable conditions in the second half of the year [91] - The company is closely monitoring credit performance and economic forecasts, with a provision for credit losses expected to be approximately $11 million to $13 million for 2024 [10][69] Other Important Information - The company recorded a provision for credit losses of $1.9 million in Q4, with a coverage ratio of 1.3% [9] - The effective tax rate for 2024 is expected to be approximately 20% to 20.5% [10] Q&A Session Summary Question: What is the impact of potential rate cuts on net interest income? - Management indicated that initial rate cuts would have minimal impact due to the nature of variable rate loans and deposits, with a significant portion of the loan book repricing immediately [35][77] Question: What are the expectations for fee income growth? - Management expects growth in insurance and wealth businesses, with a focus on saleable production in mortgage banking to generate more gain on sale income [43][44] Question: How is the company managing deposit dynamics? - Management noted a slight increase in non-interest-bearing deposits and expects to match loan growth with deposit growth moving forward [68][108] Question: What is the outlook for credit trends in 2024? - Management stated that there are no significant changes expected in credit performance, with a focus on event-driven assessments quarter by quarter [111]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2023 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ Commission File Number: 0-7617 UNIVEST FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdic ...

Financial Performance - Consolidated net income for the three months ended June 30, 2023, was $16,800,000, a 27.6% increase from $13,166,000 in the same period of 2022[158]. - Net interest income on a tax-equivalent basis for the three months ended June 30, 2023, was $54,600,000, reflecting a 5.1% increase from $52,000,000 for the same period in 2022[160]. - The Corporation's earnings per share for the three months ended June 30, 2023, was $0.57, a 26.7% increase from $0.45 in the same period of 2022[158]. - Noninterest income for the three months ended June 30, 2023 was $19.8 million, an increase of $835 thousand, or 4.4%, from the same period in 2022[174]. - Noninterest expense for the three months ended June 30, 2023 was $49.8 million, an increase of $2.4 million, or 5.1%, from the same period in 2022[180]. Interest Income and Margin - The net interest margin on a tax-equivalent basis was 3.14% for the three months ended June 30, 2023, compared to 3.19% for the same period in 2022[162]. - The increase in net interest income for the three months ended June 30, 2023, was primarily due to an increase in average loan balances and asset yields[160]. - Net interest income for Q2 2023 was $54,632 thousand, compared to $51,968 thousand in Q2 2022, reflecting a year-over-year growth of 5.08%[164]. - The net interest margin for Q2 2023 was 3.14%, slightly down from 3.19% in Q2 2022[164]. - The average rate on interest-bearing checking deposits increased to 2.14% in Q2 2023 from 0.27% in Q2 2022[164]. Asset and Liability Management - Total interest-earning assets increased to $6,982,017 thousand in Q2 2023, up from $6,536,802 thousand in Q2 2022, representing an increase of 6.78%[164]. - Total liabilities increased to $6,634,089 thousand in Q2 2023, compared to $6,190,991 thousand in Q2 2022, marking an increase of 7.15%[164]. - Total assets increased to $7,330,616 thousand in June 2023, up from $7,004,954 thousand in June 2022, representing a growth of approximately 4.64%[167]. - The ratio of average interest-earning assets to average interest-bearing liabilities decreased to 142.77% in Q2 2023 from 163.77% in Q2 2022[164]. - Total interest-bearing liabilities amounted to $4,890,259 thousand in Q2 2023, with a net interest expense of $35,809 thousand, resulting in an average rate of 2.94%[164]. Credit Quality and Provisions - Provision for credit losses for the six months ended June 30, 2023, was $6.8 million, up from $3.2 million in the same period of 2022, indicating a significant increase in credit loss provisions[171]. - The allowance for credit losses on loans and leases was $82.7 million, representing 1.28% of loans and leases held for investment[172]. - Net loan and lease charge-offs for the six months ended June 30, 2023, were $3.4 million, compared to $1.8 million for the same period in the prior year[195]. - Nonaccrual loans and leases increased to $15.1 million from $13.4 million at December 31, 2022, with a related allowance for credit losses of $373 thousand[194]. Segment Performance - The Banking segment reported pre-tax income of $20.6 million for Q2 2023, up from $15.8 million in Q2 2022, and $45.3 million for the first half of 2023, compared to $38.6 million in the same period of 2022[208]. - The Wealth Management segment's noninterest income decreased to $6.7 million in Q2 2023 from $6.9 million in Q2 2022, and for the first half, it fell to $13.4 million from $14.2 million, attributed to reduced assets under management of $4.5 billion as of June 30, 2023, down from $4.6 billion a year earlier[209]. - The Insurance segment reported noninterest income of $5.2 million for Q2 2023, an increase from $4.8 million in Q2 2022, and $11.9 million for the first half of 2023, compared to $10.6 million in the same period of 2022, driven by increased premiums for commercial lines[210]. Capital and Liquidity - The Corporation aims to achieve adequate and reliable earnings through business growth while maintaining adequate levels of capital and liquidity[157]. - The Corporation's total capital to risk-weighted assets ratio was 13.54% as of June 30, 2023, exceeding the required minimum of 8.00%[214]. - The Tier 1 capital to risk-weighted assets ratio for the Corporation was 10.26% as of June 30, 2023, above the required minimum of 6.00%[214]. - Cash and cash equivalents were $140.4 million at June 30, 2023, with additional securities classified as available-for-sale totaling $356.2 million[222]. - The Corporation had committed borrowing capacity of $3.2 billion from the Federal Home Loan Bank and Federal Reserve Bank as of June 30, 2023, with $2.0 billion available[222]. Operational Expenses - Salaries, benefits, and commissions increased $742 thousand, or 2.5%, for the three months ended June 30, 2023, reflecting expansion into new markets[181]. - Data processing expenses increased $429 thousand, or 11.6%, for the three months ended June 30, 2023, primarily due to investments in technology[182]. - Insurance commission and fee income increased $479 thousand, or 10.3%, for the three months ended June 30, 2023, driven by higher premiums[175]. - Other income increased $481 thousand, or 64.9%, for the three months ended June 30, 2023, primarily due to OREO income[176].

Univest Financial Corporation (NASDAQ:UVSP) Q2 2023 Earnings Conference Call July 27, 2023 9:00 AM ET Corporate Participants Jeff Schweitzer - President and Chief Executive Officer Mike Keim - Chief Operating Officer and President, Univest Bank & Trust Brian Richardson - Chief Financial Officer Conference Call Participants Frank Schiraldi - Piper Sandler Michael Perito - KBW Operator Ladies and gentlemen, thank you for standing by, and welcome to the Univest Financial Corporation Second Quarter 2023 Earning ...

Financial Performance - The Corporation's net income for the three months ended March 31, 2023, was $21,034,000, representing a 3.5% increase from $20,317,000 in the same period of 2022[147]. - Basic earnings per share increased to $0.72, up 4.3% from $0.69 in the prior year, while diluted earnings per share rose to $0.71, a 4.4% increase from $0.68[147]. - The Corporation's return on average assets was 1.18% for Q1 2023, slightly up from 1.17% in Q1 2022, while return on average equity increased to 10.81% from 10.64%[147]. - Noninterest income decreased to $19.68 million in Q1 2023, down by $790 thousand or 3.9% from $20.47 million in Q1 2022[161]. - Total noninterest expense increased by $4.1 million, or 9.1%, to $49.5 million for the three months ended March 31, 2023[165]. Net Interest Income and Margin - Net interest income on a tax-equivalent basis for Q1 2023 was $59.7 million, a 26.5% increase from $47.2 million in Q1 2022, driven by loan balance growth and higher asset yields[149]. - The tax-equivalent net interest margin improved to 3.58% in Q1 2023, compared to 2.89% in Q1 2022, with excess liquidity having no impact on the margin for the current period[150]. - Net interest income for the three months ended March 31, 2023, was $59.68 million, up from $47.17 million in the same period of 2022, representing a year-over-year increase of 26.5%[156]. - The net interest margin improved to 3.58% in Q1 2023, compared to 2.89% in Q1 2022, reflecting better asset yield management[152]. - Total interest-earning assets amounted to $6.76 billion in Q1 2023, with a net interest spread of 2.80%, up from 2.71% in the previous year[152]. Credit Losses and Provisions - The provision for credit losses was $3.4 million for Q1 2023, compared to a reversal of $3.5 million in Q1 2022, indicating a shift towards increased credit loss provisions[158]. - The allowance for credit losses as a percentage of loans and leases held for investment was 1.28% as of March 31, 2023, slightly down from 1.29% at the end of 2022[158]. - Net loan and lease charge-offs for the three months ended March 31, 2023, were $2.8 million compared to $76 thousand for the same period in the prior year[178]. Assets and Liabilities - Total assets increased to $7.22 billion as of March 31, 2023, compared to $7.05 billion in the previous year, reflecting a growth of approximately 2.5%[152]. - Total liabilities increased to $6.43 billion as of March 31, 2023, compared to $6.27 billion in the previous year, marking a growth of approximately 2.6%[152]. - Total deposits decreased by $78.9 million, or 1.3%, from December 31, 2022, primarily due to decreases in commercial and consumer deposits[188]. - Total borrowings increased by $199.9 million, or 45.4%, from December 31, 2022, driven by increases in short-term FHLB overnight borrowings and federal funds purchased[189]. Business Strategy and Risks - The Corporation aims to achieve reliable earnings through business growth while maintaining adequate capital and liquidity levels[146]. - The Corporation is exposed to various risks, including economic conditions, regulatory changes, and competition for loans and deposits[140]. - The management has identified critical accounting policies that could materially affect financial results, particularly regarding fair value measurement and credit loss allowances[143]. - The Corporation's business strategy includes expanding its market presence and enhancing its service offerings through subsidiaries[145]. Segment Performance - The Banking segment reported pre-tax income of $25.7 million for the three months ended March 31, 2023, compared to $22.8 million for the same period in 2022[194]. - The Wealth Management segment's pre-tax income decreased to $825 thousand for the three months ended March 31, 2023, down from $2.4 million in 2022, attributed to reduced assets under management[195]. - The Insurance segment reported pre-tax income of $2.7 million for the three months ended March 31, 2023, an increase from $1.7 million in 2022, driven by higher premiums[196]. Capital and Liquidity - The Corporation's total capital to risk-weighted assets ratio was 13.78% as of March 31, 2023, exceeding the required minimum of 8.00%[200]. - The Corporation and the Bank were in compliance with all capital adequacy requirements as of March 31, 2023, with the Bank categorized as "well capitalized"[200]. - The Corporation's cash and cash equivalents were $138.3 million as of March 31, 2023[208]. - Securities classified as available-for-sale totaled $367.7 million at March 31, 2023, providing additional liquidity sources[208]. - The Corporation had committed borrowing capacity of $3.1 billion from the Federal Home Loan Bank and Federal Reserve Bank, with $1.9 billion available as of March 31, 2023[208]. Funding Sources - Core deposits remain the largest funding source, generated from individuals, businesses, municipalities, and non-profits in primary service areas[209]. - The Corporation utilizes a mix of short-term and long-term wholesale funding, including federal funds purchases and secured borrowing lines[210]. - The most significant cash requirements are for repaying certificates of deposit and long-term borrowings[211]. - Commitments to extend credit are the Corporation's most significant commitment, often expiring without being drawn upon[212]. - No material changes in the Corporation's market risk occurred during the period ended March 31, 2023[213].

Univest Financial Corporation (NASDAQ:UVSP) Q1 2023 Earnings Conference Call April 29, 2023 9:00 AM ET Company Participants Jeff Schweitzer - President & CEO Mike Keim - COO & President, Univest Bank & Trust Brian Richardson - CFO Conference Call Participants Frank Schiraldi - ABC Matthew Breese - Stephens Jeff Schweitzer Good morning, and thank you to all of our listeners for joining us today. Joining me on the call this morning is Mike Keim, our Chief Operating Officer and President of Univest Bank and Tr ...

Financial Performance - Interest income for 2022 was $252,193,000, an increase from $209,731,000 in 2021, representing a growth of approximately 20.2%[144] - Net interest income after provision for credit losses for 2022 was $206,099,000, compared to $198,515,000 in 2021, reflecting an increase of about 3.0%[144] - Noninterest income decreased to $77,885,000 in 2022 from $83,224,000 in 2021, a decline of approximately 6.0%[144] - The net income for 2022 was $78,120,000, a decrease from $91,801,000 in 2021, representing a decline of approximately 14.9%[144] - Diluted earnings per share for 2022 were $2.64, down from $3.11 in 2021, reflecting a decline of 14.7%[147] - Total comprehensive income for 2022 was $39,298,000, down from $121,661,000 in 2021, reflecting a decrease of 67.7%[263] Credit Losses and Provisions - The provision for credit losses in 2022 was $12,198,000, a reversal from a provision of $(10,132,000) in 2021, indicating a significant change in credit loss expectations[144] - The allowance for credit losses on loans and leases was $79.0 million as of December 31, 2022, representing 1.29% of loans and leases held for investment[163] - The company experienced a net loan and lease charge-off of $3.9 million for the year ended December 31, 2022, an increase from $213 thousand in 2021[162] - Total net charge-offs for 2022 were $3.9 million, representing 0.07% of average loans, compared to $213,000 in 2021[202] Assets and Liabilities - Total assets at year-end 2022 were $7,222,016,000, slightly up from $7,122,421,000 in 2021, marking an increase of about 1.4%[144] - Total assets increased to $7,222.0 million as of December 31, 2022, compared to $7,122.4 million in 2021, marking a growth of approximately 1.4%[259] - Total deposits decreased to $5,913.5 million in 2022 from $6,055.1 million in 2021, a decline of about 2.3%[259] - Total borrowings increased by $226.4 million from December 31, 2021, driven by a $125.0 million increase in short-term FHLB overnight borrowings[210] Operational Efficiency - The efficiency ratio for 2022 was 62.4%, compared to 60.9% in 2021, indicating a decrease in operational efficiency[144] - The return on average assets for 2022 was 1.12%, down from 1.38% in 2021, reflecting a decline in profitability[144] - The Corporation's Tier 1 risk-based capital ratio was 10.37% as of December 31, 2022, down from 11.08% in 2021, while the total risk-based capital ratio decreased to 13.67% from 13.77%[220] Noninterest Expenses - Noninterest expense for the year ended December 31, 2022 was $186.8 million, an increase of $19.4 million, or 11.6%, compared to 2021[174] - Salaries, benefits, and commissions increased by $11.6 million, or 11.1%, reflecting expansion efforts and annual merit increases[174] - Other expenses increased by $2.6 million, or 11.3%, driven by higher travel and entertainment expenses[177] Digital Transformation and Investments - The development of a comprehensive digital platform incurred expenses of $3.8 million, or $0.10 diluted earnings per share, in 2022[148] - Data processing expense rose by $2.5 million, or 19.4%, due to investments in technology and support for a digital transformation initiative[175] - Professional fees increased by $1.6 million, or 21.4%, primarily for consulting fees related to the digital transformation initiative[176] Market and Economic Conditions - The Corporation anticipates a greater amount of liabilities repricing than assets in the next twelve months, indicating potential interest rate risk[226] - A simulation indicated that a +200 basis points rate shock could increase net interest income by $7.93 million (3.16%) over the next 12 months[230] - The Corporation's loan portfolio is managed with strict adherence to underwriting standards, focusing on borrower capacity and collateral sufficiency[231] Shareholder Equity and Dividends - Shareholders' equity increased by $2.7 million to $776.5 million, primarily due to an increase in retained earnings of $53.5 million[214] - Cash dividends declared increased to $0.83 per share in 2022 from $0.80 per share in 2021, totaling $24.40 million[269] Asset Quality - Nonaccrual loans and leases decreased to $13.4 million in 2022 from $33.3 million in 2021, indicating improved asset quality[195] - The ratio of allowance for credit losses to nonaccrual loans and leases was 591.66%, indicating strong coverage for potential losses[199] Revenue Recognition and Accounting Policies - The Corporation's revenue consists of net interest income and noninterest income, recognized when obligations under contracts with customers are satisfied[328] - The Corporation recognizes all derivative financial instruments at fair value, with changes in fair value recorded in income or other comprehensive income depending on the nature of the hedge[317][318]

Univest Financial Corporation (NASDAQ:UVSP) Q4 2022 Earnings Conference Call January 26, 2023 9:00 AM ET Company Participants Jeff Schweitzer - President and CEO Mike Keim - COO and President, Univest Bank & Trust Brian Richardson - CFO Conference Call Participants Tim Switzer - KBW Operator Hello, everybody, and welcome to Univest Financial Corporation to hold Fourth Quarter 2022 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Jeff Schweitzer, President and CEO. Pleas ...