Univest(US:UVSP)2023-08-01 16:51Financial 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].