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Univest Corporation of Pennsylvania -- Univest Bank and Trust Co. - Reports Second Quarter Earnings

SOUDERTON, Pa., July 22, 2015 (GLOBE NEWSWIRE) -- Univest Corporation of Pennsylvania ("Univest" or "Corporation") (NASDAQ:UVSP), parent company of Univest Bank and Trust Co. ("Bank") and its insurance, investments and equipment financing subsidiaries, today announced financial results for the quarter ended June 30, 2015. Univest reported net income of $6.5 million or $0.33 diluted earnings per share for the quarter ended June 30, 2015, a 27% increase from reported net income of $5.1 million or $0.31 diluted earnings per share for the quarter ended June 30, 2014. Net income for the six months ended June 30, 2015 was $12.6 million or $0.63 diluted earnings per share, a 16% increase in net income compared to $10.8 million or $0.66 diluted earnings per share for the comparable period in the prior year. The quarter and year-to-date financial results include the Valley Green Bank acquisition which Univest completed on January 1, 2015 and now operates as Valley Green Bank, a Division of the Bank ("Valley Green Bank.") The results for the quarter included $1.6 million of restructuring charges related to the previously announced consolidation of six financial centers in the third quarter of 2015 under the Bank's optimization plan or $0.05 diluted earnings per share on a tax affected basis. The results for the quarter and six months ended June 30, 2015 also included $151 thousand and $2.0 million, respectively, of integration and acquisition-related costs associated with Valley Green Bank or $0.07 diluted earnings per share on a year-to-date tax affected basis. Excluding these costs, net income for the three and six months ended June 30, 2015, would have been $7.6 million and $15.0 million or $0.38 and $0.75 diluted earnings per share, respectively.

Loans

Gross loans and leases increased $481.2 million from December 31, 2014 and $520.9 million from June 30, 2014, including $381.1 million of loans acquired from Valley Green Bank. Organic loan growth was 6% (12% annualized) from December 31, 2014 and 9% from June 30, 2014. The growth in loans from December 31, 2014 and June 30, 2014 was primarily in commercial business loans, commercial real estate loans and residential real estate loans as economic conditions continued to improve.

Deposits

Total deposits increased $401.7 million from December 31, 2014 and $430.8 million from June 30, 2014, primarily due to $385.9 million of deposits acquired from Valley Green Bank.

Borrowings

Borrowings at June 30, 2015, included $50 million in aggregate principal amount fixed-to-floating rate subordinated notes issued in a private placement transaction to institutional accredited investors completed on March 30, 2015. The subordinated notes have a five-year fixed rate of 5.10% and thereafter a rate of three-month LIBOR plus 3.544% until the maturity date of March 30, 2025, or any early redemption date.

Net Interest Income and Margin

Net interest income increased $5.6 million to $23.4 million for the second quarter of 2015 from the same period in 2014. Net interest income increased $11.0 million for the six months ended June 30, 2015 from the same period in the prior year. The net interest margin on a tax-equivalent basis for the second quarter of 2015 was 4.03%, compared to 4.12% for the first quarter of 2015 and 3.86% for the second quarter of 2014. The increases in net interest income and net interest margin during 2015 were mainly due to the impact of the Valley Green Bank acquisition, which included the average net interest-earning assets acquired and the net accretion of acquisition accounting fair value adjustments (the impact of the acquisition accounting adjustments was 14 basis points for the second quarter of 2015 and 11 basis points for the six months ended June 30, 2015). The subordinated debt issuance increased funding costs by 15 basis points in the second quarter of 2015 and 8 basis points for the six months ended June 30, 2015.

Non-Interest Income

Non-interest income for the quarter ended June 30, 2015 was $13.4 million, an increase of $1.4 million or 12% from the second quarter of 2014. Non-interest income for the six months ended June 30, 2015 was $26.8 million, an increase of $2.7 million or 11% from the comparable period in the prior year. Insurance commission and fee income increased $1.0 million for the quarter and $1.8 million for the six months ended June 30, 2015, primarily due to the acquisition of Sterner Insurance on July 1, 2014. The net gain on mortgage banking activities increased $848 thousand for the quarter and $1.8 million for the six months ended June 30, 2015, mainly due to an increase in purchase volume. Funded first mortgage volume for the quarter increased $30.3 million or 115%, and $60.4 million or 138% for the six months ended June 30, 2015, compared to the same periods in 2014. These favorable increases were partially offset by a decline in investment advisory commission and fee income of $269 thousand for the quarter and $555 thousand for the six months ended June 30, 2015. The decline in investment advisory commission and fee income was related to the fourth quarter of 2014 divestiture of approximately $375 million in marginally profitable assets under the supervision of independent consultants.

Non-Interest Expense

Non-interest expense for the quarter ended June 30, 2015 was $26.8 million, an increase of $5.0 million or 23% compared to the second quarter of 2014. Non-interest expense for the six months ended June 30, 2015 was $54.2 million, an increase of $11.6 million or 27% from the comparable period in the prior year. Non-interest expense was impacted by the Valley Green Bank acquisition which included integration and acquisition-related costs totaling $151 thousand for the quarter and $2.0 million for the six months ended June 30, 2015. Salaries and benefit expense increased $1.7 million for the quarter and $4.4 million for the six months ended June 30, 2015, primarily attributable to the Valley Green Bank and Sterner Insurance acquisitions and increased pension plan expense. This increase was partially offset by higher deferred loan origination costs. Commission expense increased $360 thousand for the quarter and $584 thousand for the six months ended June 30, 2015, mostly due to the increase in mortgage banking volume and the Sterner Insurance acquisition. Premises and equipment expenses increased $646 thousand for the quarter and $1.6 million for the six months ended June 30, 2015 mainly due to the Valley Green Bank acquisition and increased investments in computer equipment and software.

In addition, non-interest expense during the second quarter of 2015 included restructuring charges of $1.6 million related to the third quarter of 2015 consolidation of six financial centers under the Bank's optimization plan which was approved and announced in April 2015. Univest anticipates minimal customer disruption as all offices are being consolidated with an existing office located within a few miles. The projected annualized savings from these consolidations is $1.9 million.

Asset Quality and Provision for Loan and Lease Losses

Non-accrual loans and leases, including non-accrual troubled debt restructured loans, were $17.7 million at June 30, 2015 compared to $17.3 million at December 31, 2014 and $17.7 million at June 30, 2014. During the second quarter of 2015, one large non-accrual construction credit was transferred to loans held for sale for $4.0 million (while remaining in non-accrual status) as an agreement was reached to sell the two construction loans associated with the credit prior to December 31, 2015. In conjunction, this credit incurred $1.3 million in charge-offs during the second quarter of 2015, as the loans were written down to the sale price. Net loan and lease charge-offs were $2.5 million during the second quarter of 2015 compared to $1.7 million for the second quarter of 2014. Non-accrual loans and leases as a percentage of total loans and leases (held for investment and nonaccrual loans held for sale) were 0.84% at June 30, 2015, compared to 1.07% at December 31, 2014 and 1.12% at June 30, 2014. The provision for loan and lease losses was $1.1 million for the second quarter of 2015, compared to $1.3 million for the second quarter of 2014.

The allowance for loan and lease losses as a percentage of loans and leases held for investment was 0.93% at June 30, 2015, compared to 1.27% at December 31, 2014 and 1.52% at June 30, 2014. At June 30, 2015, the allowance for loan and lease losses as a percentage of loans and leases held for investment, excluding loans acquired in the Valley Green Bank acquisition which were recorded at fair value as of the acquisition date, was 1.12%. The allowance for loan and lease losses to nonaccrual loans and leases held for investment equaled 143.11% at June 30, 2015, compared to 119.18% at December 31, 2014 and 140.00% at June 30, 2014.

Capital

Univest continues to remain well-capitalized at June 30, 2015. Univest adopted the new Basel III regulatory capital rules during the first quarter of 2015 under the transition rules. Total risk-based capital at June 30, 2015 under Basel III was 13.49%, well in excess of the regulatory minimum for well-capitalized status of 10%.

On May 27, 2015, the Corporation's Board of Directors approved an increase of 1,000,000 shares in the common shares available for repurchase under the Corporation's share repurchase program, or approximately 5% of the Corporation's common stock outstanding as of May 27, 2015. During the quarter, Univest repurchased 284,061 shares of common stock at a cost of $5.7 million under the share repurchase program. Shares available for future repurchases under the plan totaled 1,166,896 at June 30, 2015. Total shares outstanding at June 30, 2015 were 19,559,941.

Dividend

On May 27, 2015, Univest declared a quarterly cash dividend of $0.20 per share, payable on July 1, 2015. This represented a 3.89% annualized yield based on the closing price of Univest's stock on the date the dividend was paid.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania (UVSP), including its wholly-owned subsidiary, Univest Bank and Trust Co., has $2.8 billion in assets and more than $3.0 billion in assets under management and supervision through its Wealth Management lines of business. 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 in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices in southeastern Pennsylvania extending to the Lehigh Valley, Maryland and online at www.univest.net.

This press release of Univest Corporation of Pennsylvania and the reports Univest Corporation of Pennsylvania files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial services industry and, specifically, the financial operations, markets and products of Univest Corporation of Pennsylvania. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest Corporation of Pennsylvania'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 of Pennsylvania is engaged; (6) technological issues which may adversely affect Univest Corporation of Pennsylvania's financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest Corporation of Pennsylvania files with the Securities and Exchange Commission. Univest Corporation of Pennsylvania 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
June 30, 2015
(Dollars in thousands)
Balance Sheet (Period End) 06/30/15 03/31/15 12/31/14 09/30/14 06/30/14
Assets $ 2,780,578 $ 2,757,495 $ 2,235,321 $ 2,222,196 $ 2,197,252
Investment securities 374,711 380,484 368,630 360,778 358,460
Loans held for sale 8,831 5,479 3,302 2,156 9,811
Loans and leases held for investment, gross 2,107,857 2,043,840 1,626,625 1,597,736 1,586,994
Allowance for loan and lease losses 19,602 20,934 20,662 21,762 24,094
Loans and leases held for investment, net 2,088,255 2,022,906 1,605,963 1,575,974 1,562,900
Total deposits 2,263,025 2,254,834 1,861,341 1,860,143 1,832,234
Noninterest-bearing deposits 519,026 509,183 449,339 436,189 432,399
NOW, money market and savings 1,288,318 1,293,165 1,159,409 1,162,778 1,131,605
Time deposits 455,681 452,486 252,593 261,176 268,230
Borrowings 110,480 91,423 41,974 38,005 45,066
Shareholders' equity 356,186 360,394 284,554 289,814 286,787
Balance Sheet (Average) For the three months ended, For the six months ended,
06/30/15 03/31/15 12/31/14 09/30/14 06/30/14 06/30/15 06/30/14
Assets $ 2,739,968 $ 2,691,513 $ 2,239,015 $ 2,217,474 $ 2,179,057 $ 2,715,874 $ 2,175,822
Investment securities 375,887 381,008 363,567 360,274 376,970 378,433 383,762
Loans and leases, gross 2,067,120 2,023,835 1,607,918 1,597,965 1,566,293 2,045,598 1,558,364
Deposits 2,242,217 2,237,830 1,875,938 1,860,138 1,819,546 2,240,035 1,821,556
Shareholders' equity 359,154 362,125 291,547 288,429 285,489 360,631 284,039
Asset Quality Data (Period End)
06/30/15 03/31/15 12/31/14 09/30/14 06/30/14
Nonaccrual loans and leases, including nonaccrual troubled debt restructured loans and leases and nonaccrual loans held for sale $ 17,697 $ 18,604 $ 17,337 $ 18,814 $ 17,742
Accruing loans and leases 90 days or more past due 287 1,063 451 344 524
Accruing troubled debt restructured loans and leases 6,099 5,341 5,469 5,463 6,340
Other real estate owned 955 955 955 955 1,650
Nonperforming assets 25,038 25,963 24,212 25,576 26,256
Allowance for loan and lease losses 19,602 20,934 20,662 21,762 24,094
Nonaccrual loans and leases / Loans and leases held for investment and nonaccrual loans held for sale 0.84% 0.91% 1.07% 1.18% 1.12%
Nonperforming loans and leases / Loans and leases held for investment and nonaccrual loans held for sale 1.14% 1.22% 1.43% 1.54% 1.55%
Allowance for loan and lease losses / Loans and leases held for investment 0.93% 1.02% 1.27% 1.36% 1.52%
Allowance for loan and lease losses / Loans and leases held for investment (excluding acquired loans at period-end) 1.12% 1.26% 1.27% 1.36% 1.52%
Allowance for loan and lease losses / Nonaccrual loans and leases held for investment 143.11% 112.52% 119.18% 115.67% 140.00%
Allowance for loan and lease losses / Nonperforming loans and leases held for investment 97.60% 83.71% 88.84% 88.39% 100.08%
Acquired credit impaired loans 1,876 1,627 -- -- --
For the three months ended, For the six months ended,
06/30/15 03/31/15 12/31/14 09/30/14 06/30/14 06/30/15 06/30/14
Net loan and lease charge-offs $ 2,473 $ 802 $ 1,748 $ 2,565 $ 1,724 $ 3,275 $ 3,126
Net loan and lease charge-offs (annualized)/Average loans and leases 0.48% 0.16% 0.43% 0.64% 0.44% 0.32% 0.40%
Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
June 30, 2015
(Dollars in thousands, except per share data)
For the three months ended, For the six months ended,
For the period: 06/30/15 03/31/15 12/31/14 09/30/14 06/30/14 06/30/15 06/30/14
Interest income $ 25,513 $ 24,738 $ 18,995 $ 19,219 $ 18,725 $ 50,251 $ 37,671
Interest expense 2,133 1,434 1,039 978 981 3,567 1,979
Net interest income 23,380 23,304 17,956 18,241 17,744 46,684 35,692
Provision for loan and lease losses 1,141 1,074 648 233 1,251 2,215 2,726
Net interest income after provision 22,239 22,230 17,308 18,008 16,493 44,469 32,966
Noninterest income:
Trust fee income 2,154 1,820 2,143 1,862 1,931 3,974 3,830
Service charges on deposit accounts 1,039 1,063 1,096 1,073 1,047 2,102 2,061
Investment advisory commission and fee income 2,740 2,763 2,760 3,086 3,009 5,503 6,058
Insurance commission and fee income 3,434 4,146 2,896 2,881 2,434 7,580 5,766
Bank owned life insurance income 211 353 461 346 443 564 821
Net gain on sales of investment securities 181 91 78 -- 415 272 557
Net gain on mortgage banking activities 1,367 1,258 698 616 519 2,625 868
Net gain on sales of other real estate owned -- -- -- 195 -- -- --
Other income 2,225 1,937 1,944 2,451 2,126 4,162 4,104
Total noninterest income 13,351 13,431 12,076 12,510 11,924 26,782 24,065
Noninterest expense:
Salaries and benefits 11,957 13,314 10,297 11,035 10,242 25,271 20,913
Commissions 2,155 1,814 2,052 2,200 1,795 3,969 3,385
Premises and equipment 3,743 4,047 3,368 3,115 3,097 7,790 6,185
Professional fees 1,066 807 765 744 846 1,873 1,655
Intangible expenses 893 786 405 352 650 1,679 1,410
Acquisition-related costs 41 466 531 180 516 507 559
Integration costs 110 1,374 -- 8 -- 1,484 --
Restructuring charges 1,642 -- -- -- -- 1,642 --
Other expense 5,225 4,803 5,144 4,385 4,644 10,028 8,566
Total noninterest expense 26,832 27,411 22,562 22,019 21,790 54,243 42,673
Income before taxes 8,758 8,250 6,822 8,499 6,627 17,008 14,358
Income taxes 2,292 2,134 1,632 2,264 1,547 4,426 3,552
Net income $ 6,466 $ 6,116 $ 5,190 $ 6,235 $ 5,080 $ 12,582 $ 10,806
Per common share data:
Book value per share $ 18.21 $ 18.18 $ 17.54 $ 17.87 $ 17.65 $ 18.21 $ 17.65
Net income per share:
Basic $ 0.33 $ 0.31 $ 0.32 $ 0.38 $ 0.31 $ 0.64 $ 0.67
Diluted $ 0.33 $ 0.31 $ 0.32 $ 0.38 $ 0.31 $ 0.63 $ 0.66
Dividends declared per share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.40 $ 0.40
Weighted average shares outstanding 19,675,002 19,951,242 16,215,580 16,225,596 16,243,161 19,812,359 16,249,568
Period end shares outstanding 19,559,941 19,820,824 16,221,607 16,220,249 16,248,495 19,559,941 16,248,495
Univest Corporation of Pennsylvania
Consolidated Selected Financial Data
June 30, 2015
For the three months ended, For the six months ended,
Profitability Ratios (annualized) 06/30/15 03/31/15 12/31/14 09/30/14 06/30/14 06/30/15 06/30/14
Return on average assets 0.95% 0.92% 0.92% 1.12% 0.94% 0.93% 1.00%
Return on average assets, excluding integration and acquisition-related costs and restructuring charges 1.12% 1.10% 1.01% 1.14% 1.00% 1.11% 1.04%
Return on average shareholders' equity 7.22% 6.85% 7.06% 8.58% 7.14% 7.04% 7.67%
Return on average shareholders' equity, excluding integration and acquisition-related costs and restructuring charges 8.52% 8.19% 7.78% 8.80% 7.61% 8.36% 7.93%
Return on average tangible common equity, excluding integration and acquisition-related costs and restructuring charges 13.12% 12.48% 10.73% 12.21% 10.37% 12.80% 10.76%
Net interest margin (FTE) 4.03% 4.12% 3.78% 3.88% 3.86% 4.07% 3.91%
Efficiency ratio (1) 70.29% 71.68% 71.46% 68.39% 70.00% 70.99% 68.08%
Efficiency ratio (1), excluding integration and acquisition-related costs and restructuring charges 65.60% 66.87% 69.78% 67.81% 68.34% 66.23% 67.19%
Capitalization Ratios
Dividends declared to net income 60.49% 65.26% 62.49% 52.01% 63.96% 62.80% 60.12%
Shareholders' equity to assets (Period End) 12.81% 13.07% 12.73% 13.04% 13.05% 12.81% 13.05%
Tangible common equity to tangible assets 8.67% 8.91% 9.49% 9.78% 9.94% 8.67% 9.94%
Regulatory Capital Ratios (Period End) (2)
Tier 1 leverage ratio 9.75% 10.00% 10.55% 10.50% 10.72% 9.75% 10.72%
Common equity tier 1 risk-based capital ratio 10.60% 10.90% -- -- -- 10.60% --
Tier 1 risk-based capital ratio 10.60% 10.90% 11.79% 11.98% 12.00% 10.60% 12.00%
Total risk-based capital ratio 13.49% 13.90% 12.91% 13.18% 13.26% 13.49% 13.26%
(1) Total operating expenses to net interest income before loan loss provision plus non-interest income adjusted for tax equivalent income.
(2) Ratios at June 30, 2015 and March 31, 2015 are under BASEL III regulatory capital rules. On January 1, 2015, the BASEL III rules became provisions primarily relating to regulatory deductions and adjustments impacting common equity tier 1 capital and tier 1 capital, to be phased in over a three-year period effective, subject to transition beginning January 1, 2015. Prior period capital ratios are reported under BASEL I.
Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential
For the Three Months Ended June 30,
Tax Equivalent Basis 2015 2014
Average Income/ Average Average Income/ Average
(Dollars in thousands) Balance Expense Rate Balance Expense Rate
Assets:
Interest-earning deposits with other banks $ 17,767 $ 11 0.25% $ 25,164 $ 17 0.27%
U.S. government obligations 129,482 351 1.09 127,631 316 0.99
Obligations of state and political subdivisions 109,449 1,354 4.96 107,021 1,373 5.15
Other debt and equity securities 136,956 753 2.21 142,318 695 1.96
Federal funds sold 825 -- -- -- -- --
Total interest-earning deposits, investments and federal funds sold 394,479 2,469 2.51 402,134 2,401 2.39
Commercial, financial, and agricultural loans 434,251 4,483 4.14 404,252 3,973 3.94
Real estate—commercial and construction loans 846,318 9,913 4.70 594,929 6,442 4.34
Real estate—residential loans 482,796 5,619 4.67 284,931 2,880 4.05
Loans to individuals 29,149 389 5.35 35,770 551 6.18
Municipal loans and leases 204,931 2,431 4.76 175,952 2,112 4.81
Lease financings 69,675 1,535 8.84 70,459 1,589 9.05
Gross loans and leases 2,067,120 24,370 4.73 1,566,293 17,547 4.49
Total interest-earning assets 2,461,599 26,839 4.37 1,968,427 19,948 4.06
Cash and due from banks 32,624 31,071
Reserve for loan and lease losses (21,373) (25,086)
Premises and equipment, net 40,433 34,355
Other assets 226,685 170,290
Total assets $ 2,739,968 $ 2,179,057
Liabilities:
Interest-bearing checking deposits $ 370,449 $ 67 0.07 $ 311,660 $ 42 0.05
Money market savings 344,523 259 0.30 280,693 68 0.10
Regular savings 581,765 136 0.09 537,526 79 0.06
Time deposits 445,255 983 0.89 267,610 780 1.17
Total time and interest-bearing deposits 1,741,992 1,445 0.33 1,397,489 969 0.28
Short-term borrowings 45,525 13 0.11 45,429 12 0.11
Subordinated notes (1) 49,286 675 5.49 -- -- --
Total borrowings 94,811 688 2.91 45,429 12 0.11
Total interest-bearing liabilities 1,836,803 2,133 0.47 1,442,918 981 0.27
Noninterest-bearing deposits 500,225 422,057
Accrued expenses and other liabilities 43,786 28,593
Total liabilities 2,380,814 1,893,568
Shareholders' Equity:
Common stock 110,271 91,332
Additional paid-in capital 120,294 61,854
Retained earnings and other equity 128,589 132,303
Total shareholders' equity 359,154 285,489
Total liabilities and shareholders' equity $ 2,739,968 $ 2,179,057
Net interest income $ 24,706 $ 18,967
Net interest spread 3.90 3.79
Effect of net interest-free funding sources 0.13 0.07
Net interest margin 4.03% 3.86%
Ratio of average interest-earning assets to average interest-bearing liabilities 134.02% 136.42%
(1) The interest rate on subordinated notes is calculated on a 30/360 day basis at a rate of 5.10%. The balance is net of debt issuance costs which are amortized to interest expense.
Notes: For rate calculation purposes, average loan and lease categories include unearned discount.
Nonaccrual loans and leases have been included in the average loan and lease balances.
Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the three months ended June 30, 2015 and 2014 have been calculated using the Corporation's federal applicable rate of 35.0%.
Distribution of Assets, Liabilities and Shareholders' Equity: Interest Rates and Interest Differential
For the Six Months Ended June 30,
Tax Equivalent Basis 2015 2014
Average Income/ Average Average Income/ Average
(Dollars in thousands) Balance Expense Rate Balance Expense Rate
Assets:
Interest-earning deposits with other banks $ 13,474 $ 16 0.24% $ 25,283 $ 31 0.25%
U.S. government obligations 134,694 730 1.09 129,457 647 1.01
Obligations of state and political subdivisions 107,048 2,676 5.04 107,386 2,829 5.31
Other debt and equity securities 136,691 1,408 2.08 146,919 1,415 1.94
Federal funds sold 3,692 2 0.11 -- -- --
Total interest-earning deposits, investments and federal funds sold 395,599 4,832 2.46 409,045 4,922 2.43
Commercial, financial, and agricultural loans 428,566 8,732 4.11 398,246 7,871 3.99
Real estate—commercial and construction loans 834,178 19,544 4.72 593,007 12,955 4.41
Real estate—residential loans 477,996 11,003 4.64 283,475 5,813 4.14
Loans to individuals 29,881 796 5.37 37,200 1,135 6.15
Municipal loans and leases 204,468 4,868 4.80 175,553 4,233 4.86
Lease financings 70,509 3,118 8.92 70,883 3,221 9.16
Gross loans and leases 2,045,598 48,061 4.74 1,558,364 35,228 4.56
Total interest-earning assets 2,441,197 52,893 4.37 1,967,409 40,150 4.12
Cash and due from banks 31,420 30,513
Reserve for loan and lease losses (21,231) (25,206)
Premises and equipment, net 40,500 34,303
Other assets 223,988 168,803
Total assets $ 2,715,874 $ 2,175,822
Liabilities:
Interest-bearing checking deposits $ 358,234 $ 113 0.06 $ 312,658 $ 85 0.05
Money market savings 359,936 539 0.30 284,874 135 0.10
Regular savings 572,453 258 0.09 540,301 158 0.06
Time deposits 453,270 1,952 0.87 268,277 1,583 1.19
Total time and interest-bearing deposits 1,743,893 2,862 0.33 1,406,110 1,961 0.28
Short-term borrowings 46,178 23 0.10 42,546 18 0.09
Subordinated notes (1) 25,324 682 5.43 -- -- --
Total borrowings 71,502 705 1.99 42,546 18 0.09
Total interest-bearing liabilities 1,815,395 3,567 0.40 1,448,656 1,979 0.28
Noninterest-bearing deposits 496,142 415,446
Accrued expenses and other liabilities 43,706 27,681
Total liabilities 2,355,243 1,891,783
Shareholders' Equity:
Common stock 110,271 91,332
Additional paid-in capital 120,227 61,814
Retained earnings and other equity 130,133 130,893
Total shareholders' equity 360,631 284,039
Total liabilities and shareholders' equity $ 2,715,874 $ 2,175,822
Net interest income $ 49,326 $ 38,171
Net interest spread 3.97 3.84
Effect of net interest-free funding sources 0.10 0.07
Net interest margin 4.07% 3.91%
Ratio of average interest-earning assets to average interest-bearing liabilities 134.47% 135.81%
(1) The interest rate on subordinated notes is calculated on a 30/360 day basis at a rate of 5.10%. The balance is net of debt issuance costs which are amortized to interest expense.
Notes: For rate calculation purposes, average loan and lease categories include unearned discount.
Nonaccrual loans and leases have been included in the average loan and lease balances.
Loans held for sale have been included in the average loan balances.
Tax-equivalent amounts for the six months ended June 30, 2015 and 2014 have been calculated using the Corporation's federal applicable rate of 35.0%.

CONTACT: Mike Keim UNIVEST CORPORATION OF PENNSYLVANIA Chief Financial Officer 215-721-2511, keimm@univest.net

Source:Univest Corporation of Pennsylvania