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

20:00 EDT 21 Jul 2015 | Globe Newswire

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

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