Univest Corporation of Pennsylvania - Univest Bank and Trust Co.℠ - Reports First Quarter Earnings
SOUDERTON, Pa., April 25,
2012 - Univest Corporation of Pennsylvania (NASDAQ:
UVSP) parent company of Univest Bank and Trust
Co.SM, a full-service financial institution with more
than 135 years of experience in delivering financial solutions
including personal and business banking, online banking,
residential mortgages, insurance products, investment and wealth
advisory solutions, today announced financial results for the first
quarter ended March 31, 2012. Univest reported net income of $5.3
million or $0.31 diluted earnings per share for the quarter ended
March 31, 2012, a 36% increase in net income compared to $3.9
million or $0.23 diluted earnings per share for the quarter ended
March 31, 2011.
Loans
Gross loans and leases increased $13.4 million from December 31,
2011 and increased $17.7 million from March 31, 2011. Commercial
loans increased $7.9 million and residential mortgage loans
increased $7.0 million during the quarter. While the Corporation
continued to see increased loan activity in the first quarter,
overall credit demand and utilization of lines by businesses and
consumers remained light as a result of the prolonged challenging
economic environment.
Deposits
Total deposits decreased $19.2 million from December 31, 2011 and
increased $64.8 million from March 31, 2011. Core deposits,
excluding public fund deposits, increased $18.2 million for the
quarter and $83.7 million from March 31, 2011, primarily due to new
customers choosing Univest.
Net Interest Income and Margin
Net interest income decreased $645 thousand or 3% to $18.2 million
in the first quarter of 2012 compared to the first quarter of 2011.
The net interest margin on a tax-equivalent basis for the first
quarter of 2012 was 3.95%, flat compared to 3.96% during the fourth
quarter of 2011, and down from 4.24% in the first quarter of 2011.
The decline in net interest income and the net interest margin
during the first quarter of 2012 from the same period in the prior
year was primarily due to the re-investment of maturing and called
investment securities with lower yielding investments due to the
lower interest rate environment and lower rates on commercial
business loans due to re-pricing and competitive pressures. The
decline in net interest income and the net interest margin was
partially offset by re-pricing of certificates of deposits and
savings account products. The net interest margin also declined
from excess cash funds invested in low rate, interest-earning
deposits as credit demand remains light and the Corporation
continues to keep the investment portfolio short. Average
interest-earning deposits with the Federal Reserve Bank increased
$50.5 million from the comparable period in the prior year.
Non-Interest
Income
Non-interest income for the quarter ended March 31, 2012 was $11.0
million, an increase of $3.3 million or 42% from the comparable
period in the prior year. The increase was primarily attributed to
proceeds from bank owned life insurance death benefits of $989
thousand and an increase in the net gain on mortgage banking
activities of $1.3 million due to stronger mortgage demand from
increased re-finance activity. In addition, other income increased
$616 thousand mainly due to a decrease in net loss on sales and
write-downs of other real estate owned and positive valuation
adjustments on mortgage servicing rights. During the first quarter
of 2012, the Corporation recorded a net loss on sales and
write-downs of other real estate owned of $31 thousand compared to
$352 thousand for the same period in the prior year. During the
first quarter of 2012, the Corporation reversed $212 thousand of
negative valuation adjustments on mortgage servicing rights
recorded primarily during the third quarter of 2011. In addition,
the first quarter of 2012 included a net gain on sales of
securities of $258 thousand. Partially offsetting these favorable
variances was a decline in service charges on deposits of $236
thousand. This decline is primarily due to changes in industry
practices to benefit customers impacting non-sufficient funds and
overdraft fees, which were implemented in July 2011.
Non-Interest
Expense
Non-interest expense for the first quarter of 2012 was $18.9
million, an increase of $2.1 million or 13% compared to the first
quarter of 2011. Salaries and benefits expense increased $2.6
million primarily due to higher commissions related to increased
mortgage banking activities, increased employee incentives, annual
performance increases, and lower deferred loan origination costs.
The increases for the quarter were partially offset by a decline in
deposit insurance premiums of $269 thousand mainly due to the
amended assessment calculation requirement through the FDIC rule
implemented April 1, 2011. The payment was formerly based on
deposits whereas the rule change now bases the payment on the
average consolidated total assets less average tangible equity.
Asset Quality and
Provision for Loan and Lease Losses
Non-accrual loans and leases, including non-accrual troubled debt
restructured loans, decreased to $36.3 million at March 31, 2012
from $38.2 million at December 31, 2011 and $38.6 million at March
31, 2011. The decrease in non-accrual loans was mainly due to
charge-offs and pay-downs exceeding additions to non-accrual loans.
Accruing troubled debt restructured loans increased to $7.3 million
at March 31, 2012 from $3.9 million at December 31, 2011, primarily
due to the restructuring of loans for three borrowers in the
commercial business, commercial real estate and construction loan
categories. Accruing troubled debt restructured loans were $5.1
million at March 31, 2011. Net loan and lease charge-offs were $3.4
million during the first quarter of 2012 compared to $4.3 million
and $3.2 million for the fourth and first quarters of 2011,
respectively.
Nonperforming loans and leases as a
percentage of total loans and leases were 3.02% at March 31, 2012
compared to 2.94% at December 31, 2011 and 3.07% at March 31, 2011.
Other real estate owned decreased to $5.0 million, consisting of
three properties at March 31, 2012, down from $6.6 million at
December 31, 2011 and $6.1 million at March 31, 2011. During the
first quarter of 2012, one property with a carrying value of $1.3
million was sold for $1.5 million resulting in a gain on sale of
$210 thousand.
The provision for loan and lease
losses was $4.1 million for the first quarter of 2012 compared to
$3.1 million for the quarter ended December 31, 2011 and $5.1
million for the quarter ended March 31, 2011. The allowance for
loan and lease losses as a percentage of total loans and leases was
2.10% at March 31, 2012 compared to 2.07% at December 31, 2011 and
2.27% at March 31, 2011. The allowance for loan and lease losses to
nonperforming loans and leases equaled 69.39% at March 31, 2012,
compared to 70.34% at December 31, 2011 and 74.12% at March 31,
2011.
Capital
Univest continues to remain well-capitalized at March 31, 2012.
Univest's total risk-based capital at March 31, 2012 was 15.76%,
well in excess of the regulatory minimum for well capitalized
status of 10% for total risk-based capital.
Dividend
On April 2, 2012, Univest Corporation paid a quarterly cash
dividend of $0.20 per share, which represented a 4.66% annualized
yield based on the closing price of Univest's stock on the date the
dividend was paid.
About Univest Corporation
Headquartered in Souderton, Pa., Univest Corporation of
Pennsylvania (www.univest.net) and its subsidiaries serve the
financial needs of residents, businesses, and nonprofit
organizations in Bucks, Chester, Montgomery and Lehigh counties.
For more information on Univest Corporation of Pennsylvania and its
subsidiaries, please visit www.univest.net.
This press release of Univest Corporation and the reports
Univest Corporation files with the Securities and Exchange
Commission often contain "forward-looking statements" relating to
present or future trends or factors affecting the banking industry
and, specifically, the financial operations, markets and products
of Univest Corporation. These forward-looking statements involve
certain risks and uncertainties. There are a number of important
factors that could cause Univest Corporation's future results to
differ materially from historical performance or projected
performance. These factors include, but are not limited to: (1) a
significant increase in competitive pressures among financial
institutions; (2) changes in the interest rate environment that may
reduce net interest margins; (3) changes in prepayment speeds, loan
sale volumes, charge-offs and loan loss provisions; (4) general
economic conditions; (5) legislative or regulatory changes that may
adversely affect the businesses in which Univest Corporation is
engaged; (6) technological issues which may adversely affect
Univest Corporation's financial operations or customers; (7)
changes in the securities markets or (8) risk factors mentioned in
the reports and registration statements Univest Corporation files
with the Securities and Exchange Commission. Univest Corporation
undertakes no obligation to revise these forward-looking statements
or to reflect events or circumstances after the date of this press
release.