Univest Corporation of Pennsylvania - Univest Bank and Trust Co.℠ - Reports Fourth Quarter and Year-End Earnings
SOUDERTON, Pa., January 23,
2012 - Univest Corporation of Pennsylvania (NASDAQ:
UVSP), parent company of Univest Bank and Trust Co. and its
insurance, investments and equipment financing subsidiaries, today
announced financial results for the quarter and year ended December
31, 2012. Univest reported net income of $5.1 million or $0.30
diluted earnings per share for the quarter ended December 31, 2012,
a 3% decrease in net income compared to $5.3 million or $0.32
diluted earnings per share for the quarter ended December 31, 2011.
For the year ended December 31, 2012, Univest reported net income
of $20.9 million or $1.24 diluted earnings per share, compared to
$18.9 million or $1.13 diluted earnings per share for the same
period in the prior year. The increase in net income of $2.0
million during 2012 represents an increase of 11% over the prior
year.
Loans
Gross loans and leases increased $12.4 million from September 30,
2012 and $35.5 million from December 31, 2011. The growth in loans
from the prior year-end occurred primarily in the commercial and
residential mortgage categories. While the Corporation continued to
see increased loan activity during 2012, overall credit demand and
utilization of lines by businesses and consumers remained light as
a result of the slow and uncertain economic recovery.
Deposits
Total deposits increased $87.4 million from September 30, 2012 and
$116.1 million from December 31, 2011. Deposits, excluding public
funds, grew $87.1 million from September 30, 2012 and $120.2
million from December 31, 2011, primarily due to new customers
choosing Univest and an overall increase in demand deposits.
Net Interest Income and
Margin
Net interest income decreased $184 thousand or 1% to $18.2 million
in the fourth quarter of 2012 compared to the fourth quarter of
2011. The net interest margin on a tax-equivalent basis for the
fourth quarter of 2012 was 3.80%, compared to 3.84% during the
third quarter of 2012, and down from 3.96% in the fourth quarter of
2011. Net interest income decreased $2.3 million or 3% to $72.5
million for the year ended December 31, 2012 compared to the same
period in 2011. The net interest margin on a tax-equivalent basis
for the year ended December 31, 2012 was 3.89% compared to 4.15%
for the year ended December 31, 2011.
The declines in net interest income and net interest margin were
primarily due to the re-investment of maturing and called
investment securities into lower yielding investments as a result
of the lower interest rate environment and lower rates on
commercial loans due to re-pricing and competitive pressures. The
declines in net interest income and net interest margin were
partially offset by re-pricing of certificates of deposit and
savings account products.
Non-Interest
Income
Non-interest income for the quarter ended December 31, 2012 was
$10.4 million, an increase of $1.4 million or 16% from the
comparable period in the prior year. The net gain on mortgage
banking activities increased $919 thousand during the fourth
quarter of 2012 over the same period in 2011 as refinance volume
continues to be strong. Insurance commission and fee income was up
$404 thousand mainly due to the Javers Group acquisition on May 31,
2012. In addition, trust fee income increased $433 thousand
primarily due to growth in trust assets and estate fees. Partially
offsetting this favorable variance was a decline in investment
advisory commission and fee income of $371 thousand, primarily a
result of timing and customer product selection.
Non-interest income for the year ended
December 31, 2012 was $40.3 million, an increase of $5.9 million or
17% compared to the same period in the prior year. The increase was
primarily attributable to an increase in the net gain on mortgage
banking activities of $4.2 million due to stronger mortgage demand
from increased refinance activity, a $1.3 million gain on the sale
of a former operations building and proceeds from bank owned life
insurance death benefits of $989 thousand. In addition, insurance
commission and fee income was up $798 thousand mostly due to the
Javers Group acquisition. These favorable variances were partially
offset by an increase in the net loss on sales and write-downs of
other real estate owned of $1.1 million. In addition, the net gain
on sales of securities was $305 thousand for the year ended
December 31, 2012 compared to $1.4 million for the same period in
2011.
Non-Interest
Expense
Non-interest expense for the fourth quarter of 2012 was $19.7
million, an increase of $2.1 million or 12% compared to the fourth
quarter of 2011. Salaries and benefits expense increased $1.4
million primarily due to higher commissions related to increased
mortgage banking activities, annual performance increases and
additional staff hired to expand our existing business lines and
welcomed through the Javers acquisition. Additionally, non-interest
expense increased due to higher equipment expenses and employment
services used to identify top sales personnel.
Non-interest expense for the year
ended December 31, 2012 was $76.3 million, an increase of $8.3
million or 12% compared to same period in the prior year. Salaries
and benefits expense increased $6.1 million primarily due to higher
commissions related to increased mortgage banking activities,
annual performance increases and additional staff hired primarily
to support revenue generation. Additionally, non-interest expense
increased due to higher loan workout, legal, employment services
and equipment expenses. The year-to-date increases were partially
offset by a decline in deposit insurance premiums of $350 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 $32.1 million at December 31, 2012
from $38.2 million at December 31, 2011. Non-accrual loans and
leases were $30.5 million at September 30, 2012. The decrease in
non-accrual loans from December 31, 2011 was mainly due to loan
charge-offs, pay-downs and sales, and one large non-accrual
troubled debt restructured credit for $6.2 million which was
returned to accruing troubled debt restructured status as the
borrower made six consecutive principal and interest payments;
these collectively exceeded the additions to non-accrual loans. Net
loan and lease charge-offs were $4.7 million during the fourth
quarter of 2012 compared to $4.3 million for the fourth quarter of
2011. For the year ended December 31, 2012, net loan and lease
charge-offs were $15.2 million compared to $18.5 million for the
year ended December 31, 2011.
Non-accrual loans and leases as a
percentage of total loans and leases (held for investment and
nonaccrual loans held for sale) were 2.17% at December 31, 2012,
compared to 2.07% at September 30, 2012 and 2.64% at December 31,
2011. Other real estate owned decreased to $1.6 million, consisting
of two properties at December 31, 2012, compared to $3.3 million at
September 30, 2012 and $6.6 million at December 31, 2011. The
year-to-date decrease was primarily due to write-downs on
properties of $2.0 million to their updated appraised values, and
the sale of three commercial properties for $3.0 million which had
a total carrying value of $2.9 million, resulting in a gain on sale
of $97 thousand.
The provision for loan and lease
losses was $2.4 million for the fourth quarter of 2012, compared to
$2.2 million for the quarter ended September 30, 2012 and $3.1
million for the quarter ended December 31, 2011. The provision for
loan and lease losses for the year ended December 31, 2012 was
$10.0 million, a reduction of $7.5 million compared to $17.5
million for the year ended December 31, 2011. The decrease in the
year-to-date provision was primarily the result of migration and
resolution of loans through the loan workout process and a decrease
in loss factors for commercial real estate loans. The allowance for
loan and lease losses as a percentage of loans and leases held for
investment was 1.67% at December 31, 2012, compared to 1.84% at
September 30, 2012 and 2.07% at December 31, 2011. The allowance
for loan and lease losses to nonaccrual loans and leases held for
investment equaled 77.01% at December 31, 2012, compared to 97.03%
at September 30, 2012 and 78.18% at December 31, 2011.
Capital
Univest continues to remain well-capitalized at December 31, 2012.
Univest's total risk-based capital at December 31, 2012 was 15.62%,
well in excess of the regulatory minimum for well capitalized
status of 10%.
Dividend
On November 28, 2012, Univest Corporation declared a quarterly
cash dividend of $0.20 per share, payable on December 28, 2012.
This represented a 4.82% 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.