Univest Corporation Of Pennsylvania - Univest Bank and Trust Co.SM - Report First Quarter Earnings
SOUDERTON, Pa., April 28, 2010 – Univest Corporation of Pennsylvania (NASDAQ: UVSP), parent company of Univest Bank and Trust Co.SM of Souderton, Pa., today announced financial results for the first quarter. Univest reported net income of $3.0 million or $0.18 diluted earnings per share for the quarter ended March 31, 2010, compared to $1.5 million or $0.09 diluted earnings per share in the previous quarter ended December 31, 2009 and $3.8 million or $0.30 diluted earnings per share for the comparable period in the prior year.
Deposits
Total non-time deposits increased $28.0 million during the quarter. The increase consisted of an increase of $4.2 million in non-interest bearing deposits and $23.8 million in NOW, money market and savings accounts. These increases were offset by a decline in time deposits of $19.6 million.
Loans
Gross loans and leases increased slightly by $1.8 million during the quarter primarily due to less credit demand and utilization of lines by businesses responding to the current economic environment.
Net Interest Income and Margin
Net interest income of $17.1 million in the first quarter of 2010 increased $760 thousand, or 4.65%, over the first quarter of 2009. The net interest margin on a tax-equivalent basis for the first quarter of 2010 increased 30 basis points to 3.99% from 3.69% for the fourth quarter ended December 31, 2009 and 23 basis points compared to 3.76% for the first quarter of 2009. The increase in the net interest income and the net interest margin can be attributed to declines in the cost of interest-bearing liabilities, primarily time deposits and Federal Home Loan Bank (FHLB) borrowings, exceeding the declines in yields on total interest-earning assets. The Corporation has continued to experience core deposit growth which has allowed the Corporation to continue to repay its maturing FHLB advances reducing FHLB advances from $92 million at December 31, 2009 to $64 million at March 31, 2010.
Non-Interest Income
Total non-interest income, excluding the impact of other-than-temporary impairments on the Corporation's bank equity portfolio, increased 11.71% for the quarter ended March 31, 2010 compared to the quarter ended March 31, 2009. For the quarter ended March 31, 2010, Univest reported total non-interest income of $8.2 million compared to $6.2 million for the comparable period in the prior year. This is attributed to increased fee income across each revenue source and reduced costs related to other-than-temporary impairment charges. Univest recorded other-than-temporary impairment charges on certain bank equity securities in the first quarter of 2010 of $5 thousand compared to charges of $1.2 million in the first quarter of 2009.
Non-Interest Expense
Non-interest expense for the first quarter of 2010 compared to the first quarter of 2009 increased $1.6 million or 10.17%, primarily due to increases in salaries and benefits expenses of $379 thousand due to investments in personnel to grow the Corporation's mortgage banking and commercial lending capabilities and increases of $521 thousand in marketing and advertising expenses to support a major brand campaign to position the Corporation to take advantage of the disruption in its markets. Other increases occurred as a result of increased audit expenses and legal fees for nonperforming loan activity.
Asset Quality and Provision for Loan and Lease Losses
Nonaccrual loans and leases were $34.9 million at March 31, 2010 compared to $33.5 million at December 31, 2009 and $3.7 million at March 31, 2009. Nonperforming loans and leases as a percentage of total loans and leases equaled 2.58% at March 31, 2010 compared to 2.65% at December 31, 2009 and 0.45% at March 31, 2009. The provision for loan and lease losses was $4.9 million for the first quarter of 2010 compared to $7.4 million for the quarter ended December 31, 2009 and $2.2 million for the quarter ended March 31, 2009. As a result of the increased provision year-over-year, the allowance for loan and lease losses as a percentage of total loans and leases increased to 1.90% at March 31, 2010 from 1.74% at December 31, 2009 and 1.01% at March 31, 2009. The allowance for loan and lease losses to nonperforming loans and leases equaled 73.45% at March 31, 2010 which increased from 65.54% at December 31, 2009. The allowance for loan and lease losses to nonperforming loans and leases was 225.39% at March 31, 2009.
Capital
Univest continues to remain well-capitalized at March 31, 2010. Univest's total risk-based capital at December 31, 2009 was 15.78%, well in excess of the regulatory minimum for well capitalized status of 10% for total risk-based capital.
Dividend
On April 1, 2010, Univest Corporation paid a quarterly cash dividend of $0.20 per share, which represented a 4.36% 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. Univest Bank and Trust Co.SM, member FDIC and Equal Housing Lender, offers customers 32 financial service centers, 12 retirement financial services centers, and 38 ATM locations throughout the region, and is the parent company of Univest Capital, Inc., a small ticket commercial finance business; Univest Insurance, Inc., an independent insurance agency headquartered in Lansdale, Pa., which serves commercial and personal customers; and Univest Investments, Inc., Member FINRA and SIPC, a full-service broker-dealer and investment advisory firm. 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.
