Univest Corporation of Pennsylvania Q2 2025 Earnings Report

Univest Corporation of Pennsylvania EPS Results

• Actual EPS: $0.69
• Consensus EPS: $0.64
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: N/A

Univest Corporation of Pennsylvania Revenue Results

• Actual Revenue: $81.04 million
• Expected Revenue: $79.50 million
• Beat/Miss: Beat by +$1.54 million
• YoY Revenue Growth: N/A

Univest Corporation of Pennsylvania Announcement Details

• Quarter: Q2 2025
• Date: 7/23/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 24, 2025
• Conference Call Time: 9:00AM ET

Univest Financial Corporation operates as the bank holding company for Univest Bank and Trust Co. that provides banking products and services primarily in the United States. It operates through three segments: Banking, Wealth Management, and Insurance. The Banking segment offers a range of banking services, such as deposit taking, loan origination and servicing, mortgage banking, other general banking, and equipment lease financing services for individuals, businesses, municipalities, and nonprofit organizations. Its Wealth Management segment provides investment advisory, financial planning, and trust and brokerage services for private families and individuals, municipal pension plans, retirement plans, and trusts and guardianships. The Insurance segment offers commercial property and casualty insurance, employee benefits solutions, personal insurance lines, and human resources consulting services. The company was formerly known as Univest Corporation of Pennsylvania (NASDAQ:UVSP) and changed its name to Univest Financial Corporation in January 2019. The company was founded in 1876 and is headquartered in Souderton, Pennsylvania.

Univest Corporation of Pennsylvania Q2 2025 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Net income of $20 million (EPS $0.69) in Q2, while loan outstandings contracted by $31.9 million despite solid $507 million YTD commercial loan production.
• Neutral Sentiment: Total deposits fell $75.8 million in Q2 due to seasonal public funds and broker declines, but rose $77.5 million after excluding those factors.
• Negative Sentiment: Q2 saw $7.8 million of net charge-offs, with $7.3 million from one suspected-fraud relationship now on nonaccrual (remaining balance $16.4 million).
• Positive Sentiment: Net interest margin expanded to 3.20% (core NIM 3.24%), up 11 bps/12 bps QoQ thanks to higher asset yields and lower funding costs.
• Positive Sentiment: 2025 guidance sees 1–3% loan growth, 10–12% net interest income growth, 1–3% noninterest income growth, and 2–4% expense growth, with a stable 20–20.5% tax rate.

Presentation

[Operator]

Good morning, all, and thank you for joining us. Univest Financial Corporation second quarter twenty twenty five earnings call. My name is Carly, and I'll be coordinating the call today. If you'd like to a question during the call, you can do so by pressing star followed by one on your telephone keypad. And to remove yourself by line of questioning, please star followed by 2.

[Operator]

I'd now like to hand over to our host, Jeff Schwartz, to begin. The floor is yours.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

Thank you, Carly, and good morning, and thank you to all of our listeners for joining us. Joining me on the call this morning is Mike Keim, our Chief Operating Officer and President of Univest Bank and Trust and Brian Richardson, our Chief Financial Officer. Before we begin, I would like to remind everyone of the forward looking statements disclaimer. Please be advised that during the course of this conference call, management may make forward looking statements that express management's intentions, beliefs or expectations within the meaning of the federal securities laws. Univest's actual results may differ materially from those contemplated by these forward looking statements.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

I will refer you to the forward looking cautionary statements in our earnings release and in our SEC filings. Hopefully, everyone had a chance to review our earnings release from yesterday. If not, it can be found on our website at univest.net under the Investor Relations tab. We reported net income of $20,000,000 during the second quarter or $0.69 per share, While loan outstandings contracted by $31,900,000 during the quarter, production has remained solid through the first six months of the year. However, we continue to be impacted by early payoffs and paydowns.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

Overall, year to date commercial loan production through June 30 was $5.00 $7,000,000 compared to $4.00 $2,000,000 in the prior year. However, this has resulted in contraction in loan outstanding year to date of $25,400,000 compared to growth of $117,600,000 in the prior year. While deposits decreased $75,800,000 during the quarter, this was predominantly due to the seasonal decline of public funds deposits and a decline in broker deposits. Excluding these declines, deposits increased $77,500,000 during the quarter. During the quarter, we reported $7,800,000 of net charge offs predominantly related to one credit, which accounted for $7,300,000 of the charge offs.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

The remaining balance of this relationship of $16,400,000 has been placed on non accrual and is supported by the appraised value of the real estate collateral. As this is still an active situation where fraud is suspected, we will have no further comments at this time. Absent this one relationship, credit quality continues to remain strong. Before I pass it over to Brian, I would like to thank the entire Univest family for the great work they do every day and for their continued efforts serving our customers, communities and each other. I'll now turn it over to Brian for further discussion on our results.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

Thank you, Jeff. I would also like to thank everyone for joining us today. I would like to start by highlighting a few items from the earnings release. First, during the quarter, reported NIM of 3.2% increased by 11 basis points from 3.09% in the prior quarter due to increased yields on assets and a reduction in our cost of funds. Core NIM of 3.24%, which excludes the impact of excess liquidity, expanded by 12 basis points compared to the first quarter.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

We expect core NIM to contract by a few basis points in the third quarter due to the repricing of our 2020 sub debt issuance and the seasonal build of higher cost public funds. However, we expect NII to be relatively in line with the second quarter. Second, noninterest income increased by 521,000 or 2.5% compared to the second quarter of two thousand twenty four. This was primarily driven by increases in investment management fees, gains on sale of SBA loans, and treasury management fees, partially offset by a decrease in net gains on mortgage banking due to elevated interest rate environment and competition. Third, noninterest expense increased 1,600,000.0 or 3.3% compared to the second quarter of two thousand twenty four.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

The increase was primarily driven by compensation costs, specifically annual merit increases, medical costs, and variable incentives. I believe the remainder of the earnings release was straightforward, and I would now like to provide an update to our 2025 guidance. First, for the full year, we expect loan growth of approximately 1% to 3%, and we expect net interest income growth of 10% to 12% compared to 02/2024. Second, our provision for credit loss guidance remains unchanged at 12,000,000 to $14,000,000 for 2025. However, the provision will continue to be event driven, including loan growth, changes in economic related assumptions and the credit performance of the portfolio, including specific credits.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

Third, 2024 noninterest income totaled 84,500,000.0 when excluding the $3,500,000 gain on sale of MSRs and 245,000 of Boeing death benefits. For 02/2025, we expect noninterest income growth for approximately one to 3% off the 84,500,000 base. Fourth, we reported noninterest expense of a 198,000,000 for 02/2004. For 2025, we expect growth of approximately 2% to 4%. Lastly, as it relates to income taxes, our guidance remains unchanged at 20% to 20.5% based on current statutory rates.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

The aggregate impact of these guidance updates when compared to our most recent guidance is accretive to both EPS and PPNR. That concludes my prepared remarks. We will be happy to answer any questions. Harley, would you please begin the question and answer session?

[Operator]

Of course. Thank you very much. With that, I'd open the line for q and a. If you'd like to ask a question, please leave a message by pressing star followed by one on your telephone keypad. To remove your cell phone and a question, it will be star followed by two.

[Operator]

As a reminder, to raise a question, it will be star followed by one. Our first question comes from Tim Switzer from KBW. Tim, your line is now open.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Hey. Good morning, guys. Thank you for taking my question. I I apologize. You you broke up a little bit on my end on some of the guidance numbers.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Could you give me your update for loan growth and expenses?

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

Sure. Loan growth is one to 3%, and the corresponding interest income growth is 10 to 12%, and then expenses is two to 4%.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Okay. Great.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

I guess, could you maybe talk about some of the changes there? It looks like both those numbers are down a little bit. Could you just talk about, you know, what you're seeing from the loan environment? Is there a lot of is demand kind of faltering a little bit, or is it more about competition?

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

No.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

Actually, as Jeff referenced at the beginning of his remarks, Tim, loan activity and loan origination activity is strong. We're consistent with what it has been in the prior year. We were just impacted fairly significantly by payoff activity in the first half of the year. We look to, you know, we predict that and forecast that and are interacting with our customers to the best of our ability. We're looking for that to slow down that being prepayment activity in the second half of the year, and we'll continue to produce at the levels that we have.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

And therefore, that'll lead to growth. And then on the expense side, we just continue to see the benefit of our prudent expense management and discipline on that side. Of course, there's some variable expenses like medical costs and some things like that that aren't directly controllable. But but as we trend through the first six months of the year, that's what's causing us to to ratchet the expense growth down from four to 5% down to two to 4%.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Gotcha.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Okay. And you you guys are sitting with very healthy capital levels. You you haven't seemed all that determined to execute any M and A deals. You you guys are doing a little bit of share repurchases, but, you know, with share price coming up, it's going to be a longer earn back. Can you kind of talk about what your strategy is going to be to efficiently deploy that capital and whether you're going to return it to shareholders or find some opportunities to reinvest into the business?

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

Yeah. So, Tim, you know, we will continue to be active on buybacks and even with the rise in our share price. The earn back period, while it's gotten longer, it's still well within, you know, two it's within a two to three year range even as we go up from here. So we'll we'll still continue to stay active on the buyback front and feel that that's a good use of capital. You know, while m and a isn't an immediate strategic priority of ours, we always wanna be have our eyes open and see what's available out there.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

There's nothing that's overly exciting right now. But we also look at on the insurance side, wealth management side. We're always keeping our eyes open there too. So we're not opposed to m and a. I would say it's probably more on the nonbank side than the bank side at this point that we would be more interested.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

But within lieu of opportunities like that, we're gonna continue to also do share buybacks.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Okay. And I'm I'm I'm curious what you guys are hearing or seeing in terms of deposit competition out there. There's been some reports from some competitors that it's starting to, you know, step up a little bit. And with the Fed not lowering rates this year so far, it sounds like a lot of deposit repricing has, you know, kind of already ran through.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

No. I would say that that's consistent with what we see, especially on the consumer side with money market rates and CD rates. So, yeah, it is a tough environment out there. People continue to fight for the deposit and to generate the liquidity necessary to support their their growth. So we've identified certain things, certain campaigns and certain niches that we continue to, you know, push forward with.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

And we look forward to continue to grow our deposits as the year moves forward. As you well know or most people know if they follow us, the third quarter will be a peak quarter for us on public funds. So that, you know, that would be expected. We will continue to manage through, but no, it is a tough environment from a competitive perspective.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Okay.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Gotcha. And last question for me. Could you guys talk about your outlook in terms of the NIM trajectory going forward over the next couple of quarters? You you mentioned public funds is gonna be seemingly higher next quarter, so that impacts it a little bit. And then what would you guy what kind of impact could you expect from one or two rate cuts in the back half of the year?

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

Sure, Tim. So as I've got it, for the third quarter, we expect core NIM to pull back. We'll report NIM to pull back for sure, core NIM to pull back slightly just again due to our the repricing of our sub debt issuance as well as those higher cost public funds coming on, then we'd expect it to be flat to slightly up thereafter assuming relatively stable interest rate environment for next several quarters. If we one or two rate cuts, it really does not expect it to be impactful over a longer term. There might be noise within a given quarter just based on how the timing of when assets and liabilities reprice.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

But then once that kind of lends itself through, you're not expecting that to be overly impactful due to our new relative neutrality from an Aon perspective.

[Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)]

Okay. Great. Thank you guys for taking all my questions. Appreciate it.

[Operator]

much. As a reminder, to raise a question, we'll be start followed by one. Our next question comes from Tyler Casciatore from Stephens. Tyler, your line is now open.

[Tyler Cacciatori, Equity Research Associate at Stephens Inc]

Good morning. This is Tyler on for Matt Breeze.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

Morning, Tyler.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

Morning, Tyler.

[Tyler Cacciatori, Equity Research Associate at Stephens Inc]

I just wanted to start.

[Tyler Cacciatori, Equity Research Associate at Stephens Inc]

Last week, senator Dave McCormick held the energy and innovation summit in Pittsburgh outlining a number of projects totaling around 90,000,000,000 in data centers, energy and power infrastructure, and some other projects, some of which are expected in Eastern Pennsylvania. Just curious on any on if you've heard anything on these projects and if you think there could be some positive benefit in your footprint?

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

I mean, anytime that there's investment in our state, we're obviously very supportive of that and excited to see the money flowing into Pennsylvania. You know, we'll bet in a bit more from our customers being able to participate in any projects that are being built out. You know, we have a very diversified customer base, a lot of which are in, you know, electrical contracting and construction and things of that nature that could potentially benefit from this.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

I think it's a little early stages right now as far as that we've heard any significant chatter from our customers in market, but I know that everybody's excited, obviously, to see the investment made in Pennsylvania.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

And I would just add, wouldn't just be Eastern Pennsylvania for us. We're act obviously active in Central Pennsylvania, and we have a presence in Western Pennsylvania. So to Jeff's point, we'd be certainly pleased to participate across our footprint.

[Tyler Cacciatori, Equity Research Associate at Stephens Inc]

Alright.

[Tyler Cacciatori, Equity Research Associate at Stephens Inc]

Thanks. And then I just had one more. I know you talked about the pipeline a little bit. I was just wondering how yields are holding up. I know you cited some increase in competition.

[Tyler Cacciatori, Equity Research Associate at Stephens Inc]

But in terms of spread compression, how much are you seeing there?

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

We we really haven't. New loan yields on the commercial side, have been relatively stable for the last quarter or two. And, again, as we said, productions remain strong just so that the lack of loan growth is really driven by the payoff headwinds.

[Tyler Cacciatori, Equity Research Associate at Stephens Inc]

Okay. Great.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

So do you think without any rate cuts, the space of loan yields loan yield expansion is repeatable? Not repeatable. I think that'll definitely start to slow down from an expansion perspective because we have a repricing of the book occurs, of course, as that base gets higher. Just on a notional basis, your that expansion will start to slow down even if you can remain with consistent production volume.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

So I think it would slow down a little bit and things remain competitive for sure. But but nothing that that would suggest at this point that it's gonna start pulling back in anyway.

[Tyler Cacciatori, Equity Research Associate at Stephens Inc]

Okay. Great. That's all for me. Thanks for answering my questions.

[Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co at Univest Financial]

Thank you.

[Operator]

Thank you very much. We currently have no further questions. So I'd just like to hand back to Josh White for any further remarks.

[Jeffrey Schweitzer, Chairman, President & CEO at Univest Financial]

I'd like to thank everyone for participating today. Hope you're having a great summer. We look forward to talking to everybody after the end of the third quarter.

[Operator]

As we conclude today's call, we'd like to thank everyone for joining. You may disconnect your lines.

Participants

Executives

• Jeffrey Schweitzer, Chairman, President & CEO
• Brian Richardson, SVP & CFO - Univest Financial Corporation and Univest Bank & Trust Co

Analysts

• Tim Switzer, Vice President at Keefe, Bruyette & Woods (KBW)
• Tyler Cacciatori, Equity Research Associate at Stephens Inc