Univest Financial Reports Solid Q3 2024 Performance Amid Strategic Growth

Univest Financial Corporation

SOUDERTON, PAUnivest Financial Corporation (NASDAQ: UVSP), the parent entity of Univest Bank and Trust Co. along with its associated subsidiaries, has announced robust financial results for the third quarter of 2024, revealing a net income of $18.6 million or $0.63 per diluted share. This marks an increase from the $17.0 million or $0.58 per diluted share reported in the same quarter last year.

Lending and Deposits

The quarter saw Univest’s gross loans and leases grow by $45.9 million, largely fueled by substantial gains in commercial real estate and residential mortgage sectors, although these were partially counterbalanced by declines in construction and commercial loans. From the end of 2023, the figure rose by $163.5 million, underscoring a strategic expansion in loan portfolios.

Deposits surged by $358.8 million since June 2024, achieving a notable 5.5% quarterly growth, driven by seasonal influxes in public funds. This upward trajectory was even more pronounced compared to the end of last year, with a total increase of $478.4 million, evidencing a robust deposit intake across various segments.

Interest and Income

Despite a slight dip in net interest income year-over-year due to shifting deposit costs, the figure rose by $2.2 million from the previous quarter, reaching $53.2 million. This growth reflects higher average balances and improved asset yields. The net interest margin, reported at 2.82%, experienced minor compression due to excess liquidity.

Noninterest income climbed to $20.2 million, a 7.8% increase from the previous year, bolstered by higher investment advisory fees and insurance commissions. Gains from Small Business Administration loan sales were particularly noteworthy, contributing significantly to the income uptick.

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Expenditure and Tax Considerations

The quarter’s noninterest expenses were managed effectively, with a modest reduction to $48.6 million. This was achieved through strategic cost reductions in various areas, including professional fees and deposit insurance premiums.

The effective tax rate edged up slightly to 20.6%, influenced by rising state tax rates despite ongoing benefits derived from tax-exempt investments.

Asset Quality and Shareholder Returns

Asset quality remained stable, with nonperforming assets holding steady at $36.6 million. Net charge-offs were controlled at $820 thousand, reflecting prudent credit risk management. The provision for credit losses was set at $1.4 million, consistent with maintaining a solid allowance for credit losses at 1.28% of loans and leases.

In a move to reward shareholders, Univest declared a quarterly dividend of $0.21 per share, payable on November 20, 2024. The corporation also repurchased over 156,000 shares during the quarter, with board approval to extend repurchase capacity by another million shares.

As Univest Financial Corporation continues to navigate the financial landscape, these results highlight its strategic focus on sustainable growth and operational efficiency, positioning it well for future opportunities.

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