Univest Corporation of Pennsylvania - Univest Bank and Trust Co. - Reports Third Quarter Earnings
(firmenpresse) - SOUDERTON, PA -- (Marketwire) -- 10/26/11 -- Univest Corporation of Pennsylvania (NASDAQ: UVSP), parent company of Univest Bank and Trust Co., a full-service financial institution with 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 third quarter. Univest reported net income of $5.2 million or $0.31 diluted earnings per share for the quarter ended September 30, 2011, compared to $4.1 million or $0.25 diluted earnings per share for the comparable period in the prior year. Net income for the nine months ended September 30, 2011 was $13.6 million or $0.81 diluted earnings per share, compared to $10.8 million or $0.65 diluted earnings per share for the comparable period in the prior year.
Total deposits increased $103.8 million from June 30, 2011 and $38.8 million from December 31, 2010. The increase was primarily a result of an increase in public fund balances due to anticipated seasonal tax deposits as well as larger balances being maintained by existing public fund customers. Total public fund balances increased $103.2 million for the quarter and $53.9 million for the first nine months of 2011.
Gross loans and leases decreased $2.3 million from June 30, 2011 and $34.8 million from December 31, 2010, primarily due to continued light credit demand and utilization of lines by businesses and consumers as a result of the prolonged challenging economic environment.
Net interest income decreased $337 thousand or 1.78% to $18.6 million in the third quarter of 2011 compared to the third quarter of 2010. The net interest margin on a tax-equivalent basis for the third quarter of 2011 was 4.15% compared to 4.24% during the second quarter of 2011 and remained level with 4.15% in the third quarter 2010. The decrease in the net interest margin during the third quarter was due to the inflow of public fund deposits, which were primarily invested in overnight fed funds during the quarter, as the Corporation's cash position increased by $90.1 million from June 30, 2011 to September 30, 2011.
Net interest income of $56.4 million for the nine months ended September 30, 2011 increased $2.1 million or 3.81% compared to the nine months ended September 30, 2010. The net interest margin on a tax-equivalent basis for the nine months ended September 30, 2011 increased 13 basis points to 4.21% from 4.08% for the nine months ended September 30, 2010.
The year-to-date increases in the net interest income and the net interest margin were a result of declines in the cost of interest-bearing liabilities, primarily time deposits. The increases were also attributed to declines in the volume of Federal Home Loan Bank (FHLB) borrowings, exceeding the declines in yields on total interest-earning assets. The Corporation repaid its maturing FHLB advances in 2010 reducing average year-to-date FHLB advances from $58.1 million for the nine months ended September 30, 2010 to $5.0 million for the nine months ended September 30, 2011. FHLB advances at September 30, 2011 remained at $5.0 million.
Non-interest income for the quarter ended September 30, 2011 was $9.0 million, a slight increase of $90 thousand from the comparable period in the prior year. Non-interest income for the quarter included a net gain on sales of securities of $848 thousand, an increase of $509 thousand from the third quarter of 2010. These net securities gains were offset by a mortgage servicing right impairment of $672 thousand during the quarter primarily due to the decline in interest rates which increased the projected speeds of prepayment. This impairment is reflected in other income and is an increase of $260 thousand compared to the third quarter of 2010. Non-interest income also included increases in trust fee income of $175 thousand and bank owned life insurance income of $228 thousand. Additionally, the third quarter of 2010 was impacted by a fair value write-down on the ineffective portion of a fair value swap of $246 thousand, which was terminated in August, 2010. These favorable variances were offset by a $415 thousand decline in service charges on deposit accounts, primarily due to the amendments to Regulation E which were implemented on August 15, 2010; a $333 thousand decrease in the net gain on mortgage banking activities as a result of lower volume and net gains on sales; and a $150 thousand negative valuation adjustment on one real estate owned property.
Non-interest income for the nine months ended September 30, 2011 was $25.4 million, an increase of $279 thousand or 1.11% compared to $25.2 million for the nine months ended September 30, 2010. Non-interest income for the first nine months of 2011 included increases from trust fees of $425 thousand, investment advisory commissions and fees of $160 thousand, insurance commissions and fees of $105 thousand, bank owned life insurance income of $306 thousand, other service fee income of $260 thousand primarily related to interchange fees, and an increase in the net gain on sales of securities of $991 thousand. Additionally, the nine months ended September 30, 2010 was impacted by fair value write-downs on the ineffective portion of a fair value swap of $1.1 million, which was terminated in August 2010. These favorable variances were partially offset by a decline of $1.3 million in service charges on deposit accounts, mainly due to the amendments to Regulatory E which were implemented on August 15, 2010 and a decline of $965 thousand in the net gain on mortgage banking activities due to weaker mortgage demand in the first six months of the year. During the third quarter of 2011, mortgage demand has shown significant improvement due to re-financings. In addition, fair value write-downs on other real estate owned properties increased by $390 thousand and the first quarter of 2010 included a litigation settlement.
Non-interest expense for the third quarter of 2011 was $17.3 million, a slight increase of $124 thousand compared to the third quarter of 2010. Salaries and benefits expense increased by $113 thousand, due to increased incentive plan expenses, and other expenses increased $315 thousand primarily due to loan workout and legal expenses. The increases for the quarter were partially offset by a decline in deposit insurance premiums of $256 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.
For the nine months ended September 30, 2011, non-interest expense was $50.4 million, a decrease of $712 thousand or 1.39% compared to the same period in the prior year. This was attributed to a decline of $550 thousand in salaries and benefits as a result of higher deferred loan origination costs partially offset by higher commissions expense, restricted stock expense, employee incentive expense and salaries and benefits expense to grow the mortgage banking business. The Corporation implemented higher deferred loan origination costs commencing during the fourth quarter of 2010 based upon an in-depth study performed which incorporated management's additional review time in connection with the loan approval process in the current environment. Additionally, the decrease was a result of a decline of $679 thousand in marketing and advertising expenses and a decline of $376 thousand in deposit insurance premiums. These decreases were partially offset by increases in premises and equipment and loan workout expenses.
Non-accrual loans and leases, including non-accrual troubled debt restructured loans, decreased to $38.2 million at September 30, 2011 from $43.5 million at June 30, 2011 and $45.2 million at December 31, 2010. The decrease in non-accrual loans was mainly due to the partial charge-off and foreclosure on two commercial real estate loans for two borrowers. These loans represented $4.7 million in the aggregate, of which $1.7 million was charged-off during the quarter and the remaining $3.0 million was transferred to other real estate owned at September 30, 2011. Net loan and lease charge-offs were $5.2 million during the third quarter of 2011 compared to $5.8 million for both the second quarter of 2011 and the third quarter of 2010. For the nine months ended September 30, 2011, net loan and lease charge-offs were $14.2 million or 1.31% of average loans and leases compared to $11.2 million or 1.04% for the nine months ended September 30, 2010.
Nonperforming loans and leases as a percentage of total loans and leases equaled 2.96% at September 30, 2011 compared to 3.42% at June 30, 2011 and 2.37% at September 30, 2010. Other real estate owned increased from $5.0 million at June 30, 2011 to $7.7 million at September 30, 2011 primarily due to the addition of two commercial properties during the quarter as previously discussed. As of September 30, 2011, a total of seven properties remain in other real estate owned with three properties totaling $993 thousand under agreements of sale.
The provision for loan and lease losses declined to $3.6 million for the third quarter of 2011 compared to $5.6 million for the quarter ended June 30, 2011 and $5.5 million for the quarter ended September 30, 2010. The allowance for loan and lease losses as a percentage of total loans and leases was 2.16% at September 30, 2011 compared to 2.27% at June 30, 2011 and 1.97% at September 30, 2010. The allowance for loan and lease losses to nonperforming loans and leases equaled 72.85% at September 30, 2011, which increased from 66.26% at June 30, 2011. The allowance for loan and lease losses to nonperforming loans and leases was 83.10% at September 30, 2010.
Univest continues to remain well-capitalized at September 30, 2011. Univest's total risk-based capital at September 30, 2011 was 16.00%, well in excess of the regulatory minimum for well capitalized status of 10% for total risk-based capital.
During the quarter, Univest deployed $742 thousand of capital to repurchase 56,408 shares of common stock through the stock repurchase program. Maximum shares available for future repurchases through the plan at September 30, 2011 was 587,374. Total shares outstanding at September 30, 2011 were 16,727,099.
On October 3, 2011, Univest Corporation paid a quarterly cash dividend of $0.20 per share, which represented a 6.17% annualized yield based on the closing price of Univest's stock on the date the dividend was paid.
Headquartered in Souderton, Pa., Univest Corporation of Pennsylvania () 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 .
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.
CONTACT:
Jeff Schweitzer
UNIVEST CORPORATION OF PENNSYLVANIA
Chief Financial Officer
215-721-2458
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Datum: 26.10.2011 - 18:41 Uhr
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