GlobeNewswire Inc | Jul 22, 2020 04:15PM EDT

July 22, 2020

SOUDERTON, Pa., July 22, 2020 (GLOBE NEWSWIRE) -- Univest Financial Corporation (Univest or the "Corporation") (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. and its insurance, investments and equipment financing subsidiaries, today announced net income for the quarter ended June30, 2020 of $2.1million, or $0.07 diluted earnings per share, compared to net income of $16.5 million, or $0.56 diluted earnings per share, for the quarter ended June30, 2019. Net income for the six months ended June30, 2020 was $2.9 million, or $0.10 diluted earnings per share, compared to net income of $32.5 million, or $1.11 diluted earnings per share, for the six months ended June30, 2019.

Pre-tax pre-provision income1 for the quarter ended June30, 2020 was $25.6 million, an increase of $3.3 million, or 15.1%, from the second quarter of 2019. Pre-tax pre-provision income1 for the six months ended June 30, 2020 was $47.6 million, an increase of $3.2 million, or 7.1%, from the comparable period in the prior year.

During these challenging times, we continue to responsibly serve the needs of our customers while prioritizing the health and safety of our employees. For the majority of the second quarter we operated our financial centers as drive-through only where these capabilities existed. Additionally, we allowed for controlled and limited access to our financial centers to allow customers to access their safe deposit boxes and to serve customers at locations without drive-through capabilities. On June 22nd, we began the process of re-opening of financial center lobbies. After the successful re-opening of six financial centers, we proceeded to the next stage of our re-opening plan on June 29th, by allowing for access to the lobbies of all Univest financial centers with the exception of our Souderton financial center which is being utilized by our customer support team as well as for employee training. Additional safety protocols have been put in place in accordance with orders and guidance issued by the Commonwealth of Pennsylvania and the State of New Jersey, as applicable. We enabled approximately 95% of our non-financial center personnel to work remotely and continue to encourage our employees to work remotely in accordance with recommendations from State authorities. Our employees, systems and processes have managed this unprecedented change seamlessly and with great success.

As a result of the impact of COVID-19, we have taken various actions to support our customers and the communities they live in and serve, including modifying outstanding loans and leases and waiving certain deposit service charges. As of June30, 2020, we have modified approximately 1,420 loans and leases via principal and/or interest deferrals in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus and have not categorized these modifications as troubled debt restructurings. These loans and leases have a combined principal balance of approximately $720 million as of June 30, 2020, which represents 16.2% of the loan portfolio, excluding PPP loans. For more information on these loans, including a breakdown of such loans by type, please see the "Loan Portfolio Overview" table within this document.

CECLThe Corporation adopted Accounting Standard Update No. 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL) effective January 1, 2020. During the quarter ended June30, 2020, the Corporation recorded CECL related charges of $23.7 million of which $19.9 million (after-tax charge of $15.7 million), or $0.54 diluted earnings per share, which was attributable to changes in economic assumptions within the Corporations CECL model, which were predominately driven by COVID-19. During the six months ended June 30, 2020, the Corporation recorded CECL related charges of $45.6 million, of which $40.2 million (after-tax charge of $31.8 million), or $1.09 diluted earnings per share, was attributable to economic assumptions within the CECL model.

Paycheck Protection ProgramAs a Small Business Administration (SBA) approved lender, the Corporation was well positioned to participate in the Paycheck Protection Program (PPP), which was enacted as a component of the CARES Act that was signed into law on March 27, 2020. Through this program, we successfully originated approximately 2,550 loans and secured funding of approximately $510 million for our customers. During the quarter we recorded income of $2.0 million within net interest income related to these loans. Additionally, during the quarter we recorded incremental capitalized compensation of $1.3 million related to origination of PPP loans. As of June 30, 2020, we have $11.0 million of net deferred fees on our balance sheet related to these loans.

LoansGross loans and leases, excluding PPP loans of $499.0 million, increased $4.0 million, or 0.4% (annualized), from March31, 2020, despite a $94.5 million decrease in commercial line utilization. During the six months ended June 30, 2020, gross loans and leases, excluding PPP loans, increased $66.0 million, or 3.0% (annualized), despite a $89.5 million decrease in commercial line utilization. As of June 30, 2020 commercial line utilization was 29.8%. Since June 30, 2019, gross loans and leases, excluding PPP loans, have increased $284.9 million, or 6.8%.

DepositsTotal deposits increased $462.0 million, or 41.9% (annualized), from March31, 2020 and $509.3 million, or 23.4% (annualized), from December31, 2019 primarily due to increases in commercial and consumer deposits partially offset by a seasonal decrease in public funds deposits. Total deposits increased $747.2 million, or 18.1%, from June30, 2019 primarily due to increases in commercial and consumer deposits partially offset by a decrease in public funds deposits. Deposits at June 30, 2020 were inherently elevated by the PPP loans originated during the quarter to the extent the funds were not utilized.

Net Interest Income and MarginNet interest income of $43.5 million for the three months ended June30, 2020 increased $1.1 million, or 2.5%, from the three months ended March31, 2020, and $883 thousand, or 2.1%, from the three months ended June30, 2019. Net interest income of $86.0 million for the six months ended June30, 2020 increased $1.8 million, or 2.2%, from the six months ended June30, 2019. The increase in net interest income for the six months ended June30, 2020 compared to the same period of 2019 was primarily due to lower deposit and borrowing costs and growth in loans partially offset by a decrease in yield on loans.

Net interest margin, on a tax-equivalent basis, was 3.18% for the second quarter of 2020, compared to 3.48% for the first quarter of 2020 and 3.67% for the second quarter of 2019. Purchase accounting accretion had no impact on the quarter ended June30, 2020 or March 31, 2020 compared to a favorable impact of one basis point for the quarter ended June30, 2019. Excess liquidity reduced net interest margin by approximately sixteen basis points for the quarter ended June30, 2020 compared to six basis points for the quarter ended March 31, 2020 and five basis points impact for the quarter ended June30, 2019. This excess liquidity was primarily driven by strong deposit balance growth over the last year. PPP loans reduced net interest margin by nine basis points for the quarter ended June30, 2020. Excluding purchase accounting accretion, the impact of excess liquidity, and the impact of PPP loans, the net interest margin, on a tax-equivalent basis, was 3.43% for the quarter ended June30, 2020, 3.54% for the quarter ended March 31, 2020 and 3.71% for the quarter ended June30, 2019.

Noninterest IncomeNoninterest income for the quarter ended June30, 2020 was $18.0 million, an increase of $1.6 million, or 10.1%, from the second quarter of 2019. Noninterest income for the six months ended June30, 2020 was $36.4 million, an increase of $3.7 million, or 11.4%, from the comparable period in the prior year.

Net gain on mortgage banking activities increased $2.7 million, or 341.6%, for the quarter and $5.0 million, or 389.4%, for the six months ended June30, 2020 compared to the comparable periods in the prior year, due to an increase in mortgage volume and expansion of margins. Net gain on sales of investment securities for the six months ended June30, 2020 increased $752 thousand compared to the comparable period in the prior year primarily due to a $652 thousand gain on the sale of $58.3 million of agency backed mortgage backed securities in the first quarter of 2020.

Other income increased $1.1 million, or 146.1%, for the quarter and $784 thousand, or 73.8%, for the six months ended June30, 2020 compared to the comparable period in the prior year. Fees on risk participation agreements for interest rate swaps increased $1.3 million for the quarter and $1.2 million for the six months ended June30, 2020 compared to the comparable period in the prior year, driven by increased customer activity based on the current rate environment. Gain on sale of small business administration (SBA) loans decreased $239 thousand for the quarter and $294 thousand for the six months ended June30, 2020 compared to the comparable period in the prior year due to decreased SBA loan sale activity. Equity securities measured at fair value decreased $40 thousand for the quarter and $312 thousand for the six months ended June30, 2020.

Other service fee income decreased $1.1 million, or 42.5%, for the quarter and $1.5 million, or 30.9%, for the six months ended June30, 2020 compared to the comparable period in the prior year. Mortgage servicing rights amortization increased $484 thousand for the quarter and $814 thousand for the six months ended June30, 2020 compared to the comparable period in the prior year driven by the decline in interest rates and their impact on prepayment activity. Additionally, a valuation allowance adjustment of $283 thousand for the quarter and $338 thousand for the six months ended June30, 2020 was recorded against mortgage servicing right assets due to a decline in fair value. Interchange income decreased $226 thousand for the quarter and $256 thousand for the six months ended June30, 2020 compared to the comparable period in the prior year due to decreased customer activity.

Service charges on deposit accounts decreased $557 thousand, or 38.5%, for the quarter and $595 thousand, or 20.6%, for the six months ended June30, 2020 compared to the comparable period in the prior year primarily due to the waiving of certain deposit service charges for customers in response to COVID-19. Investment advisory commission and fee income decreased $515 thousand, or 12.7%, for the quarter compared to the comparable period in the prior year, primarily due to a decline in the value of assets under management due to overall declines in the market, as a majority of investment advisory fees are billed based on the prior quarter-end assets under management balance.

Noninterest ExpenseNoninterest expense for the quarter ended June30, 2020 was $36.0 million, a decrease of $821 thousand, or 2.2%, compared to the second quarter of 2019. Noninterest expense for the six months ended June30, 2020 was $74.7 million, an increase of $2.4 million, or 3.3% from the comparable period in the prior year.

Salaries, benefits and commissions decreased $352 thousand, or 1.6%, for the quarter and increased $1.9 million, or 4.4%, for the six months ended June30, 2020 compared to the comparable period in the prior year. The increase for the six months ended June30, 2020 was primarily attributable to additional staff hired, primarily during 2019, to support revenue generation across all business lines, expansion of our commercial lending groups in the first and second quarter of 2019, annual merit increases and increased variable compensation due to strong mortgage banking activity. The decrease for the quarter was the result of $1.3 million in compensation capitalized due to PPP loan originations which offset the previously discussed increases. Other expense increased $718 thousand, or 6.7%, for the six months ended June30, 2020 due to a one-time $656 thousand charge related to the extinguishment of long-term debt in the first quarter of 2020. Marketing and advertising expense decreased $251 thousand, or 31.9%, for the quarter and decreased $389 thousand, or 29.3%, for the six months ended June30, 2020, due to a decrease in advertising activities during the COVID-19 related stay at home orders.

Asset Quality and Provision for Credit LossesNonperforming assets were $36.0 million at June30, 2020, compared to $39.3 million at December31, 2019 and $27.1 million at June30, 2019. The increase in nonperforming assets at June30, 2020 compared to June30, 2019 was primarily due to one commercial banking relationship, totaling $11.6 million as of June30, 2020, which was placed on non-accrual status during 2019.

Net loan and lease charge-offs were $3.6 million during the second quarter of 2020 and $4.1million for the six months ended June30, 2020. The provision for credit losses was $23.7 million for the second quarter of 2020, of which $21.5 million related to loans and leases and $2.2 million related to unfunded commitments, and $45.6 million for the six months ended June30, 2020, of which $42.0 million related to loans and leases, $3.0 million related to unfunded commitments, and $556 thousand related to investment securities. The second quarter of 2020 included a charge-off of $2.7 million and provision for credit losses of $1.3 million related to one commercial real estate loan, which was transferred to other real estate owned. As of June 30, 2020, the property was carried at $8.1 million, in other real estate owned, based on a letter of intent to sell the property. This loan was initially placed on nonaccrual during the first quarter of 2018.

Net loan and lease charge-offs were $1.1 million during the second quarter of 2019 and $1.5 million for the six months ended June30, 2019. The provision for credit losses on loans and leases was $2.1 million for the second quarter of 2019 and $4.8 million for the six months ended June30, 2019.

The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment, excluding PPP loans, was 1.94%1 at June30, 2020, compared to 0.81% at December31, 2019 and 0.78% at June30, 2019.

Tax Provision The effective income tax rate was (14.5)% for the quarter ended June30, 2020, compared to an effective income tax rate of 18.2% for the quarter ended June30, 2019. The effective income tax rate was (42.4%) for the six months ended June30, 2020 compared to an effective income tax rate of 18.0% for the six months ended June30, 2019. The negative effective tax rate for the quarter and six months ended June30, 2020 reflects the benefits of tax-exempt income from investments in municipal securities and loans and leases.

DividendOn May 18, 2020, Univest declared a quarterly cash dividend of $0.20 per share, payable on July 1, 2020. This represented a 5.23% annualized yield based on the closing price of Univests stock on the date the dividend was paid.

Conference CallUnivest will host a conference call to discuss second quarter 2020 results on Thursday, July 23, 2020 at 9:00 a.m. EST. Participants may preregister at http://dpregister.com/10145862. The general public can access the call by dialing 1-888-338-6515.A replay of the conference call will be available through August 23, 2020 by dialing 1-877-344-7529; using Conference ID: 10145862.

1Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included within this document.

About Univest Financial CorporationUnivest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $6.1 billion in assets and $3.6 billion in assets under management and supervision through its Wealth Management lines of business at June30, 2020. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region.Univest delivers these services through a network of more than 50 offices in southeastern Pennsylvania extending to the Lehigh Valley and Lancaster, as well as in New Jersey and Maryland and online at www.univest.net.

This press release of Univest and the reports Univest files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the financial services industry and, specifically, the financial operations, markets and products of Univest. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Univest's future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) competitive pressures among financial institutions; (2) changes in the interest rate environment; (3) changes in asset quality, 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 is engaged; (6) technological issues that may adversely affect Univest financial operations or customers; (7) changes in the securities markets or (8) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission. It is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: (1) demand for our products and services may decline, making it difficult to grow assets and income; (2) if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; (3) collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; (4) our allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect our net income; (5) the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; (6) as the result of the decline in the Federal Reserve Boards target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; (6) a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend; (7) our wealth management revenues may decline with continuing market turmoil; (8) litigation, regulatory enforcement risk and reputation risk regarding our participation in the Paycheck Protection Program and the risk that the Small Business Administration may not fund some or all PPP loan guarantees; (9) our cyber security risks are increased as the result of an increase in the number of employees working remotely; (10) we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us; (11); and Federal Deposit Insurance Corporation premiums may increase if the agency experience additional resolution costs. Univest undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.



Univest Financial Corporation Consolidated Selected Financial Data (Unaudited) June 30, 2020 (Dollars in thousands) Balance Sheet (Period 06/30/20 03/31/20 12/31/19 09/30/19 06/30/19 End)Assets $ 6,125,312 $ 5,464,768 $ 5,380,924 $ 5,353,611 $ 5,154,298 Investment securities,net of allowance for 397,852 423,521 441,599 448,447 468,833 credit lossesLoans held for sale 31,082 11,417 5,504 2,893 1,498 Loans and leases held 4,951,809 4,448,825 4,386,836 4,251,933 4,167,904 for investment, grossAllowance for creditlosses, loans and 86,217 68,216 35,331 33,662 32,600 leasesLoans and leases held 4,865,592 4,380,609 4,351,505 4,218,271 4,135,304 for investment, netTotal deposits 4,869,329 4,407,303 4,360,075 4,337,991 4,122,110 Noninterest-bearing 1,725,819 1,318,270 1,279,681 1,198,425 1,166,301 depositsNOW, money market and 2,623,025 2,452,021 2,474,384 2,421,466 2,246,372 savingsTime deposits 520,485 637,012 606,010 718,100 709,437 Borrowings 515,722 323,363 263,596 273,855 304,241 Shareholders' equity 654,873 651,551 675,122 664,299 651,670 Balance Sheet (Average) For the three months ended, For the six months ended, 06/30/20 03/31/20 12/31/19 09/30/19 06/30/19 06/30/20 06/30/19 Assets $ 6,000,790 $ 5,409,561 $ 5,400,591 $ 5,317,867 $ 5,170,448 $ 5,704,527 $ 5,087,810 Investment securities,net of allowance for 411,957 441,900 445,932 460,099 471,422 426,928 470,812 credit lossesLoans and leases, gross 4,836,858 4,388,584 4,280,430 4,170,485 4,123,069 4,612,720 4,070,508 Deposits 4,794,669 4,349,984 4,374,586 4,288,170 4,145,411 4,572,326 4,038,897 Shareholders' equity 660,950 673,460 672,647 659,523 645,538 667,205 638,595 Asset Quality Data (Period End) 06/30/20 03/31/20 12/31/19 09/30/19 06/30/19 Nonaccrual loans andleases, including nonaccrual troubleddebt restructured loans and leases $ 26,141 $ 36,626 $ 38,578 $ 37,368 $ 25,147 Accruing loans andleases 90 days or more 1,193 1,777 143 2,488 1,379 past dueAccruing troubled debtrestructured loans and 53 54 54 54 55 leasesTotal nonperforming 27,387 38,457 38,775 39,910 26,581 loans and leasesOther real estate owned 8,642 516 516 495 540 Total nonperforming 36,029 38,973 39,291 40,405 27,121 assetsNonaccrual loans andleases / Loans and 0.53 % 0.82 % 0.88 % 0.88 % 0.60 % leases held forinvestmentNonperforming loans andleases / Loans and 0.55 % 0.86 % 0.88 % 0.94 % 0.64 % leases held forinvestmentNonperforming assets / 0.59 % 0.71 % 0.73 % 0.75 % 0.53 % Total assets Allowance for creditlosses, loans and 86,217 68,216 35,331 33,662 32,600 leasesAllowance for creditlosses, loans andleases / Loans and 1.74 % 1.53 % 0.81 % 0.79 % 0.78 % leases held forinvestmentAllowance for creditlosses, loans andleases / Loans andleases held for 1.94 % 1.53 % 0.81 % 0.79 % 0.78 % investment, excludingPaycheck ProtectionProgram loans (1)Allowance for creditlosses, loans andleases / Nonaccrual 329.82 % 186.25 % 91.58 % 90.08 % 129.64 % loans and leases heldfor investmentAllowance for creditlosses, loans andleases / Nonperforming 314.81 % 177.38 % 91.12 % 84.34 % 122.64 % loans and leases heldfor investment For the three months ended, For the six months ended, 06/30/20 03/31/20 12/31/19 09/30/19 06/30/19 06/30/20 06/30/19 Net loan and lease $ 3,576 $ 489 $ 558 $ 468 $ 1,078 $ 4,065 $ 1,525 charge-offsNet loan and leasecharge-offs 0.30 % 0.04 % 0.05 % 0.04 % 0.10 % 0.18 % 0.08 % (annualized)/Averageloans and leases (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included within this document.

Univest Financial Corporation Consolidated Selected Financial Data (Unaudited) June 30, 2020 (Dollars inthousands, except pershare data) For the three months ended, For the six months ended, For the 06/30/20 03/31/20 12/31/19 09/30/19 06/30/19 06/30/20 06/30/19 period:Interest $ 49,980 $ 52,019 $ 53,369 $ 54,300 $ 54,060 $ 101,999 $ 106,424 incomeInterest 6,462 9,551 10,940 11,655 11,425 16,013 22,266 expense Netinterest 43,518 42,468 42,429 42,645 42,635 85,986 84,158 incomeProvision for 23,737 21,843 2,227 1,530 2,073 45,580 4,753 credit lossesNet interestincome after 19,781 20,625 40,202 41,115 40,562 40,406 79,405 provisionNoninterest income:Trust fee 1,924 1,890 1,912 1,973 2,054 3,814 3,941 incomeServicecharges on 890 1,397 1,551 1,513 1,447 2,287 2,882 depositaccountsInvestmentadvisory 3,540 4,255 4,064 4,032 4,055 7,795 7,844 commission andfee incomeInsurancecommission and 4,067 4,732 3,609 3,877 3,941 8,799 9,085 fee incomeOther service 1,488 1,870 2,229 2,255 2,590 3,358 4,857 fee incomeBank ownedlife insurance 732 734 741 743 743 1,466 1,695 incomeNet gain onsales of 65 695 13 33 7 760 8 investmentsecuritiesNet gain onmortgage 3,515 2,744 1,038 1,629 796 6,259 1,279 bankingactivitiesOther income 1,779 67 1,013 544 723 1,846 1,062 Totalnoninterest 18,000 18,384 16,170 16,599 16,356 36,384 32,653 incomeNoninterest expense:Salaries,benefits and 21,700 23,836 21,933 22,758 22,052 45,536 43,598 commissionsNet occupancy 2,478 2,574 2,534 2,475 2,601 5,052 5,212 Equipment 923 995 1,027 1,088 1,065 1,918 2,055 Data 2,750 2,760 2,685 2,624 2,627 5,510 5,141 processingProfessional 1,264 1,317 1,475 1,517 1,307 2,581 2,571 feesMarketing and 535 402 710 558 786 937 1,326 advertisingDepositinsurance 615 504 342 (444 ) 430 1,119 882 premiumsIntangible 321 330 374 378 417 651 843 expensesOther expense 5,374 6,059 6,398 5,316 5,496 11,433 10,715 Totalnoninterest 35,960 38,777 37,478 36,270 36,781 74,737 72,343 expenseIncome before 1,821 232 18,894 21,444 20,137 2,053 39,715 taxesIncome tax(benefit) (264 ) (606 ) 3,384 3,782 3,669 (870 ) 7,168 expenseNet income $ 2,085 $ 838 $ 15,510 $ 17,662 $ 16,468 $ 2,923 $ 32,547 Net income per share:Basic $ 0.07 $ 0.03 $ 0.53 $ 0.60 $ 0.56 $ 0.10 $ 1.11 Diluted $ 0.07 $ 0.03 $ 0.53 $ 0.60 $ 0.56 $ 0.10 $ 1.11 Dividendsdeclared per $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.40 $ 0.40 shareWeightedaverage shares 29,187,197 29,286,200 29,327,169 29,305,524 29,287,754 29,236,698 29,282,575 outstandingPeriod endshares 29,201,985 29,164,782 29,334,629 29,312,534 29,294,942 29,201,985 29,294,942 outstanding

Univest Financial CorporationConsolidated Selected Financial Data (Unaudited)June 30, 2020 For the three months ended, For the six months ended,Profitability 06/30/20 03/31/20 12/31/19 09/30/19 06/30/19 06/30/20 06/30/19Ratios (annualized) Return on average 0.14 % 0.06 % 1.14 % 1.32 % 1.28 % 0.10 % 1.29 %assetsReturn on average 1.27 % 0.50 % 9.15 % 10.62 % 10.23 % 0.88 % 10.28 %shareholders' equityReturn on averagetangible common equity 1.73 % 0.68 % 12.40 % 14.52 % 14.10 % 1.20 % 14.23 %(1)Net interest margin 3.18 % 3.48 % 3.44 % 3.52 % 3.67 % 3.32 % 3.71 %(FTE)Efficiency ratio (2) 57.7 % 62.8 % 63.0 % 60.4 % 61.5 % 60.2 % 61.0 % Capitalization Ratios Dividends declared to 278.7 % 699.9 % 37.8 % 33.2 % 35.6 % 399.5 % 36.0 %net incomeShareholders' equityto assets (Period End) 10.69 % 11.92 % 12.55 % 12.41 % 12.64 % 10.69 % 12.64 %

Tangible common equity 8.06 % 8.99 % 9.59 % 9.42 % 9.54 % 8.06 % 9.54 %to tangible assets (1)Common equity book $ 22.43 $ 22.34 $ 23.01 $ 22.66 $ 22.25 $ 22.43 $ 22.25 value per shareTangible common equitybook value per share $ 16.41 $ 16.31 $ 17.01 $ 16.64 $ 16.20 $ 16.41 $ 16.20 (1) Regulatory Capital Ratios (Period End)Tier 1 leverage 9.15 % 9.90 % 10.02 % 9.97 % 10.01 % 9.15 % 10.01 %ratioCommon equity tier 1risk-based capital 10.73 % 10.79 % 11.03 % 11.03 % 10.99 % 10.73 % 10.99 %ratioTier 1 risk-based 10.73 % 10.79 % 11.03 % 11.03 % 10.99 % 10.73 % 10.99 %capital ratioTotal risk-based 13.72 % 13.65 % 13.78 % 13.81 % 13.79 % 13.72 % 13.79 %capital ratio (1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included below.(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income. Non-GAAP to GAAP Reconciliation Management uses non-GAAP measures in its analysis of the Corporation's performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release. Shareholders' $ 654,873 $ 651,551 $ 675,122 $ 664,299 $ 651,670 $ 654,873 $ 651,670 equity Goodwill (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) Other (3,017 ) (3,333 ) (3,658 ) (4,026 ) (4,396 ) (3,017 ) (4,396 ) intangibles (a) Tangible common $ 479,297 $ 475,659 $ 498,905 $ 487,714 $ 474,715 $ 479,297 $ 474,715 equity Total assets $ 6,125,312 $ 5,464,768 $ 5,380,924 $ 5,353,611 $ 5,154,298 $ 6,125,312 $ 5,154,298 Goodwill (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) Other (3,017 ) (3,333 ) (3,658 ) (4,026 ) (4,396 ) (3,017 ) (4,396 ) intangibles (a) Tangible assets $ 5,949,736 $ 5,288,876 $ 5,204,707 $ 5,177,026 $ 4,977,343 $ 5,949,736 $ 4,977,343 Average shareholders' $ 660,950 $ 673,460 $ 675,647 $ 659,523 $ 645,538 $ 667,205 $ 638,595 equity Average goodwill (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) (172,559 ) Average other (3,185 ) (3,506 ) (3,853 ) (4,234 ) (4,615 ) (3,346 ) (4,821 ) intangibles (a) Average tangible $ 485,206 $ 497,395 $ 499,235 $ 482,730 $ 468,364 $ 491,300 $ 461,215 common equity Net income before $ 1,821 $ 232 $ 18,894 $ 21,444 $ 20,137 $ 2,053 $ 39,715 taxes Provision for 23,737 21,843 2,227 1,530 2,073 45,580 4,753 credit losses Pre-tax pre-provision $ 25,558 $ 22,075 $ 21,121 $ 22,974 $ 22,210 $ 47,633 $ 44,468 income Loans and leases held for $ 4,951,809 $ 4,448,825 $ 4,386,836 $ 4,251,933 $ 4,167,904 $ 4,951,809 $ 4,167,904 investment, gross Paycheck Protection Program ("PPP") 498,978 - - - - 498,978 - loans Gross loans and leases excluding $ 4,452,831 $ 4,448,825 $ 4,386,836 $ 4,251,933 $ 4,167,904 $ 4,452,831 $ 4,167,904 PPP loans (a) Amount does not include servicing rights

Univest Financial Corporation Average Balances and Interest Rates (Unaudited) For the Three Months Ended, Tax Equivalent June 30, 2020 March 31, 2020 Basis Average Income/ Average Average Income/ Average (Dollars in Balance Expense Rate Balance Expense Rate thousands)Assets: Interest-earningdeposits with other $ 313,668 $ 67 0.09 % $ 118,108 $ 325 1.11 %banksU.S. government 7,236 36 2.00 7,298 37 2.04 obligationsObligations ofstate and political 26,546 240 3.64 33,595 289 3.46 subdivisionsOther debt and 378,175 2,182 2.32 401,007 2,668 2.68 equity securitiesFederal Home LoanBank, Federal 28,977 362 5.02 31,450 527 6.74 Reserve Bank andother stockTotalinterest-earningdeposits,investments and 754,602 2,887 1.54 591,458 3,846 2.62 otherinterest-earningassets Commercial,financial, and 816,976 7,330 3.61 821,267 8,631 4.23 agricultural loansPaycheck Protection 370,669 2,128 2.31 - - - Program loansRealestate?commercial 2,232,827 23,110 4.16 2,139,369 23,917 4.50 and constructionloansRealestate?residential 1,004,671 10,270 4.11 991,550 11,052 4.48 loansLoans to 29,079 327 4.52 30,016 407 5.45 individualsMunicipal loans and 291,433 2,977 4.11 317,006 3,265 4.14 leasesLease financings 91,203 1,592 7.02 89,376 1,554 6.99 Gross loans and 4,836,858 47,734 3.97 4,388,584 48,826 4.47 leasesTotalinterest-earning 5,591,460 50,621 3.64 4,980,042 52,672 4.25 assetsCash and due from 46,970 50,891 banksReserve for creditlosses, loans and (69,292 ) (44,372 ) leasesPremises and 55,750 56,399 equipment, netOperating lease 34,419 34,545 right-of-use assetsOther assets 341,483 332,056 Total assets $ 6,000,790 $ 5,409,561 Liabilities: Interest-bearing $ 617,927 $ 372 0.24 % $ 584,391 $ 796 0.55 %checking depositsMoney market 1,063,463 853 0.32 1,057,336 2,903 1.10 savingsRegular savings 872,422 475 0.22 816,760 792 0.39 Time deposits 577,462 2,672 1.86 602,903 2,915 1.94 Total time andinterest-bearing 3,131,274 4,372 0.56 3,061,390 7,406 0.97 deposits Short-term 161,365 122 0.30 40,126 106 1.06 borrowingsLong-term debt 210,040 762 1.46 169,205 764 1.82 Subordinated notes 94,890 1,206 5.11 94,847 1,275 5.41 Total borrowings 466,295 2,090 1.80 304,178 2,145 2.84 Totalinterest-bearing 3,597,569 6,462 0.72 3,365,568 9,551 1.14 liabilitiesNoninterest-bearing 1,663,395 1,288,594 depositsOperating lease 37,680 37,766 liabilitiesAccrued expensesand other 41,196 44,173 liabilities Total liabilities 5,339,840 4,736,101 Shareholders' Equity:Common stock 157,784 157,784 Additional paid-in 295,681 295,318 capitalRetained earnings 207,485 220,358 and other equity Totalshareholders' 660,950 673,460 equity Total liabilitiesand shareholders' $ 6,000,790 $ 5,409,561 equityNet interest income $ 44,159 $ 43,121 Net interest spread 2.92 3.11 Effect of netinterest-free 0.26 0.37 funding sourcesNet interest margin 3.18 % 3.48 %Ratio of averageinterest-earningassets to average 155.42 % 147.97 % interest-bearingliabilities Note 1: For rate calculation purposes, average loan and lease categoriesinclude deferred fees and costs and purchase accounting adjustments. Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts forthe three months ended June 30, 2020 and March 31, 2020 have been calculated using the Corporation?s federal applicable rate of 21.0%.

Univest Financial Corporation Average Balances and Interest Rates (Unaudited) For the Three Months Ended June 30,Tax Equivalent 2020 2019 Basis Average Income/ Average Average Income/ Average (Dollars in Balance Expense Rate Balance Expense Rate thousands)Assets: Interest-earningdeposits with other $ 313,668 $ 67 0.09 % $ 102,623 $ 569 2.22 %banksU.S. government 7,236 36 2.00 17,315 73 1.69 obligationsObligations ofstate and political 26,546 240 3.64 59,267 507 3.43 subdivisionsOther debt and 378,175 2,182 2.32 394,840 2,572 2.61 equity securitiesFederal Home LoanBank, Federal 28,977 362 5.02 31,938 535 6.72 Reserve Bank andother stockTotalinterest-earningdeposits,investments and 754,602 2,887 1.54 605,983 4,256 2.82 otherinterest-earningassets Commercial,financial, and 816,976 7,330 3.61 820,009 10,589 5.18 agricultural loansPaycheck Protection 370,669 2,128 2.31 Program loansRealestate?commercial 2,232,827 23,110 4.16 1,912,248 23,110 4.85 and constructionloansRealestate?residential 1,004,671 10,270 4.11 941,712 11,483 4.89 loansLoans to 29,079 327 4.52 31,939 510 6.40 individualsMunicipal loans and 291,433 2,977 4.11 335,399 3,305 3.95 leasesLease financings 91,203 1,592 7.02 81,762 1,459 7.16 Gross loans and 4,836,858 47,734 3.97 4,123,069 50,456 4.91 leasesTotalinterest-earning 5,591,460 50,621 3.64 4,729,052 54,712 4.64 assetsCash and due from 46,970 46,868 banksReserve for creditlosses, loans and (69,292 ) (31,847 ) leasesPremises and 55,750 58,873 equipment, netOperating lease 34,419 35,821 right-of-use assetsOther assets 341,483 331,681 Total assets $ 6,000,790 $ 5,170,448 Liabilities: Interest-bearing $ 617,927 $ 372 0.24 % $ 457,231 $ 457 0.40 %checking depositsMoney market 1,063,463 853 0.32 982,440 4,234 1.73 savingsRegular savings 872,422 475 0.22 818,523 1,013 0.50 Time deposits 577,462 2,672 1.86 688,897 3,407 1.98 Total time andinterest-bearing 3,131,274 4,372 0.56 2,947,091 9,111 1.24 deposits Short-term 161,365 122 0.30 48,312 217 1.80 borrowingsLong-term debt 210,040 762 1.46 159,572 836 2.10 Subordinated notes 94,890 1,206 5.11 94,663 1,261 5.34 Total borrowings 466,295 2,090 1.80 302,547 2,314 3.07 Totalinterest-bearing 3,597,569 6,462 0.72 3,249,638 11,425 1.41 liabilitiesNoninterest-bearing 1,663,395 1,198,320 depositsOperating lease 37,680 38,873 liabilitiesAccrued expensesand other 41,196 38,079 liabilities Total liabilities 5,339,840 4,524,910 Shareholders' Equity:Common stock 157,784 157,784 Additional paid-in 295,681 293,496 capitalRetained earnings 207,485 194,258 and other equity Totalshareholders' 660,950 645,538 equity Total liabilitiesand shareholders' $ 6,000,790 $ 5,170,448 equityNet interest income $ 44,159 $ 43,287 Net interest spread 2.92 3.23 Effect of netinterest-free 0.26 0.44 funding sourcesNet interest margin 3.18 % 3.67 %Ratio of averageinterest-earningassets to average 155.42 % 145.53 % interest-bearingliabilities Note 1: For rate calculation purposes, average loan and lease categoriesinclude deferred fees and costs and purchase accounting adjustments. Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the three months ended June 30, 2020 and 2019 have been calculated using the Corporation?s federal applicable rate of 21.0%.

Univest Financial Corporation Average Balances and Interest Rates (Unaudited) For the Six Months Ended June 30, Tax Equivalent 2020 2019 Basis Average Income/ Average Average Income/ Average (Dollars in Balance Expense Rate Balance Expense Rate thousands)Assets: Interest-earningdeposits with other $ 215,888 $ 392 0.37 % $ 72,760 $ 838 2.32 %banksU.S. government 7,267 73 2.02 18,669 155 1.67 obligationsObligations ofstate and political 30,070 529 3.54 61,703 1,053 3.44 subdivisionsOther debt and 389,591 4,850 2.50 390,440 5,203 2.69 equity securitiesFederal Home LoanBank, Federal 30,214 889 5.92 32,148 1,121 7.03 Reserve Bank andother stockTotalinterest-earningdeposits,investments and 673,030 6,733 2.01 575,720 8,370 2.93 otherinterest-earningassets Commercial,financial, and 819,121 15,961 3.92 815,565 21,347 5.28 agricultural loansPaycheck Protection 185,334 2,128 2.31 Program loansRealestate?commercial 2,186,098 47,027 4.33 1,867,510 44,669 4.82 and constructionloansRealestate?residential 998,111 21,322 4.30 940,015 22,895 4.91 loansLoans to 29,548 734 5.00 32,230 1,028 6.43 individualsMunicipal loans and 304,219 6,242 4.13 333,858 6,526 3.94 leasesLease financings 90,289 3,146 7.01 81,330 2,894 7.18 Gross loans and 4,612,720 96,560 4.21 4,070,508 99,359 4.92 leasesTotalinterest-earning 5,285,750 103,293 3.93 4,646,228 107,729 4.68 assetsCash and due from 48,931 45,797 banksReserve for creditlosses, loans and (56,832 ) (30,984 ) leasesPremises and 56,074 59,025 equipment, netOperating lease 34,482 36,472 right-of-use assetsOther assets 336,122 331,272 Total assets $ 5,704,527 $ 5,087,810 Liabilities: Interest-bearing $ 601,159 $ 1,168 0.39 % $ 468,019 $ 1,171 0.50 %checking depositsMoney market 1,060,399 3,756 0.71 950,641 7,982 1.69 savingsRegular savings 844,591 1,267 0.30 803,859 1,827 0.46 Time deposits 590,183 5,587 1.90 672,193 6,334 1.90 Total time andinterest-bearing 3,096,332 11,778 0.76 2,894,712 17,314 1.21 deposits Short-term 100,745 228 0.46 82,796 855 2.08 borrowingsLong-term debt 189,623 1,526 1.62 152,475 1,575 2.08 Subordinated notes 94,868 2,481 5.26 94,633 2,522 5.37 Total borrowings 385,236 4,235 2.21 329,904 4,952 3.03 Totalinterest-bearing 3,481,568 16,013 0.92 3,224,616 22,266 1.39 liabilitiesNoninterest-bearing 1,475,994 1,144,185 depositsOperating lease 37,724 39,478 liabilitiesAccrued expensesand other 42,036 40,936 liabilitiesTotal liabilities 5,037,322 4,449,215 Shareholders' Equity:Common stock 157,784 157,784 Additional paid-in 295,500 293,123 capitalRetained earnings 213,921 187,688 and other equityTotal shareholders' 667,205 638,595 equityTotal liabilitiesand shareholders' $ 5,704,527 $ 5,087,810 equityNet interest income $ 87,280 $ 85,463 Net interest spread 3.01 3.29 Effect of netinterest-free 0.31 0.42 funding sourcesNet interest margin 3.32 % 3.71 %Ratio of averageinterest-earningassets to average 151.82 % 144.09 % interest-bearingliabilities Note 1: For rate calculation purposes, average loan and lease categoriesinclude deferred fees and costs and purchase accounting adjustments. Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included in the average loan balances. Tax-equivalent amounts for the six months ended June 30, 2020 and 2019 have been calculated using the Corporation?s federal applicable rate of 21.0%.

Univest Financial Corporation Loan Portfolio Overview (Dollars in millions) $ Modified Total % of % of Balance Loans asIndustry Outstanding Commercial PPP $ Portfolio of a % of Description Balance Loan (1) with PPP Modified Portfolio (excl PPP) Portfolio Loans (2) Loans (3) (3)CRE - Retail $ 260.7 7.1 % $ 0.2 - % $ 124.7 47.8 %Animal Production 240.3 6.6 0.7 2.1 20.7 8.6 CRE - 1-4 FamilyResidential 238.7 6.5 1.3 0.2 26.9 11.3 InvestmentCRE - Office 208.0 5.7 - 0.0 16.4 7.9 CRE - Multi-family 182.3 5.0 - 0.0 11.8 6.5 Hotels & Motels 171.7 4.7 2.4 50.4 146.6 85.4 (Accommodation)Nursing andResidential Care 155.4 4.3 7.9 27.4 - - FacilitiesCRE - Industrial / 125.4 3.5 0.1 4.8 26.3 21.0 WarehouseReal EstateLenders, Secondary 116.9 3.2 4.3 18.6 - - Market FinancingSpecialty Trade 114.7 3.2 66.9 15.3 6.0 5.3 ContractorsCRE - Mixed-Use - 107.2 3.0 - - 34.5 32.1 ResidentialProfessional,Scientific, and 100.4 2.8 70.1 30.4 11.6 11.6 Technical ServicesHomebuilding(tract developers, 91.1 2.5 15.0 6.7 3.3 3.7 remodelers)Education 89.9 2.5 15.6 39.8 6.7 7.4 MerchantWholesalers, 71.7 2.0 20.7 21.0 9.7 13.5 Durable GoodsFabricated MetalProduct 68.4 1.9 12.9 3.7 6.1 8.9 ManufacturingCrop Production 61.9 1.7 0.3 0.6 3.2 5.2 Food Services and 61.1 1.7 15.9 25.5 33.9 55.5 Drinking PlacesCRE - Medical 59.8 1.6 - - 14.7 24.7 OfficeAdministrative and 54.4 1.5 28.8 33.0 1.6 2.9 Support ServicesMotor Vehicle and 51.8 1.4 11.6 5.5 18.0 34.8 Parts DealersFood Manufacturing 51.0 1.4 3.0 1.4 17.5 34.4 Total Commercial $ 2,682.8 73.8 % $ 277.7 11.6 % $ 540.2 20.1 %Loans >$50MIndustries with<$50 million in $ 951.0 26.2 % $ 221.3 19.2 % $ 126.2 13.3 %outstandingsTotal Commercial $ 3,633.8 100.0 % $ 499.0 13.6 % $ 666.4 18.3 %Loans $ Modified Total Balance Loans asConsumer Loans and Outstanding PPP $ of a % of Lease Financings Balance (1) Modified Portfolio Loans (3) (3)RealEstate-Residential $ 462.5 $ - $ 35.5 7.7 %Secured forPersonal PurposeReal Estate-HomeEquity Secured for 173.1 - 4.1 2.4 Personal PurposeLoans to 29.2 - 0.5 1.7 IndividualsLease Financings 154.2 - 13.6 8.8 Total - ConsumerLoans and Lease $ 819.0 $ - $ 53.7 6.6 %Financings Total $ 4,452.8 $ 499.0 $ 720.1 16.2 % (1) Includes($11.0) million of net deferred fees.(2) Represents weighted average percent of the portfolio which received a PPP loan.(3) Loan modifications referenced above were made in accordance with Section4013 of the CARES Act and the Interagency Statement on Loan Modifications andReporting for Financial Institutions Working with Customers Affected by theCoronavirus and therefore were not classified as TDRs.



CONTACT:Brian J. RichardsonUNIVEST FINANCIAL CORPORATIONChief Financial Officer215-721-2446richardsonb@univest.net